Meta Opinions

According to the recent global news, Australian economy grew at its fastest pace in three years in the second quarter of the year. The growth was fueled by demand for the country’s iron ore and other commodities, mainly from China.

This figures was released last Wednesday, showed gross domestic product (GDP) expanded 1.2% in the April-June quarter from the previous quarter, compared with 0.7% in the first quarter. Australia has gone for 19 years without suffering a recession. It was hit by the recent global downturn, but less hard than most other developed countries. Australia came through the crisis better than most other developed countries, although it still needed a stimulus package of 42bn Australian dollars ($38bn).

“It’s a fantastic result – the economy is as strong as an ox,” said Brian Redican, a senior economist at Macquarie. “It was also well balanced, with household consumption much stronger than anyone thought. The figure meant there was now very little chance of a cut in interest rates. Investors had thought there might be cut in interest rates at some point in the near future, as inflation had been cooling.”

According to the latest buzz, Washington Post is to sell Newsweek magazine to Sidney Harman, 91-year-old founder of audio equipment firm Harman International Industries. He won Newsweek in an auction that included Fred Drasner, ex-publisher of the New York Daily News, and OpenGate Capital, owner of TV Guide. It brings to an end nearly 50 years of the Post owning the US weekly news magazine.

The magazine has been losing money in recent years. It also lost nearly $11m during the first quarter of this year. “In seeking a buyer for Newsweek, we wanted someone who feels as strongly as we do about the importance of quality journalism,” said Donald Graham, chief executive of the Washington Post.

The size of the deal was not revealed but the newspaper publisher is retaining the pension assets, liabilities and certain employee obligations of Newsweek. The magazine, which has about 300 employees, was put up for sale in May. Like many magazines across the world, Newsweek has struggled during the downturn with falling advertising revenue. It has also suffered as readers increasingly rely on free online news. Newsweek was launched in 1933 and was bought by the Post in 1961.

According to the latest news, China has confirmed that a new tax on sales of primary resources will be rolled out nationwide. The 5% tax is being tested in the western province of Xinjiang, with revenues going to the local government. Beijing also plans to tax other raw materials, although the tax rate may vary, a government spokesman said.

“The reform will clearly increase the local fiscal income of the resource-rich western regions. Before going nationwide, the tax will first be rolled out across the other Western regions of China – including Tibet – and will be extended to coal sales.” said Du Ying of the Chinese planning agency.

The resources tax will meet demands from local government for more fiscal autonomy. In Xinjiang – which has significant commodity deposits – there was already a tax on oil and gas output, which will now be replaced by the new sales tax.

The tax may offset the impact on domestic energy and commodity prices of a recent shift in China’s exchange rate policy. The new “flexible” yuan policy is widely expected to allow the Chinese currency to increase in value against the dollar over the coming months. This would make the cost of commodity and energy imports – on which the Chinese economy is heavily dependent – cheaper.

According to the recent news, there are disappointing manufacturing reports from China and Europe have worried investors, raising concerns over the strength of the global recovery. World stock markets fell on Thursday following data showing that pace of growth in Chinese manufacturing slowed in June.

Meanwhile the eurozone also reported its second successive monthly fall in manufacturing growth. European stock markets closed down between 1.8% and 3% following the news. In the US, the Dow Jones Industrial Average also fell in early trading.

In China, the Purchasing Managers’ Index (PMI), which measures manufacturing growth, fell to 52.1 in June from 53.9 in May. Thus, observers said the data suggested that the faltering global recovery was affecting China’s output. “The Chinese economy is cooling down, and the export and import sector is the first to feel the pinch,” said He Yifeng, an analyst with Hongyuan Securities in Beijing.

A separate survey on China, compiled for HSBC, showed a steeper fall to a 14-month low of 50.4 from 52.7 in May. Anything above 50 shows an expansion. Manufacturing growth in other parts of Asia also slowed, with India’s rate of growth down from a two-year high and South Korean manufacturing growing at its slowest rate in six months.

In Europe, the PMI measure for the eurozone also fell, raising fears that fiscal tightening measures may already be hitting demand. The UK appears to be faring slightly better, though manufacturing is still growing slower than in May. The European figures were of particular concern to analysts.

“The second successive drop in the PMI in June suggests that the eurozone’s manufacturing upturn may now be flagging,” warned Howard Archer, chief European economist at IHS Global Insight. “This could be partly due to inventory corrections drawing to a close in some countries. But it may also be a sign that the eurozone debt crisis and an associated intensified tightening of fiscal policy in a number of countries is having a dampening impact on economic activity, he added.”

According to the latest news, shares in EADS have surged after Dubai airline Emirates placed a huge order for A380 super-jumbo jets. The deal for 32 double-decker A380s brings the number ordered by Emirates to 90 and signals the airline’s intention to continue its rapid growth.

The A380s, made by EADS’s Airbus unit, have a list price of $11.5bn, although Emirates probably secured big discounts on such a large order. The order, announced at the Berlin Air Show, is especially good news for Airbus, which has faced a series of operational and financial difficulties. And the news came in the week that global airlines upgraded their profit forecasts after the worst recession for decades, according to figures from the International Air Transport Authority.

The small emirate of Dubai has aspirations to be the world’s aviation hub for air traffic moving across the globe. State-owned airline’s growth rate was summed by Wolfgang Mayrhuber, chief executive of rival Lufthansa, when he told a meeting in Berlin: “It is already too many of us a miracle that Emirates now already has more seats on intercontinental routes than Air France and British Airways together, with a relatively small home market.”

Emirates airline carried 27.5 million passengers last year, an increase of 4.7%. The airline is already using 10 of the A380s, which typically carry about 525 passengers. Emirates  Chief executive Sheikh Ahmed bin Saeed al-Maktoum said “Our latest commitment signals Emirates’ confidence in the growth to come in a thriving aviation sector.”