CURRENCIES
China ‘prepared’ for ‘war’
A top Chinese banker said Beijing is “fully prepared” for a currency war, as he urged the world to abide by a consensus reached by the G20 to avert confrontation, Xinhua news agency reported yesterday. People’s Bank of China Deputy Governor Yi Gang (易鋼) issued the call after G20 finance ministers last month moved to calm fears of a looming war on the currency markets at a meeting in Moscow. Those fears have largely been fueled by the recent steep decline in the Japanese yen, which critics have accused Tokyo of manipulating to give its manufacturers a competitive edge in key export markets over Asian rivals. Yi said a currency war could be avoided if major countries observed the G20 consensus that monetary policy should primarily serve as a tool for domestic economy, Xinhua reported.
INTERNET
Yahoo cuts slow products
Yahoo Inc is shutting down seven products, including its mobile app for BlackBerry smartphones, as new CEO Marissa Mayer takes a page from Google Inc’s play book by eliminating unsuccessful products en masse. The product shutdowns, which Yahoo announced on its official company blog on Friday, are part of what the company said are regular efforts to evaluate and review its product line-up. The announcement represents Yahoo’s second group shutdown of products since Mayer, a former Google executive, became CEO of the struggling Web portal in July last year. The other products to be terminated are Yahoo Avatars, App Search, Sports IQ, Clues, Message Boards Web site and Updates API.
MANUFACTURING
US manufacturing expands
US manufacturing expanded at a faster pace than forecast last month, reaching the highest level since June 2011 as factories boosted production. The Institute for Supply Management’s (ISM) factory index advanced to 54.2, from 53.1 in January, the Tempe, Arizona-based group said on Friday. The figures exceeded the most optimistic forecast in a Bloomberg survey in which the median projection was 52.5. A reading greater than 50 signals expansion. The production gains complement a rebound in the housing market and help underpin the economy amid budget disputes in Washington. Estimates from the 81 economists surveyed by Bloomberg ranged from 50.5 to 54. The gauge averaged 51.7 last year and 55.2 in 2011. The ISM report also showed a measure of US production increased to 57.6 from 53.6 in January. The new orders measure climbed to 57.8, the highest since April 2011, from 53.3.
CRIME
Ernst & Young fined for fraud
Ernst & Young LLP will pay US$123 million to resolve a US tax-fraud probe as part of a non-prosecution agreement, according to a statement by the Manhattan US Attorney’s Office on Friday. The accounting firm “admitted wrongful conduct” by its partners and employees in connection with four tax shelters from 1999 to 2004, it said. About 200 Ernst & Young clients used the shelters to try to avoid more than US$2 billion in taxes, prosecutors said. In addition to the money and the admissions, Ernst & Young agreed to a series of permanent restrictions on its tax practice and would continue to cooperate with the government’s tax-shelter investigation.
CHIP WAR: Tariffs on Taiwanese chips would prompt companies to move their factories, but not necessarily to the US, unleashing a ‘global cross-sector tariff war’ US President Donald Trump would “shoot himself in the foot” if he follows through on his recent pledge to impose higher tariffs on Taiwanese and other foreign semiconductors entering the US, analysts said. Trump’s plans to raise tariffs on chips manufactured in Taiwan to as high as 100 percent would backfire, macroeconomist Henry Wu (吳嘉隆) said. He would “shoot himself in the foot,” Wu said on Saturday, as such economic measures would lead Taiwanese chip suppliers to pass on additional costs to their US clients and consumers, and ultimately cause another wave of inflation. Trump has claimed that Taiwan took up to
A start-up in Mexico is trying to help get a handle on one coastal city’s plastic waste problem by converting it into gasoline, diesel and other fuels. With less than 10 percent of the world’s plastics being recycled, Petgas’ idea is that rather than letting discarded plastic become waste, it can become productive again as fuel. Petgas developed a machine in the port city of Boca del Rio that uses pyrolysis, a thermodynamic process that heats plastics in the absence of oxygen, breaking it down to produce gasoline, diesel, kerosene, paraffin and coke. Petgas chief technology officer Carlos Parraguirre Diaz said that in
SUPPORT: The government said it would help firms deal with supply disruptions, after Trump signed orders imposing tariffs of 25 percent on imports from Canada and Mexico The government pledged to help companies with operations in Mexico, such as iPhone assembler Hon Hai Precision Industry Co (鴻海精密), also known as Foxconn Technology Group (富士康科技集團), shift production lines and investment if needed to deal with higher US tariffs. The Ministry of Economic Affairs yesterday announced measures to help local firms cope with the US tariff increases on Canada, Mexico, China and other potential areas. The ministry said that it would establish an investment and trade service center in the US to help Taiwanese firms assess the investment environment in different US states, plan supply chain relocation strategies and
Japan intends to closely monitor the impact on its currency of US President Donald Trump’s new tariffs and is worried about the international fallout from the trade imposts, Japanese Minister of Finance Katsunobu Kato said. “We need to carefully see how the exchange rate and other factors will be affected and what form US monetary policy will take in the future,” Kato said yesterday in an interview with Fuji Television. Japan is very concerned about how the tariffs might impact the global economy, he added. Kato spoke as nations and firms brace for potential repercussions after Trump unleashed the first salvo of
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