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China wants to give its economy a big push as 2020 begins – Aljazeera.com

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The Chinese government is trying to set the economy up for a stronger start to 2020, with a multi-pronged policy push ranging from easier monetary settings to freer trade.

The latest pledge came late Monday, when Premier Li Keqiang signaled that further cuts in the amount of cash that banks have to park as reserves will be forthcoming. In theory, that will free up funds to lend to private-sector companies that have struggled to access loans this year.

The funding promise follows a wide-ranging set of initiatives to boost the non-state sector announced at the weekend, and a fresh round of tariff cuts designed to spur domestic demand released on Monday.

After a bruising year that’s seen economic output growth slow to the weakest pace in almost 30 years, modest signs of stabilization have begun to appear in incoming data. On top of that, trade negotiators this month succeeded in staving off another increase in tariffs on Chinese exports by U.S. President Donald Trump.

Speaking in the western city of Chengdu on Monday, Li said the government will continue to cut the reserve ratio for banks and look into increasing re-lending and re-discounting quotas, steps that can also help reduce overall borrowing costs for small firms.

“Beijing may cut the required-reserve ratio slightly earlier than we previously expected given an increasing risk of locally-based credit contraction in some regions, and upcoming liquidity shortage in January 2020,” said Lu Ting, chief China economist at Nomura International Ltd.. The moves would come “in the coming weeks before the lunar new year holiday, to stabilize liquidity conditions, credit supply and growth,” he said.

The private sector this year has faced difficulty accessing credit, amid a multi-year effort to reduce financial risk and rising defaults among corporate bond issuers. Despite an increase in overall credit growth, there’s evidence that not all lending is going to productive purposes.

Upgraded Outlook

Nevertheless, economists have upgraded their outlook for economic growth in 2020. Gross domestic product expansion will come in at 5.9% as easing trade tensions and the prospect of lower bank borrowing costs boost confidence, according to a survey of analysts and traders last week.

Survey respondents see policy makers maintaining a measured pace of easing into next year, trimming the price of central bank medium-term lending by 15 basis points with the first cut coming in the first quarter.

In the meantime, the leadership also stressed more opening-up of the economy, and is seeking to forge stronger partnerships with some trading members.

“To defend free trade is the only way to revitalize the economy,” Li said on Tuesday at a China-Japan-South Korea summit in Chengdu. He called for deeper cooperation between the three countries to counter the “downward economic pressure” posed by the changing global economic and political situation. He also urged the speeding up of negotiations toward a trilateral free trade agreement, which in his words, would allow China to further open its services sectors.

“China is willing to open up its finance, medical care, elderly care and other services sectors to foreign investors, including scrapping the caps on ownership requirements, step by step,” he reiterated.

Lower Tariffs

The Ministry of Finance on Monday published a list of 859 types of products that will enjoy tariffs lower than the standard rates for this year. It included frozen pork as a key item aimed at alleviating shortages of the meat due to the outbreak of African swine fever.

In 2018, imports of the listed items totaled some $389 billion, or about 18% of China’s total imports of $2.14 trillion, according to Bloomberg calculations.

Steps announced Sunday by the State Council, China’s cabinet, aim to help private firms gain better market access and equal regulatory treatment to their state-owned peers. Among actions to be taken are the further opening of key industries to non-state investors, including energy and finance, and also facilitating equity and bond sales by private-sector businesses.

The private sector, which accounts for 9 out of every 10 new jobs created in China, has been hardest hit thanks to what critics say is a regulatory regime that tilts business conditions in favor of state-owned companies.

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Pandemic Binge Helped Turkish Economy Outperform Most Peers – BNN

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(Bloomberg) — Turkey’s economy outperformed all but one major competitor in the final quarter, as rate cuts and a spending-and-credit binge beat back pandemic restrictions even as the lira collapsed.

Gross domestic product rose 5.9% from a year earlier, more than all G-20 nations except China. The median of 20 forecasts in a Bloomberg survey was for 6.9% growth. The seasonally and working day-adjusted figures showed an expansion of 1.7% in the last quarter from the previous three months. The economy grew 1.8% in 2020.

The growth push weakened the currency by 20% in 2020 and kept headline inflation in double digits for the entire year. The data expose the challenge facing central bank Governor Naci Agbal as he looks to cool growth and restore price stability without triggering a steep slowdown in activity and a jump in unemployment.

The government had pushed banks to ramp up lending to help businesses and consumers ride out the Covid emergency. The credit boom was coupled with a front-loaded easing cycle that helped prime the economy.

Agbal raised the benchmark interest rate by a cumulative 675 basis points to 17% following his appointment in November, signaling a return to more market-friendly monetary policy. The lira has strengthened 15% since his appointment.

The International Monetary Fund raised its growth forecast for Turkey’s economy to 6% in 2021 amid the coronavirus vaccine rollout, while warning the pandemic response worsened pre-existing financial risks despite leading to a strong rebound in economic activity.

“With some stability in the currency market, Turkish exporters can finally enjoy the price competitiveness accumulated over recent years,” said JPMorgan Chase & Co.’s London-based analyst Yarkin Cebeci. “Depending on the pace of vaccinations, tourism will most probably be stronger than last year as well.”

©2021 Bloomberg L.P.

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Pandemic Binge Helped Turkish Economy Outperform Most Peers – Bloomberg

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Turkey’s economy outperformed all but one major competitor in the final quarter, as rate cuts and a spending-and-credit binge beat back pandemic restrictions even as the lira collapsed.

Gross domestic product rose 5.9% from a year earlier, more than all G-20 nations except China. The median of 20 forecasts in a Bloomberg survey was for 6.9% growth. The seasonally and working day-adjusted figures showed an expansion of 1.7% in the last quarter from the previous three months. The economy grew 1.8% in 2020.

The growth push weakened the currency by 20% in 2020 and kept headline inflation in double digits for the entire year. The data expose the challenge facing central bank Governor Naci Agbal as he looks to cool growth and restore price stability without triggering a steep slowdown in activity and a jump in unemployment.

The government had pushed banks to ramp up lending to help businesses and consumers ride out the Covid emergency. The credit boom was coupled with a front-loaded easing cycle that helped prime the economy.

#lazy-img-368962288:beforepadding-top:56.25%;Turkey's industrial output has been rising on an annual basis since June

Agbal raised the benchmark interest rate by a cumulative 675 basis points to 17% following his appointment in November, signaling a return to more market-friendly monetary policy. The lira has strengthened 15% since his appointment.

The International Monetary Fund raised its growth forecast for Turkey’s economy to 6% in 2021 amid the coronavirus vaccine rollout, while warning the pandemic response worsened pre-existing financial risks despite leading to a strong rebound in economic activity.

“With some stability in the currency market, Turkish exporters can finally enjoy the price competitiveness accumulated over recent years,” said JPMorgan Chase & Co.’s London-based analyst Yarkin Cebeci. “Depending on the pace of vaccinations, tourism will most probably be stronger than last year as well.”

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    Spinning waste into gold: Victoria, Nanaimo councillors call for 'circular economy' strategy – Times Colonist

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    When people talk about a circular economy in which materials get reused and less waste ends up in landfills, they’re really ­talking about entrepreneurs such as ­Meaghan McDonald.

    The 31-year-old Victoria woman has launched a new venture that aims to make money and protect the environment at the same time.

    article continues below

    Her brand, Salt Legacy, plans to give new life to discarded or “dead” sails from sailboats by using the durable, water- and sun-resistant materials to make backpacks, surfboard bags and other outdoor gear rather than burying all that nylon and polyester underground.

    “I’ve always been really eco-conscious and always wanted to create something that would kind of help within the circular economy,” McDonald said.

    She has a background in biology rather than business, so she got help from an eight-month incubator program run by Victoria’s Project Zero — a partnership between the non-profit Synergy Foundation and Vancity that assists start-up businesses looking to operate in a circular economy.

    Project Zero envisions a Vancouver Island where, by 2040, “our waste will be our greatest resource” and hundreds of people will be working for small independent businesses that, like McDonald, will be “upcycling” materials into new products.

    Municipal politicians are getting on board.

    Victoria Coun. Jeremy Loveday describes the circular economy as an immense opportunity “to create good green jobs and live on this planet in a way that will actually be sustainable.”

    That’s why he got Victoria council to endorse a resolution to the Union of B.C. Municipalities, calling on the provincial government to develop a circular-economy strategy.

    Loveday said such a strategy would allow the province to encourage and mandate that governments, businesses and residents adopt circular-economy practices.

    “And, I think, local governments are at the heart of it because cities are where the population, carbon emissions, waste and innovation are all occurring.”

    His motion, which emerged from the Climate Caucus, a non-partisan network of more than 300 elected officials across Canada, received final approval from Victoria council on Thursday.

    In a related move, council also backed Loveday’s resolution to the UBCM asking the province to adopt right-to-repair legislation, which would ensure citizens have access to the parts and information they need to fix items, rather than being discouraged by ­companies that claim ownership over the ­intellectual property of their ­products.

    “The idea, essentially, is that it’s time for the era of planned ­obsolescence to be over, and that consumers should have the right to receive information about their products, have access to spare parts, and that we should be able to repair the things that we purchase, rather than having a product that is designed to have an end of life,” Loveday said.

    Nanaimo Coun. Ben Geselbracht won approval from his council for similar motions last week, as well as a third resolution calling for a provincial strategy to deal with demolition and construction waste.

    Geselbracht said that the more municipal councils sign on to the resolutions, the stronger the case for them receiving serious ­consideration at the next UBCM ­convention.

    “Then, hopefully, when it gets passed to the minister, there’s a pretty clear mandate that this is an important issue and we really demand action on it.”

    As for McDonald, she’s forging ahead with her business plans and collecting old sails from marinas and sailing clubs that are only too happy to donate materials destined for the landfill.

    She has the prototype for her backpack complete, work is underway on a fanny pack and a surfboard bag is in the design stage.

    McDonald is also gathering the history of each discarded sail, so that she can attach stories of adventure and world travel to her new products.

    “Then the new consumer can kind of have a bit of that history and that connection piece to the backpack they just bought,” she said.

    In that way, her products will keep stories circulating as well as the economy.

    lkines@timescolonist.com

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