Morning business round-up: US urges China to move focus

  • Published

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

US Treasury Secretary Timothy Geithner has urged China to change its export-led growth policy and focus on increasing domestic consumption.

Mr Geithner said that such a shift was necessary to sustain China's economic growth in the future.

"In China, you are in the process of exploring the next frontier of economic reforms, recognizing as your predecessors did more than 30 years ago, that future economic growth will require another fundamental shift in economic policy," Mr Geithner said at the opening of the annual US-China talks in Beijing.

China, the world's second-largest economy, relies heavily on its exports for growth.

However, a slowdown in key markets such as the US and Europe has raised fears about China's growth prospects.

In Europe, French bank Societe Generale has said that its first quarter profits fell 20% as the eurozone debt crisis continued to hamper results.

Net profit for the first three months of the year fell to 732m euros ($962m), from 916m euros last year.

SocGen said a "sharp upturn in corporate and investment banking activities" had begun once the last Greek bailout had been finalised.

Shares in the bank have fallen by 60% in the past year.

Spain has successfully sold 2.52bn euros of bonds, but at much higher interest rates.

The Bank of Spain sold three-year bonds at average yields of 4.04%, up from 2.6% at its last sale on 1 March.

It also sold two categories of five-year bonds, with yields of 4.75% and 4.96%, up from 4.3% on 4 April.

Media caption,

Biz Heads

The Renault-Nissan alliance has agreed to raise its stake in Lada-owner Avtovaz to take majority control of Russia's largest carmaker.

The French-Japanese alliance partners hope the deal will result in closer collaboration between the three and bring about cost savings.

As part of the deal, Renault and Nissan models could be produced alongside Ladas in Togliatti, Russia. The deal will come into force by 2014.

German airline Lufthansa is to cut 3,500 jobs as it seeks to cut its administrative costs by a quarter.

The airline will cut those full-time jobs in administrative departments worldwide over the next few years.

The news came as its loss narrowed to 379m euros ($498m) in the first quarter, from a loss of 507m euros in same period of 2011.

Lufthansa blamed higher fees and taxes, even as quarterly revenues rose by 5.6% to a record 6.6bn euros.

In the UK, a closely-watched survey has suggested that growth in the dominant service sector slowed in April but remained "solid".

The Markit/CIPS services purchasing managers' index (PMI) fell to 53.3 last month from 55.3 in March. A number above 50 indicates growth.

The survey found that profit margins were under pressure from a "strong" rise in input prices.

But it also found business expectations at their highest level for two years.

Finally, UK gas producer BG Group has announced a deal to sell its stake in Brazil's Comgas to Sao Paulo-based Cosan for $1.8bn (£1.1bn).

BG said it expected to deal to be completed by the end of the year.

The group also reported a surge in first quarter profits, which jumped to $2.2bn from $1.4bn a year earlier. Revenue rose 20% to $5.8bn.

The latest edition of Business Daily looks at Greece's attempts to sell the family silver to raise cash to pay down its debts.

Around the BBC