Monday newspaper round-up: China, Peacocks, S&P

16th Jan 2012 06:55

China can maintain an annual growth rate of 8% for the next two decades, the World Bank has said, raising hopes that the powerhouse economy will help lead other countries back to growth. Justin Lin, the World Bank's chief economist used a wide-ranging speech in Beijing to issue the upbeat prognosis for the Chinese economy. Economists remain split over whether China can avoid a hard landing in the wake of rampant inflation and rocketing property prices, but Mr Lin said the country's government had the room to use policies to maintain demand and growth. Mr Lin described the country's fiscal position as "sound" and said there was room for significant industrial development, urbanisation and infrastructure development to help drive growth, The Telegraph reports. Global markets are set for a rocky day of trading after German leader Angela Merkel warned that it could take many months to rebuild confidence in the Eurozone and schisms over financing the bloc's bail-out fund re-emerged. The German chancellor warned that Standard & Poor's decision to downgrade nine Eurozone countries on Friday evening demonstrated that politicians needed to step up their efforts to resolve the crisis, warning that it was a "longer process" that would take more than a few months. "The decision confirms my conviction that we have a long way ahead of us before investor confidence returns," she said in a radio address. Germany was not among the countries downgraded, The Telegraph says. George Osborne will hail a ground breaking agreement with China today that will bring a multibillion-pound boost to the City of London. Speaking in Hong Kong, the Chancellor will say that Britain must look to the Asian "engine of world growth" as he announces that London will become an offshore trading centre for the Chinese currency, the yuan. Mr Osborne, who faces warnings that Britain has slipped back into recession, will contrast the struggling economies of Europe with the burgeoning growth of China. While he will admit that European countries are working hard to improve the situation, he will add: "The Chinese economy is 15 times larger than it was when I first visited China as a student two decades ago. In 1960, South Korea had the same income per head as those in sub-Saharan Africa. Today, South Koreans enjoy an average income of $23,000 [£15,000]," writes The Times. The Royal Bank of Scotland has emerged as the main lender refusing to save Peacocks, the struggling retailer, putting 10,000 jobs at risk. The bank, majority owned by the taxpayer, is believed to be reluctant to inject any more money into the company, which is burdened with £240m of debt. RBS's unwillingness to prop up Peacocks is not just worrying for the retailer, which runs 700 shops, it is also of great concern for a number of high street names backed by the lender. A source close to the bank said: "Yes, RBS is owned by the taxpayer, but that means it has a responsibility to look after that money wisely. Should it throw good money at the sector, when we've seen how bad conditions are?" RBS also supports HMV and Clinton Cards, both of whom have been hit hard in recent months, The Telegraph reports. The slowdown in Scottish economic growth finally began to catch up with the country's jobs market last month, according to data released today. Figures from Bank of Scotland showed the number of people being placed into permanent jobs fell for the first time since September 2010. The bank's labour market barometer - which is designed to give a snapshot of the employment market - fell from 51.4 in November to 50.3 in December, its lowest reading in 14 months. Although any figure above 50 indicates an improvement in the market, last month's reading shows only marginal growth. However, Scotland's jobs market continues to outperform the UK as a whole - it posted a reading of 48.6 in December, showing the overall market had got worse, The Scotsman says. Glencore is facing legal action over pollution caused by its vast and lucrative copper operations in Zambia. Glencore's Mopani Copper Mines subsidiary has been a thorn in the firm's side since its £6bn float in May last year, throwing up allegations of environmental recklessness and tax avoidance, which the company denies. The Swiss-based firm could find itself dragged through the courts after Zambian campaign group the Centre for Trade Policy and Development demanded the company explain itself or face a lawsuit, The Daily Mail says. AB