Morning business round-up: China in large trade deficit


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

China posted its largest trade deficit in at least a decade in February, after imports of commodities jumped as companies built up supplies.

The deficit was $31.5bn (£20bn) after imports rose 39.6% from a year earlier and exports rose 18.4%, the customs bureau said.

Analysts said the widening trade gap could signal deeper economic issues that China would need to address.

China has an export-led economy, but global economic growth remains slow.

Elsewhere in Asia, Japan's economic recovery has received a boost as core machinery orders, a key indicator of capital expenditure, rose more than expected in January.

Orders rose 3.4% from the previous month, up from a 7.1% decline in December, latest data showed.

There have been fears that some manufacturers might shift production out of Japan in the wake of weak domestic demand and a strong yen.

Last month, Japan reported a 2% jump in factory output in January.

And there was also good economic news in India where industrial production grew by 6.8% in January from a year earlier, easing concerns about a slowdown in its economy.

The growth was led by an 8.5% expansion in the manufacturing sector.

This comes just days after data showed India's economy grew by 6.1% in the last three months of 2011, its weakest pace in nearly three years.

A global slowdown and a series of interest rate rises aimed at reining in high prices have hurt India's growth.

Media caption,
Biz Heads

In Europe, Finance ministers from eurozone nations are to meet on Monday to discuss giving Greece's second bailout final approval.

The Eurogroup, which includes eurozone finance ministers, the president of the European Central Bank and European Commission chiefs, meets in Brussels.

Spain's financial status is also likely to be on the agenda.

Earlier this month, Spain said it would miss a deficit target of 4.4% of GDP for 2012 agreed with Brussels. It now expects the deficit to be 5.8%.

Seven European aviation firms have written to governments complaining about the inclusion of airlines in the EU's Emissions Trading Scheme (ETS).

The signatories, which include Airbus, British Airways and Virgin Atlantic, argue the move threatens jobs.

They are concerned about trade retaliation by countries not complying with the ETS, which puts a cost on carbon emissions beyond set limits.

China and the US both oppose the move.

In company news, car giant Volkswagen says 2012 could be another record year.

The company also said that 2012 profits could match 2011. The firm reported a net profit of 15.8bn euros (£13.4bn; $21.2bn) for last year, double the surplus it made in 2010.

VW says its goal is to become the world's biggest and most profitable carmaker by 2018.

And watchmaker Swatch and jeweller Tiffany are suing each other following the collapse of their production deal.

In 2007, Swatch agreed to produce watches under the Tiffany brand. Under the deal, the two firms would have shared the profits.

But last year, Swatch ended the deal, accusing Tiffany of blocking the development of the business.

Swatch is now suing Tiffany for 3.8bn Swiss francs ($4.1bn; £2.6bn), and Tiffany has launched a counterclaim.

Our Business Daily podcast looks at the Japanese economy a year on from the tsunami and discusses the latest Greek bailout.

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