Economy

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Chinese diplomats will arrive in Azerbaijan with a message for the UN COP29 climate conference. In the “real world”, they will argue, China is racing ahead of schedule in its efforts to decarbonise its economy. It is also helping the developing world do the same via its booming renewable energy and electric vehicle industries, as well as its Belt and Road infrastructure initiative.Chinese officials, meanwhile — in line with recent discussions with diplomats and other foreign visitors — are expected to push back at moves from Washington and Brussels that link negotiations over climate change to Beijing’s industrial policy and trade practices. They will also be increasingly assertive in highlighting China’s efforts to finance the green transition in the developing world, despite western calls for Beijing to be more ambitious.And, with COP29 opening after Donald Trump’s US presidential election win, expectations that the country will withdraw from the Paris agreement on climate change have been raised.Li Shuo, an analyst of Chinese climate and energy policy, says global climate diplomacy is at risk of becoming “more politicised, more divisive” and drifting to “a rather irrelevant status” because of the US government’s insistence on linking climate and trade issues.“China’s impressive success when it comes to embracing the low-carbon economy . . . is not a political story but a ‘real economy’ story,” argues Li, director of the China Climate Hub at the Asia Society Policy Institute think-tank. “Which part of the world wins that ‘real economy’ competition?”Beijing’s growing confidence in climate diplomacy marks a significant change after years of pressure from western leaders, who have argued that the world’s biggest polluter — accounting for about a third of global emissions — needs to act more quickly to help the world tackle global warming. Several statistics point towards China’s decarbonisation efforts outstripping Beijing’s expectations, and progressing towards the dual goals of peak emissions before 2030 and carbon neutrality before 2060 that President Xi Jinping announced four years ago. Beijing achieved its target of having 1,200 gigawatts of installed solar and wind capacity — enough to power hundreds of millions of homes annually — in July, six years early. The government’s original goal of electric vehicles to account for half of car sales by 2035 is on course to be achieved next year.Some content could not load. Check your internet connection or browser settings.At the same time, China’s foreign direct investment outflows are tracking at record levels. They are underpinned by cleantech investments in the developing world and supported by one of Xi’s hallmark foreign policies, the Belt and Road, which Beijing is now refocusing on green investments.China’s emissions could even fall this year: CO₂ output in the third quarter hovered around last year’s levels and declined in the previous three months, according to an analysis by UK-based climate news site Carbon Brief. This reflects, in part, both the surge in low-carbon electricity generation in China, which is home to about two-thirds of the world’s solar and wind power projects under construction, and transport sector electrification. It also raises the possibility that China’s total emissions peaked in 2023 — seven years ahead of Xi’s 2030 target. The China-Laos high-speed railway, a key project of Beijing’s Belt and Road Initiative, connects Kunming, capital of the Yunnan province, with Vientiane More

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Chinese automakers were told at a meeting with China’s Ministry of Commerce on Oct. 10 that they should pause their large-scale investment plans in European Union countries that had backed the tariff proposal, Reuters has previously reported.Leapmotor and Stellantis displayed the upcoming B10 EV at the Paris Motor Show four days after that meeting in an Oct. 14 debut both carmakers hailed as a milestone in their partnership.      Poland is among the 10 EU members which supported the EU’s decision to impose tariffs of up to 45% on imported Chinese-made EVs.Five EU members, including Germany and Slovakia opposed the tariffs, and 12 other member states abstained from the vote to approve the tariffs, which took effect on Oct. 30.      Stellantis and Leapmotor have not disclosed where the B10 SUV will be produced, and it was not clear if factors other than the pressure from Beijing on China’s automakers had played a role in the decision to shift planned production of the B10 from Poland.      China’s State Council Information Office, the agency that speaks for the government, did not immediately respond to a request for comment. China’s Ministry of Commerce also did not immediately respond to a request for comment from Reuters.      Polish industry ministry did not immediately reply to a request for comment.      Stellantis’ Tychy plant in Poland has been producing the T03 compact EV with components shipped from China. It is not immediately clear whether the T03 assembly was also under review and whether the plan would have impact on jobs.      Production in Germany, an option under consideration for the new joint-venture EV, would be more expensive than Poland in terms of utility costs and labour, the first person familiar with the review said.Leapmotor has said the B10 is the first of a B series of EVs it will roll out designed for markets outside China, including Europe, where it began sales in September.      Stellantis CEO Carlos Tavares said the partnership with Leapmotor and the B10 was a way to bring “high-tech, affordable” EVs to consumers outside China.Stellantis owns a 51% stake in the joint venture with its Chinese EV partner. Leapmotor owns the remaining 49% of the partnership, Leapmotor International.      German and Slovakian governments did not immediately reply to a request for comment from Reuters. Opel was not immediately available for comment.      Chinese companies have to seek approval from Beijing for their direct investments overseas under Chinese laws and regulations. More

By Shariq KhanNEW YORK (Reuters) -Oil prices settled more than 2% lower on Friday as traders grew less fearful of prolonged supply disruptions from a hurricane in the U.S. Gulf of Mexico, while China’s latest economic-stimulus packages failed to impress some oil traders.U.S. West Texas Intermediate futures led the decline and settled at $70.38 per barrel, down by 2.7%, or $1.98. Global benchmark Brent crude futures fell by 2.3%, or $1.76, to$73.87 per barrel.Energy producers shut in more than 23% of oil output in the U.S. Gulf of Mexico by Friday to brace against Hurricane Rafael. However, the latest forecasts on trajectory and intensity reduced the risks Rafael poses to oil production.”Threats of supply outages due to Hurricane Rafael are subsiding as the storms shifts to circling in the center of the Gulf of Mexico for the next five days or so,” Alex Hodes, analyst at brokerage firm StoneX told clients in a note. The storm, which left a trail of destruction in Cuba this week, had weakened to a Category 2 hurricane on Friday, according to the U.S. National Hurricane Center’s latest advisory.Meanwhile, top oil importer China’s latest round of fiscal support disappointed oil investors. Chinese authorities announced a package easing debt-repayment strains for local governments, but those measures do little to directly target demand, UBS analyst Giovanni Staunovo said.”I guess some market participants were hoping for more stimulus measures coming from China,” he said. “Hence, the disappointment weighing on prices earlier today.”Deflationary pressures on the Chinese economy have been a heavy drag on oil prices this year, with customs data showing a sixth consecutive month of year-over-year declines in the country’s crude oil imports for October.Despite Friday’s losses, oil prices gained more than 1% week-over-week, drawing support from expectations of tighter sanctions on Iran and Venezuela by U.S. President-elect Donald Trump, which could cut oil supply to global markets.The U.S. Federal Reserve’s decision to cut interest rates by a quarter percentage point on Thursday could also helped lift oil prices by more than 1% in the previous session. More

TOKYO (Reuters) -Bank of Japan policymakers were divided on how soon they could raise interest rates with some warning of the risk of renewed market volatility, a summary of opinions at the October policy meeting showed on Monday (NASDAQ:MNDY).Many in the nine-member board highlighted the need to scrutinise market developments, particularly yen moves, in determining whether Japan’s economy can weather higher borrowing costs, the summary showed.While the risk of a U.S. hard landing has subsided, the BOJ must spend time scrutinising market developments “as it was too early to conclude markets will restore calm,” one member said.Another member said the BOJ must “take time and exercise caution” when raising rates.Others, however, saw the need to communicate clearly the BOJ’s resolve to continue raising rates if its economic and price forecasts are met, the summary showed.”The Bank should consider further rate hikes after pausing to assess developments in the U.S. economy,” one member was quoted as saying, adding that Japan’s economy no longer needed substantial monetary support.At the Oct. 30-31 meeting, the BOJ maintained ultra-low interest rates but said risks around the U.S. economy were somewhat subsiding, signalling that conditions are falling into place to raise interest rates again. More

In its latest stimulus measures, the country’s top legislative body approved a 10 trillion yuan ($1.4 trillion) package on Friday to ease local government “hidden debt” burdens, rather than directly injecting money into the world’s second-biggest economy, as some investors had hoped. Analysts say the package will likely do little to boost economic activity, demand and prices in the near term.The consumer price index (CPI) rose 0.3% from a year earlier last month, slowing from September’s 0.4% rise and marking the lowest since June, data from the National Bureau of Statistics showed, short of the 0.4% increase forecast in a Reuters poll of economists.However, core inflation, excluding volatile food and fuel prices, rose 0.2% in October, accelerating from 0.1% in September.”Due to the Golden Week holiday in October, the effect of stimulus policies on promoting domestic demand issued since late September is not obvious yet,” said Bruce Pang, chief economist at JLL. He expected CPI to maintain an upward trend while core inflation remains mild, opening up space for the authorities to cut interest rates further early next year.China’s central bank in late September unveiled the most aggressive monetary support measures since the COVID-19 pandemic to revive economic growth.MORE SUPPORT EXPECTEDThe highly anticipated stimulus plan passed on Friday by the standing committee of the National People’s Congress may leave investors who speculated on a fiscal bazooka disappointed, as it fell short of expectations for strong policy steps to boost consumption and reflate the economy.Finance Minister Lan Foan indicated on Friday that more stimulus was coming, telling a press conference that tax policies to support the housing market would come soon and that the authorities were accelerating the work of recapitalising banks.Some analysts say Beijing may want to retain some economic ammunition until Donald Trump resumes the U.S. presidency in January.On a month-on-month basis, China’s CPI dropped 0.3%, versus an unchanged outcome in September and below a forecast 0.1% decline.Declining food prices dragged down the month-on-month CPI, Dong Lijuan of the statistics bureau said in a statement.With 70% of Chinese household wealth tied up in the ailing real estate sector, which at its peak made up a quarter of the economy, consumers are holding onto their money tightly, subjecting the economy to deflationary pressures.China’s headline consumer inflation will likely remain low next year at 0.8%, while producer prices will not turn positive until the third quarter of 2025, Goldman Sachs said in a note this month.Producer prices slid 2.9% on year in October, deeper than the 2.8% fall the previous month and below an expected 2.5% decline. It marked the biggest drop in 11 months. Factory-gate deflation deepened in the petroleum and natural gas extraction, oil and coal processing, chemical products manufacturing and auto manufacturing sectors.”The implementation of some better-than-expected counter-cyclical adjustment policies is expected to improve consumption and investment momentum,” said Zhou Maohua, a macroeconomic researcher at China Everbright (OTC:CHFFF) Bank. “But a recovery in the domestic housing market, household consumption and a balance of supply and demand would require some time.”($1 = 7.1785 Chinese yuan renminbi) More

SINGAPORE (Reuters) -Singapore’s biggest lender DBS Group Holdings Ltd (OTC:DBSDY) is exploring expanding into Malaysia with potential acquisitions of stakes in banks in its Southeast Asian neighbour, including in one of Malaysia’s smallest banks by assets, two sources said. DBS is exploring a purchase of Singapore state investor Temasek’s 29.1% stake in Alliance Bank Malaysia Bhd, said the two sources with knowledge of the matter, a slice currently valued at about $460 million. Temasek is biggest shareholder in DBS with a 28.9% stake, according to LSEG data. Other options for expanding into Malaysia include buying Kuwait Finance House’s Malaysian retail banking assets, worth more than $500 million and which have been put up for sale, one of the sources said. Deliberations are in very early stages, however, the sources said, and any formal negotiations for an acquisition of a stake in a Malaysian bank would need approval from the Malaysian central bank, or Bank Negara Malaysia. The two sources declined to be named as talks on the possible acquisitions were confidential. “We do not comment on market rumours and speculation,” said a spokesperson for DBS, Southeast Asia’s biggest lender by assets. Temasek declined to comment. Alliance Bank, the second smallest listed bank in Malaysia by total assets, and Bank Negara Malaysia did not respond to requests for comment after business hours on Friday.Kuwait Finance House said the process for selling its retail banking portfolio in Malaysia was in preliminary stages, and that it was not able to share additional information. DBS is the only Singaporean bank without a retail banking presence in Malaysia. Local rivals Oversea-Chinese Banking Corporation and United Overseas Bank (OTC:UOVEY) both have retail banking operations in Malaysia.DBS’ plan to foray into Malaysia comes amid improving economic prospects for the Southeast Asian nation, with new infrastructure projects and investments expected to result in a surge in credit growth.In the second quarter, Malaysia’s economy expanded by an annual 5.9%, its fastest in 18 months, on higher household spending, exports and investment. Its monetary unit, the ringgit, is Southeast Asia’s best-performing currency this year.’BOLT-ON ACQUISITIONS’ DBS emerged as a regional banking powerhouse under outgoing Chief Executive Piyush Gupta’s 15-year tenure, bolstered by acquisitions that established significant presences in markets including China, India, Indonesia and Taiwan. DBS completed the acquisition of Citigroup (NYSE:C)’s consumer banking business in Taiwan in August last year. In July, Gupta said DBS was looking for bolt-on acquisitions that would support further strategic expansion in the region. Tan Su Shan, who heads up DBS’ institutional banking group and is deputy CEO, will take over from Gupta in March next year, making her the first woman to lead the bank. On Thursday, DBS posted its highest ever quarterly net profit for July-September on record fee income. DBS last attempted to buy Temasek’s stake in Alliance Bank in 2012. Those plans did not go through because of regulatory hurdles, according to sources at the time. The current Malaysian government under Prime Minister Anwar Ibrahim has been more forthcoming and open to ideas and investments with an aim to boost economic growth, said the sources with knowledge of DBS’ plan for Malaysia.  More