Business

HO CHI MINH CITY — Thousands of selfie-taking Ho Chi Minh City residents crammed into train carriages Sunday as the traffic-clogged business hub celebrated the opening of its first-ever metro line after years of delays.

Huge queues spilled out of every station along the $1.7 billion line that runs almost 20 kilometres (12 miles) from the city centre — with women in traditional "ao dai" dress, soldiers in uniform and couples clutching young children waiting excitedly to board.

"I know it (the project) is late, but I still feel so very honoured and proud to be among the first on this metro," said office worker Nguyen Nhu Huyen after snatching a selfie in her jam-packed train car.

"Our city is now on par with the other big cities of the world," she said.

It took 17 years for Vietnam's commercial capital to reach this point. The project, funded largely by Japanese government loans, was first approved in 2007 and slated to cost just $668 million.

When construction began in 2012, authorities promised the line would be up and running in just five years.

But as delays mounted, cars and motorbikes multiplied in the city of nine million people, making the metropolis hugely congested, increasingly polluted and time-consuming to navigate.

The metro "meets the growing travel needs of residents and contributes to reducing traffic congestion and environmental pollution", the city's deputy mayor Bui Xuan Cuong said.

Cuong admitted authorities had to overcome "countless hurdles" to get the project over the line.

'Frustrating' delays

According to state media reports, the metro was late because of "slow capital disbursement, unexpected technical problems, personnel difficulties and the COVID-19 pandemic".

"The delays and cost overruns have been frustrating," said professor Vu Minh Hoang at Fulbright University Vietnam, who warned that with just 14 station stops, the line's "impact in alleviating traffic will be limited in the short run".

However, it is still a "historic achievement for the city's urban development", he added.

With lessons learnt, "the construction of future lines will be increasingly easier, faster, and more cost-efficient", Hoang told AFP.

Back on the train, 84-year-old war veteran Vu Thanh told AFP he was happy to experience below ground in a more positive way after spending three years fighting American troops in the city's famous Cu Chi tunnels, an enormous underground network.

"It feels so different from the underground experience I had years ago during the war. It's so bright and nice here," he said.

Reflecting on the delays, he added: "We built the tunnels to hide from our enemies in the past, so building a tunnel for a train should not be that hard," he added.

"Finally, we made it!"

BERN, Switzerland — European Commission president Ursula von der Leyen visited the Swiss capital recently to seal a new set of agreements aimed at stabilising the country's ties with the bloc after disagreements over freedom of movement across Switzerland's borders.

Switzerland was set to announce it has concluded the package deal with the European Union which would recalibrate relations with the surrounding bloc.

However, the government's green light, after years of sometimes hostile negotiations, is just the first step on the road to refreshing relations between the wealthy Alpine nation and its biggest trading partner.

The Swiss parliament will also have its say — with the hard-right Swiss People's Party (SVP), the country's biggest party, fiercely opposed to any rapprochement with the EU — and the public will likely have the final word in a referendum.

A sticking point in the talks — which has now reportedly been resolved — had been Switzerland's stubborn efforts to secure an exemption to the EU's cherished free movement of people between countries.

On Friday, SVP lawmakers stood outside the parliament in Bern holding up candles in what they called a vigil "for our independence and democracy", in opposition to the "package of lies" in the "EU submission treaty".

It said Switzerland would be forced to pay hundreds of millions of francs to the "crisis-ridden EU", saying the government's "logic is simply perverse: it is handing us Swiss over to the EU — and we are supposed to pay for it!"

SVP president Marcel Dettling said they were "fighting for the self-determination of the Swiss people".

'Delicate balance'

"President Von der Leyen is meeting with the president of Switzerland, Viola Amherd, in Bern," a European Commission spokesperson said Friday, adding that they would host a joint press conference at 1315 GMT.

Bern and Brussels are seeking to simplify and harmonise their ties, which are currently governed by a tangle of more than 120 separate agreements.

Relations plunged when Switzerland, suddenly and without warning, slammed the door on the negotiations in 2021.

The talks tentatively resumed in March, with the goal of concluding a deal by the end of the year.

Unlike previous attempts to seal an overarching framework agreement, the current negotiations have sought to update the existing agreements and conclude new ones on issues like electricity, health and food safety.

In recent days, Swiss media cited diplomatic sources saying that all the issues had been agreed, with the exception of how much Switzerland should pay into the EU's Cohesion Fund, which is aimed at reducing economic and social disparities in the bloc.

A fresh round of discussions on Tuesday "took place in a very positive atmosphere", a European diplomatic source said.

"We believe we have reached what is a very delicate balance, and should be appreciated as such by all parties."

The road to this point has been long: around 200 negotiation meetings have taken place.

Separate slices

Fearing it could be tough to win over voters, Bern last week reportedly changed its strategy, and cut the package of agreements into four separate "slices", according to Swiss public broadcaster SRF.

Each slice could then be put to a referendum separately, reportedly in the hope that it would be easier to win support on each narrow set of issues than on a broad package.

The Swiss Trade Union Federation has already called for further negotiations, warning that the agreement as it currently stands risks hitting Swiss wages.

Unions have also voiced concern at the potential impacts on Switzerland's rail and electricity sectors.

The Swiss business federation Economiesuisse supports an agreement.

It said a deal would "enable Switzerland to maintain the current conditions, allowing its economy to access the European market, and to develop them in important areas".

LONDON — The Bank of England (BoE) on Thursday kept its key interest rate at 4.75 per cent, deciding against a cut in line with the US Federal Reserve (Fed), as UK inflation rises again. 

"We've held interest rates today following the two cuts since the summer," BoE Governor Andrew Bailey said in a statement. 

"We need to make sure we meet the 2 per cent inflation target on a sustained basis," he added following a regular policy meeting and after official data this week showed UK annual inflation rising to 2.6 per cent. 

The expected rate decision came a day after the Fed cut US borrowing costs by a quarter-point but signalled fewer reductions for next year. 

The European Central Bank cut eurozone rates last week while the Bank of Japan made no change in a decision announced Thursday. 

Britain's finance minister Rachel Reeves said she supported the latest BoE call despite the pressure that it puts on Britons. 

Had the BoE cut its rate, retail banks would likely have followed suit by reducing borrowing costs on mortgages. 

"I know families are still struggling with high costs," Reeves said Thursday. 

"We want to put more money in the pockets of working people, but that is only possible if inflation is stable and I fully back the Bank of England to achieve that." 

Bailey joined five other policymakers in voting for no change, while the remaining three called for a cut of 0.25 per centage points as they highlighted "sluggish demand and a weakening labour market". 

"The Bank of England is ringing in the same discordant notes of caution as the Federal Reserve," noted Susannah Streeter head of money and markets at Hargreaves Lansdown. 

"The Fed's guidance yesterday of just two further interest rate cuts next year sparked nervousness... and the Bank's decision has done little to provide much cheer." 

Global stock markets retreated following the Fed's update, while reaction to the BoE's action was muted. 

Britain's Consumer Prices Index reached 2.6 per cent in the 12 months to November, up from 2.3 per cent for October, data showed Wednesday. 

CPI had struck a three-year low of 1.7 per cent in September before higher energy bills pushed it back above the BoE's inflation target. 

November's additional inflation rise is a further blow to the Labour government, which has found efforts to grow the economy come unstuck since winning power in July. 

The BoE reduced its key interest rate in August for the first time since early 2020, from a 16-year high of 5.25 per cent as UK inflation returned to normal levels. 

It cut further last month, while analysts on Thursday forecast that the next reduction will occur in February. 

Major central banks started this year to cut interest rates that had been hiked in efforts to tame inflation. 

UK inflation had soared to above 11 per cent in October 2022, the highest level in more than four decades, as the Russia-Ukraine war cut energy and food supplies, sending prices soaring. 

Companies faced supply constraints also as they struggled to return to the pre-COVID rhythm of working. 

TOKYO — Japanese auto giants Honda and Nissan are in preliminary merger talks to help them compete against Tesla and Chinese electric vehicle makers, media reports said Wednesday.

Shares in Nissan soared as much as 24 per cent, while Honda dipped more three per cent. Mitsubishi Motors — of which Nissan is the top shareholder — gained almost 20 per cent.

Japan's number two and three automakers behind Toyota had already agreed in March to explore a strategic partnership on EVs.

"We are discussing possibilities for cooperation... in a wide range of fields and in various areas, and those possibilities include the latest reports, but there is nothing decided," a Honda spokesman told AFP on Wednesday.

Nissan said: "The content of the report is not something that has been announced by either company... If there are any updates, we will inform our stakeholders at the appropriate time."

Major automakers the world over have been reeling from tough competition in EVs, in particular from Chinese competitors such as BYD.

Volkswagen, for instance, is considering closing German factories for the first time in its history.

Last month, Nissan announced 9,000 job cuts, slashed its sales forecasts and said it would reduce global production capacity by 20 per cent.

Warning of a "severe situation", CEO Makoto Uchida said he would forfeit half his salary.

Nissan has seen a turbulent decade that included an attempted major alliance with France's Renault that saw its former boss Carlos Ghosn arrested in 2018.

In Paris, shares in Renault, which owns a significant stake in Nissan, soared more than six per cent on Wednesday.

Electric race 

Bloomberg reported that an approach by Taiwan's Foxconn — officially known as Hon Hai Precision Industry — to take a controlling stake in Nissan accelerated discussions with Honda.

Foxconn, the world's largest contract electronics manufacturer including for Apple, was not immediately available for comment.

Honda and Nissan are considering operating under a holding company and will soon sign a memorandum of understanding, the Nikkei reported.

Their respective stakes, as well as other details, will be decided later, and they also look to eventually bring Mitsubishi Motors under the holding company, the paper said.

The Financial Times reported that the exploratory talks about a merger were at an early stage.

There are, however, concerns about a possible political backlash since a merger could result in significant job cuts, the FT reported.

Japanese television channel TBS reported that the companies could make an announcement as early as Monday.

Honda is considering several options including a merger, capital tie-up or the establishment of a holding company, executive vice president Shinji Aoyama told Bloomberg.

Overtaken

China overtook Japan as the world's biggest vehicle exporter in 2023, helped by its dominance in EVs, a sector where Japanese firms have lost ground by focusing on hybrid vehicles.

Honda announced plans in May to double investment in electric vehicles to $65 billion by 2030, part of its ambitious target set three years ago of achieving 100 per cent EV sales by 2040.

Nissan has signalled similar ambitions.

It said in March that 16 of the 30 new models it plans to launch over the next three years would be "electrified".

The world's auto giants are increasingly prioritising electric and hybrid vehicles, with demand growing for less polluting models as concern about climate change grows.

At the same time, however, there has been a slowdown in the EV market on the back of consumer concern about high prices, reliability, range and a lack of charging points.

"From Nissan's perspective, the possible merger would provide short-term relief for Nissan, which is under significant financial pressure," Tatsuo Yoshida, Bloomberg Intelligence analyst, told AFP.

"From Honda's perspective, Honda is performing better financially, the benefits for Honda would be more long-term," Yoshida said, adding, however, that agreeing on a deal would be "very difficult".

NEW YORK — Global shares mostly retreated Monday as markets awaited a Federal Reserve interest rate decision while concerns over political battles in Europe and China's struggling economy pressured equities.

The Nasdaq was the day's outperformer, surging more than one per cent to a fresh all-time high behind big gains for Broadcom, Google-parent Alphabet and other tech names.

But the Dow fell, along with bourses in Europe and Asia as traders fretted over political instability in France and Germany.

Bitcoin, meanwhile, hit a new record high, reaching $107,115.89 as it continues to gain support from Donald Trump's backing of cryptocurrencies.

Investors are turning their attention to Wednesday's US Federal Reserve decision on borrowing costs at its last policy meeting of the year before Trump takes office next month.

The Fed is widely expected to cut its key lending rate for a third straight time, reducing it by a quarter point despite a recent uptick in inflation.

But there are fears it will have to slow its pace of easing next year owing to sticky inflation and bets that Trump's tax cuts and tariffs will reignite price increases.

Kathleen Brooks, research director at trading platform XTB, said that there would be "an elephant in the room" at the Fed meeting.

"How to accurately forecast economic activity and inflation rates, when the President-elect's policies are expected to have a huge economic impact and could trigger more inflation?" she wrote.

China and Europe worries 

Investors also tracked data showing that Chinese retail sales grew 3.0 per cent last month, much slower than in October and well off the five per cent forecast.

Hong Kong and Shanghai stock markets closed lower after the data release while oil prices fell slightly on concerns over Chinese demand.

Chinese officials have unveiled a string of aggressive measures in recent months aimed at bolstering growth in the world's second-biggest economy.

In Europe, the Paris stock market fell 0.7 per cent after Moody's downgraded France's credit rating Saturday following months of political crisis and the appointment of centrist Francois Bayrou as prime minister.

"The market is likely to watch closely to see how the political problems in France affect sentiment in the German economy," said Jochen Stanzl, an analyst at CMC Markets.

Frankfurt slid 0.5 per cent as Germany's embattled center-left Chancellor Olaf Scholz lost a confidence vote, triggering elections set for February 23.

The European Central Bank cut rates again last week as inflation appears to come under control and the eurozone economy shows signs of weakness.

ECB chief Christine Lagarde said Monday that the bank would keep lowering interest rates, while warning that higher US tariffs under Trump could hit growth in the bloc.

A closely watched survey released Monday showed that business activity declined further in the eurozone in December, though less sharply than the previous month thanks to an upturn in the services sector.

LONDON — British Prime Minister Keir Starmer will visit Norway on Monday where he is expected to tout a "green industrial partnership" on renewable energy and carbon capture to tackle climate change.

It comes as Starmer's new Labour government seeks ways to meet its commitments to completely decarbonise the UK's electricity production by 2030, reduce emissions by at least 81 per cent compared to 1990 levels by 2034 and become carbon-neutral by 2050.

To be formally signed in the spring, the agreement with Oslo would help Britain "seize the opportunities from a new era of clean energy, driving investment into the UK and boosting jobs both now and in the future", Starmer was cited as saying in a statement from his office.

Precise details of the partnership's contents were not made available ahead of Starmer's meeting with his Norwegian counterpart Jonas Gahr Store.

At the beginning of October, the Labour government announced 22 billion pounds ($28 billion) in investment over 25 years to develop carbon capture and storage on two former industrial estates in the north of England.

Carbon capture, utilisation and storage is a technology that seeks to eliminate emissions created by burning fuels for energy and from industrial processes.

The carbon is captured and then stored permanently in various underground environments.

"Our partnership with Norway will make the UK more energy secure, ensuring we are never again exposed to international energy price spikes …," said Starmer.

Quoted in the Downing Street release, Norway's Prime Minister Store hailed the agreement as "important to facilitate more green jobs both in Norway and the UK, and for advancing the green transition".

The two North Sea countries already have extensive energy ties, with Norway being one of the UK's main suppliers of gas.

Several Norwegian companies already have a strong presence in the British market.

Norwegian energy giant Equinor has partnered with BP in a number of carbon capture and storage projects in the UK, while Vagronn is also involved in a floating wind farm project in Scotland.

The UK's ambition to become "a world-leader in carbon capture" comes despite doubts over the technology's effectiveness at tackling global warming given the costs and complexity involved.

It has however been advocated by the UN's Intergovernmental Panel on Climate Change (IPCC) and the International Energy Agency (IEA), especially for reducing the CO2 footprint of difficult to decarbonise industries like cement and steel.