INTERNATIONAL
Already running against time on GST, the revenue department will have a tough time in training 60,000 field officials for its implementation from April 1 as it has provided requisite skills to only 3,074 personnel. The National Academy of Customs, Excise and Narcotics (NACEN) has been tasked with the mammoth task of training officials of both the Centre and states. The target is to train 60,000 officers in the “next few months”. As per the latest data (up to September 23) of NACEN, 3,074 field officers have been trained as against the target of 60,000. The government intends to roll out the goods and services tax (GST) regime from April next year. However, the target in the case of different types of ‘trainers’ has been achieved and in some cases, surpassed. These include training of officers from the Comptroller and Auditor General (CAG). “There are undoubtedly huge challenges before us as we go about learning the nuances and provisions of the new law. We need to recognise the changes taking place and reorganise our existing administrative set-up to meet the requirements of the new tax regime,” said CBEC Chairman Najib Shah in a communication to officials.
CBEC officials have already been deputed to the GST Network, the IT backbone of the new indirect tax regime. In fact, the board’s name itself will undergo a change with the subsuming of the central excise and service tax. Finance Minister Arun Jaitley, while addressing a parliamentary consultative committee yesterday, said the government is working on a target date of April 1, 2017 for the rollout of GST. He also said that so far the government is following the road map for implementation of GST as per the schedule. Shah asserted that CBEC will have to provide a lead role in meeting implementation challenges, training officials, the trade and industry, holding workshops with all stakeholders and acquiring and imparting necessary IT skills.
SOURCE: The Financial Express
Worried about the global economy being in a “protracted deterioration”, noted economist Kaushik Basu has warned against low interest regimes and the rich countries following “foolish policies” like protectionism even as he asserted India stands out with a growth rate of over 7 per cent. “The global economy is going through a difficult phase. There is no sharp downturn but a protracted deterioration. This year’s global growth will be less than last year’s. In addition, there are individual countries that are struggling. “Among relatively well-off countries, the Russian economy is shrinking. Among emerging economies, Brazil and Argentina have negative growth. In addition, several advanced economies, such as the Eurozone and Japan, are battling lukewarm growth,” he said.
In an interview to PTI before demitting his office as Chief Economist at World Bank, Basu however complemented Bank of Japan for its “attempt at creativity”, as against the tradition of central banks tending to be non-experimental in their temperament. “It is good to see this changing. The last week we saw both the Bank of Japan and the US Fed take stock of their policies and make announcements. Both are being creative. The problem however lies elsewhere. “They are trying to go in orthogonal directions. And in today’s globalized world that will not work. That is why the big challenge for central banks is not what they do individually but for more coordinated action. It is a bit like a nuclear non-proliferation treaty. A single country can’t do it,” Basu told PTI.
Talking about the major concerns in the global economy, he said among advanced economies, the US is in reasonable good shape, with unemployment below 5 per cent, and, among emerging economies, India stands out for its steady growth of over 7 per cent. “What worries me is that the global slowdown has continued for so long, and given that there are some vulnerable points to do with debt and banking, one small crisis can spark a bigger fire, pulling the entire world economy down for another dip. “There are two specific matters of some concern. The first is the very low interest rate regime that we are in. I am talking about industrialized economies and their central banks. Six of them now have at least one policy rate in negative territory. It began with the ECB in June 2014. Now we have Sweden, Denmark, Switzerland, Japan and, most recently, Hungary, join the band.” Basu, who had earlier served as Chief Economic Advisor in India, said the the negative interest rate experiment was worth trying but, but one must be prepared to accept that it may not work like any other experiment. “What is happening is that with such low interest rates in so many countries, far from saving less, people are saving more to stock up for their old age. Pension funds around the world are under strain. “Despite this, no central bank can do much unilaterally. The economies are caught in what is best described as a negative-interest trap. This is affecting other economies as well. The reason that the US Fed is not moving up rates is not any weakness in the US but if it does so unilaterally, with so many other central banks using negative rates, it will cause the dollar to strengthen, exports to stagnate and even the stock-market to be adversely impacted.”
SOURCE: The Financial Express
Being the major beneficiary of bilateral trade ties with Pakistan, India has not uttered a single word to suspend it, while it has threatened to stop rivers’ water flow to Pakistan, and boycotted South Asian Association of Regional Cooperation (Saarc) scheduled meeting. According to the data, bilateral trade is always in favour of India, so it will not stop or suspend it for sometimes. In year 2014-15, India exported $1.7 billion worth goods to Pakistan and imported only worth $358 million. Similarly, 11 months figures of (July-May 2015-16) shows that Indian exports to Pakistan has increased 15 percent and reached Rs 171.846 billion from Rs 160 billion while imports are reduced by Rs 4.5 billion down to Rs 29.45 billion from Rs 34 billion.
A spokesperson of Ministry of Commerce said the ministry believed that trade and water issues should not come in conflict. “We know that balance of trade is in favor of India but we are working to increase Pakistan’s exports globally,” he said. The exports to India has decreased during 11 months of last fiscal year while imports increased by 15 percent, he said adding the ministry is aware of the fact and working on different aspects to increase exports as well.
Newly elected president of Lahore Chamber of Commerce and Industry (LCCI) Abdul Basit said suspension of trade with Pakistan will be last decision by India, as Hindu mindset is to promote business irrespective of any situation. So not a single word has come from politicians, and government of India on the bilateral issue while the India has announced boycotting the South Asian Association of Regional Cooperation (Saarc) scheduled meeting in November in Islamabad and also voiced to violate the Indus Water Treaty. “Our company was importing soybean from India. But we stop it with a view that supply from India is never dependable as every time in cross border tensions, uncertainty prevails. One cannot do business with uncertainty,” Basit said. Additionally, India has barriers on certain products of Pakistan. For example, Pakistan cannot export meat or meat products to India, as it has been put in sensitive list by Indian authorities while there is no such restriction from Pakistan’s side. “Pakistan should protect local industry, agriculture and farming sectors by evolving long-term polices and end any dependency on Indian agricultural products,” Basit observed.
Standing Committee on Indo-Pak Bilateral Trade in LCCI Chairman Aftab Ahmed Vohra believed that India will not suspend trade ties with Pakistan. Rather, it will continue proxy war with Pakistan by creating instability and insurgency in Balochistan and other parts of Pakistan, he said. Additionally, suspension of bilateral trade will also affect both countries’ economy, Vohra said, adding Pakistan imports huge quantity of cotton which means suspension of trade will hurt largest exporting sector of Pakistan. This will also affect the already declining exports of county. Similarly, India is exporting over $1.7 billion worth goods to Pakistan which will directly hit Indian economy. Hence, both economies will suffer setback due to suspension of trade, Vohra said. “Discussion has started in India to stop exports of cotton to Pakistan and search Bangladeshi and Chinese markets for it,” he said, quoting some Indian media. However, implementation of it is not as easy as saying, he added. However, All Pakistan Textile Mills Association (APTMA) newly elected Punjab Zone Chairman Ali Ehsan said suspension of trade with India will not affect Pakistan’s economy rather benefit, as India is dumping yarn, cotton yarn, cloth and other textile products. As cost of doing business is rational in India while government of India also gives 25 to 28 export rebate to their textile industry, so it is dumping its products to Pakistan. “We have not imported a single bale from India this year as India itself facing shortage of cotton,” he said, adding 1.2 million bales imported in 2015-16 against total consumption of 15 million bales, imported 207,965 bales in 2014-15 and 911,435 bales in 2013-14,” he said. “We discussed it at Friday (today) meeting to import cotton bales from alternate countries including China, US, and others. This will cause some extra freight cost to the industry but nothing is more than country,” Syed Ali Ahsan said. Pakistan, despite the fact bought cotton from India when they were in desperate need to sell cotton in view of their projected large crop size and sold carryover stocks which later found to be false.
India has also announced boycotting 75th Plenary Meeting of International Cotton Advisory Committee (ICAC) to be held in Pakistan from 30 October 2016 to 4 November 2016. An official of APTMA said despite the fact boycotting of the ICAC meeting is a real state of Indian attitude towards Pakistan which is evident from trade deficit. The fact that balance of trade is in favor of India simply because India is exporting negative list items to Pakistan through a third country and destroying Pakistan’s industry and reaping benefit in the form of millions of jobs in India and loss of millions of jobs in Pakistan. This is a high time to correct this mistake and understand that India is not buying, promoting or selling any product of Pakistan into India which is evident from the facts that Pakistan’s exports to India are negligible in comparison with the exports of India to Pakistan.
SOURCE: The News
Informal trade or putting it bluntly, smuggling of goods, between India and Pakistan is estimated at over USD five billion, almost double the official two-way commerce between the two neighbours with history of chequered ties, an ASSOCHAM study has pointed out. Based on well-researched documents and reports by over 50 top think tanks and research organisations, including ICRIER, annual reports of the Indian Ministry of Home Affairs, Lahore Journal of Economics, Institute of South Asian Studies-National University of Singapore among others, the ASSOCHAM Paper on India - Pakistan Trade, bought out some interesting facts which include the non-formal trade or unaccounted transactions, which can bluntly be called smuggling.
Smugglers/traders mainly carry out the informal trade between Pakistan and India through the exchange of goods at the Indo-Pakistan borders as well as through the misuse of the personal baggage scheme through the 'Green Channel' facilities at international airports or railway stations. Informal trade is also taking place through Afghanistan whereby goods are exported officially from India to Afghanistan and later on brought into Pakistan through Peshawar. It said while the actual volume of informal trade is difficult to calculate, there are different informal channels of information which has been collated over a period of time by different research bodies and think tanks. The ASSOCHAM Paper has largely drawn upon a wide bank of these research documents.
Informal traders in both the countries have developed efficient mechanisms for information flow, risk sharing and risk mitigation. The three important contributory factors towards thriving informal trade are quick realization of payments, zero documentation and little procedural hassles leading to lower transaction costs. There are more exports from India than imports through the smuggling route. Besides the Afghanistan route, other channels of such informal trade include India-Dubai-Pakistan, Wagah by rail or road and Srinagar-Muzaffarabad. The composition of items going from India include jewellery, textiles, machinery and electronic appliances. On the import front, the items include textiles, dry fruits, spices and carpets.
Significantly the informal trade or smuggling is over and above the 'Third country' trade which is generally done through Dubai and is not illegal. The 'Third country' trade is also done through agents in Singapore. Through this route, exports from India include capital goods, textile machinery, dyes and chemicals, iron and ore, spices, tannery equipment, machine tools, cotton fabrics, tyres and chemicals and medicine. It is mostly exports. Trade between Pakistan and India via Dubai has the advantage (for the traders) that consignments are not scrutinized as much as those coming directly from either country. So, the India-Pakistan official trade of USD 2.67 billion is far less than other channels.
SOURCE: The Business Standard
In over a decade since its inception, BRICS, a grouping of emerging economies of Brazil, Russia, India, China and South Africa, has today emerged as a powerful global economic bloc. BRICS has evolved as a serious, competent and responsible grouping addressing issues and challenges with global and regional ramifications.
Starting essentially with economic issues of mutual interest, the agenda of BRICS meetings has considerably widened over the years to encompass topical global issues. BRICS cooperation has two pillars – consultation on issues of mutual interest through meetings of Leaders as well as of Ministers of Finance, Trade, Health, S&T, Education, Agriculture, Communication, Labour, etc. and practical cooperation in a number of areas through meetings of Working Groups/Senior Officials.
The engagement of BRICS countries with the rest of the world in terms of trade flows has increased over time. Merchandise imports from the world into the BRICS countries have gone up from US$ 2.95 trillion in 2012 to US$ 3.03 trillion in 2014. Likewise, the global merchandise exports of the BRICS countries have gone up from US$ 3.2 trillion in 2012 to US$ 3.47 trillion in 2014. Intra-BRICS trade has also been on the rise. In 2012, intra-BRICS trade stood at US$ 281.4 billion and this increased to US$ 297 billion in 2014. This encouraging trend needs to be strengthened as trade amongst BRICS nations is less than 5 per cent of their total global trade.
There are several shared interests that bring the BRICS economies together. A major agenda of the grouping is to reform the global governance architecture which is yet to reflect the changing global scenario where the emerging economies are playing a larger role. Another agenda for the BRICS economies is to work with the international community in keeping the multilateral trading system stable. The most important development under BRICS has been the creation of the New Development Bank (NDB) which aims to serve as a source of finance for developing and emerging economies to meet their developmental needs. Even as BRICS nations work together towards achieving these objectives, there is a need felt for measures to be taken to deepen intra-BRICS economic engagement, trade and investment ties. The programmes planned at New Delhi – BRICS Trade Fair (October 12-14, 2016), BRICS Business Forum (October 13, 2016) and BRICS Business Council (October 14, 2016) – are steps that would help the grouping to collectively move in this direction.
The first BRICS Trade Fair and Exhibition will be staged just ahead of the BRICS political summit in Goa (October 15-16, 2016). This major initiative was proposed by the Prime Minister of India, Shri Narendra Modi, last year during his address to the members of the BRICS Business Council at Ufa, Russia. In line with the overall core theme for BRICS in 2016, the focus of the Trade Fair is ‘Building BRICS – Innovation for Collaboration’. The Trade Fair is expected to give an impetus to intra-BRICS economic engagement and to foster connects amongst members of our business community. The Fair will showcase about 20 key sectors. These include aerospace, agro-processing, auto and auto components, chemicals, green energy and renewables, healthcare and pharmaceuticals, railways, textiles and apparel, infrastructure, IT, engineering goods, tourism, gems and jewellery and skill development.
The BRICS Trade Fair will be a platform for respective BRICS countries to exhibit the state-of-the-art technologies and advances made in industrial development. Besides established companies, start-ups and innovators from BRICS will showcase their offerings. The idea is to help technology solution providers from BRICS countries to share knowledge and expertise in dealing with the common development challenges in areas such as healthcare, education, energy efficiency, waste management and urbanization management. Besides, business leaders from BIMSTEC countries (Bangladesh, Bhutan, Myanmar, Nepal, Sri Lanka and Thailand) have been invited for meetings and discussions with the BRICS business leaders and companies at the Trade Fair. This is a new dimension and complements the regional outreach efforts being made by our respective governments to fortify South-South cooperation.
In addition to the BRICS Trade Fair, BRICS Business Forum will be held on October 13, 2016. This is a full day conference that will see participation from over 1000 business delegates from all BRICS countries. Hon’ble Vice President of India and the Trade Ministers of all BRICS nations have been invited to address the participants and share their vision for economic engagement at the BRICS Business Forum. The Vice President of New Development Bank and the senior team will join this forum and share how the private sector can support its own efforts to promote sustainable development projects across BRICS countries. The Forum is expected to give a fillip to these efforts.
The BRICS Business Council was established during the fifth BRICS Summit in Durban, South Africa, with the objective of promoting and strengthening business, trade and investment ties amongst the business communities of the five countries. The Council will hold focused seminars and workshops concurrent with the Trade Fair. The seven working groups in the areas of Infrastructure, Manufacturing, Financial Services, Energy & Green Economy, Skills Development, Agribusiness and Deregulation that have been formed under the aegis of the BRICS Business Council will engage in interactions with a view to better understand the market opportunities and build synergies based on their respective competitive strengths and to promote industrial development and job creation. Through the various programs that will be held, it is expected that many suggestions would emerge to take forward and implement the action plan contained in the BRICS Strategy for Economic Partnership.
SOURCE: PIB
In spite of the rate of export fall coming down steadily, the prospect of merchandise exports making a comeback to the growth charts anytime soon is still uncertain. Exports had fallen for the second consecutive month in August, going down by a marginal 0.30 per cent. This constituted a fall in the country's outbound trade on a staggering 20 out of 21 months till August. Besides a global slowdown, the severe fall is attributed to global factors such as a decline in commodity prices due to a glut in supply amidst low demand, as well as sluggishness in the Chinese and European economies', amongst others.
NEVER ENDING WAIT FOR REVIVAL IN MERCHANDISE
Although outbound trade fell for 16 major export items, compared to 22 items in July, exporters and trade experts alike cautioned against a hope for sudden exports revival in the month of September, figures for which are yet to be released. S C Ralhan, the President of the Federation of Indian Exports Organisation (FIEO) said global trade outlook has improved but economic indicators from some advanced economies continue to be troubling. Ajay Sahai, Director General at FIEO said, "we are expecting mild growth next month based on the prices of a number of commodities firming up". He went on to add that the global situation remains fluid and solid growth will take time. The government is betting on outbound merchandise trade picking up next month, according to Commerce Ministry officials who wish to maintain anonymity. They pointed to the rate of fall steadily decreasing from as high as 24.3 in September 2015 to the latest 0.30 per cent.
Experts not hopeful of quick exports revival However, monthly rate of changes should be taken with caution, Madan Sabnavis, Chief Economist at CARE ratings said, instead advising focus on cumulative exports. Cumulative exports for the April-August period of FY17 stood at $108.51 billion, compared with $111.85 billion for the corresponding period in FY16, suggesting a drop of -2.98 per cent. In the current financial year, cumulative exports have not been able to overtake the figure of the corresponding period last year even once. The same is true for major exchange earners like engineering goods and petroleum products, cumulative exports of which have not matched up to that of the previous year.
In August, petroleum products continued to fall by 14.08 per cent, albeit lower than the 21.78 per cent fall seen in July. As the price of crude oil stays low, the realisation value of crude re-exports in the form of refined petroleum has also stayed down. This is the problem with other commodities as well, whose trade has maintained, sustained or improved in volume terms, but whose value has gone down. Sabnavis said the global economic conditions have not stabilised to a suitable degree so as to allow hopes of an exports rise anytime soon. He said, "until demand in the importing economies pick up, Indian exports will continue to face a tough time even with improved government support." On Thursday, the government announced additional incentives worth Rs 1,500 crore under the Merchandise Exports from India Scheme (MEIS) with the number of export items covered going up from 5,012 to 7,913. The rate of incentives has also been increased for certain products.
SOURCE: The Business Standard
India’s $782-million worth of cotton exports to Pakistan is likely to come to a halt, with exporters keen to divert shipment to other cotton scarce countries, following talks of withdrawal of the Most Favoured Nation (MFN) status to its neighbour. India had granted MFN status to Pakistan in 1996 to enhance trade between the two nuclear neighbours. A meeting, chaired by Prime Minister Narendra Modi, was scheduled to be held on Thursday in New Delhi to reconsider MFN status that Pakistan enjoys for around 20 years. But the meeting got postponed and is now rescheduled for next week. According to trade sources, India exported around two million bales (1 bale = 170 kilos) of cotton to Pakistan in 2015-16, constituting over 10 per cent of overall exports of the natural fibre from India. Pakistan’s cotton imports from India jumped in 2015-16 due to crop failure there. “Pakistan is short of two million bales this year as well (October–September), which they seek from India. But, if the relations between the two countries deteriorate further, it would be difficult for India to ship cotton to Pakistan. Textiles mills in Pakistan have to import cotton from the US, which would prove to be a costly proposition,” said M B Lal, a city-based cotton exporter and a former chairman of the Cotton Corporation of India. While cotton exports from India attract “zero” duty due to surplus availability of the natural fibre here, Pakistan gets favourable treatment under the MFN status to which Indian exporters prioritise shipment. However, with India preparing to withdraw MFN status to Pakistan, Indian cotton exporters are readying to divert their cotton shipment to other countries, including Bangladesh, China, Taiwan, etc. “We would like India to withdraw all trade ties with Pakistan. We have decided to stop cotton exports to Pakistan. A lot of alternative options are available for India for cotton exports,” said Arun Sakseria, a city–based cotton exporter.
Going a step further, Indian cotton traders have decided not to participate in the 75th plenary meeting of International Cotton Advisory Committee (ICAC), scheduled to be held from October 30–November 4 in Islamabad. Pakistan got the opportunity after 55 years to host this annual event for the entire value chain in cotton trade, including production, export, import and consumption. Earlier, Pakistan hosted ICAC plenary session in 1951. “We are not going to participate in this session, following the decision of the government to boycott Saarc (South Asian Association of Regional Co-operation) Summit in Pakistan,” said a senior trade official scheduled to participate in this event. Of the 400 delegates expected from 48 countries to participate in the ICAC plenary session, registration from India is estimated at 10 per cent.
SOURCE: The Business Standard
India is unlikely to overtake the manufacturing dominance of China, at least not for the next 10 years, despite its focus on 'Make in India' and availability of cheap wages. "Cost of production is rising in China. Wages are three to four times higher than India but even then its manufacturing dominance is going to stay even if you speak about next 10 years," Hong Kong Trade Development Council (HKTDC) principal economist Dickson Ho told PTI in an interview.
Elaborating, he said manufacturing dominance would mean mass production and not specialised products like aircraft. But focus of Chinese manufacturing and services companies for having 'alternate' base in India is growing strong and fast, he said. HKTDC is working on finding alternative manufacturing bases for Hong Kong based companies with competitive business enviornment, Ho, who is on a visit to West Bengal, said. He will also go to Orissa, Assam and Telegana during this visit to focus on opportunities in labour intensive industries and textile, clothing and footwear which are attracting special attention. Ho, in his previous visit, had covered western and southern parts of the country for his research on competitiveness India offers in manufacturing with extensive study on the textile sector. According to Ho, wage alone is not the key to set up business. Internal market and ease of doing business also hold great importance. India's has a strong position in Asia for its huge internal market, he added.
SOURCE: The Business Standard
Bangladesh has ratified the Trade Facilitation Agreement (TFA), becoming the 94th member of the World Trade Organization (WTO) and 12th least developed country (LDC) to do so. Concluded at the WTO's 2013 Bali Ministerial Conference, the TFA contains provisions for expediting the movement, release and clearance of goods, including goods in transit. The TFA also sets out measures for effective cooperation between customs and other appropriate authorities on trade facilitation and customs compliance issues. It further contains provisions for technical assistance and capacity building in this area. It will enter into force once two-thirds of the WTO membership has formally accepted the Agreement. Bangladesh's acceptance means over 85 per cent of the ratifications needed for entry into force have now been received.
The TFA broke new ground for developing countries and LDCs in the way it will be implemented. For the first time in WTO history, the requirement to implement the Agreement was directly linked to the capacity of the country to do so. In addition, the Agreement states that assistance and support should be provided to help them achieve that capacity. A Trade Facilitation Agreement Facility (TFAF) was also created at the request of developing and least-developed country members to help ensure that they receive the assistance needed to reap the full benefits of the TFA and to support the ultimate goal of full implementation of the new agreement by all members. Implementation of TFA has the potential to increase global merchandise exports by up to $1 trillion per annum, according to the WTO's flagship World Trade Report released in October 2015. Significantly, the Report also found that developing countries will benefit significantly from the TFA, capturing more than half of the available gains.
SOURCE: Fibre2fashion
The Textile, Clothing and Footwear (TCF) Council has been urged to improve its market access into Australia and New Zealand through the developing country preference. Trade Minister, Faiyaz Koya said the industry must invest directly into value added or niche products. Under the preference, the Fiji TCF exporters are allowed to source raw materials from more efficient and cost effective sources outside of Australia and the Pacific region. They are able to procure textiles, including woolen materials, from developing countries such as China, Bangladesh, India, Thailand and Vietnam and then convert these into finished garments for duty-free export into Australia. Mr Koya said the industry must also tap into the Pacific Island neighbors and the Asian markets. "The industry is encouraged to explore more opportunities through its participation at expos, exhibitions and trade shows to expose Fijian talents and brands," he said. According to economic forecast, the wearing apparel is expected to grow by $64.8 million this year. In 2016 alone, the industry's new export market contributed close to $5million with about 460 new employees. Mr Koya made the comments at the council's annual general meeting this week.
SOURCE: The Fiji Times
Activity in China's manufacturing sector expanded again in September, an official survey showed on Saturday, which may indicate that recent positive momentum can be sustained. The official Purchasing Managers' Index (PMI) stood at 50.4 in September, identical with the previous month's level. A reading above 50.0 shows growth on a monthly basis. September's 50.4 reading matched the prediction of a Reuters poll. After a significant pick-up in March, China's official PMI slipped, falling below 50 in July before showing expansion in August. In an encouraging sign, new export orders increased in September, rising to 50.1 from the previous month's 49.7. In September, output edged up to 52.8 from 52.6 in August, but the index for total new orders slipped to 50.9 from 51.3. A sub-index for smaller firms fell, while performance at larger companies improved, a sign that the government's dependence on big state firms for growth this year has not changed. Economists say the pattern over the past few months suggested sustained economic growth, but a growing dependence on government spending and an overheated property market may pose increased risks later this year with debt levels continuing to rise. Industrial profits rose at the fastest pace in three years in August, with rising sales and higher prices stimulated by a construction boom and heated property market.
Still struggling
But profits remained uneven, as traditional heavy industries with excess capacity such as steel still struggled for growth. Sectors like high-tech, auto manufacturing and shipbuilding showed strong expansion, the survey showed. Jobs were again lost, though at a slower pace, with the employment sub-index rising to 48.6, compared to 48.4 in August. Job losses could be rising as the government has pledged broad capacity cuts across a range of industries. Industrial overcapacity remains one of the main drags on economic growth. Beijing has pledged to quicken the pace of its industrial capacity cuts, particularly in steel, after falling behind earlier in the year.
China's state planner rejected a request in September by the nation's steel makers for coal mines to ramp up coking coal output to help ease supply tightness that has triggered a frenzied price rally. China's slowing economy and problems with industrial overcapacity have also reduced investment opportunities, a view reinforced by Fan Gang, a member of China's central bank monetary committee. Private investment grew just 2.1 per cent in the first eight months of the year, remaining at record lows. A similar official survey showed activity in China's services sector expanded at a slightly faster pace, with the official reading at 53.7 in September from 53.5 in August. A measure of the construction industry rose as the government has gone on an infrastructure spending spree. The services employment sub-index rose in September, but still indicated services companies were cutting staff. Beijing has been counting on a strong services sector to pick up the slack as it tries to shift the economy away from a dependence on heavy industry and manufacturing exports. A private business showed on Friday that factory activity expanded in September but the improvement was marginal and manufacturers continued to shed jobs. The Caixin/Markit Manufacturing Purchasing Managers' index for September rose to 50.1 from a no-change level of 50.0 in August.
SOURCE: The Business Standard
China's yuan joins the International Monetary Fund's basket of reserve currencies on Saturday in a milestone for the government's campaign for recognition as a global economic power. The yuan joins the US dollar, the euro, the yen and British pound in the IMF's special drawing rights (SDR) basket, which determines currencies that countries can receive as part of IMF loans. It marks the first time a new currency has been added since the euro was launched in 1999. The IMF is adding the yuan, also known as the renminbi, or "people's money", on the same day that the Communist Party celebrates the founding of the People's Republic of China in 1949. "The inclusion into the SDR is a milestone in the internationalisation of the renminbi, and is an affirmation of the success of China's economic development and results of the reform and opening up of the financial sector," the People's Bank of China said in a statement. China will use this opportunity to further deepen economic reforms and open up the sector to promote global growth, the central bank added. Yuan joins elite club of IMF reserve currencies The IMF announced last year that it would add the yuan to the basket, so actual inclusion is not expected to impact financial markets. But it puts Beijing's often opaque economic and foreign exchange policy in the international spotlight as some central banks add yuan assets to their official reserves.
Critics argue that the move is largely symbolic and the yuan does not fully meet IMF reserve currency criteria of being freely usable, or widely used to settle trade or widely traded in financial markets. US Republican presidential nominee Donald Trump has said he will formally label China a currency manipulator if he wins November's election. China stunned investors by devaluing the currency last year and the yuan has since weakened to near six-year lows, adding to worries about already feeble global growth. Some China watchers also fear that Beijing's commitment to further market opening and financial sector reforms will fade after its diplomatic success, despite repeated reassurances from Beijing it will continue with the process. US Treasury Secretary Jack Lew said on Thursday the yuan was "quite a ways" from true global reserve currency status. The new IMF status recognises the "enormous" change in China in the last 10 years that had made the yuan more open, but Beijing still had work to do to make its currency and its economy more market-driven, he said. "Being part of the SDR basket at the IMF is quite a ways away from being a global reserve currency," he said. Capital Economics said inclusion of the currency in the IMF's SDR basket will have minimal impact on foreign demand for yuan assets, so "offers little support" for the currency. "If anything, the risk is that official intervention to keep the renminbi stable ahead of its inclusion will subsequently be paired back, allowing for renewed deprecation," it said in a research note. The IMF on Friday fixed the relative amounts of the five currencies in the basket for five years, based on their average exchange rates over the past three months.
SOURCE: The Business Standard
Wacker Polymers will raise prices for vinyl acetate-ethylene copolymer (VAE) dispersions under the Vinnapas brand in the Americas region. These prices will be raised up to 15 per cent effective November 1, 2016 or as customer contracts allow. This has been necessitated due to a very high price increase of VAM, the primary raw material for VAE dispersions. According to the company, this price adjustment will enable it to continue providing customers with a wide-range of innovative quality products and comprehensive technical, sales and customer support services. Dispersions under the Vinnapas brand are applied in a broad variety of industries, ranging from adhesives, caulks, nonwovens, paints and coatings to paper, carpet and textiles.
SOURCE: Fibre2fashion
