14/07/2025

BIZ & FINANCE MONDAY | JULY 14, 2025

16

China’s economy likely grew 5.2% in Q2: Poll

Chery denies improper subsidy

declarations SHANGHAI: Chinese automaker Chery on Saturday denied assertions that it had improperly claimed government subsidies for environmentally friendly vehicles. A Ministry of Industry and Information Technology audit disqualified declarations by Chery and BYD for a combined US$53 million (RM225 million) in government subsidies for thousands of vehicles sold in the five years to 2020, accounting for nearly 60% of such improper claims. Chery denied its declarations were improper. The company said in a statement it had previously consulted the authorities about the challenges of missing receipts because the cars were sold more than five years ago and that the government had advised the company to declare the cars for the ministry to determine if they should be qualified. “Our company has truthfully reported to the authorities we did not collect certificates for end sales; there’s no fraudulent act,” the auto maker said in the statement. The government’s assertions do not include allegations of fraud. EV maker BYD did not respond to requests for comment. The audit, initiated earlier this year to verify subsidy applications over the five-year period, disqualified 21,725 vehicles for subsidies as it found discrepancies such as failure to submit required supporting documents or to meet the mandated mileage thresholds, according to the documents published by the Ministry of Industry and Information Technology last month. Chery had 7,663 vehicles disqualified – 19 for mileage thresholds and 7,643 for not providing certificates. The audit documents did not lay out any penalties or mention reimbursement.

BEIJING: China’s economy is expected to have expanded more than 5% in the second quarter thanks to strong exports, analysts say, but they warned Donald Trump’s trade war could cause a sharp slowdown in the final six months. The world’s second-largest economy is fighting a multi-front battle to sustain growth, a challenge made more difficult by the US president’s tariff campaign. Trump has imposed levies on China and most other major trading partners since returning to office in January, threatening Beijing’s exports just as it becomes more reliant on them to stimulate economic activity. Washington and Beijing have sought to de-escalate their trade spat after reaching a framework for a deal at talks in London last month, but observers warn of lingering uncertainty. Official data on Tuesday will show how China’s overall economy fared during the April-June period as leaders worked to shield the country from external pressures while encouraging consumers to spend up. An AFP survey of analysts forecasts data tomorrow will show a 5.2% expansion of gross domestic product in the second quarter compared with last year, with many anticipating slower growth in the next six months. “Ultimately, external trade alone cannot offset the drag from weak domestic demand,” Sarah Tan, an economist at Moody’s Analytics, told AFP. “Without stronger, sustained policy support and structural reforms to boost household incomes and confidence, China’s recovery risks further loss of momentum in the second half.” Data released this week showed that consumer prices edged up in June, barely snapping a four-month deflationary dip, but factory gate prices dropped at their fastest clip in nearly two years. The producer price index, which measures the price of wholesale o But analysts warn trade war could cause sharp slowdown in final six months NEW DELHI: India has reversed a decade-old mandate to install US$30 billion (RM128 billion) worth of clean-air equipment, easing sulphur emission rules for most coal-fired power plants, a government order said. Reuters in December reported the government was reviewing 2015 norms that required nearly 540 coal-based power units to install flue

People walking on a promenade in Shanghai. – REUTERSPIC

may exceed five percent year-on-year in (the first half of 2025), it has been driven by manufacturing and exports,” wrote Larry Hu and Yuxiao Zhang, economists at Macquarie. “But as domestic demand remains weak, this growth has been deflationary, jobless and profitless,” they added. Beijing’s bid to achieve its official growth goal this year hinges on how it manages its trade relationship with Washington, as well as additional efforts to boost domestic spending such as lowering interest rates. According to some experts, better-than-expected growth could lead it to avoid adopting the deep reforms needed to put its economy on a more sustainable footing. “Without a strong policy stimulus, it’s hard to escape the ongoing deflationary spiral,” wrote Hu and Zhang.

China’s second-quarter growth, she said, but warned that it “should be much weaker” for the rest of the year. Many economists argue that China needs to shift towards a growth model propelled more by domestic consumption than the traditional key drivers of infrastructure investment, manufacturing and exports. Beijing has introduced a slew of measures since last year in a bid to boost spending, including a consumer goods trade-in subsidy scheme that briefly lifted retail activity. However, Tan said the scheme did little to address the causes of consumer caution “such as stagnant income growth, weak job security and fragile sentiment”.

goods as they leave the factory, declined 3.6% year-on-year last month, extending a years-long negative run. “Deflationary pressures haven’t abated and labour market indicators continue to underwhelm,” Betty Wang, lead economist at Oxford Economics, told AFP. “We remain somewhat cautious on the outlook” for the rest of the year, Wang said. China’s exports reached record heights last year, offering a lifeline to the economy as pressures elsewhere mounted. Overseas shipments likely remained strong in the second quarter this year, with analysts pointing to a surge caused by foreign buyers frontloading purchases to prepare for future trade turbulence under Trump.

The government has previously said automakers will have to repay subsidies for vehicles found not to have met mileage requirements. Chery said the audit covered declarations for subsidies that were not prepaid and thus automakers did not need to repay. – Reuters India eases sulphur emission rules for coal power plants, reversing decade-old mandate “April was particularly good for exports given the high US import tariffs that month,” said Alicia Garcia Herrero, chief economist for Asia Pacific at Natixis. The strong performance led to an upward revision of their forecast for Beijing is targeting an overall expansion of around five percent this year – the same as last year but a figure considered ambitious by many experts. First-quarter growth came in at 5.4%, beating forecasts and putting the economy on a positive trajectory. “While the headline GDP growth “However, a policy bazooka is unlikely until exports slow down significantly. “This is because policymakers only want to hit the 5% growth target, not overachieve it,” they said. – AFP

the impact on the competitiveness or recovery of costs by these power plants. It said the decision was taken after the Central Pollution Control Board carried out a detailed analysis of the increase in “carbon dioxide emission into the atmosphere due to operation of control measures being deployed”. – Reuters

December 2027, according to the new mandate. The notification comes after state-run NTPC, India’s top electricity producer, spent about US$4 billion on installing the equipment at 11% of the power plants, and 50% of the units either placed orders for the desulphurisation systems or are installing them. The notification did not mention

The mandate to install FGD for another 11% of the plants near populated cities would be taken on a “case-to-case basis”, the notification said. The balance of 10% of the coal-fired power plants closer to New Delhi and other cities with a million-plus population will be required to install the desulphurisation equipment by

gas desulphurisation (FGD) systems that remove sulphur from the plants’ exhaust gases in phases starting in 2027. The Environment Ministry last week issued a gazette notification that exempted 79% of the coal-fired power plants, outside a 10km radius of populated and polluted cities, from the 2015 mandate.