China ‘will boost innovation, creativity’

Updated 12 October 2014
0

China ‘will boost innovation, creativity’

HAMBURG: China’s Premier Li Keqiang said the world’s second-biggest economy must open further to harness the innovative and creative talents of its 1.3 billion people.
After three decades of reforms, China — often called the world’s manufacturing workshop — had launched administrative and market reforms “to boost creation and innovation,” he said on a visit to Germany.
“What we hope is to incentivize 1.3 billion people, including 800-900 million workers, to mobilize their innovation capability and creativity so that everyone will have an opportunity to make great accomplishments,” he said.
This would “turn our dividend of population into a dividend of talents.”
Li was speaking at a business forum on the first country stop of a week-long Europe tour, a day after Berlin and Beijing signed a range of business deals and pledged to deepen links and boost trade that last year topped 140 billion euros ($177 billion).
The premier delivered his speech in the northern port of Hamburg, a European base for 500 Chinese companies and the gateway for half of Germany’s annual trade with China, equating to 2.7 million shipping containers last year.
Li reminded his audience that China is a “driving force of growth and recovery of the world economy,” predicting GDP growth of about 7.5 percent this year, despite multiple global crises.
Just as important for China, he said, was job creation, raising household incomes and the “war against pollution.”
During Li’s visit foreign companies operating in China again voiced long-standing complaints about unfair market access, including being blocked from public tenders and having to form local joint ventures.
The premier said China must integrate further with its economic partners, protect intellectual property rights, enforce fair business rules and create “a level playing field” under government oversight.
“China needs to learn from other countries as well as the fine achievements of human civilization, and must combine these with China’s own national conditions, so that China will become a (hotbed) for creation and will be a huge market for the world,” he said.
Li said, China “must rely on innovative development, and we cannot do this without the rest of the world. The world also needs China to achieve prosperity.”
He stressed that for the Chinese economy “there will not be a hard landing, as suggested by some media.”
He added that “economic development is not a sprint, instead it is a long-distance race that never ends... there should be a certain speed but more importantly we need perseverence and stamina.”
Li is on his second Europe tour since taking office this year, which next takes him to Russia, where he will meet President Vladimir Putin, before he travels to Italy for an October 16-17 meeting of Asian and European leaders.


Lufthansa profit warning spooks European airline sector

Updated 17 June 2019
0

Lufthansa profit warning spooks European airline sector

  • Ryanair Chief Executive Michael O’Leary last month warned of the impact of what he called ‘attritional fare wars’

FRANKFURT: Germany’s Lufthansa sent shockwaves through the European airline sector on Monday as it cut its full-year profit forecast, with lower prices and higher fuel costs compounding the effect of losses at its budget subsidiary Eurowings.
The warning follows gloomy comments last month from Irish budget airline Ryanair, which vies with Lufthansa for top spot in Europe in terms of passengers carried. Air France-KLM also reported a widening quarterly loss last month.
In a statement issued late on Sunday, Lufthansa forecast annual EBIT of between €2 billion and €2.4 billion, down from the previously targeted €2.4 billion to €3 billion.
“Yields in the European short-haul market, in particular in the group’s home markets, Germany and Austria, are affected by sustained overcapacities caused by carriers willing to accept significant losses to expand their market share,” it said.
European airlines are locked in a battle for supremacy, with a surfeit of seats holding down revenues and higher fuel costs adding to the pressure. A number of smaller airlines have collapsed over the past two years.
Lufthansa cited falling revenue from its Eurowings budget business as a key reason for the profit warning.
“The group expects the European market to remain challenging at least for the remainder of 2019,” it said.
It also pointed to high jet fuel costs, which it said could exceed last year’s figure by €550 million, despite a recent fall in crude oil prices.
Ryanair Chief Executive Michael O’Leary last month warned of the impact of what he called “attritional fare wars” and said four or five European airlines were likely to emerge as the winners in the sector.
“No signs that anyone is prepared to reduce capacity, therefore we would anticipate the wave of consolidation in European short haul is not over,” said analyst Neil Wilson, analyst at London-based broker market.com.
Earlier this month global airlines slashed a widely watched industry profit forecast by 21 percent as an expanding trade war and higher oil prices compound worries about an overdue industry slowdown.
Lufthansa’s problems are centered on its European business, with a more positive outlook for its long-haul operations, especially on transatlantic and Asian routes.
Eurowings management is due to implement turnaround measures to be presented shortly, Lufthansa said, adding that efforts to reduce costs had so far been slower than expected.
Lufthansa’s adjusted margin for earnings before interest and tax (EBIT) was forecast between 5.5 percent and 6.5 percent, down from 6.5 percent to 8 percent previously, it said in a statement.
Lufthansa also said it would make a €340 million provision for in its first-half accounts, relating to a tax matter in Germany originating in the years between 2001 and 2005.