Business

DUBAI — Robots puttering around Dubai's hi-tech Expo site could be a sign of things to come for the Gulf, where new cities are being built from scratch with artificial intelligence (AI) at their core.

The 5G-enabled Expo, covering an area twice the size of Monaco, will remain as a "city of the future" and tech industry hub, Expo's chief said before its grand opening last month.

But the $7 billion project, featuring robots that greet visitors and can be used to order food, is not just in the Gulf, where money is being invested heavily in a post-oil future.

Neighbouring Saudi Arabia is lavishing $500 billion on NEOM, a brand new, next-generation Red Sea tech centre that will offer ultra-connectivity to its planned population of one million-plus, and is trialling airborne taxis.

AI is also at the heart of other Saudi developments including the Red Sea Project, a new tourist area that will use smart systems to monitor environmental impacts and visitor movements.

Analysts say the Gulf monarchies are willing to bet big on AI, knowing they must move away from their reliance on fossil fuel industries and become more active in tech, tourism and other areas.

"You've got very forward [-looking], somewhat risk-loving leadership that sees the need to transform," said Kaveh Vessali, a partner at consultancy firm PwC Middle East. 

"I think that's just completely the opposite of what I see in the rest of the world." 

Automated transport 

Artificial intelligence courses in Bahrain primary schools, the UAE's plans for automated delivery drones and Dubai's ambition to have 25 per cent of all transport automated by 2030 offer further evidence of the Gulf's tech aspirations.

The Middle East is predicted to receive only two per cent of the estimated $15.7 trillion global AI economy by 2030, according to PwC. 

But analysts say the Gulf countries — Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and UAE — are playing the long game, positioning themselves to leapfrog global players.

The annual growth rate of the Middle East AI market is about 20 to 34 per cent, led by the UAE and then Saudi Arabia, PwC said in a report, predicting that more than 10 per cent of each of the two countries' gross domestic product will come from AI by 2030.

"Governments have the luxury of being more strategic," said Vessali, citing the 20 and 50-year plans which are a hallmark of Gulf governments. 

"This is unheard of a) in the private sector, and b) in the West," he adds. 

Vessali said most AI companies in Gulf states are fully, or at least semi, governmental, with comparatively low pressure to generate short-term returns.

However, the region has a history of investing in companies which did not become particularly profitable, outside a few core industries such as oil and gas, he warned. 

'Streamlined' 

decision-making 

While the region might be known as culturally conservative, its AI strategies are better characterised as liberal and aggressive, according to some local players. 

In 2017, the UAE appointed its first minister of state for artificial intelligence, Omar bin Sultan Al Olama, to spearhead the country's AI strategy, launched that same year.

The UAE has said it aims to become one of the leading nations in AI by 2031, creating new economic and business opportunities, and generate up to 335 billion dirhams ($91 billion) in extra growth.

"The region seems to classify being left behind on new technologies as a bigger risk than anything else," said Cesar Lopez, the CEO of Datumcon. 

"Taking the risk to do what others aren't has attracted and built business," he noted.

The data and AI solutions company based in the UAE and Saudi Arabia is using computer vision to scan and identify damaged containers at Jebel Ali port in Dubai, one of the world's busiest, operated by logistics company DP World. 

But despite the Gulf's AI investments, the lack of reliable and accessible data sets, which are at the core of these systems, remain a barrier.

"It's going to take a few years to get there because the data isn't mature enough for it yet [in the region]," said Stephen Rawson, an associate at American consulting firm Oliver Wyman.

While Gulf countries have been better at centralising data across different governmental platforms, other leading countries have managed better data sets for longer. 

But being newer to data collection has its advantages, said Rawson, as Gulf countries can generate cleaner data to create more streamlined AI systems. 

"They are empowered to do this more than they would be in the West," said Rawson, because with private enterprises, "getting them to work and play nice will only work if there's a profit margin incentive for all of them". 

DUBAI — Boeing announced its first big order at a major air show in Dubai on Tuesday, saying India's new carrier Akasa Air had ordered 72 of its 737 MAX aircraft.

The world's dominant aerospace companies are seeking new business at the industry's first major show since the COVID pandemic started, an event which runs until Thursday. 

US aerospace giant Boeing made the announcement a day after its European rival Airbus won a mega-order for 255 single-aisle A321 aircraft valued at more than $33 billion at list prices. 

As the industry slowly recovers from a COVID-induced downturn, Airbus has returned to profit and delivered 460 aircraft in the year's first 10 months, while Boeing has remained in the red and supplied just 268 planes.

"The new Indian carrier has ordered [72] 737 MAX airplanes to build its fleet," Boeing said in a statement, adding that the order was valued at nearly $9 billion at list prices.

Akasa Air has ordered two models from the 737 MAX family, the 737-8 and the high-capacity 737-8-200. 

The airline's CEO Vinay Dube said "we are delighted to partner with Boeing for our first airplane order and thank them for their trust and confidence in Akasa Air's business plan and leadership team". 

"India is one of the fastest-growing aviation markets in the world with an unparallelled potential. We are already witnessing a strong recovery in air travel, and we see decades of growth ahead of us."

More orders 

Boeing said on Sunday it had signed a contract with an Icelandic company to convert 11 737-800BCFs — the previous generation of the MAX series — into cargo planes. It did not disclose the value of the contract. 

Boeing's 737 MAX returned to the skies last year after the entire fleet was grounded for 20 months following two crashes — in Ethiopia and Indonesia — that left 346 people dead.

"We are honoured that Akasa Air... has placed its trust in the 737 family to drive affordable passenger service in one of the world's fastest-growing aviation regions," said Stan Deal, president and CEO of Boeing Commercial Airplanes, according to the statement.

Almost 370 of the planes remain in inventory and Boeing chief executive David Calhoun has said that it will take two years to sell them all.

The 737 MAX has also yet to be recertified in China, a major market for aircraft makers. Boeing's production plans will depend on access to the Chinese market, Calhoun says.

Boeing also announced on Tuesday that it signed a contract with Air Tanzania for several aircraft —- including a 787 Dreamliner, a 767 freighter and two 737 MAX jets — valued at more than $726 million at list prices. 

In another deal for approximately $704 million at list prices, Dubai-based aviation giant Emirates ordered two of Boeing's 777 freighters. 

Sky One FZE, an Emirati leasing company, is set to acquire three 777s. 

Meanwhile, Airbus on Tuesday said it signed a memorandum of understanding with Kuwait's low-cost carrier Jazeera Airways for 28 new aircraft.

The deal is valued in excess of $3.3 billion at list prices while the actual deal remains confidential, Jazeera said in a statement.

WASHINGTON — With US prices rising at a rate not seen in decades, President Joe Biden's administration is looking for ways to turn the tide.

From relaxing tariffs on China to addressing the semiconductor shortage, there are many actions Washington could take to keep price increases in check.

However, analysts warn that few will offer immediate relief from the price surge that has struck the world's largest economy this year as it bounces back from the COVID-19 pandemic:

Roll back China tariffs 

Under former president Donald Trump, the United States imposed tariffs on Chinese products worth $370 billion in 2018, citing trade practices Washington deemed unfair.

The Biden administration has kept those tariffs up, but announced it would review trade strategy towards China, as well as begin a process for some US firms to receive exemptions from the levies they say drive up costs.

China is the top supplier of goods to the United States, and Biden could choose to relax the tariffs further to address the price increases, which the Labour Department put at a year-on-year rate of 6.2 per cent in October.

In a Sunday interview with CBS, Treasury Secretary Janet Yellen was noncommittal about changing tariff policy, but acknowledged that "it would make some difference."

"Tariffs do tend to raise domestic prices," she said.

Jay Bryson, chief economist for Wells Fargo's corporate and investment bank, said a tariff rollback would help "at the margins" and lower the costs of some goods, but wouldn't strike the death blow against inflation Biden may be looking for.

Sort out supply chains 

Even if tariffs were dropped, the United States would still have to deal with snarls at its ports. 

Ships have idled off the coasts of Los Angeles and Savannah, Georgia for months waiting for cargo to be offloaded, raising fears of disruptions to the holiday shopping season.

The reasons for the broken supply chains are many, and Biden has attempted to address them by pushing the Port of Los Angeles to provide 24-hour service, as well as getting WalMart, FedEx and UPS to work extended hours to clear backlogs.

The White House has said the $1.2 trillion infrastructure bill Biden was set to sign on Monday would dedicate funds towards modernisation projects that can further aid ports.

But Senior US Economist at Capital Economics Andrew Hunter wasn't so sure.

He warned that the overhaul, along with a $1.85 trillion effort to expand US social services Biden is pushing Congress to pass, "aren't going to do anything to contain inflation now, and could even increase it further if they result in a further fiscal expansion in the near term, which boosts demand".

Stimulate semiconductor production 

American factories have struggled in recent months to secure semiconductors, with the auto sector particularly hard hit. 

The slowdown in new car production is a factor in the surge in used car prices that has pushed overall inflation higher, while the efforts of rental car companies to rebuild their fleets has also played a role.

Earlier this year, Biden met with leading CEOs in the semiconductor industry, and looked for ways to work with the European Union on addressing the shortages in a September summit.

Pressure the Fed 

The branch of the US government best equipped to handle inflation is the Federal Reserve. 

However, its tools are blunt: the central bank could hike rates from their zero level, but doing that with the economy still bouncing back from the pandemic could spur a recession.

Its top officials have also made clear there will be no rate hike until the Fed finishes winding down its monthly asset purchases, which is predicted to conclude in the middle of next year.

"To the extent that (inflation) is being caused, at least partially, by supply constraints, there's very little the Fed can do about that. The Fed can't make more computer chips," Bryson said.

Fed Chair Jerome Powell and other top officials are appointed by the White House but act independently, meaning that even if Biden wanted to change US monetary policy now, the decision is not his to make.

BEIJING — A new Chinese stock exchange focused on SMEs began trading in Beijing on Monday, boosting support for smaller-scale firms as economic growth slows and Beijing cracks down on domestic tech giants.

More than 80 companies started trading on the Beijing Stock Exchange, which is expected to complement two main bourses in Shanghai and Shenzhen by catering to smaller enterprises, which have long faced difficulty getting funding from banks.

Chinese media reported that shares of 10 newly listed companies on the exchange rose by more than 60 per cent, triggering temporary suspensions.

Auto parts maker Henan Tongxin Transmission Co. made the biggest gains, surging about 494 per cent by the close, and media reported that the 10 new stocks rose an average of almost 200 per cent from their issue prices.

But the 71 other firms migrated from an existing board posted mixed performances.

Stocks will not be allowed to rise or fall more than 30 per cent in a single trading day on the exchange, although earlier reports said there would be no cap for the first day of listing.

The new exchange is vital for "improving financial support for SMEs, as well as promoting innovation-driven development", Yi Huiman, the chairman of the China Securities Regulatory Commission, said at an opening ceremony.

The new exchange follows the 2019 launch of a Nasdaq-style board focused on science and technology listings on the Shanghai Stock Exchange.

It comes as authorities move to develop the country's capital markets amid slowing economic growth, and as Beijing clamps down on tech giants in a bid to stem the sector's aggressive expansion, alleged data misuse and monopolistic practices.

The Beijing exchange provides a capital-raising conduit for SMEs and takes in companies on the top tier of China's existing National Equities Exchange and Quotations (NEEQ), founded in 2012.

The NEEQ is an entry-level, over-the-counter stock trading platform allowing firms to raise funds before listing on a stock exchange.

Seventy-one companies from the NEEQ — or "New Third Board" — were transferred to the Beijing exchange and 10 others were listed directly.

The Beijing exchange's rules allow it to process listing applications more quickly than some other boards.

Hong Hao of financial services firm Bocom International told AFP that the exchange's long-term success "remains to be seen".

"You need to have credible companies to be listed on the exchange, to generate enough interest," he said.

Many Chinese companies including giants such as Alibaba and Baidu have in the past listed on the more developed US exchanges.

But Beijing has been pressing companies to instead list on home soil, and Chinese firms hoping to trade shares in the United States face heightened scrutiny from regulators there as the economic and tech rivalry between the two countries deepens.

But Hong Kong remains a more likely location for large Chinese companies seeking to list outside the country's mainland, observers note.

FRANKFURT — European Central Bank (ECB) President Christine Lagarde said on Monday she would not "venture" into speculation over interest rate rises in 2023 amid pressure for the bank to define its response to high inflation.

"I don't think I will venture into 2023," Lagarde told the European Parliament's Committee on Economic and Monetary Affairs, repeating her statement from earlier in the month that rates were "very unlikely" to change in 2022.

"Inflation has been surprising to the upside for a while," Lagarde said after the measure hit 4.1 per cent in the eurozone in October, a 13-year high driven by soaring energy prices. 

Nonetheless, the bank expects inflation to remain below its two-per cent inflation target "in the medium term", Lagarde said.

The ECB expected "higher wages in 2022 than in 2021" as employees set about negotiating new pay deals with business, she said.

But there was "no evidence" so far that higher wages were feeding back into prices, creating higher inflation over the long term. 

An early withdrawal from stimulus was "not desirable" while businesses and consumers struggled with high energy prices, and would "represent an unwarranted headwind for the recovery", Lagarde said. 

The ECB has long held interest rate at historic lows, including a negative bank deposit rate that means lenders pay to park excess cash at the central bank.

The bank's policymakers will meet on December 16 to decide on the future of its massive pandemic-era bond purchasing programme.

The 1.85-trillion-euro ($2.12-trillion) pandemic emergency bond-buying programme, the ECB's main crisis fighting tool, is expected to come to an end in March 2022.

DUBAI — Airbus came out strongly at the Dubai Airshow on Sunday with a group order for 255 single-aisle A321 aircraft, marking the first major deal of its kind since the pandemic began.

The European plane-maker's announcement came shortly after its American rival Boeing said it would fulfil an order to convert 11 single-aisle 737s into cargo aircraft, and as the aviation industry slowly recovers from a COVID-induced downturn.

Airbus said the order came from Wizz Air, Frontier, Volaris and JetSMART — all from US company Indigo Partners — for a total value of more than $33 billion, according to the latest list price published by Airbus in 2018.

The total cost of the order was not disclosed, but list rates are rarely applied to large deliveries.

Hungarian low-cost carrier Wizz Air will receive 102 aircraft, American Frontier Airlines will receive 91, while 39 will go to Mexico's Volaris and 23 to Chilean JetSMART. 

Airbus CEO Guillaume Faury said that because the four companies fall under the same aviation-focused equity firm, it allowed for a large order and for an attractive price, adding: "It's a give and take situation."

Deliveries are set to begin in 2025.

Wanted 'to be early' 

Representatives of the embattled aviation industry flocked to the Dubai Airshow on Sunday as the sector emerges from coronavirus pandemic travel restrictions and faces pressure to reduce its impact on climate change.

The five-day event in the United Arab Emirates is the industry's first large gathering since COVID-19 clipped its wings last year, as border closures left airports deserted and hundreds of aircraft idle.

Air traffic has since bounced back, though it was still 53 per cent lower in September compared to pre-pandemic levels.

Commenting on Sunday's deal, Indigo Partners chief Bill Franke said the company wanted "to be early in the (recovery) process". 

Christian Scherer, Airbus Chief Commercial Officer and head of Airbus International, said the Indigo Partners airlines had "acted fast and decisively over the last few months to position themselves for this landmark order as the effect of the pandemic recedes and the world wants more sustainable flying".

Airbus also said Sunday that the UAE's air force ordered two additional A330 Multi-role Tanker Transport (MRTT) aircraft, bringing the number of MRTT planes among its fleet to five. 

Boeing, meanwhile, announced it had signed a contract with an Icelandic company to convert 11 single-aisle 737 aircraft into cargo planes.

The American plane-maker did not disclose the value of the contract with Icelease to convert 11 Boeing 737-800BCFs — previous generation of the MAX series — into cargo aircraft. 

To meet growing demand, Boeing said it would open three new freighter conversion lines in Canada and the United Kingdom, in addition to those recently opened in China and Costa Rica. 

"It was a nascent phenomenon before COVID. Pre-COVID, we just couldn't put enough 737 (cargo planes) out there to satisfy the market," Ted Colbert, CEO of Boeing Global Services, told reporters in Dubai. 

The aviation industry has weathered the global supply chain crisis that has created headaches for the shipping industry.

But amid a slump in global air traffic, during which traditionally half of all air freight was carried in the holds of passenger aircraft, airlines have turned to cargo planes. 

With a decrease in air traffic during the pandemic, hundreds of planes have been abandoned — particularly older generation ones — which could potentially be turned to cargo aircraft. 

Boeing said in a statement it forecast 1,720 freighter conversions over the next 20 years to meet demand, adding it has "more than 200 orders and commitments from 19 customers".

While wide-body aircraft, such as the Boeing 777, 767 and A350 have their own cargo versions, single-aisle aircraft such as the 737 do not.

SHANGHAI — Chinese ecommerce titan Alibaba enjoyed record sales during its Singles Day shopping extravaganza, giving a much-needed boost to the firm after a torrid year in which it became the symbol of a government crackdown that hammered the country's tech sector.

The firm said 540.3 billion yuan ($84.5 billion) was spent as China's army of consumers went on a splurge, despite a much lower-key sales campaign following pressure from the government to tone down the aggressive promotions and rampant consumerism.

Combined sales with industry rival JD.com came in at 889 billion yuan ($139.4 billion) — equivalent to the gross domestic product of many countries — which was also a record and up about a fifth from last year.

Both Alibaba and JD.com reported strong sales of items such as electric appliances, electronics, pet supplies, and cosmetics and other personal-care goods.

JD.com share rose more than four per cent in Hong Kong on Friday, though Alibaba was down more than one per cent.

"Single's Day" — so-called for the 11.11 date — began more than a decade ago and for years was a one-day, 24-hour event on November 11.

But industry players expanded it recently into an extended promotion from November 1-11, with many retailers and platforms offering discounts and pre-sales even earlier.

The shopping festival now dwarfs the US "Black Friday" spree and has become a barometer of consumer sentiment in the world's second-largest economy.

Concerned that Big Tech was becoming too powerful and abusing its market dominance, the government has this year dramatically tightened regulation.

The campaign has rattled investors, slicing billions of dollars off the market capitalisation of Alibaba — which has seen its share price plunge about 30 per cent this year — as well as JD, Tencent and other major players.

In e-commerce, the government has taken specific aim at alleged abuse of user data and monopolistic business practices by platforms, such as banning merchants from selling their products on rival sites.

But the steadily rising consumer sales are also likely to be quietly welcomed by the government, which is moving to create a more modern consumer-driven economy, lessening the traditional reliance on manufacturing, exports and government investment.