China said it will cut the reserve requirement ratio for some of the nation’s banks, the government’s latest step to support growth in the world’s second-biggest economy.
Policymakers will “appropriately” lower the reserve requirement for banks that have extended a certain amount of loans to rural borrowers and smaller companies, the Cabinet said yesterday after a regular meeting led by Chinese Premier Li Keqiang (李克強), without giving more details about the reduction. The Chinese State Council also pledged to fine-tune policy when needed, while reiterating it will maintain a prudent monetary stance.
China’s economy is forecast to expand 7.3 percent this year, which would be the weakest pace since 1990, according to a Bloomberg survey of analysts this month. Li called last week on regional authorities to help stabilize expansion as he seeks to ensure that the government meets its goal of about 7.5 percent growth for the year.
The move “shows policymakers are concerned about the economic slowdown,” Beijing-based Chinese Academy of Social Sciences economist Zhang Bin (張斌) said by telephone. “On the other hand, the government is trying to avoid all-out policy easing as it will jeopardize China’s much-needed economic restructuring.”
The Chinese Communist Party is trying to revive the economy without repeating the mistakes of its US$586 billion stimulus begun in 2008, which caused a record buildup of debt and inflated property bubbles. Chinese President Xi Jinping (習近平) said last month that the nation needs to adapt to a “new normal” in the pace of growth.
The State Council also said in yesterday’s statement that the nation will reduce social financing costs and maintain reasonable growth in credit and social financing as it faces “relatively large” downward economic pressure.
The Chinese central bank cut reserve requirements for some rural banks in April and this month called on the biggest lenders to accelerate the granting of home mortgages. The council has also outlined steps including faster railway spending and tax breaks to help ensure the government meets its growth goal.
A property-market slump threatens to limit any economic rebound and pressure policymakers to do more. Chinese home prices fell 0.3 percent last month from April in the first monthly drop since June 2012, SouFun Holdings Ltd (搜房網), the nation’s biggest real-estate Web site owner, said yesterday.
Nomura Holdings Inc said it expects more policy easing measures in the third quarter after yesterday’s statement, with the government focusing on “targeted and gradual” reserve ratio cuts.
“We expect more details to be announced next week on how the government rates the banks in terms of the share of their loans to the ‘real economy’ and how the size of the required reserve ratio cut will be linked to such a reduction,” Nomura said in a note. “The announcement enhances our conviction that policy easing should delay the risk of a hard landing to 2015.”
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
MAJOR BENEFICIARY: The company benefits from TSMC’s advanced packaging scarcity, given robust demand for Nvidia AI chips, analysts said ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip packaging and testing service provider, yesterday said it is raising its equipment capital expenditure budget by 10 percent this year to expand leading-edge and advanced packing and testing capacity amid strong artificial intelligence (AI) and high-performance computing chip demand. This is on top of the 40 to 50 percent annual increase in its capital spending budget to more than the US$1.7 billion to announced in February. About half of the equipment capital expenditure would be spent on leading-edge and advanced packaging and testing technology, the company said. ASE is considered by analysts