Asia

ISLAMABAD: “In early 2022, new investments through the China-Pakistan Economic Corridor (CPEC), originally established in 2013, were announced. Although infrastructure in these second-phase investments could raise growth prospects, attendant contingent liabilities also pose a risk to debt sustainability,” the IMF stated in its Public and External Debt Sustainability Analysis done alone with the Fund staff report released after the approval of EFF program for Pakistan. The report states that Pakistan’s public debt continues to be judged as sustainable with strong policies and robust growth, but with greater uncertainty, in part because the fiscal relaxation in FY22H2 prevented the debt ratio reduction projected at the time of the sixth review. The debt-to-GDP ratio is now projected t...

No one in the financial sector is feeling the pinch more than the small lenders, which account for about a quarter of the country’s total banking assets. This could spell trouble for millions of individual savers, analysts warned. Some 20 per cent of the 45 regional and rural banks listed on stock exchanges suffered a plunge in profits in the first half of 2022, while some saw their non-performing loan ratios deteriorate. It was the poorest half-year performance in years. The wounds of non-listed small lenders – 128 city commercial banks, 1,596 rural commercial banks and 1,651 village and township banks, to be precise – could be even deeper, a worrying prospect that prompted the banking regulator to promise speedy action. Two rural banks, Liaoyang Rural Commercial Bank and Liaoni...

About one in every three cigarettes smoked in the world is smoked in China. The Chinese have an extensive and relatively historical culture of smoking where 52% of adult male are smokers, about two-third of them starting even before they turn 20. It is an intrinsic part of their socio-cultural fabric, where gifting of cigarettes to friends and even strangers is considered polite. Given this, it comes without surprise that the most commonly diagnosed cancer in China is lung cancer, becoming the leading cause of cancer mortality in the country. It was still not a problem if the world could dismiss China’s extensive culture of tobacco consumption as its internal matter. Unfortunately, like all things Chinese, it is not that simple anymore. The Chinese government and tobacco conglomerates ...

The double digit growth story of China in the 1990s that transformed it into the “manufacturing hub” of the world was inherently contradictory to the principles of sustainable development, especially with regard to energy intensity as well as energy mix. China ended up in the two decades of its breakneck growth as the largest polluter of the world releasing over 10065 million tons Carbon (CO2). It contributes more than 30% of the total global carbon emissions as compared to 15% of the US, 7% of India, 5% of Russia and 4% of Japan. China’s energy intensity and carbon intensity is among the highest in the world, indicating higher use of energy and carbon emission to raise GDP by one unit. This in turn has made China one of the most climatically vulnerable places with increasing frequency...

The rural-urban divide among millions of Chinese youth may stand between the dragon country and future economic rise because of a growing mismatch between jobs and education. Every passing year is forcing the youth to choose higher education courses on the basis of their low income backgrounds. That in turn is leading to lower academic performance. As a result, the question millions of youth in China face after completing high school is whether to pursue academic or vocational education. The academic route is very expensive in the country. It costs time too. However, the returns are not very encouraging considering scores of skilled youth with college degrees compete for low-level jobs. On the other hand, youth prefer vocational education because it is tailored to the skill sets nee...

Prominent businessmen and around 50 representatives from the Pak business and industrial community at a recent emergency meeting have demanded Prime Minister Shehbaz Sharif to declare an economic emergency and take urgent steps to avoid a Sri Lanka-like situation. Pakistan Businesses Forum Senior Vice President Muhammad Riaz Khattak stated that “Pakistan is going through a severe economic crisis and unfortunately mainstream political parties have not come up with any effective measures to save the economy.”  While international investors operating in Pakistan welcomed the government’s ‘bold policy measures’ to finalise the IMF programme, they are increasingly getting apprehensive about deteriorating prospects of the Pak economy. They have also expressed doubt about the efficacy of...

ISLAMABAD: “Once finalised, Pakistan’s extent of borrowing from the IMF during the present financial year (July to June) will increase by $2.8bn. This will be a very important gesture,” a senior Pakistani official said. The assistance would help Pakistan secure a $1.2bn payment from the IMF, whose board is set to meet this month to approve the disbursement. The IMF agreed last month to increase its loan package by $1bn to $7bn, but has conditioned the disbursement on assurances that Pakistan receives additional financial support from elsewhere. Meanwhile, Finance Minister Miftah Ismail said the government cannot afford to provide subsidy on petroleum products, adding that they had made arrangements to get $4 billion from friendly countries as desired by the IMF. When asked by ...

The economic data, which largely fell short of market expectations on Monday, highlights the uncertainties lying ahead for the world’s second-largest economy in the face of coronavirus outbreaks, deeper property-market adjustments, possible stagflation in the global economy, and an intensifying rivalry with the United States. With China’s central bank cutting a major policy interest rate by 10 basis points on Monday – the first cut since mid-January – analysts are expecting Beijing to use price tools, coupled with a credit boost and infrastructure push, to quickly drive up domestic demand before a leadership reshuffling at this autumn’s 20th Party Congress. The impact of the stimulus rolled out in May-June has proved weaker than expected, prompting policymakers to step up policy eas...

Being increasingly seen as “easy money”, the Chinese investments underBelt and Road Initiative (BRI) across the world are causing alarm among thebeneficiaries, as some realise, at times too late, the debt trap that it brings.It’s a mixed picture, but worrisome nevertheless. Some get abjectlydependent and cannot find a way out, others struggle to survive by curtailingdependence and cancelling projects. But suffering in silence is not an option:debts incurred have to be paid back, come what may.Some speak up. The recent warning by Bangladesh finance minister AHMMustafa Kamal or a recent cancellation of a key Chinese-financed project byZambia are sharp pointers.Zambia, working to prevent China’s debt-diplomacy, which only reaps profitsto Beijing while countries are pushed towards an economic...

China's smartphone market boom comes to an end as it registers a sharp decline in demands within the mainland and outside. As per the latest data, China's second-quarter smartphone shipments fell by 14.7 per cent, which is the fifth consecutive quarterly decline. Analysts believe that the Chinese market is in deep trouble, and under the blow of multiple factors, the prospects are becoming bleaker and bleaker. According to data released by the US research firm IDC, smartphone shipments in China fell 14.7 per cent in the second quarter from a year earlier to 67.2 million units. It was the fifth consecutive quarter of declines in shipments and the second consecutive quarter of double-digit declines, with major players like Xiaomi, Vivo and Oppo reporting sharp declines in sales. Bloomb...