Eurozone unemployment hits record 10.9% as manufacturing slumps to recession!

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Eurozone unemployment hit a record in March, with Spain’s 24.1% rate setting the pace.

NEW YORK (CNNMoney) — Unemployment in the eurozone rose to 10.9% in March, another sign of the broad economic weakness and possible recession across the continent.

The unemployment rate across the broader 27-nation European Union remained at 10.2% in March, according to a organization report Wednesday.

10 largest economies

But the 17-nation eurozone unemployment edged up from 10.8% in February. The EU and eurozone rates are the highest since the creation of the common euro currency in 1999.

There are now 13 nations in Europe struggling with double-digit percentage unemployment, led by a 24.1% rate in Spain, which was a record high, and 21.7% in Greece.

The rising jobless rates are primarily blamed on the ongoing European sovereign debt crisis, which has forced governments to take tough austerity measures to cut spending.

Europe’s next recession risk: Germany

There are 12 countries in Europe that have had two or more consecutive quarters in which their gross domestic product has dropped — a condition many economists say define a recession. Nine of the countries are in the eurozone, and three use their own currency.

The United Kingdom, which had an 8.2% unemployment rate in its most recent reading, is the largest economy now in recession.

The entire EU and and eurozone are widely believed to be in recession as well, a fact likely to be confirmed when their combined GDPs are reported on May 15.

Even some of the healthier countries in Europe are likely to meet that criteria, including Germany, the EU’s largest economy and one in which unemployment is 5.6%, the fourth-lowest rate on the continent.

German GDP declined 0.2% in the fourth quarter and many economists are forecasting another drop in the first quarter, suggesting Germany could be in recession soon.

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By contrast to Europe, the U.S. unemployment rate has been steadily falling, reaching 8.2% in March. The jobless rate here reached a 26-year high of 10.0% in October 2009, but it has declined in six of the last seven months, shaving almost a full percentage point off the 9.1% rate of last August.

Economists surveyed by CNNMoney forecast that the rate will stay unchanged in the April jobs report this Friday, while hiring is expected to pick up to a gain of 160,000 jobs

By Chris Isidore @CNNMoney ,  Newscribe : get free news in real time

Eurozone manufacturing heads towards recession

(BRUSSELS) – Gloom over eurozone manufacturing deepened in April, highlighting the impact of policies to control budgets and signalling recessionary pressures, a Markit survey showed on Wednesday.

A key index of activity based on a survey by Markit fell to almost the lowest level for three years.

Markit publishes closely watched leading indicators of economic activity and in its latest survey for its purchasing managers’ index the firm said: “The eurozone manufacturing downturn took a further turn for the worse in April.”

The adjusted manufacturing PMI figure, closely watched as an indicator of economic trends, fell to 45.9 from 47.7 in March.

A figure of below 50 points to contraction and Markit noted that “the headline PMI has signalled contraction in each of the past nine months.”

The chief economist at Markit, Chris Williamson, said: “Manufacturing in the eurozone took a further lurch into a new recession in April, with the PMI suggesting that output fell at (a) worryingly steep quarterly rate of over 2.0 percent.”

He said that “austerity in deficit-fighting countries is having an increasing impact on demand across the region” and that “even German manufacturing output showed a renewed decline.”

Williamson commented that the latest forecast from the European Central Bank “of merely a slight contraction of GDP (gross domestic product) this year is therefore already looking optimistic.”

He added: “However, with the survey also showing inflationary pressures to have waned, the door may be opening for further stimulus.”

His remarks highlight controversy over policies in many countries to correct budget deficits and heavy debt to install confidence on debt markets where governments borrow.

There are increasing warnings that the eurozone must raise economic growth, but opinions differ on the best route, with some saying that budget austerity opens the way to structural reform and competitiveness and others saying that extra stimulus is essential.

Markit said that “the April PMIs also indicated that manufacturing weakness was no longer confined to the region’s geographic periphery.”

In Germany, which has the biggest economy in the eurozone and has shown broad resilience to downturn elsewhere, Markit also noted a setback.

“The German PMI fell to a 33-month low, conditions deteriorated sharply again in France and the Netherlands also contracted at a faster rate,” it said.

Markit said: “There was no respite for the non-core nations either, with steep and accelerating downturns seen in Italy, Spain and Greece. Only the PMIs for Austria and Ireland held above the 50.0 no-change mark.”

Markit said that manufacturers reported weak demand from clients inside and outside the zone and this had hit even German companies.

The worsening outlook for eurozone manufacturing was also affecting the job market, Markit said, just as eurozone data put the unemployment rate at a record high level.

In manufacturing “job losses were reported for the third straight month in April, with the rate of decline the sharpest in over two years,” Markit said on the basis of its survey. – AFP.

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French head to polls in presidential election

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First round voting begins in overseas territories as incumbent Nicholas Sarkozy appears set to face a stern test.

More than 44 million French voters are to go to the polls for the first round of a presidential election that represents a serious threat to incumbent Nicholas Sarkozy‘s tenure in the post.

While predictions of a high abstention rate and a strong protest vote have left the outcome uncertain, opinion polls point towards Francois Hollande, Sarkozy’s main Socialist challenger, replacing his conservative rival.

The two 57-year-old political leaders are on course to finish in the top two in Sunday’s polling, thus setting them up to square off in a second round vote on May 6.

The result of that vote will decide who is France’s president for the next five years.

Voting began on Saturday in France’s overseas territories, which are mainly islands dotted around the Indian, Pacific and Atlantic oceans.

On Sunday, voting will continue in 85,000 polling stations across the country’s European mainland. Voting will begin at 8am local time (06:00 GMT) and continue until 8pm (18:00 GMT).

Voting estimates will then be immediately published, giving what has been a traditionally accurate assessment of how the polls will stand once results are finalised.

In all, 10 candidates are in the race, with Hollande and Sarkozy trailed by far-right leader Marine Le Pen, hard-left leader Jean-Luc Melenchon and veteran centrist Francois Bayrou. A handful of outsiders round out the field.

Once the first round is over, the top two candidates will face each other in the final poll, with the run-up to that including a televised debate.

Spotlight coverage of April 22 presidential election

Hollande says that Sarkozy has trapped France in a spiral of austerity and job losses, and has called for the European response to the debt crisis to be more pro-growth.

Sarkozy, meanwhile, says that his rival is weak-willed and would spark panic in financial markets by adopting an approach that involves increased government spending.

Al Jazeera’s Tim Friend, reporting from Paris, said that Sarkozy faces a stiff challenge due to his “extraordinary” unpopularity.

“A lot of the people voting will be putting their ballot paper into the ballot box more against Sarkozy than perhaps for the candidate they eventually vote for,” he said.

Since Saturday, there has been no sign of any of the rhetoric that has characterised an increasingly heated contest, as French law prohibits campaigning and opinion polls on the eve of voting.

Voters went about their business without being accosted by pamphleteers, the campaigns’ websites, Facebook pages and Twitter feeds were left without updates and broadcasters had to find other subjects to interview.

Source: Al Jazeera and agencies

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Unemployment Fuels Debt Crisis

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Job-seekers wait outside a job center before opening in Madrid, Spain. Spain’s jobless rate has more than doubled since 2008 after the collapse of a real estate market that fueled a decade of economic growth. Photographer: Angel Navarrete/Bloomberg

Surging unemployment rates from Spain to Italy and Greece are threatening efforts to quell the region’s debt crisis and keeping bond yields close to record premiums relative to benchmark German bunds.

Joblessness is soaring as European nations reduce spending, igniting strikes and protests from Athens to Madrid. Unemployment in Spain surged to almost 24 percent, pushing the euro-region level to 10.8 percent in February, the highest in more than 14 years. Italy’s rate is at 9.3 percent, the most since 2001, hampering efforts to spur economic growth.

Deepening recessions in Italy and Spain contributed to a five-week slide in Italian and Spanish bonds as the shrinking tax base helped lead to both countries raising their deficit targets. The yield premium investors demand to hold Spanish 10- year debt over German bunds reached a four-and-a-half-month high this week.

“The higher the jobless rate, the more that has to be spent on benefits, creating the potential for a negative spiral,” said Christian Schulz, an economist at Berenberg Bank in London and a former ECB official.

Berenberg Bank predicts euro-region unemployment will peak at 11.5 percent in September, he said.

The extra yield investors demand to hold Spanish 10-year bonds rather than similar-maturity German securities was 411 basis points yesterday, compared with an average 130 during the past five years. The rate has risen more than 80 basis points this year. The spread was 376 basis points for Italy and 1,072 basis points for Portugal.

Youth Joblessness

Spain’s jobless rate has more than doubled since 2008 after the collapse of a real estate market that fueled a decade of economic growth. The country is now home to more than one third of the euro-region’s jobless and more than half of young people are out of work.

Hundreds of thousands of Spaniards protested on March 29 in a general strike against Prime Minister Mariano Rajoy’s overhaul of labor market rules and the deepest budget cuts in at least three decades that are pushing the economy deeper into its second recession since 2009.

“Spain faces formidable challenges, especially concerning youth unemployment,” European Union Economic and Monetary Affairs Commissioner Olli Rehn told lawmakers at the European Parliament in Strasbourg Wednesday.

Italy’s jobless rate rose to the highest in more than a decade in February and the International Monetary Fund forecast on April 17 that unemployment will reach 9.9 percent this year. Italian bonds reversed morning gains yesterday after the government cut its growth forecasts and abandoned a goal to balance the budget next year.

Estimate Revisions

Italy’s gross domestic product will contract 1.2 percent this year, more than twice the previous forecast, and the deficit will end next year at 0.5 percent, more than the 0.1 percent previously forecast. The Italian announcement came six weeks after Rajoy abandoned Spain’s deficit goal for next year.

Joblessness in both countries may worsen as the recession deepens and rigid labor market laws are overhauled. Rajoy passed in February a plan to make it cheaper for employers to let workers go, while Italy gave companies more leeway to fire workers without fear of court-ordered reinstatements.

“High unemployment means a very dissatisfied electorate and makes it difficult to get stuff done,” said Padhraic Garvey, head of developed market debt at ING Groep NV in Amsterdam. “It makes it significantly more difficult to pass austerity measures and exacerbates a difficult situation.”

Rajoy’s Challenges

Rajoy probably will face further unrest if he’s forced to implement more budget cuts to meet ambitious deficit goals. His government has now pledged to reduce the shortfall to 5.3 percent of GDP in 2012 from 8.5 percent in 2011 and by more than 2 percentage points next year to get within the EU’s 3 percent limit. Despite a raft of austerity last year, the country achieved a deficit reduction of less than 1 percentage point.

Falling joblessness in Germany underscores the widening gap between the resilience of the euro-region’s largest economy and the so-called periphery. The nation’s adjusted jobless rate slipped in March to a two-decade low of 6.7 percent, according to the statistics office. While the 17-member euro-region economy will shrink 0.4 percent in 2012, Germany’s economy probably will grow 0.7 percent, according to economists’ forecasts compiled by Bloomberg.

“The divergence between Germany and the other economies is here to stay,” said Christoph Rieger, head of interest-rate strategy at Commerzbank AG in Frankfurt. “It provides a structural reason for spreads to stay wider, regardless of what other progress is made on containing the crisis.”

Greek Elections

In Greece, where official data showed unemployment climbed to 21 percent in January, elections scheduled for May 6 may produce a hung parliament, raising questions about the nation’s ability to implement its austerity measures. The nation’s 2 percent bond due in February 2023 trades at about 25 cents on the euro.

In Portugal, where the government forecasts the unemployment rate will average 13.4 percent this year, up from 12.7 percent in 2011, Soares da Costa SGPS SA, Portugal’s third- biggest publicly traded construction company, said it’s expanding abroad and eliminating jobs at home, where it faces a slump in government infrastructure spending.

“High and rising unemployment is likely to impact at a political level and may make the reforms more difficult to undertake,” said Eric Wand, a fixed-income strategist at Lloyds Banking Group Plc in London. “If the political desire to reform comes in to doubt, then the market wouldn’t like that. There’s good scope for the crisis to get worse in the near term, the economies are still on pretty shaky ground and there’s a lot of political risk.”Daniel Tilles at dtilles@bloomberg.net.

India’s ‘Look East Policy’

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India put forward the “Look East Policy” in the beginning of the1990s and it was considered as an important foreign strategy of India. At that time, led by Treasury Secretary Manmohan Singh, the government of Rao began promoting economic reform, changed Indian development patterns and actively developed the economic relations with foreign countries. Due to the collapse of the Soviet Union, Russia and eastern European countries were beset with a crisis and the cooperation between India and these countries sagged seriously.

In addition, its relations with the neighboring countries were not developing very smoothly; as a result, it was difficult for India to establish international economic cooperation in the South Asia. Under that circumstance, the Southeast Asiancountries that flourished in economic development became India’s first choice to develop its foreign economic cooperation because they have deep historical and geopolitics relations with India.

Overall, the focal point of the “Look East Policy” of

The Association of Southeast Asian Nations (ASEAN) (Photo credit: Wikipedia)

India at that time was put in economic cooperation. Due to various reasons, India did not positively promote the “Look East Policy” at that time and the Southeast Asian countries had paid their attention to East Asia and underestimated India. Subsequently, the “Look East Policy” did not exert obvious effects.

Since the acceleration of globalization and change of Asian pattern in the 21st century, the “Look East Policy” of India has shown new vitality and rising trend.

India began adopting specific action, transforming to all-round cooperation from exclusive economic exchanges and enlarging its foreign policies from the Southeast Asia to East Asia and Australia.

India strengthened its association with the Southeast Asian countries, joined the treaties of the Association of Southeast Asian Nations, established free trade zone with the Southeast Asian countries and participated in the East Asian cooperative mechanisms and the security forum of the Association of Southeast Asian Nations. The cooperative contents also expend to the military and cultural fields from exclusive economic cooperation.

The “Look East Policy” has become an important part of India’s diplomatic strategy.

Is the “Look East Policy” related with the eastward transfer of American strategic focus?

The facts above show India is much earlier in promoting the “Look East Policy” than the eastward transfer of American strategic focus. In order to realize the strategy of eastward transfer, the United States positively encouraged India to participate in the East Asian affairs.

As the strategy of eastward transfer catered to the psychology of India’s misgivings and precautions against China, India also manifested its enthusiasm. India lately held a trilateral dialogue with the United States and Japan, and it has also close contacts with Vietnam, Burma and some other Southeast Asian countries.

However, it cannot be deemed as the collaboration of the United States and India. India has been pursuing the independent foreign policy and mainly considers its own interests. It is hard to imagine that India will completely follow the foreign policies of the United States. India has an all-round diplomatic policy and it both maintain relations with the United States and takes much count to the relations with other countries. India always keeps a close contact with Russia, Japan and the European Union countries and its relation with China is also positive.

In the state leaders meeting of the BRICS just closed in New Delhi, India proposed a series of positive proposals, hoping deepening the relations of the BRICS, strengthening cooperative mechanism of these countries and enlarging the role of the international economy and political life of these countries, which again embodies India’s all-round diplomatic policy. Therefore, it is groundless to think its “Look East Policy” and the American strategy of eastward transfer are converging.

By Pei Yuanying (Jiefang Daily)

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China’s Dueling Economic Theories

China’s NPC (Parliament) Photograph: Lintao Zhang/Getty Images

Delegates attend the closing ceremony of the closing session of the National Peoples Congress (NPC) at The Great Hall Of The People on March 14, 2012 in Beijing, China. The National People’s Congress (NPC), China’s parliament, adopted the revision to the Criminal Procedure Law at the closing session of its annual session today.

Should China push for radical reform or return to a more government-directed economy? It’s a familiar question made more urgent by the downfall of Bo Xilai, seen by many as a leader of the Communist Party’s conservative faction. A recent People’s Daily editorial that strongly supported more reform, plus a call by the World Bank and a research arm of China’s Cabinet for a smaller state role in financing and industry, have highlighted the issues. “The debate will be messy,” wrote Standard Chartered (STAN:LN) China economist Stephen Green in a March 1 report. However, he added, “something good is stirring in Beijing.”

The back-and-forth focuses on two models. The Chongqing model calls for a top-down push for social equality, with a stronger role for government in the economy; its name evokes the giant southwestern city where Bo Xilai ran the show until early March. The other model plays down the role of state companies, encourages the growth of more capital-intensive, value-added industries, and favors grassroots political reform. This is the Guangdong approach, named for the coastal province that was first to grow rich on exports and now is a center for experiments in governance. “I am strongly supportive of the Guangdong model and wary of the Chongqing model,” wrote Tsinghua University sociologist Sun Liping on March 16 in the Beijing-based business weekly Economic Observer. “In the long term, it is more important that the masses have the right to struggle for their own interests.”

Despite Bo Xilai’s fall from power, the Chongqing model still has its adherents. A website whose name translates as Utopia in English supports the state-heavy approach, and was blocked after Bo’s dismissal in an unfolding scandal that may implicate him in corruption. The site, back in business, has posted hundreds of articles supporting Bo, says David Kelly, research director at the Beijing-based consulting firm China Policy.

To reverse growing social inequality in its region, Chongqing has encouraged farmers to become urban residents and qualify for better benefits, and started to build 800,000 units of public housing. Bo also created several large conglomerates by merging more than a dozen smaller state companies. Despite Chongqing’s success in attracting such investors as Ford Motor (F) and Foxconn Technology Group, foreign businessmen have worried that government-backed businesses could squeeze them out. A crackdown by city officials last fall on Wal-Mart Stores (WMT) over mislabeled pork forced the world’s biggest retailer to shutter 13 stores temporarily, spooking investors. “If the Chongqing model is one that favors a greater role for the government, with state enterprises managing the economy, that is a negative for foreign businesses,” says Christian Murck, president of the American Chamber of Commerce in China. Also disturbing was Bo’s handling of a cleanup of the mob in Chongqing: He jailed not only the alleged mobsters but also a top Beijing lawyer who was defending one of the accused.

Guangdong party secretary Wang Yang has been upgrading the province’s economy from labor- and energy-intensive, polluting export industries such as toys, textiles, and plastics to newer and cleaner ones including software, new energy, and biotech. Wang has opted to rely mainly on private businesses, encouraging their growth with tax breaks and squeezing lower-margin industries with tighter labor and environmental regulations. Shenzhen, for example, has seen many of its dying industries depart in what Wang has dubbed “emptying the cage and changing the bird.”

What excites Chinese liberals more is Wang’s encouragement of grassroots policy making. That includes giving workers more of a voice within the official union, as well as a soft-handed approach to last year’s Wukan village uprising over land grabs and the death of a protester. Wukan, on Guangdong’s coast, just held what appear to be unrestricted elections for a new village chief.

Which of these two models will gain the upper hand is unclear. Clarity is unlikely at least until the fall Party Congress, when China will replace most of its top leaders, and both camps may vie for supremacy for years. “In 2001, we had a road map and that was the World Trade Organization accession agreement. Today we don’t have a sense of what comes next for China,” says the Chamber’s Murck. “There is more uncertainty than we’ve seen in years.”

The bottom line: As social inequality deepens and growth slows, China’s leaders must choose between more market reforms or a stronger state.

By Roberts is Bloomberg Businessweek‘s Asia News Editor and China bureau chief.

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US Monopoly on World Bank Presidency Challenged

U.S. President Barack Obama arrives at the Osan Air Base in Seoul, South Korea, on March 25, 2012. Obama arrived in South Korea to attend the 2012 Seoul Nuclear Security Summit to be held on March 26-27. (Xinhua)

The United States on Friday named its candidate to lead the World Bank (WB), but this time the selection is not a solo any more.

Two candidates endorsed by developing countries unprecedentedly challenged the U.S. monopoly on the top post of the WB, the leading global financial institution for fighting poverty and supporting development.

SURPRISE PICK

As the deadline loomed, U.S. President Barack Obama announced the nomination of Jim Yong Kim, a Korean-American global health expert, as candidate to replace outgoing Robert Zoellick, whose term as WB president expires at the end of June.

“It’s time for a development professional to lead the world’s largest development agency,” Obama said as he made the announcement.

“Jim has truly global experience,” said Obama, “He has worked from Asia to Africa to the Americas, from capitals to small villages. His personal story exemplifies the great diversity to our country.”

The selection is commonly considered as a surprise pick because Kim, the current Dartmouth College president, has hardly been talked about for the nominee in the past week.

The U.S. traditional choices of the WB head have been either politicians or business leaders since the bank was founded after World War II.

Obama chose Kim out of several more well-known candidates, such as Susan Rice, the U.S. ambassador to the United Nations, and Lawrence Summers, former director of the president’s National Economic Council.

Arvind Subramanian, a senior fellow at the Peterson Institute for International economics, called it a “quite unusual choice.”

Yukon Huang, a senior associate in the Carnegie Endowment for International Peace, told Xinhua the message the White House conveyed was that the nominee is a man of the world – born in Korea, raised and educated in the United States with professional interests that are highly relevant for developing countries.

U.S. economist Jeffrey Sachs, who openly campaigned for the job and finally withdrew, said in an article posted on the Washington Post website that “without incisive leadership, the bank has often seemed like just a bank.”

“And unfortunately, Washington has backed at the helm bankers and politicians who lack the expertise to fulfill the institution’s unique mandate,” Sachs added.

UNPRECEDENTED COMPETITION

Following the close of the nomination process, the WB announced two more candidates for the position: Ngozi Okonjo-Iweala of Nigeria and Jose Antonio Ocampo of Colombia.

For the first time, two non-American candidates will compete with a U.S. nominee. What’s more, both of them have impressive credentials as economists and diplomats.

Okonjo-Iweala, the current Nigerian finance minister, was nominated by three African countries – South Africa, Angola and her native land. She has profound working experience in the multinational World Bank and her capability has been widely recognized.

Ocampo, endorsed by Brazil, has strong academic background and held posts in the Colombian government as well as the United Nations.

Although Yukon Huang said Kim’s selection was not driven by domestic political considerations but by his professional qualifications, Subramanian doubted whether Kim is a better choice in terms of international experience and management.

Domenico Lombardi, a former WB board official said the impressive background of both Ocampo and Okonjo-Iweala signals a big shift and really reflects a game change. He said this is the first time in history for a truly contested election.

However, analysts believe that the United States is very much likely to laugh last as it is the WB’s largest donor and has the largest voting share.

Uri Dadush and Moises Naim, senior associates at the Carnegie Endowment for International Peace, criticized the way that top leaders of the WB and International Monetary Fund (IMF) have been selected.

They said the leaders of both the WB and IMF are selected through “opaque, quota-driven negotiations,” which have been defied by the meritocracy.

“No well-run global company selects its senior management this way,” they added.

Rogerio Studart, the Brazilian member of the WB’s 25-member executive board, said there was a strong sense among developing countries that the selection of Zoellick’s successor should involve a broader discussion about the bank’s future.

By （Editor：厉振羽） 

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What is a banker really worth?

Barclays made a serious error over the pay of John Varley, the bank’s former chief executive, who stepped down in 2010 with a ‘goodbye package’ of nearly £4m – it wasn’t enough!

Sir Philip Hampton, RBS chairman, warns that the vilification of Fred Goodwin, RBS’s former boss, has morphed into the persecution of his replacement, Stephen Hester. Photo: PA. By Jeff Randall – Telegraph

So says Sir Nigel Rudd, Barclays’ former deputy chairman, who led its remuneration committee.

As Britain’s state-controlled banks, RBS and Lloyds, prepare to unveil results and bonuses later this week, Sir Nigel’s comments in my television documentary (Sky News 7pm, Wednesday) will enrage critics who believe that bankers remain detached from public anger over jackpot salaries.

Sir Nigel, however, is adamant that Mr Varley made a “huge difference” to Barclays during the credit crunch, when rival banks fell apart. By raising funds privately, Barclays was able to survive without a bail-out from UK taxpayers.

“John Varley was underpaid. Because what he did [for Barclays] during the crisis was phenomenal,” Sir Nigel says. In his last year, Mr Varley received a salary of £1.1m, a bonus of £2..2m and a performance cash incentive of £550,000.

Sir Nigel, who is now chairman of BAA, the airports operator, offers advice to ministers wrestling with demands for a pay clampdown while trying to maximise value in the state’s bank shareholdings: “If I was the Prime Minister, I’d ban the use of fairness as a word, because I don’t think you can be fair.”

Sir Philip Hampton, RBS’s current chairman, warns that understandable anger about the banks’ past failings is becoming destructive. In particular, the vilification of Fred Goodwin, RBS’s former boss, has morphed into the persecution of his replacement, Stephen Hester.

“We do lynch mobs better than most, but I think the opprobrium is directed now at the wrong people – the people that are fixing the problems rather than the people that are causing the problems,” Sir Philip says.

He believes the main flaw with bank bonuses is that they were linked to profits which turned out to be “illusory”. The banks did not understand the risks they were embracing, but it took a while for profits to collapse, by which time the bankers had pocketed the cash.

Alistair Darling, who was chancellor when the financial turmoil erupted, says that many highly paid bankers were in denial and remain so. “One or two to this day still don’t realise they did anything wrong, which most people find just flabbergasting.”

In a reference to Mr Goodwin and his top team, Mr Darling says: “They didn’t know what they were doing and we, not them, to a large extent are paying the price for that.”

Mr Goodwin’s old adversary, Sir Peter Burt, who led Bank of Scotland when it was outbid by RBS in a takeover battle for National Westminster in 2000 , doesn’t hide his dislike of the disgraced banker but deplores the nationwide “witch-hunt” against him: “Perhaps Fred should count himself lucky there weren’t any lamp-posts low enough from which to hang him.”

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China to Overtake USA !

HSBC: China to become world’s Largest Trading Nation by 2016

Image via Wikipedia

By Sophie Leung

Feb. 21 (Bloomberg) — China will overtake the U.S. as the world’s largest trading nation by 2016, as intra-Asian commerce and rising demand from emerging markets boost shipments, according to HSBC Holdings Plc.

Trade in China and the Asia-Pacific will grow at an annualized pace almost twice as fast as the world average over the next five years, driven by shipments within the region and expanded ties with Latin America, the Middle East and North Africa, HSBC said in a global trade report issued today.

Demand from traditional consumer markets in the West is expected to slow as the evolving European debt crisis threatens the global outlook. China, the world’s second-biggest economy, will stimulate growth with fiscal stimulus and an acceleration in infrastructure projects, raising its imports of commodities from Latin America and the Middle East, HSBC said.

“The world’s largest businesses are continuing to broaden their supply chains across Asia-Pacific” that will boost trade within the region, Simon Constantinides, HSBC’s regional head of global trade, Asia-Pacific, said in an interview in Hong Kong. “As China expands its global reach, especially into South America and Africa, its substantial energy demand and higher manufacturing output will drive strong imports and exports within these sectors.”

Largest Exporter

HSBC estimates the value of China’s trade will rise at an annualized rate of 6.6 percent over the next five years, compared with 6.5 percent gains for Asia and 3.8 percent for the world, according to today’s reports.

“The developed markets will slow,” Constantinides said. “Everybody is going to trade with China.”

China’s share of global imports and exports will increase to 12.3 percent in 2026 from 9.8 percent last year, the bank estimates. The nation overtook Germany as the world’s largest exporter in 2009.

Vietnam and Bangladesh will become the region’s top emerging trade partners over the next five years for ready-made garments, textiles and rice, while Peru, Norway and Brazil will become major partners for trade in iron ore, soya and oil, HSBC said.

Printing and machinery will become the fastest emerging industry in the Asia-Pacific as global supply chains locate in the region, evidence of a shift toward higher value production, HSBC said in its report.

–Editors: Nerys Avery, Iain Wilson

U.S. Favorability Ratings Remain Positive

 China Seen Overtaking U.S. as Global Superpower

Overview

In most regions of the world, opinion of the United States continues to be more favorable than it was in the Bush years, but U.S. image now faces a new challenge: doubts about America’s superpower status. In 15 of 22 nations, the balance of opinion is that China either will replace or already has replaced the United States as the world’s leading superpower. This view is especially widespread in Western Europe, where at least six-in-ten in France (72%), Spain (67%), Britain (65%) and Germany (61%) see China overtaking the U.S.

Majorities in Pakistan, the Palestinian territories, Mexico and China itself also foresee China supplanting the U.S. as the world’s dominant power. In most countries for which there are trends, the view that China will overtake the U.S. has increased substantially over the past two years, including by 10 or more percentage points in Spain, France, Pakistan, Britain, Jordan, Israel, Poland and Germany. Among Americans, the percentage saying that China will eventually overshadow or has already overshadowed the U.S. has increased from 33% in 2009 to 46% in 2011.

At least some of this changed view of the global balance of power may reflect the fact that the U.S. is increasingly seen as trailing China economically. This is especially the case in Western Europe, where the percentage naming China as the top economic power has increased by double digits in Spain, Germany, Britain and France since 2009.

In other parts of the globe, fewer are convinced that China is the world’s leading economic power. Majorities or pluralities in Eastern Europe, Asia, and Latin America still name the U.S. as the world’s dominant economic power. In the Middle East, Palestinians and Israelis agree that America continues to sit atop the global economy, while in Jordan and Lebanon more see China in this role. Notably, by an almost 2-to-1 margin the Chinese still believe the U.S. is the world’s dominant economic power.

These are among the key findings from a survey by the Pew Research Center’s Global Attitudes Project, conducted March 18 to May 15.¹  The survey also finds that, in the U.S., France, Germany, Spain and Japan, those who see China as the world’s leading economic power believe this is a bad thing. By contrast, those who name the U.S. tend to think it is good that America is still the top global economy. In developing countries those who believe China has already overtaken the U.S. economically generally view this as a positive development. Meanwhile, in China, those who believe the U.S. is still the world’s leading economy tend to see this as a negative.

Compared with reaction to China’s economic rise, global opinion is more consistently negative when it comes to the prospect of China equaling the U.S. militarily. Besides the Chinese themselves, only in Pakistan, Jordan, the Palestinian territories and Kenya do majorities see an upside to China matching the U.S. in terms of military power. Meanwhile, the prevailing view in Japan and India is that it would not be in their country’s interest if China were to equal the U.S. militarily; majorities across Western and Eastern Europe, and in Turkey and Israel, share this view.

U.S. Image Largely Favorable

Despite the view in many countries that China either has or will surpass the U.S. as the leading superpower, opinion of America remains favorable, on balance. The median percentage offering a positive assessment of the U.S. is 60% among the 23 countries surveyed. The U.S. receives high marks in Western Europe, where at least six-in-ten in

France, Spain, Germany and Britain rate the U.S. positively. Opinion of the U.S. is also consistently favorable across Eastern Europe, as well as in Japan, Kenya, Israel, Brazil and Mexico.

As in years past, U.S. image continues to suffer among predominantly Muslim countries, with the exception of Indonesia, where a majority expresses positive views of the U.S. One-in-five or fewer in Egypt, the Palestinian territories, Jordan, Pakistan and Turkey view America favorably. In Lebanon, opinion of the U.S. is split, reflecting a religious and sectarian divide; the country’s Shia community has overwhelmingly negative views of America, while Lebanese Sunnis and Christians are more positive.

Views of the U.S. in the Muslim world reflect, at least in part, opposition to the war in Afghanistan and U.S. efforts to fight terrorism. Moreover, few in predominantly Muslim countries say the U.S. takes a multilateral approach to foreign policy. Fewer than a quarter in Lebanon, Jordan, Egypt, Pakistan and Turkey say the U.S. takes the interests of countries like theirs into account when making foreign policy decisions

In Western Europe, fewer than half in Britain (40%), France (32%) and Spain (19%) say the U.S. takes the interests of other countries into account when making foreign policy decisions. Only in Germany does a majority feel otherwise. In Eastern Europe, a third or less believe America acts multilaterally.

Interestingly, a majority of Chinese (57%) credit America with considering the interests of other nations, although last year more (76%) held this view. Elsewhere, majorities in Israel, India, Japan, Brazil and Kenya describe the U.S. as multilateral in its approach to foreign policy.

Majorities or pluralities in nearly every country surveyed say the U.S. and NATO should remove their troops from Afghanistan as soon as possible; the only exceptions are Spain, Israel, India, Japan and Kenya, where more say troops should remain in that country until the situation is stabilized than say they should be removed. However, in many parts of the world, there is strong support for the broader, American-led effort to combat terrorism. About seven-in-ten in France (71%), two-thirds in Germany, 59% in Britain and 58% in Spain back U.S. anti-terrorism efforts. Majorities in Eastern Europe also support the U.S.-led fight against terrorism, as do most in Israel and Kenya.

U.S. Viewed More Favorably Than China

Across the nations surveyed, the U.S. generally receives more favorable marks than China: the median percentage rating China favorably is 52%, eight points lower than the median percentage offering a positive assessment of the U.S.

However, the number of people expressing positive views of China has grown in a number of countries, including the four Western European countries surveyed. China’s image has also improved in Indonesia, Japan, Egypt and Poland. Opinion of China has worsened substantially in only two countries surveyed: Kenya (down 15 percentage points from last year) and Jordan (9 points lower than in 2010).

U.S. image, meanwhile, has declined in most countries for which there are trends. Compared with last year, favorable views of America are lower in Kenya (11 percentage points), Jordan (8 points), Turkey (7 points), Indonesia (5 points), Pakistan (5 points), Mexico (4 points), Poland (4 points) and Britain (4 points). However, the largest downward shift has occurred in China, where the number expressing a positive view of the U.S. has fallen 14 points – from 58% in 2010 to 44% today.

In Japan, by contrast, opinion of the U.S. has improved dramatically. A year ago, roughly two-thirds (66%) held a favorable view of America; today, more than eight-in-ten (85%) assess the U.S. favorably. This huge boost in U.S. image is attributable in part to America’s role in helping Japan respond to the devastating earthquake and tsunami that struck the island nation’s northeast coast in March. A majority (57%) of Japanese say the U.S. has done a great deal to assist their country in responding to this dual disaste

Views of Obama

Assessments of President Obama track fairly closely with overall U.S. ratings. Obama is viewed most positively in Western Europe, where solid majorities say they have confidence in the U.S. president to do the right thing when it comes to world affairs. At least two-thirds in Kenya, Japan and Lithuania also express confidence in Obama, as do smaller majorities in Brazil, Indonesia and Poland.

As is the case with the overall U.S. image, Obama receives his most negative ratings among predominantly Muslim countries. In the Arab world, majorities in the Palestinian territories (84%), Jordan (68%), Egypt (64%) and Lebanon (57%) lack confidence in the president. Roughly seven-in-ten in Turkey (73%) and Pakistan (68%) say the same. Indonesians are the exception, with 62% saying they have confidence in Obama to do the right thing in world affairs.

Overall, the U.S. president continues to inspire more confidence than any of the other world leaders tested in the survey. German Chancellor Angela Merkel is next most trusted, at least in Europe and Israel. Majorities across Western Europe endorse the German leader’s handling of world affairs, as do most in Eastern Europe. In fact, in Russia and Ukraine she is more trusted than Obama; this is also the case in Israel.

Broad trust in Obama’s leadership does not mean foreign publics necessarily agree with the U.S. president’s policies. For example, in nearly every nation surveyed majorities or pluralities disapprove of Obama’s handling of the Israeli-Palestinian conflict. Many also disapprove of Obama’s handling of Iran and Afghanistan, while reactions to the way he has dealt with the recent calls for political change in the Middle East are mixed.

In general, Obama receives his highest marks for his handling of global economic problems. Majorities across Western Europe, for example, endorse Obama’s approach to economic issues, with the highest approval (68%) found in Germany. Large numbers in Kenya, Japan, Indonesia, Brazil and Lithuania also approve of how the U.S. president is dealing with the challenges facing the global economy.

Reactions to China’s Growing Power

Across the globe, public reactions to China’s growing economy are far more positive than opinions about the country’s growing military power. Positive assessments of China’s growing economy are most widespread in the Middle East, where majorities in the Arab countries surveyed, as well as Israel, agree that China’s economic growth benefits their country.

Most in Kenya, Pakistan, Indonesia, Japan, Britain, Brazil and Spain also say China’s growing economy is good for their country. Within Asia, only Indians offer negative views, with just 29% describing an expanding Chinese economy as a good thing and 40% saying it is a bad thing for their country.

When China’s emerging power is framed in military terms, publics in most surveyed nations react less favorably. Majorities or pluralities in all but four of the nations surveyed say China’s increasing military might is a bad thing for their country. This is especially the case in Japan, the U.S., Western Europe and Russia, where at least seven-in-ten have negative views of China’s growing military power.

In contrast, about seven-in-ten Pakistanis (72%) see China’s growing military might as a good thing for their country, as do 62% of Kenyans and Palestinians. Indonesians, by a slim margin (44% to 36%), concur with this view.

Economic Concerns

Opinions as to whether the U.S. or China is the world’s leading economic power, and whether China will supplant America as the dominant superpower, are taking shape against a backdrop of widespread uncertainty about the future and unhappiness with economic conditions at home. In most of the nations surveyed, people say their country’s economy is in bad shape and express dissatisfaction with the way things are going in their country. Moreover, few expect economic conditions to improve in the next year.

Frustration is especially intense in Pakistan, where roughly nine-in-ten say they are displeased with the way things are going in their country, but large majorities across the globe are also dissatisfied. For example, in Spain, dissatisfaction with the country’s direction is at its highest level (83%) since 2003. Meanwhile, the number of Americans who think their country is headed in the wrong direction has swelled from 62% to 73% over the past year.

Only in a handful of countries do more than half express satisfaction with their country’s direction. Among these exceptions are China, Brazil, and India – all dynamic, emerging economic powerhouses, regionally and globally. In Egypt, too, there is substantial satisfaction with the country’s direction (65%), likely reflecting renewed optimism about the country’s future, following the democratic uprising earlier this year

In many instances, levels of overall satisfaction are linked to assessments of the economy. In the U.S., France, Britain and Spain, eight-in-ten or more offer a negative assessment of the national economy, and majorities in these countries see rising prices and a lack of jobs as very big problems.

Inflation worries are especially pronounced outside the industrialized West. Overwhelming majorities in Pakistan, Kenya, Lebanon, the Palestinian territories, India and Indonesia describe price increases as a major problem. In Spain, Britain and the U.S., unemployment weighs more heavily than rising prices on the minds of average citizens.

The Chinese public is the most upbeat about economic conditions, with nearly nine-in-ten describing the domestic economy as good. In Germany, two-thirds echo this view, while smaller majorities in India, Israel and Brazil favorably assess the economic situation in their country.

Inflation and a lack of job opportunities are also seen as less urgent issues among Chinese and German respondents. In Germany, for instance, only about a third of the public describes either price increases or unemployment as very big problems. In China, 37% say a lack of jobs is a major concern, while about half are worried about inflation.

Despite economic concerns, publics in all regions express substantial support for growing international trade and business ties with other countries. No fewer than two-thirds in each country say increased international trade is very or somewhat good for their country.

Also of Note:

• Among those who describe the economic situation in their country as bad, most place the primary blame on government. To a greater degree than others, Western Europeans fault banks and other financial institutions for economic troubles at home, with as many as 75% of those who say the economy is bad in Britain and Spain taking this view.
• Worldwide, people tend to blame outside forces, rather than individuals themselves for unemployment in their country. In Western Europe and the U.S., roughly seven-in-ten or more attribute unemployment to forces beyond the control of individuals.
• The United Nations generally receives positive marks among the 23 nations surveyed. However, opinion of the international body is negative in Israel (69%), the Palestinian territories (67%), Jordan (64%) and Turkey (61%).
• In most predominantly Muslim countries there is widespread opposition to Iran acquiring nuclear weapons. Only in Pakistan does a majority (61%) support Iran’s nuclear ambitions, although significant numbers of Palestinians (38%) and Lebanese (34%) back Iran’s acquisition of a nuclear arsenal.

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S’pore escaping recession?

Govt reiterates 1%-3% GDP forecast for 2012 after smaller contraction

SINGAPORE: Singapore says it may avoid a recession despite the weak global economic outlook, after data showed the economy contracted less than expected in the last quarter of 2011 despite persistent weakness in electronics.

“The first month of trade numbers, export numbers are quite good,” Thia Jang Ping, a director at the Ministry of Trade and Industry, told a news conference.

“It’s still too early to call, but our near-term indicators do not suggest an imminent danger of Singapore slipping very badly into a recession in the first quarter,” he added.

The economy shrank 2.5% in the fourth quarter from the preceding period on an annualised and seasonally adjusted basis, data showed yesterday.

Slowdown: Singapore’s port is seen through the downtown business district. The island nation says its trade and non-oil domestic exports are expected to grow by 3% to 5% this year, down from a rise of 8% and 2.2%, respectively, in 2011. — AP

The GDP data was better than an advance flash estimate of a 2.9% contraction, but worse than the median estimate for a 2.3 % decline by economists polled by Reuters.

From a year earlier, gross domestic product grew 3.6%. Singapore stocks and currency weakened yesterday although that was in line with the regional trend, with sentiment hit by a another delay in cementing a bailout package for Greece.

Singapore expects its economy to grow by 1% to 3% in 2012, down from last year’s revised expansion of 4.9%, although it warned of risks to the forecast.

Asia is suffering the effects of slowing demand in the West, and the International Monetary Fund (IMF) last month warned that Europe’s debt crisis could tip the world economy into recession.

A recession is often defined as two consecutive quarters of contraction, and Singapore, whose trade is three times GDP, tends to feel the chills from a deterioration in global economic conditions faster than most countries.

“Specifically, a disorderly sovereign default in the eurozone could precipitate a global financial crisis, while an escalation of geopolitical tension in the Middle East could trigger a global oil price shock,” Singapore’s trade ministry said in a statement.

On Wednesday, South Korea said January exports fell 7% from a year ago in the biggest annual decline since October 2009, while Australia said its leading index of employment dropped in February in a sign that jobs growth could fall.

Singapore also said yesterday its trade and non-oil domestic exports were expected to grow by 3% to 5 % this year, down from a rise of 8% and 2.2%, respectively, in 2011. – Reuters

Eurozone unemployment hits new record

Unemployment is at the highest rate since the euro was launched in 1999

The jobless rate in the 17 countries that use the single currency was 10.4% in December, unchanged from November’s figure which was revised up from 10.3%.

Some 16.5 million people were out of work in the eurozone in December, up 751,000 on the year before.

The highest unemployment rate remains in Spain (22.9%), while the lowest is in Austria (4.1%).

Unemployment has been rising throughout 2011, as the debt crisis in the region has continued. In December 2010, the unemployment rate in the euro area was 10%.

Investment delays

Guillaume Menuet, economist at Citigroup, said he expected the number of people out of work to increase throughout 2012.

“If you think about the direction of employment expectations that you see across various business surveys, the outlook for employment doesn’t look particularly enticing, simply because the uncertainty is very high.

“Start Quote

Much energy and argument has been spent on this agreement. It is questionable, however, whether it will have much influence on the immediate crisis. ”

Gavin Hewitt BBC Europe editor

“In many cases you find firms continuing to delay investment projects. For those that are still making profits, hiring is being frozen, and for those which are under pressure to hit results or losing money, job losses are becoming the only solution that they have,” he said.

In the 27 EU countries, the unemployment rate was 9.9% in December, with 23.8 million people out of work. November’s figure was also revised up from 9.8% to 9.9%.

The biggest increases over the past year were seen in Greece, Cyprus and Spain.

The largest falls took place in Estonia, Latvia and Lithuania.

Deteriorating situation

The issue of jobs and economic growth was a key area for discussion at this week’s summit of EU leaders in Brussels.

On Monday, figures showed that the Spanish economy shrank by 0.3% in the last quarter of 2011. It is now widely expected that Spain will enter recession in the first quarter of this year.

Also on Monday, France cut its growth forecast for this year to 0.5% from 1% “to take into account the deterioration of the economic situation”.

At the Brussels summit, 25 of the 27 member states agreed to join a fiscal treaty, aimed at much closer co-ordination of budget policy across the EU to prevent excessive debts accumulating.

The UK and the Czech Republic did not sign up to it. UK Prime Minister David Cameron said he had “legal concerns” about the use of EU institutions in enforcing the treaty, while the Czechs cited “constitutional reasons” for their refusal.

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