Two bits of interesting news yesterday: 1. France – while the eurozone is in financial meltdown – is allowing some of its workers to retire early; 2. China – while the eurozone is in financial meltdown – is on a shopping spree, buying European assets on the cheap. Perhaps there we have, in a nutshell, the pattern of what is to follow in the coming months.
Francois Hollande’s lowering of the pension age by two years to 60 applies to only a small class of workers, but it appears to be just the start of a slew of changes to employment laws — today, his government announced it would make it more expensive for companies to lay off workers. At any rate, the message to the world is clear — the new president is taking his ‘Socialist’ mantle seriously. How his latest jobs measures, which will require money his nation does not have, are ‘pro-growth’ is less clear.
Meanwhile, the ‘communist’ apparatchiks in Beijing have spotted bargains in Europe, and have tripled direct investment in the continent to $10 billion. This is just the beginning, says a report published by economic consultancy Rhodium Group and CICC, a Chinese investment bank – China could spend as much as $250-$500 billion in the region by 2020. The country — which today felt compelled to cut interest rates to try to stimulate growth — is using its massive surplus for some very capitalist, strategic buying.Tags: China, Economy, France, Francois Hollande, Growth