Economy

BEIJING (Reuters) – In China’s take on Squid Game, fraudsters are preying on the financially distressed in a slumping economy with promises of prize money, debt restructuring and other schemes that are not always what is promised. Unlike the dystopian South Korean TV series, which returns to the small screen for a second season on Thursday, Chinese players taking on “self-discipline” challenges do not risk their lives if they lose. But courts have found some participants in isolation challenges – who pay hundreds of dollars to stay in a room for days, following prescribed rules in the hopes of winning as much as 1 million yuan ($140,000) – are being scammed. And regulators are warning people about dodgy debt relief claims.Isolation challenges, often advertised on Douyin, as TikTok is known in China, have risen in popularity this year as the world’s second-biggest economy slows. It grew at the weakest pace in more than a year in the three months to September, spurring policymakers to pledge fresh measures to boost household incomes among other steps.The long lists of rules in the challenges include toilet breaks not exceeding 15 minutes and bans on touching the alarm clock more than twice a day. Many players cry foul when they do not survive their first day for infractions caught on surveillance cameras, which they dispute.In October, a court in the eastern province of Shandong ordered an organiser to refund 5,400 yuan ($740) in sign-up fees to a player surnamed Sun, ruling the contract was unfair and “violated public order and good morals”. Sun was trying to win 250,000 yuan by surviving a 30-day isolation challenge with rules forbidding smoking, use of electronic devices, consumption of alcohol and contact with anyone outside the room.On the third day of the challenge, organisers said Sun had covered his face with a pillow, breaking a prohibition on players obscuring their faces.The Cyberspace Administration of China, which regulates the country’s internet, and ByteDance, owner of Douyin, did not respond to Reuters requests for comment. The National Financial Regulatory Administration (NFRA) warned the public on Tuesday not to fall for “debt intermediaries” claiming to help people restructure their borrowings or improve their credit profiles.Touting their services through phone, texts, flyers and ads on social media, such intermediaries claim they can help secure new loans or provide temporary funds, but the regulator warned the services come with a high fee.Intermediaries charge as much as 12% of the loan value in “service fees”, the state-backed National Business Daily said.Another scheme involves charging large fees to ostensibly help debtors repair their credit records, according to the NFRA, which cautioned that borrowers’ personal information might also be leaked or sold.China’s household loans totalled 82.47 trillion yuan ($11.3 trillion) in November, according to central bank data. ($1 = 7.2988 Chinese yuan renminbi) More

TOKYO (Reuters) -The Bank of Japan expects the economy to move closer to sustainably achieving the central bank’s 2% inflation target next year, Governor Kazuo Ueda said on Wednesday, suggesting the timing of its next interest rate increase was nearing.But he warned of the need to scrutinise the fallout from “high uncertainties” surrounding overseas economies, especially the economic policies of the incoming U.S. administration of President-elect Donald Trump.The outlook for next year’s wage negotiations between Japanese firms and unions is also key, Ueda said in explaining factors the central bank would scrutinise in setting policy.”The timing and pace of adjusting the degree of monetary accommodation will depend on developments in economic activity and prices as well as financial conditions going forward,” Ueda said in a speech to business lobby Keidanren.The remarks underscore the BOJ’s resolve to keep pushing up short-term rates from the current 0.25% next year. Most analysts expect the bank to raise rates to 0.5% in January or March.The BOJ ended negative interest rates in March and raised its short-term policy target to 0.25% in July. It has signalled a readiness to hike again if wages and prices move as projected.Consumption has shown signs of improvement as intensifying labour shortages push up wages, Ueda said, stressing progress Japan has made in durably achieving the BOJ’s price target after years of aggressive monetary stimulus.In the current phase of transition towards achieving 2% inflation in a sustainable manner, the BOJ will support the economy by keeping its policy rate lower that levels neutral to the economy, Ueda said.But if the economy continues to improve, the BOJ will raise rates, as maintaining excessive monetary support for too long could heighten inflationary risks, he said.”Our projection is that the virtuous cycle will further intensify and that Japan’s economy will move closer to sustainable and stable 2% inflation, accompanied by wage increases,” Ueda said on the prospects for 2025.”Prices of a wide range of goods and services have begun to rise moderately recently, reflecting increasing wages. Against this background, we judge that sustainable and stable achievement of our 2% inflation target is now within sight.”The speech followed remarks Ueda made last week calling for the need to await more information on Trump’s policy stance and domestic wage developments before hiking borrowing costs again.Those remarks at a press conference after the BOJ kept rates steady, were interpreted by investors as dovish, helping push the yen to its weakest since July and triggering warnings by Japanese authorities.Japan must see wages rise at levels consistent with 2% inflation, Ueda said on Wednesday, adding that high profits achieved by big firms must be distributed to smaller firms and households for the economy to durably meet the BOJ’s inflation target.”We will examine how wage hikes by small and midsize firms will evolve, using our network of branches,” Ueda said.The BOJ will release its quarterly report on regional economic conditions on Jan. 9, which will likely include its view on whether wage hikes are spreading nationwide.The report will likely be among factors the BOJ’s board will scrutinise for its next policy decision on Jan. 24. More

China will vigorously promote the reform of the commercial housing sales system, and expand the scope of urban village renovation beyond the addition of 1 million units, the report said.China will strictly control the supply of commercial housing, while increasing the supply of affordable housing to help solve the living problems of a large number of new citizens, young people and migrant workers, it said.Policymakers have stepped up efforts to revive the real estate by introducing new measures to encourage home demand after a government-led campaign to rein in highly leveraged developers triggered a crisis in 2021.Since September, measures aimed at encouraging homebuying have included cutting mortgage rates and minimum down-payments, as well as tax incentives to lower the cost of housing transactions.The real estate market has shown some momentum of stabilising, with home transactions in October and November seeing year-on-year and month-on-month growth for two consecutive months, said the conference.China’s home prices fell at the slowest pace in 17 months in November, supported by government efforts to revive the sector, official data showed.An official of the Central Financial and Economic Affairs Commission in December called for policy measures with direct impact on stabilising the real estate market to be adopted as soon as possible, with local governments getting greater autonomy to buy housing stock.(This story has been corrected to say that home transactions showed year-on-year and month-on-month growth, not double growth, in paragraph 6) More

VAT, the largest tax category in China, accounted for around 38% of national tax revenue in 2023, official data show.The report did not detail provisions of the law. The latest draft included exemptions for some agricultural products, imported instruments and equipment for scientific research and teaching, some imported goods for the disabled and services provided by welfare institutions such as nursery, kindergarten and nursing institution for the elderly.To aid specific sector or business, the government could include new items into the scope of tax deductibles.”With the introduction of the VAT Law, 14 tax categories out of 18 in China have their own laws, covering the majority of tax revenue and marking significant progress of implementing the principle of statutory taxation,” Xinhua said.The law was passed at the end of a session of China’s top legislature, the National People’s Congress Standing Committee, which began on Saturday.Last month, China unveiled tax incentives on home and land transactions to support the crisis-hit property market. Residents are exempt from VAT when they sell their homes at least two years after purchase.In September 2023, the finance ministry said it would extend a VAT refund policy aimed at encouraging domestic and foreign research institutions to purchase Chinese-made equipment until the end of 2027.China in 2019 cut the VAT rate for manufacturers to 13% from 16%, and to 9% from 10% for the transportation and construction sectors.With the slowing world’s second-largest economy, VAT revenue in the first 11 months this year dropped 4.7% from the same period last year to 6.1 trillion yuan ($840 billion), as businesses suffered weak domestic demand. For November, VAT revenue rose 1.36%.”The rebound in VAT reflects improving economic vitality, as sales and business activity recover. It may also indicate a recovery in industrial profits, further supporting economic momentum,” Tommy Xie, head of Asia macro research at OCBC, said in a note on Monday.($1 = 7.2986 Chinese yuan renminbi) More

The People’s Bank of China (PBOC) issued 300 billion yuan ($41.10 billion) worth of one-year medium-term lending facility (MLF) loans to some financial institutions at 2.00%, unchanged from the previous rate, according to an online statement from the bank.The bid rates in Wednesday’s operation ranged from 1.90% to 2.30%, the central bank said.A batch of 1.45 trillion yuan worth of MLF loans was due to expire this month.($1 = 7.2984 Chinese yuan)(This story has been refiled to correct the spelling of ‘cenbank’ in the headline) More

The minimum wage in 2025 will rise to 1.4 million pesos ($323.90) per month, Petro said, up from 1.3 million pesos per month this year.The increase is smaller than the hike announced for this year. At the end of 2023, the government announced the minimum wage for 2024 would increase by 12%.Business groups and unions had reached an agreement with the government over minimum wage increases for 2022 and 2023. A deal was not reached for the minimum wage this year.The technical team of Colombia’s central bank forecasts annual inflation in Latin America’s fourth-largest economy will close this year at 5.3% before slowing to 3.1% by the end of 2025.($1 = 4,395.44 Colombian pesos) More

The company, along with other Chinese firms, have been at the center of new U.S. laws aimed at restricting their businesses in the United States due to national security concerns.The U.S. House of Representatives had passed a bill in September which would prohibit federal contracts with targeted firms and those that do business with them.The bills are designed to keep Americans’ personal health and genetic information from foreign adversaries and aim to push U.S. pharmaceutical and biotech companies to lessen their reliance on China for everything from drug ingredient manufacturing to early research.WuXi said it would also sell Oxford Genetics, the UK-based operating entity of the WuXi ATU business to Altaris LLC.Altaris declined to comment beyond the given details while WuXi AppTec did not respond to a Reuters request for comment. More

MEXICO CITY (Reuters) – Mexico’s central bank board could discuss a rate cut of either 25 basis points or 50 basis points in its next decision in February, Deputy Governor Jonathan Heath told Reuters, even as he warned of growing uncertainty regarding U.S. trade.Heath stipulated that the final decision would depend on the conditions at the time of the meeting.The monetary authority has been cutting rates by 25 basis points since kicking off an easing cycle earlier this year, but said last week it was open to larger cuts as inflation continues to slow.But Heath warned that the possibility of tariffs on U.S. imports from Mexico has added uncertainty. In November, President-elect Donald Trump promised to apply a blanket 25% tariff on goods from Mexico if more action is not taken to curb the flow of drugs and migrants into the United States.”If Trump doesn’t announce a major disruption (in his inauguration speech on) Jan. 20, if inflation is in line with projections and as long as there’s no unanticipated shock, discussion prior to the February decision could be between cutting the benchmark rate by 25 to 50 basis points,” Heath said in a written response to questions on Monday.The 70-year-old economist added that the decision was dependent on other factors such as the economic outlook, ratings agencies’ perspectives and more information on services inflation, which has been sticky. “Even if the discussion takes place, the larger adjustment is not a given,” Heath said.But anything larger than a 50-basis-point cut from the current 10% rate would be “completely out of the question,” Heath said.Even then, the decision from the board may not be unanimous, Heath said, as the other board members differ on the speed and size of rate cuts to bring inflation back within target.With the current information, the benchmark rate ending 2025 between 8% and 8.5% is “reasonable,” Heath said, but warned a number of factors could influence that. Analysts polled by the central bank expect the Mexican economy to grow just 1.12% next year, from around 1.6% this year. They see headline inflation closing 2025 at 3.8%, slowing from 4.37% at end-2024.Heath attributed the expected slowdown to cautiousness from the private sector in the face of an uncertain and high-risk environment, as well as a tight fiscal policy with little wiggle room as the government works to rein in the deficit. “However, as long as the sluggishness persists, the more likely it is that we’ll reach our inflation target in the time frame estimated,” he said. “That will lead us to continue lowering the rate until we reach a neutral stance.” In 2026, if Mexico is not hit with any negative shocks, inflation should come to within 3%, the monetary stance should be neutral and the economy will be in full-throttle expansion, Heath said. More