The top concern for Asia is an expected slowdown in growth in the US, a senior official at Fitch Ratings said yesterday, emphasizing that the region has yet to wean itself away from demand in the world's largest economy.
"The biggest threat that we see to Asian growth going forward is a slowdown in the US, which is something we do expect to happen later this year as higher interest rates start to take hold," James McCormack, Fitch's head of Asia Sovereign Ratings, told reporters.
"Even though China is absorbing more of the rest of Asia's exports [as] the US is absorbing less, a lot of that trade is then finding its way to the US," said Hong Kong-based McCormack, who was visiting Seoul for an investment seminar.
US growth accelerated in the first quarter of this year, growing an annualized 4.8 percent, a sharp rebound from the 1.7 percent recorded in the final three months of last year. US Federal Reserve Chairman Ben Bernanke said he expected growth to moderate in coming quarters.
The IMF predicted last month that the US will grow 3.4 percent this year and 3.3 percent next year, both slightly slower than last year's 3.5 percent.
McCormack cited the example of exports of intermediate goods from countries like South Korea to China, where finished products are assembled and then shipped to the US.
"So China has become a part of a regional manufacturing process," McCormack said.
He added, however, that "final demand in the US is still what matters for Asia."
China, the world's fastest growing major economy, expanded 10.2 percent in the first quarter from the same period last year. The World Bank yesterday raised its forecast for economic growth this year to 9.5 percent from an earlier forecast of 9.2 percent.
But the World Bank urged China to allow its currency to appreciate faster, saying a stronger yuan would help rebalance the nation's trade surplus and ease domestic economic problems.
"Accelerating appreciation [of the yuan] would also help reduce current account surpluses and rebalance growth towards consumption," the World Bank said as it released a quarterly report.
AI REVOLUTION: The event is to take place from Wednesday to Friday at the Taipei Nangang Exhibition Center’s halls 1 and 2 and would feature more than 1,100 exhibitors Semicon Taiwan, an annual international semiconductor exhibition, would bring leaders from the world’s top technology firms to Taipei this year, the event organizer said. The CEO Summit is to feature nine global leaders from Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), ASE Technology Holding Co (ASE, 日月光投控), Applied Materials Inc, Google, Samsung Electronics Co, SK Hynix Inc, Microsoft Corp, Interuniversity Microelectronic Centre and Marvell Technology Group Ltd, SEMI said in a news release last week. The top executives would delve into how semiconductors are positioned as the driving force behind global technological innovation amid the artificial intelligence (AI) revolution, the organizer said. Among them,
Demand for artificial intelligence (AI) chips should spur growth for the semiconductor industry over the next few years, the CEO of a major supplier to Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) said, dismissing concerns that investors had misjudged the pace and extent of spending on AI. While the global chip market has grown about 8 percent annually over the past 20 years, AI semiconductors should grow at a much higher rate going forward, Scientech Corp (辛耘) chief executive officer Hsu Ming-chi (許明琪) told Bloomberg Television. “This booming of the AI industry has just begun,” Hsu said. “For the most prominent
Former Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) chairman Mark Liu (劉德音) yesterday warned against the tendency to label stakeholders as either “pro-China” or “pro-US,” calling such rigid thinking a “trap” that could impede policy discussions. Liu, an adviser to the Cabinet’s Economic Development Committee, made the comments in his keynote speech at the committee’s first advisers’ meeting. Speaking in front of Premier Cho Jung-tai (卓榮泰), National Development Council (NDC) Minister Paul Liu (劉鏡清) and other officials, Liu urged the public to be wary of falling into the “trap” of categorizing people involved in discussions into either the “pro-China” or “pro-US” camp. Liu,
Minister of Economic Affairs J.W. Kuo (郭智輝) yesterday said Taiwan’s government plans to set up a business service company in Kyushu, Japan, to help Taiwanese companies operating there. “The company will follow the one-stop service model similar to the science parks we have in Taiwan,” Kuo said. “As each prefecture is providing different conditions, we will establish a new company providing services and helping Taiwanese companies swiftly settle in Japan.” Kuo did not specify the exact location of the planned company but said it would not be in Kumamoto, the Kyushu prefecture in which Taiwan Semiconductor Manufacturing Company (TSMC, 台積電) has a
RSS