Business
Beijing Has No Choice but to Buy Australia’s Iron Ore: Economist
Despite politically motivated trade sanctions on Australian goods, Beijing has been left buying Australia’s expensive iron ore by the boatload. Professor of Economics at the University of New South Wales (UNSW), Richard Holden, said that Canberra holds a great deal of influence over Beijing, who has nowhere else to turn to meet its ravenous iron ore demand, even if it wanted to. “We’ve actually got quite a lot of leverage with China in this instance, which is that they need a lot of iron ore,” Holden told The Epoch Times. “And they don’t buy iron ore from us because they want to be particularly nice to Australia.” “They buy it because we produce a lot of it, we produce it very efficiently and effectively, and we don’t have some of the situations that have led to the iron ore price going up so much, like when Brazil had so many …
Business
Nigeria and China Revive Currency Swap Agreement – Guardian Nigeria
Nigeria and China have renewed their currency swap deal, enhancing economic cooperation and facilitating trade between the two nations, as reported by Guardian Nigeria.
Currency Swap Deal Renewed
Nigeria and China have officially renewed their currency swap agreement, which is vital for strengthening economic ties between the two nations. This deal is designed to enhance trade relations, making transactions more efficient and less vulnerable to fluctuations in foreign exchange markets.
Benefits for Both Nations
The renewed agreement allows both countries to conduct trade using their local currencies, thereby reducing dependence on the U.S. dollar. This initiative is expected to foster economic stability and boost bilateral trade, benefiting businesses on both sides significantly.
Future Prospects
As the agreement takes effect, it is anticipated that Nigeria will experience easier access to Chinese goods and investments. This partnership not only promises immediate economic advantages but also signals a long-term commitment to closer collaboration between Nigeria and China, paving the way for future developments in trade and infrastructure.
Source : Nigeria, China renew currency swap deal – Guardian Nigeria
Business
China Provides Clarification on the Implementation of Article 88 (1) of the New Company Law
China’s Supreme People’s Court clarified that Article 88(1) of the New Company Law won’t apply retroactively, easing concerns for prior shareholders in equity transfers before July 1, 2024.
Clarification on Article 88(1) Non-Retroactivity
The Supreme People’s Court of China has clarified that Article 88(1) of the New Company Law will not retroactively apply to equity transfer disputes occurring before July 1, 2024. This announcement aims to address concerns from existing shareholders and resolve discrepancies in judicial decisions nationwide. Companies are advised to strengthen risk management practices for future equity transactions.
Judicial Guidance and Legal Framework
On December 24, 2024, the Supreme People’s Court issued a response reaffirming that disputes tied to equity transfers before the July 1, 2024, deadline will be governed by previous laws. This decision follows inconsistencies in judicial rulings regarding capital contributions, prompting a review by the Legislative Affairs Commission, which concluded that retroactive application was not justifiable.
Risk Management Strategies Moving Forward
Despite the ruling, equity transfers after July 1, 2024, may still attract supplemental liability under Article 88(1). To mitigate these risks, businesses should consider reducing registered capital, conducting thorough risk assessments, and implementing contractual safeguards to protect against potential liabilities.
Source : China Clarifies the Application of Article 88 (1) of the New Company Law
Business
Russia’s Booming Economy is Straining a Vital Trading Route with China
Russia’s railway industry is experiencing a significant downturn, with a nearly 30% investment cut and a 5% freight volume decline, complicating trade with China amidst the economic impacts of the Ukraine war.
Downward Trend in Russia’s Railway Industry
Russia’s railway industry is currently experiencing a significant downturn, largely due to the impacts of the ongoing conflict in Ukraine. According to MMI Research, this sector is facing its biggest slowdown since the Great Financial Crisis, with freight volumes dropping by 5% in the first 11 months of 2024. The war-driven economy has hindered trade, particularly with China, which heavily relies on rail transport.
Investment Cuts and Economic Consequences
Investment in Russia’s railways is set to decrease by almost 30% next year, dropping to 890 billion rubles (approximately $8.5 billion). This reduction is attributed to high interest rates, currently at a record 21%, which further complicate financing options. The state-owned Russian Railways is reconsidering future investments, indicating potential cuts by another third through 2030.
Challenges Affecting Trade with China
The decline in rail capacity poses significant challenges for Russia’s trade with China. As Western sanctions push Russia to diversify its trade routes, rail transport has become increasingly vital for moving goods. However, supply bottlenecks, exacerbated by the need to transport war-related materials, threaten to disrupt this crucial trading relationship further.
Source : Russia’s overheated economy is squeezing one of Moscow’s key trading channels with China
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