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Govt and policies

E-payments support economy

The rapid rise of third-party electronic payments is boosting the growth of China's online consumer market and will support the economy's rebalancing, according to a recent research report from Moody's. The value of third-party e-payments in China has grown at an annual rate of more than 100 percent since 2015, offering consumers an alternative to banks' payment channels at lower transaction costs, said the global rating agency. The growth stimulates online consumption and services, benefiting internet companies and service companies along the supply chain, it said. In the longer term, the development of e-payments and overall growth of e-commerce will encourage China's economic rebalancing toward consumption from investment, according to Moody's. It will support growth of the service sector, which will boost employment and consumption, and in turn stimulate more e-payments, said the report.

Macao CPI up 0.95% in May

Composite consumer prices index in the Macao Special Administrative Region increased by 0.95 percent year-on-year, the SAR's statistics department said on Wednesday. Composite CPI increased to 109.20 in May, which was attributable to higher charges for eating out and outpatient services, as well as increase in tuition fees, according to latest data released from Macao's Statistics and Census Service. Among the various sections of goods and services, price indices of Education and Health increased by 7.46 percent and 5.14 percent respectively year-on-year, and price index of food & non-alcoholic beverages that accounted for the largest share of household expenditure went up by 1.62 percent. Meanwhile, price indices of communication and housing and fuels dropped by 5.79 percent and 1.28 percent respectively.

Companies and markets

Toshiba to talk on sale of chip unit

Toshiba Corp said on Wednesday it will conduct negotiations solely with a government-led consortium over the sale of its prized memory-chip unit as the cash-strapped conglomerate tries desperately to bolster its financial position. "Toshiba has determined that the consortium has presented the best proposal, not only in terms of valuation, but also in respect to certainty of closing, retention of employees, and maintenance of sensitive technology within Japan," the company said in a statement following the conclusion of its board meeting. The consortium Toshiba was referring to comprises the state-backed Innovation Network Corp of Japan, the state-owned Development Bank of Japan and US fund Bain Capital.

Ford reshuffling business layout

US auto giant Ford announced on Tuesday it plans to move its Focus production to China in 2019. The Dearborn-based automaker also announced on its website to invest $900 million in a Kentucky truck plant to produce all-new Ford Expedition and Lincoln Navigator. "Finding a more cost-effective way to deliver the next Focus program in North America is a better plan, allowing us to redeploy the money we save into areas of growth for the company - especially sport utilities, commercial vehicles, performance vehicles as well as mobility, autonomous vehicles and electrified vehicles," said Joe Hinrichs, Ford executive vice-president and president of Global Operations. Ford said the North American Focus production at the Michigan Assembly Plant will remain until mid-2018. Afterward, the Michigan Assembly plant will be converted to produce new Ranger pickup starting in late 2018, and the new Bronco SUV in 2020.

Ryanair buys 10 Boeing aircraft

Low-cost airline Ryanair announced on Tuesday the purchase of 10 more Boeing 737 Max 200 Gamechanger aircraft, five of which will be delivered in the first half of 2019, with the second five delivered in the first half of 2020. This new order, which is valued at more than $1.1 billion at current list prices, will, together with the existing firm order for 100 Max 200s, allow Ryanair to grow its traffic to 200 million customers per annum by 2024. These new Max Gamechanger aircraft will reduce fuel consumption by up to 16 percent and reduce noise emissions by 40 percent, while offering 4 percent more seats per flights, allowing Ryanair to lower fares even further, the Dublin-headquartered airline said.

Around the world

S. Korean corporate financing dips

Corporate financing in South Korea posted a double-digit decline last month, financial watchdog data showed on Wednesday. Corporate direct financing, including the sales of stocks and bonds, amounted to 14.47 trillion won ($12.66 billion) in May, down 27 percent from the previous month, according to Financial Supervisory Service. Financing in the stock market, including the initial public offering and the rights issuance, was 90 billion won, down 96.8 percent from a month earlier. Debt financing tumbled 15.3 percent from a month earlier to 14.38 trillion won last month as sales of corporate bonds with a credit rating of AA or higher declined.

Malaysia May inflation up 3.9%

Malaysia's inflation, as measured by consumer price index, rose 3.9 percent year-on-year in May, due to higher transportation and food costs, government figures showed on Wednesday. The number was down from April's 4.4 percent, Malaysia's Department of Statistics said in a statement. Core inflation rose 2.6 percent in May compared to the same month of the previous year, while CPI for the period from January to May registered an increase of 4.3 percent as compared to the same period last year, it said. According to the statement, the increase of CPI in May was mainly due to the indices of transport (13.1 percent), food and non-alcoholic beverages (4.4 percent). Other categories that recorded increases were recreation services and culture (2.9 percent), health (2.9 percent), restaurants and hotels (2.3 percent) and housing, water, electricity, gas and other fuels (2.2 percent).

BOE head defends rate decision

Bank of England Governor Mark Carney on Tuesday defended an earlier decision by the bank not to raise interest rate from the record low of 0.25 percent. "Given the mixed signals on consumer spending and business investment, and given the still subdued domestic inflationary pressures, in particular anaemic wage growth, now is not yet the time to begin that adjustment," Carney told business leaders in his annual Mansion House speech. The BOE's rate-setting Monetary Policy Committee met last week and decided not to raise the bank rate from the record low set in August last year as a counter-stimulus to the expected deflationary pressures that Brexit would bring to the British economy. "In the coming months, I would like to see the extent to which weaker consumption growth is offset by other components of demand, whether wages begin to firm, and more generally, how the economy reacts to the prospect of tighter financial conditions and the reality of Brexit negotiations," said the central bank governor.

Bangladesh slashes rice import duty

Bangladesh has cut import duty on rice to 10 percent from 28 percent in a bid to cool down instability in prices of the staple food in the domestic market. Bangladeshi Commerce Minister Tofail Ahmed made the announcement at a media briefing on Tuesday in capital Dhaka. He said prices of rice are expected to fall by 6 taka (7 US cents) per kilogram as a result of the duty reduction. Officials say a gazette will be issued in this regard soon. Owing to higher import duty placed back in 2015 and 2016 in a bid to safeguard local farmers amid cheap prices from neighboring countries, rice import has dropped to a four-year low this year.

China Daily - Agencies

(China Daily USA 06/22/2017 page14)