20/01/2026

BIZ & FINANCE TUESDAY | JAN 20, 2026

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Gold, silver hit peaks on renewed US-EU trade fears

Shares of NZ’s a2 Milk dive as China birth rate hits decades-low WELLINGTON: Shares of New Zealand’s a2 Milk tumbled more than 11% yesterday to post their biggest drop in 17 months, after data showed that the total number of births in key market China fell to the lowest level in decades last year. The dairy producer’s New Zealand-listed shares fell 13.9% in their biggest intraday drop since Aug 19, 2024 to NZ$9.50, the lowest level since late September 2025. The stock finished 11.2% lower at NZ$9.8, its lowest close since late September 2025. The company’s Australia-listed shares slumped up to 14.8% before trading was halted. Data from China’s National Bureau of Statistics showed that the total number of births in China dropped to 7.92 million in 2025, its lowest in decades, from 9.54 million in the previous year. Matt Montgomerie, a senior analyst at brokerage Forsyth Barr, attributed the share price drop to the latest China birth rate data and observed that markets moved instantaneously to the figures. Montgomerie said in a note that their previous forecast of 8.6 million new births in China in 2026 now appeared to be optimistic, after the latest figures highlighted that China’s proactive birth/fertility policies were having limited impact. “Multiples are too high with China’s birth rate weakening. China data was weak everywhere. I would be worried if I owned Chinese retail exposure and that is what a2M offers,” said Mathan Somasundaram, CEO at Deep Data Analytics. In its annual report in August, a2Milk had flagged that it expected a decline in China’s birth rate in 2025. In 2024, the rate was higher due to a combination of delayed births from Covid-19 years and the “Year of the Dragon” effect. – Reuters acknowledging the economy faces problems and challenges including strong supply and weak demand. Fixed-asset investment shrank 3.8% in 2025, the first annual drop since data became available in 1996 – a sign that local governments are under pressure to reduce debt rather than build new roads and bridges, their usual growth playbook. Private investment also fell 6.4% as businesses see little reason to expand in an economy marred by overcapacity, where households prefer to save rather than spend. Scott Yang, who owns a factory making pipe-fitting valves used in real estate and infrastructure projects in eastern China, feels the domestic strains first-hand. “If real estate is doing poorly, the impact on our whole industry is very large. Same for infrastructure,”Yang said. “It’s hard to quantify, but qualitatively this winter feels piercingly cold.” Yang said he felt he had no solutions, especially without funds to upgrade the factory’s products: “If our profits in the past few years weren’t very good, where would the investment come from?” To help small businesses like Yang and ease credit access across the economy, the central bank announced last week a targeted monetary policy easing package, including a new one trillion yuan (RM583 billion) programme for private enterprises. But analysts say credit supply has been ample for years and demand is the missing piece. Beijing’s demand-side policies so far include incremental annual increases on minimum pensions and other welfare items, such as childcare or tuition support – which are also aimed at arresting a demographic decline. – Reuters

there is a difference between merely mentioning the anti-coercion instrument as a signal and formally pursuing it as action. “Even if the immediate tariff threat gets negotiated down, the structural risk is that fragmentation keeps rising, with more politicised trade, more conditional supply chains, and higher policy risk for companies and investors.” There was little major reaction to data showing China’s economy expanded 5% last year, in line with its target, but one of the slowest rates in decades. Growth in the final three months slowed sharply from the previous quarter. The figures showed that exports continued to provide the main basis of growth as domestic consumption remained subdued, putting pressure on officials to provide more stimulus. Sarah Tan, an economist at Moody’s Analytics, wrote: “China enters 2026 with confidence still fragile, the property downturn unresolved, and the external environment turning more hostile. “The property slump is set to extend into the year, which will weigh on households and manufacturers alike. “Meanwhile, the (trade) truce with the US is time-limited and set to expire before the end of 2026, putting both talks and friction on the horizon. “As a result, China begins 2026 with as much uncertainty as it faced at the start of 2025.” Investors in Seoul and Taipei brushed off a warning from US Commerce Secretary Howard Lutnick that South Korean chipmakers and Taiwan firms not investing in the United States could be hit with 100% tariffs unless they boost output in the country. – AFP

ARD television: “I don’t believe that this agreement is possible in the current situation.” Aides to French President Emmanuel Macron said he would ask the EU to activate a never-before-used “anti-coercion instrument” against Washington if Trump makes good on his threat. The measure allows for curbing imports of goods and services into the EU, a market of 27 countries with a combined population of 450 million. Bloomberg reported that member states were discussing the possibility of retaliatory levies on €93 billion (RM438 billion) of US goods. The prospect of a trade war between the global economic heavyweights shook markets, with safe-haven assets extending gains that had come on the back of Trump’s threats against Iran last week and the US ouster of Venezuelan president Nicolas Maduro. Gold, a key go-to in times of turmoil, hit a peak of US$4,690.59, while silver struck US$94.12. On equity markets, Paris and Frankfurt opened more than 1% lower, while London was also deep in the red. Tokyo, Hong Kong, Sydney, Singapore, Manila, Mumbai and Wellington retreated, though there were gains in Shanghai, Seoul, Taipei and Bangkok. US futures sank. The dollar also retreated against its peers, with the euro, sterling and yen all higher. “The next signpost is whether this moves from rhetoric to policy, and that is why the concrete dates matter,” wrote Charu Chanana, chief investment strategist at Saxo Markets. “On the European side, the decision path matters as much as the headline, because

HONG KONG: Gold and silver hit record highs yesterday while equity markets fell after Donald Trump revived trade war fears by threatening several European nations with tariffs over their opposition to the United States buying Greenland. The US president has fanned already-rising geopolitical tensions this month by insisting that Washington would take control of the North Atlantic island, citing national security needs. And on Saturday, after talks failed to resolve “fundamental disagreement” over the Danish autonomous territory, he announced he would hit eight countries with fresh levies over their refusal to submit. Trump said he would impose 10% tariffs on Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands and Finland from Feb 1 – rising to 25% from June 1 – if they did not agree to the takeover. The announcement drew an immediate response, with a joint statement from the countries saying: “Tariff threats undermine transatlantic relations and risk a dangerous downward spiral.” The move also threatened a trade deal signed between the United States and the European Union last year, with German Foreign Minister Johann Wadephul telling o Prospect of trade war between global economic heavyweights shakes stock markets Since its property sector crash in 2021, Beijing has guided resources towards the industrial complex rather than consumers to meet ambitious growth targets, creating endemic production overcapacity and forcing factories to look for buyers abroad. Last year, China’s inroads into global markets went further than ever before, leading to a record trade surplus of US$1.2 trillion, 20% higher than in 2024 and equivalent to the size of a top 20 economy, such as Saudi Arabia. While shipments to the United States fell by a fifth, they rose sharply to the rest of the world as producers conquered new markets to insulate themselves from US President Donald Trump’s aggressive tariff policies to counter Beijing’s challenge to American hegemony. “We’re doing well in Europe and Latin America and we don’t need that market,” said Dave Fong, who co-owns three factories in southern China making everything from school bags to climbing gear and industrial machinery. About 15% of his orders used to come from the US, but that’s now down to a trickle. But the success of China’s export-oriented manufacturers contrasts with persistent weakness in the domestic-focused parts of the economy. Yesterday’s data underscored that divergence: industrial output rose 5.9% in 2025, outpacing retail sales’ 3.7% growth, while property investment slumped by 17.2%.

China hits 2025 GDP growth target on export boom BEIJING: China’s economy grew 5% last year, meeting the government’s target by seizing a record share of global demand for goods to offset weak domestic consumption, a strategy that blunted the impact of US tariffs but is increasingly hard to sustain.

A staff member attends to a customer at an air conditioner booth at a home appliance mall in Beijing. – REUTERSPIC

output in 2033, Reuters calculations show. “It’s hard to imagine how the trade surplus could continue to expand at this clip indefinitely into the future, if only because that would incur a wider protectionist backlash abroad,” said Christopher Beddor, economist at Gavekal Dragonomics. The economy grew 4.5% in the fourth quarter from a year earlier, beating analysts’expectations slightly but slowing to a three-year low from the third-quarter’s 4.8% pace, as consumption and investment dragged. China’s economic development in 2025 was “hard-won”, NBS head Kang Yi said yesterday,

And unless Beijing is able to redirect resources towards consumers and lift the sectors depending on Chinese spending at home, future economic growth risks slowing sharply, analysts say. While China is expected to target a roughly 5% pace again this year, a Reuters poll predicted 2026 growth at 4.5%. Relying on exports for growth in the longer run is hardly an option. If China’s trade surplus were to grow every year at the same rate it did in 2025, it would match the size of France’s roughly US$3 trillion economy in 2030 and Germany’s US$5 trillion