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Business Times
4 days ago
- Business
- Business Times
China's rare lending slump feeds worry on slower economic growth
[BEIJING] China's first contraction in outstanding loans since 2005 has crystallised worries about a deepening downturn for the world's second-largest economy. Instead of putting money to work, households and companies are paying down their debt as they take a more dim view of their prospects, threatening a self-fulfilling cycle of economic underperformance. The longest deflation streak since at least the 1990s is also suppressing demand for borrowing, contributing last month to a 430 billion yuan (S$77 billion) decline in loans to the real economy, the most on record going back to 2002. 'Weaker loan demand tends to be a negative sign for future growth,' said Lynn Song, chief Greater China economist at ING Bank. 'My biggest concern is the entrenched pessimism, which is the main reason for weak consumer and corporate borrowing appetite.' The flow of credit will dictate the economic tempo for years to come. For Beijing, the challenge now is in how to lift languishing domestic demand that threatens to hobble growth in the long run, just as trade barriers abroad present a risk for China's export engine. China's bond and stock markets largely shrugged off the surprise loan drop, with the CSI 300 Index ending mostly unchanged on Thursday (Aug 14). The onshore equity benchmark has rallied in the past few months, thanks to ample liquidity. Even so, policymakers face a tricky balance. Officials are trying to heed a call by President Xi Jinping's government to tackle price wars and reduce excessive competition without sparking a wave of job losses or further depressing sentiment among the very consumers they want to spend more. 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 That could be tough. State media said after the credit data on Wednesday that reining in China's overcapacity problem could have had a negative impact on loan demand. Other factors were in play, too. The property market deteriorated while consumer subsidies slowed temporarily, weighing on household loans. Under pressure from intense price wars and US tariff threats, companies also dialled back their borrowing. The only expansion in July materialised in bill financing, a tool used by banks to inflate lending when borrowing demand is weak. While it may be too early to ring the alarm about the risk of a Japanese-style balance-sheet recession, 'we do worry about the renewed weakness in the property market', said Serena Zhou, senior China economist at Mizuho Securities Asia. Beijing will likely find boosting demand difficult without stabilising the property market because it's a store for almost 60 per cent of household wealth, based on a central bank survey in 2019. Now in its fourth year of decline, the housing sector may not bottom out until mid-to-late 2026, according to some estimates. 'If we do see a double dip in the property sector, the negative wealth effects will become a bigger overhang on consumer sentiment,' meaning 'the government's efforts at subsidising consumption' would have been in vain, Zhou said. China's credit growth has been stuck in a low gear since 2022. Not even interest-rate cuts by the central bank were able to reverse the slowdown in lending. While industrial loans skyrocketed after the pandemic, their moderation in recent months shows that China's formidable manufacturing machine also is not immune to a feeble appetite for debt. And as deflation in the economy becomes increasingly pervasive, it's souring household and business expectations for future income and profit. The danger is that without a timely fix to reflate the economy, China may follow the footsteps of Japan and become trapped in decades of deflation and low growth. What made the data appear even worse in July was local governments' effort to resolve hidden debt, which involves selling bonds to repay loans and may have cut into bank credit volumes. Financial News, a paper backed by the People's Bank of China (PBOC), also singled out a campaign to ensure big companies are paying their small suppliers on time as a potential reason for poor borrowing demand from companies. Ultimately, as policymakers try to rein in inefficient loans that are fuelling overcapacity, the economic side effects threaten a steep fall in demand because of production curbs. Authorities also need to overcome the resistance from local governments and banks, who have plenty of motivations to keep unprofitable, and even 'zombie', companies alive to maintain employment and avoid losses on their books. That's why the PBOC has taken an increasingly targeted approach when it comes to credit support, according to Xing Zhaopeng, senior China strategist at Australia & New Zealand Banking Group. The central bank will pay increasing attention to the five sectors deemed important by top officials, including tech and green industries, shifting away from the kind of broad-based stimulus boost delivered for the entire economy in the past, he said. Credit support 'will be retreating in some areas and advancing in some areas, and the former will be plenty,' Xing said. 'It will mostly be the industries with overcapacity'. BLOOMBERG
Time of India
29-05-2025
- Business
- Time of India
AI could cut half of all entry-level white collar jobs: Anthropic CEO
Anthropic CEO Dario Amodei has openly voiced what many people are fearing: artificial intelligence (AI) could eat away nearly half of all entry-level white collar jobs , and soon. Amodei, who leads one of the world's largest AI companies, has warned that significant job cuts could occur within five years, urging consumers and US lawmakers to prepare, according to Axios. He also criticised the government and other AI companies for "sugar-coating" the coming reality: the potential for mass job eliminations across various white-collar professions, particularly at the entry level, including technology, finance, law, and consulting. "Most of them are unaware that this is about to happen. It sounds crazy, people just don't believe it," he said. Amodei is at the helm of the very technology he predicts will bring about the job cuts, and says he is speaking out about this in the hope that the government will heed the warning and protect the nation. A 'jobs' bloodbath Discover the stories of your interest Blockchain 5 Stories Cyber-safety 7 Stories Fintech 9 Stories E-comm 9 Stories ML 8 Stories Edtech 6 Stories Amodei spoke out about the fears of artificial intelligence after demonstrating the ability of his company's latest AI models, under the Claude 4 family. Claude Opus 4, one of the company's chatbots in this family, was in the news after its launch as it exhibited alarming behaviour during safety tests by threatening to blackmail its engineer after being informed it would be replaced. This comes as OpenAI, Google and other major AI firms rapidly enhance their large language models (LLMs), enabling them to increasingly match and surpass human performance across a range of tasks. The report cited Anthropic research, which shows that people still view AI as something that will help them do their job, and not necessarily replace them to do it. But Amodei warns that the use of AI in companies will move more and more towards automation in "as little as a couple of years or less". Hundreds of companies are already producing agents to automate a significant chunk of their gruntwork. AI agents can take on the work of humans and finish it much quicker, for a fraction of the cost. Meta Technologies CEO Mark Zuckerberg had told host Joe Rogan on his podcast that his company is working on making AI a mid-level engineer that can write code. Separately, the company announced plans to lay off 5% of its workforce. Meta is not alone. Big Tech and other conglomerates in the US are laying off workers. Microsoft is cutting 6,000 staff, many of them engineers. Cybersecurity firm CrowdStrike slashed 5% of its workforce and Walmart is reportedly cutting 1,500 corporate jobs.
Time of India
28-05-2025
- Politics
- Time of India
"Indian forces acted with utmost restraint": MP Anand Sharma in Johannesburg
Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Congress MP Anand Sharma , member of the all-party delegation led by NCP-SCP MP Supriya Sule , emphasised India's restrained and targeted response to an interaction with the Indian community in Johannesburg, Sharma stated that Indian forces targeted only terrorist headquarters, but when Pakistan retaliated by attacking Indian air bases, India had to respond also highlighted Pakistan's role in harboring terrorists, saying, "We have the terrorists who had attacked Mumbai. Finally, one of them has been extradited to India. The world knows that Osama bin Laden was found in Abbottabad, Pakistan... Indian security forces and the government had acted with utmost restraint. We had only targeted the headquarters of the terror groups. It was unfortunate that Pakistan did not pay heed; instead of taking action, they attacked Indian air bases, and there had to be a forceful Indian retaliation," Sharma all-party Indian Parliamentary delegation led by Supriya Sule, MP, Lok Sabha, commenced the South Africa engagement on May 27, in Johannesburg, with a community interaction, to reiterate India's message against terrorism, as per the delegation conveyed India's zero-tolerance policy towards cross-border terrorism . The delegation shared that Operation Sindoor , conducted by Indian in response, was calibrated, targeted and proportionate, demonstrating India's commitment to countering terrorism without escalating tensions. They emphasised the need to stop differentiating the terrorists and their backers and dismantle the cross-border terrorism infrastructure, developed and used against India for several members of the delegation are Members of Parliament Supriya Sule, Rajiv Pratap Rudy, Vikramjeet Singh Sahney, Manish Tewari, Anurag Singh Thakur, Lavu Sri Krishna devarayalu, Anand Sharma, former Minister of Commerce & Industry, V Muraleedharan, Former Minister of State for External Affairs, and Syed Akbaruddin, Former Permanent. Representative of India to the Wednesday, the delegation will visit Cape Town for meetings in the South African Parliament and with South Africa's Ministers of Government.
Yahoo
20-05-2025
- Politics
- Yahoo
Hawley: House GOP must listen to Trump on Medicaid
Sen. Josh Hawley (R-Mo.) urged House Republicans to heed President Trump's advice on Medicaid, seeking to blunt efforts to significantly cut health benefits in the GOP's mammoth budget bill. The president met with GOP members in the Capitol on Tuesday to solidify support for the 'one big beautiful' spending bill aimed at extending Trump's 2017 tax cuts, bolstering border security and raising the nation's debt ceiling while proposing cuts to the insurance program that provides coverage to lower-income families and individuals with disabilities. Trump, behind closed doors, told party members not to 'f‑‑‑ with Medicaid.' 'I hope congressional Republicans are listening,' Hawley wrote in a Tuesday post, resharing a report about Trump telling the GOP at the meeting to leave Medicaid alone. Hawley has long warned his party against Medicaid cuts, writing in a New York Times op-ed earlier this month that slashing health care for the working poor 'is both morally wrong and politically suicidal.' Proposed cuts have raised concerns for lawmakers across the country after a Congressional Budget Office report said the spending bill could result in 10.3 million people losing Medicaid coverage by 2034 and 7.6 million people going uninsured. In past weeks, Republicans have pledged not to touch the insurance program despite legislative language suggesting they would. 'Our priority remains the same: strengthen and sustain Medicaid for those whom the program was intended to serve: expectant mothers, children, people with disabilities, and the elderly,' House Energy and Commerce Committee Chair Brett Guthrie (R-Ky.) said last week. He added that the reforms will 'return taxpayer dollars to middle-class families.' Trump on Tuesday argued that Republicans should focus on 'waste, fraud and abuse' in Medicaid, maintaining, 'We are not doing any cutting of anything meaningful.' After Trump's Capitol meeting, House Freedom Caucus Chair Rep. Andy Harris (R-Md.) said the president didn't convince enough people that the current spending bill is 'adequate.' House Republican leaders are pushing to pass the bill before Memorial Day. Democrats, meanwhile, have blasted the GOP legislation, asserting it would harm vulnerable women and children most. 'It's clear that all this bill does is take away health care for millions of Americans in order to pay for giant tax breaks for billionaires and big corporations. And that's not what the American people want,' Rep. Frank Pallone Jr. (N.J.), the top Democrat on Energy and Commerce Committee, said last week. Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
The Hill
20-05-2025
- Health
- The Hill
Hawley: House GOP must listen to Trump on Medicaid
Sen. Josh Hawley (R-Mo.) urged House Republicans to heed President Trump's advice on Medicaid, seeking to blunt efforts to significantly cut health benefits in the GOP's mammoth budget bill. The president met with GOP members in the Capitol on Tuesday to solidify support for the 'one big beautiful' spending bill aimed at extending Trump's 2017 tax cuts, bolstering border security and raising the nation's debt ceiling while proposing cuts to the insurance program that provides coverage to lower-income families and individuals with disabilities. Trump, behind closed doors, told party members not to 'f‑‑‑ with Medicaid.' 'I hope congressional Republicans are listening,' Hawley wrote in a Tuesday post, resharing a report about Trump telling the GOP at the meeting to leave Medicaid alone. Hawley has long warned his party against Medicaid cuts, writing in a New York Times op-ed earlier this month that slashing health care for the working poor 'is both morally wrong and politically suicidal.' Thank you for signing up! Subscribe to more newsletters here Proposed cuts have raised concerns for lawmakers across the country after a Congressional Budget Office report said the spending bill could result in 10.3 million people losing Medicaid coverage by 2034 and 7.6 million people going uninsured. In past weeks, Republicans have pledged not to touch the insurance program despite legislative language suggesting they would. 'Our priority remains the same: strengthen and sustain Medicaid for those whom the program was intended to serve: expectant mothers, children, people with disabilities, and the elderly,' House Energy and Commerce Committee Chair Brett Guthrie (R-Ky.) said last week. He added that the reforms will 'return taxpayer dollars to middle-class families.' Trump on Tuesday argued that Republicans should focus on 'waste, fraud and abuse' in Medicaid, maintaining, 'We are not doing any cutting of anything meaningful.' After Trump's Capitol meeting, House Freedom Caucus Chair Rep. Andy Harris (R-Md.) said the president didn't convince enough people that the current spending bill is 'adequate.' House Republican leaders are pushing to pass the bill before Memorial Day. Democrats, meanwhile, have blasted the GOP legislation, asserting it would harm vulnerable women and children most. 'It's clear that all this bill does is take away health care for millions of Americans in order to pay for giant tax breaks for billionaires and big corporations. And that's not what the American people want,' Rep. Frank Pallone Jr. (N.J.), the top Democrat on Energy and Commerce Committee, said last week.
