17/04/2026

BIZ & FINANCE FRIDAY | APR 17, 2026

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China’s economy beats forecasts

Iran war “is likely to add to this trend”. A major international trade fair kicked off this week in Guangzhou – a metropolis in China’s southern manufacturing heartland – where attendees told AFP the war is impacting their business. Chinese exporters and Middle Eastern buyers at the opening day of the Canton Fair on Wednesday gloomily told AFP the Iran war had pummelled orders and led to price hikes. Wang Jun, the deputy head of China’s customs administration, this week acknowledged “many uncertainties and instabilities in the external environment”. “The impact of international geopolitical conflicts on global industrial and supply chains is still evolving in a complex manner,” he said. – AFP

But data this week showed export growth slowed sharply in March, indicating that war in the Middle East was already taking a toll. Yesterday’s NBS data also showed retail sales grew 1.7% on-year in March, well short of a Bloomberg forecast of 2.4%. Industrial production rose 5.7%, the NBS said, beating a Bloomberg estimate of 5.3% but well down from the 6.3% seen in January and February combined. The first-quarter acceleration in growth was fuelled by exports, Zichun Huang of Capital Economics wrote in a note. “We think growth will soften a bit over the rest of the year,” she said. “While the Chinese economy is holding up well, it is becoming ever more dependent on external demand,” she said, noting that the

could be “thrown off course” by the Middle East war. It also reduced its forecast for China to 4.4% growth, from a previous estimate of 4.5%. “The global economy is facing this next test of resilience as signs of unevenness lie beneath the surface,” it said, noting that China’s “domestic activity – especially in the housing sector – lags behind exports”. Beijing has set a 2026 target of 4.5%-5% growth – the lowest in decades. A years-long crisis in the property sector and a persistent slump in domestic spending have left leaders reliant on exports to meet growth targets. Outbound shipments have boomed, exemplified by the country’s whopping US$1.2 trillion trade surplus last year.

immediate a potential global downturn caused by the war could weaken demand for its exports, which have been propping up the country’s economy. Gross domestic product in the world’s second-largest economy expanded 5% year-on-year in January-March, according to the National Bureau of Statistics (NBS). The reading was slightly higher than an AFP forecast of 4.8% based on a survey of economists. During the first quarter, China’s economy “achieved a strong start to the year, further demonstrating its resilience and vitality”, the statistics bureau said in a statement announcing the data. The reading came days after the International Monetary Fund cut its 2026 global growth projection, warning that the world economy shocks, though

BEIJING: China’s economy expanded more than expected in the first three months of the year, with official data yesterday indicating resilience in the face of a Middle East crisis that threatens to hit global growth. The figures came despite a surge in world energy prices caused by the US-Israel war on Iran, which has stymied shipping through the crucial Strait of Hormuz, through which a fifth of the world’s oil and natural gas passes. Analysts say China’s diversified energy supply shields it from o Diversified energy supply shields it from immediate shocks

‘Tremendous opportunity’ for yuan-backed

stablecoin: Circle CEO HONG KONG: Circle Internet Group sees “tremendous opportunity” for yuan-backed stablecoin as digital money becomes increasingly integrated into global trade and finance, said the chief of the world’s largest regulated stablecoin issuer. China wants to expand the yuan’s role in the global financial system, and stablecoins have emerged as a way to “export” a currency by making it easier for global payments, Jeremy Allaire, co-founder and CEO of Circle, told Reuters. Stablecoins are a type of cryptocurrency designed to maintain a constant value and are usually pegged to a fiat currency such as the US dollar. “There’s a tremendous opportunity for a yuan stablecoin,“ Allaire said in an interview in Hong Kong. “If there’s currency competition, you want your currency to have the best features possible. This is becoming a technological competition.” He said China could roll out a yuan-backed stablecoin in the next three to five years. Reuters reported last August, citing sources with knowledge of the matter, that the country was considering yuan-backed stablecoin to boost adoption of its currency globally. Such a move, if realised, would mark a major shift in China’s approach towards digital assets. The country banned cryptocurrency trading and mining in 2021 due to concerns about the stability of the financial system. China’s central bank reaffirmed its tough stance on virtual currencies in November amid a market frenzy over digital assets. Use of stablecoins, which offer faster and cheaper transactions, has surged globally in recent years. Circle’s USDC, which is backed by the US dollar and is the world’s second most-held stablecoin, grew 72% year-on-year in circulation to US$75.3 billion by the end of 2025, according to its quarterly results. Allaire said Circle recorded “several billion dollars” in USDC transaction growth following the outbreak of the US-Iran war as heightened geopolitical risks boosted demand for portable digital dollars. Hong Kong is a hub for cross-border payments and settlement, Allaire said, adding that Circle saw significant opportunities to work with Hong Kong dollar stablecoins to integrate them into global platforms. – Reuters

The company logo is displayed outside of TSMC Museum of Innovation in Hsinchu, Taiwan. – REUTERSPIC

AI demand drives TSMC’s net profit to fresh record TAIPEI: Taiwanese chip maker TSMC said yesterday its net profit surged to a fresh record in the first quarter, fuelled by the global artificial intelligence race despite the war in the Middle East. Governments and tech giants are pouring huge sums into building data centres that can train and run AI tools such as chatbots, image generators and agents that can execute tasks. “The recent situation in the Middle East ... brings further macroeconomic uncertainties, as such we are being prudent in our business planning,”“ TSMC chairman CC Wei said. A weaker Taiwanese dollar had also boosted the firm’s revenues from overseas sales. It said yesterday quarterly net revenue rose 35.1 percent year-on-year to NT$1.13 trillion. A note from UBS analysts had predicted strong quarterly results for TSMC but warned that consumer demand was weakening as a result of higher prices caused by a global memory chip shortage that is a side-effect of the AI boom.

Massive demand for AI hardware means business is booming for TSMC – the biggest contract maker of microchips used in everything from Apple phones to Nvidia processors. Chief financial officer Wendell Huang said the company did not expect the war to impact its supply of key chipmaking materials such as helium and hydrogen in the near term. “We source from multiple suppliers in different regions, and we have prepared safety stock inventory on hand,“ Huang told an earnings call, adding that energy supplies were also sufficient to continue operations as normal for now. TSMC said net profit for the first three months of the year jumped 58.3% year-on-year to NT$572.5 billion (RM71 billion), trouncing analyst estimates of NT$540.20 billion.

“Having said that, AI-related demand continues to be extremely robust,“ he added. “We maintain strong confidence for our full-year 2026 revenue to now grow by above 30 percent in US dollar terms.” Last month, Jensen Huang, head of top US chip designer Nvidia, said everyone in the tech world felt they could develop their AI and grow revenue “if they could just get more capacity”. Ahead of yesterday’s earnings announcement, Ian Lyall at Proactive Investors said it appeared TSMC is “so deeply embedded in the AI supply chain that macro headwinds are struggling to leave a mark”. “The bleeding-edge manufacturing that only TSMC can reliably deliver at scale is running at capacity,“ he noted.

“Cloud AI demand continues to strengthen, but we think supply constraints will limit meaningful upside for TSMC this year,“ the UBS team said. “Middle East tensions add a layer of macro uncertainty, but AI spend should stay insulated, barring a protracted conflict.” The UBS analysts predicted “limited disruption from tight helium supply on TSMC’s production”. Helium gas is a key material in the chip supply chain, and Qatar – one of the countries affected by the war in the Middle East – is one of its few large-scale producers. – AFP