Latest news with #Australia&NewZealandBankingGroup
Business Times
20-05-2025
- Business
- Business Times
China ran record budget deficit with spending blitz amid tariffs
CHINA'S fiscal stimulus pushed its four-month budget deficit to a record high, as the government ramped up support for the economy during an escalation in its trade conflict with the US. The broad deficit reached 2.7 trillion yuan (S$484 billion) in January to April, the most ever for the period, according to Bloomberg calculations based on data released by the Finance Ministry on Tuesday (May 20). The shortfall swelled by more than 50 per cent compared with a year earlier. It's the clearest evidence yet that Beijing shifted into a higher gear in deploying this year's planned fiscal stimulus to help the economy weather external shocks. US tariffs on most Chinese goods rose to a prohibitively high level of 145 per cent in April before the two countries agreed to a truce earlier this month. Outlays soared against the backdrop of stabilising earnings. Total income in China's two main fiscal books reached 9.32 trillion yuan in January to April, a decline of only 1.3 per cent year on year after a much steeper drop during the first quarter. Total expenditure rose 7.2 per cent to 12 trillion yuan, the data showed. That number combines spending under the general budget, which includes mainly everyday outlays, with expenditure in the government fund budget, which is more weighted towards capital investment projects. Looking ahead, the urgency of further fiscal support is waning after an agreement by China and the US to temporarily lower tariffs levied against each other's products. The truce, along with decent economic activity numbers for April, has led a few major international banks to raise their forecasts for China's growth this year and dial back expectations of additional stimulus by the government. Tuesday's fiscal figures have given them more reasons to bet on the government delaying new supportive measures. 'Government spending was accelerating while revenue shows signs of stabilisation,' said Zhaopeng Xing, senior strategist at Australia & New Zealand Banking Group. 'The need for expanding fiscal deficit in the middle of the year has declined.' BLOOMBERG
Straits Times
06-05-2025
- Business
- Straits Times
China's firm hand restores calm after Asia's wild currency moves
China's economic clout means the yuan is seen as an anchor for currencies across the region, with its stability reducing the chances of extreme moves elsewhere in Asia. PHOTO: REUTERS BEIJING – China signalled that it's not ready to let the yuan strengthen dramatically against the US dollar, helping restore calm to Asia's foreign-exchange market after days of extreme volatility. The People's Bank of China kept its daily reference rate for the yuan steady as it returned from a public holiday, pushing back against a recent rally in the offshore version of its currency – and making clear to traders that the dollar's rout in Asia won't all be one-way traffic. The country said it would hold a briefing on policy measures to stabilise the market on May 7. The moves come as the latest surge in Asian currencies has raised the need for central banks in the region to cap currency strength and calm currency markets. Taiwan on May 6 said it had intervened to weaken the country's dollar in April, while Hong Kong's central bank said it had conducted another round of Hong Kong dollar selling to limit the currency's moves within its trading band. Beijing's determination to keep the yuan relatively stable is a crucial factor for traders trying to weigh up how long an Asian currency rally against the greenback can continue. China's economic clout means the yuan is seen as an anchor for currencies across the region, with its stability reducing the chances of extreme moves elsewhere in Asia. 'They have no desire to allow the yuan to strengthen in anticipation of a trade deal which may not eventuate, or at the very least is still some way off,' Khoon Goh, head of Asia research at Australia & New Zealand Banking Group wrote in a note. Beijing seeking to keep the yuan fixing stable 'should stem the recent appreciation seen in other Asian currencies,' wrote Mr Goh. The onshore yuan was around 0.7 per cent higher on May 6, partly catching up to moves during the public holiday, but the offshore version of the currency weakened slightly. The Taiwan dollar slipped versus the greenback, snapping a six-day winning streak, while the dollar climbed against some other Asian currencies. By midday in London, the Bloomberg Dollar Spot Index was slightly higher on the day. State-owned banks bought the dollar in the onshore spot market on May 6 in an attempt to slow the yuan's advance, said local traders, who asked not to be identified. The Taiwan dollar led the wild moves in Asia this week, strengthening by as much 5 per cent against the greenback on May 5, its biggest gain since the 1980s. The recent action has been driven in part by bets on trade deals with the Umied States, with speculation that Taipei may agree to let its currency strengthen in order to secure a deal. The US Treasury said in November that it was monitoring the currency practices of China, Japan, Korea, Singapore, Taiwan and Vietnam, raising the possibility that appreciation against the greenback could be a bargaining chip in future trade deals. The PBOC set the daily fixing rate for the onshore yuan at 7.2008 on May 6, little changed from its level before the public holiday. The PBOC's decision to stand firm with its fixing came as Taiwan's central bank warned against 'irresponsible speculation,' while Hong Kong's de facto central bank has conducted four currency-selling operations since May 2 to limit gains in the local dollar. Still, ING Groep strategist Francesco Pesole sees a risk that Asian currencies may keep gaining versus the US dollar on increased hedging flows. 'Local players are now seeking greater USD hedging as well as starting to diversify away from US investments,' Mr Pesole wrote in a note. 'This fits into a more worrying bearish narrative for the dollar, and opens up a risk that a period of supposedly USD-positive trade deals with Asian countries may turn into an opportunity for USD-rich Asian countries to reduce USD exposure.' BLOOMBERG Join ST's Telegram channel and get the latest breaking news delivered to you.
South China Morning Post
29-04-2025
- Business
- South China Morning Post
Malaysia delays sales tax expansion amid Trump's tariff pressure, offering businesses respite
Malaysia is delaying a planned expansion of its sales and service tax (SST), providing a reprieve for manufacturers bracing for higher US tariffs. Advertisement The planned widening of the tax base, originally due on May 1, will be implemented at a later date, a spokesperson from the Ministry of Finance said in a text message. Manufacturers have been urging the government to refrain from adding to their tax burdens this year after the US threatened a 24 per cent tariff on the Southeast Asian country. The sector, a major contributor to the nation's tax revenue, is under severe cost pressure, Soh Thian Lai, president of the Federation of Malaysian Manufacturers, said earlier this month. The delay in the move 'will provide some relief for businesses already grappling with the uncertainty caused by US tariff policy,' said Khoon Goh, head of Asia research at Australia & New Zealand Banking Group. 'While this means that the additional tax revenue from the SST expansion will be put off, the bigger concern at present is the growth impact rather than the government's finances.' Malaysia's ringgit rose 0.7 per cent against the dollar to its strongest level since October as of 11.15am in Kuala Lumpur, the best performer among Asian currencies after the Thai baht. Advertisement Other Southeast Asian countries are also seeking to mitigate the impact of the trade war on their economies.
Yahoo
28-04-2025
- Business
- Yahoo
China vows steps to ease exporters' pain as Trump's tariffs hit
Why Car YouTuber Matt Farah Is Fighting for Walkable Cities Newsom Says California Is Now the World's Fourth-Biggest Economy At Bryn Mawr, a Monumental Plaza Traces the Steps of Black History Los Angeles Downgraded to AA- by S&P Due to Budget Woes US Cricket Deepens Bet on Texas With HQ Shift From California Policymakers in Beijing on Monday laid out policies to aid exporting companies, including plans to ensure troubled firms get the loans they need and boost domestic consumption to absorb the blow of US levies. The briefing amounted to Chinese officials' most detailed attempt since the start of Trump's second term to address growing trade headwinds as cargo shipments to the US plummet. 'Since the beginning of this year, the risks and challenges faced by China's foreign trade development have increased significantly, especially the unilateral tariffs imposed by the US,' said Sheng Qiuping, vice minister of commerce. 'In order to help foreign trade enterprises actively respond to external risks and challenges, we will adhere to a goal-oriented and problem-oriented approach.' The measures represent a targeted approach to stabilizing the economy as a trade war with the Trump administration continues with no immediate off-ramp in sight. Beijing is signaling it's in no rush to aggressively expand economic stimulus or jump into negotiations with the US, even as prohibitive levels of tariffs are forecast to halt bilateral trade and hurt a sector that contributed to nearly a third of the economy's expansion last year. 'Both the timing, the size and approach of growth supportive measure will be flexible, pending the next move of the US,' said Raymond Yeung, chief economist for Greater China at Australia & New Zealand Banking Group, adding that Beijing has a track record of offering exporters-specific support during the pandemic and the global financial crisis. China's benchmark CSI 300 Index of onshore stocks erased losses as the briefing went on. The yield on 10-year government bonds was little changed, while the yuan weakened a tad along with most regional peers as the dollar gained. Officials announced efforts including: Guidance for lenders to maintain loans to small and medium-sized trade firms Special credit tool to support the export of large equipment Assistance to firms to diversify markets Reducing costs for domestic trade, such as rent and streaming fees Optimizing the exchange rate hedging tool for trade firms Zhao Chenxin, Vice Chairman of the National Development and Reform Commission, said authorities are 'fully confident' in reaching the expansion target of around 5% for 2025. He largely repeated vows last week by the decision-making Politburo, led by President Xi Jinping, to prepare for external shocks. In an early sign of trouble for exporters, cargo shipments have plummeted since the US raised levies on China to 145% early this month, perhaps by as much as 60%, according to one estimate. There are currently about 40 cargo ships that recently stopped at ports in China and are now bound for the US, down by about 40% from early April, according to ship tracking compiled by Bloomberg. Zhao highlighted the economy's resilience in the first three months of the year, including the stronger contribution of domestic demand to growth compared to the previous quarter. Whether consumers can make up for lost exports will be key to Beijing's attempt to achieve this year's growth target. Economists at international banks including UBS Group AG (UBS) and Goldman Sachs Group Inc. (GS) have lowered their forecasts for China's 2025 growth in recent weeks to around 4% or lower. Xi previously vowed to make boosting domestic consumption a top economic priority this year, although consumer confidence remains sluggish as a property market slump zapped a main source of wealth for households. Yu Jiadong, Vice Minister of Human Resources and Social Security, acknowledged the adverse effects of US tariffs, saying some exporters face business difficulties and some jobs are affected. He said the government will take steps to improve workers' skills and prioritize youth employment. China will also free up more cash for banks and cut interest rates at an appropriate time, according to Zou Lan, deputy governor of the People's Bank of China ( He reiterated the Chinese central bank would keep the yuan stable at a 'reasonable and equilibrium' level, adding that the foreign exchange market's resilience provides strong support for a stable yuan. Yuyuantantian, a social media account affiliated with state-run China Central Television that regularly signals Beijing's thinking about trade, said in a post after the briefing that the new and previously announced measures will be implemented by the end of June, without specifying the policies. China appeared to have resisted rushing into any trade negotiations with Trump. Officials last week dismissed claims that there were talks on reaching a trade deal and reiterated a demand for Washington to revoke all unilateral tariffs. Before talks begin, officials in Beijing want to see Trump show more respect by reining in disparaging remarks by members of his cabinet, Bloomberg previously reported. China also wants the US to name a point person for talks and show a willingness to address China's concerns around American sanctions and Taiwan, the self-ruled island Beijing considers its territory. Despite the rhetoric, Beijing is quietly considering suspending its 125% retaliatory tariffs on some US imports, a move that will contain the fallout of the trade war on certain sectors. 'The way the Chinese government is making exemptions, clearly they don't want their own economy to be harmed by the tariffs that they lay on,' Michael Hart, president of the American Chamber of Commerce in China told Bloomberg Television, adding that member companies have already seen exemptions in IT, health care and aviation sectors. —With assistance from Yujing Liu and Jing Li. (Updates with more details and context.) As More Women Lift Weights, Gyms Might Never Be the Same Why US Men Think College Isn't Worth It Anymore Eight Charts Show Men Are Falling Behind, From Classrooms to Careers The Mastermind of the Yellowstone Universe Isn't Done Yet Healthy Sodas Like Poppi, Olipop Are Drawing PepsiCo's and Coca-Cola's Attention ©2025 Bloomberg L.P. By subscribing, you are agreeing to Yahoo's Terms and Privacy Policy Sign in to access your portfolio
Business Times
28-04-2025
- Business
- Business Times
China vows steps to ease exporters' pain as Trump's tariffs hit
[NEW YORK] Chinese officials vowed to provide more support for exporters affected by US President Donald Trump's tariffs, showing greater urgency to shore up the crucial sector as signs of distress emerge. Policymakers in Beijing on Monday (Apr 28) laid out policies to aid exporting companies, including plans to ensure troubled firms get the loans they need and boost domestic consumption to absorb the blow of US levies. The briefing amounted to Chinese officials' most detailed attempt since the start of Trump's second term to address growing trade headwinds as cargo shipments to the US plummet. 'Since the beginning of this year, the risks and challenges faced by China's foreign trade development have increased significantly, especially the unilateral tariffs imposed by the US,' said Sheng Qiuping, vice-minister of commerce. 'In order to help foreign trade enterprises actively respond to external risks and challenges, we will adhere to a goal-oriented and problem-oriented approach.' The measures represent a targeted approach to stabilising the economy as a trade war with the Trump administration continues with no immediate off-ramp in sight. Beijing is signalling it's in no rush to aggressively expand economic stimulus or jump into negotiations with the US, even as prohibitive levels of tariffs are forecast to halt bilateral trade and hurt a sector that contributed to nearly a third of the economy's expansion last year. 'Both the timing, the size and approach of growth supportive measure will be flexible, pending the next move of the US,' said Raymond Yeung, chief economist for Greater China at Australia & New Zealand Banking Group, adding that Beijing has a track record of offering exporters-specific support during the pandemic and the global financial crisis. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up China's benchmark CSI 300 Index of onshore stocks erased losses as the briefing went on. The yield on 10-year government bonds was little changed, while the yuan weakened a tad along with most regional peers as the US dollar gained. Officials announced efforts including: Guidance for lenders to maintain loans to small and medium-sized trade firms Special credit tool to support the export of large equipment Assistance to firms to diversify markets Reducing costs for domestic trade, such as rent and streaming fees Optimising the exchange rate hedging tool for trade firms Zhao Chenxin, Vice-Chairman of the National Development and Reform Commission, said authorities are 'fully confident' in reaching the expansion target of around 5 per cent for 2025. He largely repeated vows last week by the decision-making Politburo, led by President Xi Jinping, to prepare for external shocks. In an early sign of trouble for exporters, cargo shipments have plummeted since the US raised levies on China to 145 per cent early this month, perhaps by as much as 60 per cent, according to one estimate. There are currently about 40 cargo ships that recently stopped at ports in China and are now bound for the US, down by about 40 per cent from early April, according to ship tracking compiled by Bloomberg. Zhao highlighted the economy's resilience in the first three months of the year, including the stronger contribution of domestic demand to growth compared to the previous quarter. Whether consumers can make up for lost exports will be key to Beijing's attempt to achieve this year's growth target. Economists at international banks including UBS Group and Goldman Sachs have lowered their forecasts for China's 2025 growth in recent weeks to around 4 per cent or lower. Xi previously vowed to make boosting domestic consumption a top economic priority this year, although consumer confidence remains sluggish as a property market slump zapped a main source of wealth for households. Yu Jiadong, Vice-Minister of Human Resources and Social Security, acknowledged the adverse effects of US tariffs, saying some exporters face business difficulties and some jobs are affected. He said the government will take steps to improve workers' skills and prioritise youth employment. China will also free up more cash for banks and cut interest rates at an appropriate time, according to Zou Lan, deputy governor of the People's Bank of China. He reiterated the Chinese central bank would keep the yuan stable at a 'reasonable and equilibrium' level, adding that the foreign exchange market's resilience provides strong support for a stable yuan. Yuyuantantian, a social media account affiliated with state-run China Central Television that regularly signals Beijing's thinking about trade, said in a post after the briefing that the new and previously announced measures will be implemented by the end of June, without specifying the policies. China appeared to have resisted rushing into any trade negotiations with Trump. Officials last week dismissed claims that there were talks on reaching a trade deal and reiterated a demand for Washington to revoke all unilateral tariffs. Before talks begin, officials in Beijing want to see Trump show more respect by reining in disparaging remarks by members of his cabinet, Bloomberg previously reported. China also wants the US to name a point person for talks and show a willingness to address China's concerns around American sanctions and Taiwan, the self-ruled island Beijing considers its territory. Despite the rhetoric, Beijing is quietly considering suspending its 125 per cent retaliatory tariffs on some US imports, a move that will contain the fallout of the trade war on certain sectors. 'The way the Chinese government is making exemptions, clearly they don't want their own economy to be harmed by the tariffs that they lay on,' Michael Hart, president of the American Chamber of Commerce in China told Bloomberg Television, adding that member companies have already seen exemptions in IT, health care and aviation sectors. BLOOMBERG
