02/02/2026

BIZ & FINANCE MONDAY | FEB 2, 2026

16

South Korea posts record January exports on AI chip boom SEOUL: South Korea posted its highest-ever exports for the month of January, official data showed yesterday, fuelled by a global AI boom heavily reliant on chips made in the country. The total value of January’s exports was US$65.8 billion (RM259 billion), a 33.9% rise on-year, according to a Trade Ministry statement, marking the first time they surpassed a US$60 billion threshold for the month. Home to the world’s leading memory chip makers, South Korean products have become crucial to AI infrastructure. Technology giants Samsung and SK both posted record quarterly operating profits in the October-December period. “Semiconductor exports came in at US$20.5 billion, a 102.7% increase,” the ministry said, the second-highest monthly chips exports. The record was set a month earlier, when the country exported chips worth US$20.8 billion. Automobile exports increased 21.7% on-year to US$6 billon thanks to the strong performance of hybrid and electric cars, it said. It comes as Seoul is scrambling to respond to US President Donald Trump’s announcement earlier this week that he was raising tariffs on South Korean goods to 25% from 15%, accusing the South Korean legislature of not having ratified their trade deal. Seoul and Washington struck a deal in October with Seoul pledging investment in the United States in exchange for slicing tariffs from 25% to 15%. Seoul’s presidential office insisted in November that the deal does not require parliamentary approval, arguing it represents a memorandum of understanding rather than a binding legal document. South Korean Trade and Industry Minister Kim Jung-kwan met his US counterpart Howard Lutnick in Washington following the hike announcement and returned to Seoul on Saturday. “There was considerable disappointment (from the US) over the fact that the special bill remains pending in the National Assembly,” Kim told reporters at the airport, adding that talks would continue. – AFP Beijing has pledged “forceful” measures to boost demand in coming years, with some key policies expected to be announced in March with the release of the government’s newest “five-year plan”. A protracted debt crisis in China’s vast real-estate sector has discouraged would-be homebuyers from investing in property – long a key store of wealth. Complicating the challenges are demographic trends, with a shrinking and ageing population weakening the outlook for a future spending boom. – AFP

Sitharaman holds a folder bearing the Government of India’s emblem, as she poses with her officials while leaving her office to present the annual federal budget in Parliament. – REUTERSPIC

India budget makes fresh bet on manufacturing current year.

capital goods, textiles and sports goods. A review of 200 legacy industrial clusters will also be conducted. The Modi government has been struggling to raise manufacturing from the current level of under 20% of GDP to 25% to generate jobs for the millions entering the nation’s workforce each year. To spur private investment and demand, New Delhi has rolled out a series of reforms in recent months, including consumption and income tax cuts, overhaul of labour laws and steps to open up the tightly controlled nuclear-power sector. “The nation is moving away from long-term problems to tread the path of long-term solutions. Long term solutions provide predictability that fosters trust in the world,” Modi said on Thursday before the government’s economic survey forecast growth of between 6.8% and 7.2% for the fiscal year starting in April. India will continue with “next-generation reforms”, as the next 25 years will be key to meeting the goal of making the South Asian nation a developed economy, he said. The government will set up a high-level committee to review rules for the country’s financial sector and announced steps to boost the corporate bond markets. To keep economic growth strong, the government will also spend 12.2 trillion Indian rupees on infrastructure in the new year, compared to 11.2 trillion rupees last year. Defence spending was raised by a modest 6%. “Overall, this is a budget without fireworks – not a big positive, not a big negative,” said Aishvarya Dadheech, founder and chief investment officer at Mumbai-based Fident Asset Management. – Reuters

o Hike in transaction tax on equity derivatives spooks investors NEW DELHI: India made a fresh bet on its manufacturing sector in its annual budget, but the Narendra Modi-led government’s reform plans fell short of expectations as the global economic order undergoes profound changes wrought by Donald Trump’s administration. The absence of ambitious reforms and an increase in the transaction tax on derivatives spooked equity markets which fell 1% in a special trading session for yesterday’s budget proposals. The Indian economy has remained one of the fastest growing major economies, with gross domestic product growth expected at 7.4% in the financial year ending March 31, 2026. But foreign investors have sold a record amount of Indian equities, with sales adding up to US$22 billion (RM87 billion) since last January, and the rupee has weakened sharply to all-time lows. The government will look to strengthen the country’s manufacturing sector, Finance Minister Nirmala Sitharaman said in her budget speech, as she laid out priorities for Asia’s third-biggest economy and pledged to accelerate growth amid a volatile global environment. It will also continue to focus on strengthening government finances, by bringing down the federal government debt-to-GDP ratio to 55.6% in the next financial year from 56.1% and the fiscal deficit to 4.3% from 4.4% in the

It will borrow 17.2 trillion Indian rupees from the bond markets, which have seen yields rise due to high government borrowings. “The government has delivered a non-adventurous budget,” said Dhiraj Nim, economist at ANZ in Mumbai. “It is the kind of budget that will likely keep the bond markets nervous as the pace of fiscal consolidation is slower than expected.While equity market participants were expecting a reduction in the Securities Transaction Tax (STT), the rise has come as a negative surprise,” he said. The STT was hiked by more than 50% on futures trading to 0.05% from 0.02% and to 0.15% from 0.01% on options. India’s benchmark equity index, the Nifty 50 was down about 1% with stocks falling across the board including banks, infrastructure, defence and capital markets. Nifty’s index of capital market stocks was down about 6% following the announcement. Indian bond and forex markets were closed yesterday. India’s economy has so far withstood punitive US tariffs imposed by President Donald Trump, with growth supported by government spending on infrastructure while income and consumption tax cuts have boosted consumer spending. India is also striking deals such as a landmark trade agreement with the European Union to offset the hit from thetariffs Trump has imposed. The government will prioritise scaling up manufacturing across seven sectors, Sitharaman said. They include pharmaceuticals, semiconductors, rare-earth magnets, chemicals,

China factory activity loses steam due to ‘weak domestic demand’ BEIJING: China’s factory activity slowed in January, official data showed on Saturday, missing forecasts after a brief rise into positive territory at the end of last year. statement that the data reflected “insufficient effective market demand”, as well as a “traditional off-season” for certain manufacturing sectors. demand”, Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, wrote in a note. “Economic activity may soften in (the first quarter),“ Zhang said.

December’s slight uptick at 50.1 had snapped an extended negative streak that began in April. The world’s second-largest economy is facing a persistent domestic consumer slump, weighing on activity even as exports remain robust. The decline in factory activity shown Saturday was the result of “weak domestic

A key measure of industrial health, the manufacturing purchasing managers’ index slipped to 49.3 this month, the National Bureau of Statistics (NBS) said. The reading fell below the 50-point mark that divides expansions and contractions, also significantly behind the 50.1 forecast by a Bloomberg survey of economists. NBS statistician Huo Lihui said in a

Last year, exports represented the “pillar of growth”, he said, adding that the sector’s “sustainability is very important for the growth outlook”. China achieved a historic trade surplus of US$1.2 trillion last year – a key strong spot as consumer sentiment at home remained subdued.