Gross domestic product (GDP) in the world's second-largest economy expanded
7.8pc last year in the face of weakness at home and in key overseas markets, the
National Bureau of Statistics (NBS) announced on Friday. But it grew 7.9pc in the final three months of 2012 as industrial production
and retail sales growth strengthened at the end of the year, snapping seven
straight quarters of slowing growth in a positive sign for the spluttering world
economy.
The official statistics come as optimism grows among analysts that China will pick up steam in 2013
after two years of relative weakness, although they - and the government -
caution that the improvement will not be dramatic. "The international economic environment remains complicated this year and...
there are still unbalanced conflicts in the Chinese economy," NBS spokesman Ma
Jiantang told reporters. Still, Ma added: "We expect China's economy to continue to grow in a stable
manner in 2013." The problem is that the economic and social arrangements that have emerged in
China on the back of a decade or so of double-digit growth don't work, ie are
unsustainable when the growth rate subsides. This is what worries the hell out
of the Chinese leadership. The risk is that Chinese society becomes unstable.
It's really no different to us over here having got used to trend economic
growth of, say, 2.0% - 3.0% pa trying to sustain our own massively indebted
complex societies on annual growth rates of 1.0% - 1.5%. In essence, we're
going bust....The fundamental issue in all of this is that politicians won't tell their
societies that they/we are indeed going bust. By the same token, many/most folk
don't fully appreciate that a society that has emerged on the back of 60 years
of a trend of, say, 2.5% pa growth (as is the case in the UK) cannot survive in
recognisable form for more than about 5 years, 10 years at the very most,
without that society fracturing. China certainly has its problems; we certainly have ours. Our mutual
predicament is that "infinite" economic growth predicated on "infinite" supplies
of cheap energy, primarily cheap oil, is by definition unsustainable. .....We have entered interesting times.
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Bed and breakfast and chip shop owners were then left with major bills after the financial crisis caused a collapse in interest rates.
In total, 11 banks – including Santander UK, the Co-operative Bank and Yorkshire Bank – have signed up to a redress scheme run by the FSA, meaning the total bill is likely to be in excess of £1.5bn.
The reason for the increases in provisions – which will be published as part of the full- year figures due in six weeks' time – is that the number of swaps the banks will have to pay out on has risen.
The FSA's pilot study – which saw each bank assess 50 claims with the help of an independent auditor – is understood to have referred far more claims for payment than had been expected.
At the same time, the regulator is not happy with the financial redress the banks are suggesting be paid out, which will further increase the eventual compensation.
Several banks are also querying the workings of the FSA's pilot study. One key issue is the test of whether a company's directors could be deemed to be "sophisticated" and therefore able to understand the complex calculations behind the products that they were buying.
The pilot study judged companies on revenue, number of employees and size of balance sheet. If a company met two of the three criteria, its directors were deemed to be sophisticated.
But with so-called special purpose vehicles, such as property companies set up alongside operating companies, or subsidiaries of global companies, these criteria were not met even though the firms were run by professionals.
To date, Barclays has taken the highest provision, of £450m, while HSBC has set aside $240m (£150m). RBS has set aside £50m, while it is understood Lloyds, which in the past has described its provision as "not material", has put aside £90m in its books.
David Cameron will deliver a "red-meat announcement" on Britain's future in the EU, which he believes will satisfy all but a hard core of Conservative MPs, when he makes his much-delayed keynote speech on Europe in the next few days.
Amid uncertainty over the exact timing of the jinxed address, senior government sources told the Observer that the prime minister intends to make the speech this week – possibly on Monday – if a resolution has been found to the Algerian hostage crisis.
"He wants to go ahead as soon as possible. There will be something in it which will pacify all but the hard core," said the source. "But he could deliver the same kind of speech that Margaret Thatcher gave in Bruges in 1988 and around 25 MPs would not be happy. It is not possible to please everyone."
Advanced briefing of his speech, which he had been scheduled to give in Amsterdam on Friday but had to postpone because of events in Algeria, made clear that he would demand repatriation of some powers from Brussels to Westminster if he wins a majority at the next election. The new deal would then be put to the British people in a referendum.
Journalists were told that he would speak of "growing frustration" with the EU among UK voters which needs to be addressed if this country is not to slide towards the EU exit door.
Britain is in danger of putting at risk the fight against terrorism and organised crime if the Conservatives win a battle within the coalition to end British involvement in a series of European Union justice measures.
As Downing Street rushed forward David Cameron's long-awaited speech on Europe, which he will now deliver in the Netherlands on Friday, key crime fighting agencies warned of a risk to public safety if Britain distances itself from the EU.
The prime minister will move to heal divisions within the Conservative party over Europe, which played a part in the overthrow of Margaret Thatcher in 1990, when he sets out plans on Friday to hold a referendum on British membership of the EU.
Downing Street was forced to bring forward the speech by four days after France and Germany reacted angrily to reports that it would take place on 22 January. Angela Merkel is understood to have told Cameron of unease that the speech would take place as Paris and Berlin celebrate the 50th anniversary of the Elysée treaty which set the seal on their postwar reconciliation.
A No 10 spokesperson said: "We've made clear that we will decide what to opt back in to on a case by case basis, guided by what is in our national interest and how best to ensure our national security and public safety."
The prime minister is expected to depict himself as a practical eurosceptic in his speech who wants Britain to remain in the EU, though not on its current terms. Sources said it is impossible to see a new treaty, supporting new arrangements for the eurozone, passing through parliament without changes in the terms of British membership.
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