Archive for the ‘manufacturing’ Category

China fears recession riots

January 7, 2009

A stark warning by state media Wednesday of possible mass unrest in China signalled deepening fears over the global recession, as Europe grappled with more job losses and an energy cutoff during a winter freeze.

The economy of Asian powerhouse China might become so bad in the next few months that the fabric of the world’s most populous nation could start unraveling, the authoritative weekly Outlook, published by the Xinhua news agency, warned in its latest edition.

By Beth O’Connell, AFP

The magazine said that “enterprise closedowns, layoffs and labour disputes have significantly increased” and with workers’ livelihoods threatened, “their pent-up discontent could easily burst out… and spark mass conflicts.”

European workers are also feeling the brunt of the global recession with official data showing that the number of people out of work in Germany rose by 114,000 in December to 3.1 million.

On Britain’s high street, iconic retailer Marks & Spencer said it would slash up to 1,230 jobs and close 27 stores as consumer spending, the driver of the British economy, shrinks.

Analysts expect the Bank of England to intervene in this recessionary climate Thursday and cut its key interest rate to the lowest ever level.

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Japanese economy shrinks at faster rate than feared

December 9, 2008

The Japanese economy, the world’s second largest,  contracted at a far faster pace than expected in the third quarter

 By Julian Ryall in Tokyo
The Telegraph (UK)

An electronic share price board is seen in central Tokyo. Japan ...

An electronic share price board is seen in central Tokyo. Japan sank deeper into recession than previously thought in the third quarter as firms slashed investment to cope with the financial crisis, official figures have shown.(AFP/File/Kazuhiro Nogi)
The economy shrank 1.8pc on an annualised basis, steeper than the 0.4 percent the government had predicted, with the blame pinned on drastically reduced capital expenditure and reduced inventories.

“When GDP drops by five times more than you were expecting, that will set the alarm bells ringing,” said Martin Schulz, senior economist at the Fujitsu Research Institute.

“We are now seeing the downturn affecting the real economy and there are big problems, although not as bad as we see in Europe,” he said.

Japanese companies are earning less from their overseas operations, but domestic demand has not “nose-dived,” as it has in Europe, because employees here are confident their companies will ride out the economic storm. Household spending rose a marginal 0.3pc from the previous quarter, one of the few bright spots in the data.

In Europe, in comparison, “consumers have gone on strike,” Schulz said.

Still, the figures will come as a major blow to Japanese corporations and the government.

Capital spending declined 2pc on the quarter, up from a predicted 1.7pc slump. Economists predict those figures are likely to be replicated in the next quarter.

Sony has also announced that it is cutting 8,000 jobs, reducing its investments and withdrawing from unprofitable businesses as part of its restructuring efforts.

The Bank of Japan is due to issue its Tankan report on corporate sentiment next week, with experts predicting that large manufacturers will be the most pessimistic about the outlook for more than three decades.

The bad economic news was repeated in China, where the growth in output was up 7.2pc in November, the weakest growth in nine years as the economy weakens.

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