10/12/2025

BIZ & FINANCE WEDNESDAY | DEC 10, 2025 17 EU deal to further weaken corporate sustainability laws

BRUSSELS: European Union (EU) members and parliament reached a deal yesterday to cut corporate sustainability laws, after months of pressure from companies and governments, including the United States and Qatar. The changes, which would weaken such rules for a large majority of businesses now covered, come in response to criticism from some industries that EU red tape and strict regulation hindered competi tiveness with foreign rivals. “This is an important step towards our common goal to create a more favourable business environ ment to help our companies grow and innovate,” Denmark’s European affairs minister, Marie Bjerre, said in a statement. The agreement was a very good compromise, added Jorgen War born, a Swedish centre-right law maker. The push to weaken the laws had dismayed environmental campaigners, some investors and governments, including that of Spain, which had urged TOKYO: The Bank of Japan (BOJ) plans to ramp up government bond buying if long-term interest rates rise sharply, governor Kazuo Ueda said yesterday, noting that the recent rate rises have been “somewhat rapid”. “Recently, long-term rates have been rising at a somewhat rapid pace,” Ueda told parliament, as the benchmark 10-year Japan ese government bond yield hit 18-year highs this week. He also said that in exceptional circum stances where long-term in terest rates rise sharply in deviation from normal market movements, the BOJ intends to take flexible measures, such as increasing government bond purchases. On monetary policy, Ueda said the likelihood of the BOJ’s baseline economic and price outlook materialising has been gradually increasing, con sidering reduced uncertainty around the US economy and tariff policies. – Reuters GERMAN EXPORTS UNEXPECTEDLY HIGHER IN OCTOBER DUE TO EU TRADE BERLIN: German exports rose slightly in October, beating ex pectations for a decline thanks to EU trade, while exports to the United States and China fell strongly. Exports rose by 0.1% in October compared with the previous month, data from the federal statistics office showed yesterday. The result compared with a forecast 0.5% decrease in a Reuters poll. Imports were down 1.2% on a calendar and seasonally adjusted basis. The foreign trade balance showed a surplus of €16.9 billion (RM81 billion) in October, up from €15.3 billion in September and €14.6 billion in October 2024. Exports to EU countries rose by 2.7% on the month, while exports of goods to countries outside the EU declined by 3.3%. Exports to the US fell by 7.8% on September, while exports to China decreased by 5.8%. – Reuters BOJ CHIEF SAYS RISES IN LONG-TERM INTEREST RATES ‘SOMEWHAT RAPID’

3% of companies’ global turnover, with guidelines to follow from the Commission, and compliance re quired by July 2029. Companies such as ExxonMobil, as well as the leaders of Germany and France, had sought deeper cuts, including scrapping the due diligence law entirely, saying it hurt the competitiveness of European businesses. The EU Parliament and EU member countries must each give formal approval for the changes to become law, usually a formality that waves through pre-agreed deals. – Reuters

corporations, which have more than 5,000 employees and annual turn over exceeding €1.5 billions. The same rules will cover non-EU companies with turnover in the EU above that level. The European Union has also dropped a clause for companies to adopt climate transition plans under the directive. The United States and Qatar have pressured Brussels to scale back the due diligence law, warning that the rules risked disrupting liquefied natural gas trade with Europe. EU co-legislators also agreed to cap penalties for non-compliance at

o Bloc to loosen rules after industry pressure, drop climate transition plans requirement

with more than 1,000 employees and annual net turnover exceeding €450 million (RM2.15 billion), down from about 50,000 companies with more than 250 employees now. For non-EU firms, the threshold was set at €450 million in turnover generated within the bloc. The deal limits the EU’s Corporate Sustainability Due Diligence Directive to only the largest EU

Brussels to keep the rules intact to support European priorities on sustainability and human rights. The EU’s Corporate Sustainability Reporting Directive requires com panies to disclose details of their environmental and social impact, so as to be more transparent to investors and consumers. EU negotiators agreed that such reporting will cover only companies

China premier tells trade partners to reject protectionism BEIJING: China’s Premier Li Qiang yesterday urged trading partners to reject rising protectionism, a day after the world’s second-largest economy posted a record US$1 trillion (RM4.1 trillion) trade surplus driven by a rush of exports to non-US markets. President Donald Trump’s decision to hike tariffs on Chinese goods was hugely disruptive for global trade, Beijing’s reluctance to reform leaves the West with few alternatives.

BR I E F S

“China is not taking any action, and I think has no intention to do so,” said Alicia Garcia-Herrero, senior fellow at the think tank Bruegel. “I don’t see China caring about all of these (visiting) officials whatsoever.” “Its export-driven model is going to contribute around 40% of global growth in 2025. I don’t think it has ever been higher, and China is supposedly growing, so there is no reason for such a big contribution to external demand,” she added. Monday’s trade data indicated that China’s push to diversify its exports since Trump’s November 2024 US election victory is bearing fruit, with a surge in shipments to Europe, Australia, and Southeast Asia. China insists it is committed to reducing reliance on a credit-driven manufacturing sector and exports, with top leaders on Monday pledging more measures to stimulate domestic demand. HSBC’s Neumann said an uptick in domestic demand would go a long way to reducing pressure on global trade but that this was unlikely in the near-term unless officials adopted substantial policy easing. – Reuters

Beijing is now facing broadening tensions with major trading partners beyond the US, which are calling on China to do more to reform its US$19 trillion economy and reduce its dependence on exports to support growth. China’s second-ranking official urged the heads of the International Monetary Fund (IMF), World Bank, World Trade Organization and others to strengthen global governance in response to the growing number of economies imposing levies on imported goods, China included. “Since the beginning of the year, the threat of tariffs has loomed over the global economy, with various trade restrictions proliferating and severely impacting global economic activity,“ Li told the “1+10 Dialogue” in Beijing, which also includes officials from the Organisation for Economic Cooperation and Development and the International Labour Organization. “The mutually destructive consequences of tariffs are becoming increasingly apparent, and calls from all sides to uphold free trade are

Li Qiang speaks next to New Development Bank president Dilma Rousseff and World Bank president Ajay Banga at the ‘1+10 Dialogue’ with heads of major economic organisations, at the Diaoyutai State Guesthouse in Beijing yesterday. – REUTERSPIC

protectionist measures. French President Emmanuel Macron said on Sunday that he had threatened Beijing with tariffs during his state visit last week, which coincided with the European Commission unveiling plans to boost Europe’s resilience to threats such as rare earth shortages and dumped imports. Economists argue that while US

a probability on those.” While markets initially read the Reserve Bank of Australia (RBA) statement as more balanced and made only small moves, Bullock’s hawkish comments injected fresh impetus to the Australian dollar as it rose 0.3% to US$0.6645. Three-year government bond yields surged 11 basis points to 4.152%, the highest since November last year. Investors brought forward bets for rate hikes next year, with a move in February seen as a 28% probability, while March has moved closer to 50%. There is a total tightening of 47 bps expected next year, equivalent to two rate hikes. “The recent data suggest the risks to inflation have tilted to the upside, but it will take a little longer to assess the persistence of inflationary pressures,” growing ever stronger,” Li added. Analysts largely agree that China’s massive trade surplus and its unwillingness to shift away from an export-driven economy are directly fuelling the rise of global tariffs. However, they see little incentive for Beijing to change course, despite growing international pressure, leading to a worldwide surge in competitive tensions and calls for

Australia’s central bank flags rate hike risk as it ends brief easing cycle SYDNEY: Australia’s central bank yesterday ruled out further policy easing after holding interest rates steady at 3.6%, warning the next move could be up if inflation pressures prove to be stubborn. the board said in a statement. “There are uncertainties about the outlook for domestic economic activity and inflation and the extent to which monetary policy remains restrictive.” The economy, which could be running near its speed limit, grew at the fastest pace in two years last quarter, fuelled by spending by businesses, governments and consumers. The labour market also stayed resilient, with the jobless rate edging lower to 4.3% in October, from 4.5%.

The RBA has cut interest rates three times this year but inflation is rearing its head again, having climbed for four straight months to 3.8% in October. The trimmed mean measure of core inflation ran at 3.3%, above the mid point of the target band of 2%-3%. The board said there is uncertainty about how much of a signal the new monthly Consumer Price Index numbers provide. “Nevertheless, the data do suggest some signs of a more broadly based pick-up in inflation, part of which may be persistent and will bear close monitoring,” the statement added.

Wrapping up the last policy meeting of the year, governor Michele Bullock said the board did not explicitly discuss the case of a rate hike, but it did discuss the circumstances under which rates might need to be raised again. “What I would say at this point is what we know at the moment, I don’t think there are interest rate cuts in the horizon for the foreseeable future,” Bullock said at the post-meeting press briefing. “The question is – is it just an extended hold from here, or is it a possibility of a rate rise? I couldn’t put

The mood among consumers, long stuck in the doldrums, has turned positive in a boost to the outlook for household spending. Home prices surged to new record highs, home loan growth jumped and upbeat stock markets suggest that financial conditions might not be as restrictive as previously thought. “Our sense is that it won’t take much for the RBA to respond to evidence of a more persistent inflation trajectory,” said Sally Auld, chief economist at the National Australia Bank. – Reuters