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.”
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.
ARIZONA PROJECT: A spokeswoman said that TSMC appreciates the support from US authorities, which gives it and its partners confidence about future investments City officials in Phoenix, Arizona, on Wednesday approved a slate of financial incentives and government support for Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) planned US$12 billion chip plant, a step toward bringing high-tech manufacturing to the US and addressing national security concerns over the industry supply chain. The city agreed to provide about US$200 million to develop roads, sewers and other infrastructure, according to a notice from the city council. At least one additional set of traffic lights would be included for a cost of approximately US$500,000. The company is conducting due diligence on several locations in Phoenix with a final decision to
HARD ASK: At a meeting held by the MOEA to talk about the RCEP trade deal, trade associations said that they expect the government to push for more free-trade deals Business representatives yesterday urged the government to slow the appreciation of the New Taiwan dollar, saying that some Taiwanese industries have been undercut by rivals due to unfavorable foreign exchange rates. The government should also assist local industries to expand their domestic market, and push for more bilateral trade deals so that Taiwanese companies can enjoy zero or preferential tariffs on exports, following the nation’s exclusion from the Regional Comprehensive Economic Partnership (RCEP) which was signed by 15 Asia-Pacific nations on Nov. 15, they said at a meeting with the Ministry of Economic Affairs (MOEA). Some participants said that the NT dollar’s
A.P. Moller-Maersk A/S is planning to launch a US$1.6 billion share buyback program as the world’s biggest container shipping company weathers the COVID-19 crisis better than expected. Copenhagen-based Maersk, which on Tuesday raised its guidance for a second time since last month, reported a 39 percent rise in earnings before interest, taxes, depreciation and amortization to US$2.3 billion in the third quarter. Profit by that measure, before restructuring and integration costs, would reach US$8 billion to US$8.5 billion this year, the company said. Its previous guidance was for US$7.5 billion to US$8 billion. “The global economic environment was [in the third quarter]
OPPORTUNITY: After Huawei said it would sell a sub-brand, potentially exempting it from the US ban, the Hsinchu-based chipmaker eyes the chance to boost sales in China MediaTek Inc (聯發科) yesterday became the nation’s second-most valuable listed company after its market capitalization climbed to NT$1.157 trillion (US$40.23 billion) amid investors’ optimism of new business opportunities, while Hon Hai Precision Industry Co (鴻海精密), a major assembler of Apple Inc’s iPhones, fell one notch to third with a market capitalization of NT$1.153 trillion. The increase in MediaTek’s value came as its shares rallied 4.6 percent to close at NT$728 yesterday, as investors expected the handset chip supplier to benefit from Huawei Technologies Co’s (華為) decision to sell its low-to-mid-range smartphone business under the Honor (榮耀) sub-brand. On Tuesday, Huawei announced