Chinese growth lowest in 28 years as Davos gets under way – business live

China 0 Comment 0

Official data show China’s economy grew 6.6% last year as the world’s global elite head to the World Economic Forum

10.49am GMT

Over in Japan, the former Nissan chairman Carlos Ghosn has offered to wear an electronic ankle tag and hire security guards to track his every move, in another bail request.

Ghosn is awaiting trial on financial misconduct charges and has been in jail since he was arrested on 19 November. The Tokyo district court has already turned down one bail request, believing Ghosn to be a flight risk and that he could tamper with evidence over allegations that he underreported his income by tens of millions of dollars and transferred personal investment losses to Nissan.

Related: Carlos Ghosn offers to wear ankle tag if he is granted bail in Japan

9.38am GMT

The pound has slipped before Theresa May lays out her “Plan B,” designed to break the deadlock in parliament over Brexit.

Sterling is down 0.2% against the dollar at $1.2847, and has lost 0.3% versus the euro, trading at 88.53 pence.

It is generally understood that the revised plan for a negotiated Brexit involves asking the EU for changes, in the ‘back stop’ arrangement; but being one of the Union’s ‘red lines’, it is unlikely that any proposed changes to the controversial arrangement will be accepted.

Therefore, the chances of any substantial developments in the process this Monday are slim and because of the that, sterling is likely to remain where it has been for the last week, just above $1.28, with traders pricing in comparatively low chances of a no deal Brexit, but also reflecting a large degree of uncertainty regarding the outcome of the negotiations.

9.13am GMT

William Hill has warned (again) that full year profits will be down 15% from 2017, totalling £234m. The bookmaker already cut its profit forecast in November.

The company said it would “remodel [its] retail offer while building a digitally-led international business”. It is looking at new products to offer alternatives to fixed-odds betting terminals, following the UK government’s decision to slash maximum stakes on FOBTs from £100 to £2. William Hill is also closing 900 betting shops in the UK, as announced last summer.

8.59am GMT

The chief executive of Just Eat, Peter Plumb, has left abruptly. The takeaway ordering website announced he had stepped down with immediate effect – just 16 months after joining the firm from MoneySavingExpert.com.

Chief customer officer Peter Duffy will run the business until a permanent replacement is found. The shares dropped 3% on the news but are now slightly up.

2018 was another year of strong growth for the group. The business is in good health, and now is the right time for me to step aside and make way for a new leader for the next exciting wave of growth.

8.51am GMT

The troubled cafe chain Patisserie Valerie issued a statement this morning, saying that talks with its banks continue and it will give an update when they are concluded. The chain is fighting for its survival.

Luke Johnson, Patisserie Valerie’s leading shareholder, has been seeking to extend a standstill agreement on its bank facilities, which officially expired at midnight on Friday.

Related: Patisserie Valerie could collapse this week if last-ditch talks fail

8.43am GMT

Here’s a round-up of this morning’s corporate news.

GlaxoSmithKline’s chairman Sir Philip Hampton is to step down ahead of the company’s split, which will see it spin off its consumer healthcare business in a £10bn joint venture with its US rival Pfizer. The board has started looking for a successor. Hampton has been chairman of Britain’s biggest pharmaceutical company since 2015. Before that, he chaired Royal Bank of Scotland.

It is a privilege to serve as chairman of GSK. It is one of the UK’s great companies and under Emma Walmsley’s leadership, GSK has made very good progress with a new strategy and new approach to R&D. Following the announcement of our deal with Pfizer and the intended separation of the new consumer business, I believe this is the right moment to step down and allow a new chair to oversee this process through to its conclusion over the next few years and to lead the board into this next phase for GSK.

8.34am GMT

European stock markets slipped in early trade after hitting six-week highs last week, slightly unnerved by the Chinese slowdown. In London, the FTSE 100 index opened 0.1% lower but is now 0.13% ahead, a gain of 9 points, to 6977.80.

8.27am GMT

Some say China’s problems are much deeper than the trade war, noting that productivity growth has been weak since the financial crisis.

Bloomberg writes:

This, along with flagging population growth, is a toxic economic combo. Meanwhile, the growing antagonism of China’s trading partners is closing off access to cutting-edge technology.

Since the crisis, Beijing has deployed bursts of credit-based stimulus to keep the economy moving. But this might feed the longer-term problem, [Bloomberg columnist] Noah Smith suggests, by pumping capital into local governments and pricey building projects that don’t boost productivity. Far more than Trump, China may be stunting its own economic future.

8.22am GMT

Hussein Sayed, chief market strategist at forex broker FXTM, says hopes of a US-China trade deal are propping up stock markets.

Despite the complex situation, it seems markets are tending to believe that negotiations are moving in the right direction and this is likely to provide further support to risk sentiment.

The release of Chinese GDP figures, which showed the economy has grown at its slowest pace in almost three decades, was not a surprise and this has been factored into asset prices.

8.21am GMT

Although Donald Trump denied reports that US tariffs on Chinese exports would be lifted, he said on Saturday that there has been progress towards a deal with China.

“Things are going very well with China and with trade,” he told reporters at the White House.

If we make a deal certainly we would not have sanctions and if we don’t make a deal we will.

We’ve really had a very extraordinary number of meetings and a deal could very well happen with China. It’s going well. I would say about as well as it could possibly go.

8.08am GMT

From @Breakingviews – China’s economy is cooling faster than Beijing wants, but not fast enough to warrant the aggressive monetary and fiscal steps some bureaucrats, and many investors, would like. For now, expect more talk than action: @cbeddor https://t.co/jO6LQ5j8y1 pic.twitter.com/kR52xe2ff5

China’s econ data is trash. But that misses the point: growth is decelerating, and after years of rapid expansion the rest of the world is not remotely insulated from a slowdown https://t.co/s7tDuDnYyc pic.twitter.com/KosrDkect5

8.04am GMT

Here is some reaction to the Chinese GDP data.

ING economist Iris Pang says:

The details show that the infrastructure investment is shaping up to be the engine for 2019. However, non-infrastructure business activities will be dismal this year. And debt will grow.

Industrial production grew faster at 5.7% year-on-year in December from 5.4%YoY. However, again, when we look at the details, we find that capital expenditure related items are shrinking, not growing. For example, industrial robot production shrank 12.7%YoY.

Even though there are some signs of hope stemming from the negotiations on US-China trade, we believe that both sides will only agree on certain standard trade issues. However, the more important topics in the trade talk, intellectual property and the transfer of technology, are much more difficult to reach agreement on. And Liu He will not be able to decide on these topics alone. That’s why we believe that by 1st March 2019, the trade talks may only have agreements on trade but not technology.

In this case, there will be increasingly more developed economies, or even emerging economies, trying to ban the use of China-made electronic components and goods. That will hurt the production sector of electronics in China, and the prices of these items will fall in China.

7.40am GMT

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

China’s economic growth slowed to its slowest pace in 28 years in 2018 after years of rapid expansion, amid a damaging trade war with the US and weaker consumer spending. Official data out on Monday showed the world’s second-biggest economy grew 6.6%, down from 6.8% in 2017 and the lowest rate since 1990.

Related: China’s economic growth slowest since 1990 amid trade war with US

Continue reading…
Source: china
Link : Chinese growth lowest in 28 years as Davos gets under way – business live

Author

Leave a comment

Search

Back to Top