Hoping to cool rising inflation, China's central bank will tighten credit by increasing the amount of deposits that weaker banks must set aside, but it ruled out yesterday any immediate hikes in lending or deposit rates. \nAdjustments announced Wednesday in reserve rate requirements and in the interest rates the central bank charges to some commercial institutions also are intended to rein in lending by weaker banks, whose mountains of bad loans are considered a source of financial instability. \nLocal analysts quoted in state-run media said they expect the new policies will have limited impact since they affect only some banks. \nThe monetary policy committee of the central bank, or People's Bank of China, ruled out any short-term increases in commercial bank lending and deposit rates in a statement released yesterday. It did, however, express concern about soaring lending. \n"The committee believes a stable monetary policy should be continuously implemented and the scale of lending should be properly brought under control," the statement said. \nOutstanding bank loans have grown by more than 20 percent from last year. Regulators fear that excessive lending by commercial banks is supporting booms in real estate development and in certain industries -- such as auto manufacturing, steel and aluminum -- that could lead to supply gluts and financial crisis. \nGiven the fast rate of growth in investment in construction and new factory equipment -- which in the first two months of this year surged 53 percent over last year -- inflation remains a threat, a report by analysts at Merrill Lynch said. \n"The new measures are unlikely to alter China's strong growth momentum and hence the looming inflationary pressure," the report said. \nRecent rises in food and fuel prices have pushed inflation to the highest levels in years. The consumer price index rose 2.1 percent in February, while wholesale prices jumped 3.5 percent. \nUnder the central bank's order Wednesday, banks not holding a minimum capital adequacy ratio of 8 percent must raise the percentage of deposits held as reserves to 7.5 percent from the current 7 percent. The change takes effect April 25. \nMost Chinese commercial banks fail to meet the 8 percent minimum requirement for capital adequacy -- expressed as a percentage of a bank's risk-weighted capital exposures. Those that do are not required to raise their reserves. \nIn a further measure aimed at curbing bank lending, the central bank said it was raising the rediscount rate -- what commercial banks pay the central bank in return for cashing in short-term commercial bills before maturity -- by 0.27 percentage point to 3.24 percent. \nA change in the reserve requirement is considered one of the most blunt instruments a central bank can use to control lending growth. Just six months ago, the reserve requirement for all commercial banks was raised to 7 percent from 6 percent.
EXTRADITION DEAL? A former prosecutor said that the US Department of Justice might ask Taiwan to extradite the men in return for the US doing something in return The US won arrest warrants for three Taiwanese men — a former president of China-based Fujian Jinhua Integrated Circuit Co (福建晉華) and two engineers — charged with stealing secrets from Idaho-based Micron Technology Inc. The effort to apprehend the three men — former Fujian Jinhua president Stephen Chen (陳正坤), and Ho Chien-ting (何建廷) and Wang Yong-ming (王永銘), who work for Taiwan-based United Microelectronics Corp (UMC, 聯電) — is notable because they were charged in 2018 in the first case filed under the “China initiative” of US President Donald Trump’s administration targeting trade-secret theft, hacking and economic espionage. However, legal experts have said
There was a net reduction last year in the number of Taipei residents and this year is expected to set a 23-year high for population decline in the city, Ministry of the Interior statistics released yesterday showed. From January to last month, 18,861 more people moved out of Taipei than moved into the capital, an increase of 7,000 from the same period last year, the data showed. That is a 7.2 percent decrease in the city’s population since the start of the year, the biggest drop in both percentage and total number among all municipalities and counties nationwide, the data showed. The data
COUNCILS CLASH: The Mainland Affairs Council said a new office in Hong Kong is to assist people with issues related to investment, study and employment in Taiwan The Mainland Affairs Council (MAC) yesterday denied an accusation by the Hong Kong-Taiwan Economic and Cultural Co-operation and Promotion Council that its Taiwanese counterpart in the territory was “interfering with Hong Kong’s internal affairs.” The Hong Kong council leveled the accusation after Taipei’s Taiwan-Hong Kong Economic and Cultural Co-operation Council this month announced it would establish a Taiwan-Hong Kong Services and Exchanges Office to facilitate humanitarian aid for Hong Kongers. The new office is scheduled to begin operations on Wednesday. The MAC yesterday asked the Hong Kong council to “not misinterpret” the government’s intentions. The two Taiwan-Hong Kong councils were established in 2010 to
IRRESPONSIBLE ATTITUDES? Some experts say the NHI system does not do enough to educate the public, or pay doctors to talk to patients, about healthy lifestyles While the life expectancy of Taiwanese newborns in 2018 reached 80.69 years, the number of years people spent in poor health hit a record high at 8.41 years, Ministry of Health and Welfare statistics showed on Saturday. Healthy life expectancy is calculated by a person’s life expectancy minus the time they spend in ill health, such as the loss of mobility, disabilities and chronic disease, based on medical records and calculations about the years they live with disabilities. The number of years that Taiwanese spend in poor health is increasing slowly, but steadily, rising by 0.46 years, or five-and-a-half months, between 2012