Morning business round-up: Davos debates capitalism


What made the business news in Asia and Europe this morning? Here's our daily business round-up:

This year's World Economic Forum (WEF) has kicked off with a debate on capitalism, which Bill Gates labelled a "phenomenal system".

"We're going through a tough period, but there is no other system that has improved humanity," the Microsoft founder told the BBC.

He was speaking in the UK, where economic activity shrank by 0.2% in the last three months of last year, according to official figures.

It marks a sharp drop in economic activity from the third quarter of 2011, when gross domestic product (GDP) expanded by 0.6%.

The figures, from the Office for National Statistics (ONS), are a preliminary estimate, which could be revised either up or down by 0.2%.

But there was better news for the German economy. Business confidence has risen for the third month in row, reflecting a "positive" start to the year for Europe's biggest economy, according to the Ifo economic think tank.

The closely-watched Ifo Business Climate Index rose to 108.3 in January, up from 107.3 in the previous month.

Firms saw the current situation as less favourable, but expectations for the future had "brightened considerably".

In company news, low-cost airline Norwegian Air Shuttle has said it has signed a deal to buy 222 new planes from Airbus and Boeing for a total cost of 127bn Norwegian krone ($21.5; £13.9bn).

The order includes 100 Airbus A320neo and 100 Boeing 737Max8, both of which are designed to be fuel-efficient, and the right to buy a further 150 planes.

The airline said the deal was the largest in European aviation history.

Media caption,
Biz Heads

In Asia, Japan has announced its first annual trade deficit in more than 30 years, a setback for a country known for its exports, including cars and electronics.

The deficit came in at 2.49 trillion yen ($32bn; £20bn) for 2011, the finance ministry said.

Japan's imports rose 12% and its exports fell 2.7%, compared to the previous year.

The decline in exports was attributed to the impact from the earthquake and tsunami on 11 March.

India's central bank has left interest rates unchanged but moved to increase liquidity, as it battles high inflation and the prospect of weaker growth.

The Reserve Bank of India (RBI) pointed to the government's "policy and administrative uncertainty" as one of the reasons for the economic problems.

Earlier, it cut its prediction for economic growth for the financial year to March from 7.6% to 7%.

And Conoco Phillips and China National Offshore Oil Corporation (CNOOC) have agreed to pay $1bn yuan ($158m; £101m) for the oil spill at their Penglai offshore field in China.

The spill, which happened last year, saw almost 3,200 barrels of oil and fluids being leaked into the Bohai Bay.

Groups of fishermen from the area had filed lawsuits demanding compensation for alleged loss of livelihood.

The latest edition of Business Daily looks at the state of the world economy, speaking to Olivier Blanchard, the chief economist of the International Monetary Fund, who says it is on a "knife edge".

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