Economy

Europe must do more to fight back against “massive” hidden handouts doled out by China to its industries, the European Commission president said, as the EU rushes to counter a swath of global subsidies that threaten its competitiveness.Speaking after European leaders discussed how to respond to US president Joe Biden’s $369bn climate bill, which is wooing green businesses, Ursula von der Leyen said the EU also needed to do more to deal with Beijing’s support for its domestic industries.“Where China is concerned we know they are giving massive subsidies, not only [to] the clean-tech sector but in general,” von der Leyen said in a press conference after a summit of EU leaders. “So the topic is much wider than our focus on [Biden’s Inflation Reduction Act]. Therefore we are developing a much broader strategy to deal with that.”Biden’s legislation, which includes subsidies and tax breaks for green technologies, has rattled EU leaders who fear it will lure businesses across the Atlantic.“In the face of the new geopolitical reality, the European Union will act decisively to ensure its long-term competitiveness, prosperity and role on the global stage,” EU leaders agreed in a joint statement on Friday morning.Von der Leyen said the IRA was “clearly defined and targeted” at six clean-tech sectors, meaning that the EU was finding it “very open and transparent” to deal with.She said the situation in China was far more opaque with “hidden subsidies” and a wider range of sectors affected. European companies have struggled to get access to the Chinese market and complained of a failure to respect intellectual property rights, she said.French president Emmanuel Macron said the EU had to “react with great force” to the IRA and said European state aid was needed “to help support our strategic sectors at the right level and in particular to counter the risks of relocation”.He implored the bloc to react against the “unfair competition” with “speed”.EU leaders agreed to “simpler, faster and more predictable” state aid procedures, including through tax credits, as well as the use of EU funds for green technology and “simplified and fast-tracked” regulations for climate-friendly investments.The EU has long complained about state support for China’s green industries, including photovoltaic solar panel manufacturing. Brussels imposed anti-dumping duties on Beijing in 2013, alleging Chinese producers were getting unfair subsidies. The EU recently approved new rules allowing it to investigate foreign companies that benefit from government cash.

Chinese electric vehicles, which are winning an increasing share of the European market, are seen as another threat.Speaking after the summit, German chancellor Olaf Scholz said the EU had longstanding policies to counter Chinese subsidies and “some ways to react”.He added: “It is not helpful for the world if everyone is working with subsidies, trying to distort competition.”Dutch prime minister Mark Rutte, who opposes raising new EU funding to support industry, said the bigger issue was cutting red tape to get money to businesses.“My country is investing €60bn between now and 2035 in cleaning our economy and we are only 6 per cent of the European economy,” he said.“So it is not that Europe is not stepping up. The problem is permitting — how do you get your money at a place where it has to go to as soon as possible with the least hassle?” More

(Reuters) -News Corp said on Thursday that it would cut 5% of its workforce, or 1,250 jobs, after the media conglomerate fell short of quarterly Wall Street estimates for profit and revenue, hurt by declines across its businesses including news.The company also said it incurred $6 million in one-time costs associated with its plans to merge with Fox Corp, which News Corp (NASDAQ:NWSA) Executive Chairman and Fox Co-Chairman Rupert Murdoch scrapped in January. A slump in advertising spending by businesses hit by rising inflation and higher interest rates has dented one of the major sources of revenue for companies such as News Corp, which publishes the Wall Street Journal (WSJ). “A surge in interest rates and acute inflation had a tangible impact on all of our businesses,” Chief Executive Robert Thomson said in a statement.Shares of the company were down nearly 3% in extended trading.To combat the slowdown, Thomson said there were a number of initiatives underway, including the job cuts. The layoffs will be made across all businesses and result in annual savings of at least $130 million.The company said that in the third quarter it expects to see one-time costs related to the withdrawn Fox-News Corp proposal and its previously announced exploration of a sale of Move Inc, which operates the Realtor.com website, to CoStar Group (NASDAQ:CSGP). The Dow Jones division, which includes the WSJ, reported an 11% rise in revenues to $563 million in the quarter, with strong growth in its professional information business. Subscriptions for the WSJ and Barron’s Group approached 5 million for the first time. However, earnings were down 3% from a year ago, to $139 million.News Corp’s advertising revenue in the second quarter fell 10.6% to $464 million. Fox’s ad revenue in the December quarter rose 4% thanks to a boost from the World Cup and the U.S. midterm election.Total revenue was $2.52 billion in the second quarter ended Dec. 31, while analysts on average expected $2.55 billion, according to Refinitiv data.Adjusted earnings per share were 14 cents, while analysts were expecting 19 cents. More

TOKYO (Reuters) -A possible revision to a joint Japanese government and Bank of Japan (BOJ) statement that focuses on pulling the country out of deflation must be discussed with the new BOJ governor, Finance Minister Shunichi Suzuki said.”What to do with the statement is something the government must discuss with the new governor,” Suzuki told parliament on Friday, adding that it was premature to say whether it actually needs to be revised as the government has yet to nominate the new BOJ chief.”But the goals mentioned in the joint statement, such as the need to pull Japan out of deflation and achieve stable economic growth, remain important policy challenges,” Suzuki said.The remarks came as the government intensifies its efforts to select a successor to BOJ Governor Haruhiko Kuroda, whose second, five-year term ends in April.Some analysts say a revision to the statement signed a decade ago would allow the BOJ to tweak its ultra-loose monetary policy more flexibly, and could heighten market expectations of a near-term end to its yield control policy.Under strong pressure by then-Prime Minister Shinzo Abe to take bolder steps to beat deflation, the BOJ signed the joint statement with the government in 2013 and committed itself to achieve its 2% inflation target “at the earliest date possible”.Some officials of Prime Minister Fumio Kishida’s administration are keen to revise the statement that focuses on steps to beat deflation – a goal that has become out of sync with recent rises in inflation, sources have told Reuters. More

“The inflation data will get better to a level we need to worry about less than at present,” Minister Choo Kyung-ho said at a forum hosted by senior domestic media editors, while giving no specific forecast.South Korea’s consumer price index rose 5.2% in January from a year before, picking up speed from a 5.0% gain in December 2022 and above market expectations for 5.0% growth.Choo said he has been meeting frequently with the head of the central bank to exchange views on current issues, but declined to comment on interest rates, noting that monetary policy was the preserve of the Bank of Korea.He said an anticipated pick-up in China’s economic growth after its shift away from COVID-related restrictions would be positive for South Korea’s economy, although the country needs to continue efforts to diversify export markets. More

In a hawkish-sounding quarterly Statement on Monetary Policy, the Reserve Bank of Australia (RBA) said domestically-sourced cost pressures were still picking even if consumer price inflation was a whole may have finally peaked last quarter. While growth in global goods prices had cooled this was yet to show clearly in Australia, while inflation in the service sector had climbed faster than expected.”The Board expects that further increases in interest rates will be needed to ensure that the current period of high inflation is only temporary,” said the RBA, implying two or more hikes were waiting in the wings.”The Board’s priority is to return inflation to target. High inflation makes life difficult for people and damages the functioning of the economy. And if high inflation were to become entrenched in people’s expectations, it would be very costly to reduce later.”On Tuesday, the RBA raised its cash rate for the ninth straight time to a fresh decade-high of 3.35%, bringing the total tightening since last May to a whopping 325 basis points.It also surprised markets by signalling further increases were needed, quashing talk of a pause and leading markets to sharply revise up their outlook for terminal rates to 4%.Consumer price inflation is running at a 32-year high of 7.8% and is now expected to only slow to 6.7% by June this year, up from a previous forecast of 6.3%. It should then slow further to the top of the RBA’s target range of 2-3% by mid-2025. The closely-watched trimmed mean measure of inflation will only slow to 6.2% by the middle of this year, compared with a previous forecast of 5.4%.Annual wage growth is expected to pick up to a peak of 4.2% at the end of this year, compared with the previous forecast of 3.9%, before easing back to 3.8% by mid 2025.The unemployment rate is expected to steadily increase to 4.4% by mid-2025, from the current 3.5%. All these forecasts are based on the technical assumption that interest rates peak at around 3.75% in mid-2023 before easing back to around 3% to June 2025.The bank also raised its forecast of economic growth this year to 1.6% this year, compared with 1.4% previously. China’s abrupt elimination of COVID curbs has added to growth in global demand, supporting Australia’s terms of trade and national income. The RBA also noted that the momentum in household consumption growth could be sustained for longer than expected, even as some are experiencing a painful squeeze on their budgets due to higher interest rates and the rising cost of living. More

(Reuters) – A U.S. judge on Thursday sanctioned Meta Platforms Inc (NASDAQ:META) and its law firm, Gibson, Dunn & Crutcher for “delay, misdirection and frivolous arguments” in a data privacy lawsuit over the company’s sharing of user information with third-parties.U.S. District Judge Vince Chhabria in San Francisco ordered Meta, Facebook’s parent company, and Gibson Dunn to pay about $925,000 over what he said was an effort to make the litigation unnecessarily difficult and expensive for the plaintiffs.Chhabria, who has long been critical of Gibson Dunn’s handling of the case, said the firm and Facebook mounted a “sustained, concerted, bad-faith effort to throw obstacle after obstacle in front of the plaintiffs—all in an attempt to push the plaintiffs into settling the case for less than they would have gotten otherwise.”Representatives for Gibson Dunn and Facebook did not immediately respond to requests for comment. The firm has argued in court filings that it followed court orders and has blamed the plaintiffs for issuing “unreasonable and incessant” demands for company documents. Los Angeles-founded Gibson Dunn has represented the company in numerous matters.Meta, Facebook’s parent company, agreed last year to pay $725 million to settle the lawsuit, which was sparked by revelations in 2018 that Facebook had allowed British political consulting firm Cambridge Analytica to access data of as many as 87 million users. The company did not admit wrongdoing.In Thursday’s decision, the judge faulted Meta and its lawyers for claiming they were only required to produce internal documents in the case about user data the company admitted it shared with third-parties. The court had ordered Facebook to turn over data it had collected on the plaintiffs in the case, regardless of whether it had been shared.The judge also accused Meta’s legal team of needlessly delaying turning over documents related to an internal investigation Facebook had commissioned into third-party apps that accessed user data.The case is IN RE: Facebook, INC. Consumer Privacy User Profile Litigation, U.S. District Court for the Northern District of California, No. 18-md-02843-VC.For plaintiffs: Derek Loeser of Keller Rohrback and Lesley Weaver of Bleichmar FontiFor Meta: Rosemarie Ring of Gibson Dunn More

HELSINKI (Reuters) – Finnish parliamentary groups are expected to discuss on Friday when to ratify NATO’s founding treaties, in a move that could lead the country to proceed with membership ahead of neighbouring Sweden, amid growing support among the Finnish public to go it alone. The two Nordic countries sought NATO membership shortly after Russia’s invasion of Ukraine last year, and while most member-states have ratified the applications, Turkey has yet to give its approval.”Our position on Finland is positive, but it is not positive on Sweden,” President Tayyip Erdogan said last week.Turkey’s differing view on Finnish and Swedish memberships is putting pressure on Finnish leaders to push ahead. A 53% majority of Finns polled on Feb. 2 for daily Ilta-Sanomat said they did not want Finland to wait for Sweden. Some 28% said it should. On Friday, parliamentary groups in Finland will decide whether parliament should ratify NATO’s founding treaties before it goes into recess on March 3, before a parliamentary election on April 2. If parliament on a later date votes in favour of approving the treaties, as it is widely expected to do, the president must proceed with the application within three months and as soon as all existing NATO members have also ratified Finland’s bid, which could effectively lead to proceeding with NATO membership without Sweden.For that to happen, Turkey and Hungary need to ratify the Finnish membership first and NATO to officially invite Finland as a member.Finland’s Chancellor of Justice Tuomas Poysti told Ilta-Sanomat the process would leave Finland some room to wait for Sweden if need be, but not endlessly. Officially, Finland has reaffirmed time and time again that it wants to join NATO with Sweden.Sweden is Finland’s closest defence ally. In case of a conflict with Russia, with which Finland shares a 1,300-km (800-mile) border, NATO would need Swedish territory to help Finland defend itself, for instance in terms of logistics.Ankara wants Helsinki and Stockholm in particular to take a tougher line against the Kurdistan Workers’ Party (PKK), which is considered a terror group by Turkey and the European Union, and another group it blames for a 2016 coup attempt. More

TOKYO (Reuters) – Japan’s wholesale prices in January rose 9.5% from a year earlier, data showed on Friday, adding to growing signs of inflationary pressure that could keep the central bank under pressure to phase out its massive stimulus programme.The increase in the corporate goods price index (CGPI), which measures the price companies charge each other for their goods and services, compared with a median market forecast for a 9.6% gain. It followed a revised 10.5% rise in December, Bank of Japan data showed.While global commodity inflation has run its course, companies continued to charge higher prices for products ranging from food, steel and chemical goods, the data showed.The data suggests that Japan’s core consumer inflation, which hit a 41-year high of 4.0% in December, will likely remain well above the central bank’s 2% target in coming months. More