The lack of new foreign-exchange policies in Chinese Premier Li Keqiang’s (李克強) annual report to legislators is prompting economists to speculate that China will probably slow efforts to increase the yuan’s global usage and focus more on keeping the currency steady.
Li shied away from saying the nation will increase the yuan’s two-way flexibility and make progress toward its convertibility under the capital account, departing from language used in the work report at last year’s National People’s Congress.
He said instead that the currency will remain generally stable at an appropriate and balanced level, and that improvements will be made to how the exchange rate is decided.
The change in wording “suggests that Chinese authorities are setting yuan stability as the top priority,” Mizuho Bank Ltd Hong Kong-based currency strategist Ken Cheung said. “Any mismanagement on foreign exchange or the economy will ruin market confidence, trigger heavy capital outflows and throw the nation into crisis mode.”
The People’s Bank of China made a two-pronged attack on yuan speculators earlier this year, choking outflows from the mainland while mopping up the currency offshore.
The IMF said it will start identifying the currency in its official foreign-exchange reserves database from October.
China aims to move ahead with both convertibility and internationalization of the yuan, according to a five-year plan released on Saturday.
The nation’s defense of the yuan depleted its foreign-exchange reserves by US$513 billion last year, the first annual drop since 1992. Bloomberg Intelligence estimates that a record US$1 trillion fled overseas last year.
“They moved too fast on capital account opening,” Standard Life Investments Ltd emerging markets Edinburgh-based economist Alexander Wolf said. “There is the potential they progressed rapidly to meet the special drawing rights requirements before the once-every-five-year reviews and now will drastically slow the process.”
SEMICONDUCTORS: The German laser and plasma generator company will expand its local services as its specialized offerings support Taiwan’s semiconductor industries Trumpf SE + Co KG, a global leader in supplying laser technology and plasma generators used in chip production, is expanding its investments in Taiwan in an effort to deeply integrate into the global semiconductor supply chain in the pursuit of growth. The company, headquartered in Ditzingen, Germany, has invested significantly in a newly inaugurated regional technical center for plasma generators in Taoyuan, its latest expansion in Taiwan after being engaged in various industries for more than 25 years. The center, the first of its kind Trumpf built outside Germany, aims to serve customers from Taiwan, Japan, Southeast Asia and South Korea,
Gasoline and diesel prices at domestic fuel stations are to fall NT$0.2 per liter this week, down for a second consecutive week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) announced yesterday. Effective today, gasoline prices at CPC and Formosa stations are to drop to NT$26.4, NT$27.9 and NT$29.9 per liter for 92, 95 and 98-octane unleaded gasoline respectively, the companies said in separate statements. The price of premium diesel is to fall to NT$24.8 per liter at CPC stations and NT$24.6 at Formosa pumps, they said. The price adjustments came even as international crude oil prices rose last week, as traders
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which supplies advanced chips to Nvidia Corp and Apple Inc, yesterday reported NT$1.046 trillion (US$33.1 billion) in revenue for last quarter, driven by constantly strong demand for artificial intelligence (AI) chips, falling in the upper end of its forecast. Based on TSMC’s financial guidance, revenue would expand about 22 percent sequentially to the range from US$32.2 billion to US$33.4 billion during the final quarter of 2024, it told investors in October last year. Last year in total, revenue jumped 31.61 percent to NT$3.81 trillion, compared with NT$2.89 trillion generated in the year before, according to
PRECEDENTED TIMES: In news that surely does not shock, AI and tech exports drove a banner for exports last year as Taiwan’s economic growth experienced a flood tide Taiwan’s exports delivered a blockbuster finish to last year with last month’s shipments rising at the second-highest pace on record as demand for artificial intelligence (AI) hardware and advanced computing remained strong, the Ministry of Finance said yesterday. Exports surged 43.4 percent from a year earlier to US$62.48 billion last month, extending growth to 26 consecutive months. Imports climbed 14.9 percent to US$43.04 billion, the second-highest monthly level historically, resulting in a trade surplus of US$19.43 billion — more than double that of the year before. Department of Statistics Director-General Beatrice Tsai (蔡美娜) described the performance as “surprisingly outstanding,” forecasting export growth
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