China’s central bank has loosened controls on lending to small and medium-size companies hit hardest by credit limits and slowing exports, state media reports said yesterday, the latest evidence of growing concern over an economic slowdown.
The People’s Bank of China advised local commercial banks that their annual quota for loans to smaller companies was raised by 10 percent, while the quotas for national commercial banks were increased by 5 percent, China Daily and other state-run newspapers reported.
The news, coupled with an overnight rally on Wall Street and continued weakening in crude oil prices, buoyed Chinese shares, with the Shanghai Composite Index rising 1.1 percent to 2,719.37.
With the start of the Beijing Olympics just two days away, many in China are speculating over a potential post-party “hangover” after the euphoria and extra spending wears off.
“Recent data suggested that the slowdown has taken a firmer hold of the economy and the Olympics may present some downside risks,” Citibank economist Ken Peng said.
While China’s economy continues to rumble along at a 10 percent-plus pace that would be astounding for most major industrial countries, a decline last month in a key manufacturing indicator, reported last week, has reinforced worries that global economic malaise is beginning to take a toll.
Smaller companies have long suffered from a lack of access to bank loans, and recent efforts to fight inflation by imposing stringent controls on lending have hit them hardest.
China’s chief economic planning agency, the National Development and Reform Commission, estimates that 67,000 such companies went bankrupt in the first half of the year because of credit controls and the deteriorating business environment, the state-run Shanghai Securities News reported.
Higher costs for energy and other materials have left many low-cost exporters, especially makers of toys, shoes and other light industrial goods, struggling to survive at a time when demand is weakening.
At the same time, the surging value of the yuan against the US dollar has sapped their competitiveness in overseas markets.
Top leaders have meanwhile signaled a shift toward policies more geared toward sustaining economic growth, while still trying to cool inflation, which remained at a painful 7.1 percent in June.
“As the domestic and external uncertainties rise, worries about a sharper-than-expected economic slowdown loom large, and the government has changed its tone on macro policy recently,” Wang Tao, an economist at UBS Securities, said in a report issued this week.
For now, economists say, the government is focusing on certain industries, rather than loosening broader limits aimed at controlling investment and cooling inflation.
Last week, the government announced that it was raising rebates of value-added taxes on exports of textiles and clothing by 2 percentage points to 13 percent.
The move could boost industry-wide profits by up to 30 billion yuan (US$4.4 billion), Citibank’s Peng said.
He forecast further “growth-oriented” adjustments to broader economic policy.
“Tightening policies likely have reached an end,” he said.
CONGRESSIONAL SUPPORT: A new committee would investigate a backlog of US weapons sales to Taiwan, said its chairman, US Representative Mike Gallagher The US should formally recognize Taiwan as an independent nation, and end its outdated and counterproductive “one China” policy, US Representative Tom Tiffany and 18 other US lawmakers wrote in a petition. “It is time to change the status quo and recognize the reality denied by the US government for decades: Taiwan is an independent nation,” Tiffany told the Epoch Times. “As our long-standing and valued partner, correctly acknowledging their independence from communist China is long overdue.” The resolution also asks the administration of US President Joe Biden to support Taiwan’s membership in international organizations and to negotiate a bilateral free-trade
The Pentagon is preparing for US House of Representatives Speaker Kevin McCarthy to visit Taiwan later this year, Punchbowl News reported on Monday, citing an official directly involved in the talks. US administration officials anticipate McCarthy would visit Taiwan some time in the spring, the report said. McCarthy had previously pledged to visit Taiwan if he became House speaker. He was elected speaker earlier this month. He had also said that he would have liked to join then-US House speaker Nancy Pelosi’s delegation when she visited Taiwan in August last year. Pelosi’s 19-hour visit to Taipei marked the first time in 25 years
Taiwan’s Chou Chieh-yu (周婕妤) was crowned the Kamui WPA Women’s World 9-Ball Champion after shutting out British pool titan Allison Fisher 9-0 in Atlantic City, New Jersey, the organizers said on Sunday. Following the championship win at Harrah’s Resort and Casino Atlantic City, Chou pocketed US$30,000 and became the first female competitor to hold both the 9-ball and 10-ball world titles since Briton Kelly Fisher in 2012. Chou, 36, won the Predator World Women’s 10-Ball Championship in Austria in September last year after clinching a silver medal at last year’s World Games in Birmingham, Alabama, in July. “I’m very excited and it’s like
JOINT OPERATIONS: Participating in the IMET program, which offers professional training and education to military personnel, would boost Taiwan’s defense capabilities The US government is appropriating funding to help Taiwan participate in its International Military Education & Training (IMET) program to enhance interoperability and capabilities for joint operations of the Taiwanse and US militaries. The funding for Taiwan’s participation in the program is mentioned in the Consolidated Appropriations Act 2023, a US$1.7 trillion spending bill funding the US federal government for the fiscal year 2023. It covers funding for military support for Ukraine, defense spending and regions affected by natural disasters. The American Institute in Taiwan (AIT) told the Chinese-language Liberty Times (the Taipei Times’ sister newspaper) that IMET is an important US
RSS