China's government will step up its lending curbs and investment restrictions because industrial expansion by state companies has yet to be reined in sufficiently, Vice Premier Zeng Peiyan (曾培炎) said.
"We must increase structural adjustments," Zeng said in a speech to the World Economic Forum's China Business Summit in Beijing. "Macroeconomic adjustments have been effective, but these are just initial results. We can't relax the campaign."
PHOTO: EPA
China's industrial production growth picked up last month for the first time in six months, the government said Friday, suggesting lending curbs are having less of an impact. Inflation, which may be reported today, is forecast to have accelerated from a seven-year high, a Bloomberg survey showed.
"The government was too slow to implement measures to cool fixed-asset investment," Bruce Murray, chief representative of the Asian Development Bank in Beijing, said. "That's why the policies haven't been as effective as they might."
China has clamped down on lending to the steel, cement, real estate and other industries to cool an investment boom that it blames for causing power shortages, clogging transport links and driving up raw materials prices.
INVESTMENTS
China's investment in factories, roads and other fixed assets rose 32 percent from a year earlier last month, Wu Jinglian (
Zeng said the government will extend the loan crackdown to make it more difficult for state companies to expand. Authorities will continue to monitor investment in industries such as steel, autos and property, he said.
The central government plans to pare the number of business licenses and approvals required in an attempt to make the economy more market-oriented and reduce the influence of the state, Minister of the National Development and Reform Commission Ma Kai (馬凱) said at the forum.
Ma, who has berated local governments this year for fuelling "blind" and "haphazard" investments, said this year's slowdown in fixed-asset investment showed the government was right to use administrative measures to slow the economy.
"History will prove that this regulation avoided big ups and downs in the Chinese economy," Ma said. "We have to constantly enrich the content of macro regulation."
Interest rates
Economists including Qu Hongbin (
China should hold off from raising rates as higher borrowing costs may deter private investment, which is needed to drive economic growth and create jobs, said Cheng Siwei (程思危), vice chairman of the National People's Congress.
"We want to improve the effectiveness and efficiency of our investments," he said at the forum. "China doesn't want to slow economic growth."
Central bank Governor Zhou Xiaochuan (周小川) said last week that policy makers will decide whether to raise interest rates after reviewing last month's economic reports. China's inflation rate matches the People's Bank of China's one-year lending rate, which has been held at 5.31 percent since February 2002 and was last raised in 1995.
The central bank on Friday rejected media reports that it's told commercial lenders to prepare for a rate increase next month.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday said that its investment plan in Arizona is going according to schedule, following a local media report claiming that the company is planning to break ground on its third wafer fab in the US in June. In a statement, TSMC said it does not comment on market speculation, but that its investments in Arizona are proceeding well. TSMC is investing more than US$65 billion in Arizona to build three advanced wafer fabs. The first one has started production using the 4-nanometer (nm) process, while the second one would start mass production using the
A TAIWAN DEAL: TSMC is in early talks to fully operate Intel’s US semiconductor factories in a deal first raised by Trump officials, but Intel’s interest is uncertain Broadcom Inc has had informal talks with its advisers about making a bid for Intel Corp’s chip-design and marketing business, the Wall Street Journal reported, citing people familiar with the matter. Nothing has been submitted to Intel and Broadcom could decide not to pursue a deal, according to the Journal. Bloomberg News earlier reported that Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is in early talks for a controlling stake in Intel’s factories at the request of officials at US President Donald Trump’s administration, as the president looks to boost US manufacturing and maintain the country’s leadership in critical technologies. Trump officials raised the
‘SILVER LINING’: Although the news caused TSMC to fall on the local market, an analyst said that as tariffs are not set to go into effect until April, there is still time for negotiations US President Donald Trump on Tuesday said that he would likely impose tariffs on semiconductor, automobile and pharmaceutical imports of about 25 percent, with an announcement coming as soon as April 2 in a move that would represent a dramatic widening of the US leader’s trade war. “I probably will tell you that on April 2, but it’ll be in the neighborhood of 25 percent,” Trump told reporters at his Mar-a-Lago club when asked about his plan for auto tariffs. Asked about similar levies on pharmaceutical drugs and semiconductors, the president said that “it’ll be 25 percent and higher, and it’ll
CHIP BOOM: Revenue for the semiconductor industry is set to reach US$1 trillion by 2032, opening up opportunities for the chip pacakging and testing company, it said ASE Technology Holding Co (日月光投控), the world’s largest provider of outsourced semiconductor assembly and test (OSAT) services, yesterday launched a new advanced manufacturing facility in Penang, Malaysia, aiming to meet growing demand for emerging technologies such as generative artificial intelligence (AI) applications. The US$300 million facility is a critical step in expanding ASE’s global footprint, offering an alternative for customers from the US, Europe, Japan, South Korea and China to assemble and test chips outside of Taiwan amid efforts to diversify supply chains. The plant, the company’s fifth in Malaysia, is part of a strategic expansion plan that would more than triple
RSS