China’s economic planning agency yesterday outlined details of measures aimed at boosting the economy, but refrained from major spending initiatives.
The piecemeal nature of the plans announced yesterday appeared to disappoint investors who were hoping for bolder moves, and the Shanghai Composite Index gave up a 10 percent initial gain as markets reopened after a weeklong holiday to end 4.59 percent higher, while Hong Kong’s Hang Seng Index dived 9.41 percent.
Chinese National Development and Reform Commission Chairman Zheng Shanjie (鄭珊潔) said the government would frontload 100 billion yuan (US$14.2 billion) in spending from the government’s budget for next year in addition to another 100 billion yuan for construction projects.
Photo: Bloomberg
The scale of spending overall was well below the multitrillion yuan levels that analysts said might be expected.
Zheng said China was still on track to attain its full-year economic growth target of about 5 percent, but he acknowledged the economy faces difficulties and an increasingly “more complex and extreme” global environment.
In a note, UBS chief China economist Wang Tao (王濤) said that the market was “likely expecting a significant fiscal stimulus.”
A modest package of 1.5 trillion to 2 trillion yuan is more reasonable to expect in the near term, she said, with another 2 trillion to 3 trillion yuan next year.
Late last month, China unveiled a monetary stimulus package including cuts to mortgage rates and in the amount of reserves required to keep on deposit with the central bank.
Those and other measures were the most aggressive efforts so far to try to pull the property industry out of the doldrums and spur faster growth.
The commission said the new measures would focus on boosting investment and spending, and supporting small and medium-sized businesses that operate at a disadvantage to large, state-corporations.
However, much of the information focused on technical issues, such as payment regulations, management of projects and deployment of bonds for financing.
Separately, Chinese drinkers might have to pay more for Remy Martin and other European brandies after the government yesterday announced provisional tariffs of 30.6 to 39 percent on those liquors, four days after most EU countries approved duties on China-made electric vehicles (EVs).
The tit-for-tat move potentially gives Chinese negotiators leverage in talks with the EU on reducing or eliminating the tariffs of up to 35.3 percent on Chinese EVs, which take effect at the end of this month.
The brandy tariffs are provisional and require importers to make a deposit with the Chinese customs for the amount of the tariff, starting on Friday.
The announcement followed a preliminary finding by the Chinese Ministry of Commerce in late August that European brandy was being dumped in China, threatening “substantial damage” to domestic producers.
The brandy probe mainly targeted French makers of Cognac and similar spirits such as Armagnac. France has supported the investigation into Chinese-made EVs, while Germany, whose automakers fear retaliation in the Chinese market, has opposed it.
The provisional tariffs vary by brand, similar to the EU duties on EVs made in China. For example, Martell products face a 30.6 percent tariff versus 38.1 percent for Remy Martin and 39 percent for Hennessey.
The tariffs are being imposed on dozens of companies, including some Spanish producers.
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