China’s central bank yesterday said cooling surging prices is still its top priority even after inflation eased slightly last month.
The announcement might disappoint companies and investors who hope Beijing will respond to a slowing global economy by reversing repeated interest rate hikes and other curbs imposed in an effort to cool China’s overheated economy.
SUSTAINABLE GROWTH
Beijing is trying to steer growth, that hit 9.5 percent in the latest quarter, to a more sustainable level even as Washington and other Western governments struggle to shore up tepid growth and prevent a renewed global recession.
China’s inflation spiked to a 37-month high of 6.5 percent in July, before retreating to 6.2 percent last month, still one of the highest levels for the past three years.
“Our country has controlled several of the factors causing prices to rise, but the fundamentals have not been eliminated and a stable price level still is the primary mission of macro-controls,” the central bank statement said.
Inflation is politically dangerous for China’s leaders because it erodes the economic gains that help to underpin the ruling party’s monopoly on power.
PRICE SPIKE
Analysts blame the price spike on strong demand for food and a bank lending boom that was part of Beijing’s response to the 2008 global financial crisis. Summer floods this year have damaged crops, reducing supplies of vegetables and grain.
Repeated rate hikes and investment curbs have prompted a shortage of credit for China’s small and privately owned companies, which produce all of the country’s new jobs.
Last month’s price rises were driven by a 13.4 percent jump in politically sensitive food prices. That was down from July’s 14.8 percent, but still uncomfortably high for a society where the poorest families spend half their income on food.
Non-food inflation, which has remained low until now, also rose last month to 3 percent, driven by a 14.9 percent jump in fuel costs.
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
Apple Inc has been developing a homegrown chip to run artificial intelligence (AI) tools in data centers, although it is unclear if the semiconductor would ever be deployed, the Wall Street Journal reported on Monday. The effort would build on Apple’s previous efforts to make in-house chips, which run in its iPhones, Macs and other devices, according to the Journal, which cited unidentified people familiar with the matter. The server project is code-named ACDC (Apple Chips in Data Center) within the company, aiming to utilize Apple’s expertise in chip design for the company’s server infrastructure, the newspaper said. While this initiative has been
GlobalWafers Co (環球晶圓), the world’s No. 3 silicon wafer supplier, yesterday said that revenue would rise moderately in the second half of this year, driven primarily by robust demand for advanced wafers used in high-bandwidth memory (HBM) chips, a key component of artificial intelligence (AI) technology. “The first quarter is the lowest point of this cycle. The second half will be better than the first for the whole semiconductor industry and for GlobalWafers,” chairwoman Doris Hsu (徐秀蘭) said during an online investors’ conference. “HBM would definitely be the key growth driver in the second half,” Hsu said. “That is our big hope
The consumer price index (CPI) last month eased to 1.95 percent, below the central bank’s 2 percent target, as food and entertainment cost increases decelerated, helped by stable egg prices, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. The slowdown bucked predictions by policymakers and academics that inflationary pressures would build up following double-digit electricity rate hikes on April 1. “The latest CPI data came after the cost of eating out and rent grew moderately amid mixed international raw material prices,” DGBAS official Tsao Chih-hung (曹志弘) told a news conference in Taipei. The central bank in March raised interest rates by