Business

BEIJING — Chinese consumer prices fell in January at their quickest rate in more than 14 years, data showed on Thursday, as the country's leaders struggle to revive buying sentiment in the world's second-biggest economy.

The reading will likely add to calls for officials to do more to breathe life into the economy, with central bank interest rate cuts and measures to boost lending having little impact so far. 

The 0.8 per cent drop in the consumer price index, revealed by the National Bureau of Statistics (NBS), marked the fourth straight month of deflation and was much bigger than the 0.5 per cent fall forecast in a survey by Bloomberg News.

The reading was the worst since the second half of 2009, during the global financial crisis.

And a 2.5 per cent plunge in the producer price index (PPI) — which measures the cost of goods leaving factories — signalled continued weakness.

The NBS said the figures reflected the "high base of the Spring Festival holiday in the same period last year".

China slipped into deflation in July for the first time since 2021 and — apart from a brief rebound in August — has been in constant decline since.

"The primary drag on inflation continued to be food prices, which fell by 5.9 per cent year-on-year, the lowest level on record," Lynn Song, chief economist, Greater China, at bank ING, said in a note.

She also pointed to figures showing costs rising month-on-month.

"While a far cry from the above-target inflation levels seen in many other economies, these numbers do not imply China is stuck in a deflationary spiral," Song said.

"We see a high likelihood that January's data could mark the low point for [year-on-year] inflation in the current cycle."

While deflation suggests goods were cheaper, it poses a threat to the broader economy as consumers tend to postpone purchases, hoping for further reductions.

A lack of demand can then force companies to cut production, freeze hiring or lay off workers, while potentially also having to discount existing stocks — dampening profitability even as costs remain the same.

Officials have unveiled a series of measures aimed at boosting the economy — which has failed to rebound even after strict zero-COVID policies were lifted at the end of 2022 — with analysts warning a "bazooka" stimulus plan was needed to restore confidence. 

"China needs to take actions quickly and aggressively to avoid the risk of deflationary expectation to be entrenched among consumers," Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, said.

China's sinking prices are in stark contrast with the rest of the world, where inflation remains a persistent bugbear, forcing central banks to ramp up interest rates.

PARIS — French group TotalEnergies reported on Wednesday the highest profit of its history for 2023, underpinned by performances in its liquefied natural gas and electricity divisions.

Net profit came in at $21.4 billion, an increase of 4 per cent over 2022.

Its bottom line put the French energy conglomerate ahead of its global peers Shell, BP, Exxon-Mobil and Chevron which all reported lower earnings in the face of weaker energy prices.

But TotalEnergies's 2022 net profit had been weighed down by a huge exceptional charge — $15 billion — from its withdrawal from Russia following that country's invasion of Ukraine.

Once non-recurring items were stripped out, profits suffered a sharp downturn last year, with adjusted net profit falling 36 per cent to $23.2 billion.

Oil and gas prices dropped some 10 percent on average last year from 2022 when spiking oil prices had boosted earnings at energy companies worldwide.

Chairman Patrick Pouyanne called the results "robust", saying in a statement they had been achieved in "an uncertain environment". Hydrocarbons had performed well, he said.

Still, the 2023 net profit figure fell short of forecasts by financial analysts, who had been looking for a figure of up to $23.7 billion.

The company's share price dropped around 1.5 per cent in early Paris stock exchange trading in reaction.

Controversial projects 

TotalEnergies has pursued its diversification towards low-carbon electricity production, but continues to be criticised by environmental groups for its ongoing investment in fossil fuels because of their climate impact.

The group announced in September that it would increase hydrocarbon production by an annual 2 to 3 per cent over five years.

Several court cases against the company are pending, including for its land acquisition practices for controversial projects in Uganda and Tanzania slammed by environmentalists.

TotalEnergies is pushing ahead with its Tilenga drilling project in Uganda and the 1,443-kilometre East African Crude Oil Pipeline to transport crude to the coast in Tanzania.

Tilenga targets oil under the Murchison Falls nature reserve in western Uganda with a planned 419 wells, triggering fears for the region's fragile ecosystem among the people who live there and environmentalists.

Drilling began in mid-2023 and production is slated for 2025.

TotalEnergies has argued that such projects are needed to meet world demand for energy, and points to its efforts to transition to low-carbon production, notably in solar and wind energy.

The energy giant proposed a 7.1 per cent increase in its annual dividend paid out to shareholders.

RIYADH — Saudi Arabia drew 27 million foreign tourists in 2023 and has more than doubled its goal for the end of the decade, an official said on Tuesday. 

The announcement came less than five years after the Gulf kingdom fully opened up to tourism and as fears persist that the ongoing Hamas-Israel war could engulf the wider region. 

"We have reached 100 million tourists this year, 77 million from home, 27 million from abroad, over 100 million," Tourism Minister Ahmed Al Khateeb said at a conference organised by Saudi Arabia's sovereign wealth fund, describing the 2023 figures. 

Authorities now hope to hit 150 million tourists by 2030, up from an earlier goal of 100 million, with 70 million of those coming from abroad, up from an earlier goal of 30 million, he said. 

Tourism is an important element of Crown Prince Mohammed Bin Salman's Vision 2030 reform agenda, which aims to help the world's biggest crude exporter transition away from fossil fuels and prepare for an eventual post-oil future. 

Home to Islam's holiest sites in Mecca and Medina, Saudi Arabia has long welcomed pilgrims as well as business travellers, but it inaugurated a general tourism visa only in 2019, just months before the coronavirus pandemic decimated the industry globally. 

New resorts along the Red Sea coast are expected to be a major draw, though recent attacks on Red Sea shipping by Houthi rebels in neighbouring Yemen have revived security concerns in the area. 

The Houthis, who have been at war with a Saudi-led military coalition since 2015, say their attacks are an act of solidarity with Palestinians and a protest against the Hamas -Israel war that has been raging in the Gaza Strip since October.

ROME — A convoy of tractors was poised on Saturday to descend on Rome as farmers' protests caused disruptions across Europe, though they wound down in France following government concessions.

Farmers have expressed anger at what they say are excessively restrictive regulations on agriculture and unfair competition, among other grievances.

The movement erupted in France last month and there have also been protests in Germany, Belgium, Poland, Romania, Greece and The Netherlands.

Farmers have blocked motorways and disrupted traffic in key cities with convoys of tractors.

In Italy on Saturday, around 150 tractors massed in Orte, about an hour north of Rome.

Protesters there called for better pay and conditions and announced their imminent arrival in the Italian capital, an AFP reporter saw.

"Italian agriculture has woken up," said protester Felice Antonio Monfeli.

"It's historic and the people here are proving it. For the first time in their history, farmers are united under the same flag, that of Italy."

The demonstrators have for days been calling for talks with Prime Minister Giorgia Meloni's government, without having had a response so far.

"The situation is critical, we cannot be slaves in our own companies," said another protester, Domenico Chiergi.

Greek farmers

consider escalation 

In Greece, around 2,000 farmers protested in the country's second-largest city of Thessaloniki on Saturday calling for increases in aid.

Their action came a day after Prime Minister Kyriakos Mitsotakis announced further support measures.

Some farmers from the mountain villages of Thessaly threw chestnuts and apples that had spoiled because of the natural disasters that hit the region.

"We have no food, we cannot put our lives in discount," Kostas Tzelas, president of the Rural Associations of Karditsa, told AFP.

"We want to stay on our land and not become migrants." 

Mitsotakis has already extended the refund of a special consumption tax on oil and a discount on rural electricity from May to September.

It is among a package of measures whose cost Mitsotakis put at more than one billion euros ($1.1 billion).

But Tzelas dismissed these measures as "peanuts".

The president of a union of agricultural associations, Rizos Maroudas, told reporters a meeting was scheduled next week "to decide the escalation of blockades".

German, Belgium,

The Netherlands 

In Germany, hundreds of farmers on tractors disrupted access to Frankfurt airport, the country's busiest, in opposition to a reform of diesel taxation, police said.

A Hesse farmers' association estimated vehicle numbers at around 1,000, while police said 400 tractors took part before the protest ended in the early afternoon.

A protest on the Dutch-Belgian border that had shut down a main motorway was wound down on Saturday evening, the Belga news agency reported.

Farmer discontent has also affected non-EU Switzerland, where around 30 tractors paraded in Geneva on Saturday in the country's first such protest since the movement started elsewhere in Europe.

"As a young person, it scares us a lot not knowing if there is a future in our profession," Antonin Ramu, a 19-year-old apprentice winegrower, told AFP.

He welcomed the transition to a more environmentally friendly agriculture but asked for more help in the face of competition from countries without the same standards.

In Spain, the three main farmers' unions have announced more protests in the coming weeks, with a major demonstration planned for Barcelona on February 13.

In France, security forces cleared the few remaining blockades of motorways a day after the main agricultural union called for them to be lifted following government concessions.

Their mobilisation had forced new Prime Minister Gabriel Attal's government to pause a plan to reduce pesticide and insecticide use and offer an aid package of 400 million euros.

Romanian farmers and hauliers also announced the end of their road-block protest on Saturday following an agreement with the government.

The EU is scrambling to address concerns ahead of European Parliament elections this year.

The European Commission on Thursday promised measures to defend the "legitimate interests" of EU farmers, notably the much criticised administrative burdens of the bloc's Common Agricultural Policy.

BEIJING — China's economic slowdown is likely to persist in the coming years as the Asian giant struggles with sagging productivity and a rapidly ageing population, the International Monetary Fund (IMF) said recently.

The world's second-largest economy last year saw some of its slowest growth in decades, as a debt crisis in the property sector added to geopolitical tensions and weakening global demand.

And an IMF report on Friday forecast growth to decline further to 3.5 per cent by 2028 "amid headwinds from weak productivity and population aging", adding that "uncertainty surrounding the outlook is high".

It previously forecast growth of 4.6 per cent for this year.

Driving the slowdown is a years-long crisis in the country's real estate market, once a key growth pillar but now mired in debts that may threaten China's financial system.

Property giant Evergrande has become a symbol of the sector's woes, racking up astronomical debts of more than $300 billion.

A court in Hong Kong this week issued an order that should kickstart the liquidation of Evergrande's overseas assets, though the company insisted the decision would not affect its domestic operations.

And the IMF report warned a continued slowdown in the property market "could further weigh on private demand and worsen confidence".

Sonali Jain-Chandra, Mission Chief for China at the IMF's Asia and Pacific Department, told a media briefing Friday that the sector was "in the midst of a multi-year transition to a smaller and more sustainable size".

"Some of this adjustment has happened, but we're still in the midst of it," she explained, adding that "more needs to be done" to prop up the ailing sector.

China's economy grew by 5.2 per cent last year, according to official statistics, beating a modest target of around five per cent.

Exports — long a key driver of growth — notched their first decline in seven years, dragged down by notable tensions with Western countries and a decline in global demand.

Chinese officials are due to release their growth target for 2024 in March.

TOKYO — China's global dominance in electric cars helped it overtake Japan as the world's biggest vehicle exporter last year, official data confirmed on Wednesday.

Japanese giants such as Toyota and Nissan have been much more cautious than their Chinese counterparts like BYD on electric vehicles (EVs), banking instead on hybrid models.

Figures released Wednesday by the Japan Automobile Manufacturers Association showed shipments of cars, trucks and buses rising 16 per cent to 4.42 million last year.

But China exported almost 500,000 more — 4.91 million vehicles in total, as reported by the China Association of Automobile Manufacturers this month.

China's customs bureau put the number even higher at 5.22 million, a huge year-on-year rise of 57 per cent, with one in three fully electric vehicles.

The country had already been shipping more vehicles than Japan on a monthly basis, but Wednesday's data confirmed that it was also number one for a whole year.

Unlike Chinese firms, Japanese automakers including Toyota — re-confirmed on Tuesday as the world's largest company by unit sales — also make huge volumes of vehicles in other countries.

In 2022, vehicle production in Japan excluding motorcycles totalled 7.84 million units, but overseas production was almost 17 million. Japanese manufacturers have long bet on hybrids that combine battery power and internal combustion engines, an area they pioneered with the likes of the Toyota Prius.

But they have vowed to up their game, with Toyota aiming to sell 1.5 million EVs annually by 2026 and 3.5 million by 2030.

The company is also hoping to mass-produce solid-state batteries that charge faster than conventional ones and give EVs more range.

Helped by strong government support, Chinese EV firms have stolen a march on more established rivals such as General Motors, Volkswagen and Toyota. BYD in the fourth quarter of 2023 even snatched Tesla's crown for most sales of all-electric vehicles, data this month showed.

On Tuesday BYD — it stands for "Build Your Dreams" — which also sells batteries to the likes of Tesla, BMW and Mercedes, said it expects net profit for last year to reach 29-31 billion yuan ($4.1-4.4 billion).

But China's success in EVs has also landed its firms in hot water with regulators in Western markets worried about unfair competition for local automakers.

The European Commission is investigating Chinese state subsidies in a probe that could lead to the European Union imposing import duties.

To soothe concerns, BYD is planning to build more factories abroad including a $600 million plant in Brazil and another in Hungary.

"It's kind of reminiscent of what happened to Japan in the 1980s, when they started exporting a lot of automotives," said Christopher Richter, an auto analyst at CLSA.

"So the Japanese solved it by starting [to build] a lot of factories overseas... They build overseas four times more than what they export," he said in October. 

RIYADH — Saudi Arabia has ordered energy giant Aramco to maintain its oil production capacity at 12 million barrels per day, abandoning a planned increase, the firm said on Tuesday. 

"Aramco announces that it has received a directive from the ministry of energy to maintain its maximum sustainable capacity [MSC] at 12 million barrels per day" instead of ramping it up to 13 million bpd, the firm said in a statement. 

"The company will update its capital spending guidance when its full-year 2023 results are announced in March." 

Saudi Arabia is the world's largest crude exporter and Aramco is the jewel of the Gulf kingdom's economy. 

Aramco's profits are expected to finance Crown Prince Mohammed Bin Salman's sweeping economic and social reform programme known as Vision 2030, which aims to lay the groundwork for an eventual post-oil future. 

Riyadh announced the planned production capacity increase in October 2021, the same month it pledged to achieve net zero carbon emissions by 2060 — drawing intense scepticism from environmental activists. 

Aramco said it planned to achieve production capacity of 13 million bpd by 2027. 

Aramco has pledged to achieve "operational net-zero" carbon emissions by 2050. 

That applies to emissions that are produced directly by Aramco's industrial sites, but not the CO2 produced when clients burn Saudi oil in their cars, power plants and furnaces. 

In the lead-up to the COP28 climate change talks in Dubai last year, Saudi Arabia was among the loudest voices calling for more investment in fossil fuel production, saying it was necessary to fight energy poverty in regions such as Africa. 

Fluctuating profits 

Tuesday's announcement was not expected to have an immediate effect on production or exports. 

After a series of oil supply cuts dating back to October 2022, Saudi Arabia's daily production stands at approximately nine million bpd, far below its capacity of 12 million bpd. 

Aramco reported record profits in 2022 after Russia's invasion of Ukraine sent oil prices soaring, allowing Saudi Arabia to record its first budget surplus in nearly a decade. 

Lower prices resulted in year-on-year profit drops of 23 per cent in the third quarter, 38 per cent in the second quarter and 19.25 per cent in the first quarter of last year, with fourth quarter earnings yet to be announced.