INTEREST RATES
Fed split on rate decision
US Federal Reserve officials were sharply divided last month when they decided to cut their key policy rate for a second time this year. Minutes of the discussion at last month’s meeting released on Wednesday showed that the majority of Fed officials believed a second quarter-point cut was appropriate given increased economic uncertainty from trade tensions and a slowing global economy. However, a “couple” of participants favored a half-point reduction, saying the larger rate cut would reduce the risks of a possible recession. However, a third group of “several participants” argued that the Fed should not be cutting rates at all, as the current economic outlook had changed little since the bank’s last meeting.
CHINA
Capital flight surges: report
China’s hidden capital flight surged to a record high in the first half of this year, suggesting that residents wanting to move money abroad are using unrecorded transactions to evade tight capital controls, the Washington-based Institute of International Finance (IIF) said in a report on Thursday. Net errors and omissions in the balance of payments, a category reflecting flows that cannot be explained and widely seen as an indicator of concealed capital flight, rose to a record US$131 billion in the first six months of this year, IIF said. That was larger than the average US$80 billion recorded during the same period in 2015 and 2016, when outflow pressures intensified, it said. While recorded resident outflows of US$74 billion were the smallest in 10 years, “the true extent of capital flight seems underreported,” IIF head of China research Gene Ma (馬青) said.
RETAIL
Walmart US head quits
Walmart Inc’s US chief executive Greg Foran is leaving the company to take a top job at Air New Zealand Ltd. Foran, a native of New Zealand, has worked at the retail giant since 2011 and been CEO of the US division for the past five years, a period noted for several years of consecutive quarterly sales gains. John Furner, 45, the president and CEO of Walmart’s Sam’s Club division since 2017, is to take over the position on Nov. 1. Under Foran, Walmart cleaned up its 4,700-plus US stores, improved customer service and added employee training, as the nation’s largest retailer adapted to competition from online leader Amazon.com.
AUTOMAKERS
Nissan picks new CEO
Nissan Motor Co’s embattled board appears to have settled on a leader that will not be as autocratic as deposed automotive titan Carlos Ghosn, nor as divisive as his successor, Hiroto Saikawa. Incoming CEO Makoto Uchida, 53, is well regarded within the Japanese firm and his experience working closely with Renault SA could help ease tensions with Nissan’s top shareholder, people familiar with him said. The board particularly liked Uchida’s track record of producing results, most recently as head of the China business, said one of the people, who spoke on condition of anonymity.
SPORTS
Nike ends Oregon Project
Nike Inc yesterday said it is to shut down its Oregon Project training group after athletics coach Alberto Salazar was banned for doping. “This situation, along with ongoing unsubstantiated assertions, is a distraction for many of the athletes and is compromising their ability to focus on their training and competition needs,” Nike chairman Mark Parker said in a staff memo. “I have therefore made the decision to wind down the Oregon Project.”
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
CROSS-STRAIT TENSIONS: The US company could switch orders from TSMC to alternative suppliers, but that would lower chip quality, CEO Jensen Huang said Nvidia Corp CEO Jensen Huang (黃仁勳), whose products have become the hottest commodity in the technology world, on Wednesday said that the scramble for a limited amount of supply has frustrated some customers and raised tensions. “The demand on it is so great, and everyone wants to be first and everyone wants to be most,” he told the audience at a Goldman Sachs Group Inc technology conference in San Francisco. “We probably have more emotional customers today. Deservedly so. It’s tense. We’re trying to do the best we can.” Huang’s company is experiencing strong demand for its latest generation of chips, called
GLOBAL ECONOMY: Policymakers have a choice of a small 25 basis-point cut or a bold cut of 50 basis points, which would help the labor market, but might reignite inflation The US Federal Reserve is gearing up to announce its first interest rate cut in more than four years on Wednesday, with policymakers expected to debate how big a move to make less than two months before the US presidential election. Senior officials at the US central bank including Fed Chairman Jerome Powell have in recent weeks indicated that a rate cut is coming this month, as inflation eases toward the bank’s long-term target of two percent, and the labor market continues to cool. The Fed, which has a dual mandate from the US Congress to act independently to ensure