NEWS,01.02.2013

Daimler boosts stake in China

German automaker Daimler unveiled plans Friday to boost its position in the fast-growing Chinese market by acquiring a 12% stake in the country's fifth-biggest car group.Daimler, which at the end of last year created a new position on its management board dedicated especially to China, said in a statement it had decided to deepen its existing partnership with Beijing Automotive Group (BAIC) by buying a stake in its passenger car unit BAIC Motor.BAIC is planning to float the subsidiary on the stock exchange and when it does so, Daimler would buy a stake of 12%, the German group said.As part of the agreement, Daimler would receive two seats on the BAIC Motor's board of directors.At the same time, the two sides would increase their stakes in existing joint ventures, they said.BAIC's holding in the production joint venture Beijing Benz Automotive Company (BBAC) would rise to 51 percent from 50 percent, while Daimler's stake in the integrated sales joint venture Beijing Mercedes-Benz Sales Service would be increased to 51 percent.Financial details were not disclosed. But Daimler and BAIC expect the deal  which still has to be approved by the relevant authorities -- would be closed "by the end of this year or early next year.""Following our technical cooperation with BAIC Motor and the setup of our integrated sales company, we are now taking the next step in deepening our relationship even further," said Daimler chief executive Dieter Zetsche."Our investment is a strong sign of the increased level of trust and cooperation between our two companies and clearly emphasises the long-term commitment to a joint successful future of our two companies," he said.BAIC chairman Xu Heyi said the partnership "has entered into its best phase ever, with further deepened cooperation in accordance with the mutual interests and development plans between both companies."Daimler's acquisition of a 12% stake "will go a long way in accelerating the development of BAIC's self-owned brand in terms of capital, technology, management, and brand. At the same time, this will help Mercedes-Benz to boost its business performance in China," Xu said.NordLB analyst Frank Schwope put the estimated price tag of the deal at €640m.He said Daimler has long been trailing rivals BMW and Audi, a unit of Volkswagen, in China, which is the world's most important market in terms of growth outlook.In 2012, Daimler, which employs more than 2 000 people in China, sold around 210 000 of its Mercedes-Benz cars there. It aims to lift sales to 300 000 by 2015 with two thirds of those manufactured locally.China is currently Daimler's third-biggest market after Germany and the United States, but is expected to become the German group's number one market by 2020.According to the China Association of Automobile Manufacturers or CAAM, BAIC is China's fifth-biggest maker with sales of 1.69 million vehicles last year.Investors nevertheless appeared somewhat sceptical about the deal and Daimler shares were underperforming the overall market on the Frankfurt stock exchange, edging up only 0.08 percent while the blue-chip DAX 30 index rose by 0.26 percent.

Eurozone inflation nears ECB goal

Eurozone inflation fell more than expected in January in a sign that companies were cutting prices to entice consumers at a time when joblessness remained at a record level at the end of 2012.The rate of consumer price inflation in the 17 countries using the euro fell to 2% in January compared to a year ago, the EU's statistics office Eurostat said on Friday.The reading, Eurostat's first estimate, was lower than the 2.2% level forecast by economists polled by Reuters, which was also December's level.Unemployment remained at a euro-era high of 11.7% in December, Eurostat also said, slightly lower than the 11.9% level expected by economists, but still higher than the European Commission's year-end 11.3% prediction.Inflation is now near the European Central Bank's target of close to, but below 2%, and along with record unemployment, gives the ECB room to cut interest rates again to stimulate the economy.But an improvement in eurozone business morale for the third straight month in January and better factory output suggest the bloc has passed the worst of its recession, meaning further ECB stimulus in the form of lower borrowing costs may not be necessary. "Inflation is non-existent," said Thomas Costerg, an economist at Standard Chartered in London. "Now with German inflation decelerating, that will fuel debate about how to do ECB's easing," he said, forecasting a cut in the ECB's main refinancing rate in the second quarter.The ECB's Governing Council kept rates on hold at its January meeting and will discuss rate policy again on February 7. The decision to keep policy on hold was unanimous last month, but economists are still divided over the ECB's next move. 38 out of 73 analysts polled by Reuters in January, said that the ECB will remain on hold in the first quarter. The ECB's task is also complicated by a divide between wealthier, northern countries which are showing signs of emerging from the eurozone's three-year debt crisis and countries such as Spain and Italy, that are in deep recessions."The story in the eurozone remains one of national divergence between the peripheries and the core," said Evelyn Herrmann, an economist at BNP Paribas in London, also pointing to a growing gap between the German and French economies.

 

Taiwan premier resigns over economy

Taiwanese Premier Sean Chen said Friday he has stepped down for health reasons, after the cabinet he heads came under fire for its poor handling of the economy."I have some health problems ... and I need to completely change my life and work style to reverse the situation," the 63-year-old finance expert told a press conference to announce his resignation."I believe that the economy will improve in the coming year. We have worked very hard on the planning for long-term issues and I hope everybody will continue to support the new team."Deputy premier Jiang Yi-huah, 53, a scholar-turned-politician and a former interior minister, will take over his job, Chen said.Chen's departure came as Taiwan's economy grew 1.25% in 2012 from a year ago at the slowest pace in three years due to shrinking exports. Chen, who previously headed the Financial Supervisory Commission, the main industry regulator, had a tense term since taking office as premier in early 2012.His cabinet frequently came under attacks over the sluggish economy and other controversial policies, with the opposition repeatedly demanding his resignation.Last year, Chen survived a parliamentary no-confidence vote - only the second in Taiwan history - over what opposition lawmakers deemed as his cabinet's failure to curb rising unemployment and inflation.Under Taiwan's political system the premier heads the cabinet and is appointed by the president.

'Rockstar' Clinton leaves lasting legacy

Hillary Clinton is stepping down as the top US diplomat firm in the belief she has restored America's global standing during her tenure that may also have traced a path to the White House in 2016.But as she sweeps out of the imposing buildings of the State Department for the last time on Friday, how will history judge her as secretary of state?How she stacks up against giants of American diplomacy like Henry Kissinger and James Baker and how she'll fill in the blank pages as she opens a new chapter in her life remain open questions.Clinton says she never once gave a thought to her legacy in the past four years. Instead, she just got up every day determined to work as hard as she could to promote America's interests.She now leaves office with the highest popularity rating of any of President Barack Obama's cabinet members, imbued with the title of "rock star diplomat" and with many saying she'll be the Democratic Party's strongest hope in the next elections, despite her constant denials that she is planning to run."Her contribution I think was fighting for resources for her own department, America's credibility in the world through her relentless travel, finding a 21st century agenda, I call it planetary humanism," said Wilson Centre vice president Aaron David Miller."These are important issues. They don't get you into the secretary of state hall of fame," Miller, a distinguished scholar who has served under six secretaries of state, said.Critics say Clinton cannot point to a signature issue achieved under her stewardship. The major challenges of the day - Syria, the new world order emerging from the Arab Spring, Iran's nuclear ambitions and the search for peace in the Middle East - she bequeaths to her successor John Kerry.Yet the Obama administration seized the opportunity to help prise open Myanmar, she showed effective diplomacy in negotiating the freedom of Chinese dissident Chen Guangcheng, helped the United States pivot its focus toward Asia and built a solid alliance in support of biting sanctions against Iran.And Clinton brought to Obama's administration her charisma, celebrity status and a willingness to travel, believing that even in this interconnected world, face-to-face meetings remain one of diplomacy's most important tools."Secretary Clinton, because of her celebrity and popularity, has been a great secretary of state from that respect. People are thrilled to meet with her. She's probably second best to meeting with Obama," said Isobel Coleman, senior fellow at the Council on Foreign Relations.Even hardened politicians found it hard to resist her charms, British Foreign Secretary William Hague revealed during a dinner in her honour."There is a wonderful stillness that descends on large halls full of diplomats and ministers the moment Hillary enters the room," he said.Hague praised Clinton's "infectious spirit of optimism, opportunity and hope" as well as her faith "in the power of friendship and persuasion".In pursuit of diplomacy, Clinton has travelled exactly 1 539 712.5km, visiting about 112 countries. She was the first US secretary of state ever to visit Togo, and the first in over half a century to fly into Laos."Remember what we faced in January 2009: Two wars. An economy in freefall. Traditional alliances fraying. Our diplomatic standing damaged," she told the Council on Foreign Relations on Thursday."And around the world, people questioning America's commitment to core values and our ability to maintain our global leadership."That was my inbox on day one as secretary of state."Four years on, while the world "remains a dangerous and complicated place", much has changed, Clinton argued, saying "we've revitalised American diplomacy and strengthened our alliances".Those dangers were highlighted by the September attack on the US mission in Benghazi, Libya, in which the ambassador Chris Stevens and three other Americans were killed.Whether the attack, and the scathing criticism of security failures by the State Department, will taint her career in the long-term is too soon to tell.Many argue that Clinton's emphasis on what she calls "soft power" - her unrelenting focus on women's rights, development issues, economic statecraft and lesbian and gay rights - may well be what she's remembered for."As a long-term enduring legacy, I think I'd feel prouder about that than having invaded another Middle Eastern country," Coleman said.Observers also point to Europe's renewed faith in America, after Clinton made 42 trips to the continent during her time in office."In 2009, everything needed to be rebuilt... she has succeeded in restoring America's image in the world. She has marked the return of multilateralism," a western diplomat said in an interview.Tyson Barker, director of transatlantic relations at the Bertelsmann Foundation North America, agreed that "Europe loves Hillary Clinton, and she's spent a lot of time here investing in that relationship."She has really carried the torch for reconciliation and European integration."

Japan PM vows new statement on WWII

Japan's hawkish Prime Minister Shinzo Abe told lawmakers on Friday he intends to release a new statement on World War II, a move that could cause friction with neighbouring nations including China."I would like to announce a future-orientated statement that will suit the 21st century," Abe said. "On the timing and the content I'd like to think thoroughly hereafter."The nationalist premier said he wanted to update a landmark statement issued in 1995 by then-prime minister Tomiichi Murayama, seen as a key step in what many Asian nations say was Japan coming to terms with its brutal history.The statement said Japan "through its colonial rule and aggression, caused tremendous damage and suffering to the people of many countries, particularly to those of Asian nations", adding the premier feels "deep remorse" and offers a "heartfelt apology".Abe said on Friday he was in agreement with previous sentiments, adding: "Japan in the past caused great damage and suffering to many countries, particularly in Asia. The Abe cabinet shares that recognition with past cabinets."In a possible hint the statement may come in 2015, he said: "The so-called Murayama statement was issued to commemorate 50 years after the war, and 60 years after the war the [Junichiro] Koizumi administration issued a statement."Neighbouring countries that came under the yoke of Japan's military tyranny in the first half of the 20th Century, notably China and South Korea, chafe at the idea of Japan reneging on its apology, which both insist was insufficient anyway.

NEWS,21.12.2012

Obama nominates Kerry for Secretary of State

President Barack Obama has announced the nomination of US Senator John Kerry to replace Hillary Clinton as Secretary of State, calling him the "perfect choice" to guide American diplomacy in the years ahead.Obama settled on Kerry, chairman of the Senate Foreign Relations Committee and the 2004 Democratic presidential candidate, after UN Ambassador Susan Rice withdrew from consideration last week.He said he expected quick Senate confirmation of the Massachusetts lawmaker."As we turn the page on a decade of war, he understands that we have to harness all elements of American power," Obama said at the White House.Even as Obama put in place one important piece of his revamped national security team, he held off on naming a new defense secretary.The delay comes in the face of a growing backlash from critics of former Republican Senator Chuck Hagel, considered a leading candidate to replace Leon Panetta at the Pentagon.Kerry, 69, a stalwart Obama supporter known to have long coveted the job of America's top diplomat, will take over from Clinton, who has been consistently rated as the most popular member of the president's cabinet.But he will also have to pick up the pieces after a scathing official inquiry found serious security lapses by the State Department in the deadly September 11 attack on the US consulate in Benghazi, Libya a report that has tarnished the final days of Clinton's tenure.Kerry's nomination follows a political firestorm that engulfed Rice, seen as the early favorite for the State job, spearheaded by Republicans fiercely critical of her role in the administration's early explanations for the Benghazi assault.Rice, defended by Obama, said last Thursday she was withdrawing her name from consideration to avoid a potentially lengthy and disruptive confirmation process.Kerry, known nationally through his presidential run and for his role as a Democratic power broker in the Senate, offers no such challenges.The selection of Kerry sets a pragmatic tone as Obama begins reshaping his national security team, which will include a new CIA director.Kerry will be the leading Cabinet member charged with tackling a range of thorny global challenges, including Middle East upheaval, Iran's nuclear standoff with the West and winding down the war in Afghanistan all at a time of fiscal austerity at home. 

US economy showing 'surprising' signs of resilience

The US economy showed surprising signs of resilience in November despite the approach of the so-called fiscal cliff, as consumer spending rose by the most in three years and a gauge of business investment jumped. Consumer spending rose 0.6% when adjusted for inflation, while new factory orders for capital goods outside the defence and aerospace sectorsa proxy for business spending plans jumped 2.7%, the Commerce Department said today.Economists had pinned earlier weakness in investment plans on worries lawmakers and the White House might fail to strike a deal to avoid the brunt of tax hikes and government spending cuts scheduled to begin in January.They also worried consumers would hold back as the end-of-the-year deadline approached with both parties far apart on how to avoid the potential hit to the economy. But today's data suggests both consumers and businesses had mostly shrugged off the cliff, at least in November."It appears that the looming fiscal cliff hasn't been nearly as disruptive as we had feared," said Paul Ashworth, an economist at Capital Economics in Toronto. Still, another report provided ample reason for caution as US consumer sentiment slumped in December, with households apparently rattled by on-going negotiations to lessen the fiscal tightening that could easily trigger a recession next year. The Thomson Reuters/University of Michigan's final index of consumer sentiment in December tumbled more than expected to 72.9 from 82.7 a month before. US stocks fell sharply after a Republican proposal for averting the fiscal cliff was abandoned late yesterday, eroding optimism that a deal could be reached quickly. At the same time, US government debt prices rallied and the dollar gained ground as investors sought a safe haven. Economists still expect economic growth to cool in the fourth quarter as companies slow the pace at which they have been re-stocking their shelves, but the data suggests consumers are offsetting some of that drag. Consumer spending is on track to grow at a 2.2% annual rate in the fourth quarter, faster than during the prior three months, said Michael Feroli, an economist at JPMorgan in New York. Forecasting firm Macroeconomic Advisers raised its forecast for fourth-quarter economic growth by four tenths of a point to a 1.4% annual rate. In the third quarter, the economy expanded at a 3.1% rate. "The economy is holding in here at the end of the year despite the concerns about the fiscal cliff," said Gary Thayer, an economic strategist at Wells Fargo Advisors in St. Louis. Those concerns are not going away. In November, many analysts on Wall Street said they expected Washington would largely avert the fiscal cliff, and optimism had grown over the last week that a deal was within reach. Since Wednesday, however, negotiations have fallen into disarray. If Congress and the White House do not reach a deal in time, taxes will go up for all Americans beginning in January and the government will cut spending on a host of programs. Running off the fiscal cliff would slash the nation's trillion-dollar budget deficit nearly in half in just one year. The impact would only come gradually, but economists expect it would be enough to knock the country into recession in the first half of the year. So far, uncertainty over the talks appears to have had only a limited impact on the economy. New orders for durable goods, items meant to last three years or more, rose a greater-than-expected 0.7% in November due to gains in machinery, fabricated metal products, and computer and electronic products. Those increases were offset by a decline in volatile aircraft orders. The report also showed a rise in shipments, brightening the prospects for fourth-quarter economic growth. Shipments of non-defence capital goods orders excluding aircraft, used to calculate equipment and software spending in the government's measures of gross domestic product, gained 1.8%, after rising by a softer 0.6% in October.

Brazil to privatise airports

Brazilian President Dilma Rousseff on Thursday announced that airports in Rio and Belo Horizonte, two host cities for the 2014 World Cup, will be privatized during a September 2013 auction."International experience shows that airports are good business," Rousseff said, recalling that last February, 20-year concessions were granted to manage three airports, two in Sao Paulo and one in Brasilia.Brazil, a continent-sized country of 194 million people, is seeking to upgrade its creaking infrastructure ahead of the 2014 World Cup.The previously granted concessions, valued at a total of $14bn, will upgrade congested terminals in preparation for handling the tens of thousands of tourists expected for the World Cup. Rousseff said Thursday that any private entities participating in the September auctions will have to include at least one international partner "with experience in running an airport handling at least 35 million passengers a year."This operator must have "at least a 25% stake" in the consortium.Companies with majority stakes in operations of other airports will not be allowed to take part in next year's auction. Rousseff said Brazil was now a "middle class country" in which more and more people will fly, including many of the "40 million Brazilians lifted out of poverty over the past decade".Civil Aviation Minister Wagner Bittencourt said the government hopes to raise $5.7bn through the concessions: $3.3bn for Rio's Tom Jobim airport and $2.4bn for Belo Horizonte's Confins airport.Brazil has announced huge investments in airport, highway and rail projects in partnership with the private sector to modernize its creaking infrastructure and jumpstart a sluggish economy expected to grow a mere one percent this year.Bittencourt said that in an initial phase, the government plans to invest $3.6bn to modernize 270 small airports. The longer term objective is to upgrade 689 public airports, he added.Experts meanwhile warn that the aviation sector has to contend with higher taxes and fuel costs, inadequate infrastructure and a leveling-off of demand."2012 can be seen as the worst year for commercial civil aviation," Paulo Kakinoff, president of Gol, the country's second biggest airline, said last week."This is due to a series of factors: a nearly 60 percent hike in fuel costs, the 10% depreciation of the real in relation to the dollar, higher taxes and new taxes."