China yesterday pledged to “significantly increase” debt to revive its sputtering economy, but left investors guessing on the overall size of the stimulus package, a vital detail to gauge the longevity of its recent stock market rally.
Chinese Minister of Finance Lan Foan (藍佛安) told a news conference that Beijing would help local governments tackle their debt problems, offer subsidies to people with low incomes, support the property market and replenish state banks’ capital, among other measures.
These are all steps investors have been urging China to take as the world’s second-largest economy loses momentum and struggles to overcome deflationary pressures and lift consumer confidence amid a sharp property market downturn.
Photo: AFP
However, Lan’s omission of a dollar figure for the package is likely to prolong investors’ nervous wait for a clearer policy road map until the next meeting of China’s rubber-stamp legislature, which approves extra debt issuance. A date for the meeting has yet to be announced, but it is expected in the coming weeks.
The news conference “was strong on determination, but lacking in numerical details,” said Vasu Menon, managing director for investment strategy at Singapore’s Oversea-Chinese Banking Corp (華僑銀行).
“The big bang fiscal stimulus that investors were hoping for to keep the stock market rally going did not come through,” he said, adding that this might “disappoint some” in the market.
A wide range of economic data in the past few months has missed forecasts, raising concerns among economists and investors that the government’s about 5 percent growth target this year was at risk, and that a longer-term structural slowdown could be in play.
Data for last month, which would be released over the coming week, is expected to show further weakness, but officials have expressed “full confidence” that the target would be met.
Beijing’s planned special bonds are aimed at boosting the capital available to banks — part of a push to get them lending in the hopes of firing up sluggish consumer spending.
China is also preparing to allow local governments to borrow more to fund the acquisition of unused land for development, aimed at pulling the property market out of a prolonged slump.
China still has room “to issue debts and increase the deficit” to fund the new measures, Lan said.
Beijing was “accelerating the use of additional treasury bonds, and ultra-long-term special treasury bonds are also being issued for use,” he said.
“In the next three months, a total of 2.3 trillion yuan [US$325.5 billion] of special bond funds can be arranged for use in various places,” he added.
Additional reporting by AFP
US President Donald Trump yesterday announced sweeping "reciprocal tariffs" on US trading partners, including a 32 percent tax on goods from Taiwan that is set to take effect on Wednesday. At a Rose Garden event, Trump declared a 10 percent baseline tax on imports from all countries, with the White House saying it would take effect on Saturday. Countries with larger trade surpluses with the US would face higher duties beginning on Wednesday, including Taiwan (32 percent), China (34 percent), Japan (24 percent), South Korea (25 percent), Vietnam (46 percent) and Thailand (36 percent). Canada and Mexico, the two largest US trading
AIR SUPPORT: The Ministry of National Defense thanked the US for the delivery, adding that it was an indicator of the White House’s commitment to the Taiwan Relations Act Deputy Minister of National Defense Po Horng-huei (柏鴻輝) and Representative to the US Alexander Yui on Friday attended a delivery ceremony for the first of Taiwan’s long-awaited 66 F-16C/D Block 70 jets at a Lockheed Martin Corp factory in Greenville, South Carolina. “We are so proud to be the global home of the F-16 and to support Taiwan’s air defense capabilities,” US Representative William Timmons wrote on X, alongside a photograph of Taiwanese and US officials at the event. The F-16C/D Block 70 jets Taiwan ordered have the same capabilities as aircraft that had been upgraded to F-16Vs. The batch of Lockheed Martin
GRIDLOCK: The National Fire Agency’s Special Search and Rescue team is on standby to travel to the countries to help out with the rescue effort A powerful earthquake rocked Myanmar and neighboring Thailand yesterday, killing at least three people in Bangkok and burying dozens when a high-rise building under construction collapsed. Footage shared on social media from Myanmar’s second-largest city showed widespread destruction, raising fears that many were trapped under the rubble or killed. The magnitude 7.7 earthquake, with an epicenter near Mandalay in Myanmar, struck at midday and was followed by a strong magnitude 6.4 aftershock. The extent of death, injury and destruction — especially in Myanmar, which is embroiled in a civil war and where information is tightly controlled at the best of times —
China's military today said it began joint army, navy and rocket force exercises around Taiwan to "serve as a stern warning and powerful deterrent against Taiwanese independence," calling President William Lai (賴清德) a "parasite." The exercises come after Lai called Beijing a "foreign hostile force" last month. More than 10 Chinese military ships approached close to Taiwan's 24 nautical mile (44.4km) contiguous zone this morning and Taiwan sent its own warships to respond, two senior Taiwanese officials said. Taiwan has not yet detected any live fire by the Chinese military so far, one of the officials said. The drills took place after US Secretary
RSS