China’s economic growth slows amid trade battle with US

Chinese leaders express confidence their $12 trillion-a-year economy can survive the conflict with US President Donald Trump. (AP)
Updated 19 October 2018

China’s economic growth slows amid trade battle with US

  • The world’s second-largest economy expanded by 6.5 percent over a year earlier in the three months ending in September
  • ‘Downward pressure has increased,’ government spokesman Mao Shengyong Mao says

BEIJING: China’s economic growth slowed further in the latest quarter, adding to challenges for communist leaders as they fight a tariff battle with Washington.
The world’s second-largest economy expanded by 6.5 percent over a year earlier in the three months ending in September, government data showed Friday. That was down from 6.7 percent for the quarter ending in July and 6.8 percent for the year’s first three months.
Forecasters expected China’s economy to cool after Beijing tightened credit controls last year to rein in a debt boom. But the slowdown has been sharper than expected, prompting Chinese leaders to reverse course and encourage banks to lend.
Communist leaders express confidence their $12 trillion-a-year economy can survive the conflict with US President Donald Trump. But export industries have begun to suffer from American tariff hikes of up to 25 percent on Chinese goods.
Economic performance was “stable overall,” but “we must also see the number of external challenges has increased significantly,” said a government spokesman, Mao Shengyong.
“Downward pressure has increased,” Mao said at a news conference.
Growth in retail spending and investment in factories and other fixed assets, which are much bigger parts of the economy than trade, slowed in the latest quarter, though to still-robust rates.
Retail sales rose 9.1 percent over a year earlier in the first nine months of the year, down 0.1 percent from the first half, according to the National Bureau of Statistics. Investment in factories and other fixed assets rose 5.4 percent in the first three quarters, down 0.6 percent from the first half.
Beijing has rejected US pressure to scale back industrial development plans Washington says are based on stealing or pressuring foreign companies to hand over technology. American officials worry they might threaten US industrial leadership.
The conflict with Washington has prompted communist leaders to step up the pace of a marathon effort to encourage self-sustaining growth driven by domestic consumption and reduce reliance on exports and investment.
Beijing has announced tariff cuts, announced plans to end restrictions on foreign ownership in the Chinese auto industry and taken other steps to rev up growth. But leaders have rejected pressure to scrap plans such as “Made in China 2025,” which calls for state-led creation of Chinese champions in robotics and other technologies.
Washington, Europe and other trading partners complain those plans violate Beijing’s market-opening commitments.
Beijing has responded to previous downturns by flooding the state-dominated economy with credit, but that has swelled debt. The ruling Communist Party has told banks to step up lending, especially to private entrepreneurs who generate China’s new jobs and wealth, but has avoided a full-scale stimulus. Forecasters say it will take the measures some time to work their way through the economy.
Washington has raised tariffs on $250 billion of Chinese goods and Trump says he might extend penalties to almost all imports from China. Beijing responded with its own tariff hikes on $110 billion of American imports but is running out of goods for retaliation due to their lopsided trade balance.
Forecasters say if threatened tariff hikes by both sides are fully carried out, that could cut China’s 2019 growth by up to 0.3 percentage points.
September exports to the United States rose 13 percent despite the tariff hikes, down slightly from August’s 13.4 percent. The country’s politically volatile trade surplus with the United States widened to a record $34.1 billion.
Chinese exporters of lower-value goods such as clothes say American orders fell off starting in April as trade tensions worsened. But makers of factory equipment, medical technology and other high-value goods express confidence they can keep their market share.
Trade accounts for a smaller share of the economy than it did a decade ago but still supports millions of jobs.
On Thursday, the Commerce Ministry promised official help for companies that have suffered due to the American import controls.
“In general, the impact is limited,” said a ministry spokesman, Gao Feng. “Governments at all levels will also take active measures to help enterprises and employees cope with possible difficulties.”


Saudi Arabia promotes investment opportunities with Japan’s business leaders  

Updated 23 October 2019

Saudi Arabia promotes investment opportunities with Japan’s business leaders  

  • Saudi Arabia and Japan exchanged 12 MoUs in the fields of education, science, technology, and banking and finance

DUBAI: Saudi Arabia opened its doors for Japanese investment during a Saudi-Japan business forum held in Tokyo on Wednesday amid growing economic ties between the two nations.  

The Saudi Arabian General Investment Authority (SAGIA) discussed tourism and entertainment investment opportunities in Saudi Arabia with Japan’s business leaders and government officials during the Saudi-Japan Vision 2030 Business Forum, hosted in partnership with the Japan External Trade Organization (JETRO).

During the forum, 12 Memoranda of Understanding (MoU) were exchanged in fields of education, science, technology, and banking and finance.

The MoUs include Toyobo and Saline Water Conversion Corporation and Arabian Japanese Membrane Company which will aim to manage disposed brine water generated from seawater desalination plants for environmental sustainability.

Two Saudi and Japanese universities signed MoUs for academic exchange on research. While SAGIA signed MoU with Sumitomo Mitsui Banking Corporation to enhance investment opportunities.

“Japan is one of Saudi Arabia’s most important economic partners, and businesses from across our countries have a strong track record of working together,” Saudi Arabia’s Minister of Commerce and Investment, Majid Al-Qasabi said at the Forum.

“Today’s Forum reflects the success and strength of this enduring partnership. We established the Saudi-Japanese Vision 2030 two years ago, which seeks to drive and facilitate continued private sector involvement by establishing joint-ventures between entities across our respective countries,” he added.

These investments come alongside a broad series of economic reforms, which are enabling rapid growth in foreign investment in Saudi Arabia. This is part of the Kingdom’s efforts to diversify its economy as outlined in Vision 2030.

Saudi Arabia has moved up three positions to the 36th place, globally, through its efforts to diversify the Kingdom’s economy, according to the 2019 Global Competitiveness Report published by the World Economic Forum.

The total number of foreign investor licenses issued in the first half of 2019 was more than double the number issued the same period a year before.

“We believe that the future prosperity of the Kingdom depends on fostering even closer ties with our strategic partners across the globe, and we look forward to welcoming these companies as they take part in the historic transformation of our economy,” Al-Qasabi said. 

Memoranda of Understanding exchanged at the Forum include:

  • University of Tokyo and King Fahd University of Petroleum and Minerals (KFUPM) – the academic exchange for research in renewable energy and petrochemicals
  • Kyoto University Institute for Advance Study (KUIAS) and King Abdullah University for Science and Technology (KAUST)– to promote the exchange of scientific materials, publications, and information and exchange of faculty members and researchers, students and joint research
  • University of Tokyo and King Abdullah University for Science and Technology (KAUST) – to collaborate on the research and the next generation of organic and soft electronics and efficient generation of hydrogen
  • Japan Patent Office (JPO) and Saudi Authority for Intellectual Property (SAIP) – to promote the exchange of data and best practices in the field of intellectual property protection including trademarks and patents
  • Sumitomo Mitsui Banking Corporation and Saudi Arabian General Investment Authority (SAGIA) – to enhance investment opportunities between Japan and Saudi Arabia
  • Mitsubishi UFJ Financial Group and Saudi Arabian General Investment Authority (SAGIA) – a framework for cooperation to enhance investment from Japan to the Kingdom of Saudi Arabia
  • Toyobo and Saline Water Conversion Corporation and Arabian Japanese Membrane Company – to develop innovative membrane technologies and manage disposed brine water generated from seawater desalination plants for environmental sustainability
  • Sojitz Corporation and AIZAWA Concrete Corporation and Al Saedan for Development – to explore opportunities and utilize 3D printing technology and local materials for housing construction
  • Cyberdyne Group and Abdul Latif Jameel Investments – to collaborate and enhance Cybernic treatment and contribute to the social development of the Kingdom.
  • Saudi-Japan Vision Office Riyadh (VRO) and National Industrial Development and Logistics Program (NIDLP) – to expand collaboration and enable investments in the field of industry, mining, energy and logistics
  • TBM and SABIC – to build a circular economy using LIMEX
  • Ministry of Economy, Trade and Industry (METI) and the National Industrial Clusters Development Program (NICDP) and the Technical and Vocational Training Corporation and Saudi-Japanese Automobile High Institute – to provide support and training for human capacity development for Saudi youth in the automotive sector