China's booming economy is displaying signs of a slowdown as consumption of energy declines and inventories rise, US investment bank Morgan Stanley said yesterday.
The economic slowdown will likely become more acute in six months as commodity prices continue to fall and the property sector undergoes an inventory liquidation, the bank's chief Asian economist Andy Xie (
"Property inventory is piling up and capex [capital expenditure] projects are slowing down, on declining commodity prices and vanishing speculative demand for property," Xie, based in Hong Kong, said in a report.
"Decelerating energy consumption reflects the economic slowdown," he said.
China has taken steps to cool down its torrid economic expansion but gross domestic product still grew by a faster-than-expected 9.5 percent in the first six months of the year, after expanding 9.4 percent in the first quarter.
Fixed asset investment, which largely reflects government spending on infrastructure, grew at 25.4 percent year-on-year.
This was some 3.2 percentage points lower than a year ago but way above the 16 percent target for the year.
According to Xie, it will take the Chinese economy at least two years to bottom out but the slowdown would generate some social benefits for the world's most populous nation.
"The recent overheating redistributed a substantial proportion of household income to businesses and governments through property, food and energy inflation," Xie said.
"As inflation turns into deflation, the share of household income in GDP should recover.
"The slowdown should be good for social stability."
Xie however said Chinese authorities should be on guard against speculators gambling on a fresh revaluation of the yuan currency, which was allowed to float against a basket of currencies after Beijing last month lifted the decade-old peg to the US dollar.
"China must be vigilant regarding financial stability during the ongoing economic consolidation," Xie said.
"The key is to prevent a sudden outflow of the hot money that has come in over the past three years to speculate on RMB [yuan] revaluation."
Real estate agent and property developer JSL Construction & Development Co (愛山林) led the average compensation rankings among companies listed on the Taiwan Stock Exchange (TWSE) last year, while contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) finished 14th. JSL Construction paid its employees total average compensation of NT$4.78 million (US$159,701), down 13.5 percent from a year earlier, but still ahead of the most profitable listed tech giants, including TSMC, TWSE data showed. Last year, the average compensation (which includes salary, overtime, bonuses and allowances) paid by TSMC rose 21.6 percent to reach about NT$3.33 million, lifting its ranking by 10 notches
Popular vape brands such as Geek Bar might get more expensive in the US — if you can find them at all. Shipments of vapes from China to the US ground to a near halt last month from a year ago, official data showed, hit by US President Donald Trump’s tariffs and a crackdown on unauthorized e-cigarettes in the world’s biggest market for smoking alternatives. That includes Geek Bar, a brand of flavored vapes that is not authorized to sell in the US, but which had been widely available due to porous import controls. One retailer, who asked not to be named, because
SEASONAL WEAKNESS: The combined revenue of the top 10 foundries fell 5.4%, but rush orders and China’s subsidies partially offset slowing demand Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) further solidified its dominance in the global wafer foundry business in the first quarter of this year, remaining far ahead of its closest rival, Samsung Electronics Co, TrendForce Corp (集邦科技) said yesterday. TSMC posted US$25.52 billion in sales in the January-to-March period, down 5 percent from the previous quarter, but its market share rose from 67.1 percent the previous quarter to 67.6 percent, TrendForce said in a report. While smartphone-related wafer shipments declined in the first quarter due to seasonal factors, solid demand for artificial intelligence (AI) and high-performance computing (HPC) devices and urgent TV-related orders
MINERAL DIPLOMACY: The Chinese commerce ministry said it approved applications for the export of rare earths in a move that could help ease US-China trade tensions Chinese Vice Premier He Lifeng (何立峰) is today to meet a US delegation for talks in the UK, Beijing announced on Saturday amid a fragile truce in the trade dispute between the two powers. He is to visit the UK from yesterday to Friday at the invitation of the British government, the Chinese Ministry of Foreign Affairs said in a statement. He and US representatives are to cochair the first meeting of the US-China economic and trade consultation mechanism, it said. US President Donald Trump on Friday announced that a new round of trade talks with China would start in London beginning today,
RSS