Latest news with #MichelleLam
Economic Times
6 days ago
- Business
- Economic Times
China's new loans fall in July, a first in two decades
A key measure of lending at Chinese banks contracted for the first time in two decades in July while broad credit growth slowed, as borrowing demand languishes in a deflating economy. Financial institutions recorded a decrease of ¥49.9 billion ($7 billion) of yuan-denominated new loans in the month, according to figures released by the People's Bank of China on Wednesday, in the first decline since July 2005. The rare drop, driven by a net repayment from borrowers, adds to a slew of signs that households and companies have become even more reluctant to take on debt. Instead, the focus is on paying down what they owe, as their outlook on future income and growth government stimulus so far failing to spur enough optimism to lift economic momentum, authorities this week announced a plan to subsidise part of the interest payments on some consumer loans. The contraction is "alarming by itself," said Michelle Lam, Greater China economist at Societe Generale SA. "That could be the reason why the government announced the interest rate discount policies earlier this week." Consumer loans have collapsed over the past year as people turned more frugal and their wealth plunged with the property market. Households net repaid ¥383 billion worth of short-term loans, in the first seven months of this year-the first in records going back to 2009.
The Star
10-08-2025
- Business
- The Star
Taiwan exceeds full-year trade surplus record with US in 7 months
Uncertainty persists: A display of a semiconductor chip made by TSMC in Taipei. Taiwanese firms which have US capacity such as TSMC may be exempted, but how that plays out for firms without capex commitment remains unclear. — AFP TAIPEI: Taiwan's trade surplus with the United States has exceeded its full-year record in just seven months, as a global boom in artificial intelligence (AI) fuels demand for its tech products. US-bound shipments from Taiwan rose nearly 63% in July from a year earlier to US$18.6bil, the Finance Ministry said in a statement last Friday. That brought the island's trade surplus with the world's largest economy to almost US$70bil for January-July, already surpassing the yearly record set in 2024. The latest reading showed no sign of a slowdown, with overall exports soaring 42% in July from a year earlier, the biggest gain in 15 years and far more than forecast by any economist in a Bloomberg survey. Exports benefitted from the rapid development of innovative applications in AI, as well as this month's deadline for US tariffs to take effect, the ministry said in the statement. It expects full-year exports to reach US$500bil for the first time ever. The current full-year record for exports was US$479bil set in 2022. Taiwan has been cashing in on surging demand for AI around the world, racking up an unprecedented trade surplus with the United States that's drawn President Donald Trump's ire. The export growth in July was somewhat overstated given the strong appreciation of Taiwan dollar, said Michelle Lam, Greater China economist at Societe Generale SA. 'While we do expect some moderation ahead as front-loading activities ease, the strength of AI demand has remained solid.' Last week, the US announced a 20% tariff on goods from Taiwan – which the government in Taipei has called temporary but a rate higher than those imposed on regional rivals including Japan and South Korea. The move sparked concerns that it risks undermining the competitiveness of Taiwanese companies. But for Taiwan, even more significant are national security reviews known as Section 232 investigations into semiconductor-related products. At stake in the probes led by the US Department of Commerce are goods that account for some 80% of Taiwan's US-bound exports, which are currently subject to exemptions. Last Wednesday, Trump said the tariff rate on chips would be set at 100%, but promised there would be no charge 'if you're building in the United States of America'. Investors have interpreted the comment as a positive signal for the island's largest firm, Taiwan Semiconductor Manufacturing Co (TSMC), the go-to supplier of advanced chips for Apple Inc and Nvidia Corp. TSMC has been actively investing in US production facilities, which could potentially shield it from the steep tariffs. 'Uncertainty remains to what extent the 100% chip tariff will affect Taiwan's chip exports,' Lam said. 'Firms which have US capacity such as TSMC may be exempted, but how that plays out for firms without capex commitment remain unclear.' The Taiwan government expects exports to grow between 17% and 22% year-on-year next month, even as some traditional industries and mid-sized companies may come under pressure from the new 20% tariff, said Beatrice Tsai, Director General of the Ministry's Department of Statistics, at a briefing last Friday. She also said the government is likely to raise its forecasts for economic growth, both for the third quarter and the full year of 2025. The updated projections will be released this Friday. — Bloomberg
Mint
27-07-2025
- Business
- Mint
China's baby bonus: Can cash incentives convince young Chinese to have kids?
As China prepares to roll out a nationwide child-care subsidy next year, policymakers are betting that modest cash incentives will help reverse one of the country's most worrisome long-term trends: its shrinking population. The central government is planning to provide 3,600 yuan ($503) a year for each child under age three, starting in 2025, according to recent Chinese state media reports. The move marks the first national-level effort to directly support families with newborns, following years of local experimentation and mounting concern over declining birthrates. If the subsidy amount seems paltry by American standards, keep in mind that China's nominal per capita income this year was just $13,687, according to IMF estimates. China's population has contracted for three consecutive years, with just 9.54 million births in 2024—down from nearly 19 million in 2016. The drop poses a structural threat to the world's second-largest economy, where fewer young people mean a shrinking workforce, waning productivity, and growing pressure on the pension system. But whether the few hundred dollars a year will convince reluctant young couples to start families is far from certain. 'I can see the government is trying, but it's not enough to change my mind," said Liu Wen, a 28-year-old marketing analyst in Hangzhou. 'The cost of raising a child here isn't just diapers and formula—it's school, housing, and our own careers. A subsidy won't fix that." That sentiment reflects a broader challenge facing Beijing. While the new program represents a shift in the central government's willingness to fund pronatalist policy, analysts say its size may be too small to shift behavior in a meaningful way. Goldman Sachs estimates the total cost of the program at around 100 billion yuan ($14 billion) annually in a steady state, or less than 0.1% of GDP. Because the subsidies will also retroactively cover children born before January 2025 who are still under age three, Goldman projects a larger 250 billion yuan expenditure in the second half of 2025. Even so, the impact on growth is expected to be modest—adding about 25 basis points to GDP in late 2025 but fading quickly thereafter. 'International experience suggests that a program of such size may not boost birthrates by much," Goldman analysts wrote in a recent report, adding that the move reflects 'China's new policy thinking and long-term planning to counteract cyclical and structural growth headwinds." Michelle Lam, Greater China economist at Société Générale, said in a note that the measure was 'tiny" in scale but notable for signaling 'a change in mind-set and [paving] the way for more stimulus to come." Indeed, the symbolic weight of the policy may matter more than its near-term effect. For years, central authorities avoided the direct handouts common in other advanced economies, preferring tax breaks or indirect support. Now, China appears to be embracing a more direct approach, with the central government reportedly funding up to 95% of the program in less-developed regions. Some local governments have already gone further. Hohhot, the capital of China's Inner Mongolia region, offered couples 50,000 yuan for a second child and 100,000 yuan for a third earlier this year. Cities like Hefei, Tianmen, and Panzhihua have also implemented targeted programs, with mixed results. Goldman notes that Tianmen saw a temporary reversal in birthrate declines after launching its subsidy in 2023, while Panzhihua managed to slow the drop. Still, experts caution that financial incentives alone are unlikely to reverse deeper societal trends. China's marriage rate hit a nearly 50-year low last year, and many young people cite job insecurity, high housing prices, and burnout as reasons to delay or forgo parenthood entirely. That's especially true in major cities, where career pressure and the high cost of living collide. 'I'm still trying to pay off my own student loans and save for a down payment," said Zhang Rui, a 32-year-old software engineer in Shanghai. 'How can I think about a baby right now?" Beijing has started to acknowledge these structural obstacles. In his annual government work report this March, Premier Li Qiang pledged to expand child-care services and reduce the burden on working families. But details remain sparse, and the pace of implementation is uneven. For investors, the implications go beyond demographics. A sustained drop in births could weigh on long-term growth, consumer demand, and labor supply, while also reshaping sectors from education and housing to healthcare and insurance. The question now is whether China's latest policy shift marks the beginning of a broader family support agenda—or merely a symbolic gesture. Either way, the stakes are clear. United Nations projections suggest China's population could fall to 1.3 billion by 2050 and below 800 million by 2100. Without a meaningful rebound in fertility, China's economic future may rest on a shrinking base. For now, though, most young families seem unconvinced that a few thousand yuan a year is enough to tip the scales. Write to editors@
Miami Herald
07-07-2025
- Business
- Miami Herald
China's New Cash Plan to Tackle Birth Rate Threat
China plans to introduce new nationwide cash incentives for families with newborn babies in an effort to boost the country's declining birth rate and ensure long-term economic growth. Newsweek reached out to the Chinese Foreign Ministry via email for comment. China ended its decades-long one-child policy in 2016, but the country's fertility rate continued to decline for seven years, despite a raft of government policies. Officials fear that the demographic shift could have wide-ranging effects on the world's second-largest economy in the years to come. While the fertility rate last year bucked the trend, ticking upward to 1.2 births per woman from 1.0 in 2023, this was still well below the replacement rate of 2.1. Meanwhile, the population shrank for a third year, raising official concerns about the impact of these demographic shifts on China's economy and global position. Under a new nationwide policy, central authorities will offer families a cash allowance of 3,600 yuan (about $500 USD) per year for each child born on or after January 1, 2025, Bloomberg reported, citing people familiar with the matter. Payments will continue until the eligible child reaches the age of three. This builds on previously announced local cash subsidies, though these have primarily targeted couples having their second or third child. While these efforts have generally failed to boost birth rates, one notable exception is the Hubei province city of Tianmen, where incentives were followed by a notable surge in births last year. Other measures have included subsidizing in vitro fertilization and providing child care subsidies. Last month, officials announced that all tertiary-level hospitals would be required to provide epidural anesthesia during childbirth, aiming to make the experience less stressful and encourage higher fertility. The policy follows a pledge by China's No. 2 official, Premier Li Qiang, to introduce additional child care subsidies, although he did not provide details. Experts have pointed to a range of factors behind the demographic decline, from gender discrimination in the workplace to the high cost of education. Michelle Lam, a Greater China economist at French banking group Societe Generale, told Bloomberg: "[Central government subsidies are a] tiny but signals a change in mindset and paves the way for more stimulus to come. It's a move in the right direction." He Yafu, an independent demographer, wrote on the Chinese social media platform WeChat in January: "Tianmen's case proves that cash incentives are making a childbearing subsidies have no effect, it is because they are too small and need to be increased." It remains to be seen whether the nationwide cash subsidies or other recent measures will be enough to offset the economic and cultural forces driving China's declining birth rate. The United Nations has projected that China's population—currently about 1.4 billion—could shrink to under 800 million by 2100 if current trends hold. Related Articles China Stealth Fighter Rival to US F-35 Seen in Sky, Images Appear to ShowIran Gets Significant Diplomatic BoostUS Ally Gives Military Shootdown Authorization Against Chinese DronesUS Ally Plans Naval Power Increase Amid China Threat on Disputed Territory 2025 NEWSWEEK DIGITAL LLC.
Newsweek
07-07-2025
- Business
- Newsweek
China's New Cash Plan to Tackle Birth Rate Threat
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. China plans to introduce new nationwide cash incentives for families with newborn babies in an effort to boost the country's declining birth rate and ensure long-term economic growth. Newsweek reached out to the Chinese Foreign Ministry via email for comment. Why It Matters China ended its decades-long one-child policy in 2016, but the country's fertility rate continued to decline for seven years, despite a raft of government policies. Officials fear that the demographic shift could have wide-ranging effects on the world's second-largest economy in the years to come. While the fertility rate last year bucked the trend, ticking upward to 1.2 births per woman from 1.0 in 2023, this was still well below the replacement rate of 2.1. Meanwhile, the population shrank for a third year, raising official concerns about the impact of these demographic shifts on China's economy and global position. What To Know Under a new nationwide policy, central authorities will offer families a cash allowance of 3,600 yuan (about $500 USD) per year for each child born on or after January 1, 2025, Bloomberg reported, citing people familiar with the matter. Payments will continue until the eligible child reaches the age of three. This builds on previously announced local cash subsidies, though these have primarily targeted couples having their second or third child. While these efforts have generally failed to boost birth rates, one notable exception is the Hubei province city of Tianmen, where incentives were followed by a notable surge in births last year. Other measures have included subsidizing in vitro fertilization and providing child care subsidies. Last month, officials announced that all tertiary-level hospitals would be required to provide epidural anesthesia during childbirth, aiming to make the experience less stressful and encourage higher fertility. The policy follows a pledge by China's No. 2 official, Premier Li Qiang, to introduce additional child care subsidies, although he did not provide details. Experts have pointed to a range of factors behind the demographic decline, from gender discrimination in the workplace to the high cost of education. A young mother pushes a stroller while watching kites shaped like jellyfish soaring in the sky over Chongqing, China, on November 12, 2024. A young mother pushes a stroller while watching kites shaped like jellyfish soaring in the sky over Chongqing, China, on November 12, People Are Saying Michelle Lam, a Greater China economist at French banking group Societe Generale, told Bloomberg: "[Central government subsidies are a] tiny but signals a change in mindset and paves the way for more stimulus to come. It's a move in the right direction." He Yafu, an independent demographer, wrote on the Chinese social media platform WeChat in January: "Tianmen's case proves that cash incentives are making a childbearing subsidies have no effect, it is because they are too small and need to be increased." What Happens Next It remains to be seen whether the nationwide cash subsidies or other recent measures will be enough to offset the economic and cultural forces driving China's declining birth rate. The United Nations has projected that China's population—currently about 1.4 billion—could shrink to under 800 million by 2100 if current trends hold.
