06/03/2026

BIZ & FINANCE FRIDAY | MAR 6, 2026

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China ramps up high stakes tech race with US

Ivory Coast cuts cocoa producer price by 60% ABIDJAN: Ivory Coast, the world’s leading cocoa producer, on Wednesday cut the price paid to its growers by nearly 60%, the government said, to try to address a sales slump affecting the sector. Agriculture Minister Bruno Kone announced the reduction to 1,200 CFA francs (RM7.89) per kilogramme – which comes amid a fall in world cocoa prices and an oversupply crisis. “The price of cocoa on the international market is forcing us to make an adjustment,” Kone said. The Ivorian government sets the price of cocoa paid to its producers twice a year, but its latest announcement comes a month earlier than normal. The sector accounts for 14% of the west African country’s gross domestic product and around five million people depend on it for their living. In October, just ahead of his re election, President Alassane Ouattara announced himself that authorities were setting the price at a record high of 2,800 CFA francs a kilogramme. But global cocoa prices, which went through the roof in 2024 before starting to drop in 2025, have plunged this year, meaning Ivorian cocoa cost much more than world market prices. After soaring to US$12,000 per tonne in late 2024, the price per tonne on the world market is currently US$2,900. – AFP Seoul activates US$68b market stability fund SEOUL: South Korea’s president ordered the activation of a US$68 billion market stabilisation fund yesterday, citing the need to smooth out volatility caused by war in the Middle East. “The escalating crisis in the Middle East is significantly worsening the global economic and security environment,“ President Lee Jae Myung said. “First, we must respond proactively to heightened volatility in financial markets, including equities and foreign exchange.” Lee said the programme would “pre-empt instability” in capital markets. But he stressed it would not be used to“directly prop-up stock prices”. “If structurally there is no problem, it is meant to correct temporary abnormalities when they occur, not to artificially support prices.” The programme includes funds earmarked for government and corporate bonds. South Korea’s benchmark Kospi index fell around 19 percent on Tuesday and Wednesday. But it bounced back as much as 12% yesterday, leading a global rebound from the week’s turmoil. Until the end of last week, the index had soared around 50% this year. – AFP

BEIJING: China yesterday set out a five-year roadmap to turbocharge scientific breakthroughs and embed AI across its industrial economic machine, framing technological dominance as a core national security goal in its sharpening rivalry with the US. In its 15th strategic plan since adopting Soviet-style quinquennial policy cycles in the 1950s, Beijing has outlined a bet that technology – not consumption – will drive its next phase of development despite growing structural pressures. The objectives reflect President Xi Jinping’s vision of developing “new productive forces” to escape the middle-income trap, counter the demographic downturn, and enhance self-sufficiency to insulate China from US export controls. At the opening of the annual Parliament meeting, Premier Li Qiang praised China’s ability to withstand US President Donald Trump’s tariff hikes, but said “multilateralism and free trade are under severe threat”, announcing 7% increases in the defence budget, as well as in research and development. Li acknowledged an “acute” imbalance between strong supply and weak demand and risks from a worsening property sector crisis and high local government debt. These challenges have pushed Beijing to set a slightly lower growth target of 4.5%–5% for 2026, down from last year’s 5%, which was met largely through a one-fifth surge in its trade surplus to a record US$1.2 trillion. As widely expected, the five-year plan also pledged a “notable” increase in household consumption, without specifying figures, dampening expectations for demand-side reforms. Last year’s trade punches with the Trump administration, which briefly escalated to embargo-like conditions of triple-digit tariffs, showed the importance of its supply chain dominance as leverage. China vowed to maintain its competitive edge in rare earths. The US and its allies are still years away from breaking their reliance on China for these materials vital to everything from AI chips to defence systems. “China’s government remains

o Five-year plan envisions AI-driven future with robots manning factories

laser-focused spurring technological breakthroughs and high-tech investment,” said Fred Neumann, chief Asia economist at HSBC. “In part, this is motivated by competition with the United States for control over the technologies of the future.” “Many international observers may be left disappointed, therefore, by slower progress in rebalancing the economy away from investment towards consumption.” China invests 20 percentage points of GDP more than the global average, while its households spend roughly 20 points less – a state controlled, debt-driven development model that analysts say creates industrial overcapacity and fuels trade tensions abroad and deflationary pressures at home. “The rebalancing challenge that China faces, and that will take years to achieve, is implicitly acknowledged by a weaker growth target for the coming year,” Neumann added. The five-year plan aims to raise the value-added of “core digital economy industries” to 12.5% of GDP and roll out new policies for an integrated national data market, AI adoption across the full supply chain, and an AI security system. Ambitions span biomedicine, quantum tech, atomic-scale manufacturing, hyper-scale computing clusters, nuclear fusion, brain-computer interfaces and even commercialising AI-powered humanoid robots. “Beijing is trying to manage a ‘controlled glide’ in growth while building a new economy based on technology rather than property,” said Andy Ji, Asian FX & rates analyst at ITC Markets. “It is a high-stakes rebalancing where the government is betting the house on AI and advanced manufacturing.” State-owned enterprises were enrolled to create demand for made-in-China semiconductors and drones. The 141-page plan name-checks AI over 50 times, envisioning robots on

Attendants prepare to serve tea before the opening session of the National People’s Congress at the Great Hall of the People in Beijing yesterday. – REUTERSPIC

stabilise relations in the short-term bode well for such adjustments. Dan Wang, China director at Eurasia Group, said Beijing appeared to take advantage of “the trade truce” to absorb the job market pressure created by any production curbs. Stimulus-wise, China plans a budget deficit of 4% of GDP and has set special debt issuance quotas at 1.3 trillion yuan (RM743 billion) for the central government and 4.4 trillion yuan for local authorities – all unchanged from last year. China pledged to raise minimum monthly pensions by 20 yuan per person and basic medical insurance subsidies for rural, non-working people by 24 yuan - marginal, rather than structural, moves. It said it wants to increase education spending, subsidise childcare and reform public hospitals, acknowledging the demographic downturn. Yuan Yuwei, fund manager at Trinity Synergy Investment, warned that China’s growth and policy aims for this year – prepared at the end of 2025 – do not take into account the US-Israeli attacks in Iran. “That’s very negative for China, which counts the Strait of Hormuz as a crucial trade route,” said Yuan. – Reuters

plugging labour shortages and factories operating with little human oversight. It builds on a breakout year for Chinese developers – led by DeepSeek – who rapidly closed the gap with US leaders such as OpenAI and Gemini. But the five-year plan also lists bigger ambitions in areas China already dominates: it accounts for 85% of the world’s electric vehicle charging stations, but still aims to double their number within three years. Economists say a lower growth target allows Beijing to experiment with cutting overcapacity in low-value added industries, but cautioned that this did not mean a departure from its production-focused growth model. Beijing also appeared to suggest tightened supervision of local government spending, some of which had gone into unproductive infrastructure projects, warning many officials had “a misguided understanding of what it means to perform well”. The US Supreme Court’s decision to strike down some of Trump’s tariffs and expectations that a meeting between the two countries’ presidents later in March could

Japan union seeks average 5.94% wage hike for 2026 TOKYO: Japan’s largest labour union group Rengo said yesterday its member unions are seeking an average wage hike of 5.94% for this year, underscoring strong momentum in annual labour talks closely watched by policymakers. from the widening Middle East conflict, such as rising oil prices that pose risks for an import-dependent economy, while stressing that it should not affect ongoing wage negotiations. 5.25%, their biggest pay hike in 34 years and the third straight year of robust growth, according to Rengo. The union group has about seven million members. A Teikoku Databank survey of more than 10,000 companies found that a record 63.5% plan to raise wages for full-time employees this year. Among those companies

expecting to increase pay, 74.3% cited the need to retain and secure labour as a main reason. Separately yesterday, UA Zensen, a labour union group representing retail, restaurant and other industry unions, said that its member unions are seeking an average wage hike of a record 6.46% for their full-time employees in the 2026 wage negotiations. – Reuters

A broad-based pay rise is a prerequisite for the Bank of Japan to continue monetary policy normalisation after the central bank raised interest rates to the highest level since 2008 in January. Talks between management and labour unions over the 2026 wage levels typically conclude around mid-March at major firms, and go into effect a few months later.

The average demand surpasses Rengo’s wage increase target of at least 5% in 2026, including a rise in the base pay of at least 3%. Base pay rises exclude the seniority-based automatic annual increase already built into the pay scale. Last year, Japanese companies agreed to raise wages by an average

The figure, slightly short of last year’s demand of 6.09%, reflects persistent inflation that has squeezed households, as well as a chronic labour shortage in Japan’s fast-ageing society – a scarcity that is forcing companies to raise pay to attract and retain workers. But labour union executives have voiced concerns about the fallout