Chinese premier warns slowing growth raises job concerns

BEIJING (Reuters) - China's slowing growth poses a major challenge to job creation for the world's most populous nation and the country will need to achieve a "golden" balance between structural adjustment and growth, Premier Li Keqiang was quoted as saying on Sunday.

China's economy is set to grow at its slackest pace in 23 years in 2013, at 7.5 percent, as its export sales falter on fragile global demand.

The country's leaders have pledged deep economic reforms to shift away from an export-led economy to one more reliant on domestic consumption, while making it clear they will accept lower growth rates during the transformation. But Li said such a path would present challenges.

"China has already entered a new stage of development. To maintain a growth rate as rapid as in the past is not realistic, but development is the foundation to solving many problems," state media quoted Li as telling a recent meeting with business leaders.

"As a big country with 1.3 billion people, there is no certain pace of development that can cope with so many difficulties and problems, especially preserving jobs."

The premier added that China would need to find a "golden balancing point" between upgrading the economy and maintaining a reasonable growth rate to ensure further job creation.

China's leaders gather from November 9 to November 12 at a Communist Party plenum to discuss deepening reforms of the world's second largest economy.

Li told Chinese and foreign business leaders last week that China would further reform its government finances, financial markets and industry, among other areas.

(Reporting By Dominique Patton; Editing by Ron Popeski)

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Chinese, Egyptian onions to the rescue

Bangalore, Oct 23 (IANS) In a bid to check the soaring onion prices, the United Progressive Alliance government would soon import the vegetable bulbs from China or Egypt, Union Agriculture Minister Sharad Pawar said Wednesday.

The imports would be channelised through the state-run National Agricultural Cooperative Marketing Federation of India (Nafed), the minister said.

"We will authorise Nafed to import onions from China or Egypt where prices are lower if domestic prices remain high," Pawar told reporters on the margins of a farm meet.

As an apex body, Nafed promotes trade of farm produce and forest resources across the country, besides procuring agri-products.

"As there are ample stocks of onions in China and Egypt, we will take action early. The imported price is $500 per tonne as against $900 per tonne in the country currently," Pawar said, after inaugurating the eighth national conference of Krishi Vigyan Kendras organised by the state-run Indian Council of Agricultural Sciences.

Hoping that procurement in the domestic market would improve in a couple of weeks and aid stabilisation of onion prices, Pawar said a large quantity of the onion crop got damaged due to excessive rain in states where the bulb is grown extensively.

"At the same time, every state should take stringent action against hoarding. Nobody is exporting. The hoarding is causing shortage in the market," Pawar said.

Noting that imports would increase supply, the minister said onions have started coming to the market in Alwar in Rajasthan, about 160 km from Delhi.

Lower supply to the market had led retail onion prices to touch Rs.100 per kg in Delhi Tuesday, from Rs 80 per kg last week.

Expressing concern also for onion growers, Pawar said if prices of the bulb crash in the future the government would have to protect the investment of farmers in their crop.

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Chinese tensions hit world shares, dollar tentative

By Marc Jones

LONDON (Reuters) - Concerns over tighter Chinese monetary policy hit global shares still high on hopes of extended U.S. stimulus on Wednesday, when the dollar tentatively steadied at an eight-month low after its latest slide.

European shares saw their biggest falls in two weeks as markets opened when fears of tighter policy in China were amplified by reports that some of its big banks were tripling write-offs on bad loans.

Asian markets saw widespread weakness as a variety of factors ranging from a strengthening yen in Japan and fading rate cut hopes in Australia added to the negativity.

"What has happened this morning is that we have the Chinese rate surge on the policy tightening fears," said Alvin Tan, a strategist at Societe Generale in London.

"That has basically generated a broad correction in risk assets and in Europe that is continuing."

Short-term Chinese money rates underscored investors' concerns that regulators there are poised to tighten liquidity to quell growing inflationary pressures.

The benchmark seven-day repo contract, which had been steadily sliding since October 9, spiked in the morning session, a day after a policy adviser to the People's Bank of China (PBOC) told Reuters it was weighing tightening measures.

In Europe, A string of earning misses from some of the region's biggest corporate names including chip maker STMicroelectronics and brewer Heineken added to the pressure on shares. <.eu>

Investors were also digesting the first firm details from the European Central Bank on it plans to check the health of euro zone banks over the next year.

The FTSEurofirst 300 <.fteu3> was down as much as 0.7 percent as trading gathered pace, with Italian, Spanish and Portuguese markets leading the way with respective falls of 1.4, 1.2 and 1.3 percent.

ECB BANK CHECK

The ECB's new supervision role is the first leg of a three-pronged plan for a banking union in the euro zone and is designed to ensure there are no holes that could leave the bloc vulnerable.

Jan von Gerich, chief developed market strategist for Nordea, said that while if done properly it should help the euro zone, in the short term it could revive questions about its weaker members.

"The most interesting part will be what it says about Italy. Its banks haven't gone through the same kind of scrutiny as the ones in Spain or those in Greece, Ireland or Portugal... The smaller countries, too, whether Slovenia will need a bailout for example."

In the currency market, focus remained on the prospect of Federal Reserve keeping its stimulus programme running at full after soft jobs data on Tuesday stoked concerns the U.S. was losing momentum even before this month's budget tussle.

Nine of 15 U.S. primary dealers surveyed by Reuters on Tuesday now expect the Fed to begin tapering its $85 billion-a-month bond-buying programme in March.

The dollar had tumbled almost 1 percent against its Japanese counterpart to 97.22 yen by 0830 GMT and was near a two year low versus the euro at $1.3760.

In the near-term, the dollar could see further weakness against other major currencies such as the euro and sterling, said Sim Moh Siong, FX strategist for Bank of Singapore, adding that the euro may rise towards levels around $1.39.

"I think there's certainly a high possibility that dollar weakness might extend a bit further, but I'm not really sure that it changes the medium-term dollar picture," Sim said.

The Australian dollar was last down 0.6 percent against its U.S. counterpart in a whipsaw session that saw it jump about a quarter of a U.S. cent after a stronger than expected inflation reading dampened rate cut hopes.

The yield on benchmark 10-year Treasury notes fell to 2.492 percent, its lowest since late July, after closing U.S. trade at 2.512 percent. German Bunds tracked the move as they hit three-week highs in early trading.

On the commodities front, concerns about a near-term U.S. crude surplus helped push U.S. crude prices down about 0.8 percent to $97.53 a barrel. Brent crude gave up 0.6 percent to $109.29 a barrel, supported by a weaker dollar.

Copper slipped from near one-month highs as traders booked profits after the U.S. jobs report reinforced the metal's weak fundamental outlook, falling 0.8 percent to $7,272.75.

Gold fell 0.3 percent to $1,332.39 an ounce, having risen to a four-week high after the payrolls data.

(Reporting by Marc Jones; editing by Ron Askew)

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