■ Interest rates
Fed holds rate at 1.25%
Federal Reserve policymakers left their benchmark interest rate unchanged and said the economy still needs the lowest borrowing costs in four decades to sustain the recovery "through its current soft spot." Central bankers voted unanimously to leave the benchmark overnight bank lending rate at 1.25 percent, the lowest since July 1961. The Fed reduced the rate by a larger-than-expected half percentage point at its Nov. 6 meeting, a decision that Fed Governor Ben Bernanke later told an economics club was "insurance" against additional economic weakness. "They want to be aggressive," said Janet Yellin, a former Fed governor who is now a business professor at the University of California, Berkeley. The Fed would rather see "a recovery that is too strong rather than one that is too weak" and is likely to leave rates unchanged "for a good, long time."
■ Banking
Luxembourg wants secrecy
Luxembourg and Austria will try today to fend off pressure to tear down their banking-secrecy protections as part of a Europe-wide plan to combat tax evasion. The two are resisting a proposal for an EU bank-interest reporting requirement as long as Switzerland, not an EU member, clings to the depositor protections that have helped Swiss banks amass US$2.3 trillion in assets under management. "All the actors know that the proposed legislation is very costly and contains too many loopholes -- who could then possibly agree with it?" Charles Hermann, a partner in KPMG's Zurich office, said in an interview. The interest-reporting rule would replace a tax the UK blocked in 1999. The deadlock reflects increasing competition between financial centers in an era when investors can move capital across national borders at the touch of a button. Luxembourg, the EU's smallest state, has made finance the backbone of its economy by offering banking secrecy and no withholding taxes.
■ Trade
China happy with WTO
China's state media cheered the first anniversary of its hard-won WTO membership yesterday, saying it was boosting trade and investment while making the state-dominated economy more open and competitive. Newspapers hailed China as an exemplary WTO member and said trade this year is expected to hit record highs. The reports made only veiled references to Chinese worries that foreign competition could cost millions of jobs and didn't mention foreign complaints that Beijing has been slower than promised in opening its markets. "Against a gloomy global slowdown, China has make its first year of WTO membership a splendid success," said the newspaper China Daily. China became a member of the rule-making body for world trade on Dec. 11, 2001, in Doha, Qatar, capping the 15-year quest by the last major communist nations to embrace global capitalism. The China Daily noted that regulators now must publicize policy changes -- a big step for system that used to treat such data as secret, leading to complaints from both Chinese and foreign companies. The State Economic and Trade Commission, the nation's top trade regulator, has abolished or changed half of its regulations, cutting the number of items subject to official examination by one-third, China Daily said.
Agencies
RETHINK? The defense ministry and Navy Command Headquarters could take over the indigenous submarine project and change its production timeline, a source said Admiral Huang Shu-kuang’s (黃曙光) resignation as head of the Indigenous Submarine Program and as a member of the National Security Council could affect the production of submarines, a source said yesterday. Huang in a statement last night said he had decided to resign due to national security concerns while expressing the hope that it would put a stop to political wrangling that only undermines the advancement of the nation’s defense capabilities. Taiwan People’s Party Legislator Vivian Huang (黃珊珊) yesterday said that the admiral, her older brother, felt it was time for him to step down and that he had completed what he
Taiwan has experienced its most significant improvement in the QS World University Rankings by Subject, data provided on Sunday by international higher education analyst Quacquarelli Symonds (QS) showed. Compared with last year’s edition of the rankings, which measure academic excellence and influence, Taiwanese universities made great improvements in the H Index metric, which evaluates research productivity and its impact, with a notable 30 percent increase overall, QS said. Taiwanese universities also made notable progress in the Citations per Paper metric, which measures the impact of research, achieving a 13 percent increase. Taiwanese universities gained 10 percent in Academic Reputation, but declined 18 percent
CHINA REACTS: The patrol and reconnaissance plane ‘transited the Taiwan Strait in international airspace,’ the 7th Fleet said, while Taipei said it saw nothing unusual The US 7th Fleet yesterday said that a US Navy P-8A Poseidon flew through the Taiwan Strait, a day after US and Chinese defense heads held their first talks since November 2022 in an effort to reduce regional tensions. The patrol and reconnaissance plane “transited the Taiwan Strait in international airspace,” the 7th Fleet said in a news release. “By operating within the Taiwan Strait in accordance with international law, the United States upholds the navigational rights and freedoms of all nations.” In a separate statement, the Ministry of National Defense said that it monitored nearby waters and airspace as the aircraft
UNDER DISCUSSION: The combatant command would integrate fast attack boat and anti-ship missile groups to defend waters closest to the coastline, a source said The military could establish a new combatant command as early as 2026, which would be tasked with defending Taiwan’s territorial waters 24 nautical miles (44.4km) from the nation’s coastline, a source familiar with the matter said yesterday. The new command, which would fall under the Naval Command Headquarters, would be led by a vice admiral and integrate existing fast attack boat and anti-ship missile groups, along with the Naval Maritime Surveillance and Reconnaissance Command, said the source, who asked to remain anonymous. It could be launched by 2026, but details are being discussed and no final timetable has been announced, the source