Business

BEIJING — Chinese leader Xi Jinping headed to Peru on Wednesday, bound for a meeting of Asia-Pacific Economic Cooperation (APEC) organisation leaders overshadowed by fears of renewed global trade tensions under Donald Trump.

Xi will join leaders from the United States and other Asia-Pacific nations in the Peruvian capital Lima for the APEC gathering, after which he will go to Brazil for a G20 summit.

China — the world's second-largest economy — is grappling with a prolonged housing crisis and sluggish consumption that could worsen under Trump, who has promised to slap 60 per cent tariffs on Chinese imports.

While in Peru, the Chinese leader will also inaugurate South America's first Chinese-funded port, in Chancay, around 50 miles (80 kilometres) north of Lima.

Expected to serve as a major trade hub, the $3.5-billion complex is seen as symbolic of Beijing's growing influence in South America, where it has built a vast array of railways, highways and other infrastructure.

Bilateral trade between the Asian giant and Peru, one of Latin America's fastest-growing economies over the past decade, stood at nearly $36 billion in 2023, making Peru China's fourth-largest Latin American trading partner.

The Chancay port will also serve Chile, Colombia and Ecuador, among other South American countries, allowing them to skirt ports in Mexico and the United States for trade with Asia.

Starting Wednesday, Lima will receive government ministers and business leaders of APEC member countries, which also include Russia, Japan, South Korea, Indonesia, Chile and Australia.

Ministerial meetings will take place Thursday, followed by talks at the level of heads of state the following two days.

State broadcaster CCTV said Xi will be accompanied in Peru by Foreign Minister Wang Yi.

Peru to Brazil 

After Lima, Xi will go to the Brazilian coastal city of Rio de Janeiro from November 17 to 21 for a summit of G20 leaders.

China is Brazil's top trading partner, exceeding $180 billion in each-way trade in 2023, with semiconductors, phones and pharmaceuticals dominating exports to the South American country.

Since returning to power last year, Brazilian President Luiz Inacio Lula da Silva has carried out a delicate balancing act as he seeks to deepen ties with China while improving relations with the United States.

Both Brazil and China have sought to position themselves as mediators in the conflict in Ukraine, while declining to sanction Russia for its invasion.

A visit this year by Vice President Geraldo Alckmin was seen as paving the way for Brazil to join China's massive Belt and Road Initiative infrastructure project.

A number of South American nations, including Peru, have signed up to the initiative, a central pillar of President Xi's bid to expand China's clout overseas.

FRANKFURT, Germany — German chemicals giant Bayer on Tuesday cut its forecast for 2024 operating earnings after a poor performance in its agrochemicals division hit quarterly profits.

The group reported a net loss of 4.18 billion euros ($4.45 billion) in the third quarter, with revenues in its agricultural unit down 3.6 per cent.

A heavy drop in sales of its key glyphosate-based weedkillers — at the centre of long-running legal fights over claims they cause cancer — weighed particularly heavily.

Earnings at the agricultural unit were also hit by hefty writedown on assets.

"The development of the agricultural market has been weaker than anticipated, especially in Latin America," the group said in a statement.

The Leverkusen-based group, which also makes pharmaceuticals and consumer health products, confirmed its sales targets for 2024.

But it lowered its outlook for EBITDA — or operating earnings, a key measure of corporate profitability — to between 10.4 billion and 10.7 billion euros from a previous forecast of between 10.7 billion and 11.3 billion euros.

It also cut the outlook for profit margins in the agrochemicals division.

Elsewhere, Bayer — the maker of Aspirin — reported slightly higher sales in its pharmaceuticals division but a drop in operating earnings due to currency effects.

The consumer health unit reported higher sales and earnings.

Bayer has been dogged in recent years by massive litigation issues linked to the Roundup weedkiller, a problem it inherited in the 2018 takeover of US firm Monsanto.

The group has faced a wave of lawsuits in the United States over claims Roundup, which contains the active ingredient glyphosate, causes cancer. Bayer denies the claim but has spent billions of euros on legal costs.

Group CEO Bill Anderson, hired last year to help steer the troubled group in a new direction, is aiming to make savings of two billion euros a year from 2026.

He has previously ruled out any imminent break-up of the group despite facing pressure from activist investors to do so.

LONDON — Major stock markets diverged, the dollar gained and bitcoin extended a record run higher Monday, as traders took their lead from events in the United States and China.

Chinese stock markets closed mixed and oil prices slid after China's latest plans to stimulate its economy fell short of expectations.

Europe saw solid gains around midday, tracking events in the United States where president-elect Donald Trump is putting together his cabinet.

"European markets are enjoying an upbeat start to the week, with the uncertainty around trade relations with the US seemingly being put on the backburner," said Joshua Mahony, analyst at traders Scope Markets.

Stocks rallied last week on hopes that a second Trump administration — supported by a Republican Congress — would push through a slew of business-friendly policies including deregulation and tax cuts, offsetting concerns about possible trade wars.

However, the mood changed after China said Friday it would ramp up a local debt ceiling, but fell short of announcing any new growth-boosting measures.

Hopes had been building all last week that officials would deploy a "bazooka" stimulus, the need for which was highlighted Sunday by data showing Chinese inflation slowed last month and came in below forecasts.

Authorities in late September began unveiling a raft of policies aimed at reigniting the economy, which has failed to fire since the lifting of tough COVID-fighting rules at the end of 2022.

Among them were interest-rate cuts and an easing of home-buying measures as leaders try to address a crisis in China's vast property sector.

Wall Street indices hit fresh record highs Friday, helped also by another cut in US interest rates by the Federal Reserve.

Observers said there were concerns about the impact of Trump's planned tariffs, which he said would have a particular focus on China, fuelling talk of another trade war between the economic superpowers.

Pepperstone Group's head of research Chris Weston said Beijing may have had an eye on this in its pre-weekend announcement.

"Many feel that China is keeping its tactical powder in play for such time as the Trump-China tariff negotiations build, and they can respond in a more targeted fashion to stem the likely economic fallout," he noted.

Weston added that there were downside risks to Chinese stock markets and yuan in the short term.

Bitcoin hit an all-time high $82,387.50 Monday on optimism that Trump would ease regulations surrounding the cryptocurrency.

"We shouldn't expect this bullish trend to be interrupted for a long time — about a year," Stephane Ifrah, of French crypto asset management company Coinhouse, told AFP.

"The next level for me is $100,000."

AMMAN — Board member of the Jordan and Amman chambers of industry Ahmad Khodari highlighted the "quality and competitiveness" of Jordanian industrial products, which qualifies them to lead Arab exports to China. 

Following an industrial delegation’s visit to China, Khodari emphasised the "strong ties" between Jordan and China, where Beijing is a major trading partner, the Jordan News Agency, Petra, reported. 

He added that the delegates, during the visit that lasted for several days, noted significant Chinese interest in Jordanian imports, highlighting a valuable opportunity for Jordanian industries to access one of the world’s largest markets. 

Khodari, who also chairs the Jordan Exporters and Producers Association, stressed the importance of expanding Jordanian exports and attracting more investments, especially in the industrial sector.

The delegation toured factories in Shanghai, observing advancements in fields such as electronics, AI, and medical supplies. The delegates also discussed potential collaboration and means to transfer Chinese manufacturing expertise to the Kingdom.

At the China International Import Expo, the delegation explored future participation by Jordanian manufacturers, while meetings with Chinese and Arab business owners went over ways to increase imports from Jordan. 

The visit, organised by Iris United Group, a China-based company founded by Jordanian investors, also included a meeting with scientists from the Fudan University to check on the latest developments in neuroscience research.

BEIJING — China last week unveiled some of its most ambitious plans in years to lift local government debt and boost its economy, following a meeting of lawmakers eyeing the possibility of intensified trade tensions with US president-elect Donald Trump.

Local governments in China face a ballooning debt burden of $5.6 trillion, according to Beijing, raising worries about wider economic stability.

The International Monetary Fund (IMF) put the figure at $8.4 trillion last year.

Policymakers gathered in Beijing this week voted to swap their hidden debts — defined as borrowing for which a government is liable, but which is not disclosed to its citizens or to other creditors.

The move would raise "the local government debt limit by six trillion yuan, which will be used to replace existing hidden debts, freeing up space for local governments to better develop the economy and protect people's livelihood," state broadcaster CCTV said.

The move was taken after "fully considering the international and domestic development environment, ensuring the smooth operation of the economy and finance," Finance Minister Lan Fo'an told a press conference in Beijing.

"Since the beginning of this year, some new situations and problems have arisen in economic operations," he admitted.

The debt ceiling will be raised every year from 2024 to 2026 "to support local governments in replacing all kinds of hidden debt", he said.

A total of $558 billion of "hidden debt can be replaced", Lan explained.

And $112 billion "will be arranged from new local government special bonds every year for five consecutive years to supplement government financial resources", he added.

Lawmakers also approved a new energy law to promote carbon neutrality" as Beijing moves ahead with its pledge to decarbonise its economy by 2060.

President and Chief Economist at Pinpoint Asset Management Zhiwei Zhang, said the debt swap "is an important policy measure which helps local government to alleviate their debt burden".

"This is expected by the market, but nonetheless the confirmation of such policy is positive," he said.

Taking stock of Trump

Officials were this week keeping close tabs on the US vote as they gathered in the Chinese capital for a meeting of the country's top lawmaking body.

Trump promised during his campaign of punishing tariffs on Chinese goods that threaten further grief for the world's second-largest economy, which is already grappling with a prolonged housing crisis and sluggish consumption.

Observers say Beijing could seek to cushion that blow with a long-awaited "bazooka stimulus" for the economy — though caution details might still take time.

This week's meeting, originally scheduled for late October, was likely pushed back to allow "policymakers a chance to address a possible Trump win", Chief Economist for Greater China at ING Lynn Song, said.

"In our view, the odds for a larger policy support package will rise somewhat with a Trump victory," he added.

Trump's victory is "not necessarily bad for China as this may 'pressure' Beijing for a bigger stimulus", CIO of UOB Kay Hian Wealth Management Qi Wang, said on X.

Beijing began to unveil a raft of measures in September aimed at boosting economic activity, including rate cuts and the easing of some home purchasing restrictions, but analysts have bemoaned the lack of detail so far.

'Turning point'

Trump's re-election provides a need for greater urgency, experts say, though caution may still prevail as officials try to avoid piling on more government debt.

"Any potential stimulus size may be bigger, but so is the pressure," Senior Economist at Natixis Gary Ng, said.

"The market may still not get the economic boosters it wants," he warned.

In Beijing on Friday, people acknowledged recent woes but expressed cautious optimism about the future of the economy.

Han Xi, a 32-year-old man from Shanxi province in northern China, began a new auditing job in Beijing this week after resigning from his previous company in April.

"I have sent out resumes during this period, but you can see it takes more than half a year to get a new job," Han told AFP, adding that "many companies are laying off employees right now".

"But from a macroeconomic perspective, I'm generally optimistic," he added.

"Even though we're still in a downturn cycle, I think we are close to the turning point, though we haven't quite reached it yet."

TOKYO — Japanese automaker Nissan on Thursday announced 9,000 job cuts as it slashed its annual sales forecast, saying it was taking urgent measures to tackle "a severe situation".

The company reported a 93 per cent plunge in net profit in the first half as CEO Makoto Uchida told reporters that weak sales in the North American market were a major factor.

Nissan and its domestic rivals are also struggling to stand their ground in China, as fast-growing electric vehicle firms backed by Beijing race ahead.

"Facing a severe situation, Nissan is taking urgent measures to turnaround its performance and create a leaner, more resilient business capable of swiftly adapting to changes in the market," a company statement said.

"Nissan will cut global production capacity by 20 per cent and reduce its global workforce by 9,000," it added.

Uchida "will voluntarily forfeit 50 per cent of his monthly compensation starting in November 2024 and the other executive committee members will also voluntarily take a pay reduction accordingly", the statement said.

The firm now expects net sales of 12.7 trillion yen ($80 billion) — down from 14 trillion previously forecast.

But Nissan did not issue a net profit forecast on Thursday, having downgraded it in July to 300 billion yen. In the six months to September, net profit was just 19.2 billion yen.

"Net income is to be determined due to ongoing assessment of costs necessary for the planned turnaround efforts," Uchida said.

Nissan's "core" vehicle models are not performing as well as before in North America, he added. "From the cost perspective, and the brand-strength perspective, we will rebuild our brand in America," Uchida said.

Among other measures, the automaker will reduce its stake in Mitsubishi Motors by selling shares back to the firm.

It said its stake in Mitsubishi will fall to around 24 per cent from 34 per cent currently. Uchida added that Nissan would keep close ties with the company.

Nissan has seen a turbulent decade that included the shock 2018 arrest of former boss Carlos Ghosn, who later jumped bail and fled Japan concealed in a music equipment box.

Ghosn remains an international fugitive in Lebanon and denies the allegations against him. He said he fled Japan because he did not believe he could receive a fair trial.

When asked about Donald Trump's victory in the US presidential election, Uchida said Nissan was "hearing various things, like tariffs, but it's not just us".

"We will be lobbying, and the direction of our medium- to long-term plans should remain, but we will conduct our business while monitoring the situation carefully," he added.

HONG KONG — The dollar surged and bitcoin hit a record high Wednesday before Donald Trump claimed victory in the US election, with traders ramping up bets on fresh tax cuts, tariffs, and rising inflation.

While polls had shown the race on a knife edge, the Republican fared far better than his Democratic opponent Vice President Kamala Harris as results rolled in.

Both candidates picked up expected wins in safe states, but indications that the business tycoon was on course for a second term boosted the so-called Trump Trade.

While victory is not yet official, Trump claimed it in a speech in Florida, saying: "We are going to help our country heal... We have a country that needs help and it needs help very badly."

News that the former president's party had won control of the Senate boosted the prospect of sweeping tax cuts, more tariffs, and deregulation — seen as a boost for the greenback.

The dollar jumped 1.5 per cent to 154.38 yen, its highest since July, while it was also up more than one per cent against the euro and more than three per cent against the Mexican peso.

Bitcoin sprung $6,000 higher to a record $75,371.69, topping its previous peak of $73,797.98 in March.

Trump has pledged to make the United States the "bitcoin and cryptocurrency capital of the world" and to put tech billionaire Elon Musk in charge of a wide-ranging audit of governmental waste.

"The price of bitcoin has closely followed Trump's position in the polls and on betting markets," Russ Mould, an analyst at AJ Bell, said ahead of Tuesday's US election.

Investors are "potentially taking the view that a Republican victory would lead to a surge in demand for the digital currency", he added.

Analysts said a clean sweep of Congress and the White House for Trump and Republicans would likely boost the dollar and Treasury yields owing to his plans to cut taxes and impose tariffs on imports.

Peter Esho, economist and founder at Esho Capital, said: "The markets are scrambling to figure out what happens next, but for the time being, the market is pricing in a higher growth and higher inflation outlook."

'Trade and tariffs and taxation'

And Neil Wilson at Finalto trading group said: "Trade and tariffs and taxation would be the three Ts of the Trump Trade, followed by deregulation."

But he added: "Bear in mind as a caveat that the House is still up for grabs and Trump had complete control of Congress last time and it didn't mean he could do everything he said he world."

Such an outcome could provide a headache for Federal Reserve boss Jerome Powell as he continues his battle to bring inflation to heel, with Trump's plans considered inflationary.

The election comes as the central bank prepares to deliver its latest policy decision Thursday amid expectations it will cut interest rates by 25 basis points, having lowered them by 50 points in September.

The dollar's surge against the yen rallied stocks more than three per cent in Tokyo at one point thanks to gains in exporters, while markets Sydney, Singapore, Taipei, Mumbai and Bangkok also rose.

However, there were losses in Shanghai, Seoul, Wellington, Manila and Jakarta.

Hong Kong was also well down — at one point diving almost three per cent — on worries about the impact of a Trump presidency on China's economy and relations between Beijing and Washington.

London, Paris and Frankfurt all rose at the open.

US futures also rallied.

Traders had been given a strong lead from Wall Street, where all three main indexes climbed more than one per cent.

While the result of the election is being closely followed globally, it is of real interest in China after Trump vowed to ratchet up a trade battle with the economic titan by imposing massive tariffs on goods from the country.

The vote comes as Chinese leaders hold a key meeting to hammer out a package of stimulus measures aimed at kickstarting growth and providing support to the colossal property sector, which is mired in a painful debt crisis.

Beijing said Wednesday it hoped for "peaceful coexistence" with the United States as Trump looked set for victory.

RIYADH, Saudi Arabia — Energy giant Saudi Aramco reported a 15 per cent year-on-year drop in third quarter profit on Tuesday, citing low oil prices.

The fall in net income to $27.56 billion this year from $32.58 billion in 2023 "was mainly due to the impact of lower crude oil prices and weakening refining margins", the firm said in a statement posted to the Saudi stock exchange.

Saudi Arabia, the world's biggest crude exporter, is currently producing roughly nine million barrels per day (bpd), well below its capacity of 12 million bpd.

This reflects a series of output cuts since October 2022.

On Sunday Saudi Arabia and seven other members of the OPEC+ group of oil-producing nations said they were extending a 2.2 million-barrel reduction announced in November 2023 by another month, until the end of December.

"Aramco delivered robust net income and generated strong free cash flow during the third quarter, despite a lower oil price environment," chief executive Amin Nasser said in a statement.

The firm was striving "to cement our position as a leading global energy and petrochemicals player", he added.

Aramco is the jewel of the Saudi economy and the main source of revenue for Crown Prince Mohammed bin Salman's Vision 2030 reform agenda, which aims to set the Gulf kingdom up for a prosperous post-oil future.

Its profits help finance flagship projects including NEOM, the planned futuristic mega-city being built in the desert, a giant airport in Riyadh and major tourism and leisure developments.

Aramco reported record profits in 2022 after Russia's invasion of Ukraine sent oil prices soaring.

But its profits dropped by a quarter last year because of lower oil prices and production cuts.

Profits were down 14.5 per cent in the first quarter of this year and 3.4 per cent in the second quarter.

Lower expectations 

The year-on-year drop in Aramco's profits "isn't coming as a surprise to the government which has already revised down revenue expectations for this year based on weakening oil markets", said Jamie Ingram, senior editor at the Middle East Economic Survey.

"When it comes to oil production policy, they'll be trying to assess what will ultimately bring in the most revenue. Is it maximising volumes or maximising prices? For now, the strategy remains the latter."

The IMF said in April that, at current production levels, Saudi Arabia's fiscal break-even oil price would be $96.2 per barrel in 2024.

Brent, the international benchmark, has been volatile and consistently well below that, priced at around $75 per barrel on Tuesday.

The Saudi finance ministry said in September it expected a budget deficit of 2.3 per cent of GDP in 2025 and for deficits to continue through 2027.

The government's stake in Aramco, one of the world's biggest companies by market capitalisation, is around 81.5 per cent.

Aramco's initial public offering in 2019, the biggest flotation in history, raised $29.4 billion, and a secondary offering this year of nearly 1.7 billion shares fetched $12.35 billion.

In January, Aramco said it had been instructed to abandon a plan to increase production capacity to 13 million barrels per day, up from its current level of 12 million bpd.

Analysts said the surprise announcement could reflect a lack of confidence in demand, although Energy Minister Prince Abdulaziz bin Salman said it was motivated by the transition to cleaner fuels.

Saudi Arabia has pledged to achieve net zero carbon emissions by 2060, a statement that has drawn intense scepticism from environmental activists.

Aramco has also vowed to achieve "operational net-zero" carbon emissions by 2050, which does not include the emissions from customers burning its products.