EUROZONE
Activity accelerates
Economic activity this month unexpectedly accelerated at the fastest pace in six months, with services proving resilient as factories battled challenges, including the COVID-19 outbreak in China. The reading in a survey by IHS Markit came a day after European Central Bank President Luis de Guindos said the bloc’s relatively strong labor market and ultra-low interest rates were supporting economic growth. The bank has long argued that domestic strength is providing some buffer against global risks. In Germany a surprise jump in the factory purchasing managers’ index sent the euro higher, though the improvement was largely a statistical distortion that masked weakness in export demand and sentiment. The composite gauge — a measure of private-sector activity — edged up to 51.6, signaling quarterly economic growth of about 0.2 percent. Manufacturing continued to shrink, though at a slower pace.
UNITED STATES
China to honor deal: official
The government expects China to honor its commitments to buy more US goods under a trade deal signed last month, despite the COVID-19 outbreak, a senior official said on Thursday. The Department of the Treasury official said that it was too soon to make accurate forecasts for the impact of the coronavirus on the global economy, but the base case scenario sees China’s growth dropping in the first quarter and then rebounding sharply. Starting this month, China is to increase purchases of US goods by US$77 billion this year and by US$123 billion next year, compared with a baseline of US imports in 2017, the year before the trade dispute began. Experts had expressed skepticism that China would be able to meet such aggressive purchase commitments even before the coronavirus outbreak.
JAPAN
Gas price boosts inflation
Core inflation last month accelerated, but with the gain boosted by gasoline costs the number does little to bolster a case that consumer-led price momentum is picking up as the Bank of Japan hopes. Consumer prices excluding fresh food rose 0.8 percent from a year earlier, picking up speed from a 0.7 percent gain in December last year, the Ministry of Internal Affairs and Communications said yesterday. The result matched economists’ median forecast. While inflation has picked up since a two-year low in the summer last year, gains have come largely from changes in energy prices, a function of global commodity markets rather than consumer demand, and the jolt from a sales tax increase. After years of massive monetary easing, inflation still runs far below the central bank’s 2 percent target.
INSURANCE
Allianz beats profit forecasts
Allianz SE, the German company that owns bond giant Pacific Investment Management Co (PIMCO), stopped four consecutive quarters of bleeding assets at its European investment management unit as it beat analysts’ profit estimates for last year. Allianz Global Investors attracted 2 billion euros (US$2.16 billion) from outside clients in the fourth quarter of last year after net outflows during the rest of the year, the company reported yesterday. PIMCO lured another 18 billion euros, bringing total investors’ assets for investors to a record 1.69 trillion euros. Increasing overall income from asset management, as well as life and health insurance, helped Allianz post an operating profit of 11.9 billion euros for the full year, compared with 11.5 billion euros in 2018.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last
US CONSCULTANT: The US Department of Commerce’s Ursula Burns is a rarely seen US government consultant to be put forward to sit on the board, nominated as an independent director Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday nominated 10 candidates for its new board of directors, including Ursula Burns from the US Department of Commerce. It is rare that TSMC has nominated a US government consultant to sit on its board. Burns was nominated as one of seven independent directors. She is vice chair of the department’s Advisory Council on Supply Chain Competitiveness. Burns is to stand for election at TSMC’s annual shareholders’ meeting on June 4 along with the rest of the candidates. TSMC chairman Mark Liu (劉德音) was not on the list after in December last