China GDP growth slows to 6.9 percent for 2015

China GDP growth slows to 6.9 percent for 2015
Updated 19 January 2016

China GDP growth slows to 6.9 percent for 2015

China GDP growth slows to 6.9 percent for 2015

SHANGHAI: China's economy grew at its weakest pace in a quarter of a century last year, raising hopes Beijing would cushion the slowdown with more stimulus policies, which in turn prompted a rally on the country's rollercoaster share markets.
Growth for 2015 as a whole hit 6.9 percent after the fourth quarter slowed to 6.8 percent, capping a tumultuous year that witnessed a huge outflow of capital, a slide in the currency and a summer stocks crash.
Concerns about Beijing's grip on economic policy have shot to the top of global investors' risk list for 2016 after a renewed plunge in its stock markets and the yuan stoked worries that the economy may be rapidly deteriorating.
China's slowdown, along with the slump in commodity prices, prompted the International Monetary Fund to cut its global growth forecasts again on Tuesday, and it said it expected the world's second-largest economy to see growth of only 6.3 percent in 2016.
Data from China's statistics bureau showed that industrial output for December missed expectations with a rise of just 5.9 percent, while electric power and steel output fell for the first time in decades last year, and coal production dropped for a second year in row, illustrating how a slowing economy and shift to consumer-led growth is hurting industry.
December retail sales growth was also weaker than expected at 11.1 percent last month, disappointing those counting on the consumer to be the new engine of growth.
"While headline growth looks fine, the breakdown of the figures points to overall weakness in the economy," said Zhou Hao, senior emerging markets economist for Asia at Commerzbank Singapore.
"All in all, we believe that China will experience a 'bumpy landing' in the coming year," he said.
There was relief in the markets, however, that growth at least matched forecasts, and a growing expectation that more monetary easing measures were imminent, possibly before Lunar New Year holidays in early February.
Angus Nicholson, market analyst at IG in Melbourne, said in a note that further cuts in interest rates and the reserves that banks have to set aside were already looking "a foregone conclusion" before the data release, and now it was a question of timing.
"That gives investors an excuse to buy stocks, after sharp falls recently," said Linus Yip, strategist at First Shanghai Securities Ltd.
Investors took their cue, pushing the benchmark Shanghai Composite Index up 3.25 percent by the close of trading, while the CSI300 index of the largest listed companies in Shanghai and Shenzhen gained 2.95 percent.
The indexes remain about 14-15 percent down so far in 2016 after a series of sell-offs in the new year.
"We see this as a technical rebound," said Yip. "It's too early to say the market has seen its bottom, as we haven't yet seen a turnaround in the economy."

CURRENCY RISK
The People's Bank of China (PBOC) did its bit to calm nerves by keeping the yuan largely steady, setting the currency's daily midpoint fix at 6.5596 per dollar.
That followed news of plans requiring overseas banks to hold a certain level of yuan in reserves, a move that could raise the cost of wagering on further falls in the currency, which has lost about 5 percent since August.
Tommy Xie, economist at OCBC Bank in Singapore, said he expected more stimulus to the economy from the PBOC, but the stability of the yuan, also known as the renminbi, was critical to maintaining growth.
"This is a new risk for China. If the renminbi continues to weaken, the volatility and capital outflows get worse, then that is likely to pose a challenge to growth."
The spot yuan was at 6.5789, barely changed from Monday's close, but offshore it weakened to 6.5935 to stand 0.2 percent adrift from the onshore rate.
Confusion over China's currency policy and its commitment to reforms has sparked mayhem in financial markets in recent weeks, as the PBOC allowed the yuan to fall sharply in early January then switched to aggressive intervention to steady it.
Likewise, concerns have mounted that the economy's troubles might be beyond Beijing's ability to fix.
Markets have long harbored doubts about the veracity of China's growth data, given their habit of closely matching official forecasts year after year despite wildly changing circumstances at home and globally.
Investors used to comfort themselves with the assumption that the authorities, while often inscrutable, were competent managers who could be trusted to ultimately guide the economy to a more consumer-driven model.
That trust has been challenged by perceived policy missteps over the yuan and stock markets, giving weight to a voluble clique of China bears who claim high debt levels and massive overcapacity are bound to end in tears.
Even relative optimists are worried.
"A recent trip back to China suggests the economy remains in a rather bad shape. Public confidence and expectations are very low," says Wei Li, China and Asia economist at Commonwealth Bank of Australia.
"Faced with rising non-performing loans, banks are cutting credit lines despite policymakers calling for more support. New credits are mainly used to repay existing debts, rather than flowing into new investment projects."


STC partners with Irish software firm to develop in-car applications

Saudi Telecom Co. (STC), the Kingdom’s largest mobile network operator, has entered into a partnership with Irish vehicle software firm Cubic Telecom to develop in-car software solutions for Saudi drivers. (Supplied)
Saudi Telecom Co. (STC), the Kingdom’s largest mobile network operator, has entered into a partnership with Irish vehicle software firm Cubic Telecom to develop in-car software solutions for Saudi drivers. (Supplied)
Updated 6 min 12 sec ago

STC partners with Irish software firm to develop in-car applications

Saudi Telecom Co. (STC), the Kingdom’s largest mobile network operator, has entered into a partnership with Irish vehicle software firm Cubic Telecom to develop in-car software solutions for Saudi drivers. (Supplied)
  • As a result of the link up, the software will then also allow STC to easily add a range of in-car services to Saudi vehicles

RIYADH: Saudi Telecom Co. (STC), the Kingdom’s largest mobile network operator, has entered into a partnership with Irish vehicle software firm Cubic Telecom to develop in-car software solutions for Saudi drivers.

As a result of the link up, the software will then also allow STC to easily add a range of in-car services to Saudi vehicles, including an emergency call system which automatically alerts healthcare services in the event of an accident.

Gerry McQuaid, chief commercial officer at Cubic, told Arab News: “Basically we partnered with STC as a premier car integrity partner in Saudi Arabia. We are enabling the customer to benefit from a range of safety, entertainment, and navigation features when they purchase the car.”

Similar to every market, Saudi Arabia had a strict range of regulations for how connectivity was managed, he said, adding that the software partnership would make it easier for features to be added by carmakers and third-party developers.

“I can’t give a precise date, but in a not-too-distant future you actually don’t need a driving license, the car will actually drive autonomously for the citizens. That is the big difference,” McQuaid said.

“Already software solutions can support this capability, but it does need important regulations to be introduced to start with semi-driving.

“You can request the car on your smart phone, and it will drive to you to get in and the car will drive to your destination. You can listen to music, do some work, and have a conversation while the car drives. This is not science fiction,” he added.

Soon cars will have a whole range of applications, such as an iPhone or other smart phone, with touchscreen interaction and voice regulations, and people will interact with the car from outside using smart phone apps, he said.

On safety regulations, McQuaid pointed out that solutions included an “emergency call” system which would automatically alert emergency services in the event of an accident, give details about the incident, and suggest if it required attention.

Barry Napier, CEO of Cubic Telecom, said: “We are delighted to be working with STC to help car manufacturers activate new opportunities in a very significant market.”

Dr. Sultan bin Saeed, STC’s vice president of business development, said: “Partnering with Cubic enables STC as a digital enabler to simplify the delivery and management of advanced in-car services and gives us a foundation for innovating and meeting the changing needs of customers as new services evolve.”

Cubic Telecom provides connected software solutions in more than 5 million vehicles and devices to at least 100 countries and has already partnered with some of the Gulf region’s largest mobile operators.


Saudi Arabia to ship gas to South Korea and take CO2 back

Saudi Arabia to ship gas to South Korea and take CO2 back
Updated 1 min 4 sec ago

Saudi Arabia to ship gas to South Korea and take CO2 back

Saudi Arabia to ship gas to South Korea and take CO2 back
  • Hyundai to take LPG cargoes
  • CO2 sent back to use in oil fields

RIYADH: Saudi Arabia plans to ship gas to South Korea where it will be used to make hydrogen, and the carbon dioxide produced in the process will be transported straight back to the Kingdom, Asharq reported, citing Bloomberg.

Hyundai Oil Bank Co. will take liquefied petroleum gas cargoes from Saudi Aramco and convert them into hydrogen, to use for chemical and power solutions, the Korean energy company’s parent Hyundai Heavy Industries Holdings Company said.

Aramco and Hyundai OilBank Co. agreed in the deal signed on Wednesday, that the carbon dioxide emitted in the hydrogen-making process will be transported back to Aramco, to use it in its oil production facilities, according to a Hyundai Heavy spokesman.

“It seems the project will bank on the idea that shipping LPG to Korea and carbon dioxide back to Saudi Arabia will be cheaper than shipping hydrogen to Korea,” said Martin Tengler, BloombergNEF’s lead hydrogen analyst.

Saudi Aramco has huge quantities of natural gas, which it has identified as a key area of expansion for domestic supply and export in the form of liquefied natural gas (LNG).

“We basically look at natural gas as an area for growth for the company,” Khalid Al-Dabbagh, Aramco’s chief financial officer, said in an investor call in the run-up to its successful IPO back in 2019.


King Salman Energy Park signs anchor tenants

King Salman Energy Park signs anchor tenants
Updated 25 sec ago

King Salman Energy Park signs anchor tenants

King Salman Energy Park signs anchor tenants
  • President and CEO of SPARK Saif Al-Qahtani: SPARK is proud to welcome TAQA and AMCO as they take the first step toward launching their operations
  • By 2035, the park is expected to contribute more than SR22 billion to the Kingdom’s gross domestic product

RIYADH: King Salman Energy Park (SPARK), the Dammam-based project backed by Saudi Aramco, added two new anchor tenants on Thursday, the Abu Dhabi National Energy Company (TAQA) and AMCO.

President and CEO of SPARK Saif Al-Qahtani said: “SPARK is proud to welcome TAQA and AMCO as they take the first step toward launching their operations. SPARK sits at the heart of the energy market, offering a world-class ecosystem that facilitates the growth of our tenants’ businesses and brings sustained value to our wider communities. SPARK is set to be a fully integrated city, bringing together major national and international companies and fuelling economic growth and job creation.”

TAQA will expand its local operations with the TAQA Industrial Park at SPARK, including a new facility for oilfield services, a specialist unit for engineering and manufacturing, and a wireline and perforation center of excellence.

The facilities will be constructed in two phases starting in the second quarter of 2021, with the design and developmental planning stages having already commenced.

TAQA CEO Khalid Nouh said: “With our plans for future acquisitions focused on cutting-edge technology and innovative solutions, we further cement our alignment with Vision 2030 and the government’s drive to diversify and localize services and manufacturing in the Kingdom.”

AMCO is investing over SR260 million ($69.33 million) in a new center at SPARK. Its plans include the development of facilities to enable the manufacturing and production of steel pipes, valves, pumps, turbines, and machine and rotary equipment.

AMCO’s facilities will be developed in three phases, allowing for the gradual build-up of manufacturing capabilities and onboarding of local talent.

By 2035, the park is expected to contribute more than SR22 billion to the Kingdom’s gross domestic product, provide up to 100,000 direct and indirect jobs and localize more than 350 new industrial and service facilities.


GRAPHIC: From Beirut to Damascus currencies take a battering

GRAPHIC: From Beirut to Damascus currencies take a battering
Updated 04 March 2021

GRAPHIC: From Beirut to Damascus currencies take a battering

GRAPHIC: From Beirut to Damascus currencies take a battering

Lebanon’s president this week ordered the central bank governor to open an investigation into currency speculation, after the Lebanese pound plunged to record lows on the black market.
But the battered Lebanese pound is not alone among regional currencies that have been decimated by the impact of the pandemic and other factors.
The Syrian pound also fell to a record low on the black market this week, dragged down by its close commercial and banking ties with Lebanon.
“Businessmen and traders are fretting over fears of a free-fall in coming days and watching if unrest grows in Lebanon and its impact on dealings since Lebanon is our lifeline to the outside world,” said one Damascus-based trader told Reuters, who requested anonymity.


Saudi energy minister urges caution and vigilance on OPEC+

Saudi energy minister urges caution and vigilance on OPEC+
Updated 1 min 59 sec ago

Saudi energy minister urges caution and vigilance on OPEC+

Saudi energy minister urges caution and vigilance on OPEC+
  • OPEC and allies meet today
  • Oil price rises ahead of meeting

DUBAI: The Kingdom’s Energy Minister Prince Abdul Aziz bin Salman again urged caution and vigilance among fellow ministers in the OPEC+ alliance of oil producers, as they met to consider the next crucial steps for global crude markets.

The virtual meeting, organized from OPEC’s Vienna headquarters, is to decide whether or not to raise production levels in the face of a strong recovery in the oil price over the past month. 

Brent crude, the global benchmark, jumped over $65 a barrel as the prince was speaking.

“I have said for a long time that recovery in global oil demand is closely linked to vaccine acceptance and the speed at which these vaccines are being rolled out around the world,” he said. “The uncertainty surrounding the pace of recovery has not receded. Against this background - and at the risk of sounding like a stuck record - I would once again urge caution and vigilance.”

Some OPEC+ members, notably Russia and Kazakhstan, want to increase production next month. Others want to keep the current level of cuts in place until the recovery in demand becomes more apparent.

Saudi Arabia is also considering whether or not to halt the additional and voluntary cut of a million barrels a day it announced in January, a move credited with sparking the recent strong price rise but which expires at the end of the month.

“The right course of action now is to keep our powder dry, and to have contingencies in reserve to insure against any unforeseen outcomes”, the prince said.

Analysts took his remarks to indicate that Saudi Arabia might consider rolling over at least some part of that cut for at least another month.

“We have elected for a careful and proactive approach that has proved successful. Before we take our next step forward, let us be certain that the glimmer we see ahead is not the headlight of an oncoming express train,” the energy minister said.

The level of compliance with OPEC+ agreed targets was 103 percent in February, according to OPEC officials. Some producers, notably Nigeria, have stuck to the agreement to compensate for past over-production.

“Compliance levels have remained at the historically high levels that have been a hallmark of our joint endeavor. The list of countries on the compensation schedule continues to shorten, and I truly commend Nigeria for completing its compensation,” the prince said.