Ray S. Eñano, Editor business@thestandard.com.ph extrastory2000@gmail.com
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WEDNESDAY, JULY 19, 2017
Business
US eyeing sanctions vs Venezuela By Maria Isabel Sanchez, with Andrew Beatty In Washington
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ARACAS, VENEZUELA―US President Donald Trump threatened Venezuela with swift “economic actions” on Monday if its leader pushes on with an unpopular bid to change his country’s constitution amid mounting condemnation.
CHINA RISKS. New cars are seen in a parking lot of the Brilliance factory in Shenyang, in China’s northeast Liaoning province on July 17, 2017. China posted better-than-expected growth in the second quarter, official data showed on July 17, but authorities warned that the world’s second largest economy faces external and internal risks. AFP
China’s Xi calls for a more ‘open economy’ BEIJING, China―Chinese President Xi Jinping has called for an increase in imports and fewer restrictions for foreign investors as Beijing comes under pressure from the US and Europe to provide a more level playing field for companies in the country. Donald Trump has railed against China’s massive trade surplus while the European Union and US companies have complained about a lack of access to the huge market. Speaking to a Communist Party committee on financial and economic affairs, Xi called for “expanding imports while stabilizing exports,” state-run media
reported on Tuesday. China’s leaders trying to transform the economy from a reliance on exports and state investment to one driven by domestic demand, though that has led to a slowdown in growth to 26-year lows. Xi also said “an open economy” with fewer restrictions to foreign access will serve to “promote balance of payment under the current account,” according to the China Daily. The large US trade deficit with China was a major talking point for Trump during last year’s presidential campaign, when he claimed Beijing had “stolen”
millions of jobs from Americans. He also accused China of manipulating its currency to support its exports―a charge he has dropped since taking office in January. In his statement on Monday, Xi called for measures to liberalize trade and simplify import procedures while reducing tariffs on certain consumer products. He stressed keeping the yuan currency’s value “basically stable at a reasonable and balanced level,” and steadily pushing it “to become an international currency,” Xinhua state news agency reported. At the World Economic Forum
in Davos, Switzerland, at the start of the year, Xi stood out as a defender of free trade and globalization in the face of Trump’s protectionist rhetoric. But foreign firms in China have long pointed out the obstacles to doing business in the country, where they say domestic companies enjoy distinct advantages. “A market environment featuring fair play should be created in the country,” Xi said in his statement, noting that “national treatment in laws and policies should be granted to foreign-funded companies after they enter the market.” AFP
The warning came as Venezuela’s opposition coalition called a nationwide strike for Thursday to kick off a “final offensive” aimed at forcing President Nicolas Maduro from office through early elections. Maduro, Trump said in a statement, was “a bad leader who dreams of becoming a dictator.” “The United States will not stand by as Venezuela crumbles,” he said. Trump did not specify what measures could be taken. But the warning dramatically raised the stakes and scope of the long political and economic crisis that has been battering Venezuela. Nearly 100 people have died since April, when street protests against Maduro turned violent. Trump’s stance explicitly sided with Venezuela’s opposition, which accuses Maduro of trying to accumulate dictatorial powers to hang on to the reins. It risked fueling Maduro’s frequent allegations that he was the victim of a plot by a colluding right-wing opposition and the “imperialist” United States. There was no immediate reaction from the Venezuelan president. Separately, Colombian President Juan Manuel Santos was in Cuba―a close ally of Venezuela―on Monday for meetings with President Raul Castro. Colombian Foreign Minister Maria Angela Holguin said the Venezuelan crisis was discussed, but she denied reports that Santos traveled to convince Castro to act as a mediator. Venezuela’s opposition coalition has called a nationwide, 24hour strike for Thursday to add
pressure to Maduro following an unofficial weekend vote it held that rejected the leader’s plan. That plan, which Maduro has shown no sign of deviating from, entails a citizens’ body― called a “Constituent Assembly”―being elected on July 30 to redo the constitution. Maduro says that path is the only way to secure peace and economic recovery in Venezuela. His government has dismissed the opposition vote against it as illegal. But Trump said that, “if the Maduro regime imposes its Constituent Assembly on July 30, the United States will take strong and swift economic actions.” Venezuela, with the largest proven oil reserves in the world, is almost entirely reliant on its crude exports. The United States imports around 270 million barrels of oil a year from Venezuela, according to the US government’s Energy Information Administration―a volume in decline by about a third compared to a decade ago. Venezuela’s opposition is intent on a “final offensive” ultimately aimed at toppling Maduro through early elections. On Sunday, more than a third of Venezuela’s 19 million voters took part in the opposition ballot, giving an overwhelming rejection to the election of a Constituent Assembly and backing a presidential election before Maduro’s term ends in 2019. The poll was lauded by the European Union, the United Nations, the US, Brazil and other countries. AFP
US seeks Cheap solar supplying power at night seen soon in Middle East Hirtenstein decreased ByandAnna Mathew Carr trade gaps in Nafta WASHINGTON―The United States on Monday said it would work to shrink trade deficits with Canada and Mexico in talks to renegotiate the landmark 1994 North American Free Trade Agreement (Nafta). The Trump administration has focused on boosting domestic manufacturing while cutting trade deficits―which it sees as damaging to the economy―a move that risks undoing the free trade efforts of prior administrations. The US Trade Representative said that when Nafta talks begin next month, Washington also will seek to lower trade barriers for produce and industrial goods―while eliminating subsidies US officials say are unfair in trade with the two neighboring nations. “President Trump continues to fulfill his promise to renegotiate Nafta to get a much better deal for all Americans,” US Trade Representative Robert Lighthizer said in a statement. “Too many Americans have been hurt by closed factories, exported jobs, and broken political promises.” USTR released the Nafta negotiating objectives as required prior to the start of the talks, which will be held under a pressing political timeline due to elections next year in the US and Mexico. AFP
SOLAR plants that supply electricity at competitive prices after the sun goes down are about to become a reality in the Middle East, according to one of the region’s biggest developers of power plants. ACWA Power International Chief Executive Officer Paddy Padmanathan confirmed his company is the low bidder on a $1-billion project that will feed electricity to the grid for the Dubai Water & Electricity Authority between 4 p.m. and 10 a.m. More such plants are likely to follow because Chinese companies will start driving down the cost of equipment, he said. The 200-megawatt Dubai contract, which runs for 25 years, will harness a twodecade old technology called concentrated-solar, or solar thermal. Unlike photovoltaics, which generate a charge directly from the sun’s power, thermal plants use mirrors to concentrate heat on water, turning it to steam to drive a turbine. The heat can be stored in molten salt to be used later. The technology to date has slipped behind PV on cost but is quickly becoming more competitive, the executive said. “I expect concentratedsolar power, within 18 months, to be head to head with combined-cycle gas, if
Solar panels stand at the Ivanpah Solar Electric Generating System in the Mojave Desert near Primm, Nevada, U.S., on Monday, March 10, 2014. Bloomberg
not more competitive,” Padmanathan said in an interview in London. “The focus has been on PV and batteries, but there’s a limit on how long they can hold a charge for. We’re proving that CSP can work through the night.” Since it can retain heat, the plant can keep working after dark. The sun’s energy in some cases can heat molten salt to 490 degrees Celsius (914 degrees Fahrenheit), which allows operators to predict when electricity will flow. Uncertain Outlook While solar thermal plants
are becoming cheaper, PV costs are falling too, raising questions whether the Dubai project really will be as attractive as ACWA expects, said Jenny Chase, head of solar analysis at Bloomberg New Energy Finance. “This plant in Dubai is for delivery by 2021,” Chase said. “By then, we’re expecting solar PV and batteries to be in the same order of magnitude for cost and will be a lot more flexible than a solar thermal plant. Also, a lot of these projects are operating below what they’re meant to, such as the entire Spanish fleet and some in India
as well.” There are 319 gigawatts of photovoltaic panels installed worldwide, compared to about 5 gigawatts of solar thermal, according to BNEF data. The mass deployment has driven down costs of solar panel equipment by about 70 percent since 2010, with the latest record set in Abu Dhabi at 2.45 cents per kilowatt-hour. In comparison, solar thermal was around 15 to 18 cents per kilowatt-hour until recently. China hosts 80 percent of the world’s PV solar manufacturing industry. The nation’s expertise
at mass production is credited with making solar panels more affordable, although companies are now reviving work on thermal technology. More Suppliers “There are currently just two suppliers in solar CSP,” Padmanathan said. “The others have gone bankrupt. I know of at least five Chinese companies that are starting to enter the market.” ACWA, which is based in Riyadh, Saudi Arabia, bid 9.45 cents per kilowatt-hour, almost cutting in half the cost of concentrated-solar power. Each of the bidders were also asked to submit an alternative tender. The off-taker will choose between the bid and the alternative bid, so the price may be even lower. ACWA has also built similar projects in Morocco’s Noor solar complex and South Africa’s desert. One in each nation are operating, with two more in Morocco and one in South Africa currently under development. ACWA is also seeking to build two more projects in Morocco in the Midelt area, which will have a joint capacity of 350 megawatts. “I’m also hoping to build one in Saudi,” Padmanathan said. “Right now they’re tendering for solar PV and wind, but I think they’ll want a CSP project as well, especially when they see how cost competitive it can be.” Bloomberg