Thursday newspaper round-up: China, Brexit, zombie companies

Michele Maatouk WebFG News | 07 Dec, 2017 07:23 - Updated: 07:28 | | |


Fears that China risks being the cause of a fresh global financial crisis have been highlighted by the International Monetary Fund in a hard-hitting warning about the growing debt-dependency of the world’s second biggest economy. The IMF’s health check of China’s financial system found that credit was high by international levels, that personal debt had increased in the past five years, and that the pressure to maintain the country’s rapid growth had bred an unwillingness to let struggling firms fail. – Guardian

Britain must pay an exit bill of about £40 billion even if it does not get a trade deal with the EU, Philip Hammond said yesterday. The payments are likely to be spread over 40 years. He told MPs: “I find it inconceivable that we as a nation would be walking away from an obligation that we recognised as an obligation. That is not a credible scenario. That is not the kind of country we are. Frankly, it would not make us a credible partner for future international agreements.” - The Times

Companies based in Britain will start relocating jobs unless Theresa May secures the outline of a transition deal at next week’s EU summit, employers have warned. Piling further pressure on the prime minister, the president of the CBI said last night that 60 per cent of firms with Brexit contingency plans would activate them by Easter unless the European Council summit gave the go-ahead for trade and transition talks. - The Times

It is impossible to imagine a worse outcome for Britain than failing to agree a Brexit deal, the House of Lords will warn on Thursday, in a last-ditch warning to ministers under increasing pressure to walk away from stalled talks with the EU. In a 60-page report that predicts legal and economic chaos without an exit agreement, the cross-party committee of peers cautions that a government strategy of brinkmanship with Brussels “risks becoming a self-fulfilling prophecy”. – Guardian

Theresa May’s efforts to win EU approval to start trade talks were last night losing momentum after Leo Varadkar signalled that the Irish border row would not be solved in time for next week’s crucial summit. Mrs May yesterday spoke to both the Irish prime minister and Arlene Foster, the leader of the Democratic Unionist Party, but there was little sign of a breakthrough on how Britain could meet its promise to avoid a hard border after Brexit. - The Times

A deal for Walt Disney to buy a large slice of 21st Century Fox has entered the advanced stages and could be agreed before the end of the year, according to reports last night. Disney wants to buy several entertainment and international distribution assets from 21st Century Fox. Talks between the companies broke down in October, but were reopened at the end of last week. - The Times

There are as many as 100,000 “zombie companies” holding back the economy by soaking up credit that could be used to finance the businesses of the future, a study has claimed. The Organisation of Economic Co-operation and Development has assessed the impact on productivity of zombie firms kept on life support by their banks and has found that Britain would be growing more quickly if it encouraged a clearout. – The Times

Liam Fox has called for an overhaul of international trade statistics to solve the “iPhone problem”. The international trade secretary said that the statistics risked luring ministers into policy blunders because the gross value of exports and imports often masked the true picture of trade flows. He cited the example of the iPhone, which researchers have found appreciably widens America’s trade deficit with China as it is booked as a Chinese export despite most of the value lying in US intellectual property and software. – The Times

Uber's recently-departed UK boss, who left shortly after the transport app lost its London licence, has signed up for a job at a European tech fund. Jo Bertram has joined EQT Ventures, a €566m (£499m) arm of the Swedish private equity group EQT, where she will be tasked with helping to find the next generation of Ubers. – Telegraph

Hammerson's swoop for rival Intu Properties sent the shopping centre owner’s share price tumbling and was immediately questioned by investors and critics. One senior property investor said: “David Atkins has clearly gone for a shock-and-awe type of deal to wake everyone up, but I think is the most stupid deal anyone could have done." - The Times

Cancer patients and people with severe mental illness are going without essential medicines because of shortages that have cost the NHS £180 million in six months. At least 100 drugs have been affected by supply problems, forcing health officials to approve temporary price rises of up to 4,000 per cent to boost stocks. - The Times

A former Volkswagen executive has been sentenced to seven years in jail and given a $400,000 (£300,000) fine after pleading guilty to helping the German carmaker cheat on diesel emissions tests. The "dieselgate" scandal has cost Volkswagen as much as $30bn in fines, buybacks and settlements since 2015 when it admitted fitting 11m diesel vehicles worldwide with so-called defeat devices to suppress emissions of nitrogen oxide during tests. These allowed vehicles to cheat pollution tests. – Telegraph

Online retailers are breaking the law if they sell luxury products without permission from the owners of the brands, the European Union’s highest court has ruled. In a boost to some of the world’s most famous luxury labels, the European Court of Justice ruled that manufacturers had the right to protect their image by restricting sales of their products through websites such as Amazon and Ebay. - The Times

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