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IMF meets central bank chiefs in Shanghai

In Uncategorized on October 18, 2010 at 10:24 am

SHANGHAI (AFP) – International Monetary Fund and central bank officials from around the world met in China Monday to discuss ways to boost the global economic recovery, amid mounting fears of a damaging currency war.

The People’s Bank of China hosted the conference in the country’s financial hub Shanghai, bringing together central bank chiefs and other officials from Asia, Africa, Europe, and North and South America, the IMF said.

The Shanghai conference follows IMF and World Bank annual meetings earlier this month, where finance officials discussed how to strengthen the recovery from the worst recession since World War II and the global financial system.

Pedestrians pass in front of the Shanghai skyline. AFP

It also comes ahead of this week’s key Group of 20 meeting in South Korea, where currency reform is expected to dominate talks, amid fears that nations could adopt trade barriers to counter the rising prices of Asian exports.

“The conference is part of the ongoing international examination of the policy challenges posed by the global financial crisis,” the Washington-based IMF said in a statement.

PBOC chief Zhou Xiaochuan and IMF managing director Dominique Strauss-Kahn were co-chairing the meeting, the institution said.

The US Federal Reserve was represented by Kevin Warsh, a member of the central bank’s policy-setting Federal Open Market Committee.

Monday’s meetings had been planned for several months and Il-Houng Lee, the IMF’s resident representative in China, said all discussions would be carried out behind closed doors.

The talks were focused on macro-prudential policies — the big systemic picture of reducing the risk of too-big-to-fail institutions, Chinese central bank policy adviser Xia Bin told reporters outside the meeting room.

A news conference was scheduled for 6:00 pm (1000 GMT).

In the run-up to the G20 finance ministers’ meeting, which begins Friday in preparation for next month’s Seoul summit, South Korea has warned that frictions over the currency upheaval are growing and could lead to trade protectionism.

The United States, facing mid-term elections next month, has ratcheted up the pressure on China to allow the yuan to rise more rapidly, but Beijing insists its currency must not be used as a “scapegoat” for US economic woes.

When asked whether China feared a currency war, He Fan, an economist for the Chinese Academy of Social Science, a top government think tank, said he thought such a situation would be averted.

“Yes, we are concerned. But given historic lessons, a large-scale currency war is unlikely,” He said between attending meetings.

“But we are going to see continuing conflicts particularly in the East Asian region. Countries like Japan and South Korea have similar economic structures and both have limited room for monetary policy adjustment.”

Beijing should now tighten capital controls even further to prevent a flood of hot money — speculative funds — from coming into China on expectations that the yuan will appreciate, which would fan inflation, He said.

With Beijing keeping a tight grip on the yuan, many other Asian economies are suffering as their currencies soar against the dollar. Despite Europe’s debt woes, the euro has also surged.

In its statement, the 187-nation IMF added the meeting followed an IMF-sponsored gathering in South Korea of Asian policymakers and leaders in July, at which it “committed to forging a new relationship with the region.”

A year ago, the Group of 20 developed and developing nations tasked the IMF with stepping up its focus on global systemic stability.

Authorities agreed a broader approach was needed to spot weakness in the increasingly interconnected financial system, to complement the traditional micro-prudential regulations of bank-by-bank audit and supervision.

Asia-Pacific leaders will meet for a summit in Japan following the G20 gathering in Seoul next month.

Source: SGGP

Obama to address nation as oil chiefs grilled

In Uncategorized on June 18, 2010 at 4:32 am

WASHINGTON (AFP) – A top oil executive admitted Tuesday that companies are ill-equipped to tackle major spills, as President Barack Obama readied for a solemn Oval Office address on the Gulf of Mexico catastrophe.

In a stunning admission, ExxonMobil chief executive Rex Tillerson acknowledged in a series of testy exchanges with US lawmakers that oil giants are hamstrung once it comes to dealing with a major spill.

“When these things happen, we are not well equipped to handle them,” he said, as lawmakers grilled top executives from BP and four of its biggest global rivals.

Sitting alongside BP America boss Lamar McKay at a packed Congress hearing, officials from ExxonMobil, ConocoPhillips, and Shell took pains to distance themselves from the unfolding Gulf catastrophe.

L-R: Rex Tillerson, Chairman and CEO of ExxonMobil, John Watson, Chairman and CEO of Chevron, James Mulva, Chairman and CEO of ConocoPhillips, Marvin Odum, President of Shell Oil Company, and Lamar McKay, Chairman and President BP America, Inc. listens to questions from members while participating in a House Energy and Commerce Committee hearing, in Washington, DC.(AFP)

They maintained that had BP followed industry-wide safety practices, the disaster — triggered by an April blow-out of a BP-leased rig off the Louisiana coast — would have been avoided.

“I believe the independent investigation will show that this tragedy was preventable,” Chevron chief executive officer John Watson said.

In a further blow to BP’s troubled efforts to contain the eight-week spill, a fire on a surface containment ship Tuesday shut down the British energy giant’s bid to suck up the gushing oil.

A “small fire” broke out at around 9:30 am (1430 GMT) on a derrick on the Discovery Enterprise, a vast drilling ship collecting oil from the ruptured well on the sea floor via a mile-long pipe.

“The fire was quickly extinguished. The preliminary view is that the fire was caused by a lightning strike,” a BP statement said.

Despite the latest setback highlighting the complexities of the task, Obama vowed millions of gallons of crude in the Gulf would be contained, and the region restored to health.

“Make no mistake, the United States of America has been through tough times before, but has always come out strong, and we will do so again,” Obama said in Florida, before returning to give his first Oval Office speech.

“This is an assault on our shores, and we’re going to fight back with everything that we’ve got,” he vowed.

White House officials said Obama’s address at 8:00 pm (0000 GMT) would outline a plan going forward to restore the region once the spill, estimated at up to 40,000 barrels a day, stops spewing into the Gulf.

In a bid to speed up compensation payments for residents facing economic ruin due to the spill, the Obama administration was also poised to take over the claims process from BP.

“The best way to prevail on BP is to take the claims process away from BP,” White House spokesman Robert Gibbs told CBS television, amid bitter criticism that BP is dragging its feet.

BP America’s boss McKay declined to confirm however whether the company, which has vowed to pay all legitimate claims, would set up an escrow fund to compensate victims.

US lawmakers have demanded BP set up a 20-billion-dollar escrow fund to pay for the clean-up and economic recovery of the region, blighted after an April 20 explosion sank the Deepwater Horizon rig.

Before Tuesday’s setback, BP was containing some 15,000 barrels a day from the ruptured wellhead, and has plans to move in more ships and equipment to try to contain most of the spill.

Gibbs said the company would likely be able to siphon up more than 90 percent of the gushing oil by the end of June, explaining that BP was “adding additional lines” to bring “more oil off of the surface and out of the Gulf.”

But the under-fire company has warned the spill will not be stopped permanently until it completes drilling two deepsea relief wells in August.

Obama was also to announce the creation of a “czar” tasked with overseeing the restoration of the region once the spill is stopped.

BP suffered yet another blow Tuesday when ratings agency Fitch slashed its credit rating by six notches from “AA” to “BBB,” causing its shares to dive again on the stock market, a day after they lost 10 percent.

Obama has summoned BP chairman Carl-Henric Svanberg to the White House for talks on the crisis on Wednesday, also expected to be attended by BP chief executive Tony Hayward.

Source: SGGP

Chiefs of Samsung and Sony to meet

In Uncategorized on May 17, 2010 at 9:01 am

SEOUL, May 17, 2010 (AFP) – Samsung Electronics chairman Lee Kun-Hee is to meet his counterpart from Japan’s Sony Corp in Seoul next week, officials at the Korean company said Monday.

Lee will meet Howard Stringer on May 24 at Samsung’s reception house in central Seoul, a Samsung Electronics spokesman said without disclosing agenda details.

(AFP FILES) Employees walk past a sign outside Samsung Electronics in Suwon, south of Seoul, 24 February 2005.

The Asian electronics giants have worked together since the 1990s in the semiconductor and liquid crystal display (LCD) fields.

In 2004 they established a joint venture, S-LCD, in South Korea to jointly produce LCD panels mainly used for televisions.

The Maeil business newspaper said Stringer is expected to ask for an increase in the supply of LCD panels from Samsung.

It said both sides would also discuss ways to improve collaboration in other business areas including 3D technology.

Samsung is likely to face greater competition this year from Japanese TV makers as they vie for a share of the nascent 3D TV market.

Source: SGGP

EU finance chiefs say global stimulus plans must continue

In World on November 30, 2009 at 4:09 am

 European finance chiefs said Sunday the global economic recovery was not yet strong enough for governments to halt stimulus measures, after meeting here with Chinese Premier Wen Jiabao.

A delegation led by Eurogroup chief Jean-Claude Juncker, European Central Bank head Jean-Claude Trichet and economic and monetary affairs commissioner Joaquin Almunia also urged a “gradual and orderly” appreciation of the yuan.

It also warned China to be careful with its exports — often much cheaper than those of other countries — to avoid provoking a protectionist backlash, in the talks held in the eastern city of Nanjing.

“We are considering the moment has not yet arrived to withdraw the stimulus packages that are under way in various parts of world,” Juncker told a news briefing after the meeting between EU officials and Chinese economic managers.

China’s Premier Wen Jiabao (R) and European Commission president Jose Manuel Barroso pose before their meeting on the sidelines of the China-EU summit in Nanjing

The Asian giant’s economic recovery was well under way, Juncker said, adding the Euro area was also detecting clear signs of improvement and expecting to see a moderate recovery in 2010.

“The Euro area will see no major withdrawal of stimulus measures in 2010,” he said.

The meeting took place a day ahead of a major China-EU summit expected to focus on climate change.

The yuan’s exchange rate is one of the thorniest issues between China and the European Union.

The Chinese currency has been effectively pegged to the US dollar since the summer of 2008, and Europe fears the euro’s resultant rise against the yuan will hurt EU exports to China and slow the continent’s economic recovery.

“We said there was a case for what I would say is a gradual and orderly appreciation of the currency against the euro and the major floating currencies. This was our message,” Trichet told reporters.

“We were not defending the overall interest of the European economy only,” he said. “We were defending what we trust is the superior interest of both the Chinese and the European economy — and the global economy.”

Trichet said the rebalancing of China’s export-dependent economy was “part of its own stability and prosperity.”

However, the European officials said they were not optimistic that Beijing’s policy on the yuan would change.

Almunia confirmed the low value of the yuan against the euro had “led to a situation with which we are not satisfied.”

Protectionism was a concern for both sides, he added, pointing out the EU was China’s largest trading partner, accounting for a fifth of the Asian giant’s total exports.

“In this still difficult economic situation we should avoid protectionism… it is in the Chinese interests not to create conditions that can lead to protectionism,” he told reporters after the news conference.

Wen, for his part, also voiced his opposition to trade and investment protectionism, according to comments broadcast on state television. He also defended the yuan.

“China maintains the stability of the yuan exchange rate and has made important contributions to global financial stability and economic development,” he was quoted as saying.

Wen added China would gradually increase the “flexibility of the yuan exchange rate.”

Earlier this month US President Barack Obama appeared to have failed to persuade Chinese officials to loosen the yuan’s peg to the dollar.

“The Chinese are telling us exactly the same thing they are telling President Obama,” European Commission president Jose Manuel Barroso told reporters after a dinner with Wen before Monday’s China-EU summit.

A week before the United Nations Climate Change Conference begins on December 7, environmental concerns are expected to overshadow other issues at the summit, which is also being attended by Swedish Prime Minister Fredrik Reinfeldt, who holds the rotating EU presidency.

“I certainly asked the Chinese and all our partners to explore the outer limits of their position,” Barroso said after the dinner. “What is at stake is very important: it’s the future of our planet.”

China meanwhile is expected to offer reassuring words on the importance of the EU after Obama’s recent visit here fuelled talk of a “G2” world dominated by Washington and Beijing.

One senior European official, who spoke on condition of anonymity, said the Nanjing meeting marked the first “substantial summit we have had since 2007”.

China cancelled a December 2008 summit in protest at a meeting between the exiled Tibetan spiritual leader, the Dalai Lama, and French President Nicolas Sarkozy, who held the EU presidency at the time.

A summit between the two sides was subsequently held in Prague in May this year.

Source: SGGP Bookmark & Share