INTERNATIONAL
Textile Raw Material Price 2016-06-14
|
Item |
Price |
Unit |
Fluctuation |
Date |
|
PSF |
944.57 |
USD/Ton |
0% |
6/14/2016 |
|
VSF |
2053.15 |
USD/Ton |
0% |
6/14/2016 |
|
ASF |
1913.44 |
USD/Ton |
0% |
6/14/2016 |
|
Polyester POY |
984.81 |
USD/Ton |
0% |
6/14/2016 |
|
Nylon FDY |
2217.16 |
USD/Ton |
0% |
6/14/2016 |
|
40D Spandex |
4328.01 |
USD/Ton |
0% |
6/14/2016 |
|
Nylon DTY |
2444.95 |
USD/Ton |
0% |
6/14/2016 |
|
Viscose Long Filament |
5662.86 |
USD/Ton |
0% |
6/14/2016 |
|
Polyester DTY |
1230.07 |
USD/Ton |
0% |
6/14/2016 |
|
Nylon POY |
2050.11 |
USD/Ton |
0% |
6/14/2016 |
|
Acrylic Top 3D |
2088.08 |
USD/Ton |
0% |
6/14/2016 |
|
Polyester FDY |
1112.37 |
USD/Ton |
0% |
6/14/2016 |
|
30S Spun Rayon Yarn |
2748.67 |
USD/Ton |
0% |
6/14/2016 |
|
32S Polyester Yarn |
1670.46 |
USD/Ton |
0% |
6/14/2016 |
|
45S T/C Yarn |
2429.76 |
USD/Ton |
0% |
6/14/2016 |
|
45S Polyester Yarn |
1807.13 |
USD/Ton |
0% |
6/14/2016 |
|
T/C Yarn 65/35 32S |
2126.04 |
USD/Ton |
0% |
6/14/2016 |
|
40S Rayon Yarn |
2915.71 |
USD/Ton |
0% |
6/14/2016 |
|
T/R Yarn 65/35 32S |
2201.97 |
USD/Ton |
0% |
6/14/2016 |
|
10S Denim Fabric |
1.35 |
USD/Meter |
0% |
6/14/2016 |
|
32S Twill Fabric |
0.81 |
USD/Meter |
0% |
6/14/2016 |
|
40S Combed Poplin |
1.16 |
USD/Meter |
0% |
6/14/2016 |
|
30S Rayon Fabric |
0.68 |
USD/Meter |
0% |
6/14/2016 |
|
45S T/C Fabric |
0.67 |
USD/Meter |
0% |
6/14/2016 |
Source: Global Textiles
Note: The above prices are Chinese Price (1 CNY = 0.15186 USD dtd. 14/6/2016).
The prices given above are as quoted from Global Textiles.com. SRTEPC is not responsible for the correctness of the same.
Cotton planting in the country is likely to fall to the lowest in seven years in the 2016-17 marketing season, as farmers switch to other crops, potentially cutting production and exports of the fibre. India is the biggest producer of cotton in the world. A pest attack in key cotton-growing states and forecasts of good monsoon rains are also prompting farmers to plant other crops such as sugarcane, peanut and pulses. Lower cotton exports could support global prices, now trading near their strongest level since August 2015, and boost exports from rivals like Brazil, Australia and the US. “We are expecting seven per cent drop in area,” Dhiren Sheth, president of the Cotton Association of India told Reuters. He said farmers would likely opt to plant pulses and peanuts, also known as ground nuts. A seven per cent reduction would cut the country's cotton planting area to around 11 million hectares in the next marketing year that starts on October 1, the lowest since 2009-10. That compares to 11.9 million hectares in the current marketing year. An attack of whitefly pest in two northern states and lower prices during harvest is also prompting farmers to switch to other crops, said Paresh Valia, an exporter based in Bhavnagar district in western Gujarat, the top cotton producing state. Most Indian farmers start planting cotton with the onset of monsoon rains in June, although some with irrigation facilities can start as early as May.
The India Meteorological Department had forecast above average rainfall during the June-September monsoon season, after two straight years of drought that ravaged crops. Good monsoon rains could push farmers in Maharashtra, the second-biggest cotton producer, to instead plant sugarcane, which needs more water, said Chirag Patel, chief executive officer at Jaydeep Cotton Fibers Pvt Ltd, a leading exporter. Patel expects India's cotton output to fall 7.3 percent to 32 million bales in 2016/17. Lower production could lift domestic prices as the state-run Cotton Advisory Board estimates opening stocks for the next marketing season to fall by a third to 3.5 million bales.
SOURCE: The Economic Times
Union Minister Nirmala Sitharaman today met Tamil Nadu Chief Minister J Jayalalithaa and discussed the possibility of extension the Vizag–Chennai Industrial Corridor (VCIC) in that state. Sitharaman also requested her to appoint an officer to take care of the issues of export-oriented industries in the state with a view to promoting trade. “I spoke about extending the (VCIC) down south to Tuticorin and also offered that it can be extended westward till Colachel,” the commerce and industry minister told reporters after her meeting. Sitharaman said that the Chief Minister accepted the suggestion and stated that she would send a team to the commerce and industry ministry to discuss the matter. When asked whether she discussed about the Goods and Services Tax (GST), Sitharaman said there was no discussion on that. But she added that Finance Minister Arun Jaitley has stated that he would contact every political party to seek their support for GST and “I am sure AIADMK and the Tamil Nadu chief minister will also be contacted by the Finance Minister”.
On a question if BJP is aligning with AIADMK, she said: “we work together with all the states. So we will work together with Tamil Nadu also”. The VCIC will be India’s first coastal economic corridor. Spanning over more than 800 kilometers of India’s eastern coastline, the VCIC is part of India’s East Coast Economic Corridor. ADB is helping in drawing up a master plan for this. Later in a series of tweets, Sitharaman said that she also discussed developing a dedicated logistical hub in Tamil Nadu to boost the port-based ecosystem under. She also requested the Chief Minister to appoint a nodal officer to work with the commerce and industry minister to improve export performance of the state.
SOURCE: The Financial Express
Individuals and entities with an annual turnover of Rs 10 lakh or more could soon be under goods and service tax laws, widening the tax base of the government, according to the draft central and integrated laws released on Tuesday. According to the proposal of the draft laws, in the northeastern states the threshold is even lower at Rs 5 lakh. The draft laws also propose collection of taxes at source for e-commerce companies, including aggregators, and simplify the definition of “services” to include intangibles such as software and work contracts. These were released on the Union finance ministry website for public feedback, hours after a meeting of the Empowered Committee of Finance Ministers on GST. All states except Tamil Nadu were on board, Union Finance Minister Arun Jaitley told reporters. According to the draft laws, GST shall apply to all intra-state supply of goods and services. While the supplier of goods will have to bear the tax burden in most cases, the recipient might also have to bear it in some.
Experts said releasing the draft GST laws was a positive step, as these clearly define the contours of the tax regime. “The government releasing the draft GST laws in public domain is a positive step. It shows the intent of the Centre to implement it by April 1, 2017,” said Rakesh Nangia, a senior partner at tax consultants Nangia and Co. Including individuals and entities with turnover of Rs 10 lakh — Rs 5 lakh in the Northeast — in the GST purview has raised eyebrows. “The current threshold for excise is Rs 1.5 crore. Hence, many more businesses would come under the central tax net. Industry was hoping for a higher threshold of at least Rs 25 lakh,” said Pratik Jain, a tax consultant with PwC India. The laws also state that e-commerce companies shall, out of the money owed to suppliers of goods, keep aside specified amounts in lieu of GST deducted at source, at rates recommended by the taxman. “This will mean significant compliance burden on e-commerce companies, as many of them deal with thousands of vendors. Further, this may lead to refund situation for many suppliers who operate on thin margins,” Jain said. But the clarity of the draft laws has been appreciated.
WHAT NEXT?
Sachin Menon, chief operating officer (tax), KPMG, said: “It is one step closer to GST and it puts to rest all the confusion around what the definition of goods or service under the law should consist of.” Schedule-II of the draft laws states transfer and transportation of goods in lieu of current or future payment, business assets and selling of assets to pay debt shall be treated as “goods”. “Services” shall include leasing or renting of land or property, goods being sold for purposes apart from business, rent, real estate construction with the intention of sale or lease and transfer of intellectual property rights. In Kolkata, West Bengal Finance Minister Amit Mitra, who heads the empowered committee, said there was “general consensus” on the contentious issue of dual control of the taxation structure between the states and the Centre. “We raised the issue of dual control. There was a consensus that for turnover above Rs 1.5 crore, states will have control on GST. Above Rs 1.5 crore turnover, there will be dual control. This will be beneficial for small business,” he said, adding the matter would again be discussed at the next meeting in July.
The two-day meeting in Kolkata is being attended by finance ministers of 22 states as well as chief ministers of Arunachal Pradesh and Meghalaya and the deputy CM of Delhi, and senior officials. At the end of the first day, Jaitley said: “Virtually all the states have supported the idea of GST today barring Tamil Nadu which has expressed some reservations. It has offered a few a suggestions which have been noted by the committee.” “The fact that the draft law was released shows that the states were on board for almost all the issues,” said Menon of KPMG. The draft laws were shared with the state finance ministers as well. FM Jaitley said there was consensus among states that there would be no constitutional cap on GST rates. Congress has been demanding that there should be a cap on the GST rate and it should be included in the Constitution Amendment Bill. The Bill has been stuck in the Rajya Sabha for some time. Two other issues widely discussed in the meeting were the calculation of the revenue neutral rate and the management of taxation structure in the perspective of the dual control of the Centre and state. Chief Economic Advisor Arvind Subramanian will also make a presentation on the revenue neutral rate calculation in July. “While the principal advisor to the FM has suggested 17 per cent revenue neutral rate (RNR), another research institute has suggested 26.5 per cent. Given the divergence in views, the empowered committee of the finance ministers will meet again in July to discuss the two issues, the dual management and the RNR,” said Mitra. In the meantime, the government will also form a committee and present a report on the acceptable RNR, he added. Presentations would be made by the principal advisor to the finance minister and the National Institute of Public Finance and Policy. Jaitley said for five years, if there is any loss of revenue to the state, it would be the liability of the Centre to compensate for it. He added the Centre is flexible on the issue of additional one per cent tax for two years as a compensation to the manufacturing states.
SOURCE: The Business Standard
An HSBC report has described India as the “obvious candidate” to push global growth amid a stubborn slowdown but said it will need sustained GDP expansion to reach, by 2025, the share of world GDP that China had at the height of its boom in 2005. “If the West is not bouncing back to its former strength any time soon, where will growth come from? India is the obvious candidate,” HSBC economists said in a note. China as the economic engine has “begun to sputter” and India is the only other country with over a billion plus people and also grew “a tad faster” than its northern neighbour in the last year. On a sobering note, it said that it is clear that India’s economy is not large enough to make up for a slowdown in mainland China but added that it holds great potential. “India may struggle to attain, for now, the growth rates China achieved at the height of its boom. Still, don’t count the country out just yet: assuming things keep ticking as long as they have, by the middle of the next decade India’s economy will account for the same world share as China did in 2005, the year when the mainland really started to make itself felt globally,” it said.
The HSBC report said it is “tough” for India to match China’s boom-time growth rates, and recommended that the country will have to push its national investment rate up to achieve higher growth. “China’s investment rate has always been higher than India’s (although by a relatively narrow margin in the late 2000s). To achieve China’s growth rate of the last decade, India would have to boost its investment rate by 10 per cent points or so of GDP,” it said, adding that this is not impossible. It termed this as a “momentous shift” which will be taking place, and added that this is going by the share of world GDP in dollar terms. India will equal to China’s 4.9 per cent share of world GDP in 2005 by the middle of next decade, it said, adding that if the country grows faster, the date can be advanced. The expectation comes days after official data suggested the Indian GDP grew 7.6 per cent in fiscal year 2015-16 on the back of a faster 7. 9 per cent growth in the last quarter. The presence of a pro-growth, reform oriented regime at the Centre, along with fundamental factors like favourable demographics which make it among the youngest nation in the world, and large consumer base, is making analysts more confident about the India story, HSBC said. China, which embarked on its reforms from the early 1980s, grew at double digits to lead the global growth on its shoulders after the post-Lehman crisis.
SOURCE: Fibre2fashion
The wholesale price index (WPI) rose in May by 0.79 per cent, up from 0.34 per cent in April, when it showed the first monthly rise after 17 months of contraction. The official data was issued on Tuesday and showed the latest push was primarily due to a rise in food inflation, up 7.88 per cent, compared to 4.23 per cent in April. Also, prices of manufactured products rose for a third month, up 0.91 per cent in May. Vegetable prices rose overall by 12.94 per cent, after a 2.21 per cent rise in April. Among food items, potatoes rose by the highest margin, of 60.01 per cent in May. These prices had turned inflationary in March, rising by 6.55 per cent after many months of decline, and then jumped 35.45 per cent in April. The price rise for pulses was almost the same, up 35.56 per cent in May, after a 36.36 per cent rise the previous month. However, the decline in onion prices accelerated. It fell by 21.07 per cent in May, after dropping 18.18 per cent in April.
Incidentally, the consumer price index (CPI), measuring retail inflation, had risen in April by a higher-than-expected 5.39 per cent, after a six-month low of 4.83 per cent in March. Food inflation, biggest component of the CPI, had been responsible, rising 6.21 per cent in April, against 5.21 per cent in March. Retail inflation had then jumped in May to its highest levels in 19 months, to 5.76 per cent. Food inflation was 7.2 per cent. WPI inflation inches up 0.79% in May Prices of manufactured products, with a combined weight of 65 per cent in the index, continued to rise, albeit slowly. The increase was 0.91 per cent, against a rise of 0.71 per cent in April. The manufactured food products sub-category, which includes sugar and edible oils, registered a significant rise of 7.54 per cent. This was mainly due to sugar prices, which rose by 22.3 per cent as against 16.07 per cent the previous month, on the back of expected shortages. Prices for fuel and power continued to remain depressed, falling at a faster pace in May at 6.14 per cent, compared to a 4.83 per cent fall in April. Petrol and diesel fell on global cues, although at a slower rate. The fall in petrol prices intensified, with a 10.86 per cent fall after another decline by 4.18 per cent the previous month. "If crude oil prices sustain at current levels, average WPI inflation is likely to exceed 3% in 2016-17, given the substantial weight of mineral oils with non-administered prices in this index," said Aditi Nayar, senior economist at rating agency ICRA. The country's Consumer Price Index (CPI)-based inflation for the month of May 2016 also rose to 5.76%, the highest in 19 months. The Indian Meteorological department has predicted a greater than normal monsoon in 2016 and fairly even distribution of rains. If the prediction comes true, food inflation may come down quite a bit. Also, it will have a moderating effect on crude prices.
SOURCE: The Business Standard
Continuing its weakening trend for the fourth straight session, the rupee today fell by another 13 paise to end at 67.27 per dollar on persistent demand for the American currency from banks and importers on the back of higher greenback in the overseas market. Weakness in the domestic stock markets also affected the rupee value against the dollar, a forex dealer said. The rupee opened lower at 67.18 against Monday's closing level of 67.14 per dollar at the Interbank Foreign Exchange market and hovered in a range of 67.09 and 67.30 before quoting at 67.27, showing a loss of 13 paise or 0.19 per cent. The domestic currency has dropped by 62 paise or 0.93 per cent in four trading days. The RBI fixed the reference rate for the dollar at 67.1520 and euro at 75.7542.
In cross-currency trades, the rupee firmed up further against the pound sterling to close at 95.22 from 95.24 Monday and also moved up against the euro to 75.50 from 75.67 per euro previously. However, the domestic currency dropped further against the Japanese yen to 63.49 per 100 yens from 63.33. Meanwhile, the dollar index was up by 0.37 per cent against the basket of six global currencies in the late Asian trade. Overseas, the US dollar gained against its major rivals in early Asian trade, while the British pound remained fragile near a two-month low against the dollar and the yen hovered near six-week highs against the US currency on worries Britain may leave the European Union in a referendum. However, the yen gained moderately against the dollar and other currency peers in late Asian trade.
SOURCE: The Business Today
Prime Minister Narendra Modi's visit to the US provided an "important opportunity" to assess how the Indo-US partnership can help address global challenges and unleash opportunity in the economic and trade space, a top Obama administration official said. "There was a tremendous amount of support and goodwill and his words resonated in many many different audiences around town," Assistant Secretary of State for South and Central Asian Affairs Nisha Desai Biswal told PTI on the sidelines of an event. Following Modi's visit to Washington from June 6-8, Biswal had described the vision laid out by the Indian leader during his address to the US Congress as the 'Modi Doctrine'. Biswal, in the city to speak at the launch of the Sri Lanka Policy Forum, said Modi doctrine was "a way of framing what I thought was an important vision" that the Prime Minister put forward in his speech to the US Congress. "It's a recognition that both President (Barack) Obama and Prime Minister Modi said that we are each other's best partners in an important defining relationship, not only because of what we can do for our own peoples through our partnership but because of the way we can really advance global concerns, address challenges and create betterment around the world." She said Modi's visit was an "important opportunity" to talk about that kind of partnership and to best look at the "challenges that we see", including the challenges across the Indo-Pacific, climate change and "how we can move together to address them as well as unleash opportunity on the economic and trade space and in many other endeavors between our two countries."
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$ 46.75 per barrel (bbl) on 14.06.2016. This was lower than the price of US$ 47.46 per bbl on previous publishing day of 13.06.2016.
In rupee terms, the price of Indian Basket decreased to Rs. 3139.67 per bbl on 14.06.2016 as compared to Rs. 3183.17 per bbl on 13.06.2016. Rupee closed weaker at Rs. 67.15 per US$ on 14.06.2016 as against Rs 67.07 per US$ on 13.06.2016. The table below gives details in this regard:
|
Particulars |
Unit |
Price on June 14, 2016 (Previous trading day i.e. 13.06.2016) |
Pricing Fortnight for 01.06.2016 (12 May, 2016 to May 27, 2016) |
|
Crude Oil (Indian Basket) |
($/bbl) |
46.75 (47.46) |
46.17 |
|
(Rs/bbl |
3139.67 (3183.17) |
3098.47 |
|
|
Exchange Rate |
(Rs/$) |
67.15 (67.07) |
67.11 |
SOURCE: PIB
On its 20th anniversary, Euratex - the European Apparel and Textile Confederation, which is the political voice of the textile and clothing industry in Europe, hosted its international conference 'Best in Partnerships' devoted to inter-sectoral partnerships to boost European manufacturing. European Commissioner for Internal Market, Industry, Entrepreneurship and SMEs Elzbieta Bienkowska in her key note address said, “Textile and fashion industry is a strategic sector in the EU and it is really performing well. The European Commission is undertaking a number of actions to meet three main challenges of the sector: innovation, international competition and skills shortage.” The Commissioner underlined that the European institutions are expecting full engagement of industry, because knowledge about the companies' needs should drive the development of new policies and programmes. Euratex's President Serge Piolat emphasized that textile and fashion sector is appreciating the European Commission's willingness to build a dialogue with the industry, the organization said in a press release. Euratex proposed a concrete action plan to the European Commission to strengthen internationalisation of the SMEs, assure fair conditions for the European companies through stricter market surveillance, provide better access for SMEs to EU research funds and boost innovation investments at regional level through RegioTex initiative. “We are strongly committed to show meaningful results and we have equally high expectations of concrete actions from the policy-makers,” said Piolat. The textile and fashion industry invited other sectors to identify common challenges and discuss new areas of cooperation. The conference was organised in a new format of Industrial Dialogues when two at a time representatives of different sectors had a free discussion between them and with the audience. The topics addressed were circular economy, creative industries, education and skills and international trade.
Ietje Klaver, sales director at Ecoalf, the Spanish sustainable fashion brand making all its products with recycled materials, discussed the challenges of the circular economy with Isabelle Spiegel, a director in charge of Environmental Business Line in Arcadis – a global design, engineering and management consultancy. The circular economy is a concept of closing the loop of product lifecycles which is beneficial for the environment and profitable for companies. Both speakers agreed that to build circular economy in Europe, silos between different sectors should be broken. With companies' creativity and innovation, the waste of one industry can become the raw material for the other.
Europe is a number one destination for millions of tourists every year. The European identity is attracting visitors and making them buy goods 'made in Europe'. The quality and style are at the heart of European products. Can players within the tourism industry and local manufacturers join forces in the common interest? Sophie Blondel,a General Manager of Sofitel Brussels Le Louise and the president of Brussels Hotel Association, discussed it with Adam Hainsworth, a Director at AW Hainsworth & Sons LTD,UK-based company producing exquisite woolen cloth and high performing textiles. Local production can attract more visitors in the regions of Europe, but more cooperation between different sectors and regions is needed–concluded the speakers.
Armando Branchini, a Vice-Chairman of Fondazione Altagamma, the Foundation representing Italian Luxury Companies and Brands, and Felix Rohn, apprenticeships and vocational education and training expert from DG Employment of the European Commission, discussed the education and skills challenges in Europe. Nearly 600.000 job openings are anticipated in the textile and fashion sector in the EU-28 up to 2025. With the currently high unemployment rate in Europe, it is however difficult to attract skilled employees to fill these vacancies. Thus, it was announced that the European Commission chose textiles and clothing to be included in its Blue Print Strategy which will propose new solutions for companies to find skilled employees. The conference also discussed international trade. Trade patterns are changing in the world – a shift from global to regional and bilateral trade agreements is observed. Companies are changing their trade models and re-orientate to increase exports. This was the topic of discussion between Jean-Paul Depraetere, a Managing Director of Escolys Textiles – Belgian leading producer of Jacquard interior fabrics, and Pierre Conrath who leads the Sustainability and Public Affairs activities of EDANA, the international association serving the nonwovens. The speakers concluded that trading internationally is still a challenge for small companies, so cooperation with large, more experienced partners may facilitate their exports. Textile and fashion companies are already working hand-in-hand with the other industries, service providers and research centres. The opportunities for making profitable partnerships are not exhausted which was confirmed by the participants of Euratex's Industrial Dialogues.
SOURCE: Fibre2fashion
Key priority sectors like textiles, garments and leather received a major boost in 2016-17 National Budget presented by Rwandan minister for finance and economic planning Claver Gatete to a joint Parliamentary session last week. “High priority will be given to economic activities which will either increase export revenues or reduce import volumes. The identified key sectors for fostering economic activity include textiles, garments and leather industry, agriculture export crops, agri-business, construction, livestock, wood industry, minerals, tourism and ICT and trade and investment facilitation,” minister Gatete said. The Budget allocated 27 per cent of Frw 1949.4 billion ($2.49 billion) in the 2016-17 fiscal year to economic transformation with key focus on textiles, garments and leather industry, agriculture export crops, agri-business, construction, livestock, wood industry, minerals, tourism and ICT and trade and investment facilitation. “The 2016-17 Budget theme 'Fostering growth while increasing exports and boosting made in Rwanda goods and services' signals government's resolve to tackle diminishing commodity prices and rising import bill that have adversely affected export earnings and put pressure on foreign exchange reserves,” said Gatete in his Budget speech. The Budget announced increase in taxes on used products entering the local market. This includes an increase in tax on used clothes from $0.2 per kg to $2.5 per kg.
SOURCE: Fibre2fashion
The Ministry of Commerce has started a thorough review of all the trade pacts through which Pakistan conducts bilateral trade on preferable terms with other countries. The review will be conducted through consultations with stakeholders and the analysis of available trade data. This will help provide clear guidelines to the policymakers based on which the country will negotiate further trade agreements. The decision was taken by the Minister for Commerce Khurram Dastgir Khan after chairing a high-level meeting in the Ministry of Commerce on Tuesday. Pakistan is a signatory to Free Trade Agreements (FTA) with China, Sri Lanka and Malaysia and Preferential Trade Agreements (PTA) with Iran, Indonesia and Mauritius. These agreements were signed in the previous decade, thus providing a sufficient time frame to assess the efficacy of these agreements. Now Pakistan is in the process of negotiating FTAs with Thailand, Turkey, South Korea and Iran, which will broaden the trading opportunities for Pakistani businessmen. The meeting noted that Pakistan’s trading partners negotiated bilateral and multilateral trade pacts with other countries, thus securing greater market access. It also observed that the demand for enhanced market access should arise from the domestic industry. The minister said that trade agreements compelled the local industries to modernise and diversify in order to compete in the international market besides providing better choice of products to the local people. “Pakistani industries should also expand and remodel themselves according to the international standards,” he added.
SOURCE: The Nation
RAM Ratings is of the view that the Trans Pacific Partnership Agreement (TPPA) has an underlying ability to gradually change business environments and firms operating in related member markets in the lead-up to its implementation. “We believe that these changes, which are relatively harder to quantify empirically at this juncture, will be more significant than the actual impact on trade,” the rating agency said in a report entitled “TPPA: Liberalisation Benefits Outweigh Trade Flow Effects”. RAM Ratings said that although the TPPA may be a free trade agreement (FTA) at face value, further scrutiny reveals that it encompasses all facets of doing business, from the explicit rules and regulations on how trade and industrial activities are conducted to the intrinsic effects on labour and investment dynamics. “As the governments of the individual member countries move towards ratification, the principal outcome will be the alignment of the corresponding changes in business operations with more efficient and competitive processes and activities, to fully reap the benefits of being part of this group,” it added.
SOURCE: The Sun Daily
Encouraging data points to stabilisation of China’s economy but challenges ranging from tepid private investment to sluggish global economy suggest a strong recovery is unlikely. China’s industrial output remained steady in May, and retail sales were also robust. Property activity moderated but was still strong, Xinhua news agency reported. “The economy is holding steady, thanks to pro-growth policies and it [will hopefully] pick up in the second and third quarters,” said Jing Ulrich, Managing Director and Vice Chairman of Asia Pacific at J.P. Morgan Chase. Fiscal policies will likely maintain strong while monetary policies will gradually become neutral, she said, adding she predicted the central bank would cut interest rates once this year. Likewise, UBS economist Wang Tao expects economic activity to hover around its current pace for a few more months, with firmer growth in the April-June period on a sequential basis. Wang maintained her forecast for full year GDP growth at 6.6 per cent.
Despite the warming signs, Ulrich does not expect a strong rebound due to the sluggish global economic recovery. “The US economy markedly slowed in the second quarter and its employment data also fell short of market expectations, which will weigh on China’s exports and impact Chinese companies’ presence overseas,” Ulrich said. Besides, growth of private investment, which accounted for around two-thirds of the country’s total investment, slowed to 3.9 per cent in the January-May period from an already weak 5.2 per cent in the first four months. China should count on the service sector and high-tech manufacturing for sustainable growth momentum under the current structural slowdown, Ulrich said. The service sector has become one of the most potent economic drivers, accounting for 56.9 per cent of the country’s GDP in the first quarter, with rapid growth in the Internet, entertainment and sports sectors. China’s GDP expanded 6.7 per cent year on year in the first quarter, the slowest growth since the global financial crisis in early 2009.
SOURCE: The Financial Express
