Pakistan denies China's funding halt for CPEC projects

Pakistan on Thursday refuted reports that Beijing had halted payments on some of the China-Pakistan Economic Corridor (CPEC) projects in the country.

Foreign Office Spokesperson Muhammad Faisal at a briefing said there was no news from Beijing that the Chinese government was halting funding for any of the projects, adding that execution of payments takes place in a specific manner.

The Foreign Office's denial came days after Minister for Planning and Development Ahsan Iqbal said that China had halted the release of funds for three CPEC projects till the revision of its "financial mechanism" by Beijing.

According to a press release by the National Assembly Secretariat on December 11, Iqbal informed the 25th parliamentary committee meeting on the CPEC that the work on these projects would only restart after approval from Beijing.

The three projects are related to the road network.

Another member of the committee, Al-Haj Gul Khan Afridi, had said that they were told earlier that China had not stopped financing the CPEC projects but raised some "technical objections" to the projects, Dawn online reported.
READ MORE

China's economy on brink collapse due to high borrowing: Chinese bank chief

Zhou Xiaochuan, the governor of China's central bank - the People's Bank of China (PBOC), has warned that China's financial system is becoming more vulnerable due to high levels of leverage, or borrowing.

Zhou, in an article published on the People's Bank of China's website, has warned about the prospect of potential financial problems in the world's second-biggest economy.

He argued that deepened reform and opening up are the key measures to proactively control such risks in China's financial sector.

The central bank governor called for eliminating "zombie" companies to avoid a financial crisis.

Zhou warned that risks of damage to the financial markets in China are "hidden, complex, sudden, contagious and hazardous".

"In sectors of the real economy, this is reflected as excessive debt, and in the financial system, this is reflected as credit that has been expanding too quickly," express.co.uk quoted Zhou as saying.

Zhou elaborated on the top three financial risks China is faced with: the high-leveraging ratio and liquidity in macro-finance; the credit risk in micro-finance; and cross-market and cross-regional shadow banking together with financial crime.
READ MORE

UK industrial output rises in September; trade gap narrows

British industrial output increased in September at the fastest pace this year and the goods trade deficit improved, mostly upbeat official data showed on Friday.

Despite also showing a sharp downturn in construction, the figures as a whole are likely to hearten Bank of England officials who last week voted to raise interest rates for the first time in more than 10 years.

The Office for National Statistics said the data for September did not imply any change to its preliminary estimate that Britain's economy grew by 0.4 per cent in the third quarter, picking up a bit of speed from earlier in 2017 but still slower than growth in the euro zone.

The ONS said industrial and manufacturing output shot up by a monthly 0.7 per cent in September, the fastest growth for each sector since December last year and above all forecasts in a Reuters poll of economists.

The consensus had pointed to a reading of 0.3 per cent for both.

Industrial output, which includes manufacturing, accounts for 14 per cent of Britain's overall economic output.
READ MORE

Hurricane impact: US jobless claims topped estimates last week, at 239,000

.

The number of Americans filing for unemployment benefits rose more than expected last week, suggesting that claims processing disrupted by recent hurricanes has begun to improve.

Initial claims for state unemployment benefits increased 10,000 to a seasonally adjusted 239,000 for the week ended Nov. 4, the Labor Department said on Thursday. Claims had fallen to 229,000 in the prior week, near a 44-1/2-year low, and remain well below the 300,000 level generally regarded as signaling a healthy labor market.

Economists polled by Reuters had forecast claims rising to 231,000 in the latest week. They have declined from an almost three-year high of 298,000 hit at the start of September in the aftermath of hurricanes that ravaged parts of Texas, Florida, Puerto Rico and the Virgin Islands.

The Labor Department noted that it is now processing backlogged claims in Puerto Rico though its operations in the Virgin Islands remain severely disrupted.

US Treasury yields held near session highs after the data, while the dollar trimmed losses. US stock index futures were slightly lower, a day after Wall Street closed at a record high.

Last week marked the 139th straight week that claims remained below the 300,000 threshold. That is the longest such stretch since 1970, when the labor market was smaller.
READ MORE

Paradise Papers: EU pushes for tax blacklist after leak

EU finance ministers sought today to break resistance against creating Europe's first ever blacklist of tax havens after new revelations from the "Paradise Papers" showed how major firms escape tax.

The 28 members of the European Union have struggled for over a year to finalise a list of non-EU tax havens, with smaller countries such as Ireland, Malta and Luxembourg loath to scare off major firms headquartered in their low tax capitals.

Soon-to-quit Britain has also drawn up resistance, hoping to protect the near zero-tax rates offered in several of its dependencies, such as Jersey or the British Virgin Islands, that have been identified in the series of leaks that also include Panama Papers and the Luxleaks scandal.

The island of Jersey, a few kilometres (miles) off the coast of France, was where the latest reports said Apple shifted much of its offshore wealth when Ireland changed its laws under pressure from the EU.

"It is important that this list comes out (...) in 2017, it must be credible and up to the challenge," said EU Economics Affairs Commissioner Pierre Moscovici, who is leading the blacklist effort.

The EU ministers will try to bridge their differences and draw up an official list of unwanted tax havens in December, whittling down an initial list of 92 countries finalised last year.

Sources said EU officials have warned about 60 countries that their tax policies may be problematic and at risk of blacklisting, demanding further information before a November 18 deadline.
READ MORE

Bank of China becomes operational in Pakistan, first branch in Karachi

The Bank of China (BoC) became operational in Pakistan as it inaugurated its first branch in Karachi on Tuesday.

Emphasising that it was "a great honour" for the bank to be launched in Pakistan, BoC Chairman Chen Siqing noted that the Karachi branch was its first in South Asia.

The Dawn quoted him as saying that the bank would strengthen the "brotherly relations" between the two countries in the financial sector.

Siqing also highlighted that the bank could help Pakistan effectively reap the benefits of Beijing's economic prosperity.

Welcoming the bank to Pakistan, State Bank of Pakistan (SBP) Governor Tariq Bajwa, said that the increased diversity of foreign banks would increase the country's economic resilience.

He also expressed hope that Pakistan would learn from BoC's expertise in the small and medium enterprises sector.

Speaking during the launch, Acting Chinese Ambassador to Pakistan Zhao Lijian said that the opening of the bank "marked the confidence of the Chinese corporate sector in Pakistan's economic situation."

President Mamnoon Hussain, who was also present on the occasion, expressed confidence that the newly-launched bank will help accelerate infrastructure development and overall economic growth of the country.
READ MORE

Saudi money fuels the tech industry. It's time to ask why

We need to talk about the tsunami of questionable money crashing into the tech industry.

We should talk about it because that money is suddenly in the news, inconveniently out in the open in an industry that has preferred to keep its connection to petromonarchs and other strongmen on the down low.

The news started surfacing over the weekend, when Saudi Arabia arrested a passel of princes, including Alwaleed bin Talal, the billionaire tech investor who has large holdings in Apple, Twitter and Lyft. The arrests, part of what the Saudis called a corruption crackdown, opened up a chasm under the tech industry’s justification for taking money from the religious monarchy.

Then there’s Russia. My colleague Jesse Drucker reported on Sunday that Yuri Milner, the Russian billionaire who plowed early investments into Twitter and Facebook, had been funded in part by companies controlled by the Kremlin. DST Global, Mr. Milner’s company, defended the arrangement as just business, and noted that DST had divested from Facebook and Twitter years ago. DST had appeared to go to some lengths to hide the source of the funds through many offshore companies.

But mostly we need to talk about this money because, boy, is there a whole lot of it — and as the world’s moneyed dictators, oligarchs and other characters look for more places to park their billions, mountains more will be coming to Silicon Valley.

This presents a conundrum. Tech companies are fond of pseudo-revolutionary mission statements that extol the virtues of diversity, tolerance, freedom of expression and other progressive ideals. They have argued that their technologies are part of a force for global liberation — that forging more open communication and economic productivity through technology will loosen the grip of tyrannies across the globe. For much of the last year, Silicon Valley has also promised a revolution in its own culture, with large and small companies alike vowing to become more inclusive of women and minorities.
READ MORE

Paradise leaks: Nothing wrong in Russia-tied investments, says Wilbur Ross

US Commerce Secretary Wilbur Ross said on Monday he had done nothing wrong and did properly disclose his investments in a shipping firm that has significant business ties to Russian President Vladimir Putin's inner circle.

Ross was responding in media interviews to reports on Sunday about his investments stemming from the so-called Paradise Papers, a trove of leaked documents about an offshore investment that relate to the affairs of wealthy individuals and institutions ranging from Ross to Britain's Queen Elizabeth and trading firm Glencore.

The documents were obtained by Germany's Sueddeutsche Zeitung newspaper and shared with the International Consortium of Investigative Journalists (ICIJ) and some media outlets. Reuters has not independently verified the documents.

"There is nothing wrong with anything that was done," Ross told CNBC, adding that he had not considered resigning following Sunday's report. Ross is a billionaire investor who is helping to shape Republican President Donald Trump's trade policy.

"There was disclosure, there is no impropriety and if people draw a contrary conclusion that's because the papers have twisted the story and made it into something that it's not there," Ross told the BBC.

U.S. media said partnerships used by Ross have a 31 percent stake in Navigator Holdings, which the New York Times said earns millions of dollars a year transporting gas for Russian petrochemical firm Sibur.
READ MORE

Paradise Paper leaks reveal Wilbur Ross' offshore ties to Putin 'cronies'

After becoming commerce secretary, Wilbur L. Ross Jr. retained investments in a shipping firm he once controlled that has significant business ties to a Russian oligarch subject to American sanctions and President Vladimir V. Putin’s son-in-law, according to newly disclosed documents.

The shipper, Navigator Holdings, earns millions of dollars a year transporting gas for one of its top clients, a giant Russian energy company called Sibur, whose owners include the oligarch and Mr. Putin’s family member. Despite selling off numerous other holdings to join the Trump administration and spearhead its “America first” trade policy, Mr. Ross kept an investment in Navigator, which increased its business dealings with Sibur even as the West sought to punish Russia’s energy sector over Mr. Putin’s incursions into Ukraine.

Partnerships used by Mr. Ross, whose private equity firm has long been the biggest shareholder in Navigator, have a 31 percent stake in the company. Though his personal share of that stake was reduced as he took office in February, he retained an investment in the partnerships valued between $2 million and $10 million, and stood to earn a higher share of profits as a general partner, according to his government ethics disclosure and securities filings.

Mr. Ross’s stake in Navigator has been held by a chain of companies in the Cayman Islands, one of several tax havens where much of his wealth, estimated at more than $2 billion, has been tied to similar investment vehicles. Details of these arrangements surfaced in a cache of leaked files from Appleby, one of the world’s largest offshore law firms, which administered some 50 companies and partnerships in the Caymans and elsewhere connected to Mr. Ross.

READ MORE

Decision today: Is Trump all set to pick Jerome Powell as next Fed chair?

President Donald Trump has informed Federal Reserve Governor Jerome Powell that he is the pick to replace Janet Yellen at the helm of the central bank, a media report said on Wednesday.

The Wall Street Journal report quoted two people familiar with the matter as saying Trump spoke to Powell yesterday to inform him of the decision.

If confirmed by the Senate, Powell would take over from Yellen when her four-year term as Fed chair expires in February. Powell has already been through that confirmation process in order to become a member of the Fed's board.

Yellen was a potential, though dark horse candidate, and earlier in the day Trump praised her as "excellent." But he has made clear in all his appointments he wants to put his own stamp on policy.

The choice marks the first time since Jimmy Carter's administration in the 1970s that a president has failed to reappoint the Fed chair named by his predecessor.

After months of public debate, analysts say Powell represented a middle-ground option for the president, who wanted to mark a departure from the Obama era, while markets prefer continuity and favoured Yellen who has presided over an era of low inflation and steady economic growth.

An attorney by training who has voted with the majority of Fed members since his appointment by Barack Obama in 2012, Powell was seen as a centrist, unlikely to pursue steep rate hikes but a probably more amenable to the Trump administration's deregulation agenda.
READ MORE

Gold climbs ahead of US Fed Reserve meet, pick for Janet Yellen replacement

Gold climbed briefly back above $1,280 an ounce on Wednesday as caution ahead of this week's confirmation of the new Federal Reserve chair and a policy statement from the bank prompted some to close out bets on falling prices.

Fed Governor Jerome Powell is widely tipped to take over from incumbent Janet Yellen at the head of the U.S. central bank next year. He is seen as a less hawkish and therefore more gold friendly choice than his main challenger John Taylor, a Stanford University economist.

A statement at the end of the Fed's latest policy meeting due later will also be closely watched for clues on the outlook for U.S. interest rates. While the bank is expected to leave rates unchanged, investors will be watching for any indications that it will press ahead with another increase next month.

Spot gold was up 0.5 percent at $1,278.11 an ounce at 1035 GMT, having earlier peaked at $1,280.87. Its upward move accelerated after it broke through its 100-day moving average at $1,275 an ounce, a key chart level.

The metal has fallen for the last two weeks as the dollar has strengthened, taking it to a three-week low on Friday. While prices have recovered, they remain within a less than $15 an ounce range so far this week as traders await clarity on U.S. monetary policy.
READ MORE

Brexit to cost UK 10,000 finance jobs on day-1, 75,000 in all: BoE governor

Job losses totalling 75,000 in banking and insurance because of Brexit are "plausible", Bank of England Deputy Governor Sam Woods said on Wednesday.

Woods told British lawmakers that the 65,000 to 75,000 estimate was drawn up by consultants Oliver Wyman and not the Bank of England, but that it was within a "plausible range of scenarios".

Woods also told a House of Lords committee that it was reasonable to expect that the UK financial sector will have lost about 10,000 jobs on "day one" of Brexit when Britain leaves the European Union in March 2019.

"It's a moving feast," Woods said.

READ MORE

China slams US anti-dumping duty on aluminium foil ahead of Trump visit

China has criticised new United States anti-dumping duties on aluminium foil, saying it was "extremely dissatisfied" with the new measures, just days before President Trump visits Beijing.

The tariff was announced Friday by the US following concern that China was undercutting American manufacturers by flooding the country with underpriced aluminium products.

But the timing has raised fears of a trade dispute during Trump's first visit as president to the Chinese capital next week, when commerce between the nations is expected to be high on the agenda.

On Saturday evening, China's Ministry of Commerce said the US was ignoring World Trade Organization rules by introducing the duties, and not fulfilling its international obligations.

"The US is not only harming the interests of Chinese companies, it is also damaging the seriousness and authority of multilateral rules and regulations," said Wang Hejun, Director of the Trade Remedy and Investigation Bureau, in a statement.

The US Commerce Department plans to impose fresh duties of 96.81 per cent to 162.24 on Chinese aluminium foil imports to the US.

The new tariff will affect the type of aluminium foil found in kitchens, packaging and automobiles.
READ MORE

Saudi Arabia announces $500-bn investment city linked to Egypt, Jordan

Saudi Arabia, seeking to free itself from dependence on oil exports has announced on Tuesday a $500 billion plan to build a business and industrial zone extending into Jordan and Egypt.

The 26,500 square km (10,230 square mile) zone, known as NEOM, to be powered entirely by renewable energy, will focus on industries including energy and water, biotechnology, food, advanced manufacturing and entertainment, Saudi Crown Prince Mohammed bin Salman said.

The announcement was the highlight at the opening of a three-day international business conference drawing over 3,500 people from 88 countries.

Prince Mohammed, in a rare public address, hailed it as an example of the innovative high tech future he has promised his highly conservative country.

Speaking on a panel, he said young Saudis and the promotion of moderate Islam were the key to his modernising "dream" for his country, the world's largest oil exporter. In a brief political comment, he said the country would eradicate extremism soon.

The stakes in the country's rapid modernisation were high.

"This is a double-edged sword. If they (young Saudis) work and go the right way, with all their force they will create another country, something completely different ... and if they go the wrong direction it will be the destruction of this country," he said.
READ MORE

Watching inflation closely but economy is strong, says Janet Yellen

The US economy remains strong and the strength of the labour market calls for continued gradual increases in interest rates despite subdued inflation, Federal Reserve Chair Janet Yellen said on Sunday.

"We will be paying close attention to the inflation data in the months ahead," Yellen said in prepared remarks at an international banking seminar in Washington. "My best guess is that these soft readings will not persist."
Yellen also said she expected the US economy to exceed its long-term trend during the second half of the year and repeated the impact of recent hurricanes on the economy should be temporary.

The US central bank voted to hold interest rates steady at its last policy meeting in September. Since then, Yellen has repeatedly acknowledged rising uncertainty on the path of inflation, which has been retreating from the Fed's 2 percent target rate for much of the year.

Minutes from the meeting, released last Wednesday, showed policymakers had a broad debate about recent soft inflation and the impact on interest rates if it fails to rebound.

However, Yellen and some other key policymakers have also made plain they expect to continue to gradually raise interest rates given the strength of the overall economy and continued tightening of the labour market.
READ MORE

Trump says he has decided to decertify Iran nuclear deal

US President Donald Trump struck a blow against the 2015 Iran nuclear agreement on Friday in defiance of other world powers, choosing not to certify that Tehran is complying with the deal.

"Based on the factual record I have put forward, I am announcing today that we cannot and will not make this certification," Trump said at a White House event as he unveiled a tougher strategy against Tehran.

Trump's move does not pull the United States out of the agreement, formally known as the JCPOA.

While Trump did not pull the United States out of the agreement, aimed at preventing Iran from developing a nuclear bomb, he gave the US Congress 60 days to decide whether to reimpose economic sanctions on Tehran that were lifted under the pact.

That would increase tension with Iran as well as put Washington at odds with other signatories of the accord such as Britain, France, Germany, Russia, China and the European Union.
READ MORE

Brexit talks stutter, but EU leaders might give Theresa May a break

European Union (EU) negotiators see no big breakthrough in a new round of Brexit talks from Monday nor when Theresa May attends a summit next week, yet leaders could offer the beleaguered British prime minister a hand, EU officials believe.

Talks which began on Monday in Brussels have a thin schedule - British Brexit Secretary David Davis is to meet EU negotiator Michel Barnier on Tuesday and again on Thursday. But Wednesday is blank on the timetable and officials will not touch on the knottiest outstanding problem - how much Britain pays the EU.
That all but rules out "miracles" on key divorce issues that Barnier's boss says are needed for May's 27 fellow EU leaders to agree to open the talks she wants on a post-Brexit free trade pact when they all meet in Brussels next Thursday and Friday.

The prime minister revived an increasingly sour dialogue two weeks ago by offering concessions in a speech in Florence. But talks that followed left big gaps on three core issues on which the EU demands "significant progress" before Barnier can so much as mention what happens after Britain leaves in 18 months time.

Yet such is the opposition to compromise that May faces within her own party that many EU diplomats think leaders could give her some hope at the summit to help her face down calls for Britain to simply walk out without a deal - an eventuality that the Europeans are nonetheless preparing for.
READ MORE

Manufacturing jobs coming back to US: Donald Trump

The manufacturing jobs are coming back to America, President Donald Trump has said, asserting that his administration has already created tens of thousands of new jobs and is working to improve US' business climate.

Proclaiming October 6 as the national day of manufacturing, Trump said American manufacturers were consistently finding new ways to incorporate advanced technology into the traditional assembly line to produce previously unfathomable breakthroughs in areas like aerospace, medicine and computers.

These manufacturers are writing their chapter in the story of American innovation while providing countless job opportunities to machinists, designers, computer programmers and engineers among others, he said yesterday.

"Plants and companies are coming back into our country. You see it with announcements now from automobile companies to every kind of company. They're coming back in and, perhaps, even more importantly, they don't want to leave anymore because they know they're leaving a very good thing," Trump said while signing a national manufacturing day proclamation.

He said manufacturing jobs are coming back to the US and his administration has already created tens of thousands of new manufacturing jobs.
READ MORE

Spanish tensions keep Europe away from global stocks party

Global stock markets hit a record high on Wednesday with investors in exuberant mood in the United States overnight and in Asia later, but sentiment in Europe was soured by a political crisis gathering steam in Spain.

Tensions between Madrid and Catalonia have risen since the wealthy region held an independence referendum on Sunday that was tarnished by police violence.
The fallout from those clashes nudged Spanish stocks towards their biggest daily fall in more than a year on Wednesday, in turn dragging down other European bourses.

Catalonia would move as soon as this weekend to declare independence from Spain, the region's leader said.

"If you look at the European markets, the continued political worries in Spain is the main driver, and that uncertainty seems likely to continue if the regional government declares independence," Investec economist Ryan Djajasaputra said.

While world stocks hit a fresh record high, the pan-European STOXX 600 index was down 0.2 percent while Spain's IBEX fell as much as 2 percent, its biggest daily fall since August last year.
READ MORE

Trump's massive tax cut stirs concerns on deficit, favouritism towards rich

President Donald Trump proposed on Wednesday the biggest US tax overhaul in three decades, calling for tax cuts for most Americans, but prompting criticism that the plan favours business and the rich and could add trillions of dollars to the deficit.

The proposal drew a swift, sceptical response from Senator Bob Corker, a leading Republican “fiscal hawk,” who vowed not to vote for any federal tax package financed with borrowed money.

“What I can tell you is that I’m not about to vote for any bill that increases our deficit, period,” Corker, who said on Tuesday he would not seek re-election in 2018, told reporters.

Trump said his tax plan was aimed at helping working people, creating jobs and making the tax code simpler and fairer. But it faces an uphill battle in the US Congress with Trump’s own Republican Party divided over it and Democrats hostile.

The plan would lower corporate and small-business income tax rates, reduce the top income tax rate for high-earning American individuals and scrap some popular tax breaks, including one that benefits people in high-tax states dominated by Democrats.

Forged during months of talks among Trump’s aides and top congressional Republicans, the plan contained few details on how to pay for the tax cuts without expanding the budget deficit and adding to the nation’s $20 trillion national debt.

READ MORE