Chinese officials said they would scrutinize gains in stock prices without capping new lending after a record US$1.1 trillion of loans in the first half added to credit risks and threatened to cause asset bubbles.
The government wants stock market stability and is studying share price advances, Chinese Vice Finance Minister Ding Xuedong (丁學東) said at a press briefing in Beijing yesterday.
The People’s Bank of China has a range of tools to limit money supply, Su Ning (蘇寧), a deputy governor of the central bank, told the briefing.
PHOTO: REUTERS
The Shanghai Composite Index has rallied 79 percent this year and real-estate prices have rebounded, fueling concern that loans meant for infrastructure projects are being used for speculation. The government wants to cool asset markets without derailing the recovery of the world’s third-biggest economy, which grew 7.9 percent in the second quarter from a year earlier.
Shanghai’s benchmark stock index closed down 2.9 percent yesterday, before the briefing started, for the worst weekly loss since February. The measure fell by the most in eight months on July 29 amid concern that the central bank would rein in liquidity.
The government will monitor asset prices and create an “internal mechanism” to stabilize the stock market, Ding said, without elaborating.
The central bank will not consider asset prices when adjusting policies, said Su, who also elaborated on a reference in a quarterly monetary policy report to “fine tuning” policy, saying that this happened continuously.
“It’s not the policies that will be fine tuned, but the focus, intensity and pace of policies that will be fine tuned,” the central banker said.
The surge in loans in the first half was helped by the rollout of the government’s stimulus plan and lending won’t grow as quickly in the second half, Su said.
The government will maintain a moderately loose monetary stance and an expansionary fiscal policy as domestic and external demand remain weak, Zhu Zhixin (朱之鑫), vice chairman of the National Development and Reform Commission, told the briefing.
Inflation isn’t a concern, Su said.
“Harsh lending curbs would just hurt the economy,” said Sherman Chan (陳穎嘉), an economist with Moody’s Economy.com in Sydney.
She said the government would do more to monitor lending.
China’s banking regulator urged lenders on July 27 to ensure credit for investment projects flows into the real economy. Three days later, the regulator announced plans to tighten rules on working capital loans.
China Construction Bank Corp (中國建設銀行) president Zhang Jianguo (張建國) said on Thursday that the nation’s second-largest bank would cut new lending by about 70 percent in the second half to avert a surge in bad debt.
Construction Bank plans to extend about 200 billion yuan (US$29 billion) in loans, down from 708.5 billion yuan in the preceding six months. The company’s new lending through June 30 was 42 percent more than for all of last year.
“We noticed that some loans didn’t go into the real economy,” Zhang said in an interview at the bank’s headquarters in Beijing.
“I feel that some industries are expanding too rapidly. For example, housing prices are rising too fast, and housing sales are growing too fast,” Zhang said.
Investors are split on whether a stock bubble is a threat.
“This is a recovery story that is one of the strongest and most convincing in the world,” Chen Li (陳立), a Beijing-based strategist at Harvest Fund Management Co (嘉實基金管理公司), which oversees about US$22 billion, said on Tuesday. “I don’t think we’re in a bubble.”
Credit Suisse Group AG said this week that it would be difficult to prevent a “huge and damaging bubble from emerging” without monetary tightening.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”