South Korea, Japan and China agreed to set up regular meetings to consult on issues facing the regional economy and work more closely to help counter challenges stemming from the global financial turmoil.
Strengthened cooperation was necessary “to cope with the situation, in an effective manner, where the world economy and the financial markets are facing serious challenges,” South Korean President Lee Myung Bak, Japanese Prime Minister Taro Aso and Chinese Premier Wen Jiabao (溫家寶) said in a joint statement.
The leaders met yesterday in Fukuoka, Japan.
The summit comes a day after South Korea agreed on bilateral currency swap accords with Japan and China, the world’s biggest holders of foreign reserves, in an effort to ensure financial stability in Asia. South Korea and Japan will increase an existing won-yen arrangement to US$20 billion while China and South Korea agreed on an accord worth 38 trillion won (US$28 billion).
“Asian countries are expected to play a role as the center of world economic growth in order to reverse the downward trend of the world economy and return it to the path of sustainable growth,” the leaders said in the statement provided by the South Korean presidential office. “Our economies are dynamic, resilient and closely interlinked.”
South Korea’s Lee pursued the swap arrangements to secure access to funds and prevent a repeat of the 1997 currency crisis that caused the won to plunge and required a US$57 billion bailout from the IMF.
The won rose 7.5 percent against the dollar this week, completing the best weekly gain since the end of October, partly in anticipation of Friday’s announcements.
“The currency swap increase provides further funds in case of a liquidity shortage and a financial emergency,” said Oh Suk Tae, an economist with Citigroup Inc in Seoul. “The three nations want to get together to solidify their cooperation so they can better counter global turmoil.”
South Korea, Japan and China yesterday agreed to facilitate trade and investment in the region and “confirmed the significance of measures that will reinforce growth and expand domestic demand,” the statement said.
The countries will “refrain from raising new barriers to investment or to trade in goods and services, from imposing new export restrictions,” it said.
The three nations account for 74 percent of East Asia’s GDP and two-thirds of regional trade volume, the Japanese foreign ministry said.
The leaders said they will work with the members of ASEAN to speed up a plan agreed earlier this year that extends the so-called Chiang Mai Initiative, a deal allowing countries to lend each other money at favorable terms if help is needed to support exchange rates.
Finance ministers from 13 Asian nations, including South Korea, Japan and China, agreed in May to create a pool of at least US$80 billion in foreign-exchange reserves.
The leaders also reiterated a commitment to strengthen monitoring of the regional economy and financial markets, the statement said yesterday.
China wants contributions to the US$80 billion fund to be made in accordance with the size of each country’s foreign-exchange reserves while Japan wants to use the value of GDP as a measure, South Korea said earlier this year. The remaining 20 percent of the fund will be provided by the 10 members of ASEAN.
South Korea, Japan and China will hold the trilateral summit on a regular basis and will meet in China next year. The three nations will also share information on natural disasters and develop ways to “reduce vulnerability” to disasters and minimize the damages, they said.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to