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									                                                                                                                                                                                                                       ARAB TIMES, MONDAY, DECEMBER 26, 2011
    BUSINESS                                                                                                                                                                                                                                                                33


                                                                  French auto sector facing ‘storm’ in 2012
                                                                                                                                                                                                                                             A passenger sits at the nearly
    It is one of the key engines of the French          warning that the economic slowdown                 Varin said his company was facing a                                                                                               deserted Campanha train sta-
    economy and a historically vital industry,          expected in Europe next year will hit              significant loss in the second half of                                                                                            tion during a strike on
    but France’s auto sector is heading into            France’s auto industry, which is also suffer-      2011 and that he expected “negative                                                                                               Christmas Eve in Porto,
    2012 amid dire forecasts for its future and         ing from Asian competition, especially             growth” on the European car market                                                                                                Portugal on Dec 24. A strike
    warnings of major job losses.                       hard.                                              next year.                                                                                                                        by Portuguese train engi-
       Accounting — directly or indirectly — for          “We are going to be facing a storm (in              Analysts are warning that European car                                                                                         neers has forced the cancel-
    a quarter of the national workforce, vehicle        2012). The European and French markets             sales are sure to plunge as the full impact                                                                                       lation of most national rail
    manufacturing is one of the gems of                 will be directed downward,” Renault Chief          of the eurozone debt crisis hits home.                                                                                            services, with the three-day
    French industry and the country is home to          Operating Officer Carlos Tavares said in              “The market is catching up to econom-                                                                                          stoppage due to stretch over
                                                                                                                                                                                                                                             Christmas. (AP)
    two global auto giants, PSA Peugeot                 an interview with Le Parisien daily this           ic reality,” said Ludovic Subran, chief
    Citroen and Renault.                                week.                                              economist at credit insurer Euler Hermes.
       But industry chiefs and analysts are               Earlier this month PSA chief Philippe            (AFP)



                                                                            Japan’s economic fortunes increasingly tied to China’s growth


Japan, China look to FTA talks and debt buys
BEIJING, Dec 25, (RTRS): Japan and            (www.pbc.gov.cn) that the two leaders        Japan-Republic of Korea free-trade zone        economic ties were in both countries’            In a statement issued after the two       that Japan’s trust in dollar assets remains
China agreed to start formal talks early      agreed to strengthen bilateral financial     and East Asian financial cooperation,”         interests.                                    leaders’ meeting, the Japanese govern-       unshaken, and the scale of the planned
next year on a free trade pact that would     market cooperation and “encourage the        Wen told Noda at the meeting, according           “The deep-seated consequences of the       ment said it would seek to buy Chinese       purchase of Chinese government bonds
also include South Korea, Japanese            use of the renminbi and Japanese yen in      to Chinese Foreign Ministry’s official         current international financial crisis con-   government bonds — a tentative step          will be small.
Prime Minister Yoshihiko Noda said on         international trade transactions between     website (www.mfa.gov.cn).                      tinue to spread, and the complexity and       toward diversification of Tokyo’s large         Wen and Noda also agreed to set up a
Sunday after talks that showed the deep-      the two countries”.                             But the regional trade negotiations         severity of global and world develop-         foreign exchange reserves that are           framework to discuss maritime issues
ening bonds between Asia’s two biggest           The renminbi is another name for          could also compete for attention with          ments have exceeded our expectations,”        believed to be mostly held in dollars.       after diplomatic ties deteriorated sharply
economies.                                    China’s yuan currency.                       Washington’s push for a Trans-Pacific          Wen said.                                        China central bank said the two gov-      last year following Japan’s arrest of a
   Japan also said it was looking to buy         The trade talks announcement builds       Partnership (TPP), after Japan said last          “China and Japan both have the need        ernments agreed to support Japanese          Chinese fishing boat captain near disput-
Chinese treasury debt, and the two gov-       on an agreement between the three coun-      month it wants to join in the talks over the   and conditions to join hands more close-      businesses issuing yuan bonds in Tokyo       ed isles in the East China Sea.
ernments agreed to enhance financial          tries last month also to seek a trilateral   US proposal.                                   ly to respond to challenges and deepen        and other markets outside of China, and         Bilateral meetings attended by vice
cooperation.                                  investment treaty and finish studies on         Despite sometimes rancorous political       mutually beneficial strategic relations.”     Japan Bank for International Cooperation     ministers and senior officials from rele-
   “On a free trade agreement among           the proposed free trade agreement by the     ties between the two neighbours, Japan’s          China has been Japan’s biggest trading     would begin a pilot scheme for issuing       vant ministries will be held periodically
Japan, China and South Korea, we’ve           end of December so that they could start     economic fortunes are increasingly tied        partner since 2009.                           yuan-denominated bonds in mainland           to exchange views, in an effort to prevent
made a substantial progress for an early      formal negotiations on the trade pact.       to China’s economic growth and con-               In 2010, trade between the two nations     China.                                       a similar row from happening.
start of negotiations,” Noda told reporters      “China is willing to closely coordinate   sumer demand.                                  grew by 22.3 percent compared to levels          The People’s Bank of China also said it      “On maritime matters, we have suc-
after his meeting with Premier Wen Jiabao.    with Japan to promote our two countries’        China and Japan are also the world’s        in 2009, reaching 26.5 trillion yen           will support Japan in using the yuan for     cessfully set up a channel to solve prob-
   China’s central bank, the People’s         monetary and financial development, and      first and second-biggest holders of for-       ($339.3 billion), according to the Japan      direct investment in China.                  lems through multi-layered dialogue,”
Bank of China, said on its website            to accelerate progress of the China-         eign reserves. Wen told Noda that closer       External Trade Organization.                     But Japanese officials have stressed      Noda told reporters.



                    Rich, poor disparity worsens

    Soviet economic legacy
                                                                                           Obama savors US payroll tax
    haunts Russia 20 yrs on
    MOSCOW, Dec 25, (AFP): Russia
    has broken the shackles of state-
                                              year to 143rd in the world — on a
                                              par with Nigeria and Uganda.
                                                                                           cut victory in Hawaiian idyll
    planned economics but remains                “As for the investment climate,
    tied to oil prices and the whims of       here, we probably have to do a                                                                   ‘This is a small win, but its a big one’
    a bloated bureaucracy on the 20th         great deal more,” President Dmitry
    anniversary of the Soviet Union’s         Medvedev admitted last month.
    collapse.                                 “Besides writing laws, we have to            HONOLULU, Hawaii, Dec 25, (AFP): US President Barack                                    currently serving with his 11th president since he was first elected in his own right
       Few modern events seemed as            create conditions in which these             Obama settled into his Christmas vacation Saturday in his                               to the House in 1955.
    filled with promise or challenge as       laws work.”                                                                                                                             Dingell, who voted on some of the most sweeping social legislation in US his-
                                                                                           best political shape of 2011, thanks to a victory over                                  tory, was making the point that Obama had wrought a rather modest policy
    the prospect of ex-Cold War foe              A 2011 investment outflow fig-
    Russia dropping its Communist             ure of $85 billion — more than five          Republicans on their own turf — taxes.                                                  achievement in keeping payroll taxes at 4.2 percent through February.
    five-year plans and picking up mar-       times last year’s total — suggests              The capitulation of Republican representatives on extending a two percent               But his assessment also highlights the fact that Obama, after a year of being
    ket economics that harmoniously           doubts by the business community             payroll tax cut for two months boosted morale for Obama, now contemplating flummoxed by an aggressive Republican class of representatives swept to power in
    folded into the Western world.            in Vladimir Putin’s ability to get           his 2012 reelection race at a luxury rental home in his native Hawaii.                  2010 mid-term elections, badly needed a symbolic political victory.
       Not much went as smoothly as           the job done on his planned return              “This is a small win, but it’s a big one,” said John Dingell, a veteran Democrat        Obama’s triumph will help erode a damaging impression among some support-
    envisioned. The Soviet structure          to the Kremlin in March polls.                                                                                                                                                   ers that he has failed to be sufficiently
    crumbled with little there to replace        “Russia has transformed beyond                                                                                                                                                tough with Republicans.
    it and few people knowing how pri-        all recognition over the last 20                                                                                                                                                    “In purely political terms, it is a clear
    vate finances worked.                     years,” Renaissance Capital chief                                                                                                                                                victory for President Obama and the
       The so-called “robber barons”          executive Stephen Jennings said in                                                                                                                                               Democrats,” said Thomas Mann, a sen-
    swallowed up swathes of Siberian          reference to the recent emergence                                                                                                                                                ior fellow at the Brookings Institution
    riches while industrial cities floun-     of a new middle class and explod-                                                                                                                                                in Washington.
    dered from an end to state subsidies      ing consumer demand.                                                                                                                                                                The row erupted when Republicans in
    and scarce demand for their shoddy           But its “fundamental weakness is                                                                                                                                              the House of Representatives, powered
    and antiquated goods.                     that it finds it virtually impossible                                                                                                                                            by the ultra-conservative Tea Party,
       And the decade of prosperity the       to build quality transparent institu-                                                                                                                                            refused to pass a Senate compromise
    country finally feasted on with           tions,” Jennings told a recent                                                                                                                                                   extending the payroll tax and benefits
    Vladimir Putin in power evaporat-         investment forum.                                                                                                                                                                for two million unemployed Americans.
    ed with the 2008 financial crisis —          “Russia now faces serious eco-                                                                                                                                                   Under intense pressure from Obama,
    a bitter reminder of the state’s fail-    nomic and social challenges that                                                                                                                                                 Senate Republicans and even some
    ure to invest in its own sources of       will threaten growth prospects and                                                                                                                                               conservative commentators, Obama’s
    growth.                                   stability in the medium term,” the                                                                                                                                               foes eventually climbed down on the
       “Two-thirds of Russia’s exports        European Council on Foreign                                                                                                                                                      extension, which Obama said was cru-
    and almost half of its federal rev-       Relations concluded in a scathing                                                                                                                                                cial to the economic recovery.
    enues are tied to the oil price,” for-    report.                                                                                                                                                                             “The huge miscalculation of the
    mer central bank deputy head Sergei                        Fall                                                                                                                                                            House Republicans made it possible,
    Aleksashenko wrote in a report for                                                                                                                                                                                         but Obama had to be firm on not
    the Carnegie Moscow Centre.                  Nostalgia for the Soviet Union
                                              has remained strong: a recent poll                                                                                                                                               reopening negotiations immediately in
       “Economic growth cannot occur                                                                                                                                                                                           order to claim (the win),” Mann said.
    without        investment,”       said    by the independent Levada centre
                                              showed 53 percent of Russians                                                                                                                                                       “Democrats in Congress are rightly
    Aleksashenko. “But investment is                                                                                                                                                                                           relieved that he held his position in the
    not likely to grow until Russia’s         regretted the fall of the USSR,
                                              although this is down from a figure                                                                                                                                              showdown.”
    investment climate improves dra-                                                                                                                                                                                              More importantly for the White
    matically. This will require politi-      of 75 percent in 2000.
                                                 Strongman leader Vladimir Putin                                                                                                                                               House — which changed tack in
    cal reform.”                                                                                                                                                                                                               September to position Obama as a war-
       It is a catchphrase that has haunt-    has made clear his sorrow over its
                                              end, saying this month the last                                                                                                                                                  rior for the middle class — the
    ed Russia for much of the past two                                                                                                                                                                                         Republican tactics appeared to play
    decades as it lurched between vari-       USSR leaders should have “consis-            US President Barack Obama sits at his desk as he prepares to sign the payroll tax cut extension on Dec 23, in the White
                                              tently, fearlessly and steadfastly ...                                                                                                                                           directly into Obama’s hands.
    ous forms of government before                                                                                                      House Oval Office in Washington. (AP)                                                     While Republicans are generally
    settling on one with strong traits of     fought for the territorial integrity of
                                              our country.”                                                                                                                                                                    seen as the party of lower taxes, Obama
    its Soviet heritage.                                                                                                                                                                                                       was able to paint himself as the cham-
       The state now explains its domi-          The death knell of the Soviet                                                   Calendar, weather boost shopping
                                              Union sounded on a frosty evening                                                                                                                                                pion of a tax cut opposed by his rivals.
    neering role in business by the                                                                                                                                                                                               A new Washington Post/ABC News
    troubles Russia had when the rules        on Dec 8, 1991 when the president
                                              of the Russian part of the federa-                                                                                                                                               poll found that 46 percent of
    relaxed in the 1990s and the econo-
    my was brought still further to its
    knees.
                                              tion, Boris Yeltsin, agreed with his
                                              Belarussian and Ukrainian counter-
                                              parts to replace the USSR with a
                                                                                           US stores see sales trending up                                                                                                     Americans now trust Obama most on
                                                                                                                                                                                                                               taxes, while 41 percent backed con-
                                                                                                                                                                                                                               gressional Republicans.
                   Growth                     commonwealth that would not be a             NEW YORK/LAS VEGAS, Dec 25,                     Sales at surveyed stores were trend- more items at profit-sapping mark-                A CNN poll last week put Obama’s
       Official data show a seven-year        state.                                       (RTRS): US retailers saw a steady flow ing up at a mid-single-digit rate for the downs.                                             approval rating at 49 percent, up five
    stretch after 1991 in which growth           Gorbachev complained angrily,             of last-minute shoppers on Saturday, the week, on average, Taubman said,                   “It isn’t how much you sell but how points over the last month, helped by
    shrank by 40 percent — a record           but within days had no option but            day before Christmas, putting a moder- though luxury goods stores were trend- well you sell it,” said NPD’s Cohen. improving sentiment among the middle
    for any nation that is not at war.        to agree to the dissolution of the           ate cap on a pre-holiday season that ing up at high-single to double-digit “Retailers would rather sell out than class voters the president needs to win
       Many economists now question           USSR and his own post. The Union             started with a bang and has since waned. rates.                                         sell off.”                                  reelection.
    that figure because it compares to        of Soviet Socialist Republics                   Industry watchers are forecasting a                                                     As a result, inventory on key gift          Obama this year has rarely
    inflated Soviet-era production data       ceased to exist in international law                                                                      Craves                                                                 approached the 50 percent approval
                                                                                           stronger holiday shopping season than                                                   items, such as sweaters, was quite low in
    for goods of limited worth.               on Dec 31, 1991.                             expected, fueled by deep discounts at           Saturday caps a key week in the many stores on Saturday, Cohen said, incumbent presidents are believed to
       Yet that slide continued until            “The idea of rule from the centre         the start of the season, unusually warm retail calendar that saw a handful of and the discounts were not that extreme. need in order to be reelected, getting
    Russia was forced to admit defeat         had so badly compromised itself              and dry weather, a late Hanukkah, and major US store chains staying open                   One shopper, who only wanted to be only a short-term bounce after the
    before world creditors and devalue        that the republics had no other              an extra shopping day.                       around the clock to cater to consumers’ identified as 67-year-old Bill V., was killing of Osama bin Laden in May.
    its currency by a painful 60 percent      option than to choose their own                 On the last shopping day before late-night shopping craves, from Toys finishing up his holiday shopping at a                        The showdown may also be helpful
    in 1998 — a shock that again              path of development,” Yeltsin, who           Christmas, the scene at several malls in R Us Inc to Macy’s Inc, a decision Las Vegas-area Macy’s store early to Obama as it revealed divisions in
    wiped out savings.                        died in 2007, wrote in his memoirs.          different parts of the country was busy, hailed by shoppers and industry watch- Saturday morning.                                   Republican ranks in the House, sug-
       The export boom that followed             Given the scale of the event, the         but neither shoppers nor retailers ers alike.                                              Armed with several bags filled with gesting Speaker John Boehner strug-
    enabled the state and a few power-        end of the Soviet Union passed               seemed overwhelmed.                             The National Retail Federation raised gifts for his wife, daughter and grand- gles to control his restive caucus.
    ful oligarchs to amass amazing            remarkably peacefully. But the                  “The last-minute Charlies have come its forecast for holiday retail sales to a son, he said the deals were not much to              Boehner may be unable to deliver
    wealth that required almost no            years after its demise saw conflicts         out,” said Marshal Cohen, chief indus- 3.8 percent increase from an October write home about.                                       votes in any new compromises with the
    investment and attracted still new        erupt and hundreds of thousands              try analyst at the NPD Group. “Stores forecast of a 2.8 percent increase.                  “They were OK. They could have White House, and the sight of squabbling
    layers of bureaucracy at every level      killed as successor states and sepa-         are busy, but not bustling.”                    And ShopperTrak, which monitors been better,” he said.                              Republicans will likely deepen the image
    of government.                            ratist movements fought over the                The fact that Christmas Eve falls on a traffic at shopping malls, now expects           Vickie Hoffman, a 39-year-old stay- of a Congress locked in dysfunction.
       The country that now stands in the     new borders.                                 Saturday is good for retailers like Wal- sales in November and December to at-home mom, bought some perfume                            That could boost Democratic leader
    Soviet Union’s place shows a dra-            Civil war tore through Tajikistan,        Mart Stores, Best Buy and Gap Inc. So rise 3.7 percent, up from its September and lotions at Victoria’s Secret and an Nancy Pelosi’s hopes of pulling off a
    matic disparity between rich and          Armenia and Azerbaijan waged a               is the fact that the day after Christmas is forecast of 3 percent.                      engraved snow globe for some last- political comeback and seizing back
    poor that only grew worse with time       horrific conflict over the region of         a Monday, instead of a Sunday like last         The Thanksgiving weekend, which minute gifts on Saturday.                           the speaker’s gavel in November.
    and is slowly transforming itself into    Nagorno-Karabakh, the Kremlin                year, when many people stayed home marks the unofficial start to holiday                   “I didn’t think so much of the sales        But Obama remains highly vulnera-
    mistrust in the current authorities.      fought two campaigns against sep-            and watched American football, said shopping, saw sales soar 16.4 percent this year,” Hoffman said. “I didn’t ble because of the fragile state of the
       Figures from former economy            aratists in Chechnya, and Georgia            Ramesh Swamy, an analyst in to $52.4 billion this year, the NRF said. think there were many great deals. I economy — which is giving ammuni-
    minister Yevgeny Yasin show the           sought to quell secessionists in             Deloitte’s retail practice.                  The number of transactions at US mer- just didn’t see them.”                           tion to Republican presidential candi-
    richest fifth of the population dou-      Abkhazia.                                       “The calendar is working in our chants jumped 17 percent on Black                       Most of the steepest discounts on dates — and the threat to the US recov-
    bling their income between 1991              Every one of these conflicts is in        favor,” Swamy said.                          Friday alone, dwarfing the 5 percent clothing on Saturday were for cold- ery posed by Europe’s debt crisis.
    and 2009. The bottom 20 percent           many ways still unresolved —                    So is the fact that there was no bliz- gains seen in the prior two years, weather coats, due to the mild weather                    And the payroll tax compromise that
    had their real wages nearly halved.       Islamists pose a threat to                   zard this year, like there was last year.    according to data from MasterCard this season.                                         eventually passed on Friday contained
       This divide is hurt further by         Tajikistan’s stability, the status of           Many stores around the country saw Inc’s network.                                       A Macy’s in suburban Las Vegas was the seeds of the new year’s first big row.
    staggering capital flight and             Nagorno-Karabakh is unresolved               brisk traffic in the past week, and             The binge was spurred by deep dis- offering 50 percent to 60 percent off               “There are going to be some impor-
    Transparency International data           amid fears of a new conflict and             Friday was the busiest shopping day of counts, but they have since moderated, women’s winter coats, 60 percent off tant debates next year, some tough
    showing Russia actually improving         Russia’s Caucasus is beset by                the season, according to a survey of thanks to tighter inventory manage- sweaters, 50 percent off slippers and fights, I’m sure, in the years to come,”
    its corruption index ranking this         attacks from insurgents.                     stores done by mall operator Taubman ment by retailers who often would fuzzy socks and 40 percent to 70 per- Obama said Friday before leaving
                                                                                           Centers Inc.                                 rather sell fewer items at full price than cent off purses.                            Washington.

								
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