Stimulus needed: Roubini
The economy needs more fiscal stimulus in the short term because it remains weak, followed by measures to “deal with fiscal problems or you’re going to have a fiscal train wreck,” Nouriel Roubini said. “The right solution would be to commit to a program of trying to control spending and raise taxes gradually over the next five years,” said Roubini, co-founder of Roubini Global Economics, in an interview with Bloomberg Haberturk TV on the sidelines of the Aspen Ideas Festival in Aspen, Colorado. “The trouble is we’re doing short-term drag rather than stimulus and we’re not committing to anything in the medium term, so the policy in the US is not optimal,” he said. The Federal Reserve may be pushed by weaker-than-expected or stalled growth to do something that’s not yet priced into the market, Roubini said. “This is QE3 after QE2. It’s not going to make a huge difference, but you need more monetary stimulus,” he said.
Investors subject to tax
Individual investors in Chinese companies listed in the territory will be subject to a 10 percent witholding tax on dividends, according to a statement on the government’s Web site yesterday. China’s State Administration of Taxation clarified the issue of the dividend tax in a reply to the territory’s government, according to the statement. The tax rate avoids a double taxation in line with agreements between the administrations of China and Hong Kong, it said
Sony networks to be restored
Sony said yesterday it would fully restore all PlayStation Network and Qriocity online distribution services in Japan tomorrow, after shutting them down in April due to hacker attacks. In the wake of the cyber attack, Sony shut down those services on April 20 to conduct an investigation and boost the overall security of the network infrastructure, it said in a statement. Except for Japan, the Japanese electronics giant had already restored the services in all other countries and regions where they operated before the shutdown, including the Americas, Europe, Hong Kong and South Korea.
VW holds 56% of MAN
Volkswagen (VW), the biggest European automaker, said yesterday that it now holds 55.9 percent of the voting rights in heavy truck maker MAN, paving the way for a tie-up with Scania of Sweden. VW wants to merge the two companies along with its own heavy vehicle activities to create a rival for two other European heavyweights, Daimler Trucks and Volvo Trucks. VW had offered 95 euros for ordinary shares and 59.90 euros for preference shares in MAN, which also makes diesel engines and industrial turbines. It thus paid a little more than 3.4 billion euros (US$4.93 billion) for 35,857,607 of the former and 164,613 of the latter, according to a VW statement.
Northern unrest hurts growth
A top African economist says turmoil in the continent’s north has had a direct impact on growth and an indirect effect on politics across the continent. Mthuli Ncube, chief economist of the African Development Bank, was discussing the bank’s economic outlook for the continent yesterday. The bank says unrest in the north led to near stagnation, with GDP growth estimated at 0.7 percent this year, compared with 4.7 percent last year. Overall, Africa’s growth was estimated at 3.7 percent for this year, down from 4.9 percent last year.
‘BIG LOSS’: This year might see the last generation of Huawei’s Kirin chips, as their production would stop next month because they are made using US technology Chinese tech giant Huawei Technologies Co (華為) is running out of processor chips to make smartphones due to US sanctions and would be forced to stop production of its own most advanced chips, a company executive has said, in a sign of growing damage to Huawei’s business from US pressure. Huawei, one of the biggest producers of smartphones and network equipment, is at the center of US-Chinese tension over technology and security. Washington last year cut off Huawei’s access to US components and technology, and those penalties were tightened in May, when the White House barred vendors worldwide from using US
’WHITE BOX’: The open platform would give local firms access to Cisco’s cloud-based mobile network to develop 5G telecom equipment and tap into the global market The Ministry of Economic Affairs (MOEA) yesterday introduced a new 5G “open lab” in collaboration with US-based information technology and networking giant Cisco Systems Inc to address the rapidly growing “white box” 5G networking equipment market. The open lab will be a platform where Taiwanese manufacturers can access Cisco’s cloud-based mobile network to develop their own 5G telecom equipment, such as small-cell base stations, network switches, modems and Internet of things (IoT) devices, a ministry statement said. The open platform would allow Taiwanese manufacturers to tap into the lucrative 5G telecom equipment market, which was previously monopolized by Nokia Oyj, Ericsson AB
CORPORATE SCANDAL: Cathay Life has invested NT$13.3 billion in Bank Mayapada since 2015, but the latest loss of NT$8.8 billion has completely written off its investment Cathay Life Insurance Co (國泰人壽) yesterday said it would recognize an investment loss of NT$8.8 billion (US$298.1 million) in Indonesia’s Bank Mayapada Internasional Tbk PT due to concerns about the lender’s operations amid a corporate scandal. The company said it would revise its earnings result for June, from a net profit of NT$6.52 billion to a net loss of NT$520 million, its first monthly loss over the past 17 months. After booking an investment loss of NT$5.2 billion in Bank Mayapada earlier this year, Cathay Life has so far recognized total investment losses of NT$14 billion in the lender, executive vice president
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reported that revenue last month expanded 25 percent annually, but fell 12.8 percent month-on-month to NT$105.96 billion (US$3.59 billion). In the first seven months of this year, the chipmaker’s revenue surged 33.6 percent to NT$727.26 billion, compared with NT$544.46 billion a year earlier. TSMC has said it aims to grow its revenue by more than 20 percent this year. The company has since May 15 stopped taking new orders from Huawei Technologies Co (華為), its second-biggest customer after Apple Inc, due to the US’ restrictions on exports containing US technologies. TSMC has no plans to