French economic reforms under Macron

French President, Emmanuel Macron. (AFP)
Updated 17 July 2017
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French economic reforms under Macron

PARIS: The International Monetary Fund (IMF) on Monday hailed French President Emmanuel Macron’s “ambitious” reform program, saying his spending, labor and tax overhauls could go “a long way” toward tackling high unemployment and weak growth.
The IMF raised its 2017 growth forecast for France by 0.1 points to 1.5 percent and said it could “further accelerate” next year.
“The new government is pushing ahead with an ambitious economic program to make France’s economy more dynamic and its public finances sustainable,” the IMF said after its annual analysis of the French economy.
“The envisaged labor and tax reforms are aimed at boosting growth, employment and competitiveness,” it added.
It also said the centrist government formed by Macron, a 39-year-old former banker, “has rightly emphasized” the need to decrease public spending.
A less profligate approach will “help gradually reduce the budget deficit and debt,” the Washington-based IMF said.
Macron’s government has pledged to meet the EU deficit limit of 3 percent of gross domestic product (GDP) in 2017, a target France has missed for the past decade.
It has identified €4.5 billion ($5.1 billion) in savings across government departments this year.
Local governments will also have to tighten their belts, Budget Minister Gerald Darmanin said Monday, announcing €13 billion in funding cuts for towns, departments and regions by 2022.


Global carmakers show off SUVs, electrics as China promises reforms

Updated 6 min 10 sec ago
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Global carmakers show off SUVs, electrics as China promises reforms

BEIJING: Global carmakers touted their latest electric and SUV models in Beijing on Wednesday, as China promises a more level playing field in the world’s largest auto market where domestic vehicles are making major inroads.
Industry behemoths like Volkswagen, Daimler, Toyota, Nissan, Ford and others are displaying more than 1,000 models and dozens of concept cars at the Beijing auto show.
Thousands of Chinese auto enthusiasts are expected to wander the halls of the mega exhibition center this week, with electric cars and gas-guzzling sport-utility vehicles grabbing the spotlight.
Nissan presented its first Made in China electric car produced for Chinese consumers, the four-door Sylphy Zero Emission, with a drive range of 338 kilometers.
“The new Sylphy Zero Emission is the next step in our electrification strategy for China,” said Jose Munoz, Nissan’s chief performance officer, adding that the company will unveil 20 electrified models over the next five years.
Auto executives may have their minds on the boiling trade war between Beijing and Washington, with every twist and turn fanning fears that it could bring their plans for China to a screeching halt.
But last week Beijing announced it will liberalize foreign ownership limits in the sector, a move seen as a possible olive branch to President Donald Trump, who has railed against China’s policies in the sector.
China currently restricts foreign auto firms to a maximum 50 percent ownership of joint ventures with local companies.
The changes will end shareholding limits for new energy vehicle firms as soon as this year, followed by commercial vehicles in 2020 and passenger cars in 2022.
Foreign automakers who account for more than half of vehicle sales in China have cautiously welcomed the changes, with VW saying it has “strong” local partners in their joint ventures.
“This will have no impact on our JVs. But the overreaching principle is important. Hopefully, liberalization will as well help for fair competition, and having a level playing field,” Jochem Heizmann, CEO of Volkswagen Group China, told reporters.
The show comes as China’s market hits a transition period — the explosive growth in car sales seen over the last decade slowed last year and data from early this year point to a continued slump for many vehicle types.
Chinese consumers are following their American peers toward SUVs while policymakers in Beijing push an all-electric future.
Ride-sharing is also on the up. On Tuesday Didi — China’s answer to Uber — announced it had joined forces with some 30 partners, including Renault and Volkswagen, to develop vehicles and products specifically tailored for ride-sharing.
Accounting for some 28.9 million car sales last year, the Chinese market could soon match those of the European Union and United States combined.
General Motors sold over four million cars here last year, more than in the US. Volkswagen sold more than three million, roughly six times its home market.
But domestic firms are outselling foreign firms in the SUV segment.
In the electric car market the figures are even more lopsided, as Beijing has heaped money on projects to dominate what it sees as the future.
At the auto show, the domestic upstarts have a separate exhibition hall mostly to themselves — 124 of the 174 electric car models on display are homegrown.
Government subsidies help consumers purchase the green cars, while policymakers are planning a quota system to force producers to build electric vehicles, with plans to one day phase out gas vehicles altogether.
Volkswagen announced Tuesday investments of €15 billion in electric and autonomous vehicles in China by 2022.
“China is our second home,” recently installed chief executive Herbert Diess said at a Beijing press conference, with its market set to be “the biggest” worldwide for electric cars.