TRADE
US-China pact lucrative
Free trade between the US and China could generate annual combined economic gains of US$460 billion for the two countries, according to new research from the Peterson Institute for International Economics. The study found that if the two countries could agree on a comprehensive deal to free up trade and investment, US exports to China would double over 10 years, with particular gains in services. China stands to gain US$330 billion, or 1.9 percent of GDP, while the US would benefit to the tune of US$130 billion, or 0.6 percent of GDP.
BANKING
St Louis Fed head concerned
Federal Reserve Bank of St Louis President James Bullard on Thursday suggested that the central bank should consider prolonging its bond-buying stimulus program, which is due to begin to wind up this month. Bullard said he was concerned about falling inflation forecasts and said the Fed’s quantitative easing should continue. At its meeting on Oct. 28 and 29, the Federal Open Market Committee is expected to wrap up its asset-purchase program, which once stood at US$85 billion, but is now at US$15 billion. Bullard suggested keeping quantitative easing at that US$15 billion level.
UNITED KINGDOM
BOE chief economist gloomy
The Bank of England (BOE) might need to keep interest rates lower for longer than previously thought to reduce the chance of the economy slipping into long-term stagnation, BOE chief economist Andrew Haldane said on Friday. Haldane said he was now more downbeat about the outlook for Britain’s economy, due to weaker global growth, greater financial and political risks and the danger that wages and productivity might continue to fail to recover as forecast. “Put in rather plainer English, I am gloomier,” Haldane said. “This implies interest rates could remain lower for longer, certainly than I had expected three months ago.”
AUTOMAKERS
Rolls-Royce cuts forecasts
Rolls-Royce, the British maker of engines, on Friday announced that it was slashing its earnings forecasts partly as result of Western trade sanctions against Russia, causing a share price collapse. Rolls said underlying profit next year would be flat at best compared with this year, but could come in three percent lower. The company had previously expected earnings to grow next year. Meanwhile, Rolls said that next year would be worse than expected for the group after it was forced to change its guidance on underlying revenues for this year. It now sees revenue at 3.5 percent to 4.5 percent lower compared with last year. It had previously forecast flat growth.
ADVERTISING
RTL files tax complaint
German-owned media giant RTL Group has filed a complaint in Brussels over a Hungarian tax on advertisement revenue it calls discriminatory and damaging to press freedom, the company said on Thursday. The tax, approved by Hungary’s parliament in June, is the latest in a series of so-called “special” levies introduced by Hungarian Prime Minister Viktor Orban’s government since 2010 on sectors typically dominated by foreign companies like banking, energy, retail and telecoms. Orban’s opponents have accused him of using the tax to muzzle press freedom by singling out RTL, Hungary’s largest commercial media firm, whose TV channel regularly broadcasts news that is critical of the government.
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