Issue 23 | June 15, 2012

Chinese interest rate reduction stokes slowdown concerns
The People's Bank of China lowered interest rates on June 6 for the first time since 2008, raising worries that the action may have been prompted by weaker than expected economic numbers. Along with the change in lending rate to 6.31 percent and the deposit rate moving to 3.25 percent, the Bank also announced a loosening of lending controls over banks, allowing financial institutions greater control over the interest rates they offer in order to stimulate credit markets. The Chinese reduction follows a cut by Australia on June 5 and speculation that other nations may accede to similar financial loosening measures to counter this year's global economic slowdown. Read more.


Port of Los Angeles terminal expansion approved

The Los Angeles Harbor Commission approved the planned expansion of the APL terminal at the Port of Los Angeles after certifying the environmental impact report. The project involves expanding the terminal to 347 acres, adding improvements such as truck accessibility upgrades and other features in order to improve yearly cargo throughput to 3.2 million container units. The expansion is a part of the $1.2 billion effort by the Port to improve its infrastructure and environmental friendliness over the next five years. Read more.


G-20 meeting to boost IMF in case of Euro crisis
President of Mexico Felipe Calderon has indicated that "very significant advances" will be made concerning the European debt crisis during the upcoming G-20 meeting to be held in Los Cabos on June 18-19. The meeting will focus especially on expanding the role of the International Monetary Fund (IMF) in potentially supporting troubled European finances. During the IMF's spring meetings, G-20 nations agreed to increase the institution's available capital by $430 billion in pledges to prepare for the possibility of the fiscal contagion's spread through Europe.Read more.


Spain to accept debt aid from Eurozone
Spain will become the fourth and largest Eurozone government to accept up to $125 billion from Europe's rescue fund. Spanish Economy Minister Luis de Guindos commented that the loan's terms are "much more favorable" than funds that Spain would be able to come up with on its own. Rather than receiving a full bailout, they intend to earmark the funds for recapitalizing failing Spanish banks that have been overwhelmed by unpaid mortgages and construction loans. By receiving outside assistance, Spain hopes that their banking sector will be strengthened and will prevent the rest of the national economy from collapsing.
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Forecasts call for strong peak season imports 

According to the Global Port Tracker published by the National Retail Federation and Hackett Associates, containerized imports are expected to be on the rise, peaking in September and October. This projection is based on observations of increased consumer confidence and retail sales in the United States. The growth in imports is predicted to reach 9 percent in September and 19.9 percent in October. The percentage increase appears higher than in past years because these figures are compared to the lower than expected results of last year's imports. Read more.

OPEC likely to maintain production target despite declining prices 

A meeting between members of the Organization of the Petroleum Exporting Countries (OPEC) will likely determine on June 14 that oil production would be maintained at current levels. While oil prices have been declining as of late, spurring some to declare an oversupply in the global market for crude, Saudi Arabian Oil Minister Ali al-Naimi cited the European fiscal crisis as the impetus for maintaining the status quo. Others cite long term data and claim that oil prices, while going down, are yet close to historical peaks. Read more.
Compiled by Simon Huang and Devin Raymond, Global Initiatives Interns

For more information, contact Jasmin Sakai-Gonzalez, 213.580.7569.