INTERNATIONAL
Textile Raw Material Price 2016-03-07
|
Item |
Price |
Unit |
Fluctuation |
Date |
|
PSF |
1092.96 |
USD/Ton |
10.03% |
3/7/2016 |
|
VSF |
2035.69 |
USD/Ton |
0.45% |
3/7/2016 |
|
ASF |
1912.29 |
USD/Ton |
0% |
3/7/2016 |
|
Polyester POY |
1057.70 |
USD/Ton |
3.76% |
3/7/2016 |
|
Nylon FDY |
2207.38 |
USD/Ton |
0% |
3/7/2016 |
|
40D Spandex |
4522.06 |
USD/Ton |
-4.84% |
3/7/2016 |
|
Nylon DTY |
2096.24 |
USD/Ton |
0% |
3/7/2016 |
|
Viscose Long Filament |
1134.35 |
USD/Ton |
3.14% |
3/7/2016 |
|
Polyester DTY |
2467.97 |
USD/Ton |
0% |
3/7/2016 |
|
Nylon POY |
5713.12 |
USD/Ton |
0% |
3/7/2016 |
|
Acrylic Top 3D |
1256.98 |
USD/Ton |
3.14% |
3/7/2016 |
|
Polyester FDY |
2023.43 |
USD/Ton |
0% |
3/7/2016 |
|
30S Spun Rayon Yarn |
2743.89 |
USD/Ton |
0% |
3/7/2016 |
|
32S Polyester Yarn |
1624.87 |
USD/Ton |
0.95% |
3/7/2016 |
|
45S T/C Yarn |
2452.64 |
USD/Ton |
0% |
3/7/2016 |
|
45S Polyester Yarn |
1762.84 |
USD/Ton |
0.88% |
3/7/2016 |
|
T/C Yarn 65/35 32S |
2115.40 |
USD/Ton |
0% |
3/7/2016 |
|
40S Rayon Yarn |
2881.85 |
USD/Ton |
0% |
3/7/2016 |
|
T/R Yarn 65/35 32S |
2421.98 |
USD/Ton |
0% |
3/7/2016 |
|
10S Denim Fabric |
1.07 |
USD/Meter |
0% |
3/7/2016 |
|
32S Twill Fabric |
0.90 |
USD/Meter |
0% |
3/7/2016 |
|
40S Combed Poplin |
0.97 |
USD/Meter |
0% |
3/7/2016 |
|
30S Rayon Fabric |
0.72 |
USD/Meter |
0% |
3/7/2016 |
|
45S T/C Fabric |
0.74 |
USD/Meter |
0% |
3/7/2016 |
Source: Global Textiles
Note: The above prices are Chinese Price (1 CNY = 0.15329 USD dtd.08/03/2016)
The prices given above are as quoted from Global Textiles.com. SRTEPC is not responsible for the correctness of the same.
The Odisha government to give a boost to its textile sector plans to develop an integrated textile park over 112 acres of land in Bhadrak district. A detailed project report of the proposed park has been sent to the textile ministry to grant funds under the Secheme for Integrated Textile Parks (SITP) said an official of Idco (Odisha Industrial Infrastructure Development Corporation), the land acquisition arm of the state government. The proposed park at Bhadrak which is expected to house about 22 apparel manufacturing units will involve investment to the tune of Rs 70 crore. Idco which will develop the sector specific park has sought Rs 21 crore from the Centre as grant under the scheme for major infrastructure development for the park. As of now Idco will develop the park, if required, a special purpose vehicle may be constituted , added a source.
The SITP scheme launched in 2005 is aimed to encourage private investments and employment generation in textile sector by facilitating world class infrastructure for common facilities, such as roads, water supply treatment and distribution network, power generation and distribution network, effluent collection treatment and disposal system, design centre, warehouse, first aid centre, etc. The project cost under the scheme will be funded through a mix of equity or grant from the ministry. The Government of India, as per the scheme guidelines, support will be limited to 40 percent of the project cost with a maximum ceiling of Rs 40 crore for parks. The scheme targets industrial clusters with high growth potential, which require strategic interventions by way of providing world-class infrastructure support. The project cost will cover common infrastructure and buildings for production and support activities depending on the needs of the integrated textile park.
SOURCE: Yarns&Fibers
The Central Board of Direct Taxes (CBDT) has set up a dedicated structure for delivery and monitoring of tax payer services in the Income Tax Department. Two separate directorates — Directorate of Tax Payer Services I (TPS-I) and Directorate of Tax Payer Services II (TPS-II) — have been set up by the CBDT. Member (Revenue and Tax payer services) in the CBDT will oversee the delivery and monitoring of taxpayer services under the new structure. Together, these Directorates will be responsible for delivery and monitoring of taxpayers services in the field offices and e-services deliverable through various electronic platforms of the Department. They will oversee and co-ordinate all matters relating to grievances of taxpayers and ensure their timely redressal. These Directorates will report to the Member (R and TPS), CBDT through the Principal Director General of Income Tax (Administration), an official release said. The responsibility for delivery of tax payer services has also been specifically assigned at every level in the field offices.
SOURCE: The Hindu Business Line
India will operationalise single window customs clearance from April 1 and allow deferred payments to importers as part of a trade facilitation pact of the World Trade Organisation. “The Central Board of Excise and Customs (CBEC) is already working on a pilot for single window customs clearance at 13 air and sea ports in the country. We hope to roll it out from April 1 and we will gradually expand it to all ports,” said Najib Shah, Chairman, CBEC. Finance Minister Arun Jaitley had in the Budget proposed to amend the Customs Act to provide for deferred payment of customs duties for importers and exporters with proven track record as well as implement the Indian Customs Single Window Project.
New mechanism
Importers will be able to get clearance from most regulators including food safety, plant quarantine, textiles and drugs through the new mechanism, which will also cut down their dwell time by 50- 60 per cent. Shah said the single window customs clearance will help reduce costs for importers as well as fast-forward their shipments. Deferring customs duty payments is not a mandatory requirement under the Trade Facilitation Agreement but is a key recommendation, Shah added. “Most advanced countries however, do provide the facility,” he said.
Cabinet approval
India, through a decision of the Union Cabinet on February 17, had approved the Notification of Commitments under the TFA, which aims to expedite the movement, release and clearance of goods, including goods in transit. To facilitate implementation of the agreement, the government will also set up a committee that would be chaired jointly by the Commerce and Revenue Secretaries. The TFA will be operationalised once two-thirds of the WTO members complete their domestic ratification process.
SOURCE: The Hindu Business Line
Mumbai First, a think-tank working to find solutions for city's development, will hold a three-day conclave, involving top urban policy makers and planners from BRICS nations, in April. The event assumes significance given the megapolis's aspiration to become a global financial centre and is inspired by Prime Minister Narendra Modi's idea of promoting greater cooperation and people-to-people contact among BRICS (Brazil, Russia, India, China and South Africa) nations, a press release issued today from the organisers here said. The programme - BRICS Friendship Cities Conclave - is being organised jointly by the Maharashtra government and the External Affairs Ministry between April 14 and 16. Prime Minister Modi will inaugurate the conference, which will be attended by representatives of at least two cities from each of the BRICS nations. At least two governor-level delegations from Russia and three ministerial-level delegations from China have confirmed their participation, the release said.
Union Finance Minister Arun Jaitely, External Affairs Minister Shushma Swaraj, Maharashtra Chief Minister Devendra Fadnavis will attend the opening ceremony. Lord Jim O' Neill, the UK commercial secretary, who coined the term BRICS will also address the inaugural session. This is the second major international summit hosted by Mumbai in 2016 after the 'Make In India Week' last month. National Centre for the Performing Arts (NCPA) will be the venue for the inauguration on April 14, followed by deliberations at Hotel Trident on April 15-16, it said."Considering the fact that Mumbai is the financial, commercial, and entertainment capital of India, there could not have been a more suitable venue to hold this first friendship conference of cities from BRICS countries," the release quoted Fadnavis as saying.
SOURCE: The Economic Times
Veteran industrialist Adi Godrej is a man whose views are much sought after. As chairman of the 119-year-old Godrej Group, the 73-year-old has seen India during the licence-raj days as well as its emergence after liberalisation in the 1990s. He speaks to Viveat Susan Pinto about what he would have liked the Budget to have done, how its rural and agri push benefits his group; and the acquisition strategy of group companies. Edited excerpts:
How does the just-announced Budget benefit your group?
Two companies in particular stand to gain from this rural and agri push, Godrej Consumer and Godrej Agrovet. The projects the government has taken up as part of this push are very sensible and I see tangible benefits accruing to rural consumers as a result. The momentum coming out of this should benefit companies operating in this space. This includes two of our group as well. Apart from this, some provisions announced in the real estate sector such as those for affordable housing, exemptions for rental income taxation, housing finance deductions and no dividend distribution tax on Real Estate Investment Trusts are good. It has a positive rub-off on businesses operating in the space, including ours (Godrej Properties) as well.
Is there anything the Budget missed? Is there something you would like to tell the finance minister and Prime Minister?
While it was not expected that the finance minister would make any announcements on the goods & services tax (GST) in the Budget, since it is in Parliament, I would like to tell the PM to find some way of passing GST. It will push our economy into double-digit growth, which is what our country needs at this point. Everything else will, then, fall into place, which includes getting private-sector investments going.
During your group's 118-year celebration last year, you had identified certain pillars that would drive group revenue. Are you satisfied with the way they are headed?
The consumer goods market has slowed, so businesses operating there such as fast-moving consumer goods and consumer durables have felt the heat. But, our properties business is doing well. Our total bookings have doubled this year over last year. Defence and aerospace show huge potential thanks to the government's Make in India push. While we have been making (our products) in India for decades now, the emphasis this government is giving to Make in India will boost local manufacturing further. I am also of the view that agri-products have huge scope in the country. The pillars we've identified can take us forward.
While acquisitions are something that the Godrej Group has executed successfully in the past few years, will you go back to doing JVs like you did in the 1990s and first decade of the current millennium?
It depends on the circumstances and the opportunities at hand. There is nothing we say we won't do. But, JVs seem unlikely at this point.
SOURCE: The Business Standard
India is keen on ramping up economic cooperation with Egypt, focusing on trade and investment, the Indian envoy here has said while underlining the need for "transparency and predictability" to woo more Indian businesses to this key Middle East country. "Trade between India and Egypt increased by about 60 per cent over the last five years and this is really remarkable because you will notice that trade between many other countries has actually stagnated or even gone down and global trade itself is stagnating so this is a remarkable development," India's Ambassador to Egypt Sanjay Bhattacharyya told PTI. With the participation of about 20 leading Indian companies, the third round of the Egyptian-Indian Business Council will be held on March 10 to discuss ways of boosting cooperation and investments between both countries especially in the fields of chemicals, leather, furniture and medicine. The round will be held on the sidelines of the joint trade committee, which will begin its meeting on March 9.
Speaking about economic cooperation opportunities between India and Egypt, Bhattacharyya said economic issues should be viewed in totality. "For us it means that we must have more trade, we must have more investment flows, we must have more technology flows, we must have greater cooperation in developing skills and sharing each other's experience and we will continue to work on all these together," Bhattacharyya said. "Along with a joint trade committee we have also a meeting with a joint business council, which will look at the possibilities of investments in different parts of Egypt including the Suez Canal Zone," he said. "Business will always flow where there is an opportunity for profit and if you can provide an environment for profit business will come," Bhattacharyya said. However, there are also at the same time several macro issues that every business propositions will look at, he said. "These are particularly pertaining to the foreign exchange situation, the ease of repatriation, the regulations on the investment laws and their implementation. So once there is transparency and predictability on these fronts and they are implemented in an easy manner there will be great opportunities," Bhattacharyya said. "I have travelled to many of the governorates of Egypt. Two-thirds of Indian investments are already along the Suez Canal in other words Indian investors had long ago realised the huge potential of the Sue Canal area as a hub and I've been to Port Said and Ismalia and Ain Soukhna, where there are Indian investments and I found that the local authorities over there have been very very helpful in many instances to Indian investors," he added.
Bhattacharyya said the joint trade committee will discuss different issues including ways to increase trade between both countries. "I think the potential is much greater because there are other countries in the region around Egypt who have much higher trade with India so what is it that prevents us from having even greater trade," he added. The envoy said that in order to enhance trading cooperation between the two countries, a number of things need to be looked at. "I think we need to look at the tariff structure, also we need to look at are there any barriers to trade, we also need to see as to how we can promote complementarities; for instance agriculture products have been increasing in Egypt's exports to India we are buying much more of agriculture products from Egypt may be this is an area in which the growth can be even greater," he said. "On investments, I think the picture, in a sense, is very good because we have about 50 Indian enterprises in Egypt with a total investment of about $3 billion and if you look at it in terms of the non-hydrocarbon sector it is a very large investment," the Ambassador said.
SOURCE: The Economic Times
Ending uncertainty over tax treatment, the Central Board of Direct Taxes (CBDT) has said that benefits under the India-UK Double Taxation Avoidance Agreement (DTAA) would be applicable to partnership firms in the UK as well as India. Apprehensions that the term 'person' in the DTAA does not specifically include partnership were brought to the notice of the CBDT and clarity was sought on whether the provisions of the treaty are applicable to a partnership. In circular, the CBDT said the provision of the DTAA would be "applicable to a partnership i.e. a resident of either India or the UK, to the extent that the income derived by such partnership, estate or trust is subject to tax in that state as the income of the resident either in its own hand or in the hands of its partner or beneficiaries". Amit Maheshwari, Partner, Ashok Maheshwary and Associates, said the clarification would end the "confusion" in case of partnerships following an amending protocol to the DTAA which was notified in February 2014 with effect from December 27, 2013. "The circular is clarificatory in nature on the revision of India-UK DTAA by stating that the treaty benefits would be available to the partnerships if their profits are taxed in the UK either in the hands of the partners of the firm. "This has been the bone of contention between the revenue authorities and UK partnerships. This will put an end to the confusion being there in the minds of UK tax payers," he said. DTAA is a pact between two countries with an objective to avoid taxation of the same income in both countries. India has comprehensive DTAA with over 80 countries.
SOURCE: The Economic Times
Egypt, often viewed India's gateway in North Africa, is now providing duty free access to European Union, North America, Arab and African markets for the Indian companies. Addressing a business meet in Kolkata last month Egyptian Ambassador to India Hatem Tageldin said that 52 Indian companies are now working in Egypt with total investments of around $3 billion and the bilateral trade is about $5 billion annually. Simultaneously Egyptian companies are now looking to invest more in India. Kapci Coatings, an Egyptian company making auto refinish products. It is planning to invest around $50 million in five factories across India, according to the Ambassador. Kapci India already had considerable market share and hence decided to expand its operations in the country. Kapci had already begun the construction of its first unit in Karnataka. Another Egyptian factory has been set up in Noida El Sewedy and this specialises in electrometers.
Addressing the meet Tageldin called upon the Indian businesses to participate taking advantage of the current Egyptian investment opportunities. The investment climate in Egypt has witnessed major legislative and institutional reforms, with a tangible impact on both the level of domestic investments, as well as inflows of foreign direct investment (FDI). The Egyptian Government has launched several mega projects that would create opportunities for investment in many production and services sectors including roads, railways, ports, water plants, solar energy, integrated development projects of Upper-Egypt, the Special economic zones in the Northern West Suez Gulf, developing technological industries, integrated civil and commercial centres throughout Egypt, in addition to Suez Canal Area Project and the New Egyptian Administrative Capital. As many as 14 greenfield cement units in Egypt were now for grabs. "These licences would come with mining rights," the Ambassador informed.
Meanwhile as many as 25 Indian companies from different sectors are participating in Cairo International Fair "CIF" which is going to be held during the period from 16 to 25th March in Cairo. The Indian Trade Promotion Organisation pr ITPO in collaboration with the Indian Ministry of Commerce and Industry will have a pavilion of 600 square meters in the Fair. There will be B2B meetings between the Egyptian businessmen and their counterparts from India on the side line of that event. The Indian Ministry of Micro, Small, and Medium Enterprises is also participating in Cairo International Fair, where both countries will discuss the opportunities of cooperation in the field of MSMEs and share the Indian experiences in this regard. A Memorandum of Understanding "MoU" between the Egyptian Expo and Convention Authority "EECA" and the Indian Trade Promotion Organization "ITPO" will be discussed during the Fair. Several Indian companies participated in Africa 2016 Business and Investment Summit in Egypt on February 20. Meanwhile Tageldin also met Mahesh Sharma, Tourism Minister with an eye to promote bilateral tourism. The number of Indian tourists to Egypt increased by 27% in 2015.
SOURCE: The Economic Times
The international crude oil price of Indian Basket as computed/published today by Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas was US$ 36.17 per barrel (bbl) on 07.03.2016. This was higher than the price of US$ 34.13 per bbl on previous publishing day of 04.03.2016.
In rupee terms, the price of Indian Basket increased to Rs 2433.35 per bbl on 07.03.2016 as compared to Rs 2295.93 per bbl on 04.03.2016. Rupee closed stronger at Rs 67.27 per US$ on 07.03.2016 as against Rs 67.38 per US$ on 03.03.2016. The table below gives details in this regard:
|
Particulars |
Unit |
Price on March 07, 2016 (Previous trading day i.e. 04.03.2016) |
Pricing Fortnight for 01.03.2016 (12 Feb to 25 Feb, 2016) |
|
Crude Oil (Indian Basket) |
($/bbl) |
36.17 (34.13) |
30.61 |
|
(Rs/bbl |
2433.35 (2295.93) |
2096.17 |
|
|
Exchange Rate |
(Rs/$) |
*67.27 (67.27) |
68.48 |
* RBI reference rate for 07.03.2016 is not available. Therefore reference rate of 04.03.2016 has been considered.
SOURCE: PIB
Textiles are among several Pakistani items that are in high demand in Iran, Lahore Chamber of Commerce and Industry (LCCI) Senior Vice President Almas Hyder has said after his return from a six-day visit to Iran. Hyder said that Iran has a higher requirement of Pakistani textile products including T-Shirts, Denim jeans and home textiles. There is a need to form a textile delegation comprising leading companies, as soon as possible, he said, according to a press release of LCCI. “The Iranian side wanted that the agreed gas pipelines between Pakistan and Iran should be connected soon. The Iranian power companies can provide 5000 megawatt electricity to Pakistan which roughly cost $1.5 billion to connect electricity to eliminate load shedding from Pakistan”, the LCCI Senior Vice President added. Iranian gas can solve much of Pakistan's energy crisis that has sent the textile industry reeling in recent years. He said Iran wanted to enhance their trade with Pakistan by up to $5 billion. In this regard, necessary steps should be taken by the Pakistani side, Hyder said.
SOURCE: Fibre2fashion
Nigerian textile import is on rise, in this current year during the fourth quarter Nigeria would spend about $140 million (N27.5 billion) on imported textiles. as the Nigerian textile industry is under perfoming due to the influx of cheaper fabrics from China and India, although there are about 30 operational textile mills but running only at an average of 40 percent of installed capacity. Foreign textiles are among the 41 items that will not benefit from official foreign exchange from the Central Bank of Nigeria (CBN). Data from the National Bureau of Statistics (NBS) showed that Nigeria spent N24.7 billion ($130 million) on textile imports in Q3 2015.
In order to encourage domestic production, the federal government had placed a ban on textile importation in 2010. However, this led to increased smuggling. Estimates by analysts at FBN Capital showed that smuggled imported textiles account for over 85 percent of fabrics sold locally. Most manufacturers within the industry have cited the high cost of financing as a major roadblock to the several efforts to move the industry forward. Annual interest rates on their loans are close to 30 percent whereas in China rates of less than six percent are sometimes available. The federal government set up a N100 billion textile and garment intervention fund, and disbursed funds at rates of six percent interest about six years ago. The impact of the fund was modest since beneficiaries tended to refinance their existing loans and spent very little on capital investments.
Last year the CBN indicated interest in lending support to the industry through the establishment of its own intervention fund at a single digit interest rate. Last month the Minister of Industry, Trade and Investment, Okechukwu Enelamah, reiterated that policies geared towards boosting textile and garment industries are being developed, analysts at FBN Capital said. The Bank of Industry blames state governments' failure to implement the National Cotton, Textile and Garment policy in their respective states for the collapse of textile companies across the country. The annual global output of textile firms is estimated at $400 billion. China's production accounts for half of this figure. According to the CBN's 2014 Statistical Bulletin, the value of cotton production contracted by 1.1 percent y/y in 2014 and accounted for 5.1 percent of crop production GDP in the same quarter.
SOURCE: Yarns&Fibers
National Assembly Standing Committee on Textiles has unanimously recommended approving the proposal of Pak-Korea Technical Textile Centre, the first state-of-the-art-textile centre of the country after considering its benefits. NA body has also recommended approving Rs54 million for textile centre on Friday. From Pakistani funding, a building will be constructed while Korea will provide consultants who will not only train local scientists but will also carry out research activities. Korea will also equip the state-of-the-art centre. According to officials of Ministry of Textiles, land adjacent to a university has already been marked for the centre. Korean team is present in Faisalabad to finalize the project, and a final announcement from Korean side for 600 million funding is expected soon. After the approval from the committee, now the project will be forwarded to Planning Commission. As the Planning Commission is already burdened with many other important projects, it might take some time to get approval for this unique and first ever project. However, the officials revealed that Korea was already very active and has completed initial work. The standing committee, which assembled to discuss and finalize the PSDP budgetary proposals for 2016-17, also approved Rs600 million for the construction of building of Faisalabad Garment City Training Center, in Faisalabad Garment City. The meeting, under the chair of lawmaker Khawaja Ghulam Rasool Koreja, postponed the budgetary proposals for the project “Pink Bollworm Area Wide Integrated Management in Cotton Growing Regions” for further deliberations. Pink bollworm and whitefly are known as the two major killers of cotton crop in Pakistan. This year, around 33 percent reduction in cotton crop was termed to low quality seeds and pink bollworm and whitefly attacks. Members stressed the need for the promotion of seed production and recommended that the Agriculture University, Faisalabad may be taken on board. The standing committee members also showed desire to establish state-of-the-art-technical textile centre in other provinces as well.
SOURCE: Yarns&Fibers
Vietnam currently ranks sixth among the biggest garment exporters to the EU, trailed by China, Bangladesh, Turkey, India and Cambodia, according to the Vietnam Textile and Apparel Association (Vitas). Last year, the EU imported US$3.11 billion of apparel products from Vietnam, up 5.01% in value and 3.21% in volume, and accounting for 3.45% of the EU market share. Despite a price reduction of 2.31% from a year earlier and lower price levels than Vietnam, Cambodia’s EU market shares were higher than Vietnam, constituting 3.64% with its EU garment exports registering US$3.27 billion. Garment experts described Cambodia outpacing Vietnam in garment exports to the EU as a big surprise. Vitas reported that during the first two months of this year, garment exports hit US$3.6 billion, up 12.4% against last year’s same period. However, price levels were just as same as last year even down by 0.5-1%.
SOURCE: The Global Textiles
Bangladesh sees Latin America not only as a market for its exports, but also as a valued partner with whom its people could share its culture, said State Minister for Foreign Affairs Shahriar Alam yesterday while addressing a seminar titled “Bangladesh’s relations with Latin Amercian countries: unlocking potential”. Bangladesh thinks Latin America to be a prospective market for exports and hence plans to go beyond the traditional export markets and establish new politico-cultural and economic relations with Latin America. One resident and eight non-resident envoys from Latin American countries attended the day long seminar co-organized by the foreign ministry and Bangladesh Institute of International and Strategic Studies or BIISS. Alam said that they are eyeing the large Latin American market for their jute products, handicarfts, pharmaceuticals, leathers, ceramic wares, plastic and melamine goods, IT products and services, agricultural products and services. Bangladesh wants to explore new areas of cooperation with all the countries of the region. But garment exports from Bangladesh to Latin American countries have shown a healthy growth in the last few years. Bangladesh's relationship with Latin America is not only centred around issues and matters of bilateral interests and benefits but also about seizing the growing opportunities for cooperation and collaboration on contemporary global importance and development.
SOURCE: Yarns&Fibers
Moody's Investors Service has lowered the outlook on China's government credit ratings to "negative" from "stable", citing governments' weakening of fiscal metrics and rising contingent liabilities. The rating agency attributed the change in outlook to three major factors: rising government debt in large and rising contingent liabilities on the government balance sheet; a continuing fall in reserve buffers due to capital outflows; uncertainty about the authorities' capacity to implement reforms to address imbalances in the economy. The first driver of the negative outlook on China's rating relates to the government's fiscal strength which has weakened and which Moody's expects to diminish further, albeit from very high levels. The second driver relates to China's external vulnerability. China's foreign exchange reserves have fallen markedly over the last 18 months, to $3.2 trillion in January 2016, $762 billion below their peak in June 2014. The third driver concerns institutional strength. China's institutions are being tested by the challenges stemming from the multiple policy objectives of maintaining economic growth, implementing reform, and mitigating market volatility. Fiscal and monetary policy support to achieve the government's economic growth target of 6.5 per cent may slow planned reforms, including those related to state-owned enterprises (SOEs).
Moody's said Chinese government debt has risen markedly, to 40.6 per cent of GDP at the end of 2015, from 32.5 per cent in 2012. It expected a further increase to 43 per cent by 2017, given an accommodative fiscal stance. The agency expects debt affordability to remain high as large domestic savings will continue to fund government debt. Moody's kept the Aa3 rating for Chinese government bonds unchanged, given China's fiscal and foreign exchange reserve buffers remain sizeable. It provided a silver lining to the negative rating, saying that it could revise the rating outlook to stable if government policy was likely to succeed in balancing competing priorities and thereby arrest the deterioration in China's fiscal metrics and reduce contingent liabilities, most likely through effective restructuring of SOEs in overcapacity sectors.
Conversely, Moody's could downgrade the rating if it observed a slowing pace in the adoption of reforms needed to support sustainable growth and to protect the government's balance sheet. Tangibly, this could happen if debt metrics weaken, contingent liabilities increase, or progress on SOE reform stalls. Sustained capital outflows or a marked tightening in capital controls without tangible progress on reform implementation would also be consistent with a downgrade of the rating, it said.
SOURCE: Fibre2fashion
The Finance Ministry has put in place a new legal framework for investigating and recommending safeguard measures on goods imported from ASEAN countries.
Industry representation
“Over the past few months, sections from the Indian industry, especially representatives of the metals sector such as copper and aluminium, have been complaining about a surge in imports from some of the ASEAN countries. Imposition of safeguard duties could be an effective way of checking such imports in case injury to the specific sector can be established,” a government official told BusinessLine. The India-ASEAN Trade in Goods Agreement (part of the larger Comprehensive Economic Cooperation Agreement) — signed in 2010 — provided for imposition of safeguard measures with respect to members of the regional grouping. But the provision has not been utilised till date by India. However, now India has come up with a dedicated framework, enabling domestic industry to seek imposition of safeguard duty specifically against injurious imports from the 10-member ASEAN bloc — Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. This is significant as once any safeguard duty is imposed against a member country of ASEAN, it would not be applicable on countries outside the grouping on a most favoured nation (MFN) basis, official sources said. The safeguard mechanism provided under the India-ASEAN pact is aimed to protect domestic producers against a sudden surge in imports due to tariff concessions that would substantially cause, or threaten to cause, serious injury to the domestic industry.
Tariff rate
This allows a country to suspend the further reduction of any tariff rate or increase the tariff rate on the goods concerned to the applied MFN tariff rate (non-preferential tariff rate applicable to all countries outside the FTA) level of January 1, 2010 and maintain this protection for up to four years. Nitish Sharma, Partner-Indirect Taxation, Nangia & Co, said this was a good move that could help protect domestic industry. “It would enable domestic manufacturers whose businesses are affected by increased influx of goods from any of ASEAN countries to approach the safeguard authorities and seek relief only with respect to those countries within the grouping,” Sharma said.
Trade flows
In the case of ASEAN FTA, India has benefitted on both sides of trade flows with a statistically significant 33 per cent increase in exports and 79 per cent increase in imports. The Indian industry has been complaining about disproportionate benefits going to the ASEAN countries. Of all the FTAs signed by India, the one with ASEAN has had the biggest trade impact as this arrangement saw the greatest reduction in Indian import tariffs. In the case of ASEAN, the average import tariffs maintained by India stood at 11.3 per cent prior to the signing of FTA. This has sharply reduced to 4.7 per cent after FTA. Within the set of FTA countries, ASEAN growth rate of trade after the enactment of FTA is much higher than other FTA countries.
SOURCE: The Hindu Business Line
Tibet's foreign trade mainly with Nepal and India through the Nathula border point fell by nearly 60 per cent to USD 861 million in 2015 primarily due to massive earthquakes in Nepal. Exports of the China's autonomous region dropped by 71.9 per cent to 3.6 billion yuan, while imports were up 114.4 per cent at 2.03 billion yuan, according to the Lhasa Customs. Tibet's foreign trade mainly with Nepal and India through the Nathula border point fell by 59.2 per cent to 5.66 billion yuan (USD 861 million). The decrease was mainly caused by the massive earthquakes in Nepal last year, which blocked the highway to Zham, the border township where 90 per cent of China-Nepal land trade had been conducted, state-run Xinhua news agency reported. Nepal has remained Tibet's top trade partner since 2006. In 2014, Tibet's trade with Nepal exceeded 10 billion yuan, accounting for 90 per cent of the region's total foreign trade that year.
SOURCE: The Economic Times
The International Monetary Fund (IMF) has said that Asia has made significant progress in economic integration and collaboration. The IMF's observation came at a conference in Tokyo last week on “Advances and Challenges in Regional Integration,” to discuss Asia's experience with economic integration, including in the areas of trade, financial markets, and labour mobility. “The region has come a long way in terms of economic integration, helped by many successful rounds of multilateral trade agreements that have reduced barriers,” IMF Deputy Managing Director Mitsuhiro Furusawa said in his opening remarks, according to an IMF press release. “In addition to trade Asia has made important strides in the area of financial integration as well. Motivated by the Asian financial crisis of 1997-98, significant steps have been taken, such as regional liquidity support arrangements through the Chiang Mai Initiative Multilateralization, the Asian Bond Fund, and the Asian Bond Market Initiative,” he said. The discussion by conference participants highlighted that while further financial integration could be beneficial to Asia, the associated risks also need to be managed. In particular, some participants stressed that financial sector liberalization and capital market liberalization need to be accompanied by the development of financial and macroeconomic institutions to manage the attendant rise in risks and vulnerabilities.
In her keynote speech, Professor Anne O. Krueger of Johns Hopkins University stressed the synergies between pursuing regional and global trade integration. “In order to fully reap the benefits of regional trade agreements (RTAs) and make sure they do not result in regional protectionism, it is crucial to pursue RTAs in the context of multilateral trade liberalization,” she said. “As the fastest growing region in the world, Asia has a special responsibility in providing leadership and pushing the international community for a revival of WTO agreements.” The conference brought together senior policymakers, academics, and representatives of the IMF, the Asian Development Bank, think tanks, and the private sector. Australia, Cambodia, China, Hong Kong, Indonesia, Japan, Korea, Lao P.D.R., Malaysia, Mongolia, Myanmar, Philippines, Sri Lanka, Thailand, and Vietnam were represented at the conference. The conference was hosted by the IMF's Regional Office for Asia and the Pacific (OAP) and Hitotsubashi University.
SOURCE: Fibre2fashion
China's economy isn't headed for a hard landing and isn't dragging on the global economy, China's top economic planner said on Sunday, but uncertainty and instability in the global economy do pose a risk to the country's growth. China on Saturday acknowledged it faced tough challenges but said it would keep its economy expanding at least 6.5 per cent on average over the next five years while pushing hard to create more jobs and restructure state-owned enterprises. "China will absolutely not experience a hard landing," Xu Shaoshi, head of the National Development and Reform Commission (NDRC), told reporters at a briefing. "These predictions of a hard landing are destined to come to nothing."
China's economy grew 6.9 per cent in 2015. While that rate was the slowest in a quarter of a century, the pace was still relatively fast among major economies, Beijing says. China has set a growth target of 6.5 per cent to 7 per cent for this year. The state of the world's second-biggest economy and Beijing's ability to manage it were key talking points at a Group of 20 finance ministers and central bankers in Shanghai last month. Premier Li Keqiang says China has the confidence to handle the complexities both at home and abroad while pressing ahead with reforms. "In general, I think China's economy performance has stayed at a reasonable range (since 2015)," Xu said, adding that the Chinese economy shouldn't be viewed through traditional perspectives. "First, we should look from the angle that the economy has entered the 'new normal' period," he said, in which growth rates have shifted and the economy's growth engines are changing towards services from investment.
In the run-up to Parliament, Beijing has flagged major job losses in the country's bloated coal and steel industries. But plans to reduce industrial over-capacity were unlikely to result in large-scale layoffs, Xu said. Economic growth will create more jobs and help offset the impact of capacity cuts, he said. China also plans to launch several mixed ownership pilot programs in the oil, natural gas and rail sectors, Xu said, part of the most far-reaching reforms of its sprawling and inefficient state sector in two decades. In September last year, China issued guidance on reforming state-owned enterprises, including the introduction of so-called mixed ownership of state firms. China has about 150,000 state-owned enterprises, managing more than 100 trillion yuan ($15 trillion) in assets and employing over 30 million people, according to the official Xinhua news agency. Nonetheless, the broader world economy poses challenges to China this year, Xu said. "First, we estimate the slow recovery and low growth rates in the world's economy will continue for a period of time," he said. "Also we could not overlook the risks from unstable (global) financial markets, falling prices of commodities and risks of geopolitics."
SOURCE: The Business Standard
China unveiled a record fiscal deficit and pledged to accelerate the restructuring of its bloated state-owned industries while still setting a weaker growth target for this year. Premier Li Keqiang announced a 6.5 per cent to 7 per cent expansion goal Saturday, down from an objective of about 7 per cent last year and the first range the government has offered since 1995. The government also abandoned its trade target, underscoring the degree of uncertainty about prospects for global growth. The details were given in Li's work report at the annual meeting of the ceremonial legislature in Beijing. The plan reflected the government's determination to maintain growth and put off confronting its debt - now nearly 250 per cent of gross domestic product. The report also cited downward pressure on the economy against a backdrop of weaker global growth. "The package of monetary stimulus, higher deficit, and restructuring of the state sector is a surprisingly coherent response to China's downturn," said Andrew Collier, an independent China analyst in Hong Kong and former president of the Bank of China International USA. "The problem is there's a lot of bad lending going on behind the scenes at the banks that's slipping through the cracks."
Underscoring the government's determination, Li said in his work report that China will need average annual growth of at least 6.5 per cent in the next five years to reach its target of doubling per capita income from 2010 levels. Growth of 6.5 per cent would mark a ripping pace for most countries but would be the slowest in China in a quarter century as world's No 2 economy grapples with gyrating financial markets, softening global trade and efforts to reduce environmental degradation. "Our country's development faces more and greater difficulties... so we must be prepared for a tough battle," Li said. "On the one hand, we will focus on current realities and take targeted steps to withstand downward pressure on the economy," Li said in his report. "On the other hand, we must have our long-term development goals in mind, keep some policy tools as options for later use, strategise our moves and gather strength." The slowest growth in 25 years has prompted officials to tweak monetary policy to "prudent with a slight easing bias" last month. On Monday, the central bank cut the ratio of reserves banks must lock away. Moody's Investors Service lowered China's credit-rating outlook to negative from stable Wednesday, highlighting a surging debt burden and falling currency reserves while questioning the government's ability to enact reforms.
While the leadership pledged to speed up the disposal of unproductive state assets, there was little on specifics. Li said the government would address zombie enterprises - inefficient and unproductive state-owned companies - via mergers and restructuring, while offering 100 billion yuan ($15 billion) for employees laid off as part of that process. In lead up to parliament, the government flagged major job losses in key coal and steel industries. Overall, China aims to lay off 5-6 million state workers over the next two to three years, two sources said, in Beijing's boldest retrenchment programme in almost two decades. Li said the country will create 10 million new jobs, address zombie firms through mergers, bankruptcies and debt deals, and hold the urban registered unemployment rate below 4.5 per cent in 2016.
Seeking to improve the environment, Beijing aims to cap total energy consumption at 5 billion tonnes of standard coal by 2020 and set targets for improving water efficiency. China will increase military spending by 7.6 per cent this year, its lowest increase in six years, as it pursues a modernisation plan that will shrink staffing. Unlike previous years, the documents did not mention a specific target for trade figures, having missed their goals repeatedly in recent years. In the financial field, Communist leaders underscored commitments to free up interest rates and the yuan's exchange rate. In a possible nod to criticism about lack of policy clarity, China plans to develop forward-guidance communication at the central bank. People's Bank of China Governor Zhou Xiaochuan will extend his recent streak of public comments in a press conference scheduled for March 12. Zhou broke months of silence in a February Caixin magazine interview, saying there's no basis for a continued yuan depreciation. Li's work plan said policy makers will improve the market-based mechanism for setting the exchange rate and keep the currency "generally stable."
The Finance Ministry's budget said the fiscal deficit would increase to 3 per cent of GDP from 2.3 per cent. Money supply will rise by 13 per cent, up from a 12 per cent 2015 goal. The deficit was the highest since the founding of the People's Republic of China in 1949, the Xinhua News Agency said Saturday. Policy makers also plan to push for injecting new life into the property market by seeking more mortgage lending, among other steps. The premier's work report was released at the same time as the 2016 budget, the 2016-2020 Five-Year Plan and a report from the National Development and Reform Commission, the country's economy planner. China will push ahead with interest-rate liberalisation and deepen state-owned bank reform, the government said. The stock and bond markets will also be reformed. The goal of a 6.5 per cent to 7 per cent expansion for this year compares to a median estimate for a 6.5 per cent growth in 2016, according to economists surveyed by Bloomberg News. "The announced range for the indicative GDP growth rate is welcome," said Bert Hofman, the World Bank's country director in Beijing for China, Mongolia and Korea. "It provides needed flexibility for balancing structural reforms and demand management."
SOURCE: The Business Standard
