31/05/2025

BIZ & FINANCE SATURDAY | MAY 31, 2025

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Work on US$1b Trump Tower Vietnam may start next year

China’s May factory activity likely shrank again BEIJING: China’s factory activity likely contracted for a second month in May, a Reuters poll showed yesterday, suggesting trade tensions with major export markets are weighing on manufacturers’ minds as the world’s top two economies seek a way out of a tariff war. A poll of 21 economists forecast the official purchasing managers’ index (PMI) will come in at 49.5 today, up from April’s 49.0, but still below the 50-point threshold that separates growth from contraction in activity. The world’s second-largest economy is in a two-front trade war with the US and the European Union, threatening to derail a fragile export-led recovery unless Beijing can secure a lasting truce with Washington over US President Donald Trump’s tariffs and come to an agreement with Brussels on a series of dumping claims. Trump’s decision to single China out for tariffs of 145% comes at a particularly difficult time for the US$19 trillion (RM81 trillion) economy, which is struggling with deflation due to sluggish income growth and a prolonged property crisis. Meanwhile, the EU this month launched an investigation into whether anti-dumping measures are needed on imports of tyres for passenger cars and light lorries from China, alongside talks with Beijing over tariffs on Chinese-made electric vehicles. China has hit back by looking into European brandy imports and dairy goods. Policymakers have largely relied on exports to shore up the feeble economic recovery since the end of the pandemic and only began to take steps to boost domestic demand more earnestly late last year. Analysts expect Beijing to deliver more monetary and fiscal stimulus over the coming months to underpin growth and insulate the economy from the tariffs. China’s economy expanded at a faster-than expected pace in the first quarter, and the government has maintained a growth target of around 5% this year, but analysts say US tariffs could shift momentum sharply lower. The official PMI will be released today. The private sector Caixin survey will be released on June 3. Analysts expect its reading to edge up to 50.6 from 50.4. – Reuters HANOI: Investment in a planned Trump Tower in Vietnam is estimated at around US$1 billion (RM4.2 billion) and construction of the at least 60-storey skyscraper could start next year, a person familiar with the discussions told Reuters. The building, for which plans are still preliminary, would be the second major project the Trump Organisation, US President Donald Trump’s family business, is reviewing in Vietnam. The Southeast Asian country is currently in trade talks with Washington to avoid crippling 46% tariffs. Eric Trump, senior vice-president of the Trump Organisation, visited Vietnam last week to survey the site for the tower in the country’s southern business hub of Ho Chi Minh City and to attend the groundbreaking for a golf resort in northern Vietnam. The approval for the golf club, according to Prime Minister Pham Minh Chinh, had been expedited by the authorities. The Trump Organisation would operate the golf club, while its Vietnamese partner, real estate firm Kinhbac City, would focus on developing it with an estimated investment of US$1.5 billion, the source said. The division of work had not been previously reported. A similar arrangement is likely to be agreed for the Trump Tower, with the investment expected to come mostly from local partners, the source said, declining to be named because

the entire world”, adding he would visit the country frequently to further the company’s plans. Approvals for the tower project are still being sought and no final decision had been made about when construction will start, the source said, adding that the aim was to have the groundbreaking next year. The investment could be larger than US$1 billion if permits are obtained for a building with more than 60 floors, the person said. The Trump Organisation operates several towers in the US and across the world, but does not own all of them. The flagship Trump Tower in the Manhattan neighbourhood of New York City was built in the 1980s. Others have since been built in Chicago, Florida and abroad, including in Turkey and the Philippines. – Reuters

o Trump Organisation to also run US$1.5b golf resort, with local partner investing and developing, source says

the site where the skyscraper would be built and met local officials, the source said. That was in line with the schedule of his engagements with the city’s authorities, according to a Vietnamese document seen by Reuters. The tower would be built in Thu Thiem, an area under development in central Ho Chi Minh City where a new financial centre is planned to be built, the document from the city’s authorities showed. At the groundbreaking for the golf resort, Eric Trump said the projects to be developed in Vietnam would be “the envy of all of Asia and of

the information is not public. The Trump Organisation did not reply to a request for comment. Kinhbac City, a leading industrial real estate developer in Vietnam, did not respond to a request for comment. When it announced its collaboration with the Trump Organisation in October, the company said the venture “will focus on developing 5-star hotels, championship-style golf courses, and luxurious residential estates and unparalleled amenities in Vietnam.” During his visit last week, Eric Trump toured

India GDP seen up in January-March on rural demand, state spending NEW DELHI: India’s economic growth likely picked up pace in the January–March quarter, buoyed by stronger rural demand and higher government spending, even as private firms delayed investments amid global uncertainties. GDP is expected to have grown 6.7% year on-year in the March quarter, up from 6.2% in the previous three months, according to a Reuters poll of economists. fall in government subsidies. But they caution that true economic growth, as measured by gross value added (GVA), will be lower than the headline number. The calculation of GDP includes indirect taxes and government subsidy payouts which tend to be volatile, while GVA strips out those components. tensions have weakened the outlook, India seems relatively insulated thanks to lower goods trade dependence, tax cuts, and low interest rates. “Despite the various downside risks, we think the policy coordination between the government and the RBI remains the strongest at this juncture,“ said Kaushik Das, India chief economist at Deutsche Bank, adding that authorities are showing strong resolve to do “whatever it takes” to support growth. Economists say India remains relatively protected from trade tensions, helped by lower reliance on goods trade, tax cuts, and lower interest rates. – PEXELS PIX

JP Morgan expects March quarter GDP growth at 7.5% year-on-year, while GVA growth is seen lower at 6.7% compared to 6.2% in the previous quarter. India’s central bank, the Reserve Bank of India (RBI), expects GDP growth at 6.5% in the fiscal year beginning April 1. At that rate, India remains the fastest growing among major economies and its size could match Japan’s this year at US$4.18 trillion (RM17.7 trillion), according to projections by the IMF. Economists said that while global trade

Rural consumption improved during the quarter, while urban demand indicators remained mixed, said Gaura Sen Gupta, chief economist at IDFC First Bank Economic Research. Investment was supported by government spending, she said. The Ministry of Statistics will release March quarter GDP data and provisional estimates for the 2024-25 (April-March) fiscal year on Friday. Some economists expect GDP growth to print significantly above expectations due to a

Retail inflation, which eased to a near six year low of 3.16% in April, alongside a favourable monsoon forecast, is expected to keep food prices in check and pave the way for another policy repo rate cut by the RBI in June. The government’s income tax relief, recent fiscal measures and central bank rate cuts, could lift growth to 6.3–6.8% in the current fiscal year, the finance ministry said. – Reuters