The Great Debate UK
from The Great Debate:
Finance throws sand in wheels of trade
-- James Saft is a Reuters columnist. The opinions expressed are his own. --
Trade finance, a basic lubricant for the global economy, is becoming much more expensive and tougher to get, accelerating an already harrowing downturn.
Banks are reluctant to allocate scarce capital to trade finance, which funds cross-border buying and selling, and are very wary about being caught short by defaults by other banks which write letters of credit or by the importers and exporters themselves.
While not the prime cause of a slowdown in global trade, which is being buffeted by declining consumption and tighter finance to households and businesses, tough conditions for the obscure but crucial corner of finance that funds goods and commodities between dispatch and delivery is sand in the wheels.
Stunningly bad trade figures from China underlined the problem. China had been expected to show double digit growth in trade last month as compared to November 2007, but the data showed exports falling 2.2 percent from a year ago and imports down 17.9 percent.
from The Great Debate:
Will Obama raise fuel taxes?
John Kemp is a Reuters columnist. The views expressed are his own.
LONDON, Dec 8 (Reuters) - China's decision on Friday to link domestic fuel prices to the international price of crude oil, but increase consumption taxes on gasoline and diesel sharply to spur more efficient use of energy in the medium term, raises the question whether the incoming Obama administration might be tempted to do the same.
China is taking advantage of a cyclical pull back in energy to push through a permanent structural increase in taxes and prices. The aim is to combine a short-term boost to the economy with longer-term and more consistent incentives for improving energy efficiency.
from The Great Debate:
In China, OPEC’s nightmare comes true
-- John Kemp is a Reuters columnist. The opinions expressed are his own --
China's decision to link domestic fuel prices indirectly to the international crude oil market, subject to a price cap, while hiking the consumption tax on gasoline and diesel and phasing out a variety of road tolls and other fees shows Saudi Arabia's worst fears about high prices and demand destruction are starting to come true.
It seems likely to confirm the kingdom's determination to see prices stabilize around $75 per barrel, well below recent price peaks, and far below the level sought by some other OPEC members, as well as international oil companies and advocates of alternative energy.
from The Great Debate:
New economies want power before paying
--Paul Taylor is a Reuters columnist, the views expressed are his own--
Anyone who expected the major emerging economies to write fat checks in exchange for being invited to the first G20 leaders' summit on rescuing the world economy will have been disappointed.
But that should only have surprised the naive.
Despite intensive lobbying by British Prime Minister Gordon Brown of Saudi Arabia and China, the rising powers were never likely to make a cash down-payment to the International Monetary Fund before getting more seats and votes at the top table.
