IMF managing director Christine Lagarde yesterday warned countries against engaging in trade and currency wars, saying these would hurt global growth and imperil “innocent bystanders.”
Formally launching the IMF and World Bank annual meetings on Bali, Lagarde urged countries to “de-escalate” trade conflicts and fix global trading rules instead of abandoning them.
The US and China have slapped tit-for-tat tariffs on hundreds of billions of dollars of each other’s goods over the past few months, rattling financial markets as investors worry that the escalating trade conflict could knock global trade and investment.
Photo: AFP
Share markets in Asia plunged to a 19-month low yesterday after Wall Street’s worst losses in eight months led to broader risk aversion, partly due to the heated global trade tensions, as well as rapidly rising US dollar yields.
“We certainly hope we don’t move in either direction of a trade war or a currency war,” Lagarde told a news conference. “It will be detrimental on both accounts for all participants, and there would also be lots of innocent bystanders,” including countries that are part of China’s supply chain.
In the past few weeks, US Department of the Treasury officials have expressed concerns about China’s weakened yuan as the department prepares its semi-annual report on currency manipulation.
US President Donald Trump has accused China of deliberately manipulating its currency to gain a trade advantage, claims Beijing has consistently rejected.
US Secretary of the Treasury Steven Mnuchin yesterday met with People’s Bank of China Governor Yi Gang (易綱) on the sidelines of the IMF-World Bank meeting.
“We discussed important economic issues,” Mnuchin said of their meeting on Twitter.
Lagarde yesterday weighed into the debate, saying that yuan weakness against the US dollar was driven by the greenback’s strength as the US Federal Reserve hikes interest rates.
Against a basket of currencies, the yuan has depreciated less.
“We have supported the move of China towards [currency] flexibility and we want to encourage the authorities to continue on this path going forward,” she said.
The yuan has faced strong selling pressure this year, losing over 8 percent between March and August at the height of market worries, although it has since pared losses as authorities stepped up support measures.
Lagarde later said that she believes Chinese authorities are taking steps to maintain growth, stability and investor confidence amid the trade conflict, but face a “complicated” balancing act to keep its fiscal situation under control
World Bank president Jim Yong Kim also warned against an escalation of the trade row, saying that the development lender’s agenda depended on strong trade flows and that there would be a clear hit to growth if all countries followed through on their trade threats.
The meetings, attended by more than 19,000 delegates, showed no sign of disruption from an offshore earthquake early yesterday morning between Bali and Java that killed three people and damaged some buildings.
Hon Hai Precision Industry Co (鴻海精密) yesterday said that its research institute has launched its first advanced artificial intelligence (AI) large language model (LLM) using traditional Chinese, with technology assistance from Nvidia Corp. Hon Hai, also known as Foxconn Technology Group (富士康科技集團), said the LLM, FoxBrain, is expected to improve its data analysis capabilities for smart manufacturing, and electric vehicle and smart city development. An LLM is a type of AI trained on vast amounts of text data and uses deep learning techniques, particularly neural networks, to process and generate language. They are essential for building and improving AI-powered servers. Nvidia provided assistance
STILL HOPEFUL: Delayed payment of NT$5.35 billion from an Indian server client sent its earnings plunging last year, but the firm expects a gradual pickup ahead Asustek Computer Inc (華碩), the world’s No. 5 PC vendor, yesterday reported an 87 percent slump in net profit for last year, dragged by a massive overdue payment from an Indian cloud service provider. The Indian customer has delayed payment totaling NT$5.35 billion (US$162.7 million), Asustek chief financial officer Nick Wu (吳長榮) told an online earnings conference. Asustek shipped servers to India between April and June last year. The customer told Asustek that it is launching multiple fundraising projects and expected to repay the debt in the short term, Wu said. The Indian customer accounted for less than 10 percent to Asustek’s
‘DECENT RESULTS’: The company said it is confident thanks to an improving world economy and uptakes in new wireless and AI technologies, despite US uncertainty Pegatron Corp (和碩) yesterday said it plans to build a new server manufacturing factory in the US this year to address US President Donald Trump’s new tariff policy. That would be the second server production base for Pegatron in addition to the existing facilities in Taoyuan, the iPhone assembler said. Servers are one of the new businesses Pegatron has explored in recent years to develop a more balanced product lineup. “We aim to provide our services from a location in the vicinity of our customers,” Pegatron president and chief executive officer Gary Cheng (鄭光治) told an online earnings conference yesterday. “We
LEAK SOURCE? There would be concern over the possibility of tech leaks if TSMC were to form a joint venture to operate Intel’s factories, an analyst said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday stayed mum after a report said that the chipmaker has pitched chip designers Nvidia Corp, Advanced Micro Devices Inc and Broadcom Inc about taking a stake in a joint venture to operate Intel Corp’s factories. Industry sources told the Central News Agency (CNA) that the possibility of TSMC proposing to operate Intel’s wafer fabs is low, as the Taiwanese chipmaker has always focused on its core business. There is also concern over possible technology leaks if TSMC were to form a joint venture to operate Intel’s factories, Concord Securities Co (康和證券) analyst Kerry Huang (黃志祺)
RSS