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Indian budget airline SpiceJet Ltd is poised to order at least 92 Boeing Co 737 jetliners - as the carrier maps out a rapid expansion in the world's fastest-growing air traffic market.
The transaction, which would more than double SpiceJet's 49-plane fleet, may be closed within weeks, after lengthy talks that pitted Boeing against rival Airbus Group SE, sources with direct knowledge of the decision said.
The deal includes firm orders for at least 50 of Boeing's 737 Max model and renegotiated terms for 42 of the single-aisle jets that SpiceJet originally ordered in 2014, the sources added.
The 92 Max jets would be valued at about $10.1 billion at current list prices, before the discounts that are customary for large purchases.
The order would be a record for SpiceJet, which was forced to shut down operations for a day two years ago after it ran out of money, prompting co-founder Ajay Singh to bail out the low-cost carrier. The airline may boost the total number of planes bought if final talks yield bigger discounts and favorable maintenance contracts, one source said.
Boeing would gain a stronger toehold in India, where Airbus dominates narrow-body fleets after a string of order victories. IndiGo, Go Airlines India Pvt and the local unit of AirAsia Bhd all fly variants of the Airbus A320.
"We expect to complete these negotiations and place the order this financial year," the airline said in an emailed statement. A Boeing spokesman declined to comment.
The order would help SpiceJet, India's second-biggest budget carrier, compete with market leader IndiGo, which has ordered hundreds of Airbus jets to tap surging air-travel demand from a fast-growing middle class.
While IndiGo controls about 42 percent of a market that has seen local carriers almost double to 11 in the past four years, SpiceJet has about 13 percent.
SpiceJet shares extended gains for a third day, rising 2.3 percent to 64.60 rupees (95 cents) as of 9:25 am in Mumbai on Friday, the highest intraday level since Nov 30. Boeing shares were little changed at $158.71 in New York on Thursday.
India is crucial for Boeing and Airbus and both offered aggressive discounts to SpiceJet.
Boeing, whose jets dominate the current SpiceJet fleet, has the advantage of close financial ties. As the carrier's financial condition worsened, Boeing provided assistance with payments to help it cope with the situation. That earlier deal, which is still on the manufacturer's books, will now become a part of the new order, the people said. SpiceJet operates a fleet of 32 Boeing 737 jets and 17 Bombardier Q400 turboprops, according to the company.
Three major Japanese automakers say they sold a record number of new vehicles in China last year.
Nissan Motor says it sold 1,354,600 units, up 8.4 percent from the previous year. Honda Motor reported more than 1,247,700 vehicles sold, up 24 percent and Toyota Motor 1,214,200 units, up 8.2 percent. Each of the firms topped its sales goal.
China's automobile market grew by double digits thanks to strong demand for sport utility vehicles and government incentives such as tax reductions for smaller models.
But an industry group expects the pace of sales increases will slow this year partly due to the scaling back of tax breaks.
U.S. President-elect Donald Trump’s promise to shrink a trade deficit with China through punishing tariffs wouldn’t just hurt the world’s second-biggest economy -- it would also damage the rest of Asia too.
That’s the increasing view of economists who say the risk of significant Trump-triggered trade tensions could slow growth in the world’s best performing region, which accounts for 67 percent of America’s goods trade deficit, according to a Morgan Stanley.
“Donald Trump’s campaign proposal to impose hefty tariffs on China has raised the specter of 1930s-style trade wars,” said Priyanka Kishore, lead Asia economist at Oxford Economics in Singapore. “While we attach a low probability to a full-blown escalation, economies across Asia will have to brace themselves for rising protectionism amid subdued global growth and rising Western populism.”
Kishore added that another risk is that Trump goes beyond targeting expected areas such as iron and steel, and imposes new trade restrictions on textiles, electronics, cars, computers and more. Under such a scenario, she said the pain would spread well beyond China because of the potential downstream impact.
China is prepared to step up its scrutiny of U.S. companies in the event Trump takes punitive measures against Chinese goods, according to people familiar with the matter. The options include subjecting well-known U.S. companies or ones that have large Chinese operations to tax or antitrust probes, the people said, asking not to be identified because the matter isn’t public.
A smartphone exported to the U.S. may only be assembled in China with parts sourced from other countries in Asia. However, headline trade statistics don’t necessarily capture that supply chain. Instead, they label the phone as a Chinese export, distorting its trade balance with the U.S.
Analysis of foreign value-added content of China’s exports shows how complex the picture is.
“China accounts for only 16 percent of electronic and computer imports into the US, while the rest of Asia-ex Japan accounts for a similar share and Japan 8 percent,” Kishore said. “But standard trade statistics show that China’s share in total U.S. imports of electronic products is more than 40 percent.”
Since winning the U.S. Presidential election, Trump has backed up fiery campaign rhetoric toward China with a series of pronouncements on Twitter and the appointment of China hawks, including Peter Navarro, to key roles. Navarro has blamed China’s 2001 entry into the World Trade Organization for eroding America’s manufacturing base.
“The recent shift in political rhetoric in the U.S. has increased the risk of potential policy changes related to trade,” Morgan Stanley economists led by Hong Kong-based Chetan Ahya wrote in a report. “As these potential policy changes are aimed at improving the U.S. position in global trade, Asia will be a main focus.”
China, Korea and Japan would be the worst affected given they sell more to the U.S. than they buy back and because of their roles in a deeply intertwined regional supply chain, according to Morgan Stanley. Vulnerable industries include telecommunications, computers and cars.
Chinese state media has warned the country can fight back, saying that Trump will be met with “big sticks” if he tries to ignite a trade war or further strain ties.
“There are flowers around the gate of China’s Ministry of Commerce, but there are also big sticks hidden inside the door -- they both await Americans,” the Communist Party’s Global Times newspaper wrote in an editorial Thursday.
China can also retaliate against U.S. investment in China by targeting sectors like electronics and textiles. As the world’s second biggest financier of U.S. government debt, it could also respond by selling down its holdings of Treasuries. Then there’s the nuclear option: devalue the yuan.
“This could the first step towards, the first step on a long ladder, the end of which is a 1930s-style environment where we’ve got collapsing global trade, we’ve got default on debt, we’ve got international relations gradually falling apart, eroding, and we’re back into that environment,” Erik Britton, a director at Fathom Consulting in London, said on Bloomberg Television.
While a sudden move to sell Treasuries or weaken the yuan look unlikely, for now, China would still likely hit back, said Chi Lo, greater China senior economist at BNP Paribas Investment Partners in Hong Kong.
“Trade retaliation is very likely,” he said, noting that U.S. investment in China is higher than Chinese investment in America. “This means that the U.S. would be hurt more by China’s retaliation than it could hurt China. This also implies that the US does not have much leverage over China in a trade war.”
It remains to be seen by just how much the President-elect will deliver on fiery campaign rhetoric but, for now at least, the risk of a full blow trade war remains remote. The U.S. Chamber of Commerce in China on Friday called for an easing of trade tensions.
Yet the risk remains.
“The possibility that a Trump administration will impose substantial, across-the-board, trade tariffs on trading partners cannot be completely ruled out,” said Oxford’s Kishore....
The last months of 2016 brought strategic largesses for Russia from three ‘rather unfriendly corners’ - the US, Japan and Qatar, Forbes magazine wrote. Those benefits will allow Russia to play from a position of ‘enormous’ strength this year, it added.
In a December article, Forbes contributor Nishtha Chugh said Donald Trump’s victory in the US presidential election, as well as multi-billion dollar energy deals with Japan and Qatar, were the “perfect gift” for Moscow.
Russian President Vladimir Putin’s two-day state visit to Japan could “serve as a primer for anyone looking to do business with Russia in 2017”.
Sixty commercial deals were inked between the two countries during that December meeting. Among those deals energy agreements signed by Russian state-owned oil firm Rosneft and a conglomerate of Japanese companies.
“Potentially billions of dollars will flow between Japan and Russia on joint offshore exploration, the construction of another LNG plant in Sakhalin and a gas pipeline connecting Hokkaido,” Forbes said.
According to the magazine, Japanese Prime Minister Shinzo Abe’s decision to host to the Russian President, even at the risk of violating sanctions against Moscow, showed Tokyo’s “strategic weakness and desperation to improve ties with Russia.”
Trump’s victory had also signaled changes in Russia’s political and economic fortunes, creating strategic uncertainty for Japan, said the article.
Trump’s choice of former Exxon chief Rex Tillerson for his secretary of state was called America’s present to Russia. Tillerson's close ties with Moscow “diminishes Japan’s scope for playing the potential mediator between America and Russia.”
Another important pivot toward Russia came from Qatar, Forbes said, pointing to renewed relations and energy cooperation between the two countries.
In December, the Qatari sovereign wealth fund along with commodities trader Glencore signed a deal to buy a 19.5 percent stake in Russia’s largest oil company Rosneft. The deal worth $11.3 billion has become the biggest privatization deal in Russia, according to Rosneft CEO Igor Sechin.
While some experts saw Qatar’s deal with Russian Rosneft as a reflection of pragmatism in its foreign policy, that pragmatism could play to “Russia’s benefit in global muscle-flexing.”
LAS VEGAS -- U.S. President-elect Donald Trump may think 'Made in America' is great, but China's leading smartphone maker Huawei Technologies certainly does not think so.
American companies have actually benefited from the low-cost manufacturing China has provided over the years, said Huawei chief executive for consumer business group Richard Yu. His comments came after his keynote speech at the Consumer Electronics Show in Las Vegas on Thursday.
The U.S. now generates more "high-end, high-tech" jobs, and bringing low-cost manufacturing back to the U.S. may only lead companies to risk losing money, he said.
"If [companies] move all manufacturing to the U.S., some manufacturing is not good for U.S. companies, because costs will likely increase," Yu said. "If you move all that [low-cost] manufacturing to the U.S., you'll damage the U.S."
Yu's statement came as the world's third-biggest smartphone brand, shipping around 100 million handsets annually, is trying to establish its foothold in the U.S. At the same time, Trump is pushing U.S. companies and even foreign ones selling in the American market to manufacture locally.
Huawei introduced its premium $599.99 M9 handset at the CES. It is the first time that the Chinese smartphone company will make a flagship model generally available in the U.S.
Yu said that while his companies does not have plans to set up manufacturing operations in the U.S., it has already opened several research and development centers there, including offices in San Diego, San Francisco and Seattle.
Huawei also said that the company procures more than $8 billion worth of components from the U.S. annually.
Huawei relies on key iPhone maker Hon Hai Precision Industry -- known as Foxconn Technology Group -- Singapore-based Flex, and China's own BYD for smartphone assembly.
Chinese brands took their largest ever slice of the $10-billion Indian smartphone market in late 2016, accounting for more than one in every two phones sold - a growing market share that ate into sales from top-selling Samsung Electronics.
Samsung, the single most popular smartphone brand in India, commanded a roughly 30 percent market share just over a year ago. That slipped to 21 percent in November, according to tech research firm Counterpoint, the last month for which data is available.
Meanwhile - thanks to low cost, improved technology and an advertising blitz - Chinese brands like Oppo, Lenovo, OnePlus, Gionee and Xiaomi took a combined share of over 50 percent, compared to just 19 percent a year ago.
"Chinese brands are offering quality that is at par with Samsung, at a better price," said Manish Khatri, who owns two multi-brand smartphone outlets in Mumbai. "Of every 10 phones I sell, almost six to seven are now Chinese brands."
Celebrity endorsements from Bollywood actors like Hrithik Roshan and Ranveer Singh, along with huge sponsorship campaigns by brands such as Oppo and Gionee of the wildly popular Indian Premier League cricket franchise have helped improve perception of Chinese brands - once derided for their low quality.
"In a country like India, there are two religions - one is Bollywood and the second is cricket," said Arvind R Vohra, Gionee's India head, noting that both avenues have helped popularize its brand.
Chinese brand executives said innovative product features such as powerful selfie cameras with flash, quicker charging and longer-lasting batteries have also helped them thrive in India, one of the world's biggest and fastest growing smartphone markets.
In the large and ultra-competitive $120 to $440 mid-market smartphone segment, Chinese vendors have more than doubled their market share to 68 percent, while Samsung has lost 14 percentage points since November 2015, according to Counterpoint.
"Being a global company is Samsung's biggest curse," says Neil Shah of Counterpoint, adding Samsung cannot compete on price like their Chinese rivals, who are focused more on low-cost markets like China, India and Indonesia.
Shah said Chinese vendors' access to low-cost components and their expertise in designing metal casing for cheap phones has let brands like Oppo, OnePlus and Lenovo offer better quality products than Samsung, which uses plastic for its cheapest models.
Adding to Samsung's woes last year was the arrival of billionaire Mukesh Ambani's new telecom venture Jio, with heavily subsidised handsets to get customers on its 4G network.
Dyaneshwar Sarde, a 33-year-old Indian farmer who earlier used a Samsung device, said he wanted to buy a 4G smartphone to use Reliance Jio.
India's home-grown brands such as Micromax, Lava and Karbonn are feeling the heat even more, according to Counterpoint, with their total market share having dropped to less than 20 percent from over 40 percent last year.
(Reporting by Sankalp Phartiyal; Editing by Clara Ferreira-Marques and Randy Fabi)...
Crude prices could plunge as low as $10 per barrel within a decade as a result of five energy “tsunamis,” according to Thierry Lepercq, innovation chief for French energy company Engie.
In an interview with Bloomberg in December, he said falling costs of solar power and battery storage, increasing sales of electric vehicles, increasingly “smart” buildings and cheap hydrogen will all weigh on crude.
“Even if oil demand continues to climb until 2025, its price could drop to $10 if markets anticipate a significant fall in demand,” said Lepercq.
After a decade of acquisitions, the former French gas monopoly Engie has become the world’s largest non-state power producer.
It is now investing in renewables while selling coal-fired plants and exploration assets. By 2018 the company plans to spend $1.57 billion on technologies including grid-scale battery storage, hydrogen output, “mini-grids” that serve small clusters of homes, and smart buildings that link up the heating, lighting and IT systems to save energy and cut costs.
Lepercq said the cost of solar power would probably drop below $10 per megawatt-hour before 2025 in the world’s sunniest places, turning it into the cheapest source of electricity. With the falling costs of battery storage, solar will become even more competitive which means electric vehicles could challenge traditional passenger vehicles.
“As carmakers offer more electrical vehicles with a range exceeding 500 kilometers, charging stations being progressively deployed and more cities banning gasoline and diesel cars, a shift will gradually take place,” said Lepercq.
Data from the International Energy Agency shows the number of battery and plug-in vehicles around the world has surged to one million cars.
According to Lepercq, in less than 10 years hydrogen which can turn solar power into transportable fuel may be as cheap as LNG.
“Solar, battery storage, electrical and hydrogen vehicles, and connected devices are in a ‘J’ curve. Hydrogen is the missing link in a 100 percent renewable-energy system, but technological bricks already exist.”
Engie has recently conducted a “very deep modeling” of the French Provence-Alpes-Cote d’Azur region. The results showed the region with five million inhabitants could run entirely on renewables by 2030 for as much as 20 percent less cost than the current energy system. Solar, wind, biogas, large-scale battery storage and hydrogen would be essential elements.
“The promise of quasi-infinite and free energy is here,” said Lepercq.
Sales surged for global automakers in China in 2016 as consumers rushed to buy cars to make the most of a tax incentive, with Honda Motor Co Ltd (7267.T) seeing a particularly brisk pace of business ahead of Ford (F.N) and Toyota Motor Corp (7203.T).
Toyota has traditionally led Honda in China - the world's largest auto market - but last year Honda sped past with a year-on-year sales growth of 24 percent to 1.25 million vehicles, helped by a steady stream of fresh models particularly in the hot sport-utility vehicle segment.
Toyota reported an 8.2 percent rise in 2016 sales. The automaker expects to sell at least 1.2 million vehicles this year, roughly flat with 2016.
Ford reported a growth in China sales of 11.9 percent to 1.24 million vehicles in 2016, not including sales of its premium Lincoln brand, according to a Reuters calculation.
All three companies, however, continued to lag sales by Nissan (7201.T) in China. Nissan's sales grew 8.4 percent to 1.35 million vehicles in the country last year.
Earlier this week, General Motors Co (GM.N) and its joint venture partners reported sales of 3.87 million vehicles in China for 2016, up 7.1 percent, cementing the country's position as the U.S. automaker's top market for a fifth consecutive year.
Demand for cars in the Asian country got a shot in the arm last year from China's move to cut taxes on small-engine cars.
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The tax incentive, which halved the purchase tax on cars with engines of 1.6 liters or smaller to 5 percent, is now being rolled back. The tax will rise to 7.5 percent this year before returning to 10 percent in 2018 - a move analysts say will prevent a steep drop in sales growth.
(Reporting by Jake Spring; Additional reporting by Norihiko Shirouzu and Beijing monitoring team; Editing by Himani Sarkar)
China plans massive investment in clean and renewable energy up to 2020 to help the battle for clear skies, aiming for a significant reduction in pollutants released into the air.
The investment could amount to 2.5 trillion yuan ($360 billion), according to the energy development plan for the 13th Five-Year Plan (2016-20).
The country has set an annual target of clean and renewable energy consumption that is equivalent of 580 million metric tons of coal, the National Energy Administration said on Thursday.
Renewables investments surge to help clear the air
It will help reduce emissions of carbon dioxide by 1.4 billion tons, sulfur dioxide by 10 million tons, nitric oxide by 4.3 million tons and dust by 5.8 million tons. Coal burning is a main cause of smog in northern regions.
Installed renewable power capacity covering wind, solar, hydro and nuclear power will account for 50 percent of new electricity generation capacity by 2020, the NEA said.
Joseph Jacobelli, a senior analyst with Asia utilities and infrastructure research at Bloomberg Intelligence, said the country's investment in clean energy will help reduce the major pollutants contributing to the smog.
"As the amount of generation from clean energy sources rises, that from coal-fired generation will gradually come down, together with its pollutants," said Jacobelli.
"China's push for clean energy since the 12th Five-Year Plan (2011-15) has indeed worked in reducing emissions from the power sector and the nation has achieved some success as the contribution from clean power sources such as wind and solar has sharply increased."
It will create more than 13 million jobs in the sector, said the administration.
The focus on renewable energy also reflects China's continued focus on curbing the use of fossil fuels, which have driven the country's economic growth over the past 10 years.
"However, replacing traditional sources of energy with renewables takes a long time," said Li Li, energy research director at ICIS China.
China, the world's largest coal consumer and producer, will continuously reduce the share of coal in its overall energy mix.
Coal consumption will be reduced to 58 percent during the 13th Five-Year Plan, and the proportion of non-fossil fuel consumption will exceed 15 percent.
US President-elect Donald Trump says Toyota Motor should pay heavy taxes if it goes ahead with its plan to build a factory in Mexico.
Trump released a message on Twitter on Thursday. It reads "Toyota Motor said will build a new plant in Baja, Mexico, to build Corolla cars for US. NO WAY! Build plant in US or pay big border tax."
Toyota announced in April 2015 that it would build a Corolla plant in Mexico in 2019 as part of its realignment of North American production.
Trump is calling for a review of the North American Free Trade Agreement, which he says is for protecting US employment.
He also warns that he will impose 35-percent tariffs on products made overseas by US companies.
Trump has previously criticized General Motors and Ford Motor for their manufacturing plans in Mexico.