Chinese Minister of Finance Lou Jiwei (樓繼偉) yesterday voiced concerns about Britain’s vote to leave the EU, with the policymaker saying it has heightened market uncertainty, although some analysts expect a limited impact on the Chinese economy.
The “Brexit” decision “will cast a shadow over the global economy... The repercussions and fallout will emerge in the next five to 10 years,” Lou said at the first annual meeting of the Asian Infrastructure Investment Bank in Beijing.
“It’s difficult to predict now,” he said. “The knee-jerk reaction from the market is probably a bit excessive and needs to calm down and take an objective view.”
Photo: Reuters
Stock markets around the world plunged in the wake of the referendum while the pound also plummeted.
Lou’s views were separately echoed by other economists at the World Economic Forum (WEF) in China’s northern city of Tianjin.
“It’s hard to talk about and judge the direct impact on China’s economy,” said Huang Yiping (黃益平), a professor at Peking University and a member of the central bank’s monetary policy committee.
“If [Brexit] is an important landmark in terms of a reversal of globalization, I think that’s very bad for the world, it’s very bad for China,” Huang said.
Tsinghua University professor Li Daokui (李稻葵) was more optimistic on the referendum’s effects on the world’s second-largest economy.
“China is perhaps one of the least impacted economies in the world by the event of Brexit,” he told an audience at the WEF. “The only short-term impact I can think about is the exchange rate of the renminbi [yuan]... But I do think within a few trading sessions that situation will very quickly subdued.”
Also speaking at the forum was economist Nouriel Roubini, famed for predicting the global financial crisis, who said the decision to leave the EU “creates a whole bunch of financial, economic, political and geopolitical uncertainties.”
It could be the “beginning of the disintegration” of the bloc of countries, the euro zone or the UK, Roubini said.
“I don’t expect a global recession or another global financial crisis,” he added. “I think the impact of Brexit is significant but not of the same size and magnitude of the one we had 2007 to 2009.”
JP Morgan global investment management Asia Pacific CEO Michael Falcon said he expects more market volatility but does not think the vote would derail a global recovery.
“It is a shock, not a crisis and so far markets seem to be handling this pretty well,” Falcon said at the WEF.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s biggest contract chipmaker, booked its first-ever profit from its Arizona subsidiary in the first half of this year, four years after operations began, a company financial statement showed. Wholly owned by TSMC, the Arizona unit contributed NT$4.52 billion (US$150.1 million) in net profit, compared with a loss of NT$4.34 billion a year earlier, the statement showed. The company attributed the turnaround to strong market demand and high factory utilization. The Arizona unit counts Apple Inc, Nvidia Corp and Advanced Micro Devices Inc among its major customers. The firm’s first fab in Arizona began high-volume production
VOTE OF CONFIDENCE: The Japanese company is adding Intel to an investment portfolio that includes artificial intelligence linchpins Nvidia Corp and TSMC Softbank Group Corp agreed to buy US$2 billion of Intel Corp stock, a surprise deal to shore up a struggling US name while boosting its own chip ambitions. The Japanese company, which is adding Intel to an investment portfolio that includes artificial intelligence (AI) linchpins Nvidia Corp and Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), is to pay US$23 a share — a small discount to Intel’s last close. Shares of the US chipmaker, which would issue new stock to Softbank, surged more than 5 percent in after-hours trading. Softbank’s stock fell as much as 5.4 percent on Tuesday in Tokyo, its
The prices of gasoline and diesel at domestic fuel stations are to rise NT$0.1 and NT$0.4 per liter this week respectively, after international crude oil prices rose last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) announced yesterday. Effective today, gasoline prices at CPC and Formosa stations are to rise to NT$27.3, NT$28.8 and NT$30.8 per liter for 92, 95 and 98-octane unleaded gasoline respectively, the companies said in separate statements. The price of premium diesel is to rise to NT$26.2 per liter at CPC stations and NT$26 at Formosa pumps, they said. The announcements came after international crude oil prices
SETBACK: Apple’s India iPhone push has been disrupted after Foxconn recalled hundreds of Chinese engineers, amid Beijing’s attempts to curb tech transfers Apple Inc assembly partner Hon Hai Precision Industry Co (鴻海精密), also known internationally as Foxconn Technology Group (富士康科技集團), has recalled about 300 Chinese engineers from a factory in India, the latest setback for the iPhone maker’s push to rapidly expand in the country. The extraction of Chinese workers from the factory of Yuzhan Technology (India) Private Ltd, a Hon Hai component unit, in southern Tamil Nadu state, is the second such move in a few months. The company has started flying in Taiwanese engineers to replace staff leaving, people familiar with the matter said, asking not to be named, as the
RSS