Japan aiming to help increase bluefin tuna

Japan aims to take the lead in working out an international plan to help bluefin tuna stocks in the Pacific Ocean recover and implement it in 2015, a senior Fisheries Agency official said Thursday.

Masanori Miyahara, deputy director-general of the agency, announced the policy at a meeting of some 340 representatives of the fisheries industry, calling on them to help regulate bluefin tuna stocks in the Pacific.

The plan is aimed at increasing spawning bluefin tuna stocks, which fell to a record low in 2010. It is expected to set a target year and call for regulating annual catch quotas.

TPP countries goal to conclude talks by year end

Twelve countries negotiating Trans-Pacific Partnership free trade rules, including Japan, reconfirmed at a ministerial meeting Thursday the goal of concluding their talks by the end of this year.

Japan will participate in discussions in a proactive and constructive manner to conclude the TPP talks by the year-end, Akira Amari, Japanese minister in charge of TPP negotiations, said in the first round of the two-day meeting.

Still, Japan, which joined the negotiations in July, is aiming to maintain its tariffs on five key items including rice and sugar, with Amari pointing out during the day's session that every country has a certain set of important items.

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Pilot free trade zone in Shanghai approved by China's State Council

China's State Council has approved the establishment of a pilot free trade zone in Shanghai, according to a Ministry of Commerce statement on Thursday.

Covering 28.78 square kilometers, the new zone will be built on the basis of existing bonded zones -- Waigaoqiao Free Trade Zone, Waigaoqiao Free Trade Logistics Park, Yangshan Free Trade Port Area and Pudong Airport Comprehensive Free Trade Zone.

Experiences gained from the pilot zone are expected to be copied in other parts of the country, according to the statement.

The zone will help foster China's global competitiveness and serve as a new platform for the nation's cooperation with other countries, and contribute to efforts in building "an upgraded version of China's economy," said the statement.

China will adopt a "negative list" approach in the foreign investment management in the zone, and innovate the country's opening-up mode, said the statement.

Ratings Agencies could downgrade U.S. Banks

According to the Wall Street Journal:
Moody’s Investors Service put ratings of big U.S. bank holding companies on watch for possible downgrade, citing a possible removal of extraordinary government support now that the industry is moving closer to formalizing plans for liquidating banks in crisis.

These biggest U.S. banks’ ratings have gotten a slight boost since the financial crisis erupted five years ago because of the extraordinary support the government extended to aid the financial system. More recently, regulators and lawmakers have worked with banks to come up with plans for their orderly liquidation in the event of another crisis.

Now that those plans are getting more firm, the government may withdraw its support and the holding company ratings could drop as a result, the ratings agencies said in separate announcements this week.

Moody’s said Thursday that a possible offset to the removal of government support is the reduction in the severity of losses for holding company creditors in the event of an orderly liquidation versus a bankruptcy.

The agency joins Standard & Poor’s Corp., which said earlier this week it was also reviewing the holding company ratings of Goldman Sachs, J.P. Morgan, Morgan Stanley and Wells Fargo,JP Morgan Chase,Bank of New York Mellon,State Street and Bank of America.

Euro zone indicators show broad base expansion in August

In an article published today in the Wall Street Journal says "Markit's euro-zone purchasing managers indexes show broad-based expansion in August, including in the so-called periphery countries, such as Spain and Italy. European stocks and corporate bonds should continue to win favor despite headwinds from U.S. monetary policy and emerging-market turbulence"
.The flash estimate of the August euro-zone composite PMI rose to 51.7 from 50.5 in July, Markit said, moving further above the 50 mark that separates contraction from expansion and rising for the fifth consecutive month. Growth was once again led by Germany, where new export orders jumped, pushing the composite PMI to 53.4.

France disappointed. Its PMI dipped to 47.9, but forward-looking indicators appear encouraging: Manufacturing new orders rose and expectations in services remained positive. In any case, the French PMI has consistently understated the

strenghth of the economy.

   The really encouraging news was that the rest of the euro zone saw output rise for the first time since May 2011, across both manufacturing and services. Both domestic and export sales improved, Markit said, indicating both that economies have become more competitive and are benefiting from reduced fiscal strains.

Slower Growth of China and its impact on property markets in top and small cities.

"A flurry of housing investment over the past several years, fuelled in part by herd-like speculative buying, resulted in some developers building more housing than could be sold once the market began to slow.

Now, the concern is that the market could be cooling too quickly, and risk stalling one of the few engines in the economy that are still firing.

While new home prices in Beijing rose 14.1 percent in July from a year earlier and Shanghai prices were up 13.7 percent, smaller cities are lagging the major centers. The National Bureau of Statistics data showed average new home prices in China's top 70 cities up 7.5 percent on the year.

Housing, moreover, props up at least 40 other sectors, from cement to steel to furniture and home appliances. Local governments also depend heavily on revenues from land sales to developers to help service a debt pile worth trillions of yuan.

Still, some developers are scaling back.

Last month, Yu Liang, chief executive of China Vanke , the biggest listed developer by sales, said the company was pulling back from Yixing city in prosperous Zhejiang province.

And Yi Xiaodi, the president of Sunshine 100, a mid-sized residential developer based in Beijing, has put off plans to expand in Zhuzhou, a city with 3.9 million residents in Hunan.

"We changed our mind because of oversupply risk," Yi said. "We will avoid investing in cities where industrial competitiveness is fading and the market is plagued with over-supply. That will be very dangerous." 

China's leadership, acutely aware of housing's importance to the economy, appears to have set aside concerns that a property boom was pricing millions of families out of the market.

That is how industry executives and analysts took a July 30 pledge to maintain "steady and healthy development of the property sector" by the Politburo, the top decision-making body.

But leaving the market alone may not be enough. With stock markets volatile and caps on bank deposits, property remains the only game in town for millions of Chinese savers.

Total property investment accounted for 14.8 percent of gross domestic product in the first half of 2013, up from 13.5 percent a year earlier. Residential property accounts for 70 percent of that total.

Most economists believe incomes will keep growing enough to sustain relatively healthy demand for at least a year, and the government does plan to encourage urbanization.

"We expect a stable property sector policy in the coming year and see a modest property recovery to continue," said UBS chief China economist Tao Wang.

Industry executives say there is now a tide of new investment coming to top cities and provincial capitals, because demand remains strong. Over time, economists say, that could ease housing price inflation in China's biggest cities.

 Source: Reuters

China´s international reserves and Chimerica

The twenty-first-century economy has thus far been shaped by capital flows from China to the United States – a pattern that has suppressed global interest rates, helped to reflate the developed world’s leverage bubble, and, through its impact on the currency market, fueled China’s meteoric rise. But these were no ordinary capital flows.
They came primarily from the People’s Bank of China (PBOC), as it amassed US$3.5 trillion in foreign reserves largely US Treasury securities. 
  Much has been said about the fact that a single institution wields so much influence over global macroeconomic trends has caused considerable anxiety, with doomsayers predicting that doubts about US debt sustainability will force China to sell off its holdings of US debt. This would drive up interest rates in the US and, ultimately, could trigger the dollar’s collapse.
But selling off US Treasury securities, it was argued, was not in China’s interest, given that it would drive up the renminbi’s exchange rate against the dollar, diminishing the domestic value of China’s reserves and undermining the export sector’s competitiveness.
To describe the symbiotic relationship between China’s export-led GDP growth and America’s excessive consumption, the economic historians Niall Ferguson and Moritz Schularick coined the term chimerica
In 2009, these distortions led Ferguson and Schularick to forecastChmericas  collapse  a prediction that seems to be coming true. With the reserves’ long-term effects on China’s internal economic dynamics finally taking hold, selling off foreign-exchange reserves is now in China’s interest.

Jim Rogers Thoughts on Central Banks monetary policies

"I am worried about the global economy because this is all artificial money. Things are looking better because the world is printing money. All the major central banks including the US, Japan, UK are printing money. This is all artificial, and this is going to end badly, when it does. Nobody so far had success by printing money."

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July power sales post 1st rise in 7 months

Electricity sales by the nation's 10 major power suppliers rose 2.5 percent from a year before to 70.12 billion kilowatt-hours in July, the first increase in seven months, the Federation of Electric Power Companies of Japan said Monday.

The increase reflected greater household use of air conditioners amid a heat wave, as well as the first rise in electricity sales to large-lot industrial users since May 2012.Sales to large-lot users rose 0.7 percent to 23.93 billion kilowatt-hours due to brisk demand from main sectors such as machinery, steel, and paper and pulp on the back of the yen's weakness.

Source: NewsOnJapan

HSBC Flash China Manufacturing Purchasing Managers' Index rose in August to 50.1

The HSBC Flash China Manufacturing Purchasing Managers' Index rose in August to 50.1, its highest in four months, as new orders rebounded. That was an encouraging turnaround from July's 47.7 reading, the weakest in 11 months. Any number over 50 means activity is expanding; below 50 represents a contraction.

Economists cheered the survey result as evidence that government efforts to arrest a rapid slowdown were starting to work, while cautioning that a strong rebound still appeared unlikely.

Beijing has launched a series of targeted measures recently to support the economy, including scrapping taxes for small firms, offering more help for ailing exporters and accelerating investment in urban infrastructure and railways.
A sub-index measuring new orders rose to a four-month high of 50.5 in August from 46.6 in July. The employment sub-index of the flash PMI also picked up, but still hovered below the 50 watershed line. But a sub-index on new export orders edged lower -- a reminder that global demand for Asia's exports remains sluggish.

Source: Reuters