Tag Archives: TW

World

In diplomatic coup, Taiwan president speaks to Czech president-elect

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  • Pavel won Czech presidential election on Saturday
  • Pavel, Taiwan’s Tsai stress their shared values in call
  • China opposes other countries dealing with Taiwan
  • Beijing views Taiwan as renegade province

TAIPEI/PRAGUE, Jan 30 (Reuters) – Taiwan President Tsai Ing-wen held a telephone call with Czech President-elect Petr Pavel on Monday, a highly unusual move given the lack of formal ties between their countries and a diplomatic coup for Taipei that is sure to infuriate China.

The two leaders stressed their countries’ shared values of freedom, democracy and human rights during their 15-minute call, their offices said, and Pavel said he hoped to meet Tsai in the future.

Most countries avoid high-level public interactions with Taiwan and its president, not wishing to provoke China, the world’s second largest economy.

Beijing views Taiwan as being part of “one China” and demands other countries recognise its sovereignty claims, which Taiwan’s democratically-elected government rejects.

In 2016, U.S. President-elect Donald Trump spoke by telephone with Tsai shortly after winning the election, setting off a storm of protest from Beijing.

Tsai said she hoped that under Pavel’s leadership the Czech Republic would continue to cooperate with Taiwan to promote a close partnership, and that she hoped to stay in touch with him.

“Bilateral interaction between Taiwan and the Czech Republic is close and good,” her office summarised Tsai as having said.

Pavel, a former army chief and high NATO official who won the Czech presidential election on Saturday, said on Twitter that the two countries “share the values of freedom, democracy, and human rights”.

‘ONE-CHINA’ PRINCIPLE

Earlier, China’s foreign ministry had said it was “seeking verification with the Czech side” on media reports that the call was to take place.

“The Chinese side is opposed to countries with which it has diplomatic ties engaging in any form of official exchange with the Taiwan authorities. Czech President-elect Pavel during the election period openly said that the ‘one-China’ principle should be respected,” the ministry said.

Pavel will take office in early March, replacing President Milos Zeman, who is known for his pro-Beijing stance.

Zeman spoke with Chinese President Xi Jinping this month and they reaffirmed their “personal friendly” relationship, according to a readout of their call from Zeman’s office.

The Czech Republic, like most countries, has no official diplomatic ties with Taiwan, but the two sides have moved closer as Beijing ratchets up military threats against the island and Taipei seeks new friends in Eastern and Central Europe.

The centre-right Czech government has said it wants to deepen cooperation with democratic countries in the India-Pacific region, including Taiwan, and has also been seeking a “revision” of ties with China.

In 2020, the head of the Czech Senate visited Taiwan and declared himself to be Taiwanese in a speech at Taiwan’s parliament, channelling the late U.S. President John F. Kennedy’s defiance of communism in Berlin in 1963.

Reporting by Robert Muller and Jason Hovet; Additional reporting by Ben Blanchard and Yimou Lee in Taipei; editing by Gareth Jones

Our Standards: The Thomson Reuters Trust Principles.

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Business

Shares and bonds nervy as rate-hike week looms

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  • Fed seen hiking 25 bps, ECB and BOE by 50 bps
  • Technology giants lead host of earnings results
  • Shares edge down after robust January rally

LONDON, Jan 30 (Reuters) – Stock markets worldwide halted their January rally on Monday, pausing for breath at the start of an agenda-setting week of central bank rate hikes and data releases that will clarify if progress has been made in the battle against inflation.

Investors expect the Federal Reserve will raise rates by 25 basis points on Wednesday, followed the day after by half-point hikes from the Bank of England and European Central Bank, and any deviation from that script would be a real shock.

Europe’s benchmark STOXX index fell 0.8% on Monday morning, echoing a slight dip in MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS), which has surged 11% in January so far as China’s reopening bolsters sentiment.

The U.S. Nasdaq index is likewise on course for its best January since 2001, a rally that will be tested by earnings updates from tech giants this week.

U.S. stocks were set to follow the nervous Monday mood with S&P 500 futures down 1% and Nasdaq futures falling 1.3%, as investors await guidance later in the week on the Federal Reserve’s policy.

Analysts expect a hawkish tone suggesting that more needs to be done to tame inflation. read more

“With U.S. labour markets still tight, core inflation elevated and financial conditions easing, Fed Chair Powell’s tone will be hawkish, stressing that a downshifting to a 25bp hike doesn’t mean a pause is coming,” said Bruce Kasman, chief economist at JPMorgan, who expects another rise in March.

“We also look for him to continue to push back against market pricing of rate cuts later this year.”

There is a lot of pushing to do given futures currently expect rates to peak at 5% in March and to fall back to 4.5% by year end.

Europe offered a brisk reminder that the fight against rising prices is far from over, as bond yields in the region rose sharply on Monday in the wake of stronger-than-expected Spanish inflation data.

The data showing inflation rose 5.8% year-on-year in January, against expectations of 4.7%, pushed up the zone’s benchmark German 10-year government bond yield 7 basis points (bps) to 2.3190%, its highest since Jan. 10.

Italian and Spanish yields also inched up.

The dollar index was flat ahead of the week’s key data, on course for a fourth straight monthly loss of more than 1.5% on growing expectations that the Fed is nearing the end of its rate-hike cycle.

APPLE’S CORE

Yields on 10-year notes have fallen 33 basis points so far this month to 3.50%, essentially due to easing financial conditions even as the Fed talks tough on tightening.

That dovish outlook will also be tested by data on U.S. payrolls, the employment cost index and various ISM surveys.

Reading on EU inflation could be important for whether the ECB signals a half-point rate rise for March, or opens the door to a slowdown in the pace of tightening. read more

As for Wall Street’s recent rally, much will depend on earnings from Apple Inc (AAPL.O), Amazon.com (AMZN.O), Alphabet Inc (GOOGL.O) and Meta Platforms (META.O), among many others.

“Apple will give a glimpse into the overall demand story for consumers globally and a snapshot of the China supply chain issues starting to slowly abate,” wrote analysts at Wedbush.

“Based on our recent Asia supply chain checks we believe iPhone 14 Pro demand is holding up firmer than expected,” they added. “Apple will likely cut some costs around the edges, but we do not expect mass layoffs.”

Market pricing of early Fed easing has been a burden for the dollar, which has lost 1.6% so far this month to stand at 101.85 against a basket of major currencies.

The euro is up 1.5% for January at $1.0878 and just off a nine-month top. The dollar has even lost 1.3% on the yen to 129.27 despite the Bank of Japan’s dogged defence of its ultra-easy policies.

The drop in the dollar and yields has been a boon for gold, which is up 5.8% for the month so far at $1,930 an ounce .

The precious metal was flat on Monday ahead of the slew of key central bank moves and data releases.

China’s rapid reopening is seen as a windfall for commodities in general, supporting everything from copper to iron ore to oil prices.

Oil steadied on Monday after earlier losses, with prices bolstered by rising Middle East tension over a drone attack in Iran and hopes of higher Chinese demand.

Brent crude rose 10 cents, or 0.12%, to $86.76 a barrel by 1200 GMT while U.S. West Texas Intermediate crude added 4 cents, or 0.05%, to $79.72.

Reporting Lawrence White and Wayne Cole; Editing by Christopher Cushing, Arun Koyyur and Christina Fincher

Our Standards: The Thomson Reuters Trust Principles.

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US

Odds ‘very high’ of U.S. military conflict with China, top Republican says

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WASHINGTON, Jan 29 (Reuters) – A top Republican in the U.S. Congress on Sunday said the odds of conflict with China over Taiwan “are very high,” after a U.S. general caused consternation with a memo that warned that the United States would fight China in the next two years.

In a memo dated Feb. 1 but released on Friday, General Mike Minihan, who heads the Air Mobility Command, wrote to the leadership of its roughly 110,000 members, saying, “My gut tells me we will fight in 2025.”

“I hope he is wrong. … I think he is right though,” Mike McCaul, the new chairman of the Foreign Affairs Committee in the U.S. House of Representatives, told Fox News Sunday.

The general’s views do not represent the Pentagon but show concern at the highest levels of the U.S. military over a possible attempt by China to exert control over Taiwan, which China claims as a wayward province.

Both the United States and Taiwan will hold presidential elections in 2024, potentially creating an opportunity for China to take military action, Minihan wrote.

McCaul said that if China failed to take control of Taiwan bloodlessly then “they are going to look at a military invasion in my judgment. We have to be prepared for this.”

He accused the Democratic administration of President Joe Biden of projecting weakness after the bungled pullout from Afghanistan that could make war with China more likely.

“The odds are very high that we could see a conflict with China and Taiwan and the Indo Pacific,” McCaul said.

The White House declined to comment on McCaul’s remarks.

DEMOCRAT DISAGREES

Representative Adam Smith, the top Democrat on the House Armed Services Committee, said he disagreed with Minihan’s assessment.

Smith told Fox News Sunday that war with China is “not only not inevitable, it is highly unlikely. We have a very dangerous situation in China. But I think generals need to be very cautious about saying we’re going to war, it’s inevitable.”

Smith said the United States needs to be in a position to deter China from military action against Taiwan, “but I’m fully confident we can avoid that conflict if we take the right approach.”

U.S. Defense Secretary Lloyd Austin earlier this month said he seriously doubted that ramped-up Chinese military activities near the Taiwan Strait were a sign of an imminent invasion of the island by Beijing.

A Pentagon official on Saturday said the general’s comments were “not representative of the department’s view on China.”

Reporting By Ross Colvin; Additional reporting by David Lawder; Editing by Nick Zieminski and Mark Porter

Our Standards: The Thomson Reuters Trust Principles.

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Business

Shares rise, yen climbs as BOJ battles bond bears

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  • BOJ under intense pressure as it defends yield policy
  • Yen hits 7-mth high, yuan climbs as dollar eases
  • More earnings ahead, many central bank speakers
  • Britain’s FTSE flirts with record high

SYDNEY/LONDON, Jan 16 (Reuters) – Shares firmed on Monday as optimism over corporate earnings and China’s reopening offset concerns the Bank of Japan (BOJ) might temper its super-sized stimulus policy at a pivotal meeting this week, while a holiday in U.S. markets made for thin trading.

The yen climbed to its highest since May after rumours swirled the BOJ might hold an emergency meeting on Monday as it struggles to defend its new yield ceiling in the face of massive selling. read more

That had local markets in an anxious mood, and Japan’s Nikkei (.N225) slipped 1.3% to a two-week low.

Yet MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) added 0.27%, with hopes for a speedy Chinese reopening giving it a gain of 4.2% last week.

And European shares opened positively with the STOXX 600 (.STOXX) up 0.1% by 0850 GMT driven by healthcare stocks (.SXDP) which gained 0.6%.

Britain’s benchmark FTSE index (.FTSE) edged close to the record high of 7903.50 it hit in 2018, with banks and life insurance companies among the top gainers.

Earnings season gathers steam this week with Goldman Sachs (GS.N), Morgan Stanley (MS.N) and Netflix (NFLX.O) among those reporting.

World leaders, policy makers and top corporate chiefs will be attending the World Economic Forum in Davos, and there are a host of central bankers speaking, including no fewer than nine members of the U.S. Federal Reserve.

The BOJ’s official two-day meeting ends on Wednesday and speculation is rife it will make changes to its yield curve control (YCC) policy given the market has pushed 10-year yields above its new ceiling of 0.5%. read more

The BOJ bought almost 5 trillion yen ($39.12 billion) of bonds on Friday in its largest daily operation on record, yet 10-year yields still ended the session up at 0.51%.

Early on Monday, the bank offered to buy another 1.3 trillion yen of JGBs, but the yield stuck at 0.51%.

“There is still some possibility that market pressure will force the BOJ to further adjust or exit the YCC,” JPMorgan analysts said in a note. “We can’t ignore this possibility, but at this stage we do not consider it a main scenario.”

“Although domestic demand has started to recover and inflation continues to rise, the economy is not heating up to the extent that a sharp rise in interest rates and potential risk of large yen appreciation can be tolerated,” they added.

THE YEN UN-ANCHORED

The BOJ’s uber-easy policy has acted as a sort of anchor for yields globally, while dragging down the yen. Were it to abandon the policy, it would put upward pressure on yields across developed markets and most likely see the yen surge.

The dollar has been undermined by falling U.S. bond yields as investors wager the Federal Reserve can be less aggressive in raising rates given inflation has clearly turned the corner.

The Japanese yen rose to a more than seven-month peak against the dollar on Monday, as market sentiment was dominated by expectations that the BOJ would make further tweaks to, or fully abandon, its yield control policy.

The yen jumped roughly 0.5% to a high of 127.215 per dollar, before easing to 128.6 by 0915 GMT.

The dollar index, which measures the U.S. unit against a basket of major currencies, recovered from a 7-month low touched earlier in the session to be at 102.6 .

Futures now imply almost no chance the Fed will raise rates by half a point in February, with a quarter-point move seen as a 94% probability.

Yields on 10-year Treasuries are down at 3.498%, having fallen 6 basis points last week, close to its December trough, and major chart target of 3.402%.

Alan Ruskin, global head of G10 FX Strategy at Deutsche Securities, said the loosening of global supply bottlenecks in recent months was proving to be a disinflationary shock, which increases the chance of a soft landing for the U.S. economy.

“The lower inflation itself encourages a soft landing through real wage gains, by allowing the Fed to more readily pause and encouraging a better behaved bond market, with favourable spillovers to financial conditions,” Ruskin said.

“A soft landing also reduces the tail risk of much higher U.S. rates, and this reduced risk premia helps global risk appetite,” Ruskin added.

Commodities prices which had rallied last week, dipped on Monday.

The drop in yields and the dollar had benefited the gold price, which jumped 2.9% last week, but the precious metal slipped 0.4% to $1,911 an ounce in early trading on Monday .

Oil prices slid as a rise in COVID cases clouded the prospects for a surge in demand as China reopens its economy.

Brent crude fell 73 cents, or 0.83%, to $84.57 a barrel by 0857 GMT, while U.S. West Texas Intermediate crude CLc1 was down 61 cents, or 0.6%, at $79.24 a barrel.

($1 = 127.8000 yen)

Reporting by Wayne Cole and Lawrence White;
Editing by Shri Navaratnam and Emelia Sithole-Matarise

Our Standards: The Thomson Reuters Trust Principles.

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World

U.S. strongly committed to Japan defense, Biden tells Kishida, hails military boost

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WASHINGTON, Jan 13 (Reuters) – President Joe Biden told Japanese Prime Minister Fumio Kishida on Friday the United States was “fully, thoroughly, completely” committed Japan’s defense and praised Tokyo’s security build up, saying the nations had never been closer.

Kishida is in Washington on the last stop in a tour of the G7 industrial powers and has been seeking to bolster long-standing alliances amid rising concern in Japan, and the United States, about mounting regional security threats from China, North Korea and Russia.

In a meeting at the White House, Biden called it a “remarkable moment” in the U.S.-Japan alliance. He said the two countries had never been closer.

“Let me be crystal clear: The United States is fully, thoroughly, completely committed to the alliance, and importantly … to the defense of Japan,” he said, while also thanking Kishida for strong leadership in working closely on technology and economic issues.

“We are modernizing our military alliances, building on Japan’s historic increase in defense spending, and new national security strategy,” Biden said.

Kishida thanked Biden for U.S. work on regional security and said: “Japan and the United States are currently facing the most challenging and complex security environment in recent history.” He said Tokyo had formulated its new defense strategy released last month “to ensure peace and prosperity in the region.”

He said the two countries shared fundamental values of democracy and the rule of law “and the role that we are to play is becoming even greater.”

Kishida said he looked forward to a “candid” exchange of views on issues including “a free and open Indo-Pacific” – language the two sides use to describe efforts to push back against China – the G7, which Japan’s currently chairs, and climate change.

In a later speech at Washington’s Johns Hopkins School of Advanced International Studies, Kishida called China the “central challenge” for both Japan and the United States and said they and Europe must act in unison in dealing with the country.

DRAMATIC MILITARY CHANGE

Japan last month announced its biggest military build-up since World War Two – a dramatic departure from seven decades of pacifism, largely fueled by concerns about Chinese actions in the region.

“Biden commended Japan’s bold leadership in fundamentally reinforcing its defense capabilities and strengthening diplomatic efforts,” according to a joint U.S.-Japan statement issued after the meeting.

U.S. and Japanese foreign and defense ministers met on Wednesday and announced increased security cooperation following nearly two years of talks and the U.S. officials praised Tokyo’s military buildup plans.

[1/5] U.S. President Joe Biden and Japanese Prime Minister Fumio Kishida walk through the colonnade on their way to the Oval Office at the White House in Washington, U.S., January 13, 2023. T.J. Kirkpatrick/Pool via REUTERS

Japan’s military reform plan will see it double defense spending to 2% of GDP and procure missiles that can strike ships or land-based targets 1,000 km (600 miles) away.

Before the meeting, a senior U.S. official said Biden and Kishida were expected to discuss security issues and the global economy and that their talks are likely to include control of semiconductor-related exports to China after Washington announced strict curbs last year.

SEMICONDUCTORS

The joint statement said the United States and Japan “will sharpen our shared edge on economic security, including protection and promotion of critical and emerging technologies, including semiconductors.”

Kishida, Japan’s Foreign Minister Hayashi and U.S. Secretary of State Antony Blinken later signed an agreement on peaceful space exploration at NASA’s headquarters in Washington.

Blinken said this would take space cooperation “to new heights” and strengthen the partnership in areas including research into space technology and transportation, robotic lunar surface missions, climate-related missions, and “our shared ambition to see a Japanese astronaut on the lunar surface.”

At the ceremony, Kishida said the U.S.-Japan alliance was “stronger than ever.”

As well as chairing the G7, Japan took up a two-year term on the U.N. Security Council on Jan. 1 and holds the rotating monthly presidency of the 15-member body for January.

Kishida has said he backs Biden’s attempt to limit China’s access to advanced semiconductors with export restrictions. Still, he has not agreed to match sweeping curbs on exports of chip-manufacturing equipment that Washington imposed in October.

The U.S. official said Washington was working closely with Japan on the issue and believes they share a similar vision even if their legal structures are different. He said the more countries and significant players that backed the controls, the more effective they would be.

A Japanese official said economic security, including semiconductors, was likely to be discussed, but that no announcement was expected on that from the meeting.

Biden and Kishida committed to “strengthening vital trilateral cooperation” among the United States, Japan and South Korea, said the joint statement, which follows North Korea’s decision to exponentially increase its nuclear force and codify its right to a first strike.

Kishida’s visit follows one by Biden to Tokyo in May and a meeting between the two at a November regional summit in Cambodia.

(This story has been refiled to delete the extra word ‘defense’ in paragraph 1)

Reporting by Jeff Mason, Andrea Shalal, David Brunnstrom, Michael Martina, Tim Ahmann and Eric Beech; Editing by Don Durfee, Alistair Bell and Grant McCool

Our Standards: The Thomson Reuters Trust Principles.

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Business

Stocks hold on to gains ahead of U.S. inflation test

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  • World stocks inch higher; dollar near 7-month lows
  • Yen gains on report BOJ to scrutinise policy effects
  • Eyes on U.S. CPI due at 1330 GMT
  • Treasuries and euro zone bonds add to gains

MILAN, Jan 12 (Reuters) – World stocks held on to modest gains on Thursday on cautious optimism that U.S. data will confirm inflation is softening, while the yen rose with a report Japan will this month review the side-effects of its ultra-easy policy.

A MSCI gauge of world stocks (.MIWD00000PUS) rose 0.2% to a four-week high by 0831 GMT ahead of core U.S. consumer price inflation, (USCPFY=ECI) which are expected to have slowed to an annual 5.7% in December, from 6% a month earlier. Month-on-month headline inflation is seen at zero (USCPI=ECI).

Bonds held gains, also mirroring hopes of a softer inflation print, and the U.S. dollar was near a seven-month low against a basket of currencies. Europe’s STOXX 600 (.STOXX) equity benchmark index rose 0.4% to its highest since April 2022.

The data due at 1330 GMT is set to have a big impact on markets by shaping expectations of the speed of interest rate hikes in the world’s biggest economy. Markets have priced better-than-even odds that the Federal Reserve raises rates by 25 basis points, rather than 50, at February’s meeting.

“Both the worst and best days for the S&P 500 in 2022 came on days of a CPI release. As such, it’s inevitable that today’s U.S. CPI has the ability to shape the next month,” wrote Deutsche Bank strategist Jim Reid.

“The latest releases have seen two downside surprises on CPI in a row for the first time since the pandemic, which has led to growing hopes that the Fed might achieve a soft landing after all,” he added.

The MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) rose 0.1% after climbing to a seven-month high, while Japan’s Nikkei (.N225) was steady.

S&P 500 futures were broadly steady following gains for Wall Street indexes on Wednesday. Boston Federal Reserve bank leader Susan Collins told the New York Times that she was leaning towards a 25 basis point hike.

Optimism for a more benign rates outlook and a pickup in demand as China emerges from strict COVID restrictions kept oil prices near one-week peaks.

Brent crude futures topped $83 on Thursday before retreating slightly to trade flat on the day at 82.67 a barrel.

U.S. Treasuries added a little to Wednesday’s gains, sending benchmark 10-year yields down 4.4 basis points (bps) to 3.514%. German 10-year yields , the benchmark for the euro zone, fell 7 bps to 3.509%.

CHINA HOPES

Along with hopes that Western central banks will be gentler, investors are also banking on a recovery in China to help global growth, and are eyeing a potential policy shift in Japan.

The Bank of Japan stunned markets last month by widening the band around its 10-year bond yield target, a move that triggered a sudden rise in yields and a jump in the yen.

On Thursday. Japan’s Yomiuri newspaper reported the BOJ will review the side-effects of Japan’s ultra-easy settings sooner than expected – at next week’s policy meetings – and that it may take additional steps to correct distortions in the yield curve.

The yen rose as much as 0.9% and was last at 131.75 per dollar. Ten-year Japanese government bond futures fell to almost eight-year lows.

Foreign exchange markets elsewhere were holding their breath ahead of the U.S. CPI data while China’s reopening kept a bid under Asia’s currencies. The dollar index added 0.1% to 103.23, not far off a seven-month low of 102.93 hit this week. The yuan traded near five-month highs at 6.7555 per dollar.

China on Thursday reported consumer price falls in December and a larger-than-expected drop in factory gate prices – underscoring weakness in demand – which investors are betting will recover over the coming months.

“It’s not enough for China to come out of COVID to really turn the whole world economy around,” said Steven Wieting, chief investment strategist and chief economist at Citi Global Wealth Investments. “But it really weighs in the opposite direction.”

Reporting by Danilo Masoni in Milan and Tom Westbrook in Singapore

Our Standards: The Thomson Reuters Trust Principles.

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World

Taiwan condemns China for latest combat drills near island

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TAIPEI/BEIJING, Jan 9 (Reuters) – Taiwan condemned China on Monday for holding its second military combat drills around the island in less than a month, with the defence ministry saying it had detected 57 Chinese aircraft.

China views democratically-governed Taiwan as its own territory and has been ramping up military, political and economic pressure to assert those claims.

The Eastern Theatre Command of the People’s Liberation Army said its forces held “joint combat readiness patrols and actual combat drills” in the sea and airspace around Taiwan, focused on land strikes and sea assaults.

The aim was to test joint combat capabilities and “resolutely counter the provocative actions of external forces and Taiwan independence separatist forces”, it added in a brief statement late on Sunday.

Taiwan’s presidential office said China was making “groundless accusations” and strongly condemned the drills, saying the peace and stability of the Taiwan Strait and the region were the common responsibility of both Taiwan and China.

Taiwan’s position is very clear, in that it will neither escalate conflicts nor provoke disputes, but will firmly defend its sovereignty and security, the office said in a statement.

“The nation’s military has a close grasp of the situation in the Taiwan Strait and the surrounding area and responds calmly. Our people can rest assured,” it added.

On Monday, Taiwan’s defence ministry said that over the previous 24 hours it had detected 57 Chinese aircraft and four naval vessels operating around the island, including 28 aircraft that flew into Taiwan’s air defence zone.

Some of those 28 crossed the median line of the Taiwan Strait, an unofficial buffer between the two sides, among them Su-30 and J-16 fighters, while two nuclear-capable H-6 bombers flew to the south of Taiwan, a ministry map showed.

In China’s similar exercises late last month, Taiwan said 43 Chinese aircraft crossed the median line.

China, which has never renounced the use of force to bring the island under its control, has made regular military incursions into the waters and airspace near Taiwan over the past three years.

It held war games around Taiwan last August, following a visit to Taipei by Nancy Pelosi, then the speaker of the U.S. House of Representatives.

Taiwan strongly rejects Beijing’s sovereignty claims, saying only the island’s 23 million people can decide their future.

Beijing has been particularly angered by U.S. support for Taiwan, including weapons sales.

Like most nations, the United States has no formal diplomatic ties with Taiwan, but it is the island’s most important arms supplier and international backer.

Reporting by Sarah Wu and Beijing newsroom; Writing by Ben Blanchard; Editing by Lincoln Feast and Clarence Fernandez

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World

Taiwan to give cash payouts to citizens in ‘New Year blessing’

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TAIPEI, Jan 4 (Reuters) – Taiwan plans to give cash payouts of nearly $200 to every citizen this year, Premier Su Tseng-chang announced on Wednesday, saying the island’s economic growth will be shared by everyone.

The export-reliant economy, a global tech powerhouse for products including semiconductor chips, grew 6.45% in 2021, the fastest rate since it expanded 10.25% in 2010.

While economic growth is expected to slow in 2022 and 2023, the government has made plans to plough an extra T$380 billion ($12.4 billion) in tax revenue from last year back into the economy to help protect the island from global economic shocks, including subsidies for electricity prices and labour and health insurance.

Su said a total of T$140 billion, part of the tax revenue, would be spent as cash payouts and each citizen would get T$6,000 ($195.61).

“The fruit of economic achievements will be shared by all citizens, from young to old,” Su told reporters, adding the potential payout requires approval from parliament, where the ruling Democratic Progressive Party has a majority.

“We wish to give all citizens a New Year blessing after the beginning of the Lunar New Year,” Su told reporters, referring to the week-long holiday that starts on Jan. 20.

He did not give details of how the government would deliver the payouts.

Taiwan is a major producer of semiconductors used in everything from cars and smartphones to fighter jets. Its economy continued to grow stably during the COVID-19 pandemic in recent years helped by strong chip demand for consumer electronics as more people worked from home.

Taiwan’s central bank in December cut its 2022 estimate for gross domestic product (GDP) growth to 2.91% from its previous forecast of 3.51% in September.

For 2023, it projected GDP would grow 2.53%. The economy grew 4.01% in the third quarter from a year earlier.

$1 = 30.6740 Taiwan dollars)

Reporting By Yimou Lee and Jeanny Kao; Editing by Jacqueline Wong

Our Standards: The Thomson Reuters Trust Principles.

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World

China pledges ‘final victory’ over COVID as outbreak raises global alarm

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  • Virus spreading fast in China after policy U-turn
  • Japan latest country requiring tests from China arrivals
  • EU meeting to discuss China travel policy
  • WHO seeking data from Chinese scientists

BEIJING, Jan 4 (Reuters) – Global health officials tried to determine the facts of China’s raging COVID-19 outbreak and how to prevent a further spread as the government’s mouthpiece newspaper on Wednesday rallied citizens for a “final victory” over the virus.

China’s axing of its stringent virus curbs last month has unleashed COVID on a 1.4 billion population that has little natural immunity having been shielded from the virus since it emerged in its Wuhan city three years ago.

Funeral homes have reported a spike in demand for their services, hospitals are packed with patients, and international health experts predict at least one million deaths in China this year.

But officially, China has reported a small number of COVID deaths since the policy U-turn and has played down concerns about a disease that it was previously at pains to eradicate through mass lockdowns even as the rest of the world opened up.

“China and the Chinese people will surely win the final victory against the epidemic,” Chinese Communist Party mouthpiece the People’s Daily said in an editorial, rebutting criticism of its tough anti-virus regime that triggered historic protests late last year.

As it now dismantles those restrictions, China has been particularly critical of decisions by some countries to impose a requirement for a COVID test on its citizens, saying they are unreasonable and lack scientific basis.

Japan became the latest country to mandate pre-departure COVID testing for travellers from China, following similar measures by the United States, Britain, South Korea and others.

Health officials from the 27-member European Union are due to meet on Wednesday to discuss a coordinated response to China travel. Most European Union countries favour pre-departure COVID testing for visitors from China.

China, which has been largely shut off from the world since the pandemic began in late 2019, will stop requiring inbound travellers to quarantine from Jan. 8. But it will still demand that arriving passengers get tested before they begin their journeys.

DOUBT ON DATA

Meanwhile, World Health Organization officials met Chinese scientists on Tuesday amid concern over the accuracy of China’s data on the spread and evolution of its outbreak.

The U.N. agency had invited the scientists to present detailed data on viral sequencing and to share data on hospitalizations, deaths and vaccinations.

The WHO would release information about the talks later, probably at a Wednesday briefing, its spokesperson said. The spokesperson earlier said the agency expected a “detailed discussion” about circulating variants in China, and globally.

Last month, Reuters reported that the WHO had not received data from China on new COVID hospitalisations since Beijing’s policy shift, prompting some health experts to question whether it might be concealing the extent of its outbreak.

China reported five new COVID-19 deaths for Tuesday, compared with three a day earlier, bringing the official death toll to 5,258, very low by global standards.

But the toll is widely believed to be much higher. British-based health data firm Airfinity has said about 9,000 people in China are probably dying each day from COVID.

There were chaotic scenes at Shanghai’s Zhongshan hospital where patients, many of them elderly, jostled for space on Tuesday in packed halls between makeshift beds where people used oxygen ventilators and got intravenous drips.

With COVID disruptions slowing China’s $17 trillion economy to its lowest growth in nearly half a century, investors are now hoping policymakers will intervene to counter the slide.

China’s yuan hovered at a four-month high against the dollar on Wednesday, after its finance minister pledged to step up fiscal expansion this year, days after the central bank said it would implement more policy support for the economy.

BOOKING BOOM

Despite some countries imposing restrictions on Chinese visitors, interest in outbound travel from the world’s most populous country is cranking up, state media reported.

Bookings for international flights from China have risen by 145% year-on-year in recent days, the government-run China Daily newspaper reported, citing data from travel platform Trip.com.

The number of international flights to and from China is still a fraction of pre-COVID levels. The government has said it will increase flights and make it easier for people to travel abroad.

Thailand, a major destination for Chinese tourists, is expecting at least five million Chinese arrivals this year, its tourism authority said on Tuesday.

More than 11 million Chinese tourists visited Thailand in 2019, nearly a third of its total visitors.

But there are already signs that an increase in travel from China could pose problems abroad.

South Korea, which began testing travellers from China for COVID on Monday, said more than a fifth of the test results were positive.

Authorities there were hunting on Wednesday for one Chinese national who tested positive but went missing while awaiting quarantine. The person, who was not identified, could face up to a year in prison or fines of 10 million won ($7,840).

Reporting by Bernard Orr and Liz Lee in Beijing and Brenda Goh in Shanghai, Hyonhee Shin in Seoul and Kantaro Komiya in Tokyo; Writing by John Geddie; Editing by Robert Birsel

Our Standards: The Thomson Reuters Trust Principles.

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World

China state media plays down COVID wave severity before WHO meet

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  • State media says severe illness from COVID is rare
  • Chinese scientists expected to brief WHO
  • China factory activity shrinks in December

BEIJING, Jan 3 (Reuters) – China’s state media played down the severity on Tuesday of the COVID-19 wave surging over the country, with its scientists expected to give a briefing to the World Health Organization on the evolution of the virus later in the day.

China’s abrupt U-turn on COVID controls on Dec. 7, as well as the accuracy of its case and mortality data, have come under increasing scrutiny at home and overseas and prompted some countries to impose travel curbs.

The policy shift followed protests over the “zero COVID” approach championed by President Xi Jinping, marking the strongest show of public defiance in his decade-old presidency and coinciding with the slowest growth in China in nearly half a century.

As the virus spreads unchecked, funeral parlours report a spike in demand for their services and international health experts predict at least one million deaths in the world’s most populous country this year.

China reported three new COVID deaths for Monday, up from one for Sunday. Its official death toll since the pandemic began now stands at 5,253.

In an article on Tuesday, People’s Daily, the official newspaper of the Communist Party, cited several Chinese experts as saying the illness caused by the virus was relatively mild for most people.

“Severe and critical illnesses account for 3% to 4% of infected patients currently admitted to designated hospitals in Beijing,” Tong Zhaohui, Vice President of Beijing Chaoyang Hospital, told the newspaper.

Kang Yan, head of West China Tianfu Hospital of Sichuan University, said that in the past three weeks, a total of 46 critically ill patients have been admitted to intensive care units, accounting for about 1% of symptomatic infections.

More than 80% of those living in the southwestern Sichuan province have been infected, local health authorities said.

The World Health Organization on Friday urged China’s health officials to regularly share specific and real-time information on the COVID situation.

The agency has invited Chinese scientists to present detailed data on viral sequencing at a meeting of a technical advisory group scheduled for Tuesday. It has also asked China to share data on hospitalizations, deaths and vaccinations.

The European Union has offered free COVID vaccines to China to help contain the outbreak, the Financial Times reported on Tuesday.

EU government health officials will hold talks on Wednesday on a coordinated response to China’s outbreak, the Swedish EU presidency said on Monday.

The United States, France, Australia, India and others will require mandatory COVID tests on travellers from China, while Belgium said it will test wastewater from planes from China for new COVID variants.

China has rejected criticism of its COVID data and said any new mutations may be more infectious but less harmful.

“According to the political logic of some people in Europe and the United States, whether China opens or does not open is equally the wrong thing to do,” state-run CCTV said in a commentary late on Monday.

ECONOMIC CONCERNS

As Chinese workers and shoppers are falling ill, concerns mount about growth prospects in the world’s second-largest economy, weighing on Asian stocks.

Data on Tuesday showed China’s factory activity shrank at a sharper pace in December as the COVID wave disrupted production and hurt demand.

December shipments from Foxconn’s (2317.TW) Zhengzhou iPhone plant, disrupted late last year by a COVID outbreak that prompted worker departures and unrest, were 90% of the firm’s initial plans, a source with direct knowledge of the matter said.

A “bushfire” of infections in China in coming months is likely to hurt its economy this year and drag on global growth, said the head of the International Monetary Fund, Kristalina Georgieva.

“China is entering the most dangerous weeks of the pandemic,” warned analysts at Capital Economics.

“The authorities are making almost no efforts now to slow the spread of infections and, with the migration ahead of Lunar New Year getting started, any parts of the country not currently in a major COVID wave will be soon.”

Mobility data suggested that economic activity was depressed nationwide and would likely remain so until the infection wave began to subside, they added.

China’s Ministry of Culture and Tourism said the domestic tourism market saw 52.71 million trips during the New Year holiday, flat year-on-year and only 43% of the 2019 levels, before the pandemic.

The revenue generated was over 26.52 billion yuan ($3.84 billion), up 4% year-on-year but only about 35% of the revenue created in 2019, the ministry said.

Expectations are higher for China’s biggest holiday, the Lunar New Year, later this month, when some experts expect daily COVID cases to have already peaked in many parts of the country. Some hotels in the southern tourist resort of Sanya are fully booked for the period, Chinese media reported.

Reporting by Beijing and Shanghai bureaus; Writing by Marius Zaharia; Editing by Raju Gopalakrishnan

Our Standards: The Thomson Reuters Trust Principles.

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