Economy

A total of 8,700 claims were made in the July-September quarter, compared with the 8,600 claims taking out HK$2.177 billion during the same period in 2022, data from the Mandatory Provident Fund Schemes Authority (MPFA) showed on Wednesday.The number of claims was higher than the 7,300 for the April-June quarter and 6,700 claims in January-March that saw withdrawals of a respective HK$1.787 billion and HK$1.573 billion.Curbs to control the spread of COVID-19 were among the reasons for people leaving Hong Kong, which tracked China’s strict zero-COVID-19 policy closely but began easing restrictions in August last year.The MPF is a compulsory retirement scheme for Hong Kong residents, with employees and their employers required to make contributions.Border checkpoints were reopened fully in February while all pandemic curbs were lifted from March 1 and authorities have been trying to restore business confidence and lure investors after more than three years of severe COVID-19 measures.The city’s population increased by 152,000, or 2.1%, from the middle of last year, to 7,498,100 in June this year, marking the first significant uptick since a downward trend began in 2020 due to stringent COVID-19 measures.The Mandatory Provident Fund Schemes Authority said multiple claims for pension withdrawals are sometimes made by a single person as a scheme member may have more than one account.In the third quarter of 2023, the total number of claims – spanning all reasons including retirement – was 68,500, an increase of 18.9% from the previous quarter’s 57,600 claims.($1 = 7.7999 Hong Kong dollars) More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Vietnam will raise its tax rate in effect on multinational companies including Samsung and Intel, in a move that will bring it in line with a global agreement to crack down on corporate tax avoidance that could hit foreign direct investments to the country. A top exporter of electronics and textiles, Vietnam’s FDI has hit records as global companies search for a manufacturing alternative to China amid rising geopolitical tensions, a strategy known as “China plus one”.Technology groups from Apple to Sony as well as clothing and footwear companies including Crocs and Adidas have boosted their factory presence in the south-east Asian country in recent years.Vietnam’s corporate income tax was already 20 per cent, but for years the country has offered tax breaks and holidays to big foreign investors, allowing companies such as Samsung to pay as little as 5 per cent tax.On Wednesday, Vietnam’s parliament voted to raise its corporate levy to 15 per cent. The finance ministry estimated the move would affect 122 multinational companies and generate 14.6tn dong ($603mn) in state revenue. The long-planned change, which comes into effect in January, could hurt the country’s appeal to foreign investors, said some companies. Mitigating measures — such as a government fund or direct financial support for high-tech groups — were expected to offset the impact of the tax rise, but no details were provided on Wednesday.The move brings Vietnam in step with a global minimum tax rate, which was backed by US Treasury secretary Janet Yellen and agreed by nearly 140 countries at the OECD in 2021. Under the rules, large companies with annual global turnover of more than €750mn paying less than 15 per cent in a low-tax jurisdiction will face a top-up levy either there or in their home country. Other countries that have benefited from the “China plus one” trend, such as Thailand, are expected to follow suit.FDI is a pillar of Vietnam’s economic growth, accounting for 4 to 6 per cent of gross domestic product and totalling $438bn as of December last year, according to research by HSBC. South Korea was Vietnam’s second-biggest source of investment in the first seven months of this year, trailing behind Singapore, according to official data. Samsung assembles half of its smartphones in the country. Vietnam is also home to Intel’s largest global factory for assembling, packaging and testing chips, and the US company has been considering expanding its operations. Samsung declined to comment. Intel did not immediately respond to a request for comment. The Korean and American chambers of commerce in Vietnam did not respond to a request for comment. A person at a foreign company with large operations in Vietnam told the Financial Times it had been paying about 5 per cent tax, and was “closely watching” whether the government would provide alternative incentives.“A sharp increase in taxes will be a big burden for companies investing there,” the person said. “Vietnam is likely to make a state-run fund to support foreign investors to prevent [companies from] leaving the country. We expect to receive some support from the fund.” “To maintain Vietnam’s attractiveness to FDI in the short term, [the government] needs to adjust its new alternative incentives to attract foreign investment,” said Nguyen Thanh Vinh, a partner at Baker McKenzie in Ho Chi Minh City.Another major FDI contributor in Vietnam is China, which has not said whether it will adopt the OECD rules, noted Duong Hoang, KPMG’s head of tax for Vietnam and Cambodia. This could affect the amount of tax Chinese companies have to pay in Vietnam and their investment plans, he added.Other analysts said they did not expect the higher tax to have a big impact on FDI. “Investors don’t just invest in Vietnam because of tax benefits. It has other advantages such as low input costs including electricity and wages [as well as] access to large markets,” said Trinh Nguyen, a senior economist at Natixis. Vietnam’s FDI has held up this year against regional rivals including India, Thailand and the Philippines despite the tax changes, which have been under discussion since last year, she added. “It goes to show that investors are not deterred by this news . . . and are motivated to find diversification to China.” More

The OECD’s forecasts are less optimistic than those of the German government, which expects growth of 1.3% and 1.5% in 2024 and 2025, respectively.A constitutional court ruling nearly two weeks ago blocked the government’s plans to reallocate unused pandemic funds to green initiatives and industry support, raising fears Europe’s largest economy could be further weakened.”It is crucial to resolve the budget crisis as quickly as possible in order to give companies and households planning security and confidence in the future,” OECD economist Isabell Koske told Reuters. She said a solution should include cuts on the expenditure side, increases on the revenue side and a reform of the debt brake, which sets a limit on new borrowing.The uncertainty created by the court ruling about funding policies to support firms and workers during the green transition could weigh on investment and private consumption, the OECD warned. “If more fiscal tightening is needed to sustain the spending plans of extra-budgetary funds, GDP growth and inflation will be lower,” the OECD said. The German economy is expected to shrink by 0.1% this year, as high interest rates weigh on global demand for investment goods, which make up a large share of German exports, the OECD said. The government expects the economy to contract by 0.4% in 2023.”The German economy is certainly going through a difficult phase,” Koske said. In the coming two years, however, falling inflation and rising wages will support real incomes and private consumption, the OECD said. Tighter monetary conditions, fading energy price pressures and fiscal tightening will help to bring down inflation from 6.2% in 2023 to 2.7% in 2024 and 2.1% in 2025, it forecast. More

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Some firms argue that a law aimed at popularizing electric vehicles risks turning the United States into an assembly shop for Chinese-made technology.The Biden administration has been trying to jump-start the domestic supply chain for electric vehicles so cleaner cars can be made in the United States. But the experience of one Texas company, whose plans to help make an all-American electric vehicle were upended by China, highlights the stakes involved as the administration finalizes rules governing the industry.Huntsman Corporation started construction two years ago on a $50 million plant in Texas to make ethylene carbonate, a chemical that is used in electric vehicle batteries. It would have been the only site in North America making the product, with the goal of feeding battery factories that would crop up to serve the electric vehicle market.But as new facilities in China came online and flooded the market, the price of the chemical plummeted to $700 a ton from $4,000. After pumping $30 million into the project, the company halted work on it this year. “If we were to start the project up today, we would be hemorrhaging cash,” said Peter R. Huntsman, the company’s chief executive. “I’d essentially be paying people to take the product.”The Biden administration is now finalizing rules that will help determine whether companies like Huntsman will find it profitable enough to participate in America’s electric vehicle industry. The rules, which are expected to be proposed this week, will dictate the extent to which foreign companies, particularly in China, can supply parts and products for American-made vehicles that are set to receive billions of dollars in subsidies.The administration is offering up to $7,500 in tax credits to Americans who buy electric vehicles, in an effort to supercharge the industry and reduce the country’s carbon emissions. The rules will determine whether electric vehicle makers seeking to benefit from that program will have the flexibility to get cheap components from China, or whether they will be required instead to buy more expensive products from U.S.-based firms like Huntsman.After pumping $30 million into the project, Huntsman halted work on it. “If we were to start the project up today, we would be hemorrhaging cash,” said Peter R. Huntsman, the company’s chief executive.Callaghan O’Hare for The New York TimesCan the World Make an Electric Car Battery Without China?From mines to refineries and factories, China began investing decades ago. Today, most of your electric car batteries are made in China and that’s unlikely to change soon.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.We are confirming your access to this article, this will take just a moment. However, if you are using Reader mode please log in, subscribe, or exit Reader mode since we are unable to verify access in that state.Confirming article access.If you are a subscriber, please  More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.The writer is former head of emerging markets economics at Citi and will soon be a senior research fellow at Chatham HouseAmong the various terms that have been used to describe the world’s less advanced economies, Global South seems to be trending these days. By contrast, the emerging markets branding has lost some of its buzz.This might seem like an unremarkable switch from one analytically thin bit of jargon to another. But no, this shift is quietly signalling two trends that investors should view with some alarm. The first is the decline in potential economic growth in many parts of the developing world. And the second is creeping global fragmentation.Google data suggests that searches for Global South have regularly outnumbered those for emerging markets since early 2022. That might be considered a temporary phenomenon following Russia’s invasion of Ukraine last February. Yet the use of emerging markets as a search term has been in a fairly steady decline for some years now.That decline is mirrored in real capital flows. One measure of the steady disengagement of international portfolio managers with emerging markets is the fall in foreign investors’ ownership of emerging markets bonds denominated in local currencies.Back in 2016, international investors owned an average of around 21 per cent of local-currency bonds in emerging markets. Now that figure is just 13 per cent. In some countries — Indonesia or South Africa, for example — these declines are relative: that is, the amount of bonds owned by foreigners has increased in recent years, but at a slower rate than the country’s overall bond market. But in others — Mexico, say — this decline is absolute: investors have just walked away.Either way this is a disturbing trend. Emerging economies do best when they can fund themselves in their own currencies, and so foreign investment in local bond markets is a form of external financing that should be welcomed.The decline in investors’ engagement with emerging economies’ local currency bond markets is best explained as a response to their sense that these countries’ growth potential is diminishing in the aftermath of the commodities boom and what one might call peak globalisation.Think of it this way: if investors feel less optimistic about a country’s potential growth rate, then it becomes more difficult to count on that nation’s currency gaining value over time. And if that’s true, then the case for investing in local bond markets weakens, especially as US exceptionalism remains a persistent theme in financial markets.What’s worrying about this is that, for all its imprecision, the term “emerging markets” was designed to serve a function, namely to draw attention to developing countries as a destination for international capital flows. This moniker, in other words, always had a basically commercial objective. But the brand’s commercial value seems to be falling.Global South, by contrast, is a label that serves not so much a commercial, but rather a political, objective. One of its main uses, it seems, is to draw attention to the perceived unfairness of the global order — the dominance of US-shaped institutions such as the IMF and the World Bank, the outsized role played by the dollar and the vulnerability that creates for developing countries, which can have their access to international capital ebb and flow depending on decisions made by the US Federal Reserve.It’s no surprise that the Chinese authorities particularly like this term. That said, Beijing has some competition: leaders of both India and Brazil, for example, are also trying to position themselves more or less explicitly as leaders of the Global South.The sense in which Global South is eclipsing emerging markets, therefore, can be understood as the triumph of politics over economics, reflecting a jostling for influence as the post-cold war period of unchallenged US global dominance has ended.One should remember, though, that the peak period of US global dominance — the era of the Washington Consensus — was one in which many developing countries had their finest moment in terms of convergence towards advanced-economy levels of per capita gross domestic product. For all its many faults, the Washington Consensus was a reasonably honest effort to define a set of policies and institutions that would promote income convergence.Maybe there’s a global order in our future that can recreate the conditions of robust world trade growth that small, open economies need in order to thrive. But, for the time being, investors seem to be voting with their feet as politics is in command. More

Las personas chinas acaudaladas han sacado cientos de miles de millones de dólares del país este año, aprovechando el fin de las precauciones por covid que habían sellado casi por completo las fronteras de China durante casi tres años.Están utilizando sus ahorros para comprar apartamentos en el extranjero, acciones y pólizas de seguros. Ahora que pueden volar de nuevo a Tokio, Londres y Nueva York, los viajeros chinos han comprado apartamentos en Japón y han invertido dinero en cuentas en Estados Unidos o Europa que pagan intereses más altos que en China, donde las tasas son bajas y sigue cayendo.La salida de dinero indica, en parte, el malestar existente en China por su vacilante recuperación tras la pandemia, así como por problemas más profundos, como la alarmante desaceleración del sector inmobiliario, principal depósito de riqueza de las familias. Para algunas personas, también es una reacción a los temores sobre la dirección de la economía bajo el liderazgo de Xi Jinping, que ha tomado medidas enérgicas contra las empresas y ha reforzado la influencia del gobierno en muchos aspectos de la sociedad.En algunos casos, los residentes chinos están improvisando maneras de eludir los estrictos controles gubernamentales de su país sobre las transferencias de dinero al extranjero. Han comprado lingotes de oro lo suficientemente pequeños como para esparcirlos discretamente por el equipaje de mano, así como grandes cantidades de divisas extranjeras.Los bienes inmuebles también son una opción. Los chinos se han convertido en los principales compradores de apartamentos en Tokio que cuestan 3 millones de dólares o más, y a menudo pagan con maletas llenas de dinero en efectivo, dijo Zhao Jie, director ejecutivo de Shenjumiaosuan, un servicio en línea de venta de inmuebles en Tokio. “Es un trabajo muy duro contar esta cantidad de dinero en efectivo”.Antes de la pandemia, dijo, los compradores chinos solían comprar estudios en Tokio por 330.000 dólares o menos para alquilarlos. Ahora compran unidades mucho más grandes y obtienen visas de inversión para trasladar a sus familias.El Park Tower Harumi, un complejo de apartamentos de lujo en Tokio que ha atraído a compradores de China continental.Hiroko Masuike/The New York TimesLos jardines del Branz Tower Toyosu, otro proyecto de apartamentos de lujo en Tokio que también ha atraído a compradores de China continental.Hiroko Masuike/The New York TimesEn total, se calcula que este año han salido de China unos 50.000 millones de dólares al mes, principalmente de hogares chinos y empresas del sector privado.Los expertos dijeron que el ritmo de salida de dinero de China probablemente no representaba un riesgo inminente para la economía del país, de 17 billones de dólares, en gran parte porque las exportaciones de muchos de los principales productos manufacturados del país son fuertes, lo que devuelve un flujo constante de efectivo.Una amplia operación para enviar los ahorros familiares a otra parte podría ser motivo de alarma. Las salidas de dinero a gran escala han desencadenado crisis financieras en las últimas décadas en América Latina, el sudeste asiático e incluso la propia China, a finales de 2015 y principios de 2016.Hasta ahora, todo indica que el gobierno chino cree tener la situación bajo control. La salida de dinero de China ha debilitado la moneda, el renminbi, frente al dólar y otras divisas. Y esa debilidad del renminbi ha ayudado a mantener las exportaciones del país, que sostienen decenas de millones de empleos chinos.El flujo de dinero que sale de China “es muy manejable”, dijo Wang Dan, economista jefe para China en la oficina de Shanghái del Hang Seng Bank.Personas comprando joyas en LukFook.Billy H.C. Kwok para The New York TimesLos legisladores chinos siguen recurriendo a algunos de los límites a la salida de dinero del país que impusieron para frenar la crisis monetaria hace ocho años. Otras restricciones que se hicieron entonces, como el escrutinio de las exportaciones e importaciones para detectar estrategias encubiertas de transferencias internacionales de dinero, se dejaron sin efecto y no se han vuelto a imponer este año, a pesar de que se han reanudado las salidas de dinero.La salida de dinero de China ha igualado aproximadamente la entrada de dinero por los grandes superávits comerciales del país. Para consternación de muchos países, sobre todo europeos, China está exportando cada vez más paneles solares, autos eléctricos y otros productos avanzados, incluso cuando ha reemplazado más importaciones por producción nacional.El valor del renminbi cayó a principios de año a su nivel más bajo en 16 años. Durante gran parte de los dos últimos meses, se mantuvo en torno a los 7,3 por dólar, antes de subir un poco en la última semana.En 2015, los inversores que operan a tiempo real observaron fuertes ventas masivas de acciones chinas, cuando la salida de dinero del país provocó turbulencias en los mercados de todo el mundo.Ng Han Guan/Associated PressLa oleada de dinero que salió de China hace ocho años fue provocada por una caída en la bolsa de valores y un intento fallido de devaluar la moneda de forma controlada. El banco central de China tuvo que gastar hasta 100.000 millones de dólares al mes de sus reservas de divisas extranjeras para apuntalar el renminbi.En cambio, China parece haber gastado unos 15.000 millones de dólares al mes desde mediados de verano para estabilizar su moneda, según datos del banco central. “No hay nada que sugiera que sea desordenada”, dijo Brad Setser, especialista en finanzas internacionales del Consejo de Relaciones Exteriores. “La escala de la presión sigue siendo mucho menor que en 2015 o 2016”.Las salidas de 2015 y 2016 reflejaron los esfuerzos de las grandes empresas estatales por trasladar fuertes sumas de dinero al extranjero. En la actualidad, el gobierno ejerce un control político más estricto sobre esas empresas, y no ha habido indicios de una urgencia por movilizar dinero de su parte.En cambio, las empresas privadas y los hogares chinos han estado trasladando dinero al extranjero. Pero gran parte de la riqueza de la gente está anclada a bienes inmuebles, que no pueden venderse fácilmente.Al mismo tiempo, las empresas ilegales de cambio de moneda de Shanghái, Shenzhen y otras ciudades que solían convertir el renminbi en dólares y otras divisas extranjeras fueron cerradas por redadas policiales hace ocho años.Turistas chinos frente al Casino Londoner de Macao en octubrePeter Parks/Agence France-Presse — Getty ImagesTuristas chinos en un ferry durante una excursión a Hong KongBilly H.C. Kwok para The New York TimesY los reguladores han cerrado casi todos los viajes de apuestas a Macao, una región china de administración especial. Estos viajes permitían a los chinos adinerados comprar fichas de casino con renminbi, apostar una parte en el bacará o la ruleta y convertir el resto en dólares.Pekín también ha prohibido la mayoría de las inversiones extranjeras en hoteles, torres de oficinas y otros activos de escaso valor geopolítico. El arquitecto de las restricciones a la inversión extranjera en China, Pan Gongsheng, fue ascendido en julio a gobernador del banco central, el Banco Popular de China.Pero los hogares y las empresas siguen arreglándoselas para enviar dinero al extranjero.Una tarde reciente, las sucursales del Banco de China y del China Merchants Bank en China continental vendían lingotes de oro un 7 por ciento más caros que sus bancos afiliados en la adyacente Hong Kong. Esa diferencia de precios indica que, dentro de China, existe una gran demanda de oro, que puede trasladarse fácilmente fuera del país.Otro truco que están utilizando los residentes de China continental para sacar su dinero es abrir cuentas bancarias en Hong Kong y luego transferir dinero para comprar productos de seguros que se asemejan a certificados de depósito bancario. Según la Autoridad de Seguros de Hong Kong, las primas de las nuevas pólizas de seguro vendidas a los habitantes de China continental que visitan Hong Kong fueron un 21,3 por ciento más altas en el primer semestre de este año que en el primer semestre de 2019, tras casi desaparecer durante la pandemia.Una larga fila frente al Banco de China en Hong Kong el lunesBilly H.C. Kwok para The New York TimesEn una sucursal del Banco de China en la península de Kowloon, en Hong Kong, los habitantes de China continental esperaban a las 7:30 de una mañana reciente para abrir cuentas, 90 minutos antes de la apertura del banco. La fila era tan larga a las 8 a. m. que quien llegaba más tarde tenía suerte de llegar al principio de la fila antes de que terminara la jornada laboral, dijo Valerius Luo, agente de seguros de Hong Kong.Las familias suelen invertir entre 30.000 y 50.000 dólares estadounidenses en productos de seguros, varias veces más que antes, mientras buscan lugares seguros donde colocar sus ahorros, dijo Luo. “Sigue habiendo personas con un capital poderoso”, dijo, “y quieren un paquete de inversión que conserve el valor”.Li You More

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