US-China trade talks must cover currency, US Treasury chief says

US-China trade talks must cover currency, US Treasury chief says
Steven Mnuchin said that China needs to identify concrete ‘action items’ to rebalance the two countries’ trade relationship. (Reuters)
Updated 12 October 2018

US-China trade talks must cover currency, US Treasury chief says

US-China trade talks must cover currency, US Treasury chief says
  • The US Treasury chief and People’s Bank of China Governor Yi Gang extensively discussed currency issues on the sidelines of the IMF and World Bank annual meetings
  • Yi told an investment audience that China’s monetary policy was on an opposite cycle to that of the US Federal Reserve

NUSA DUA: US Treasury Secretary Steven Mnuchin said that he told China’s central bank chief that currency issues need to be part of any further US-China trade talks and expressed his concerns about the yuan’s recent weakness.
Mnuchin said that China needs to identify concrete “action items” to rebalance the two countries’ trade relationship before talks to resolve their disputes can resume.
The US Treasury chief and People’s Bank of China Governor Yi Gang extensively discussed currency issues on the sidelines of the International Monetary Fund and World Bank annual meetings on the Indonesian resort island of Bali.
“I expressed my concern about the weakness in the (yuan) currency and that as part of any trade discussions, currency has to be part of the discussion,” Mnuchin said of the meeting.
The two senior officials talked about market fundamentals that have driven the yuan down against the dollar, Mnuchin said, adding: “I think we had a productive explanation from his standpoint on those issues.”
Yi told an investment audience that China’s monetary policy was on an opposite cycle to that of the US Federal Reserve, which has been raising rates amid a strong economy, people who attended the closed-door session said.
Mnuchin’s comments on China’s currency come ahead of next week’s scheduled release of a hotly anticipated Treasury report on currency manipulation, the first since a significant weakening of yuan began this spring as trade tensions between the world’s two largest economies escalated.
The yuan weakened to 6.912 to the dollar as China reported a record September trade surplus with the United States, fanning fears of an escalation of the two countries’ trade war.
The Chinese currency has depreciated by 5.6 percent against the dollar since the start of the year.
Mnuchin would not discuss the findings of the currency report and declined comment on media reports that Treasury staff had recommended that China not be labeled a currency manipulator.
But Mnuchin emphasized that the report is based on rigorous research and data, and that Treasury’s career staff and leadership were fully aligned on currency issues.
“The currency report is something we report to Congress. It is done pursuant to two separate pieces of legislation. This is not a political document,” he said.
IMF Managing Director Christine Lagarde warned against adding currency wars to the trade conflict, saying this would hurt global growth and “innocent bystander” countries.
Despite US President Donald Trump’s pledge to declare China a currency manipulator on “day one” of his administration, the Treasury has stuck to its three-part test for evidence of currency manipulation — and China has failed to qualify for such a designation.
These include a high bilateral trade surplus with the United States, a global current account surplus above three percent of gross domestic product and “persistent” one-way currency market intervention to weaken or prevent a rise in a country’s currency. In the past two years, China has failed on only one criteria, its high trade surplus with the United States.
US laws mandating the report require the Treasury to enter special negotiations with an offending country to correct their practices, a process that could eventually lead to trade sanctions. But the Trump administration has already hit China with tariffs on $250 billion worth of Chinese goods imports, and has threatened duties on the remaining $267 billion.
Mnuchin declined to confirm a Wall Street Journal report that the White House had decided to proceed with a meeting in November between US President Donald Trump and President Xi Jinping at the G20 leaders summit in Buenos Aires.
But he said re-launching trade talks would require China to commit to taking action on structural reforms to its economy.
“It’s got to be more than a signal” from China, Mnuchin said. “It has to be that we can reach an agreement on action items that can rebalance the relationship. We’ve made it clear that if they have real action items that they want to discuss that we will listen.”
If the relationship could be rebalanced, he said the US-China total annual trade relationship could grow to $1 trillion from $650 billion currently, with $500 billion of exports from each country. That would approach the $1.2 trillion US-Canada-Mexico trade under the North American Free Trade Agreement.
As the IMF launches talks with Pakistan over a bailout package, Mnuchin said transparency was needed for Pakistan’s debts to China and other creditors.
“I think it’s pretty clear that if there is an IMF program, that we’d need to make sure those funds are used for appropriate purposes and they’re not being used to repay China or other creditors. I would expect China to understand that.”
Regarding steep US stock market declines over the past two days, Mnuchin said these were “normal market corrections.”
“I don’t believe markets are efficient,” he said. “So I think that when people invest in the markets, they need to be prepared that there will be times when markets go too far in both directions.”


SABIC, BASF discuss plastics circular economy in Riyadh

SABIC, BASF discuss plastics circular economy in Riyadh
Updated 23 June 2021

SABIC, BASF discuss plastics circular economy in Riyadh

SABIC, BASF discuss plastics circular economy in Riyadh
  • SABIC is working with UK-based company Plastic Energy to build its first commercial unit in Geleen
  • Chemicals giant focuses on recycling plastics

RIYADH: SABIC and BASF, two of the world’s largest chemical producers, met in Riyadh to share insights into their respective programs to develop circular economy solutions for the plastics industry.
SABIC shared progress it has made with TRUCIRCLE, a collection of processes that allow for the certification of polymers created through recycling of used and mixed plastic, certified bio-based renewable polymers, certified renewable polycarbonate (PC), and mechanically recycled polymers.
BASF discussed ChemCycling, a project to develop a pyrolysis technology that turns plastic waste into a secondary raw material called pyrolysis oil. The German multinational also explained how its plastic additives facilitate mechanical recycling of plastics.
SABIC is working with UK-based company Plastic Energy to build its first commercial unit in Geleen, The Netherlands, which will produce TRUCIRCLE certified circular polymers from recycled plastic.
“TRUCIRCLE has been introduced as a way to collectively showcase our circular innovations and help manufacturers reduce plastic waste through the adoption of a range of sustainable material solutions,” said Mark Vester, SABIC’ global leader circular economy. “It forms part of our circular economy business and is aligned with the UN Sustainable Development Goal of Responsible Consumption and Production.”


Humvee maker strikes military vehicle deal with Egypt

Humvee maker strikes military vehicle deal with Egypt
Updated 23 June 2021

Humvee maker strikes military vehicle deal with Egypt

Humvee maker strikes military vehicle deal with Egypt
  • The company will study the feasibility of developing an in-country assembly and manufacturing capability to allow Egypt to replace or supplement its existing Humvee fleet

DUBAI: Humvee manufacturer AM General has struck an initial agreement to help develop the production of military vehicles in Egypt.
The deal with the Egyptian Ministry of Military Production is expected to become a long term partnership to develop and build tactical vehicles in-country, the US-based company said in a statement on Wednesday.
The company will study the feasibility of developing an in-country assembly and manufacturing capability to allow Egypt to replace or supplement its existing Humvee fleet.
“Today’s signing ceremony further solidifies our long-standing relationship with the government of Egypt,” said AM General President CEO Andy Hove. “We look forward to applying our manufacturing and design expertise to help grow the Egyptian automotive industry.”
The agreement is part of a broader push to develop more domestic military manufacturing in Egypt which is already a major defense sector importer. Arab states are ramping up spending on local defense sector investments as part of their economic diversification agendas which aim to create more local jobs while at the same time substituting value-added imports with locally manufactured alternatives.


Oman to grant foreign investors 10-year residency

Oman to grant foreign investors 10-year residency
Updated 23 June 2021

Oman to grant foreign investors 10-year residency

Oman to grant foreign investors 10-year residency
  • Program is open to foreign retirees

RIYADH: Oman has announced a new program under which foreign investors are granted long-term residency, Asharq reported citing a statement by the Ministry of Commerce, Industry and Investment Promotion.

The Investor Residence program will be for a period of five to 10 years, subject to renewal, and is open to foreign retirees, the ministry said.

The program, starting in September, aims to attract quality investments according to clear and specific controls.


Abu Dhabi commissions solar farm in West Africa’s Togo

Abu Dhabi commissions solar farm in West Africa’s Togo
Updated 23 June 2021

Abu Dhabi commissions solar farm in West Africa’s Togo

Abu Dhabi commissions solar farm in West Africa’s Togo
  • The Mohamed Bin Zayed Solar PV Complex is expected to power around 158,000 homes and businesses in the country

DUBAI: An Abu Dhabi-funded solar plant in Togo, West Africa is now fully operational, state news agency WAM reported.

The Mohamed Bin Zayed Solar PV Complex, a 50-MW project financed by the Abu Dhabi Fund for Development (ADFD), is expected to power around 158,000 homes and businesses in the country.

The country’s first solar plant is located in Blitta, Togo, and spans around 92 hectares in the African nation’s Centrales region.

The new clean energy source will reduce the community’s reliance on firewood and charcoal, and aid Togo’s national agenda to increase renewable energy share by 50 percent by 2025, and to double it by 2030.

ADFD provided 55 million dirhams ($15 million) in concessionary loans to finance the project, which was developed by Amea Togo Solar, a subsidiary of the UAE-based clean energy developer Amea Power.

The funding is part of ADFD’s joint facility with the International Renewable Energy Agency (IRENA), where the pair vows to support the development of renewable energy projects around the world.

“Africa holds tremendous promise for renewable power generation, which can bring improved energy access and reliability of supply while creating jobs and economic opportunity,” IRENA’s Director-General Francesco La Camera said.

In 2020, ADFD and IRENA signed loan agreements worth 121 million dirhams with the governments of Togo, Niger, and Liberia to advance clean energy in Africa.


Egypt to implement eighth increase in household electricity prices in July

Egypt to implement eighth increase in household electricity prices in July
Updated 23 June 2021

Egypt to implement eighth increase in household electricity prices in July

Egypt to implement eighth increase in household electricity prices in July
  • Prices will increase between 8 percent and 26 percent
  • Subsidies phase out extended from 2021/2 to 2024//5

RIYADH: Egypt’s Ministry of Electricity and Renewable Energy is preparing to the eighth increase in electricity prices for domestic consumption since it began phasing out subsidies in 2014.

From July 1, prices will increase between 8 percent and 26 percent, depending on the consumption segment, Minister of Electricity Mohamed Shaker said in an interview on Al-Balad TV.

In 2014, a decision was taken to eliminate state subsidies within five years, which was subsequently extended earlier this month to eight years to reduce the burden on customers and will now end in the fiscal year 2024/5, he said.

“When the economic reform took place in 2016, the dollar exchange rate changed dramatically, jumping from 7 Egyptian pounds to 18 Egyptian pounds, and this turned the scales completely,” said Shaker.

Fuel affects the cost of electric power the most, and whenever the dollar exchange rate changes, the fuel prices change, he said.