Chinese president Xi urges financial risk prevention while seeking stable growth

Until now, China has refrained from cutting benchmark interest rates to spur the slowing economy. (AFP)
Updated 23 February 2019
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Chinese president Xi urges financial risk prevention while seeking stable growth

  • China’s economy is growing at its slowest pace in almost 30 years
  • Preventing and resolving financial risks, especially systemic financial risks, is a fundamental task

BEIJING: China should seek stable development of its economy while not forgetting to fend off risks to its financial system, Chinese President Xi Jinping said, state news agency Xinhua reported on Saturday.
China’s economy is growing at its slowest pace in almost 30 years, spurring policymakers to bolster growth by easing credit conditions and cutting taxes.
“It is necessary to focus on preventing risks on the basis of steady growth, while strengthening the countercyclical adjustment of fiscal policy and monetary policy and ensuring that the economy operates in a reasonable range,” Xi said.
Preventing and resolving financial risks, especially systemic financial risks, is a fundamental task, the agency cited Xi as telling a study session for senior Communist Party officials on Friday.
On Wednesday, Premier Li Keqiang reiterated that China would not resort to “flood-like” stimulus such as it unleashed in past downturns.
But after a spate of weak data, investors are asking if Beijing needs to speed or boost support to reduce the risk of a sharper slowdown.
Until now, China has refrained from cutting benchmark interest rates to spur the slowing economy, which would ease financing costs but risk adding to a mountain of debt.
To free up more funds for lending to small and private businesses, the central bank has cut the reserves that banks need to set aside five times in the past year.
Last month, Chinese banks made the most new loans on record, a total of 3.23 trillion yuan ($481 billion). A central bank official said previously that no credit floodgate had been opened, and the lending jump showed recent easing steps were working.
China’s financial sector must serve the real economy, Xi said, but stable growth and risk prevention must be balanced.


Bahrain to use Huawei in 5G rollout despite US warnings

Updated 26 March 2019
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Bahrain to use Huawei in 5G rollout despite US warnings

  • Washington has warned countries against using Chinese technology
  • ‘We have no concern at this stage as long as this technology is meeting our standards’

DUBAI: Bahrain plans to roll out a commercial 5G mobile network by June, partly using Huawei technology despite the United States’ concerns the Chinese telecom giant’s equipment could be used for spying.
Washington has warned countries against using Chinese technology, saying Huawei could be used by Beijing to spy on the West. China and Huawei have strongly rejected the allegations.
VIVA Bahrain, a subsidiary of Saudi Arabian state-controlled telecoms firm STC, last month signed an agreement to use Huawei products in its 5G network, one of several Gulf telecoms companies working with the Chinese company.
“We have no concern at this stage as long as this technology is meeting our standards,” Bahrain’s Telecommunications Minister Kamal bin Ahmed Mohammed told Reuters on Tuesday when asked about US concerns over Huawei technology.
A senior State Department official said the US routinely urges allies and partners to consider the risks posed by vendors subject to extrajudicial or unchecked compulsion by foreign states.
The US Fifth Fleet uses its base in Bahrain, a Western-allied island state off the Saudi coast, to patrol several important shipping lanes, including near Iran.
Bahrain expects to be one of the first countries to make 5G available nationwide, Mohammed said, although he cautioned it would depend on handset and equipment availability.
Early movers like the United States, China, Japan and South Korea are just starting to roll out their 5G networks, but other regions, such as Europe, are still years away and the first 5G phones are only likely to be released in the second half of this year.
Bahrain’s state-controlled operator Batelco is working with Sweden’s Ericsson on its 5G network, while the country’s third telecoms group Zain Bahrain is yet to announce a technology provider.
No foreign company is restricted by the government from providing equipment for Bahrain’s 5G network, Mohammed said, adding mobile operators choose who they work with.
Australia and New Zealand have stopped operators using Huawei equipment in their networks but the European Union is expected to ignore US calls to ban the Chinese company, instead urging countries to share more data to tackle cybersecurity risks related to 5G networks.
Mohammed said the rollout of the 5G network was an “important milestone” for Bahrain, which is hoping investments in technology will help spur its economy, which was hit hard by a recent drop in oil prices.
“It is something we are proud to have,” he said.