China is to maintain support for the economy, focusing on domestic demand which remains inadequate, the Chinese Communist Party Politburo said yesterday, Xinhua news agency reported.
The triple pressures facing the economy — shrinking demand, supply shocks and weakening expectations — have eased amid better-than-expected first-quarter growth, Xinhua reported following a politburo meeting chaired by Chinese President Xi Jinping (習近平).
“Market demand has gradually recovered, economic development has shown an upward trend and the economic operation has achieved a good start,” Xinhua said, citing the Politburo.
However, top leaders cautioned that the recovery is not strong enough and the nation faces new obstacles upgrading and transforming its economy.
“The current improvement in China’s economic performance is mainly restorative, with weak momentum and insufficient demand,” the politburo said. “Restoring and expanding demand is the key to the sustained recovery and improvement of the current economy.”
Proactive fiscal policy should be stepped up and work alongside monetary policy to boost demand, the politburo said, reaffirming the current stance.
“The politburo meeting shows the government will likely keep the supportive fiscal and monetary policy stance in the second quarter,” Pinpoint Asset Management Ltd (保銀私募基金管理) chief economist Zhang Zhiwei (張智威) said.
China’s economy grew at a faster-than-expected pace in the first quarter, as businesses and consumers were freed from strict COVID-19 curbs that had hobbled economic activity, but there are still headwinds and the recovery remains uneven.
As pockets of weakness remain and a full-blown economic recovery appears some way off, the politburo said urban and rural household income should be increased to boost services consumption, while private investment should be encouraged.
The world’s second-biggest economy has struggled to fully recover, despite lifting tough COVID-19 restrictions in December last year, as a tepid recovery in the property market, local debt risks and slowing global growth have dented confidence and overall demand.
China would expand employment channels for college graduates and stabilize jobs for migrant workers, the politburo said.
The government would also reinforce confidence among businesses, guide state investment, stimulate private investment and attract foreign investment, it added.
Legal and regulatory reforms would be made to encourage fair competition and the development of enterprises, the politburo said.
The Chinese Communist Party signaled upcoming reforms by last week approving guidance to promote the development of private firms, which account for half of tax revenue, more than 60 percent of output and provide 80 percent of urban employment.
China should attach great importance to development of general artificial intelligence, create an innovation ecology and fend off risks, the politburo said.
The politburo also reiterated its policy to support demand for improved housing and ensure property developers deliver.
Semiconductor shares in China surged yesterday after Reuters reported the US had ordered chipmaking giant Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to halt shipments of advanced chips to Chinese customers, which investors believe could accelerate Beijing’s self-reliance efforts. TSMC yesterday started to suspend shipments of certain sophisticated chips to some Chinese clients after receiving a letter from the US Department of Commerce imposing export restrictions on those products, Reuters reported on Sunday, citing an unnamed source. The US imposed export restrictions on TSMC’s 7-nanometer or more advanced designs, Reuters reported. Investors figured that would encourage authorities to support China’s industry and bought shares
FLEXIBLE: Taiwan can develop its own ground station equipment, and has highly competitive manufacturers and suppliers with diversified production, the MOEA said The Ministry of Economic Affairs (MOEA) yesterday disputed reports that suppliers to US-based Space Exploration Technologies Corp (SpaceX) had been asked to move production out of Taiwan. Reuters had reported on Tuesday last week that Elon Musk-owned SpaceX had asked their manufacturers to produce outside of Taiwan given geopolitical risks and that at least one Taiwanese supplier had been pushed to relocate production to Vietnam. SpaceX’s requests place a renewed focus on the contentious relationship Musk has had with Taiwan, especially after he said last year that Taiwan is an “integral part” of China, sparking sharp criticism from Taiwanese authorities. The ministry said
US President Joe Biden’s administration is racing to complete CHIPS and Science Act agreements with companies such as Intel Corp and Samsung Electronics Co, aiming to shore up one of its signature initiatives before US president-elect Donald Trump enters the White House. The US Department of Commerce has allocated more than 90 percent of the US$39 billion in grants under the act, a landmark law enacted in 2022 designed to rebuild the domestic chip industry. However, the agency has only announced one binding agreement so far. The next two months would prove critical for more than 20 companies still in the process
CHANGING JAPAN: Nvidia-powered AI services over cellular networks ‘will result in an artificial intelligence grid that runs across Japan,’ Nvidia’s Jensen Huang said Softbank Group Corp would be the first to build a supercomputer with chips using Nvidia Corp’s new Blackwell design, a demonstration of the Japanese company’s ambitions to catch up on artificial intelligence (AI). The group’s telecom unit, Softbank Corp, plans to build Japan’s most powerful AI supercomputer to support local services, it said. That computer would be based on Nvidia’s DGX B200 product, which combines computer processors with so-called AI accelerator chips. A follow-up effort will feature Grace Blackwell, a more advanced version, the company said. The announcement indicates that Softbank Group, which until early 2019 owned 4.9 percent of Nvidia, has secured a
RSS