Chinese Premier Wen Jiabao (溫家寶) said Beijing would “fine-tune” its economic policy this year, state media reported, raising hopes of monetary loosening as the world’s second-largest economy slows.
China’s economy expanded by an annual 9.2 percent last year, narrowing from 10.4 percent in 2010, and is widely expected to slow further this year, raising the specter of more social unrest as the contraction takes hold.
“It’s worth paying close attention to the economic situation in January and the first quarter,” Xinhua news agency quoted Wen on late Sunday as telling a government meeting.
ECONOMIC PLANS
He added the government would “pre-emptively adjust and fine-tune starting from the first quarter,” but gave no further details.
Analysts widely expect Beijing to further trim the amount of money that banks must keep in reserve, following a cut in December last year, to counter slower economic growth due to global turmoil.
“The most basic requirement is to maintain the continuity and flexibility of policy,” Wen said.
TRADE DOWN
The country’s trade activity fell last month from a year earlier, as the domestic slowdown and weaker overseas sales hit demand, though factory closures from a long holiday also played a role.
Exports fell 0.5 percent year-on-year last month to US$149.94 billion, while imports plunged 15.3 percent to US$122.66 billion, the government said, marking the worst performance since during the global financial crisis in 2009.
The slowdown has resulted in large-scale strikes in recent months, as workers resentful about low salaries or layoffs face off with employers juggling high costs and exports hit by lower demand from the debt-burdened West.
So far the policy fine-tuning has focused more on cutting taxes and red tape for the small businesses that provide about 75 percent of the jobs in China. Wen ruled out loosening the government’s grip over the property sector, citing the need for “reasonable” housing prices.
REAL ESTATE
China has introduced a range of measures aimed at curbing the real-estate market over the last year, such as bans on buying second homes, hiking minimum downpayments and introducing property taxes in select cities.
“For the purpose of promoting fairness and stability, the government’s controls cannot be relaxed,” he said.
One small city, Wuhu in the eastern province of Anhui, said last week it would offer subsidies for apartment purchases in a sign of easing, but it retreated from the policy over the weekend, state media reported.
Semiconductor business between Taiwan and the US is a “win-win” model for both sides given the high level of complementarity, the government said yesterday responding to tariff threats from US President Donald Trump. Home to the world’s largest contract chipmaker, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), Taiwan is a key link in the global technology supply chain for companies such as Apple Inc and Nvidia Corp. Trump said on Monday he plans to impose tariffs on imported chips, pharmaceuticals and steel in an effort to get the producers to make them in the US. “Taiwan and the US semiconductor and other technology industries
SMALL AND EFFICIENT: The Chinese AI app’s initial success has spurred worries in the US that its tech giants’ massive AI spending needs re-evaluation, a market strategist said Chinese artificial intelligence (AI) start-up DeepSeek’s (深度求索) eponymous AI assistant rocketed to the top of Apple Inc’s iPhone download charts, stirring doubts in Silicon Valley about the strength of the US’ technological dominance. The app’s underlying AI model is widely seen as competitive with OpenAI and Meta Platforms Inc’s latest. Its claim that it cost much less to train and develop triggered share moves across Asia’s supply chain. Chinese tech firms linked to DeepSeek, such as Iflytek Co (科大訊飛), surged yesterday, while chipmaking tool makers like Advantest Corp slumped on the potential threat to demand for Nvidia Corp’s AI accelerators. US stock
The US Federal Reserve is expected to announce a pause in rate cuts on Wednesday, as policymakers look to continue tackling inflation under close and vocal scrutiny from US President Donald Trump. The Fed cut its key lending rate by a full percentage point in the final four months of last year and indicated it would move more cautiously going forward amid an uptick in inflation away from its long-term target of 2 percent. “I think they will do nothing, and I think they should do nothing,” Federal Reserve Bank of St Louis former president Jim Bullard said. “I think the
Cryptocurrencies gave a lukewarm reception to US President Donald Trump’s first policy moves on digital assets, notching small gains after he commissioned a report on regulation and a crypto reserve. Bitcoin has been broadly steady since Trump took office on Monday and was trading at about US$105,000 yesterday as some of the euphoria around a hoped-for revolution in cryptocurrency regulation ebbed. Smaller cryptocurrency ether has likewise had a fairly steady week, although was up 5 percent in the Asia day to US$3,420. Bitcoin had been one of the most spectacular “Trump trades” in financial markets, gaining 50 percent to break above US$100,000 and
RSS