The IMF urged China to accelerate its COVID-19 vaccination program, warning that the sharply slowing pace of new doses administered could undermine a recovery in domestic consumer spending.
At the current pace, providing three doses of COVID-19 vaccines to the population would take a “matter of years,” Helge Berger, head of the IMF’s China mission, said in an interview.
With spending growth yet to recover to pre-pandemic rates, partly because households are cautious about COVID-19 infections, “an acceleration of the vaccination campaign would support confidence and ultimately consumption,” he said.
Photo: AP
About 375 million people over the age of 15 in China have yet to receive three doses of a vaccine, while the daily vaccination rate has fallen below 800,000 per day, official data show.
Studies have shown that three doses of China’s domestic COVID-19 vaccines were nearly as effective as mRNA vaccines in preventing severe infections or deaths.
The low rate of full vaccination, particularly among elderly people, is one of the reasons China is persisting with its strict “zero COVID” policy requiring limits on activity wherever virus cases occur.
Only about 64 percent of Chinese people over 60 have received three doses, the Chinese National Health Commission said.
Berger said the lockdowns in Shanghai and dozens of other cities since March are a key reason the IMF sees “downside risks” to its April forecast of 4.4 percent GDP growth for China this year.
“The second quarter will be weak given the lockdowns,” he said.
While national data have largely returned to pre-lockdown levels, Berger added that in Shanghai, measures of economic activity monitored by the IMF have recovered only to about 50 percent.
Economists surveyed by Bloomberg predict growth of 4.1 percent in China this year and a possible contraction in quarter-on-quarter GDP in the April-June period. That makes it unlikely the government would meet its full-year target of about 5.5 percent.
The IMF has consistently called on Beijing to increase fiscal support to households. Even taking into account measures announced since April, China’s fiscal stimulus this year is smaller relative to 2020, Berger added.
“The known fiscal measures this year are still small relative to 2020, even taking into account that in 2020 the overall shock was larger than this year,” he said.
INVESTOR RESILIENCE? An analyst said that despite near-term pressures, foreign investors tend to view NT dollar strength as a positive signal for valuation multiples Morgan Stanley has flagged a potential 10 percent revenue decline for Taiwan’s tech hardware sector this year, as a sharp appreciation of the New Taiwan dollar begins to dent the earnings power of major exporters. In what appears to be the first such warning from a major foreign brokerage, the US investment bank said the currency’s strength — fueled by foreign capital inflows and expectations of US interest rate cuts — is compressing profit margins for manufacturers with heavy exposure to US dollar-denominated revenues. The local currency has surged about 10 percent against the greenback over the past quarter and yesterday breached
MARKET FACTORS: Navitas Semiconductor Inc said that Powerchip is to take over from TSMC as its supplier of high-voltage gallium nitride chips Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday in a statement said that it would phase out its compound semiconductor gallium nitride (GaN) business over the next two years, citing market dynamics. The decision would not affect its financial targets announced previously, the world’s biggest contract chipmaker said. “We are working closely with our customers to ensure a smooth transition and remain committed to meeting their needs during this period,” it said. “Our focus continues to be on delivering sustained value to our partners and the market.” TSMC’s latest move came unexpectedly, as the chipmaker had said in its annual report that it has
Rick Cassidy, the chairman of Taiwan Semiconductor Manufacturing Co's (TSMC, 台積電) US subsidiary, TSMC Arizona Corp, plans to retire, but the company has yet to name a successor. After Cassidy made his intention to retire known, TSMC Arizona held a special general meeting and approved a resolution that Cassidy would not continue as chairman and would not remain as a director, TSMC said in a statement filed with the Taiwan Stock Exchange last night. The meeting also approved a plan to appoint TSMC Arizona president Rose Castanares as a director, the company said, adding that Cassidy has been named as an advisor
SECURITY WARNING: The company possesses key 3-nanometer technology, and Taiwan should prevent it from being transferred to China, a lawmaker said The Ministry of Economic Affairs yesterday said it would conduct a “strict review” of any proposed acquisition of Taiwanese tech company Source Photonics Co (索爾思光電), following media reports that a Chinese firm was planning to buy the company in the Hsinchu Science Park (新竹科學園區). Local media reported that Suzhou Dongshan Precision Manufacturing Co (東山精密), China’s largest printed circuit board manufacturer, had announced plans to acquire Source Photonics for 5.9 billion yuan (US$823.1 million). The ministry said it has not received an application from Source Photonics and has formally notified the company that any buyout would constitute a change in its ownership structure. The