Asia

The bubble has burst. The phenomenal growth story of the Chinese economy is drawing to a close. After a Covid-induced 6.8 percent shrinkage of the economy in the first quarter of 2020, now in the second quarter of 2022 the growth rate has come down to just 0.4 percent. While a draconian lockdown imposed for a two-month period from March 2022 to May 2022 to enforce an overcautious zero – Covid policy could be the immediate reason between the latest fall in growth rate, the underlying malady could be much deeper; reasons like a slump in the real estate sector of the Chinese economy, a policy of inducing growth through investment in infrastructure that has little productive use and sinking of resources in bad investments overseas though the Belt and Road Initiative in an anxiety to make s...

The US latest move to persuade South Korea to join chip 4 alliance has left China worried.  That’s because China has dreamt of becoming a leader in semiconductor production by 2030.  It has been working overtime to enhance its capabilities and production so that it can leave US and others behind. But US’s move to forge a chip alliancewill certainly curb Beijing’s growing capabilities as a chip maker.   In March, the US had planned to create a Chip 4 strategic alliance of global chip powerhouses that includes South Korea, Japan and Taiwan. The US wants to build a cooperative platform for the semiconductor supply chain that will combine the US’ technological prowess, Japan’s materials and parts, and Korea and Taiwan’s manufacturing capabilities. However, the US govern...

WASHINGTON: A Pakistan Embassy press release said Mr Fatemi told the US official that “Pakistan seeks close and cordial relations with the US on the basis of equality, mutual cooperation and mutual benefit”. He told the deputy secretary that “Pakistan is an important player in promoting regional peace, security and prosperity and taking the bilateral relationship forward in a substantive manner would serve the interests of both countries,” the statement added. Mr Fatemi told Sherman that Islamabad viewed Washington as “an important partner in its efforts to revive Pakistan’s economy,” the embassy said. Spokesperson Rice, however, focused on “coordination on Afghanistan, regional stability”, but he also mentioned the need for supporting efforts to cope with “the devastating effect...

Hundreds of disgruntled bank customers in China had been protesting for the last two months who were denied access to their accounts as four rural banks in central province of Henan and one in Anhui were exposed to what is being described as China’s “biggest bank scam”.  As the clients of these banks took to the streets to ratchet up pressure on the local governments, the authorities decided to repay individuals with deposits of below 50,000 Yuan from July 22.  Later it was decided to repay the clients from the exposed banks with deposits of up to 100,000 Yuan from July 25.  Arrangements for those with higher amounts of savings will be subject to further notice.           The bank scam is not isolated or a lone event or fi...

WASHINGTON: State Department spokesperson Ned Price said Deputy Secretary Sherman noted the 75th anniversary of diplomatic relations between the United States and Pakistan and “reaffirmed our shared goals for enhancing the US-Pakistan relationship by advancing our economic and commercial ties and health cooperation”. A Pakistan Embassy press release said Mr Fatemi told the US official that “Pakistan seeks close and cordial relations with the US on the basis of equality, mutual cooperation and mutual benefit”. He told the deputy secretary that “Pakistan is an important player in promoting regional peace, security and prosperity and taking the bilateral relationship forward in a substantive manner would serve the interests of both countries,” the statement added. Mr Fatemi told She...

Development of Gwadar projects now face un-foreseen uncertainties as the ongoing economic crisis and political instability in Pakistan is hitting Chinese investment sentiments.  Of late, China, the sole investor in the Gwadar projects is hesitating to invest. Further the Chinese investors now seeks to maintain their bank accounts in RMB in Gwadar Free Zone without converting money into local currencies in the wake of fast depreciating Pak currency rupee (PKR). The depreciation of PKR is the most important reason that is deterring Chinese investment. The recovery in the value of PKR following the receipt of IMF’s next tranche loan was short lived.  Pakistani currency nosedived to 215 against the US dollar in the inter-bank market, a significant loss consequent upon continu...

Zhengzhou, China:   China Banking and Insurance Regulatory Commission (CBRIC) inspector Huanting is said to be involved in actions that breach the law regulations, Global Times reported. His probe comes in the wake of large-scale protests in Henan province where bank depositors are demanding the release of frozen funds. On Friday, the provincial financial supervision bureau published a notice that they will repay the victims of the recent banking scam in order to placate the Henan bank protestors, local media reported. According to local media, people who had deposited up to 50,000 yuan were repaid and now people with deposits up to 100,000 are getting repaid. Earlier, The Chinese Communist Party's tanks Wednesday rolled on the streets to scare Henan bank protestors am...

In September 2021, a video showing the simultaneous demolition of 15 high-rise buildings in China went viral. The buildings which had remained unfinished were demolished in 45 seconds, much like the dreams of scores of home buyers in China who are today undertaking mortgage boycotts to express their anger at not getting possession of their dwelling units on time. This crisis comes at a time when official data shows that China’s economic growth has slowed sharply in the second quarter of the year, highlighting the colossal impact of the countrywide Covid lockdowns and casting doubt on whether its pre-ordained growth target can be met. China’s economy is also facing fresh risks from an unfolding mortgage boycott quickly spreading across the country. Data released by the Statistics Bure...

Chinese commercial banks face mounting non-performing assets that has the potential to undermine the economy. At the close of the second quarter of the year, the balance of NPAs of commercial banks was 2.95 trillion yuan. The non-performing loan ratio was 1.67 per cent. In the first half of the year, manufacturing loans increased by 3.3 trillion yuan, an increase of 1.6 trillion yuan year-on-year, of which high-tech manufacturing loans increased by 28.9% year-on-year. In the first half of the year, “the disposal of non-performing assets was 1.41 trillion yuan, an increase of 219.7 billion yuan year-on-year”. According to media repeports, entrusted loans and trust loans “fell by 380.6 billion yuan in the first half of this year. The CBIRC will “continue to strictly prevent the reboun...

Beijing, China:According to the National Bureau of Statistics in China, the data on Friday showed that the economy expanded 0.4 per cent from a year earlier in the second quarter, worse than some economists’ expectations and the slowest growth since the first three months of 2020.Notably, 2020 was a year when China effectively shut down the market to fight the early stages of the pandemic, and its economy shrank for the first time in 28 years, The New York Times reported.Unemployment, the housing market and small businesses are still a mess.“China is the shoe that has never dropped in the global economy,” said Kenneth Rogoff, a professor of economics at Harvard University and a former chief economist for the International Monetary Fund.“China is in no position to be the global engine of g...