South Korea, Japan and China agreed to set up regular meetings to consult on issues facing the regional economy and work more closely to help counter challenges stemming from the global financial turmoil.
Strengthened cooperation was necessary “to cope with the situation, in an effective manner, where the world economy and the financial markets are facing serious challenges,” South Korean President Lee Myung Bak, Japanese Prime Minister Taro Aso and Chinese Premier Wen Jiabao (溫家寶) said in a joint statement.
The leaders met yesterday in Fukuoka, Japan.
The summit comes a day after South Korea agreed on bilateral currency swap accords with Japan and China, the world’s biggest holders of foreign reserves, in an effort to ensure financial stability in Asia. South Korea and Japan will increase an existing won-yen arrangement to US$20 billion while China and South Korea agreed on an accord worth 38 trillion won (US$28 billion).
“Asian countries are expected to play a role as the center of world economic growth in order to reverse the downward trend of the world economy and return it to the path of sustainable growth,” the leaders said in the statement provided by the South Korean presidential office. “Our economies are dynamic, resilient and closely interlinked.”
South Korea’s Lee pursued the swap arrangements to secure access to funds and prevent a repeat of the 1997 currency crisis that caused the won to plunge and required a US$57 billion bailout from the IMF.
The won rose 7.5 percent against the dollar this week, completing the best weekly gain since the end of October, partly in anticipation of Friday’s announcements.
“The currency swap increase provides further funds in case of a liquidity shortage and a financial emergency,” said Oh Suk Tae, an economist with Citigroup Inc in Seoul. “The three nations want to get together to solidify their cooperation so they can better counter global turmoil.”
South Korea, Japan and China yesterday agreed to facilitate trade and investment in the region and “confirmed the significance of measures that will reinforce growth and expand domestic demand,” the statement said.
The countries will “refrain from raising new barriers to investment or to trade in goods and services, from imposing new export restrictions,” it said.
The three nations account for 74 percent of East Asia’s GDP and two-thirds of regional trade volume, the Japanese foreign ministry said.
The leaders said they will work with the members of ASEAN to speed up a plan agreed earlier this year that extends the so-called Chiang Mai Initiative, a deal allowing countries to lend each other money at favorable terms if help is needed to support exchange rates.
Finance ministers from 13 Asian nations, including South Korea, Japan and China, agreed in May to create a pool of at least US$80 billion in foreign-exchange reserves.
The leaders also reiterated a commitment to strengthen monitoring of the regional economy and financial markets, the statement said yesterday.
China wants contributions to the US$80 billion fund to be made in accordance with the size of each country’s foreign-exchange reserves while Japan wants to use the value of GDP as a measure, South Korea said earlier this year. The remaining 20 percent of the fund will be provided by the 10 members of ASEAN.
South Korea, Japan and China will hold the trilateral summit on a regular basis and will meet in China next year. The three nations will also share information on natural disasters and develop ways to “reduce vulnerability” to disasters and minimize the damages, they said.
The New Taiwan dollar is on the verge of overtaking the yuan as Asia’s best carry-trade target given its lower risk of interest-rate and currency volatility. A strategy of borrowing the New Taiwan dollar to invest in higher-yielding alternatives has generated the second-highest return over the past month among Asian currencies behind the yuan, based on the Sharpe ratio that measures risk-adjusted relative returns. The New Taiwan dollar may soon replace its Chinese peer as the region’s favored carry trade tool, analysts say, citing Beijing’s efforts to support the yuan that can create wild swings in borrowing costs. In contrast,
Nvidia Corp’s demand for advanced packaging from Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) remains strong though the kind of technology it needs is changing, Nvidia CEO Jensen Huang (黃仁勳) said yesterday, after he was asked whether the company was cutting orders. Nvidia’s most advanced artificial intelligence (AI) chip, Blackwell, consists of multiple chips glued together using a complex chip-on-wafer-on-substrate (CoWoS) advanced packaging technology offered by TSMC, Nvidia’s main contract chipmaker. “As we move into Blackwell, we will use largely CoWoS-L. Of course, we’re still manufacturing Hopper, and Hopper will use CowoS-S. We will also transition the CoWoS-S capacity to CoWos-L,” Huang said
Nvidia Corp CEO Jensen Huang (黃仁勳) is expected to miss the inauguration of US president-elect Donald Trump on Monday, bucking a trend among high-profile US technology leaders. Huang is visiting East Asia this week, as he typically does around the time of the Lunar New Year, a person familiar with the situation said. He has never previously attended a US presidential inauguration, said the person, who asked not to be identified, because the plans have not been announced. That makes Nvidia an exception among the most valuable technology companies, most of which are sending cofounders or CEOs to the event. That includes
INDUSTRY LEADER: TSMC aims to continue outperforming the industry’s growth and makes 2025 another strong growth year, chairman and CEO C.C. Wei says Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), a major chip supplier to Nvidia Corp and Apple Inc, yesterday said it aims to grow revenue by about 25 percent this year, driven by robust demand for artificial intelligence (AI) chips. That means TSMC would continue to outpace the foundry industry’s 10 percent annual growth this year based on the chipmaker’s estimate. The chipmaker expects revenue from AI-related chips to double this year, extending a three-fold increase last year. The growth would quicken over the next five years at a compound annual growth rate of 45 percent, fueled by strong demand for the high-performance computing
RSS