Trade conflicts, rising debt and the potential impact from rising interest rates in the US is likely to dampen growth in the coming year, the Asian Development Bank said yesterday in an update of its regional economic outlook report.
The Manila-based regional lender said that it expects economic growth to remain at a robust 6 percent this year, but to slip to 5.8 percent next year.
It cited looming financial and trade shocks as the biggest sources of potential trouble. If the US economy shows signs of overheating, interest rate hikes by the US Federal Reserve could disrupt currency markets and other capital flows, leading to problems with bad loans.
Overly high housing prices are also risks for China, Hong Kong, Malaysia and South Korea, it said.
However, the bigger threat comes from potential damage to supply chains caused by trade conflicts, especially between the US and China, the report said.
In a conflict stemming from US complaints that Beijing steals or pressures foreign companies to hand over technology, US President Donald Trump went ahead on Monday with a tax hike on US$200 billion of Chinese imports. Beijing retaliated by imposing penalties on US$60 billion of US goods.
That move is likely to shave 0.5 percentage points off of China’s growth and 0.1 percentage points off growth in the US, the report said.
Further expansion would cause still more pain across the region, although while the US trade deficit with China might shrink, the deficit with Asia overall would not decline so much, because other countries would likely be exporting more to make up the difference, it said.
China and the US had earlier imposed 25 percent tariffs on US$50 billion of each other’s goods. Combined, the tariffs now cover nearly half the goods and services China sells to the US and nearly 60 percent of what the US sells China.
The effect would be large both regionally and globally, especially if it expands to include autos and auto trade, it said.
“Estimates of impacts do not fully capture possible disruption to production units as overseas business networks are severed and investment plans are canceled amid a reallocation of global production,” it said.
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