Tue, May 09, 2023 page10

• World Business Quick Take

  • Agencies
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  INDUSTRY

  German production falls

  German industrial production fell more than expected in March, partly due to a weak performance by the automotive sector, spurring recession fears in Europe’s largest economy. Production decreased by 3.4 percent on the previous month following a slightly revised increase of 2.1 percent in February, the Federal Statistical Office said yesterday. “After a buoyant performance by industrial production at the beginning of the year, there was an unexpectedly sharp decline in March,” the Federal Ministry for Economic Affairs and Climate Action said. The manufacture of motor vehicles and automotive parts fell by 6.5 percent on the previous month. Production in machinery and equipment fell by 3.4 percent, and output in the construction sector decreased by 4.6 percent from a month earlier. In the first quarter, production was 2.5 percent higher than in the final quarter of last year, the statistics office said.

  DEBT

  Chinese ratio hits 279.7%

  The Chinese economy’s debt ratio reached a record high in the first quarter of this year, with bank loans to companies surging as the nation emerged from its “zero COVID-19”policy. The macro leverage ratio — or total debt as a percentage of GDP — soared to 279.7 percent in the first quarter, Bank of China and National Bureau of Statistics data compiled by Bloomberg showed. That was an increase of 7.7 percentage points from the previous quarter, the biggest jump in three years. The debt ratio held by non-financial corporates rose 5.8 percentage points. Leverage ratios for the household and government sectors were each up by about 1 percentage point. The data does not include bank loans to local government financing vehicles.

  MINING

  Plant gets rules extension

  Malaysia granted a six-month extension to Australian miner Lynas Rare Earths Ltd to get its rare earth plant in line with environmental requirements. The deadline for the plant to be radiation-free has been extended to January next year, Science, Technology and Innovation Minister Chang Lih Kang (鄭立慷) said. The Lynas rare earths refinery in Malaysia is the largest outside China, but has been dogged by environmental concerns and community opposition. The government in February issued a new three-year license to Lynas’s plant in the state of Pahang, with one of the conditions requiring that “cracking and leaching” of lanthanide concentrate move to an area outside of Malaysia by July 1. The business unit generates radioactive waste, authorities said.

  FINANCE

  Venture announces funds

  Mitsubishi UFJ Financial Group Inc plans to start two debt funds alongside Liquidity Capital with as much as US$400 million to provide financing for middle and later-stage start-ups in Japan and Europe. The funds would be established under Mars Growth Capital Pte, a joint venture between Japan’s largest bank and the Israeli tech lender, the companies said in a statement. The Japan fund would have a maximum of ￥20 billion (US$14.8 million) and the European fund up to US$250 million, they said. The move is the latest by Japan’s biggest banks to ramp up start-up finance, where they increasingly see potential for new business. Mars Growth Capital, based in Singapore, launched in 2021 and has been providing debt finance to start-ups in Asia and elsewhere.
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