■CURRENCY
Yuan revaluation unlikely
China’s deputy central bank governor Hu Xiaolian (胡曉煉) said big moves in major currencies hurt the global economy, signaling the government is unlikely to give into pressure from the US and EU over the strength of the yuan. A nation’s current account balance can be used as a “window” to watch if its exchange rate is at an equilibrium level, People’s Bank of China deputy governor Hu said at a financial conference in Shanghai. China’s current account surplus has been shrinking. The level of an exchange rate is based on market demand and supply, she said. It’s good to have currencies with a certain amount of flexibility, but big fluctuations in major currencies are bad, she said.
■FINANCE
Bank of China to raise funds
Bank of China Ltd (中國銀行) announced on Friday it will raise up to 60 billion yuan ($8.9 billion) in a new effort by a major Chinese state-owned lender to replenish capital following last year’s lending boom. Bank of China shareholders can buy 1.1 shares for each share they own “to improve the capital adequacy ratio of the bank,” the bank said in a statement. It said the new shares will be issued on exchanges in Hong Kong and Shanghai. Bank of China said its plan requires shareholder approval, but such permission is largely a formality because some 67.5 percent of its shares are owned by Central Huijin Investment Co (中央匯金), an arm of Beijing’s sovereign wealth fund.
■INTEREST RATES
India raises interest rates
India’s central bank on Friday hiked two key short-term interest rates by 25 basis points in a bid to tame double-digit inflation. The Reserve Bank of India said the decision was taken before its scheduled July 27 meeting “to contain inflation and anchor inflationary expectations going forward.” Governor D. Subbarao said the repo — the lending rate to commercial banks — has risen to to 5.50 percent with immediate effect, while the reverse repo — the rate the central bank pays to banks for deposits — is now 4.0 percent.
■TRADE
Taiwan, Guangxi linking up
There is great potential for Taiwan and China’s Guangxi region to cooperate in cultural creativity, Taiwan External Trade Development Council chairman Wang Chih-kang (王志剛) said on Friday. “Guangxi and Taiwan can cooperate in cultural creativity to develop a vast market,” Wang said at a Guangxi-Taiwan cooperation forum on business and culture. Wang suggested that both sides can strengthen cooperation in areas including LEDs, agriculture, automobile parts and components, automobile electronics and cultural creativity.
■AUTOMOBILES
General Motors to file IPO
General Motors Co plans to file its nearly US$20 billion initial public offering (IPO) in the middle of next month, a source familiar with the situation said on Friday, later than some expected as bankers work to help sort out the automaker’s finances post-bankruptcy. General Motors is also in talks with banks for a revolving credit line worth US$5 billion, sources said. Bank of America Corp, Citigroup Inc, JPMorgan Chase & Co and Morgan Stanley have already agreed to provide US$500 million of credit each, with other banks still to be chosen, a source said. The credit line is expected to be finalized in the next two weeks, about a month before the automaker files for its IPO, a source said.
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
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
CROSS-STRAIT TENSIONS: The US company could switch orders from TSMC to alternative suppliers, but that would lower chip quality, CEO Jensen Huang said Nvidia Corp CEO Jensen Huang (黃仁勳), whose products have become the hottest commodity in the technology world, on Wednesday said that the scramble for a limited amount of supply has frustrated some customers and raised tensions. “The demand on it is so great, and everyone wants to be first and everyone wants to be most,” he told the audience at a Goldman Sachs Group Inc technology conference in San Francisco. “We probably have more emotional customers today. Deservedly so. It’s tense. We’re trying to do the best we can.” Huang’s company is experiencing strong demand for its latest generation of chips, called
GLOBAL ECONOMY: Policymakers have a choice of a small 25 basis-point cut or a bold cut of 50 basis points, which would help the labor market, but might reignite inflation The US Federal Reserve is gearing up to announce its first interest rate cut in more than four years on Wednesday, with policymakers expected to debate how big a move to make less than two months before the US presidential election. Senior officials at the US central bank including Fed Chairman Jerome Powell have in recent weeks indicated that a rate cut is coming this month, as inflation eases toward the bank’s long-term target of two percent, and the labor market continues to cool. The Fed, which has a dual mandate from the US Congress to act independently to ensure