Political leaders, central bankers and financiers at the World Economic Forum have attacked China’s monetary and trade policy and questioned its ability to tackle an overheating economy.
Top Chinese officials face an increasingly difficult task saying that Beijing is acting in the interest of the world economy by keeping its yuan currency weak against the dollar and maintaining a huge trade surplus — US$196.1 billion last year.
Even in a keynote speech on the first day of the Davos forum on Wednesday, French President Nicolas Sarkozy made a veiled attack against China, saying festering trade imbalances were harming economic recovery.
“Currency is central to these imbalances,” he said. “Exchange rate instability and the under-valuation of certain currencies militate against fair trade and honest competition.”
“Persistent external imbalances” was also raised by Kuwaiti central bank chief Ibrahim Dabdoub. “Somehow we have to tackle this part of the imbalances. We have to tackle the imbalances between China and the US, and the Gulf oil exporters and the US.”
Billionaire financier George Soros added to the calls from Europe and North America for China to allow its currency to appreciate.
“The case for revaluing the renminbi is getting stronger and stronger,” he said, adding that a stronger yuan would be “good for China and the rest of the world.”
Soros also expressed skepticism about whether China would beat asset bubbles building up in its economy.
“The jury is out,” he said of China’s efforts to contain high property prices and credit. The campaign will be “a major test for the Chinese government.”
China’s economy has been expanding at red-hot pace, but the growth rate of the property and stock markets has heightened inflation fears that have already forced Beijing to cut bank lending to deter a consumer splurge on cars and property.
Ahead of a keynote speech yesterday on the financial crisis and reforms by Chinese Vice Premier Li Keqiang (李克強), defending China in Davos has been left to the deputy chief of the central bank, Zhu Min (朱民).
“It’s very important to have a stable yuan, particularly in this very volatile market,” he said. It was “good for China, it’s also good for the world.”
Zhu said the cheap US dollar was encouraging trading that could bring a repeat of attacks on Asian currencies during the region’s financial crisis of the 1990s.
Investors are borrowing dollars and putting the borrowed funds into emerging markets, where interest rates are higher, generating a better return than saving in the dollars, Zhu said.
This phenomenon, called the “carry trade” is a “massive issue today,” he said.
“It’s bigger than the Japanese yen carry trade 12 years ago,” he said.
He urged the US to tighten its lax monetary policy, making borrowing more costly. Funds could then flow quickly out of emerging markets, back into the US market.
However, this could cause a collapse in emerging market currencies and spark a repeat of the 1997-1998 Asian financial crisis, some experts said. Investors borrowed the cheap Japanese yen to put into southeast Asian economies, fueling strong growth before exports slumped amid a global demand slowdown, they said.
Speculators attacked southeast Asian currencies, believing they were overvalued. Thailand abandoned its fixed exchange rate to the dollar. Other currencies followed and crashed under crippling debt and soaring interest rates.
“It’s what we learned from the Asian financial crisis. Because the yen went back to the Tokyo market,” Zhu said. “Everyone is concerned about the direction which the capital flow will move. It’s an absolute real risk for the year.”
The nation’s fastest supercomputer, Nano 4 (晶創26), is scheduled to be launched in the third quarter, and would be used to train large language models in finance and national defense sectors, the National Center for High-Performance Computing (NCHC) said. The supercomputer, which would operate at about 86.05 petaflops, is being tested at a new cloud computing center in the Southern Taiwan Science Park in Tainan. The exterior of the server cabinet features chip circuitry patterns overlaid with a map of Taiwan, highlighting the nation’s central position in the semiconductor industry. The center also houses Taiwania 2, Taiwania 3, Forerunner 1 and
FIRST TRIAL: Ko’s lawyers sought reduced bail and other concessions, as did other defendants, but the bail judge denied their requests, citing the severity of the sentences Former Taipei mayor Ko Wen-je (柯文哲) was yesterday sentenced to 17 years in prison and had his civil rights suspended for six years over corruption, embezzlement and other charges. Taipei prosecutors in December last year asked the Taipei District Court for a combined 28-year, six-month sentence for the four cases against Ko, who founded the Taiwan People’s Party (TPP). The cases were linked to the Core Pacific City (京華城購物中心) redevelopment project and the mismanagement of political donations. Other defendants convicted on separate charges included Chinese Nationalist Party (KMT) Taipei City Councilor Angela Ying (應曉薇), who was handed a 15-year, six-month sentence; Core Pacific
J-6 REMODEL: The converted drones are part of Beijing’s expanding mix of airpower weapons, including bombers with stand-off missiles and UAV swarms, the report said China has stationed obsolete supersonic fighters converted to attack drones at six air bases close to the Taiwan Strait, a report published this month by the Arlington, Virginia-based Mitchell Institute for Aerospace Studies said. Satellite imagery of the airfields from the institute’s “China Airpower Tracker” shows what appear to be lines of stubby, swept-winged aircraft matching the shape of J-6 fighters that first flew with the Chinese People’s Liberation Army (PLA) Air Force in the 1960s. Since their conversion to drones, the aircraft have been identified at five bases in China’s Fujian Province and one in Guangdong Province, the report said. J.
China used fake LinkedIn profiles to harvest sensitive data from NATO and EU institutions by soliciting information from staff, a European security source said on Friday. The operation, allegedly orchestrated by the Chinese Ministry of State Security, targeted dozens of employees at the military alliance or EU organizations through fictitious accounts, the source said, confirming reports in French and Belgian media. Posing as recruiters on the online professional networking platform, Chinese spies would initially request paid reports before later soliciting non-public or even classified information. One particularly active fake profile used the name “Kevin Zhang,” claiming to be the head
RSS