Talks about a common currency took the backseat here this weekend, with Asia's financial elite focusing on developing the bond market as a steadier source for the region's massive funding needs.
Bonds, which received relatively less attention at previous meetings of the Asian Development Bank (ADB), was the buzzword among finance officials and corporate executives gathered in this South Korean resort island.
In an attempt to attract foreign interest, East Asian finance ministers Saturday launched a Web site that would serve as a one-stop clearinghouse for information on the bond issues.
Bonds are securities representing debts issued by governments or large corporations to finance projects or businesses. Terms can range from one to three months to as long as 30 years.
The bond market provides an opportunity to tap into Asia's massive savings which if invested within the region could reduce exposure to external shocks.
While there had been discussions about the prospects of a single East Asian monetary unit here, the consensus was that it remained a few decades away and that efforts should be geared toward developing capital markets, stabilizing exchange rates and improving a web of bilateral currency swaps.
"The common currency is not on the table," Malaysian Second Finance Minister Nor Mohamed Yakcop told reporters after a meeting between Southeast Asian ministers and their counterparts from China, Japan and Korea on Saturday.
"What we are more concerned [with] and what is more practical and what we are very excited in working towards is developing the capital markets," Yakcop said.
With Asia's infrastructure requirements alone estimated at US$250 billion a year in the medium term, accessing capital through the bond market has become an attractive choice.
Experts here have noted that one of the reasons for the 1997/98 Asian financial crisis was that most of the funding for long-term, big-ticket projects in the region was financed by short-term lending from the banks.
Joseph Yam, chief executive of the Hong Kong Monetary Authority, said there was a need to reduce Asia's vulnerability by "building bigger, deeper and more robust and diversified capital markets."
"While the interesting subject of monetary integration, which would provide a long-term solution, has been receiving some nascent attention, efforts to enhance the efficiency of financial intermediation within the region should be stepped up," he said in an address to the annual meeting yesterday.
Shielding the region from the external vulnerabilities by reducing reliance on foreign capital "underscores the importance of greater efforts to enhance the efficiency" of financing sources within the region, he said.
Japanese Finance Minister Sadakazu Tanigaki said Japan is committed to playing a leading role in the Asian Bond Markets Initiative, which aims to develop efficient and liquid bond markets in Asia.
For the first time, organizations like the ADB and the Japan Bank for International Cooperation (JBIC) can issue local currency denominated bonds in Thailand and China.
MULTIFACETED: A task force has analyzed possible scenarios and created responses to assist domestic industries in dealing with US tariffs, the economics minister said The Executive Yuan is tomorrow to announce countermeasures to US President Donald Trump’s planned reciprocal tariffs, although the details of the plan would not be made public until Monday next week, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. The Cabinet established an economic and trade task force in November last year to deal with US trade and tariff related issues, Kuo told reporters outside the legislature in Taipei. The task force has been analyzing and evaluating all kinds of scenarios to identify suitable responses and determine how best to assist domestic industries in managing the effects of Trump’s tariffs, he
TIGHT-LIPPED: UMC said it had no merger plans at the moment, after Nikkei Asia reported that the firm and GlobalFoundries were considering restarting merger talks United Microelectronics Corp (UMC, 聯電), the world’s No. 4 contract chipmaker, yesterday launched a new US$5 billion 12-inch chip factory in Singapore as part of its latest effort to diversify its manufacturing footprint amid growing geopolitical risks. The new factory, adjacent to UMC’s existing Singapore fab in the Pasir Res Wafer Fab Park, is scheduled to enter volume production next year, utilizing mature 22-nanometer and 28-nanometer process technologies, UMC said in a statement. The company plans to invest US$5 billion during the first phase of the new fab, which would have an installed capacity of 30,000 12-inch wafers per month, it said. The
Taiwan’s official purchasing managers’ index (PMI) last month rose 0.2 percentage points to 54.2, in a second consecutive month of expansion, thanks to front-loading demand intended to avoid potential US tariff hikes, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. While short-term demand appeared robust, uncertainties rose due to US President Donald Trump’s unpredictable trade policy, CIER president Lien Hsien-ming (連賢明) told a news conference in Taipei. Taiwan’s economy this year would be characterized by high-level fluctuations and the volatility would be wilder than most expect, Lien said Demand for electronics, particularly semiconductors, continues to benefit from US technology giants’ effort
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
RSS