NEWS,14. AND 15.08.2013

China probe could target oil firms, banks

China's powerful price regulator could target the petroleum, telecommunications, banking and auto sectors next in its investigations into violations of the country's anti-trust laws, state media quoted a senior official as saying.
The National Development and Reform Commission (NDRC) would look at industries that have an impact on the lives of ordinary Chinese, China Central Television (CCTV) quoted Xu Kunlin, head of the anti-monopoly bureau at the NDRC, as saying on one of its programmes.
The NDRC has launched nearly 20 pricing-related probes into domestic and foreign firms in the last three years, according to official media reports and research published by law firms.
But the scope of its investigations in the world's second-biggest economy have gathered pace in recent months and coincide with criticism in official media about the price of goods such as milk powder, medicine, luxury cars and jewellery.
"When you look at activities around the world, regulators tend to investigate sectors where their investigations can have a direct impact on consumers and that will look good," said Sebastien Evrard, Beijing-based partner at law firm Jones Day, which specialises in anti-trust law.
Last week the NDRC fined six milk powder firms for anti-competitive behaviour. It is also investigating 60 foreign and local pharmaceutical companies over pricing and costs.
Companies in the petroleum, telecommunications, banking and auto sectors were on the NDRC's radar for future investigations, CCTV's official blog quoted Xu as saying.
Xu gave a hypothetical example, saying that if banks fixed deposit or lending rates if and when China liberalised its interest rate regime, such behaviour could prompt an investigation.
CCTV gave no other details and NDRC officials could not be reached for comment.
China has been taking incremental steps towards liberalising interest rates. Last month the central bank removed controls on bank lending rates, giving commercial banks the freedom to compete for borrowers.
Evrard said that while telecoms companies and fuel prices were often the target of regulators around the world, they would not be obvious choices in China because of the involvement of state-owned companies.
State-owned majors PetroChina , Sinopec Corp and CNOOC Ltd dominate China's oil and gas industry, both upstream and downstream.
Domestic fuel prices are also set by the NDRC.
The country's three biggest telecom firms  China Unicom Ltd , China Mobile Ltd and China Telecom Corp Ltd are state-owned.
Similarly, the top four banks are controlled by the state.
The China Automobile Dealers Association told earlier this week that its officials were collecting data on the price of all foreign cars sold in the country for the NDRC.
The State Administration for Industry and Commerce (SAIC), a regulator in charge of market supervision, kicked off a separate three-month investigation into bribery in the pharmaceutical and medical services sector on Thursday.
Foreign executives and bankers in China say the various investigations are a hot topic of discussion but many are still puzzled by the motivation behind the probes and whether they will impact their business.

Europe online sales seen doubling - poll

Online retail sales in Europe are seen doubling by 2018 to €323bn  ($428.51bn) with Amazon.com expected to grow even faster than that, market research firm Mintel said.
In a survey of 19 markets in Europe made exclusively available, Mintel predicted that online sales would grow to €188bn in 2013 from €166bn in 2012.
Mintel said Germany, Britain and France would remain by far the biggest markets for online retail by 2018, although the Netherlands, Spain and Poland should grow at a faster rate and Norway and Sweden have the highest online per-capita spend.
"There is a big North-South divide in e-commerce in Europe," said Mintel European retail analyst John Mercer, noting French participation levels lag Britain and Germany by five years and Spain, Greece, Portugal and Italy are even further behind.
Mintel said Amazon is extending its lead on the continent, growing market share to 9.8% in 2012 from 9.2% in 2011, while Germany's Otto, its next closest rival, saw its share slip to 3.3% from 3.9%.
Mintel predicted Amazon could double its Europe-wide market share in the next three to four years despite negative publicity in Britain over its low tax bills and in Germany prompted by strikes at its distribution centres.
Mercer said Amazon was performing strongly despite having only five dedicated country websites in Europe - in Britain, Germany, France, Spain and Italy.
"Italy is a tiny market. Perhaps it would be more worthwhile to have launched dedicated sites for the Nordics," he said. "In terms of spend per capita, the Nordics are much higher."
Mintel said it would still be 2021 before Amazon overtook Germany's Schwarz group, owner of Lidl discount stores, as Europe's biggest retailer, assuming current trends continue.
Amazon last month forecast disappointing income and revenue as it grapples with a weaker international market, overshadowing improving profitability and economic conditions in the United States.
British grocers are also well represented in Mintel's European top 10, with Tesco holding its market share steady at 2.3% and Walmart-owned Asda and Sainsbury on 1.1% and 0.9% respectively, reflecting the popularity of online grocery shopping in Britain.
"In mainland Europe, online shopping is largely non-grocery," Mercer said. "That is not going to change fast."
The Mintel report said Britain and France have the strongest demand for buying online and collecting in-store, a trend yet to take off for Germans, who prefer their goods to be delivered.

Solar tax angers Spaniards

Two weeks after Spain's government slapped a series of levies on green energy, Inaki Alonso hired two workmen to remove the solar panels he had put on his roof only six months earlier.
Alonso, an architect who specialises in ecological projects, calculated the cost of generating his own power under a new energy law and decided the numbers no longer added up.
Neither was it possible to leave the panels on his Madrid home without connecting them to the electricity grid; that would have risked an astronomical fine of between €6m and €30m ($8m to $40m).
"The new law makes it unviable to produce my own clean energy," Alonso said.
Spain's conservative government announced a reform of the energy system last month, including the "support levy" on solar power in a country blessed with abundant sunlight.
Imposed by decree, the reform aims to raise money for tackling a €26bn debt to power producers which the state has built up over the years in regulating energy costs and prices. The solar levy was fixed at 6 euro cents per kilowatt-hour.
Under the constitution, the government can impose emergency measures by decree and has done so repeatedly since it came into office in late 2011.
With Spain in economic crisis, power consumption is falling but the energy debt will continue growing by €4bn to €5bn a year unless the government takes action.
Utilities such as Iberdrola, Endesa and Gas Natural have attacked other revenue-raising measures in the reform.
However, Spaniards who have generated power independently for their own homes under a system known as "autoconsumo" are among the hardest hit by policies which they say punish, rather than encourage, energy efficiency.
Industry Minister Jose Manuel Soria accepts the measures are painful but says they are needed to plug the energy deficit.
"I support 'autoconsumo' ... but the power system has infrastructure, grids that the rest of us Spaniards who are in the system have to pay for. And we pay for it through our electricity bill," said Soria.
As a decree law, the measures are unlikely to undergo much scrutiny in parliament where the ruling People's Party has an outright majority, meaning the opposition cannot force a debate.
Green savings crack-down
Spain imports over 80% of its energy needs, spending more than €40bn - or about 4.5% of gross domestic product - a year.
Supporters of solar power says the government ought to be supporting the industry to cut this bill and achieve renewable energy targets set by the European Union.
Soria announced the measures just as home-produced solar power had become increasingly attractive compared with electricity supplied over the grid by traditional utilities.
In the past, the high cost of solar panels discouraged many consumers from taking the plunge, but prices have more than halved in the last three years.
A 240-watt solar panel kit, enough to power household appliances, is now available on the Internet for as little as 500 euros.
Under the old regime, Spanish consumers could recover a typical €1 600 to €2 100 investment in solar panels through savings on their utility bills in about five years.
According to FENIE, an association for solar panel installations, this will jump to 17 years when the levies are imposed under the new law.
Moreover, the law does not allow homeowners to sell electricity they do not need back to the grid, a common practice in other countries such as Germany.
Spain's climate offers huge potential for solar power. In Germany, a four-person household can cut its consumption of power from the grid by 30% by using panels.
In Spain, which has among the highest electricity prices in Europe, the figure is three times that - offering big savings for consumers hit by the recession and 26% unemployment.
Solar rebels
In the end, Alonso moved his solar panels to a friend's house deep in the Spanish countryside. This was far enough from the nearest mains supply to be exempt from the stipulation that panels must be hitched up to the grid.
Apart from people in isolated communities, Spaniards must connect their panels to the grid within two months. This allows their solar power production to be metered remotely - and taxed.
However, some panel owners plan to rebel by ignoring the government's deadline, confident the courts would hesitate to uphold the huge fines. These were laid down in an old 1997 energy law and, while possibly appropriate for a large corporation, no private individual could ever pay them.
"If I spend €600 to install solar panels and get fined €6m, let the judge decide," said Sergio Pomar, chief executive of energy-efficient installation firm INEL.
Courts already expect a series of legal challenges to other elements of the reforms, which investors in renewable energy says renege on the terms of their investment.
Teresa Ribera, senior adviser to the Paris-based Institute for Sustainable Development and International Relations (IDDRI), said the law could provoke civil disobedience.
"This law is illogical in terms of energy efficiency and costs ... and is a serious invitation by the government for citizens to become anti-system," she said.
She dismissed the idea that independent solar power producers should pay for costs such as running the grid and subsidising other energy forms. "It's like asking cyclists to pay a levy to keep open the petrol stations they don't use," said Ribera, who served as secretary of state for the environment under the former Socialist administration.
Backtracking on renewables
Ribera said the law is a setback for Spain in the competitive renewable energy industry, where it was once a frontrunner.
It also threatens to prevent Spain from meeting an EU goal of producing 20% of its energy from renewable sources by 2020.
"If we continue burning more coal and stop installing renewables capacity, the targets are at risk," said renewable energy advocate Mario Sanchez.
Javier Garcia Breva, chairman of Spain's renewable energy foundation, said the country had to cut its energy import bill. "Failing to support energy efficiency will only make these costs go up," he said.

China targets many sectors in price probe

China's powerful price regulator could target the petroleum, telecommunications, banking and auto sectors next in its investigations into violations of the country's anti-trust laws, state media quoted a senior official as saying.
The National Development and Reform Commission (NDRC) would look at industries that have an impact on the lives of ordinary Chinese, China Central Television (CCTV) quoted Xu Kunlin, head of the anti-monopoly bureau at the NDRC, as saying on one of its programmes.
The NDRC has launched nearly 20 pricing-related probes into domestic and foreign firms in the last three years, according to official media reports and research published by law firms.
But the scope of its investigations in the world's second biggest economy have gathered pace in recent months and coincide with criticism in official media about the price of goods such as milk powder, medicine, luxury cars and jewellery.
"When you look at activities around the world, regulators tend to investigate sectors where their investigations can have a direct impact on consumers, and that will look good," said Sebastien Evrard, Beijing-based partner at law firm Jones Day, which specialises in anti-trust law.
Last week the NDRC fined six milk powder firms for anti-competitive behaviour. It is also investigating 60 foreign and local pharmaceutical companies over pricing and costs.
Companies in the petroleum, telecommunications, banking and auto sectors were on the NDRC's radar for future investigations, CCTV's official blog quoted Xu as saying.
Xu gave a hypothetical example, saying that if banks fixed deposit or lending rates if and when China liberalised its interest rate regime, such behaviour could prompt an investigation.
CCTV gave no other details and NDRC officials could not be reached for comment.
China has been taking incremental steps towards liberalising interest rates. Last month the central bank removed controls on bank lending rates, giving commercial banks the freedom to compete for borrowers.
Evrard said that while telecoms companies and fuel prices were often the target of regulators around the world, they would not be obvious choices in China because of the involvement of state-owned companies.
The country's three biggest telecom firms China Unicom Ltd , China Mobile and China Telecom  are state owned.
Similarly, the top four banks are controlled by the state. And the price of oil in China is set by the government.
The China Automobile Dealers Association told earlier this week that its officials were collecting data on the price of all foreign cars sold in the country for the NDRC.
The State Administration for Industry and Commerce (SAIC), a regulator in charge of market supervision, kicked off a separate three-month investigation into bribery in the pharmaceutical and medical services sector on Thursday.
Foreign executives and bankers in China say the various investigations are a hot topic of discussion but many are still puzzled by the motivation behind the probes and whether they will impact their business.

Smartphones top mobile sales - poll

Smartphones took a majority of mobile phone sales worldwide for the first time in the April-June quarter, a survey showed on Wednesday.
The report by the research firm Gartner found smartphone sales totaled 225 million in the second quarter, or 51.8% of all mobile phones sold in the period.
It was the first time smartphone sales exceeded those of feature phones, which are more basic phones with limited or no access to the Internet and applications.
The survey found Samsung remained the leading vendor of smartphones and all mobile phones, and that the Google Android system solidified its position with a 79% share of smartphones sold.
Gartner said Windows Phone, the mobile operating system from Microsoft, moved into third place with a 3.3% share, ahead of troubled BlackBerry, whose share slid to 2.7%.
"While Microsoft has managed to increase share and volume in the quarter, Microsoft should continue to focus on growing interest from app developers to help grow its appeal among users," said Anshul Gupta, a Gartner analyst.
Apple's iOS, the operating system for the iPhone, remained second with a 14.2% share, down from 18.8% a year earlier.
Gartner said Apple's average prices dropped because many of its phones sold were older, discounted models of the iPhone. This "demonstrates the need for a new flagship model," Gupta said, but added that "it is risky for Apple to introduce a new lower-priced model too."
Gartner's data showed Samsung sold 71.3 million smartphones in the quarter, representing a market share of 31.7%.
Apple was second with 31.9 million, followed by South Korea's LG, with 11.4 million and a share of 5.1%, and China's Lenovo and ZTE.
Samsung was also the top seller of all mobile phones, with a total of 107 million in the period, or 24.7%. Finland-based Nokia was second with a market share of 14% and 60.9 million phones sold, Gartner said.

UK flirts with a new house price bubble

Britain is flirting with another runaway rise in house prices, according to a poll of economists, with a firm majority putting the chances at 50-50 or higher over the next five years.
Despite those concerns, there was a clear consensus that the recent improvement in data heralds a sustainable economic recovery for the UK, which has struggled over the last three years to escape recession.
A clear pick-up in Britain's housing market, accelerated by the government's "Help to Buy" programme introduced in this year's Budget and other measures to boost lending, is a sign of rising confidence in the economy.
But with the last housing boom of 1997-2007 still fresh in the mind, there are concerns that Britain is falling back into the same mentality that led to a tripling of the average house price in 10 years.
Only nine out of 29 economists surveyed since Friday said the prospect of another house price bubble - whereby prices rise so fast they would be vulnerable to a sharp correction - is small. The other 20 were split between seven describing the risk as even, 11 as likely, and two as very likely.
The sample comprises economists working for major banks, and research institutions and consultancies.
Danny Gabay, economist at Fathom Financial Consulting, said media talk of a new housing bubble wasn't very helpful, and that rising house prices are not intrinsically a bad thing.
"We're not concerned about a new housing bubble, we're concerned about the fact we never worked off the last one before they began to re-inflate it," he said.
"We've stopped any attempt at any of the repair work that is essential for this economy to be able to heal properly."
Sustainable economic recovery
A July survey from the Royal Institution of Chartered Surveyors showed the fastest growth in house prices since 2006. Official data showed house prices in London, which typically lead the rest of the country, jumped 8.1% in June compared with the same month a year ago.
Despite declining sharply in 2008 and 2009 after Britain and other advanced economies plunged into severe recession, UK house prices have remained overvalued compared to economic fundamentals, according to every quarterly UK housing market poll since then.
Gabay argues that not only have the government and the Bank of England stopped the process of deleveraging, they're now encouraging homebuyers to take on more debt.
British Finance Minister George Osborne said last month that the "Help to Buy" programme - which provides government-backed equity loans to first-time buyers and people moving to new-build houses worth up to £600 000 pounds ($927 700) - was a targeted response to a malfunctioning mortgage market. He dismissed concerns property prices had become a one-way bet.
"I don't think in the current environment a house price bubble is going to emerge in 18 months or three years," Osborne told parliament.
Bank of England Governor Mark Carney, asked last week at a press conference about the prospect of another housing bubble, did not address whether or not that was a risk for the economy. He said the market should be put into context: mortgage applications are still well below historic averages.
Rising house prices would support economic recovery as they make homeowners feel wealthier and more likely to spend.
The poll showed the UK economy is likely to improve further from here over the next 18 months at least.
The vast majority of respondents, 30 of 35, said upbeat purchasing managers indexes, burgeoning consumer confidence and an improving retail outlook all pointed to the battered economy getting back on track.
Britain's economy is expected to grow by between 0.4 and 0.5% per quarter from here through to the end of next year, with the consensus barely changed from last month's poll, although the outlook is not without risks.
"Though sustainable, the prospective recovery is likely to face headwinds from the euro zone, a weak UK credit system and the economy's structural problems - over-reliance on finance, lack of skills," said Stephen Lewis, chief economist of Monument Securities.

NEWS,29.07.2013

Amazon hiring thousands of people

Amazon announced plans Monday to add 5 000 full-time jobs at 17 facilities in the United States and to hire more than 7 000 workers as it beefs up its customer-service network.
The online retail giant is creating jobs as it expands its distribution network to speed up deliveries. The facilities in 10 states across the country, from South Carolina to California.
Amazon said that more than 5 000 jobs were now available across its warehouse network, touting pay that is 30% higher than that of traditional retail stores.
"In the last year alone, Amazon opened eight fulfillment centers in the US, resulting in thousands of new jobs being added to communities nationwide," the company said in a statement.
The Seattle-based retailer also said it was currently hiring in four states for more than 2 000 jobs in its customer service network, which includes a mix of full-time, part-time and seasonal jobs.
Amazon shares fell 0.9% in morning trade in New York.

China agrees to talks on wine dispute

China and the European Union have agreed there is a "window for discussions" to try to resolve accusations that Europe is dumping wine in China, the EU's trade chief said on Monday.
The agreement is part of a deal announced at the weekend to defuse a row over dumping of Chinese solar panels in Europe, the biggest trade dispute yet between the two economies.
Responding to the EU's initial plan to impose punitive duties on solar panels, China launched an anti-dumping inquiry into European wine sales, which would lead to retaliatory duties on exporters in France, Spain and Italy.
"There is a window for discussions between the European Union and Chinese (wine) producers," EU Trade Commissioner Karel De Gucht told a news conference. "The Chinese government has promised to facilitate such discussions," he said.
EU and Chinese diplomats expect the wine dispute, as well as another conflict over EU exports of polysilicon a raw material for solar panels to be dropped as a goodwill gesture.
China is the world's biggest importer of Bordeaux wines and consumption soared 110% in 2011 alone.
China's commerce ministry could not confirm any freeze to the EU wine investigation, the website associated with the Communist Party mouthpiece the People's Daily reported on Monday, citing an unnamed official.
A lawyer representing the Chinese industry association that filed the wine complaint said the firm had not received any notice on the freezing of the probe, the website www.people.com.cn said.
"The relevant investigation is still proceeding regularly," Yao Fengwen, a lawyer with Bo Heng (Beijing B&H Associates) law firm, told the site.
Germany's Wacker Chemie is the world's second biggest maker of polysilicon and would be hurt by any tariffs in China.

Foreign firms win $22.5bn Saudi contracts

Saudi Arabia has granted three foreign consortium's contracts worth $22.5bn (€16.9bn) to build a Riyadh metro, the kingdom announced at a news conference in the capital late Sunday.
The consortiums are led by US, Spanish and Italian firms.
The 176-kilometre (110-mile) six-line network is aimed at easing chronic traffic congestion in Riyadh, a city of six million people.
A consortium led by US engineering giant Bechtel Corp will construct two lines worth $9.45bn, the official SPA news agency reported.
Spanish BTP-FCC consortium will build three of the metro lines for $7.88bn, after it beat competition from South Korea's Samsung, France's Alstom and Freyssinet, and Dutch group Strukton to secure the deal.
Another line costing $5.21bn went to Italy's Ansaldo.
The lines are planned to stretch across the capital and serve the airport and the future King Abdullah Financial District.
Oil-rich Saudi Arabia also plans to invest billions of dollars in rail networks linking major cities across the vast desert kingdom.
The kingdom already has a 449-kilometre passenger line between Riyadh and Dammam in Eastern Province, with a parallel freight line linking the capital with the Gulf coast city.

Focus on emerging markets

Fickle investors have spurned emerging markets in recent weeks, but this route has obscured a more alluring vista out on the horizon.

Developing economies now account for 50% of global output and 80% of economic expansion, and are projected to continue growing far faster than developed nations. They are expected to possess an even larger share of global growth, wealth and investment opportunities in years to come.
So much so that the labels investors use to classify some of these nations will change as the developing develop and the emerging emerge into more potent economic powers.
But this long-term view has been lost on many of those who look to emerging market assets for a higher yield in the short term. Their ardour cooled when the Federal Reserve signalled it may soon ease the stimulus that has kept credit cheap, heralding higher interest rates ahead.
That was coupled with signs of slower growth in key emerging markets like China and Brazil.
Still, the developing world's gross domestic product growth of 5.0% this year and 5.4% next, as projected by the International Monetary Fund, will far outpace the advanced economies' 1.2% and 2.1%.
Developing countries are now also better armed to keep panic at bay, with more foreign exchange reserves than before and less aggregate debt than developed nations. Many have put their economies on firmer foundations.
Fear of a mass exodus of investors, however, has still sent emerging market shares down about 10% in the past two months, as measured by the MSCI Emerging Markets Index, compared with a marginal rise in the Standard & Poor's index of US shares.
Consider some other data that the World Bank has crunched, suggesting developing nations will attract increased capital flows because their growth implies big investment opportunities, improved creditworthiness and the ability to better diversify portfolios and manage risk.
According to one bank report, by 2030 developing countries will represent two-thirds of all global investment, up from about half today and from one-fifth in 2000.
At that time, half the global stock of capital is expected to reside in the developing world, compared to less than one-third today. That means a shift in the distribution of wealth and in the creation of opportunity.
This shift in investment activity coincides with the catch-up growth that began during the 1990s, as developing nations integrated into global markets, transformed their economies and improved their institutions, Hans Timmer, director of the World Bank team that produced the report, said.
"Productivity catch-up, increasing integration into global markets, sound macroeconomic policies and improved education and health are helping speed growth and create massive investment opportunities, which, in turn are spurring a shift in global economic weight to developing countries," the report said.
And to be clear, this is investment in buildings and machinery, not the more flighty financial flows.
The Bric nations (Brazil, Russia, India and China) are expected to loom large. China will make up 30% of all investment activity, while Brazil, India and Russia together will account for more than 13% of global investment in 2030, edging the 11% projected in the United States.
But their growing importance as sources and destinations of capital flows will not be a Bric story alone, the report says. It calls out sub-Saharan Africa, for example, which can be expected to not only receive a growing volume of capital flows but also to attract an increasing share of the total capital flows to developing countries.
The bank's researchers forecast that developing countries will likely have the resources needed to finance massive future investments for infrastructure and services.
That's predicated on strong saving rates, expected to top out at 34% of national income in 2014 and averaging 32% annually until 2030. Meanwhile, the saving rate for high-income countries will fall from 20% to 16%.
In aggregate terms, the developing world will account for 62-64% of global saving of $25-27trn by 2030, up from 45% in 2010.
This points to greater wealth in the developing world as a percentage of the global total: the average per capital income of the developing world is expected to rise from about 8.0% of that in high-income countries in 2010, to about 16% by 2030.
The average citizen of what is now a developing country, according to one bank scenario, will earn 19% of the income of an average high-income country citizen by 2030.
Indeed, one McKinsey study projects more than half the world's population will have joined the consuming classes by 2025, boosting consumption in emerging markets to $30trn a year. It will, the report says, be nothing short of the "defining growth opportunity of our times".
Seizing on this theme, Bhaskar Chakravorti and Gita Rao, writing in Foreign Affairs recently, pointed to the hand-wringing over the decline of American power and urged US businesses to compete in emerging markets to help themselves grow, hire again and create wealth.
Another fan with a long lens is Mark Mobius, chairperson of the Templeton Emerging Markets Group, who wrote last month that commodities, exports and infrastructure development could continue to be leading growth drivers in many emerging economies, but overall growth is likely to arise increasingly from healthier domestic demand.
"Expanding consumer wealth is creating an increasingly large and discriminating body of middle class consumers across emerging markets, and their demand is, in turn, creating increasingly significant domestic economic activity," Mobius said. "
"With a relatively high proportion of the population in emerging markets moving into the workforce and a relatively low proportion of dependents, demographics are acting to reinforce consumer demand."
These forecasts are not unconditional. Some risks will reduce over time. Others will increase.
The countries must continue to drive increases in productivity and attract investors to finance the investments, the bank's report says.
There is also an assumption that some of markets will have addressed some of the hurdles to invest now which variously include poor governance, lax enforcement of contracts and property rights, corruption, lack of adequate infrastructure and distribution networks and uneven pipeline of talent.
In addition, as emerging economies develop, their financial markets integrate more into global ones, and they ease restrictions on capital that flows across their borders. It then  becomes more difficult to shield them from international shocks, the World Bank's Timmer said.
They can mitigate those shocks as alternatives to the dollar rise, and as they build reserves in other currencies like the euro and the yuan.
There are other challenges that concern Neil Shearing, chief emerging markets economist at Capital Economics in London. The first, already well known in China, is the need to reposition economies to be more consumer-driven and less dependent on exports.
The second is avoiding the kind of investment bubble created in the eastern European property market - which burst a few years ago.
"If the investment is in glitzy shopping malls," Shearing told me, "it can create bubbles and be dangerous. Whereas investment in China is excessive but in roads, railways and ports that you do want to look for."
Growth may slow, and challenges will abound, but the prospects loom large. And therein lies opportunity.

Gas flows from Myanmar-China pipeline

Gas has started flowing to energy-hungry China through a pipeline from Myanmar, Beijing's official media reported, in a major project that highlights their economic links even as political ties come under pressure.
The 793-kilometre (492-mile) pipeline runs from Kyaukpyu on resource-rich Myanmar's west coast, close to the offshore Shwe gasfields, and across the country.
It enters southwest China at Ruili, near areas where heavy clashes between the rebel Kachin Independence Army and the Myanmar military were reported earlier this year.
As well as diversifying China's sources of fuel, by supplying energy to the vast and less developed west it could help Beijing's attempts to promote economic growth there.
It went into operation on Sunday at a ceremony in Mandalay, the official Xinhua news agency reported. "When torches flamed in the sky.... a storm of applause and cheers broke out," it said.
But the controversial project is the fruit of Beijing's long allegiance with the military junta that ruled Myanmar for decades, a bond that is weakening as the reforming government opens up to the West.
In an editorial on Monday China's Global Times newspaper, affiliated with the ruling Communist Party, said: "This is another breakthrough in China's strategy of energy diversification and has obvious significance in reducing China's dependence on the Strait of Malacca for the import of oil and natural gas."
Construction began in June 2010, according to China National Petroleum Corporation, the key investor. A parallel oil pipeline is also part of the project.
According to Xinhua, the gas pipeline will be able to carry 12 billion cubic metres annually, while the crude oil pipeline has a capacity of 22 million tonnes per year.
Under military rule Myanmar was a pariah state largely isolated from the rest of the world and subject to heavy international sanctions, but it maintained close economic links with China, which for years was its major foreign influence.
Now, with Myanmar which also includes tin and precious gems among its natural assets opening up politically and economically, more countries are setting up operations and seeking deals that sanctions had previously prevented.
"Myanmar used to be sanctioned by the West and China was its only friend," the Global Times editorial acknowledged.
"Nowadays, it has opened more to the West. This will reduce its passion in cooperating with China, but does not mean it will set itself against China."
But in a warning that Beijing expects its economic interests to be protected, the newspaper cautioned Myanmar that it must ensure agreements regarding the project are fulfilled, no matter who eventually leads the country, where democracy activist Aung San Suu Kyi has entered parliament.
"China should be determined to supervise Myanmar in doing so," the paper said. "Myanmar should hold a serious attitude toward China, and Chinese will take (the Myanmar) people's attitude toward the pipeline as a test of their stance on China."
Chinese nervousness about its investments in Myanmar comes after Naypyidaw said last week it had revised a controversial copper mine agreement with a Chinese company, after dozens of Buddhist monks and villagers were injured in a botched police raid.
Myanmar Minister of Mines Myint Aung told parliament that new terms gave the government 51% of the revenue, replacing a previous deal that was a joint venture between the Chinese firm and a holding company owned by the Myanmar military.
In 2011, Myanmar President Thein Sein stopped construction on the China-backed $3.6bn Myitsone Dam on the Irrawaddy river amid public opposition to the project, a move that led Beijing to call for its companies' rights and interests to be protected.
The Shwe Gas Movement, a campaign group, says the pipeline project has sparked protests over issues including demands for higher salaries for local workers, and concerns among farmers about its environmental impacts.
Myanmar plans to renegotiate billions of dollars of natural resource deals as it imposes tougher environmental standards and clamps down on corruption, the US-based Asia Society said in a report last month.

NEWS,15.07.2013

Kuwait sends $200m worth of oil to Egypt

Kuwait has sent two oil tankers carrying crude and diesel worth $200m to Egypt, a Kuwaiti newspaper said on Sunday, part of a $4bn aid package pledged by the Gulf Arab state last week after the ouster of Islamist President Mohamed Mursi.
Kuwait last week joined other oil-producing Gulf states in pledging a massive aid package worth $12bn to Egypt in a show of support after the army toppled the Muslim Brotherhood government. Most US-allied Gulf monarchies regard the Brotherhood as a threat.
Kuwait's Arabic-language al-Rai newspaper quoted oil sources as saying that an oil tanker carrying between 90 000 and 100 000 tonnes of diesel that happened to be travelling through the Suez Canal was diverted to Egypt. A second tanker with 1.1 million barrels of crude was ordered to sail towards Egypt, it said.
The newspaper estimated the value of the cargo on each ship at $100m.
Kuwaiti officials were not immediately available to comment on the report.
The state news agency KUNA said last week that Kuwait's aid package would comprise a $2bn central bank deposit, a $1bn grant and $1bn in oil products. It did not say when the aid would be delivered.
Saudi Arabia and the United Arab Emirates had earlier pledged a total of $8bn in aid to Egypt.
The rise of Mursi's Muslim Brotherhood in Egypt since 2011 had unsettled most Gulf Arab states, including the UAE, which feared it would embolden Islamists at home.
Mursi became president a year ago in Egypt's first freely contested election but was ousted by the military after mass protests against his rule, which critics said was marked by creeping authoritarianism and mismanagement of the economy.
Kuwait has in the past coordinated policy with Saudi Arabia and the UAE by pledging financial aid for Gulf neighbours hit by social unrest such as Bahrain and Oman, but also Arab states further afield such as Morocco and Jordan.
The aid to Egypt from the three Gulf Arab oil producers is expected to help Cairo avoid a balance of payments crisis and overcome fuel shortages that were partly responsible for increasing public anger towards Mursi.
It will also ease pressure on Cairo to conclude long-running talks with the International Monetary Fund on a $4.8bn loan. However, a widening fiscal gap and political turmoil following Mursi's toppling last week will remain a pressing challenge for Egyptian authorities, analysts said.
Qatar lent Egypt more than $7bn during Mursi's year in power but other Gulf states remained aloof, wary of the Muslim Brotherhood's potential influence in their own conservative, dynastically ruled countries.

Australia to scrap carbon tax

Australia plans to scrap its carbon tax and bring forward an emissions trading scheme, Treasurer Chris Bowen said on Sunday, a policy shift certain to be a focal point in the forthcoming election.
Under current plans, Australia would move from the current fixed price on carbon essentially a tax assessed on larger companies entitling them to produce carbon emissions to a floating price in July 2015.
However, since Prime Minister Kevin Rudd regained the leadership of the governing Labour party last month, there has been mounting pressure to ditch the unpopular tax sooner.
Bowen said in a television interview that the tax would be axed and a planned emissions trading scheme, under which assessments for emissions are subject to market forces, brought forward.
He gave no details and said Rudd would announce the full plan in the coming days.
"It is no secret that we have been looking at this, that we are heading in this direction," Bowen told Channel Ten.
"We have believed in an emissions trading scheme for some time. What we are seeing is an emissions trading scheme being implemented earlier than was envisaged."
The carbon tax, set at A$24.15 a tonne, applies to around 300 of Australia's biggest polluters, including mining giant BHP Billiton, Qantas Airways and BlueScope Steel.
The emissions trading scheme would replace that with a floating price, based on current EU carbon futures and expected to be cheaper for big business.
Any new carbon plan cannot be legislated until after the elections, due to take place between late August and November. The conservative opposition has promised to scrap the carbon price if it wins office.
The planned change could undermine the government's budget strategy, as the carbon tax was due to raise A$8.14bn ($7.38bn) in 2013-14, and A$8.6bn in 2014-15. The shift could see revenue cut by around A$5.8bn in 2014-15.
Bowen would not be drawn on the impact on the budget, but said it would be "substantial" and would run to "several billion" Australian dollars.
The carbon tax was introduced last year under former prime minister Julia Gillard, ousted by Rudd in an internal party vote last month. He reclaimed the job she took from him in a similar fashion in 2010, shortly before the last election.
Rudd's reinstatement as prime minister has give Labor a boost from poor ratings in opinion polls. Surveys show Rudd is preferred by voters to opposition leader Tony Abbott, but Labor still trails the opposition narrowly.

Putin explores Baltic Sea shipwreck

Russian President Vladimir Putin on Monday dived to the bottom of the Baltic Sea aboard a submersible to explore the wreck of a ship that sank in 1869.
State television pictures showed Putin climbing aboard the Sea Explorer 5 underwater research vessel for the half-hour dive to the wreck of a frigate that sank in the Gulf of Finland.
"It is lying on its right side," Putin said in televised reports afterwards, saying the vessel was well-preserved.
"Indeed, it's in perfect state, the name of the ship can be clearly read.
"It's not scary, it's very interesting," he added, referring to the experience.
Television broadcast green-tinted footage showing the Russian strongman carefully inspecting the shipwreck from inside the submersible.
He said he was not at the controls himself, noting he was not skilled enough. "You have to have lots of experience to operate this machine," he was quoted as saying.
The Oleg was discovered by Russian divers in 2003 and is now being studied by scientists.
It lies at a depth of 60m between the islands of Gogland and Sommers.
The 60-year-old sports-mad president, who returned to the Kremlin for a third term last year, prides himself on keeping in peak physical condition and has raised eyebrows with a series of media-friendly stunts in recent years.
A self-professed thrill-seeker, Putin in 2009 dived to the bottom of Lake Baikal in Siberia aboard a mini-submarine.
In 2011, he announced that he had discovered two ancient urns while scuba diving in the Black Sea in 2011, but last year the Kremlin admitted the stunt was staged.

Italy's interior minister urged to quit

A leading Italian newspaper on Monday urged the deputy of head of Italy's fragile ruling coalition to resign over the expulsion of the wife and daughter of dissident Kazakh oligarch Mukhtar Ablyazov.

Interior Minister Angelino Alfano, who also serves as deputy premier, was not told of the operation in which Ablyazov's wife Anna Shalabayeva and their 6-year-old daughter Alua were expelled in May, the government said in a statement on Friday.

It said it had now withdrawn the deportation order.

The incident has added to the headaches facing Prime Minister Enrico Letta, who was already struggling to contain coalition tensions between Alfano's centre-right People of Freedom (PDL) and his own centre-left Democratic Party (PD).

Italian newspapers reported that at least four senior officials, including Alfano's own chief of staff could be sacked over the incident, and La Repubblica called for Alfano, a key lieutenant of centre-right leader Silvio Berlusconi, to go.

"A minister who doesn't know about an operation of this kind and is not in control of the police is both responsible for everything and good for nothing: He should resign," the left-leaning newspaper said in a front-page editorial.

Economic interests

Members of Alfano's People of Freedom party rejected the demand, saying La Repubblica was trying to bring down the government only months after the deadlocked national election in February which forced the creation of the uneasy coalition.

The PD, wary about exacerbating problems for Letta, has been more circumspect but Dario Nardelli, a senior deputy, said "it is in Alfano's interest to clear up this situation".

Italy has major economic interests in Kazakhstan, including energy group Eni's stake in the giant Kashagan oil field. The case has also highlighted the close relations between Berlusconi's former government, in which Alfano served as justice minister, and Kazakh President Nursultan Nazarbayev, who has ruled the oil-rich state for 17 years.

On Monday, Berlusconi, whose own legal problems have stoked coalition tensions, denied a report in the Unione Sarda newspaper that he had met Nazarbayev in Sardinia to discuss the case on 6 July, while the Kazakh leader was on holiday.

Letta has pledged to continue investigations into the deportation of Shalabayeva, who was hustled onto a private plane to Kazakhstan despite having a valid Latvian residence permit enabling her to stay in the European Union.

Ablyazov, a banker and ex-energy minister turned bitter critic of Nazarbayev, fled Kazakhstan after his bank BTA was declared insolvent and nationalised in 2009.

'Hostage' of the government

He was not present when Italian police raided the couple's Rome villa on 29 May and has accused the Kazakh government of "kidnapping" his family.

In an interview with La Repubblica on Monday, his eldest daughter Madina said her mother had been made a "hostage" of the government, which has been severely criticised for its treatment of political opponents by groups including Human Rights Watch and Amnesty International.

"The possibilities open to my father's enemies are unlimited as this extraordinary expulsion proves once again," she said.

The Italian government has asked Kazakhstan to safeguard Shalabayeva's rights but Kazakh authorities say she will not be able to leave pending an investigation into allegations she illegally obtained passports for relatives of Ablyazov.

Spain PM under pressure in party scandal

Spanish Prime Minister Mariano Rajoy faced calls to explain himself or resign over his alleged support for the ruling Popular Party's disgraced former treasurer, who headed to court on Monday over a slush fund scandal.

The 58-year-old, grey-bearded premier has denied any wrongdoing and refused to comment in past weeks on the growing controversy centred on former party treasurer Luis Barcenas.

Pressure on Rajoy mounted, however, as more allegations were revealed and as the 55-year-old Barcenas faced a High Court judge to answer questions over secret political payments.

Barcenas was called to appear in the Madrid court after conservative daily El Mundo last week published what it said was an original page from Barcenas' slush fund ledger and delivered the document to the court.

The excerpt purportedly showed extra payments from a secret fund to party officials including Rajoy when he was a minister under then prime minister Jose Maria Aznar in 1997, 1998 and 1999.

Barcenas is suspected of running a slush fund financed by corporate donors who were then rewarded with public contracts. The cash was allegedly used to supplement senior party members' salaries.

Illegal financing for 20 years

In the latest blow to Rajoy, the conservative daily El Mundo on Sunday published friendly mobile text messages between the prime minister and Barcenas from May 2011 to March 2013, ending about two months after the scandal erupted.

"Luis, I understand, be strong. I will call you tomorrow. Best wishes," said one of the messages reportedly from Rajoy to Barcenas, dated 18 January when El Mundo first published allegations over the slush fund.

"It is not good to try to determine what we will say or to comment on things that must be presented to the courts, which we must all respect," read another message allegedly sent by Rajoy.

Barcenas reportedly told El Mundo in an interview published on 7 July that the Popular Party had engaged in illegal financing for nearly 20 years.

The Popular Party has repeatedly denied secret financing allegations.

The leader of Spain's main opposition Socialist Party, Alfredo Perez Rubalcaba, on Sunday accused the premier of "serious collusion" with Barcenas and said he was severing all contact with the prime minister and his party.

Demands for explanation

"Given the unsustainable political situation in Spain, the Socialist Party calls for the immediate resignation of Mariano Rajoy as head of the government," he said.

But few people in Spain expect Rajoy to step down given his party's outright parliamentary majority.

An editorial in leading daily El Pais on Monday demanded an explanation from the premier.

"Out of respect for the democratic system, the citizens and his own party and voters, the head of government must give a true explanation to parliament," it said.

"Otherwise it will be impossible for him to regain his credibility."

Rajoy has so far resisted calls to appear before parliament over the scandal and has carefully avoided even mentioning the name Barcenas.

27% unemployment

But he is expected to face the press on Monday after hosting a visit by Polish Prime Minister Donald Tusk.

The corruption allegations have outraged Spaniards suffering in a recession with a record unemployment rate of more than 27%. Dozens of protesters rallied outside the Popular Party headquarters in Madrid on Sunday.

Barcenas is already behind bars while under investigation in a separate graft case.

A Spanish judge remanded Barcenas to custody on 27 June over alleged money laundering and tax fraud. He said the move was aimed at preventing him from fleeing and to preserve evidence.

Barcenas is being investigated over tens of millions of euros he allegedly stashed in Swiss bank accounts.