China May Approve Nuclear Plan Next Month, Official Says (Update 1)
By Bloomberg News - May 16, 2012 10:27 PM CT
China’s state council, or Cabinet, will probably hold a meeting before the end of June to approve safety and development plans for the nuclear industry, according to Xu Yuming, the vice secretary general of the China Nuclear Energy Association.
The government can resume approval of new nuclear plants after the plans are passed, Xu said before a conference in Beijing today. The plan was rejected earlier and amendments are being made to some “minor” details, he said.
China suspended new nuclear projects after last year’s earthquake and tsunami in Japan crippled the Fukushima Dai-Ichi plant and prompted a global review of atomic energy plants. The policy has hurt China’s major nuclear power equipment makers, including Shanghai Electric Group Co., Dongfang Electric Corp. and Harbin Electric Co., which had long-term contracts frozen.
Construction hasn’t started on four nuclear reactors that were approved prior to the Fukushima disaster, according to Xu. The reactors are Yangjiang Nos. 4, 5 and 6, and Fuqing No. 4, he said. Two new reactors will begin operations by the end of the year, he said. The facilities at Hongyanhe and Ningde resumed construction after a nationwide safety inspection that started in April 2011.
The State Council will hold a second round of talks on nuclear safety and the mid- and long-term atomic power development plans, Xinhua News Agency said on May 10, citing Wang Binghua, chairman of the State Nuclear Power Technology Corp. Xinhua didn’t provide details.
Nuclear Safety Regulation
China’s Cabinet has yet to pass a safety plan for nuclear plants, Caixin magazine reported on May 11.
The nuclear power safety regulation is ready and a draft will be submitted to the State Council after minor adjustments, the environmental protection ministry said in a statement on its website on Dec. 12. The regulation, prepared by the China Nuclear Safety Administration, a division of the ministry, outlines rules and goals for nuclear safety by 2020.
Passage of the safety regulations and atomic power development plans are the two key conditions to restart China’s nuclear projects, Li Yongjiang, vice president of the China Nuclear Energy Association, said in January.
China, which started its first commercial nuclear plant in 1994, is building at least 27 reactors and has 50 more planned, according to the association.
Nuclear-Capacity Plans
The country may have 70 gigawatts of installed nuclear power capacity and 30 gigawatts under construction by the end of the decade, Xu said today. It may have 200 gigawatts of installed capacity by 2030, he said.
The 2020 target may be scaled back to 60 gigawatts to 70 gigawatts, Li told Bloomberg in October.
China will limit the number of reactors to be built on the coast, the State Oceanic Administration said on April 7 last year. The country, which is constructing more reactors than any other nation, has at least 14 atomic units in operation and more than 25 under construction, according to reports from the World Nuclear Association.
To contact Bloomberg News staff for this story: Aibing Guo in Hong Kong at aguo10@bloomberg.net
To contact the editor responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net
Japan’s Economy Grows More-Than-Estimated 4.1% on Quake Work
By Keiko Ujikane and Masahiro Hidaka - May 16, 2012 7:41 PM CT
Japan’s economy expanded faster than estimated in the first quarter, boosted by reconstruction spending that’s poised to fade just as a worsening in Europe’s crisis threatens to curtail export demand.
Gross domestic product rose an annualized 4.1 percent, the Cabinet Office said today in Tokyo. The median estimate of 27 economists surveyed by Bloomberg News was 3.5 percent. In the fourth quarter, growth was 0.1 percent, revised data showed.
on Friday, March 9, 2012. Noda has pledged more than 20 trillion yen ($249 billion) to rebuild areas devastated by last year’s earthquake and tsunami.
The yen’s more than 4 percent gain against the dollar since mid-March may encourage politicians to keep pressing the Bank of Japan to add stimulus, with the first-quarter expansion likely to mark the peak for the year. Europe’s debt turmoil threatens to disrupt exports and financial markets as Greece teeters on the edge of exiting from the euro.
“Japan is on a steady recovery path but this high growth probably won’t continue,” said Yuichi Kodama, chief economist at Meiji Yasuda Life Insurance Co. in Tokyo. “We can’t be optimistic about the outlook.”
Economic growth may be 2.2 percent in the second and third quarters, and 1.7 percent in the final three months of the year, according to the average forecast of 40 economists in a Japan Center for Economic Research survey released May 15.
The Nikkei 225 Stock Average was little changed as of 9:34 a.m. in Tokyo after sliding 1.1 percent yesterday as Greece moved to hold another election after failing to form a new government. Today’s GDP report in Japan revised a fourth-quarter contraction to an expansion.
Asset Purchases
Japan’s central bank failed yesterday to find enough short- term government securities to buy under its asset-purchase program, signaling complications for efforts to spur growth. Officials may need to buy longer-dated debt or other types of assets.
The BOJ increased the program for a second time in three months on April 27 and some lawmakers are urging more aggressive easing as Prime Minister Yoshihiko Noda struggles to secure support for doubling a 5 percent sales tax to help contain the world’s largest public debt burden.
Europe’s woes may fuel renewed demand for the yen as a haven, with the currency trading at 80.34 per dollar as of 9:08 a.m. in Tokyo after climbing to a postwar high of 75.35 in October. Sony Corp. (6758), Japan’s largest consumer electronics exporter, gets a fifth of its sales from Europe.
“The risk will be the yen’s appreciation if the risk-off mode among investors continues,” said Masaaki Kanno, chief economist at JPMorgan Securities Japan Co. in Tokyo and a former BOJ official. “The overseas factors aren’t looking positive for Japan’s economy.”
Reconstruction Spending
Noda has pledged more than 20 trillion yen ($249 billion) to rebuild areas devastated by last year’s earthquake and tsunami. The value of public works contracts, a leading indicator for public investment, rose 10.3 percent in the first quarter from a year earlier, according to data compiled by the Land Ministry, the biggest jump since 2009.
Government subsidies for purchases of fuel-efficient cars gave a boost to consumer spending in the first quarter. They may expire in August, weakening demand later this year, according to Hiroaki Muto, a senior economist at Sumitomo Mitsui Asset Management Co. in Tokyo.
“The increase in consumer spending would be temporary as it was boosted by the government’s measures,” Muto said. “Given that the jobless rate remains high and wages are near flat, it will be difficult for consumers to increase spending considerably.”
At the same time, Japanese companies plan to increase machinery orders at a faster pace this quarter, signaling some continued domestic support for the economy, a report showed yesterday.
Energy Constraints
Constraints on energy use may add to economic challenges. Japan may impose rolling blackouts and electricity-savings targets this summer as utilities struggle to power factories and light homes with all nuclear reactors offline.
In Kansai, which accounts for about 20 percent of the economy and is the nation’s second-most important industrial heartland, consumers face the biggest limit on power use, the government says. The western region is home to Osaka, Kyoto and Kobe cities as well as the headquarters of Panasonic Corp. (6752), Sharp Corp. and Nintendo Co.
To contact the reporters on this story: Keiko Ujikane in Tokyo at kujikane@bloomberg.net; Masahiro Hidaka in Tokyo at mhidaka@bloomberg.net
Euro Officials Begin to Weigh Greek Exit From Common Currency
By Patrick Donahue - May 13, 2012 5:01 PM CT
Greece’s possible exit from the euro area moved to the center of Europe’s debt-crisis debate, with officials beginning to weigh the fallout of a withdrawal even as authorities in Athens struggled to form a government.
Meetings brokered by Greek President Karolos Papoulias are set to continue today after Syriza, the largest anti-bailout party, rejected a unity government following last week’s inconclusive elections. The country where the 2 1/2-year-old crisis began moved closer to a new vote, and to the possibility of a euro-area exit that was once a taboo among policy makers.
Greek withdrawal “is not necessarily fatal, but it is not attractive,” European Central Bank Governing Council member Patrick Honohan said in Tallinn on May 12. An exit was “technically” possible yet would damage the euro, he said. German Finance Minister Wolfgang Schaeuble reiterated in an interview in Sueddeutsche Zeitung that member states seeking to hold the line on austerity for Greece could not force the country to stay.
The debate between growth and austerity will form the centerpiece of talks tomorrow between the newly installed French President Francois Hollande and German Chancellor Angela Merkel, who has championed an agenda of spending cuts. Euro finance ministers meet today and may discuss the international bailout for Greece, as well as the situation in Spain, where the government last week made a fourth attempt to clean up the country’s banks.
The euro-area finance ministers will convene in Brussels at 5 p.m. local time.
Euro Dip
The euro dipped below $1.30 last week for the first time since January and bond yields of indebted states rose to new highs, with Spain’s 10-year yield climbing 27 basis points to 6.01 percent.
“Syriza won’t betray the Greek people,” party leader Alexis Tsipras said in a statement yesterday as Papoulias began a final bid to coax parties into a coalition. The failure to form a government has prompted concern that Greece may backtrack on pledges to cut spending as part of the bailout requirements negotiated since May 2010, so foreshadowing a euro withdrawal.
The European Commission isn’t considering easing the terms of the joint bailout for Greece from the EU and the International Monetary Fund, EU spokesman Amadeu Altafajsaid, denying a report by Athens-based Real News.
“I’m not aware of any discussions within the commission to grant new provisions, new concessions in the program” for Greece, Altafaj said by phone yesterday.
‘More Resilient’
Europe’s central bankers are discussing the possibility of a Greek departure and how to handle the fallout, Swedish Riksbank Deputy Governor Per Jansson said in an interview on May 11.
European Union Economic and Monetary Commissioner Olli Rehn said in Tallinn that the region is “certainly more resilient” to a possible Greek exit than it was two years ago, when the bloc would have been “massively underprepared.”
“I still believe that Greece can stay in the euro and find the way to make sure that it respects its commitments,” Rehn said. “It would be much worse for Greece and Greek citizens, especially for the less well-off Greek citizens, if Greece did leave the euro than for Europe as such. Europe also would suffer, but Greece would suffer more.”
Under a story headlined “Akropolis Adieu, Why Greece Must Leave the Euro”, Germany’s Der Spiegel magazine today reported that the EU may provide funding for Greece even after a euro departure.
‘Open Arms’
After elections in Greece and France signaled a backlash against the German-led agenda of scaling back spending to battle the debt crisis, officials across the region have re-tuned their rhetoric to emphasize growth and employment.
Hollande, who defeated single-term President Nicolas Sarkozy on May 6 to become the first Socialist president of the Fifth Republic in almost two decades, will tomorrow begin his campaign to shift the focus of crisis-fighting away from austerity.
Confronted with electoral defeat yesterday in Germany’s largest state, Merkel said last week that she’ll welcome Hollande for talks “with open arms.”
“I expect both of them to give a clear signal of commitment to stability of the euro zone of overcoming the sovereign debt crisis,” Peter Altmaier, the deputy floor leader of Merkel’s party, said yesterday on Sky News.
Aid Payment
With Hollande among leaders calling for a “growth pact” alongside the German-championed fiscal treaty, euro leaders will look toward a summit dinner in Brussels on May 23.
Investors will also be watching tomorrow when the Greek government is scheduled to repay 436 million euros ($563 million) on a floating-rate note held by investors who shunned its bond-loss accord. An EU official said May 10 that the payment decision is up to the government in Athens.
The government in Athens would run out of cash by early July if creditors decided to withhold their next aid payment in reaction to stalling progress in Greece, according to a report last week by Bank of America Merrill Lynch.
To contact the reporter on this story: Patrick Donahue in Berlin at pdonahue1@bloomberg.net
To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net
World’s Richest Lose $17 Billion as Slim’s Fortune Drops
By David De Jong - May 11, 2012 4:58 PM CT
The world’s richest people lost a combined $17.1 billion this week as concern over JPMorgan Chase & Co. (JPM)’s $2 billion trading loss and the weakening euro pushed the Standard & Poor’s (SPY) 500 Index to a two-month low.
Carlos Slim, the world’s richest man, lost the most. The Mexican mogul’s fortune fell by $4.2 billion during the week as shares of his Mexico City-based America Movil SAB (AMXL) dropped 3.82 percent, its biggest weekly loss since December 201
Billionaire Carlos Slim. Photographer: Susana Gonzalez/Bloomberg
The company, the biggest wireless carrier in the Americas, said May 8 it would spend as much as $3.4 billion to buy additional shares of Dutch phone operator Royal KPN NV (KPN) in an effort to further the mogul’s European ambitions.
“America Movil investors see a lot of problems in his bid for KPN,” Jos Versteeg, an Amsterdam-based analyst at Theodoor Gillissen Bankiers, said in a telephone interview May 11. “Slim has found it extremely difficult to get a foothold in the European telecom market. He hasn’t succeeded in Spain, in Italy, in Serbia and in Poland. That must hurt for Latin America’s most successful businessman.”
The 72-year-old has a net worth of $69.6 billion, according to the Bloomberg Billionaires Index, a daily ranking of the world’s 40 richest people. The combined net worth of the ranking: $1 trillion.
During the week, the euro extended its longest slump since 2008 as Greece struggled to form a government and concern grew that Spanish banks are underfunded. The S&P 500 fell 1.15 percent to 1353.39, while the STOXX Europe 600 lost 0.41 percent to close at 251.97.
Buffett, Gates
Bill Gates, 56, ranks second on the list with a net worth of $61.8 billion, up 10.1 percent year-to-date. Placing third is Warren Buffett. The Berkshire Hathaway Inc. (BRK/B) chairman is worth $45.7 billion, up $313 million during the week.
“Berkshire will continue to grow,” Buffett, 81, said in an interview with Bloomberg Television after the company’s May 5 shareholders meeting in Omaha, Nebraska.
Buffett said Berkshire’s $34 billion purchase of Burlington Northern Santa Fe LLC in 2010 “will not be the limit,” and that he is looking for bigger acquisitions. The company has $37.8 billion in cash.
Berkshire agreed to provide financing to Coty Inc. in the perfume-maker’s bid to acquire Avon Products Inc. (AVP) Coty said it increased its offer for the world’s largest direct seller of cosmetics to about $10.7 billion on May 10.
Casino mogul Sheldon Adelson’s fortune fell by $1.1 billion during the week as shares of his Nevada-based Las Vegas Sands Corp. (LVS) dropped 4.53 percent. The 78-year-old is the 12th richest person in the world, with a net worth of $23.7 billion.
Rinehart in Peril
Cheng Yu Tung, Hong Kong’s second-richest man, dropped $705 million. Shares of the tycoon’s Chow Tai Fook Jewellery Group Ltd. (1929), the largest jeweler in China and Hong Kong, fell 2.58 percent. He is worth $19 billion.
Australian mining heiress Gina Rinehart, 58, is in peril of falling off the index. On May 9, Rinehart’s children won the right to a 23.5 percent share of a trust that holds the majority of the family’s $18.2 billion fortune, the Sydney Morning Herald reported.
Rinehart’s lawyers disclosed she had moved the trust’s vesting date from 2068 to April 30 of this year. The billionaire’s three oldest children, who sued in September 2011 to have their mother removed as trustee, haven’t decided whether to take ownership of their shares in the trust because they don’t know the tax implications, the newspaper said.
The Bloomberg Billionaires Index takes measure of the world’s wealthiest people based on market and economic changes and Bloomberg News reporting. Each net worth figure is updated every business day at 5:30 p.m. in New York and listed in U.S. dollars.
To contact the reporter on this story: David De Jong in New York at ddejong3@bloomberg.net
To contact the editor responsible for this story: Matthew G. Miller at mmiller144@bloomberg.net
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Executive · Asia
China Issues Warning in Philippine Trips After Sea Standoff
By Bloomberg News - May 10, 2012 10:59 PM CT
China told tourists to avoid “unnecessary” travel to the Philippines as police gathered in front of a Chinese consular building in Manila ahead of a planned protest over a disputed island in the South China Sea.
The National Tourism Administration warned Chinese tourists who are already in the Philippines to abide by the local laws and mind their security, according to a statement posted late on its website last night. The Philippines should ensure the safety of Chinese people and companies in the country, the Foreign Ministry said yesterday.
May 11 (Bloomberg) -- Philippine Finance Secretary Cesar Purisima talks about China's decision to tell tourists to avoid "unnecessary" travel to the Southeast Asian nation. China's Manila embassy warned of public protests amid rising tensions over a disputed island in the South China Sea. The National Tourism Administration warned Chinese tourists who are already in the Philippines to abide by the local laws and mind their own security, according to a statement posted late on its Website last night. Purisima speaks from Manila with Zeb Eckert on Bloomberg Television's "On the Move Asia." (Source: Bloomberg)
Tensions have risen since last month’s standoff between both countries near the island, called the Scarborough Shoal by the Philippines and Huangyan by China. China has become more assertive over its claims to the oil and gas rich waters of the South China Sea, while the U.S., which has a mutual defense treaty with the Philippines, has shifted its military posture toward the Asia-Pacific.
“Filipinos are peace-loving and most welcoming of foreigners and I think our track record bears that out,” Finance Secretary Cesar Purisima told Bloomberg Television today. “It is important that we continue to work on this on a reasonable basis.”
Police Gather
About 150 police deployed in front of the Chinese consular office in Manila’s Makati City neighborhood, Police Superintendent Jamie Santos said. Officers stopped one man from trying to burn three Chinese flags.
About 1,000 people were expected to gather at noon, Emman Hizon, spokesman of the Akbayan political party, told reporters at the protest site. Organizers set up speakers playing patriotic songs.
“We want to call the attention of the international community about China’s bullying tactics in the Scarborough Shoal,” Hizon said. “Our message is simply for Chinese vessels to pull out of the area.”
Shares of Philippine casinos, hotel operators and airlines declined yesterday after the Xinhua News Agency reported that two Chinese travel agencies, Ctrip.com and Beijing Caissa International Travel Service Co., halted tours to the Philippines. Xinhua reported today that Chinese travel agencies in Shanghai and Guangzhou also suspended tours to the region.
‘Knee-Jerk’
The fall in tourism stocks yesterday was a “knee-jerk reaction,” presidential spokesman Ricky Carandang said in a mobile phone message.
Tourist arrivals from China rose 78 percent in the first quarter, more than from anywhere else among the top 12 markets, to 96,455, or 8.4 percent of the total, according to government data. China is the fourth-largest market for tourists to the Philippines, behind South Korea, the U.S. and Japan.
The latest dispute began on April 10, when Chinese ships blocked the Philippines from inspecting Chinese fishing boats in the area. China’s Foreign Ministry has summoned a Beijing-based Philippine diplomat at least three times since the standoff began.
“The Huangyan Island issue is completely triggered by the Philippines’ vessels taking actions against civilian fishermen from China,” Foreign Ministry spokesman Hong Lei said at a briefing in Beijing yesterday. “China warns that Philippines should stop any actions that will escalate and complicate the issue.”
Increasingly Assertive
China has become increasingly assertive in the South China Sea and Cnooc Ltd. (883) began its first deep-water drilling rig in the area on May 9. Cnooc Chairman Wang Yilin said the rigs are a “strategic weapon for promoting the development of the country’s offshore oil industry.”
At a meeting on April 30, Secretary of State Hillary Clinton reaffirmed the U.S. commitment under its mutual defense treaty with the Philippines, which obligates the two sides to support the other if attacked.
At a regular briefing yesterday, U.S. State Department spokeswoman Victoria Nuland urged restraint and said the U.S. supports “any kind of collaborative, diplomatic process by the claimants to resolve the disputes without any kind of coercion.”
To contact Bloomberg News staff for this story: Yidi Zhao in Beijing at yzhao7@bloomberg.net; Clarissa Batino in Manila at cbatino@bloomberg.net
To contact the editor responsible for this story: Peter Hirschberg at phirschberg@bloomberg.net
