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China’s central bank cuts benchmark rate, announces new stimulus measures

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China has announced a series of stimulus measures, including a cut in its benchmark interest rate, as it grapples with a slowdown in the world’s second-largest economy.

In a public briefing on Tuesday, the People’s Bank of China also announced more support for the struggling property sector, as well as a state fund to revive the stock market and help with share buybacks.

While economists were sceptical that China could meet its full-year growth target of 5%, Bank of China Governor Pan Gongsheng said the measures were aimed at ‘supporting the steady growth of China’s economy’ and ‘promoting a moderate price recovery’.

China’s blue-chip CSI 300 index, which tracks shares traded in Shanghai and Shenzhen, rose 3.8 per cent on Tuesday after the announcement. Hong Kong’s Hang Seng index rose 3.9 per cent, led by mainland Chinese companies listed in the region.

Pan said the central bank’s main policy rate, the short-term seven-day reverse repurchase rate, would be cut to 1.5 per cent from 1.7 per cent.

“The central bank will also cut the reserve requirement ratio, the amount of reserves lenders must hold, by 0.5 percentage points, signalling a possible further cut of 0.25 to 0.5 percentage points this year. The RRR cut will provide Rmb1 trillion ($142 billion) of liquidity to the banking system”, he said.

“The rare simultaneous cut in policy rates and the RRR, the relative size of the cuts, and the unusual guidance on further policy easing all point to policymakers’ growing concern about headwinds to growth,” Goldman Sachs analysts said in a note to clients. “In our view, this signals a new round of policy easing to support the real economy,” he said.

“However, further demand easing – especially fiscal easing – is likely to be needed to improve China’s growth outlook,” they added.

China’s economic growth has slowed in recent months as a prolonged downturn in the property sector has weakened consumer sentiment and reduced spending.

Economists have cut growth forecasts below the government’s official target of 5 per cent by 2024 as deflationary forces persist and producer prices have fallen since last year.

Policymakers have turned to exports in the hope that the housing crisis will bottom out, but strong shipments of electric vehicles, batteries and other goods have failed to fully offset the weak domestic economy.

“China’s economy is recovering, and the monetary policy our bank has introduced this time will help support the real economy, stimulate spending and investment, while providing a stable floor for the exchange rate,” Pan said.

Pan was joined by Li Yunze, director of the National Financial Regulatory Administration, the new financial sector watchdog, and Wu Qing, chairman of the China Securities Regulatory Commission, the market regulator.

The government will boost stock market liquidity by allowing brokers, insurance companies and funds to use central bank facilities to buy shares, officials said. The People’s Bank of China will also provide credit facilities for shareholders to buy back shares.

“A new stimulus is definitely positive,” said Liu Chang, macro economist at BNP Paribas Asset Management.

But with economic momentum weak heading into the fourth quarter, he said the authorities would have to ‘move very quickly to implement additional measures in the coming weeks if they want to achieve the 5 per cent target’.

In this context, we think there is still a worrying lack of urgency behind their words on stimulus,” Liu said.

Among other measures, the bank reduced mortgage down payments for second homes from 25 per cent to 15 per cent. Second homes had previously been subject to stricter conditions to curb property speculation, a focus of President Xi Jinping.

The central bank also said it would improve conditions for its destocking programme, under which it is providing Rmb300 billion to local state-owned enterprises to help them buy unsold inventory from property developers.

Economists say reducing China’s unsold housing stock is crucial to restoring confidence in the economy and boosting domestic consumption.

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Khalil Haqqani’s assassination will damage Pakistan influence on Taliban

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Targeting the Afghanistan minister for refugees and one of key members of the Haqqani network has generated a stock of questions. Since the return of Taliban into power Khalil Haqqani become third most important figure targeted by suicide bomber inside his most guarded ministerial complex at Kabul. In the wake of prolonged links, Pakistan is likely to face decline in its influence in war devastated Afghanistan.

Not only it claimed but even Taliban high command has blamed the Islamic States (IS) also called Daeesh terrorist for carrying out suicide attack against Khalil Haqqani. However, common men and analysts as well are in hunt of answers to queries pertained to honouring of IS militants on the soil of Afghanistan. It is no more secret that almost all hardline Islamists organs and individuals including al-Qaeda, Daeesh and others are benefitting no other than US lead allies. Rebellion against Syrian president Bashar Asad after Libyan leader Col Gaddafi has confirmed brain behind such so called Islamist groups. Whatever might be by Persian (Islamic Republic of Iran) establishment designs but its patronised Hammas and Hezbollah doing has made more strengthen US puppet Israel in the Middle East. 

Through different jihadic period, Pakistan has established unbeatable influence across Afghanistan.

Reaction of Kandaharis within Emirate Islami over murdering of Khalil Haqqani in a suicide attack is not encouraging. Not even a single top leader of Emirate Islamic turned up to the funeral of Khalil Haqqani which confirms rifts within Taliban ranks. Only foreign minister Amir Khan Muttaqi and Maulvi Abdul Kabir both from South-Eastern zone were amongst those who attended funeral or last rites of Khalil Haqqani who had accredited himself as pioneer of suicide bombers in the region. 

Rifts within Taliban ranks are not new but lingering on since mid of August 2021 last. At that time, Taliban high command had made up its mind for monopolising the government set up but opposed by none other than Khalil Haqqani. Even former Pakistan ISI chief Lt Gen (Retd) Faiz Hameed had also extended help to Khalil in this respect. Sirajuddin Haqqani who is leading the family and notorious Haqqani Network and less experienced and he was always guided by uncle Khalil Haqqani to right directions. Now when Khalil Haqqani is no more therefore Sirajuddin Haqqani would definitely face hardships.

Through different jihadic, militant and other individuals, Pakistan has established unbeatable influence across Afghanistan. Earlier, this influence has sustained first ever set back when the US established direct links with the Emirate Islami through Qatar. However, Pakistan succeeded in recovering such losses to some extent by exploiting geo-politico locations. But now the sudden death of Khalil Haqqani is likely to end Pakistan influence in Afghanistan as Khalil after his elder brother Jalaluddin Haqqani was considered most loyal and obedient to Rawalpindi-Islamabad.

All those played pivotal roles in the “Great Game” either lost their lives or end up in exile.

In the wake of recent developments in Syria, the US has confirmed its main role in Islamic world not only for safeguarding its own geo-strategic economic interests but also for making Israel safe and sound. On such ground, US lead allies are interested in further confining Russia to its own international border. Like hard line Islamist groups and individuals of Syria, US spy agencies eyeing and hopeful of a due role from al-Qaeda and IS lead Asian Islamic groups, camping across Afghanistan and its border regions along with Pakistan.

No one can deny the fact that Haqqanis are witnesses to prolonged war on the soil of Afghanistan. Almost all the eyewitnesses of this war have been eliminated. Khalil’s brutal killing is also considered in sequence or part of the move in progress against eyewitnesses of war on the soil of Afghanistan, declared a Great Game by former President Dr Najibullah little before signing of the Geneva Accord in 1988. All those who played pivotal roles in this great game have either lost their lives or are now unable to live inside the country with honour and peace.

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South Korea’s constitutional court reviews President Yoon’s impeachment case

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South Korea’s Constitutional Court convened on Monday to begin its review of the impeachment of President Yoon Suk Yeol. The case follows the National Assembly’s impeachment motion, passed late Saturday with 204 votes—well above the two-thirds majority threshold required in the 300-member legislature.

Six judges from the court decided to hold the first hearing on December 27, following their initial meeting after the impeachment vote. Representatives from the National Assembly and President Yoon will participate in the hearing to determine procedural steps for resolving the case. Additionally, the court announced the formation of a task force to facilitate the review.

“We will handle this swiftly and fairly,” said Judge Kim Hyung-du, addressing reporters before the meeting. He emphasized the importance of organizing preparatory procedures effectively. Judge Kim also expressed confidence that the court would achieve its full composition of nine members by the end of December, as motions to elect three judges were submitted last week, with confirmation hearings planned for later this week.

For the impeachment to be upheld, six of the nine judges must vote in favor.

The court’s review comes amid escalating legal challenges for President Yoon. On Sunday, Yoon declined a summons from prosecutors investigating his alleged involvement in a case of martial law declaration earlier this month. Prosecutors reissued the summons on Monday, though Yoon’s appearance remains uncertain, according to Yonhap News Agency.

Separately, police announced plans to summon Yoon on Wednesday in connection with allegations of rioting and abuse of office. The president has yet to respond to these summonses.

The impeachment vote has triggered a crisis within the People Power Party (PPP). On Monday, PPP leader Han Dong-hoon resigned after facing backlash for supporting the impeachment measure and persuading enough party members to vote in favor.

“I am resigning as leader of the People Power Party because I can no longer fulfill my duties following the resignations of board members,” Han stated during a press conference. Five of the nine board members resigned, citing dissatisfaction with Han’s handling of the impeachment.

Despite a consensus within the PPP to oppose impeachment, a secret ballot revealed that 12 PPP lawmakers joined all 192 opposition and independent MPs in supporting the motion.

The main opposition Democratic Party continues to press its advantage amid the political turmoil. Democratic leader Lee Jae-myung called on acting president and Prime Minister Han Duck-soo to establish a bipartisan body to address national issues while the Constitutional Court deliberates Yoon’s fate.

“It is time for the National Assembly to actively manage the affairs of the Republic of Korea,” Lee said at a press conference on Sunday. “The People’s Power Party is no longer the ruling party. The ruling party, as it stands, no longer exists,” he added.

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Taliban, Turkmenistan FMs visit construction site of multibillion-dollar gas pipeline project

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The Afghan Foreign Minister Amir Khan Muttaqi with his Turkmenistan counterpart Rashid Murdov, had visited the construction site of the Turkmenistan-Afghanistan-Pakistan-India gas pipeline project near the common border between the two countries. During the visit, they reviewed the operational affairs of the TAPI pipeline, where both the officials discussed laying the railway track, optical fiber transfer and visa and transportation facilities.

Spokesman for the Afghan Foreign Ministry Hafiz Zia Ahmad said that the discussions “extended beyond the TAPI pipeline project to include the expansion of the railway, the construction of railway warehouses in Torghundi, the deployment of fiber optic networks, and the facilitation of visa issuance and transportation services.”

The Turkmen Foreign Minister provided a comprehensive briefing on the progress of the TAPI pipeline, the acceleration of construction activities, and the next steps in the Project, Zia said in a statement.

The $7 billion TAPI project will bring natural gas to Afghanistan, Pakistan and India

The $7 billion Turkmenistan–Afghanistan–Pakistan–India (TAPI) Gas Pipeline, also known as Trans-Afghanistan Pipeline, is a natural gas pipeline being developed by the Galkynysh – TAPI Pipeline Company Limited with the participation of the Asian Development Bank. The pipeline will transport natural gas from the Galkynysh Gas Field in Turkmenistan through Afghanistan into Pakistan and then to India. The official work on the project was opened on 13 December 2015 in Turkmenistan and the practical work in Afghanistan began on 11 September 2024.

The pipeline will have a capacity to carry 33 billion cubic meters of gas from Turkmenistan to Pakistan and India through Afghanistan’s provinces of Herat, Farah, Helmand and Nimroz.

It is worth mentioning that the much-delayed project was first signed in 2010 but the work has been put on hold due to technical and financial complications. The work was also stalled due disagreement between the archrivals Pakistan and India. However, the four countries Turkmenistan-Afghanistan-Pakistan-India agreed to work on the TAPI pipeline project

However, the work on the Afghan side remained stuck due to war and the Taliban’s war against the foreign forces and the Afghan regime in that time backed by the US. However, the Taliban resumed work on the TAPI following their victory and the escape of the then Afghan President Ashraf Ghani following the withdrawal of foreign forces from Afghanistan after 20 years of presence.

Taliban spokesman Zia Ahmad, said that Muttaqi and Murdov reaffirmed their commitment to expediting the TAPI project, expanding railway infrastructure, improving energy and transport services, and enhancing broader economic cooperation. He furthered that the technical teams will continue their engagements in Kabul and Ashgabat to achieve these objectives.

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