1 China reveals plan to cut corporate debt (Gulf
News) China has unveiled guidelines to reduce rising corporate debt levels
which some analysts fear could destabilise the world’s second-largest economy.
The government will take a multi-pronged approach to
cutting company debt, including encouraging mergers and acquisitions,
bankruptcies, debt-to-equity swaps and debt securitisation, according to
guidelines issued by State Council, or the cabinet.
China sits on $18 trillion in debt, equivalent to
about 169 per cent of gross domestic product (GDP). International institutions
have warned Beijing to stop financing weak firms, especially inefficient
state-owned enterprises, which tend to crowd out the private sector.
2 Economics Nobel for contract theory (BBC) UK-born
Oliver Hart and Bengt Holmstrom of Finland have won the Nobel economics prize
for work on contract theory. Judges said their work laid "an intellectual
foundation" for policies in areas such as bankruptcy legislation and
political constitutions.
The pair will receive 8 million Swedish krona
(£744,652) from the committee. The Royal Swedish Academy of Sciences said that
Mr Hart and Mr Holmstrom's work was "valuable to the understanding of
real-life contracts and institutions". It also said it could identify
"potential pitfalls in contract design."
Working separately, the two created tools to help
determine whether public sector workers should receive fixed salaries or
performance-based pay, and whether providers of public services should be
publicly or privately owned.
The economics prize is the only Nobel not created by
Alfred Nobel, and was instead launched in 1968, long after the philanthropist's
death. To date Americans have dominated the award, with 55 of the 76 laureates
holding US citizenship, including those with dual nationalities.
3 Big surge in graduates ‘bad for UK economy’ (Larry
Elliott in The Guardian) The government is being urged to end the political
drive to get more people into university after new research showed that
graduates are “colonising” jobs in banking, education, the police and estate
agency that were the preserve of school-leavers in the past.
The Chartered Institute of Personnel and Development
– which represents people working in human resources – said the all-party
consensus to get more young people into higher education was no longer
justified given student debt and the careers many ended up pursuing.
Successive governments have said that rising
university numbers are justified by a graduate premium – higher lifetime
earnings that more than compensate for tuition fees and living expenses.But the
CIPD said the notion of a tertiary education premium is being called into
question by graduates’ average debt of £44,000 and official estimates that 45%
of loans would never be paid off.
Noting that its previous research had shown more
than half of graduates take non-graduate jobs, the CIPD said the current system
was not just bad for many of those who had been to university but also for
school-leavers who were overlooked for jobs that did not require a degree.
The CIPD said that in 1979 around 12% of young
people in the UK were involved in higher education. This figure had risen
fourfold to 48% by 2014-15, it added. Peter Cheese, CIPD chief executive, said:
“This report shows clearly how the huge increase in the supply of graduates
over the last 35 years has resulted in more and more occupations and
professions being colonised by people with degrees, regardless of whether they
actually need them to do the job.
The CIPD report is likely to intensify the debate
about whether university courses are good value for all students. Supporters of
the current approach say that limiting numbers would result in higher education
being dominated by children from better-off families, and that courses increasingly
have a vocational bent to prepare young people better for their careers.
It called on ministers to improve the quality of
careers advice to ensure young people are better informed about their future
careers; a shift in emphasis on apprenticeships to make quality of courses a
higher priority than the numbers involved; and a clear focus in the
government’s forthcoming industrial strategy on creating more high-skilled
jobs.
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