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| China to Overtake U.S. as Largest Trading Nation, HSBC Says by Sophie Leung (Bloomberg) -- China will overtake the U.S. as the world’s largest trading nation by 2016, as intra-Asian commerce and rising demand from emerging markets boost shipments, according to HSBC Holdings Plc. Trade in China and the Asia-Pacific will grow at an annualized pace almost twice as fast as the world average over the next five years, driven by shipments within the region and expanded ties with Latin America, the Middle East and North Africa, HSBC said in a global trade report issued today. Demand from traditional consumer markets in the West is expected to slow as the evolving European debt crisis threatens the global outlook. China, the world’s second-biggest economy, will stimulate growth with fiscal stimulus and an acceleration in infrastructure projects, raising its imports of commodities from Latin America and the Middle East, HSBC said. “The world’s largest businesses are continuing to broaden their supply chains across Asia-Pacific” that will boost trade within the region, Simon Constantinides, HSBC’s regional head of global trade, Asia-Pacific, said in an interview in Hong Kong. “As China expands its global reach, especially into South America and Africa, its substantial energy demand and higher manufacturing output will drive strong imports and exports within these sectors.” Largest Exporter HSBC estimates the value of China’s trade will rise at an annualized rate of 6.6 percent over the next five years, compared with 6.5 percent gains for Asia and 3.8 percent for the world, according to today’s reports. “The developed markets will slow,” Constantinides said. “Everybody is going to trade with China.” China’s share of global imports and exports will increase to 12.3 percent in 2026 from 9.8 percent last year, the bank estimates. The nation overtook Germany as the world’s largest exporter in 2009. Vietnam and Bangladesh will become the region’s top emerging trade partners over the next five years for ready-made garments, textiles and rice, while Peru, Norway and Brazil will become major partners for trade in iron ore, soya and oil, HSBC said. Printing and machinery will become the fastest emerging industry in the Asia-Pacific as global supply chains locate in the region, evidence of a shift toward higher value production, HSBC said in its report. --Editors: Nerys Avery, Iain Wilson To contact the reporter on this story: Sophie Leung in Hong Kong at sleung59@bloomberg.net To contact the editor responsible for this story: Paul Panckhurst at ppanckhurst@bloomberg.net http://www.businessweek.com/news/2012-02-21/china-to-overtake-u-s-as-largest-trading-nation-hsbc-says.html Japanese PM warns Israel against strike on Iran Ynet Yoshiko Noda tells Defense Minister Ehud Barak that military action could escalate situation in region, calls for diplomatic solution. Japanese Prime Minister Yoshihiko Noda warned Defense Minister Ehud Barak on Wednesday against taking military action in Iran over its nuclear ambitions, the Japanese news agency Kyodo reported, citing local Foreign Ministry officials. According to the report, Noda told Barak in a meeting that launching a strike on the Islamic Republic would be ''extremely dangerous'' and would ''escalate'' the situation in the region. He urged Israel to resolve the dispute through diplomatic and peaceful means. The Japanese prime minister has also asked Barak to exercise restraint following the recent attacks on Israeli diplomatic targets in India and Georgia. He condemned the bombings, calling them "unacceptable." Barak refused to answer when asked how Israel is to respond the terror. During the meeting, the defense minister called on Japan to join the sanctions on Tehran. Noda said that his country will make an effort to reduce the amount of oil it imports from Iran. Some 10% of Japan's oil comes from the Islamic Republic. Barak said following the meeting that he and Noda primarily discussed Iran, and terror groups the likes of Hezbollah. He said that the acts of terror in Bangkok, Delhi and Tbilisi constitute a violation of diplomatic laws. The defense minister recently made comments over the military option against Iran, causing an international stir. The New York Times reported that the US government is detecting an inconsistency between Prime Minister Benjamin Netanyahu and Barak's positions on the issue. According the report, an official US source noted that Netanyahu's recent call for silence on the possibility of a strike is "good advice." http://www.ynetnews.com/articles/0,7340,L-4190433,00.html Japan Machinery Orders Fall 7.1% by Andy Sharp Japan’s machinery orders fell at the fastest pace in three months in December as a faltering global economy and gains by the yen dimmed the outlook for exporters. Bookings, an indicator of capital spending, decreased 7.1 percent from the previous month, the Cabinet Office said in Tokyo today, after surging 15 percent in November. The median estimate of 29 economists surveyed by Bloomberg News was for a 5 percent decline. Japan’s exports fell for three straight months through December as European leaders grappled with the debt crisis that is driving the euro region into a recession. Spending may rebound as earthquake reconstruction work kicks in and today’s report showed companies forecasting a 2.3 percent increase in orders this quarter. “Growing uncertainties over the global economy and the yen’s gains could discourage companies” from spending, said Yoshiki Shinke, a senior economist at Dai-Ichi Life Research in Tokyo. At the same time “it’s unlikely that capital spending will turn into a declining trend in coming months because of reconstruction demand,” he said. Japan’s currency climbed to a post-World War II high of 75.35 per dollar on Oct. 31, eroding profits at exporters such as Sharp Corp (6753). and Honda Motor Co. The yen traded at 77.13 in Tokyo as of 10:02 a.m., from 77.05 before the report. ‘Severe’ Condition Bank of Japan Governor Masaaki Shirakawa said this week that the economy is in a “severe” condition because of deflation and gains in the yen. Japan’s lower house of parliament on Feb. 3 approved Prime Minister Yoshihiko Noda’s 2.5 trillion yen ($32 billion) recovery package from the earthquake and tsunami, the fourth supplementary budget since the disaster. The government forecast in December that Japan’s economy will grow 2.2 percent in the year starting April after a projected 0.1 percent contraction this fiscal year. The International Monetary Fund estimates that Japan’s economy will grow 1.7 percent this year, compared with a likely 1.8 percent expansion for the U.S. and an estimated 0.5 percent contraction for the euro area. To contact the reporter on this story: Andy Sharp in Tokyo at asharp5@bloomberg.net To contact the editor responsible for this story: Paul Panckhurst at ppanckhurst@bloomberg.net http://www.bloomberg.com/news/2012-02-08/japan-machinery-orders-fall-7-1-.html |
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