Wednesday, October 04, 2006

IIP Aug growth drops to 5.5% y-o-y The Index of Industrial Production (IIP) has logged a growth of 5.5% in August 2006 as compared with 5.8% in August 2005, according to data released by the government today. 3:15:16 PM    comment []

EU looks to SE Asia, South America for new free-trade areas European trade chief Peter Mandelson on Wednesday unveiled a new trade strategy for the bloc which set out plans to seek free trade agreements (FTA) with trading partners in key areas including South East Asia and South America. While stressing that multilateral negotiations under the World Trade Organisation umbrella remained the top priority, Mandelson said he had decided to put his focus on concrete results for European exporters. The core message was clear, said Mandelson, "rejection of protectionism at home, activism in opening markets abroad". He added: "Alongside our commitment to the WTO we have, through bilateral negotiations, sought to remove trade barriers behind borders, barriers beyond the reach of WTO rules for example in Latin America and the Gulf." 3:13:11 PM    comment []

Promising future for west despite economic woes Zhao Huanxin About 60 per cent of adults in China's west are confident they will have a promising future despite current heath and education woes, international researchers have revealed. About 20 per cent cannot afford hospital treatment and more than one-third of families cannot afford tuition and college fees. However, about two-thirds of people living in rural areas and more than half of city residents, say they are better off than they were five years ago. The findings were released last week by a Chinese-Norwegian team, which has been researching living conditions in western China for the past five years. The survey, conducted by Norwegian research foundation FAFO and the National Research Centre for Science and Technology Development, interviewed 44,000 families in China's western regions except the Tibet Autonomous Region 3:10:28 PM    comment []

HOUSING MARKET: STRAINING HOUSEHOLDS Sharply higher housing prices have helped to create asset value for homeowners in recent years, but prices are also straining the financial stability of homeowners across the nation, according to a Census Bureau study reported on by the New York Times. Although housing markets are considered local, homeowners, and renters stretched throughout the country are paying alarmingly high portions of their income for their housing. Financial institutions calculate that households should limit how much they spend to 30 percent of their gross income. However, over half of all renters in New York City are spending more than the 30 percent threshold according to the study. In Temecula, California, 74 percent of renters are paying more than the threshold. Setting a new record for housing unaffordability, in Boulder, Colorado, 47 percent of all renters spend at least 50 percent of their income on housing. 3:07:15 PM    comment []

Bernanke urges U.S. to fix entitlement programs soon WASHINGTON (Reuters) - The longer U.S. policy-makers delay in putting Social Security and Medicare on a sound fiscal footing, the greater the burden on future generations, Federal Reserve Chairman Ben Bernanke said on Wednesday. "If we don't begin soon to provide for the coming demographic transition, the relative burden on future generations may be significantly greater than it otherwise could have been," Bernanke told the Economics Club of Washington. Bernanke did not comment on the current outlook for the U.S. economy or Fed policy in his speech on the demographic shift of the U.S. population as the baby boom generation retires. The Fed chairman said that in addition to reform of the entitlement programs, which are forecast to be underfunded as the population ages, an increase in the national saving rate would ease some of the future burdens associated with the demographic shift. The most straightforward way to raise national saving would be to reduce the government's current and projected budget deficits, the Fed chairman said. However, he acknowledged that cutting the budget gap is politically difficult. Social Security and Medicare are government programs providing income support and health care coverage for retir 3:02:20 PM    comment []

Bernanke: Baby Boomers Will Strain U.S. JEANNINE AVERSA Unless Social Security and Medicare are revamped, the massive burden from retiring baby boomers will place major strains on the nation's budget and the economy, Federal Reserve Chairman Ben Bernanke said Wednesday. "Reform of our unsustainable entitlement programs" should be a priority, he said in prepared remarks to the Economics Club of Washington. "The imperative to undertake reform earlier rather than later is great," Bernanke added. It marked the Fed chief's most extensive comments to date on the challenges facing the United States with the looming retirement of 78 million baby boomers. In his remarks, Bernanke did not offer Congress and the Bush administration recommendations on how the massive entitlement programs should be changed. Efforts by the administration to overhaul the Social Security program _ once a centerpiece of President Bush's second-term agenda _ sputtered last year, meeting resistance from Republicans and Democrats alike. As the population ages, the nation will have to choose among higher taxes, less non-entitlement spending by the government, a reduction in spending on entitlement programs, a sharply higher budget deficit or some combination thereof, Bernanke said. Government spending on Social Security and Medicare alone will increase from about 7 percent of the total size of the U.S. economy to almost 13 percent by 2030 and to more than 15 percent by 2050, he said. Bernanke declared: "The fiscal consequences of these trends are large and unavoidable." 3:00:00 PM    comment []

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