People’s Bank of China (PBOC) Governor Yi Gang (易綱) said the central bank’s attention is to be centered on economic growth, a sign policymakers might shift gear toward supporting economic recovery as the nation gradually eases COVID-19 controls.
“Our focus is growth right now,” Yi said yesterday in a video speech given to a central bank conference in Bangkok. “We have a pretty accommodative monetary policy in place to help with economic recovery and [to] maximize employment.”
The growth rate is currently “somewhat slower than expected due to COVID and other factors,” Yi said, adding that inflation has been relatively subdued, and it would likely remain in a “moderate range” next year.
Photo: REUTERS
The central bank recently surprised market watchers by cutting the reserve requirement ratio for banks — unleashing more cash that banks can use for lending.
Economists expect the central bank to keep monetary policy relatively loose into early next year.
Speculation is also growing the Chinese Communist Party’s politburo, its top decision-making body, would likely signal a more pragmatic approach toward COVID-19 controls during its meeting this month, while placing greater focus on boosting growth.
Yi’s comments “confirmed the recent shift of policy focus to growth after the party congress” in October, Mizuho Bank foreign exchange strategist Ken Cheung (張建泰) said.
“In addition to the COVID policy, the reform in the property market has yielded progress and the PBOC is set to maintain its easing bias to support the property sector and boost growth after COVID hit,” he said.
Chinese stocks traded 0.4 percent lower yesterday after gaining in the previous three sessions.
The relaxation of some COVID-19 curbs and a shift in the official rhetoric around “zero COVID” has fueled hopes that the country might be preparing to reopen next year.
However, the economic recovery would remain bumpy, with growth likely to come in below 5 percent next year, economists surveyed by Bloomberg said.
The economy is forecast to expand 3.3 percent this year, which would be the second-slowest pace since the 1970s after 2020.
Aside from quantitative monetary policy tools, the central bank is also making use of structural instruments to boost its support to small businesses, the agriculture sector and private firms, Yi said.
The governor’s comments were part of a panel with other central bankers hosted by the Bank of Thailand and the Bank for International Settlements.
European Central Bank President Christine Lagarde, Reserve Bank of Australia Governor Philip Lowe and Bank Indonesia Governor Perry Warjiyo attended the event.
Yi called for stronger collaboration between advanced and emerging economies on macroeconomic policies, as indicators point to a rising possibility of a global recession next year.
Many emerging markets and low-income countries are facing pressures from depreciating currencies, capital outflows and inflation, he said.
The domestic unit of the Chinese-owned, Dutch-headquartered chipmaker Nexperia BV will soon be able to produce semiconductors locally within China, according to two company sources. Nexperia is at the center of a global tug-of-war over critical semiconductor technology, with a Dutch court in February ordering a probe into alleged mismanagement at the company. The geopolitical tussle has disrupted supply chains, with some carmakers reportedly forced to cut production due to chip shortages. Local production would allow Nexperia’s domestic arm, Nexperia Semiconductors (China) Ltd (安世半導體中國), to bypass restrictions in place since October on the supply of silicon wafers — etched with tiny components to
Taiwan’s foreign exchange reserves fell below the US$600 billion mark at the end of last month, with the central bank reporting a total of US$596.89 billion — a decline of US$8.6 billion from February — ending a three-month streak of increases. The central bank attributed the drop to a combination of factors such as outflows by foreign institutional investors, currency fluctuations and its own market interventions. “The large-scale outflows disrupted the balance of supply and demand in the foreign exchange market, prompting the central bank to intervene repeatedly by selling US dollars to stabilize the local currency,” Department of Foreign
Taiwan is open to joining a global liquefied natural gas (LNG) program if one is created, but on the condition that countries provide delivery even in a scenario where there is a conflict with China, an energy department official said yesterday. While Taiwan’s priority is to have enough LNG at home, the nation is open to exploring potential strategic reserves in other countries such as Japan or South Korea, Energy Administration Deputy Director-General Chen Chung-hsien (陳崇憲) said. While the LNG market does not have a global reserve for emergencies like that of oil, the concept has been raised a few times —
AI-FUELED DEMAND: The company has been benefiting from the skyrocketing prices for DRAM chips amid the AI frenzy, especially its core product — DDR4 DRAM chips DRAM chipmaker Nanya Technology Corp (南亞科技) yesterday reported that its revenue for the first quarter surged 582.91 percent to NT$49.09 billion (US$1.54 billion) from NT$7.19 billion a year earlier, as the supply crunch caused chip price spikes. Last quarter’s figure is the highest on record. On a quarterly basis, revenue jumped 63.14 percent from NT$30.09 billion, the company said. In January, Nanya Technology expected global DRAM supply scarcity to continue through the first half of 2028, thanks to strong demand for artificial intelligence (AI) applications. Market researcher TrendForce Corp (集邦科技) forecast prices of standard DRAM chips would rise between 58 percent and 63
RSS