China's central bank is seeking to cool down overheating economic sectors such as real estate as well as cut massive foreign exchange reserves, a top government official said yesterday.
The statement by Chinese Vice Minister of Finance Li Yong (
The concern about overheating comes after the economy expanded by a faster-than-expected 10.2 percent in the first quarter over the same period the previous year, after posting a rate of 9.9 percent for all of last year.
"During the first quarter of 2006 we have tried to balance investments in certain sectors," the minister told delegates.
"These sectors such as real estate and steel became overheated in 2005. Our central bank is trying to cool down overinvestment in these sectors," he said.
Housing has become so expensive in China that seven out of 10 urban families cannot afford their own homes, the state-owned Xinhua news agency said.
Last month, the People's Bank of China boosted the one-year benchmark lending rate by 27 basis points to 5.85 percent to brake credit and control "excessively fast" release of bank loans.
It forecast growth of 8.9 percent for this year.
Analysts said the decision to raise interest rates for the first time in 18 months was only the first in a series of measures aimed at preventing the country's booming economy from overheating.
"We will make adjustments [in the interest rate] if it is appropriate. We will gradually adjust the rate," Li said.
Li added that China's foreign exchange reserves had increased dramatically and "personally I do not like that ... foreign exchange reserves will be reduced to a certain extent."
He did not say by how much.
China's foreign exchange reserves, the world's largest, hit US$875.1 billion by the end of March, the central bank said.
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
EUROPE ON HOLD: Among a flurry of announcements, Intel said it would postpone new factories in Germany and Poland, but remains committed to its US expansion Intel Corp chief executive officer Pat Gelsinger has landed Amazon.com Inc’s Amazon Web Services (AWS) as a customer for the company’s manufacturing business, potentially bringing work to new plants under construction in the US and boosting his efforts to turn around the embattled chipmaker. Intel and AWS are to coinvest in a custom semiconductor for artificial intelligence computing — what is known as a fabric chip — in a “multiyear, multibillion-dollar framework,” Intel said in a statement on Monday. The work would rely on Intel’s 18A process, an advanced chipmaking technology. Intel shares rose more than 8 percent in late trading after the
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has appointed Rose Castanares, executive vice president of TSMC Arizona, as president of the subsidiary, which is responsible for carrying out massive investments by the Taiwanese tech giant in the US state, the company said in a statement yesterday. Castanares will succeed Brian Harrison as president of the Arizona subsidiary on Oct. 1 after the incumbent president steps down from the position with a transfer to the Arizona CEO office to serve as an advisor to TSMC Arizona’s chairman, the statement said. According to TSMC, Harrison is scheduled to retire on Dec. 31. Castanares joined TSMC in