China cut the amount of cash that banks must set aside as reserves for the third time in six months, pumping money into the financial system to support lending after data showed a slowdown in growth is deepening.
Reserve ratios would fall 50 basis points, effective on Friday, the People’s Bank of China said on its Web site on Saturday. The level for the nation’s largest lenders will decline to 20 percent based on previous statements.
Chinese Premier Wen Jiabao (溫家寶) is increasingly shifting to supporting the nation’s expansion from fighting inflation and containing property prices. China’s import gains stalled last month, while industrial output rose at the slowest pace since 2009, and new yuan loans were the lowest this year, adding to global growth concerns just as Europe’s debt crisis re-ignites.
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“Growth momentum is still weak and external risk has risen sharply,” Liu Ligang (劉利剛), chief China economist at Australia and New Zealand Banking Group Ltd (ANZ) in Hong Kong, said by e-mail on Saturday. “We think another cut could be in mid-June.”
The slowdown in China, the world’s second-biggest economy, underscores risks to the global recovery as job growth in the US slumps. Central bankers across Europe have started discussing the possibility of a Greek exit from the eurozone and how to handle the fallout, Swedish Riksbank Deputy Governor Per Jansson said on Friday.
A 50 basis-point cut in the reserve requirement in February probably added 400 billion yuan (US$63.4 billion) to the financial system, according to ANZ estimates. UBS AG put the figure at 350 billion yuan.
“A more assertive monetary policy is needed and the government should step up stimulus efforts even as concerns remain about the real possibility of over-stimulating,” Alistair Thornton, an economist in Beijing at IHS Global Insight, said before the announcement.
Europe’s more than two-year-old debt crisis flared again this month after voters in Greece and France backed candidates opposed to austerity measures. GDP in the 17-nation region is set to drop 0.3 percent this year, according to the European Commission.
China’s economic performance is facing downward pressure and the domestic and external situations are still “grim,” the Chinese Ministry of Industry and Information Technology said on April 25. Exports rose by less than estimated last month, a customs bureau report showed on Thursday.
The pace of China’s expansion has moderated for the past five quarters as Europe’s debt crisis crimped exports and government curbs on lending and home purchases damped domestic demand. GDP increased 8.1 percent in the first three months of this year from a year earlier, down from an 8.9 percent pace in the fourth quarter.
Bank of America Corp on Friday cut its estimate for China’s second-quarter expansion to 7.6 percent from 8.5 percent and reduced its full-year growth forecast to 8 percent from 8.6 percent. Wang Tao (王濤), China economist at UBS, also lowered her GDP estimates and cut her export growth projection for this year to 7 percent from 10 percent.
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
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],”
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day