Friday, July 29, 2016
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U.S. National Security Adviser Susan Rice (L) shakes hands with Chinese State Councilor Yang Jiechi as she arrives for a meeting at the Diaoyutai State Guesthouse in Beijing, China July 25, 2016.
The U.S. and Chinese militaries have reduced the risk of encounters between them having "unintended consequences", a top U.S. official said on Monday, while China reiterated it would not accept interference in the South China Sea.
There have been a series of incidents in recent years, most in the disputed South China Sea, where the United States has accused Chinese military ships and aircraft of coming dangerously close to U.S. forces.
Visiting U.S. National Security Adviser Susan Rice said confidence-building measures had reduced risks and the United States valued progress in improving military-to-military ties.
"Our military leaders communicate more frequently and more directly than ever before in the past," Rice said in a meeting with a vice chairman of China's powerful Central Military Commission, Fan Changlong.
"While our forces operate in closer proximity to each other, the risk of unintended consequences has gone down thanks to the confidence-building measures that our two sides have put in place."
The United States and China have increasingly been at odds over China's claims to most of the South China Sea, a waterway through which $5 trillion of trade moves annually, where the United States has sought to assert its right to freedom of navigation.
China has stepped up its rhetoric in defense of its claims since an international court ruled this month that China did not have historic rights to the waters, raising concern that China would assert its position more forcefully.
There have been two close contacts between the two militaries since last month alone, with the U.S. accusing China of shadowing an aircraft carrier in the South China Sea and of unsafely intercepting a spy plane in the East China Sea, where China has competing territorial claims with Japan.
China said it was conducting routine operations in line with laws and rules.
Fan also emphasized the need to deepen military-to-military relations with the United States to "avoid misunderstanding and miscalculation".
But he also dismissed any notion that China would bow to pressure when it came to protecting its national sovereignty in the South China Sea.
"The Chinese people will not yield to outside pressure," he said, the defense ministry said in a statement after the meeting.
Fan said relations between their militaries faced "obstacles and challenges", which, if not properly handled, would "disturb and undermine" progress.
He said the deployment of an anti-missile system in South Korea would impact mutual trust. The United States is deploying the system in South Korea to protect it from North Korea.
(Reporting by Jake Spring; Editing by Ben Blanchard, Robert Birsel)
Friday, July 22, 2016
Analysis: Andrew Walker, BBC World Service economics correspondent
'Heading for recession'
Thursday, July 21, 2016
Some German companies are holding off making investments in Britain until they know more about the relationship the country will forge with the rest of Europe following the Brexit vote.
While big companies like Siemens (SIEGn.DE) and Bosch have the deep pockets to take a longer-term view about one of Europe's most lucrative markets, and weather uncertainty about how the divorce will play out, smaller firms are more cautious.
Britain is a major market for Germany, accounting for around 7 percent of its exports, and is likely to remain so regardless of Brexit. But Germany's VDMA association, which represents thousands of firms in the engineering industry, said many of its members were unwilling to make any financial commitments.
"Companies want to continue to do good business in Britain and most are likely now waiting to see how the exit negotiations go, once they start," said its head Thilo Brodtmann.
Family-owned industrial manufacturer Kemper, for example, has shelved plans to expand its British business.
Before the Brexit vote the company, which makes air filter systems and fume extraction units for the car and construction industries, had planned to invest in its UK marketing and servicing operations this year.
"We definitely won't do that now," CEO Bjoern Kemper told Reuters from his office in Vreden, close to the Dutch border in the state of North Rhine-Westphalia.
He said Kemper's British sales have fallen this year, partly because customers had put off spending decisions ahead of the June 23 referendum, and that he saw little prospect of a rebound in the short term following the decision to leave the EU.
The company, which has overall annual turnover of about 40 million euros ($44 million), said it expects to lose around 1 million euros in UK sales this year as a result of economic uncertainty before and after the Brexit vote.
Little is clear about how Brexit will affect the British and German economies.
The Bank of England said on Wednesday it saw "no clear evidence" that a sharp economic slowdown was yet under way in Britain after last month's vote, though there were signs investment and hiring were being put on hold.
New Prime Minister Theresa May says her government is formulating its position for talks that will determine the country's relationship with the EU, and has appealed for time to work out how best to approach the complex Brexit negotiations.
British officials have stressed they believe investment will flow again once foreign businesses can see how Britain's post-Brexit ties with the EU are starting to shape up.
"People are not disinvesting, they are just on hold ... if by December or March they can see a decent landing point, they'll move ahead again," one senior economic official told Reuters.
Kemper is more exposed to Britain than most German companies, with the country accounting for a tenth of its turnover, but its experience nonetheless reflects some of the challenges the Brexit vote poses to Germany's economy.
In the first five months of 2016, German exports to Britain stagnated on the year, official data shows. The slowdown contrasts sharply with last year, when German shipments to Britain surged almost 13 percent to just under 90 billion euros, a record for German exports to Britain.
In 2015, Germany sold more goods only to the United States and France.
The VDMA engineering association said German exports from the sector to Britain fell by 4.2 percent in the first quarter, year-on-year.
In a further sign that political uncertainty has harmed economic ties, German foreign direct investment to Britain fell 6 percent on the quarter in the first three months of 2016, Bundesbank data show.
Markus Kerber, managing director of the BDI Federation of German Industries, told Reuters it expected a significant deterioration in economic relations with Britain in the coming months. "When it comes to new German foreign direct investment, it's looking bad," he said.
The immediate uncertainty is perhaps less problematic for big companies whose size and financial muscle allows them to plan further ahead.
Siemens said late last month that it was not scaling back investment in a British wind power factory due to go into production in a few months.
German car parts maker Bosch [ROBG.UL], which employs 5,300 people in UK factories, told Reuters last week that it was sticking to its plans and intended to invest 20-25 million euros in Britain this year, about in line with last year.
Much of the negotiations between London and Brussels, when they come, are likely to boil down to a trade-off between Britain's controls on immigration and its access to the EU single market. Tougher immigration controls will likely mean less market access.
Reduced market access for Britain could be damaging for trade flows between Britain and the EU. However, some German companies could profit from such a scenario.
Stephan Gais, CEO of German firm Mahr, which makes high-end measuring tools used in the auto and chemicals sectors, said uncertainty caused by Brexit was hurting his business. But he also scented opportunity should trade between Britain and the EU become more complicated as a result of the divorce.
"There are a few British competitors and if they have difficulties in Europe that would of course help us."
($1 = 0.9092 euros)
(Reporting by Michael Nienaber and Paul Carrel; Editing by Pravin Char)