"There is now no better forum than G20. Essentially, it will act as a 'steering committee for the world economy', as Barry Eichengreen aptly said, and this forum should now replace the G7 or G8 for good."Soesastro appears to regard the preoccupation with the expanded Chiang Mai Initiative as parochial and not broad enough to really address the economic concerns in the Asia Pacific. Worth reading.
2. Keith Bradsher at the New York Times reports that the National Bureau of Statistics announced the consumer prices in China fell by an annual rate of 1.6% in February. Producer prices fell 4.5% for the same time period.
"In yet another possible hint of deflation, an index of real estate prices in 70 Chinese cities also fell in February, inching down 0.3% from January and down 1.2% from a year ago."3. Zhou Xin at Reuters reported yesterday that the head of the Chinese National Energy Agency, Zhang Guobao, made comments in the China Reform Daily yesterday which argued that China should use its nearly $2 trillion in foreign exchange reserves to buy more gold, oil, uranium and other strategic commodities.
"[Mr. Zhang] added that agencies such as China's National Oil Reserves Centre should be allowed to issue foreign exchange bonds to obtain money from China's forex reserves for overseas purchases."(h/t Chuck Butler at Daily Pfenning.) Meanwhile, Judy Chen at Bloomberg reports that Wang Jian, secretary general of the China Society of Macroeconomics which itself is a division of the National Development and Reform Commission, said in an interview that a weaker yuan "won't help exports. Foreign consumers still won’t have enough money to buy."
"'A three percent in appreciation would attract more foreign capital into China to help us acquire assets overseas,' said Wang. 'We should take advantage of the low prices and use reserves to buy more commodities, oil fields and valuable assets in the US.'"4. Janet Ong at Bloomberg reports that Taiwanese exports fell at an annual rate of 28.6% in January.
"Exports, which are equivalent to about 70% of GDP, fell 37.2% over the first two months of 2009, the largest decline on record. China and the US are Taiwan's biggest overseas markets.February's export decline was Taiwan's sixth consecutive month of exports contraction.
The economy contracted 8.36% in the fourth quarter, pushing the island into its first recession since the technology bubble burst in 2001. The jobless rate climbed to a seven-year high of 5.33% in January.
Taiwan's shipments to China fell 32.6% compared with a 63.5% plunge in January. Exports to the U.S. declined 24.7% from a year earlier and sales to Europe fell 34.7%, more than January's 32.6% decrease."
5. Gordon Fairclough at the Wall Street Journal reports that the Dalai Lama delivered a speech in Dharamsala, India, to mark the 50th anniversary of his exile in which he condemned Chinese control of the region in especially harsh terms.
"The Dalai Lama said China's Communist government had subjected Tibet and its people to 'untold suffering and destruction' over the past five decades, turning the Himalayan region into 'hell on earth.' He also called for 'meaningful autonomy' for Tibetans."Edward Wong at the New York Times reports that the Dalai Lama said,
"Today, the religion, culture, language and identity, which successive generations of Tibetans have considered more precious than their lives, are nearing extinction."China's foreign ministry spokesman responded to the criticism by dismissing it as lies and claiming that Beijing's policies are "blazing a new path for Tibet's prosperity."
6. Der Spiegel reports that Jean-Claude Juncker, prime minister of Luxembourg and the chairman of 16 finance ministers from the eurozone, told reporters yesterday that the EU has rejected an appeal by the US to launch further economic stimulus coordinated internationally. He said, "We're not prepared to increase the economic programs."
7. Ben Hall at the Financial Times reports that French industrial production fell by an annual rate of 13.8% in January.
"January’s plunge was the sixth consecutive monthly decline in industrial output, the longest continuous contraction in the 29-year old statistic series."8. Emma O’Brien at Bloomberg reports that Ukraine's central bank--Natsionalnyi Bank Ukrainy--has issued warnings to a set of domestic banks not to sell the hryvnia below the rate it sets.
"'This is a tussle between the banks and the NBU,' said Dmitry Gourov, a Ukraine economist in Vienna at UniCredit SpA, Italy’s largest bank. 'The central bank could easily make a scapegoat of one particular bank, there’s always that risk.'"The hryvnia has fallen 39% versus the dollar in the past six months.
9. RIA Novosti reports that the Russian Finance Ministry will cut its export duty on crude from $115.3 to $108-$112 per metric tonne (~$14.79-$15.34/b) starting April 1. The ministry reportedly expects the Urals blend price to average between $41.54-$42.54/b in March.
10. Anthony DiPaola and Glen Carey at Bloomberg report that Abdullah bin Hamad al-Attiyah, Qatari minister of oil, said in an interview that "We cannot discuss another [OPEC] cut until we see the compliance at 100%." Al-Attiyah indicated that neither a price target nor a price band was in the works. Shigeru Sato and Yuji Okada at Bloomberg report that Saudi Aramco kept supply to Japanese refiners at the same level seen in March for April.
"'The Saudis seem to have avoided a deeper reduction in April supplies to Japan, hinting that the kingdom may oppose an additional reduction,' said Ken Hasegawa, a commodity derivatives sales manager at Newedge in Tokyo."11. Ladane Nasseri at Bloomberg reports that Iran's energy ministry announced that the Bushehr nuclear plant will be producing 500 megawatts by August 22, per a press release by Energy Minister Parviz Fattah. The other 500MW of the 1,000 MW plant is scheduled to be linked to the grid by March 2010.
12. Michael Collins Dunn at the Middle East Institute Editor's blog posted yesterday on the decision of Morocco to cut relations with Tehran. Tehran had criticized Morocco for expressing support for Bahrain after a former speaker of the Iranian parliament called it the 14th province of Iran--see Daily Sources 2/20 #6. Morocco may have felt singled out by Iran given that the rest of the Arab Muslim nations also backed Bahrain.
"[The] Moroccan announcement breaking relations also spoke of Iranian attempts to 'alter the religious fundamentals of the kingdom, to attack the roots of the Moroccan people's ancestral identity.' Iran called the charges baseless, but it seems the Moroccans are alleging direct interference with their internal affairs.13. Borzou Daragahi and Ramin Mostaghim at the Los Angeles Times reports that the arrival of Turkish Foreign Minister Ali Babacan in Tehran has sparked speculation that Ankara is looking to serve as a mediator for talks between the US and Iran.
Morocco has complained in the past that the Iranian Embassy in Rabat was seeking to spread Shi'ism in the Sunni Kingdom, where the King also claims religious leadership and the title Amir al-Mu'minin or Commander of the Faithful."
"'The term "mediation" is used at times,' Babacan told reporters in Ankara ... before departing for Iran, according to the Turkish newspaper Sabah. 'This will only be realized if a concrete request is made by both sides. We could contribute to the furthering of relations between the two nations to a positive level.'14. Ismail Khan at the New York Times reported yesterday that the Mamoond tribe, which resides in the Bajaur region of Pakistan and in Afghanistan, signed an agreement with Islamabad to hand over several Taliban leaders, lay down their arms, and stop harboring foreign militants. "The entire Taliban leadership in Bajaur comes from the Mamoond, which has also been accused of harboring al Qaeda operatives."
Clinton told Turkey's Kanal D television last week that the Obama administration welcomed any Turkish efforts to help sway the Islamic Republic. 'You know the Iranians better than we do,' she said. 'You have shared a border for--I think I was told over 350 or so years. So we are going to ask for your help in trying to influence Iranian behavior.'"
15. Lydia Polgreen at the New York Times reported yesterday that President Omar Hassan al-Bashir released from prison Hassan al-Turabi today. Turabi was originally arrested two months ago because he came out in favor of the ICC trying al-Bashir. When he was released, he reiterated that support, "We must accept all international policies, especially if they address justice." (Turabi is Sudan's most prominent Islamist, and as such puts a premium on jurisprudential thinking.) Analysts say the move might be to bridge political divisions in Sudan now that the regime is under new pressure, which makes sense. I would add, however, that Turabi, an old colleague of Osama bin Laden, and prominent Islamist is not exactly considered friendly by most of the West.
16. Joshua Goodman and Andre Soliani at Bloomberg reports that Brazil's GDP shrank by 3.6% in the fourth quarter from the third. However, Brazil's GDP grew by 1.3% in the fourth quarter of 2008 from 4Q 2007.
"Brazil’s economy expanded 5.1% last year, compared with 5.7% in 2007. Industrial activity fell 7.4% from the previous quarter. Household consumption fell 2%."17. Christine Cordner at Platts reports that the EPA today proposed a comprehensive national system for monitoring carbon dioxide and other greenhouse gas emissions which would begin reporting in 2011.
"EPA said that about 13,000 facilities, accounting for about 85-90% of US GHG emissions emitted, would be covered under the proposal. The new reporting requirements would apply to suppliers of fossil fuel and industrial chemicals, manufacturers of motor vehicles and engines, as well as large direct emitters with emissions equal to or greater than 25,000 metric tons/year."