What's news

GOVT AND POLICIES

Digital economy to be half of GDP by 2023

About 51.3 percent of China's GDP would be digitalization-related by 2023 as the country's enterprises step up digitalizing their businesses, global market intelligence firm IDC predicted. The research firm estimated that by 2025, at least 80 percent of China's new corporate applications would use artificial intelligence technologies. Chief information officers would play bigger roles within companies by planning for innovative development, while there would be rising demand for professionals in ensuring digital security and compliance, IDC said. China is on fast track for digitalization, while firms should take future-oriented strategies to prepare for related changes, said Kitty Fok, IDC China's managing director.

China takes green path in power generation

China took a green path in power generation during the 2014-18 period, with the continuous expansion of clean energy production, the fourth national economic census showed. In 2018, the country's power generation hit 7.1 trillion kilowatt-hours (kWh), up 31.3 percent from 2013, according to a report on the fourth economic census released by the National Bureau of Statistics. The growth of power generation in China's western region led all regions in the five-year period, increasing 42.3 percent from 2013, thanks to the exploitation of clean energy and the construction of power transmission channels, said the report.

COMPANIES AND MARKETS

Volkswagen vehicle deliveries grow by 3.9%

The Volkswagen brand delivered 586,400 vehicles worldwide in November, an increase of 3.9 percent year-on-year, the German carmaker announced on Wednesday. "The Volkswagen brand continues to demonstrate its capabilities even in an overall economic situation that remains challenging," said Juergen Stackmann, Volkswagen sales board member. In Germany, Volkswagen's core brand recorded "significant growth" of more than 20 percent and handed over 54,800 vehicles to customers in November. The brand also increased its market share, according to Volkswagen. "Significant growth" in vehicle deliveries was also recorded in the United States with an increase of 9.1 percent and Brazil with an increase of 12.3 percent, according to Volkswagen.

TUI reports 42.8%drop in group profit

Group profit attributable to shareholders of Europe's largest tourism company TUI declined by 42.8 percent to 416.2 million euros ($461.79 million) in fiscal year 2019, the German company announced on Wednesday. According to Fritz Joussen, chief executive officer of TUI, the company delivered a "successful financial year 2019." At the same time, underlying earnings before interests, taxes and amortization (EBITA) of the company which has registered offices in the German cities of Berlin and Hannover declined by 21.8 percent to 893.3 million euros. The main reason for the "drastic decrease of EBITA" was the grounding of TUI's Boeing 737 MAX fleet. The company's 15 such aircraft were taken out of operation and replacements had to be rented to maintain services.

Boeing 737 Max may not get regulatory clearance

Steve Dickson, chief of the Federal Aviation Administration, said on Wednesday that aviation regulators won't likely clear Boeing's troubled 737 Max airplanes for flight until 2020. "Like I said there are a number of processes, milestones, that have to be completed," Dickson told CNBC, "If you just do the math, it's going to extend into 2020. "Dickson said there is no clear timeline for when the 737 Max will be re-certified and that there are 10 to 11 milestones left to complete before it can be approved. "We're going to follow every step of the process, however long that takes," he said. "I've made it clear that I'm going to support my people and that means they are going to take whatever time it takes to get this process completed and to do it the right way."

AROUND THE WORLD

Consumer prices rise by 0.3% in November

US consumer prices rose moderately in November, which could reinforce the Federal Reserve's intention not to cut interest rates in the near term. The consumer price index (CPI) increased 0.3 percent last month after rising 0.4 percent in October, the US Labor Department said on Wednesday. In the 12 months through November, the CPI rose 2.1 percent. The so-called core CPI, which excludes the volatile food and energy categories, increased 0.2 percent in November and 2.3 percent over the past year, in line with the previous month. The firmer inflation figures would give Fed officials more confidence to keep interest rates unchanged after concluding a two-day policy meeting later on Wednesday, analysts said.

Business sentiment declines in Japan

Business sentiment among large Japanese companies dropped to its lowest level in three years in the October-December quarter, owing largely to a consumption tax hike coming into effect at the beginning of October, the government said in a report on Wednesday. According to a joint survey by the Finance Ministry and Cabinet Office, the confidence index reflecting sentiment at companies capitalized at 1 billion yen ($9 million) or more, stood at minus 6.2 for the reporting period, dropping from 1.1 logged for the previous quarter. The confidence index reflects the percentage of companies surveyed reporting that conditions have worsened subtracted from companies reporting improving conditions.

Brazil cuts benchmark interest rate to 4.5%

Brazil's central bank will cut its benchmark interest rate from 5 percent to a record low of 4.5 percent, the bank's Monetary Policy Committee (Copom) announced on Wednesday. It was the fourth interest cut in a row, after it remained stable from May 2018 to June 2019. With the latest reduction, the rate has accumulated a fall of 2 points this year. The Copom stated that recent economic data indicate that the Brazilian economy is growing, and that they believe this recovery will continue in a gradual pace. Copom put the inflation rate at 4 percent for 2019 and 3.5 percent for 2020.

South Korea banks' bad debt ratio steadies

South Korean banks' bad debt ratio stayed below 1 percent for the fifth straight quarter, financial watchdog data showed on Wednesday. The ratio of bank loans, overdue at least three months, stood at 0.86 percent of the total as of the end of the July-September quarter, down 0.10 percentage point from a year earlier, according to the Financial Supervisory Service. It hovered below 1 percent since the third quarter of last year. From three months ago, the third-quarter ratio fell 0.05 percentage points.

S&P downgrades Romania's outlook

Standard& Poor's has downgraded the outlook for Romania's rating from stable to negative due to rising deficits, local media reported on Wednesday, citing the latest statement released by the rating agency. The agency affirmed the eastern European country's long-term and short-term foreign currency debt rating at "BBB" and that of local currency debt at "A-3". The constraints on ratings include low economic prosperity, relatively poor administrative capacity, unpredictable economic environment, and only medium-level monetary flexibility compared to other countries with similar ratings.

Albania's FDI inflows up in first 9 months

Foreign direct investment (FDI) in Albania increased by 7.3 percent in the first nine months of 2019, compared to the same period last year, Finance and Economy Minister Anila Denaj said on Wednesday in a post on Facebook. According to Denaj, in January-September 2019, FDI in Albania amounted to 810 million euros ($ 898.6 million), reaching the highest historical level of foreign investments for the country. Denaj said this increase in FDI confirms the government's projections that in 2019 FDI will exceed 1 billion euros in total.