ARAB TIMES, MONDAY, DECEMBER 26, 2011
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
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
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-
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.