China is likely to hike key interest rates by 0.27 percentage points by the end of this year in order to cool down the economy, which may be on the brink of overheating, and to curb escalating inflation risk caused by rising food prices and rising wages, a Beijing-based economist said yesterday.
Chinese monetary policymakers have been cautious about making a fiscal stimulus exit out of concern about unemployment in China and fear that a worsening European debt crisis could cause a double-dip recession.
“[A run-up in] the consumer price index is the most important factor [behind the possible hikes]. Other factors can be managed,” said Huang Yiping (黃益平), a professor at Peking University’s National School of Development, on the sidelines of a speech in Taipei yesterday.
China’s economy grew at an annual rate of 11.9 percent in the first quarter, close to the recent growth rate of 12 percent, which puts the economy under a higher risk of inflation based on the past record, Huang said.
“I believe it will be no exception this time,” Huang said.
China’s CPI, a major indicator gauging an economy’s risk of inflation, jumped to 3.1 percent last month, while the figure was still in negative territory in November last year, Huang said. He said food prices were on the rise, which has caused inflation in the past.
Rising wages have added to the risk, he said. Labor shortages have boosted wages in China by between 15 percent and 20 percent since the beginning of the year, he added.
Huang did not expect to see an end to rising wages anytime soon.
To rein in the risk of inflation, the People’s Bank of China is likely to increase key interest rates by 0.27 percentage points in the second half, Huang said.
Under pressure from the US, China could also allow the yuan to rise faster than it did from 2005 to 2008, Huang said. The yuan appreciated 5 percent to 7 percent annually against the greenback during that period.
That would also push most Asian currencies higher, as many central banks in Asian countries have closely monitored the yuan to safeguard their exporters’ competitiveness, Huang said.
Cairo’s new monorail slices across the city skyline, running above the familiar chaos of blaring horns and aging buses’ exhaust fumes that mark rush hour below. The US$4.5 billion monorail, opened this month, is among Egypt’s most prominent new transport projects, part of a debt-funded infrastructure drive criticized for sapping state finances while bringing limited benefits to most of the country’s 109 million people. “It feels like you’re in a different country,” said Ramy Sayed, a restaurant manager, aboard a driverless Innovia 300 train. “No noise, no traffic, we’re not used to this.” The eastern line runs 56km from the bustling middle-class
Taiwanese firms have increased investment in the Philippines in recent years as Manila’s ties with Washington deepen and global supply chains continue to shift away from China, an expert at the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. The Philippines had not been among Taiwanese investors’ top choices in Southeast Asia, CIER Taiwan ASEAN Studies Center director Kristy Hsu (徐遵慈) said at a seminar in Taipei. However, Taiwan’s investment in the country has grown significantly since the COVID-19 pandemic, reaching US $257 million last year, a high in recent years, she said. Although Taiwan’s total investment in the Philippines still lags
Intel Corp regards Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) as a longstanding partner, as the US chipmaker would continue outsourcing production of advanced chips to TSMC, Intel chief executive officer Lip-Bu Tan (陳立武) said yesterday. “I don’t look at people as competitors. I look at the collaboration... Nvidia is also, you know, a good friend,” Tan told a news conference following his keynote speech at the Computex trade show in Taipei. “It’s a very trusted partnership for us... We are a big, top customer for them, and we’re going to continue doing that,” he said, referring to TSMC, the world’s largest foundry
Artificial intelligence (AI) agents would supplant smartphones as the center of people’s digital lives, fundamentally reshaping personal devices and driving a major computing upgrade cycle, Qualcomm Inc CEO Cristiano Amon said yesterday. In his keynote speech for this year’s Computex trade show in Taipei, Amon said that the rise of "agentic AI" — AI systems capable of reasoning, planning and carrying out tasks autonomously — would transform how people interact with technology across phones, PCs, vehicles and wearable devices. Describing the technology as the next major evolution in computing, Amon said that "2026 is the year of agents.” For decades, smartphones have sat
RSS