China GDP beats, high-tech industries surge

• David Scutt, Business Insider Australia

• 9h
• 1,155

Alibaba Group Chairman Jack Ma smiles on the "Singles' Day" global online shopping festival in Shenzhen, southern China's Guangdong province Friday, Nov. 11, 2016. AP / Kin Cheung

China’s economy — the second largest globally behind the United States — finished 2016 far stronger than where it began, with economic growth accelerating strongly in the final quarter of the year. 

According to China’s National Bureau of Statistics (NBS), China’s economy grew by 6.8% year-on-year in the final quarter of the year, above the 6.7% pace expected. 

It was also the first time since the June quarter of 2014 that the year-on-year growth rate was higher than the previous quarter.

After seasonal adjustments, the economy grew by 1.7% in the December quarter, in line with expectations but below the 1.8% pace reported in Q3.

Gross domestic product totaled 74,412.7 billion yuan, up 6.7% on the levels of a year earlier. 

China’s tertiary sector — largely services — grew by 7.8% year-on-year, outpacing growth in the nation’s secondary (industrial) and primary sectors of 6.1% and 3.3% over the same period.

“The national economy has achieved moderate yet steady and sound development, getting off to a good start during the 13th Five-Year Plan period,” the NBS said following the release of the report.

Traders at the Chinese Gold and Silver Exchange Society demonstrate manual deals settling used before computerization as part of celebrations at the beginning of their first trading day after the Chinese Lunar New Year holidays, in Hong Kong, February 14, 2013. REUTERS/Bobby Yip

It also said the economic structure continued to “transform and upgrade” while the industrial structure was “optimised and transformed”.

“In 2016, the value added of the tertiary industry accounted for 51.6% of GDP, 1.4 percentage points higher over last year and 11.8 percentage points higher than that of the secondary industry,” said the NBS. 

“The demand structure was further improved,” it added, noting that the contribution of final consumption expenditure accounted for 64.6% of GDP during the year.

An outcome that suggests China’s economic transition is going well, even forgiving well documented concerns over the reliability of the data presented.

On efforts to reduce overcapacity in the nation’s coal and steel sectors, the NBS said it had “successfully fulfilled the task”, noting output of coal dropped by 9.4% over the year, leaving it at a six-year low.

However, despite successes, the NBS said that the economy still faced a myriad of risks in 2017, both internal and external.

“The domestic and external conditions are still complicated and severe, and the foundation for a stabilised but progressing economy should be further consolidated.,” it said.

A Chinese day trader reacts as he watches a stock ticker at a local brokerage house on August 27, 2015 in Beijing, China. Kevin Frayer/Getty Images

“We should put improvement of quality and efficiency at the central place, stick to the general guidelines of stable macro-policy, precise industrial policy, flexible micro-policy, practical reform policy and solid social policy.”

Alongside the GDP report, the NBS also reported industrial output, retail sales and urban fixed asset investment figures for December, with all retail sales undershooting market expectations.

Industrial output grew by 6.0% year-on-year, down from the 6.2% pace of November and below the 6.1% rate expected. It was the the slowest year-on-year increase in six months.

The NBS said mining output dropped by 1% over the year, a decline more than offset by a 6.8% increase in manufacturing output and 5.5% expansion in electricity, thermal power, gas and water output.

Fitting with the message that the “new” China economy is strengthening, it also said that output in high-tech industries grew by 10.8% from a year earlier.

Offsetting the moderation in industrial output, retail sales continued to accelerate, growing by 10.9% from the levels of a year earlier. That figure topped expectations for a moderation to 10.7%, and was faster than the 10.8% pace reported in November.

It was also the fastest year-on-year increase sine December 2015, one year earlier.

Chinese President Xi Jinping smiles as he delivers a speech during the Korea China Investment Forum at a hotel in Seoul Thomson Reuters

Over the year, total retail sales rose to 33,231.6 billion yuan, a nominal increase of 10.4% on a year earlier. While smaller, online retail sales grew by 26.2% in nominal terms over the same period, rising to 5,1556 billion yuan.

Urban fixed asset investment, after a tentative recovery in recent months, once again slowed, expanding by 8.1% in 2016 compared to the levels of a year earlier.

That was down on the 8.3% increase seen in first eleven months of 2016 compared to the same corresponding period a year earlier.

Investment by state-backed firms grew by 18.7% over the year to 21,309.6 billion yuan, far overshadowing a 3.2% lift in private-sector investment to 36,521.9 billion yuan over the same period.

Underlining one of the key factors that underpinned economic growth during the year, the NBS said total investment in real estate rose by 6.9% to 10,258.1 billion yuan in nominal terms.

While the headline GDP figure topped expectations with retail sales also outperforming, there’s been little to no reaction in financial markets to the data deluge.

That’s probably not all that surprising, particularly as the year-on-year GDP figure has now met or exceeded market expectations for nine consecutive quarters.

Markets had already priced in a strong headline result, and that’s what they received.

Read the original article on Business Insider Australia. Copyright 2017. Follow Business Insider Australia on Twitter.

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TODAY'S THE DAY: Donald Trump is about to become America's 45th president

• Julie Pace, Associated Press

• 3h
• 2,094

U.S. President-elect Donald Trump and his wife Melania Trump arrive aboard a U.S. Air Force jet at Joint Base Andrews, Maryland, U.S. January 19, 2017. REUTERS/Jonathan Ernst

WASHINGTON (AP) — Donald Trump, a real estate mogul and reality television star who upended American politics and energized voters angry with Washington, will be sworn in Friday as the 45th president of the United States, putting Republicans in control of the White House for the first time in eight years.

Ebullient Trump supporters flocked to the nation's capital for the inaugural festivities, some wearing red hats emblazoned with his "Make America Great Again" campaign slogan. But in a sign of the deep divisions Trump sowed during his combative campaign, dozens of Democratic lawmakers were boycotting the swearing-in ceremony on Capitol Hill.

While Trump came to power bucking convention, he was wrapping himself in the traditional pomp and pageantry that accompanies the peaceful transfer of power. The president-in-waiting will attend church with his family Friday morning, then meet President Barack Obama and first lady Michelle Obama for tea at the White House. The Trumps and the Obamas will travel together in the presidential limousine for the short trip to the Capitol for the noon swearing-in ceremony.

Aides said Trump had been personally invested in crafting his inaugural address, a relatively brief 20-minute speech that is expected to center on his vision for what it means to be an American. Spokesman Sean Spicer said the address would be "less of an agenda and more of a philosophical document."

Trump has pledged to upend Obama's major domestic and national security policies, including repealing his signature health care law and building a wall along the U.S.-Mexico border. But he's offered few details of how he plans to accomplish his agenda, often sending contradictory signals.

The three days of inaugural festivities kicked off Thursday. Trump left his Trump-branded jet in New York and flew to Washington in a government plane, saluting an Air Force officer as he descended the steps with his wife, Melania. He and the incoming vice president, Mike Pence, solemnly laid a wreath at Arlington National Cemetery before joining supporters for an evening concert at the Lincoln Memorial.

"We're going to unify our country," Trump said at the close of the two-hour concert featuring country star Toby Keith, soul's Sam Moore and The Piano Guys. But not singer Jennifer Holliday: she backed out after an outcry from Trump critics.

With rain a possibility, the National Park Service announced that it was easing its "no umbrella" policy for Friday, allowing collapsible umbrellas along the parade route and on the National Mall.

The nation's soon-to-be president joked about the chance of a downpour. "That's OK," Trump told campaign donors at an event Thursday night, "because people will realize it's my real hair."

"Might be a mess, but they're going to see that it's my real hair," he said.

The lack of A-list star power — as well as the threat of showers — did little to dampen the spirits of Trump supporters looking ahead to the day.

Chris Lehmann, 55, a maintenance supervisor from Belmar, New Jersey, said: "I'm so excited, I'm like on top of the world."

Eleanor Haven, 83, of Alexander City, Alabama, was attending the festivities with her son, Scott Haven. The pair said they had never been to a political event before attending a Trump "thank you" tour rally in Alabama after the election and were looking forward to Friday's celebration.

"We're excited for changes in the country," Scott Haven said.

All of the living American presidents were scheduled to attend the swearing in ceremony, except for 92-year-old George H.W. Bush, who was hospitalized this week with pneumonia. His wife, Barbara, was also admitted to the hospital after falling ill. Trump tweeted his well-wishes to the Bushes, saying he was "looking forward to a speedy recovery."

Hillary Clinton, Trump's vanquished campaign rival, also planned to join dignitaries at Capitol Hill.

While Trump revels in a celebratory lunch with lawmakers and parade down Pennsylvania Avenue — passing his newly opened Washington hotel — workers at the White House will set about the frantic process of moving out the Obamas and preparing the residence for its new occupants. Moving trucks were on standby Friday morning at the White House.

Obama, who will continue to live in Washington, was leaving town with his family after the inauguration for a vacation in Palm Springs, California. He planned to address a farewell gathering of staff at Joint Base Andrews before boarding his last flight on the military aircraft that ferries presidents on their travels.

___

Associated Press writers Nancy Benac, Jessica Gresko, Jill Colvin and Jonathan Lemire contributed to this report.

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Matt Damon hosted a private party in Davos to discuss how he's cleaning up the world's water supply

• Lianna Brinded
 

• 11h
• 8,111

Matt Damon at the Water.org invite-only party in Davos, Switzerland. Lianna Brinded/Business Insider

DAVOS, SWITZERLAND — Matt Damon is one of the most famous actors on the planet, and he's using his fame for good.

Damon was at the World Economic Forum this week to raise awareness of a devastating problem for numerous societies and nations around the world: a lack of clean water.

Damon and Gary White founded Water.org, which says it has helped 5 million people access safe water and sanitation.

On Wednesday evening I attended a small, invite-only event in an illuminated chapel in Davos where Damon, White, and representatives of the PepsiCo Foundation and of the tech group Tradeshift highlighted the plight of people who lack clean water. The event was also a way to acknowledge those who had become involved with Water.org.

White, who is Water.org's, started the evening by signalling that he and Damon wanted to toast to all those involved with the group. The charity has benefited from corporates pitching in with funding and by raising awareness.

White then introduced Damon by saying, "Oh and who are you," to which Damon jokingly replied, "Ben Affleck."

Damon turned serious after that, telling the crowd that 663 million people globally do not have access to safe water and sanitation.

He added that trying to tackle the water crisis "is personal to me, someone with four daughters, as this is an issue that predominantly affects women and girls, who are made to do the water collection, and often it's girls that are leaving school early or missing school entirely in order to scavenge for water."

Here is the video of these comments as well as the rest of the statement:

And here is another video segment of the 2-1/2-minute speech, in which Damon highlighted how the West found its solution to this crisis 100 years ago and how he believed influential people needed to turn their sights to the developing world:

The lack of access to safe water and sanitation is one of the most devastating crises in the developing world.

According to Water.org, one in 10 people across the world lacks access to safe water — that's the equivalent to twice the population of the US. Incredibly, one-third of the global population lives without access to a toilet.

At an event in Davos on Tuesday, Damon, White, Anheuser-Busch executive Ricardo Tadeu, and WEF Global Future Council cochair Usha Rao-Monari described the problem as being solvable but requiring more than just donations.

Here's what Damon told Business Insider and others:

White, who comes from an engineering background, described the group's unique nonprofit model. Rather than rely only on donations to help solve the water-crisis problem, the group does something called WaterCredit, an idea created by White.

It's a microfinancing solution, with small loans made to provide just enough funds for a change in local infrastructure to create better access to safe water and sanitation. It is a "pay-it-forward" system, where the loans — which are $187 on average — are affordable and easy to repay. Once the loan is repaid, the money just moves onto the next person who needs it.Water.org

According Water.org stats, 938,000 WaterCredit loans had been disbursed as of June, with a 99% repayment rate. Ninety-three percent of borrowers are women.

The nonprofit has partnerships with some of the world's largest companies. Tadeu, the Africa zone president at Anheuser-Busch InBev, outlined how the company's brand Stella Artois had donated $1.2 million to Water.org financially and had introduced awareness campaigns.

Such actions could perhaps be seen as an investment. The World Health Organization in 2012 said every $1 invested in water and sanitation provided a $4 economic return.

In 2010, the Water and Sanitation Program said, "$260 billion is lost globally each year due to lack of safe water and sanitation."

Rao-Monari of the WEF Global Future Council said the world's attitudes regarding the water crisis needed to change. She said people often incorrectly thought of water as being "infinite" and needed to understand how the supply-and-demand gap for safe water would expand amid a growing global population.

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Alibaba founder Jack Ma has a brutal theory of how America went wrong over the past 30 years

• Jim Edwards
 
•   

• 9h
• 142,357

Jack Ma. WEF

DAVOS, Switzerland — Alibaba founder Jack Ma thinks America went wrong over the past 30 years by focusing too much on war and Wall Street. Speaking at the World Economic Forum on Wednesday, Ma was asked about globalisation and the reaction to it represented by the election of Donald Trump as US president.

He responded that back when Thomas Friedman published "The World Is Flat" in 2005, globalisation looked like "a perfect strategy" for the US: "We just want the technology, and the IP, and the brand, and we'll leave the other jobs" to other countries like Mexico and China, he said.

"American international companies made millions and millions of dollars from globalisation," Ma said.

As an example of just how much was available, Ma said, "When I graduated from university I tried to buy a beeper, and it cost me $250. My pay at the time was $10 a month."

"IBM, Microsoft," he added, "the profit they made was larger than the top four banks in China put together ... But where did the money go?"

US soldiers during a firefight with Taliban forces in Barawala Kalay Valley in Afghanistan's Kunar province in 2011.Pfc. Cameron Boyd / Wikimedia, CC

Ma said that 30 years ago the American companies that people in China heard about were Ford and Boeing. Today the companies that people in China talk about are in Silicon Valley and on Wall Street.

At the same time, the US spent a lot of money on foreign conflicts. "In the past 30 years, America had 13 wars spending $14.2 trillion ... no matter how good your strategy is you're supposed to spend money on your own people," Ma said. "The money goes to Wall Street. Then what happened? Year 2008 wiped out $19.2 trillion in US income ... What if the money was spent on the Midwest of the United States?"

"The other countries steal jobs from you guys — that is your strategy. You did not distribute the money in the proper way."

Elsewhere during his talk, Ma said his favourite film was "Forrest Gump" because he saw something of Alibaba in Gump's shrimp boat. Ma quoted Gump as saying "Nobody makes money catching whales — people make money catching shrimps."

"That's how we make money" at Alibaba, he said.

He also revealed that he wanted to retire early: "I don't want to die in my office," he said. "I want to die on the beaches."

Editors note: This post has been updated to reflect that Ma said "spending 14.2 trillion" where an earlier version stated he said "spending 2 trillion".

REPORT: Goldman Sachs could cut 3,000 London jobs over Brexit

• Ben Moshinsky
 

• 5h
• 1,129

Chairman and CEO of The Goldman Sachs Group, Inc. Lloyd C. Blankfein. Bryan Bedder/Getty Images for The New York Times

LONDON – Goldman Sachs is considering cutting its staffing numbers in London by up to 50%, according to a report in German newspaper Handelsblatt.

The paper reports that the bank is planning to shift 1,000 people to Frankfurt and set up a new European subsidiary as it prepares for the UK to leave the European Union. Goldman is also reportedly considering moving operations staff to Warsaw and New York, reducing the number of people in London by 3,000, Handelsblatt said.

The 3,000 estimate, which would half the bank's UK headcount, is higher than the previously floated figure of 2,000 job re-locations.

A spokesman for Goldman Sachs in London told Business Insider: "We continue to work through all possible implications of the Brexit vote. There remain numerous uncertainties as to what the Brexit negotiations will yield in terms of an operating framework for the banking industry. As a result, we have not taken any decisions as to what our eventual response will be."

On Tuesday, Prime Minister Theresa May outlined her negotiating stance for Brexit, which included a rejection of the single market and an end to the free movement of people, resulting in a so-called "Hard Brexit." This would likely have the result of stripping the City of its passport.

Passporting rights allow UK-based financial firms to access clients across the continent via branches. If this regime ends in Britain, banks will have to relocate operations to countries that do have passporting rights and many international firms are readying plans to counter their loss.

A steady flow of international banks have announced plans to move employees out of London since May's speech. Jamie Dimon, CEO of JPMorgan Chase, told Bloomberg Television on Wednesday that the bank will likely move more people than previously thought. "It looks like there will be more job movement than we hoped for," Dimon said.

HSBC CEO Stuart Gulliver said bankers generating around a fifth of HSBC's London revenue will move to Europe as a result of Brexit. "Specifically what will happen is those activities covered specifically by European financial regulation will need to move, looking at our own numbers – that’s about 20% of the revenue," Gulliver told Bloomberg in an interview at the World Economic Forum in Davos.

Gulliver said around 1,000 bankers in HSBC's investment banking and markets divisions would "probably need, in our case, to go to France."

UBS' investment bank chief Andrea Orcel also warned in an interview with Bloomberg at Davos that jobs "will definitely" move as a result of Brexit.

London's 328-year old insurance market, Lloyd's of London, is a planning to move some of its operations to the continent in reaction to the UK's Brexit vote.

Despite possible job cuts, Goldman is clearly committed to London and is currently constructing a £350 million, 850,000 square foot headquarters in London's Holborn area.

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One country dominates the global bitcoin market

• Akin Oyedele
 

• 24h
• 2,642

 More Charts

 
•  
 

Almost all bitcoin trading is done in China.

The share of the cryptocurrency that's traded via China's mainland currency escalated over the past few years, overtaking the US dollar as the dominant currency. From less than a 10% share in January 2012, the yuan now makes up nearly 100% of all bitcoin trading.

Bitcoin surged 120% last year, outperforming every other currency in the world. It kicked off 2017 by rising above $1,000 for the first time since 2013.

Those moves were made possible largely because of China.

Volumes of bitcoin trading increased as China's foreign reserves shrank, by about 8% to $3.05 trillion in 2016. Meanwhile, the yuan weakened against the dollar, hastening the rush of money out of the country and increasing interest in bitcoin.

Last week, the cryptocurrency came under pressure after China announced it was investigating exchanges in Beijing and Shanghai on suspicion of market manipulation, money laundering, and other issues.  

As of 8:34 a.m. ET on Wednesday, bitcoin traded down 4.8%, or $43, near $862 per coin. It jumped above $915 late Tuesday night but struggled to take out resistance in the $880/$920 area.

This chart shared by Deutsche Bank shows the staggering rise of China as the dominant trader of bitcoin.

Deutsche Bank

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PC sales in 2016 were the lowest they’ve been in a decade

PC sales in 2016 were the lowest they’ve been in a decade  As the smartphone has become more and more capable, the traditional PC has seen less and less room for growth. This chart from Statista makes it clear: According to recent data from research firm Gartner, annual PC shipments totaled 269.7 million in 2016. That’s a 6% decline year-over-year, the fifth straight annual decline, and the lowest total since 2006, when shipments were a hair under 240 million. For what it’s worth, fellow research firm IDC came to a final tally of 260 million shipments, which it found to be a 5.7% yearly decline. It varies slightly in which form factors it counts as “PCs,” but the gist is the same. Gartner and IDC differ slightly in where they see PCs going from here, though. Both believe certain parts of the PC market could excel going forward, especially as smartphones and tablets continue to stagnate, but the latter is more bullish on the PC reaching a point of stabilization, instead of continuing its freefall. In either case, it’s hard to say the PC is dead. There are still some tasks a mobile device simply cannot do as well, and PCs themselves are becoming more and more tablet-like. But as the multitude of computers in our lives give people less incentive to upgrade, the days of big growth seem to be fading away. Read »

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