International News 03 January 2025
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Trump's tariff threats weaken manufacturing activity in Asian countries
Asia's manufacturing hubs ended 2024 on a weak note, with factory activity slowing in China and South Korea. This is attributed to deteriorating demand expectations in the new year, as trade risks during Donald Trump's second term and China's fragile economic recovery dampen sentiment. However, Taiwan and Southeast Asia saw an increase in manufacturing activity. President-elect Trump's imminent imposition of high tariffs on imports from Mexico, Canada and China will have a significant impact on major exporting countries and global economic activity. China's manufacturing PMI fell to 50.5 in December, below analysts' forecasts and pointing to only modest growth. While China's policy support at the end of 2024 has boosted growth and will be reflected in Q4 indicators, there are concerns that this improvement may not last beyond 2025.
Alibaba sells Sun Art Retail shares to DCP for US$1.58 billion
Alibaba Group Holding has announced the sale of its 78.7% majority stake in Sun Art Retail Group to Chinese private equity firm DCP Capital for HK$12.298 billion ($1.58 billion). This strategic move follows Alibaba's acquisition of a controlling stake in Sun Art for $3.6 billion in 2020, with the aim of leveraging its digital platforms to support Sun Art's hypermarkets in China. The decision to divest the stake follows a significant surge in Sun Art's shares, which have appreciated by 85% in Hong Kong over the past year, outperforming the Hang Seng Index's 20% rise. Alibaba's strategic realignment has included the divestiture of this stake, reflecting the company's ongoing emphasis on e-commerce operations. This strategic move follows Alibaba's recent divestiture of its department store unit in China, Intime, despite incurring a loss on the transaction.
These are the countries affected when Russian gas supplies to Europe via Ukraine end
The transit of Russian gas supplies through Ukraine to Europe is set to end on 1 January 2025, as Ukraine's Naftogaz has refused to renew its transit deal with Russia's Gazprom.Despite the ongoing war between the two countries, Ukrainian President Volodymyr Zelenskiy has suggested that they might consider allowing Russian gas transit if payments to Moscow were withheld until the conflict ended. However, Russian President Vladimir Putin stated that there was not enough time left to sign a new deal this year.Since Russia invaded Ukraine in February 2022, the volume of Russian gas supplies to Europe has decreased significantly, prompting the EU to reduce its reliance on Russian gas.At its peak, Russia held approximately 35% of the European gas market, but this has now dropped to around 8%. As of 1 December, the EU received less than 14 billion cubic metres of gas from Russia via Ukraine, compared to 65 bcm/year in 2020.The European Commission has stated that these volumes could be fully replaced by liquefied natural gas and non-Russian pipeline imports.