18/06/2026

BIZ & FINANCE THURSDAY | JUNE 18, 2026

17 China in fresh push to take yuan global

multiple channels to enhance their risk resilience,” Ding said. Ding said regulators will guide financial resources to emerging and future industries, and step up regulatory cooperation in emerging areas. Authorities will also crack down on disorderly competition and prevent illegal financial activities, he said. At the forum, Zhu Hexin, head of China’s forex regulator, unveiled plans to issue fresh quotas under the outbound Qualified Domestic Institutional Investor investment scheme. That underscored Beijing’s efforts to route capital through regulated channels, following a crackdown on “illegal” cross-border investments in late May.

restructuring and a shift in growth engines” under way, he said. “It’s difficult and unnecessary for China’s credit growth to maintain its previous pace,” he said. The comments from Pan and other regulators drew a muted market response. China stocks were little changed yesterday while the yuan was steady. At the same event, China’s top banking regulator vowed to prevent systemic financial risk and channel resources to emerging industries. Ding Xiangqun, newly appointed head of the National Financial Regulatory Administration, expressed confidence that regulators will prevent risk from small financial institutions and resolve risk from real estate and local government debt. “In recent years, cross-border transmission and cross-market spread of financial risks have become increasingly pronounced,” he told the forum. Regulators will “encourage insti tutions to raise capital through

China is stepping up yuan internationalisation efforts, in a bid to reduce its dependence on a global payment system dominated by the US dollar. Pan’s speech came a day after the PBOC’s digital yuan operation centre signed direct participant agreements with 26 financial institutions in Shanghai to promote the global adoption of the digital currency, also known as e-CNY. In the domestic money market, Pan said China will increase the variety of overnight reverse repo operations to better manage liquidity. The PBOC is also studying a liquidity tool to support non-banking financial institutions in a crisis, seeking to balance the need to maintain financial stability and prevent “moral hazard”. Pan said that loan growth in China has slowed in recent years while bond and equity financing have risen steadily. This structural change reflects the “profound economic

o Regulators vow vigilance against financial risks, issue new quota for outbound investment scheme

SHANGHAI: China announced fresh measures yesterday to promote the global use of the yuan and unveiled plans to better manage domestic money market liquidity as the world’s second-biggest economy undergoes a painful restructuring. Top financial regulators also vowed at the annual Lujiazui Forum in Shanghai to further open up China’s financial markets prudently, as the country shifts its growth engine to technology and innovation from property and investment. “As financial markets continue to deepen and develop ... cross-market risk contagion may become more frequent,” said Pan Gongsheng, governor of the People’s Bank of China (PBOC), pledging to prevent systemic risks as China “continues to

integrate into the global financial system”. To promote the offshore yuan business in Shanghai, Pan said, six top state banks, including Bank of China and China Construction Bank, have been authorised to conduct offshore yuan transactions in the city’s free trade zone. The PBOC also created a tool, called the FIMA RMB Repo, that would enable overseas central banks and sovereign wealth funds to obtain yuan liquidity more easily by using top-rated Chinese bonds as collateral to borrow. “Foreign investors including central banks are actively entering China’s bond market, and their need to manage liquidity is also rising,” Pan said.

And top securities regulator Wu Qing told the same forum that China’s stock market will “actively embrace” the technological re volution, but will crack down on speculation and manipulation. – Reuters Japan’s May exports beat forecast on strong chip demand TOKYO: Japan’s exports grew for a ninth straight month in May, data showed yesterday, as a weaker yen, higher commodity prices and solid semiconductor demand offset the drag from major supply disruptions linked to the US-Israeli war with Iran. The global artificial intelligence boom has cushioned parts of the world economy against war-driven risks, enabling import-dependent nations like Japan to absorb the immediate shock to growth and trade. Total exports by value rose 17% year-on-year in May, government data showed, outpacing a median market forecast for a 16.2% increase and following a 14.8% rise in April. By volume, however, they rose just 0.5% last month. Price effects, driven by the yen’s weakness and surging energy costs, were important drivers of both exports and imports, Koki Akimoto, an economist at Daiwa Institute of Research, said. “With the overall volume hardly increasing, exports lacked underlying strength,” he added. Exports of electronic components drove overall growth, as strong demand from AI and data centres pushed up prices for memory chips and non-ferrous metals. Exports to the United States rose 12.5% in May from a year earlier, while those to China were up 17.9%, the data showed. Overall imports grew 12.5% in May from a year earlier, compared with market forecasts for a 12.8% increase, with the gains coming despite a plunge in crude oil import volumes, as the closure of the Strait of Hormuz sharply raised the prices of crude and related products. Crude oil imports plunged 28.5% in value terms and 57.3% in volume terms, with per-unit cost in yen hitting an all-time high. As a result, Japan ran a trade deficit of ¥378.7 billion (RM9.6 billion) in May, compared with the forecast of a ¥564.6 billion deficit. Separate data, also released earlier in the day, showed Japan’s core machinery orders rose 8.7% in April from the previous month, better than a median market forecast of a 0.9% increase. The orders data suggest businesses might be beginning to raise investment. Japan, heavily dependent on imported energy, has faced higher costs following disruptions to Middle Eastern supply routes. While the government has sought to diversify crude procurement by securing alternative supplies from outside the Middle East have not fully offset the impact. – Reuters

UK INFLATION STEADY ... Workers packaging cheese products at the Bridge Cheese factory in Telford, Britain. Britain’s annual inflation rate was unchanged at 2.8% in May as higher petrol prices caused by the US Iran war were offset by lower food costs, AFP reported. The Consumer Prices Index matched April’s reading, the Office for National Statistics said yesterday, while an analysts’ consensus forecast had been for an increase to 3%. The inflation data comes before an interest rate decision by the Bank of England, which is expected to hold borrowing costs steady. – REUTERSPIC

Economists trim Singapore 2026 growth forecast SINGAPORE: Economists polled by

expects the electronics segment to continue to outperform, with increases in new export orders reflected in the manufacturing PMI. He added that the reopening of the Strait of Hormuz would reduce tail risks of escalating input cost pressures, persistent severe supply chain disruptions and significantly weakened external demand. OCBC chief economist Selena Ling kept her full-year non-oil domestic export growth forecast unchanged at 6% with growth expected to slow. The final growth rate will also be moderated by a high base effect, with strong export numbers recorded last year.“The global AI story remains resilient for now,“ she said. In June, the US Trade Representative accused 60 countries, including Singapore, of failing to curb trade in goods made with forced labour and proposed additional tariffs of 12.5% on Singapore’s exports to the United States. Singapore’s trade ministry denied the assertion and said the nation has outlawed such illegal practices within its borders. It said about a third of Singapore’s direct exports to the United States could be affected by the additional tariffs. – Reuters

Last month, the trade ministry maintained its economic growth forecast for this year at 2% to 4%. Meanwhile, Singapore’s non-oil domestic exports rose by 38.4% in May from a year earlier, data showed yesterday, as robust AI related demand boosted exports of integrated circuits, disk media products and PCs. The figure was higher than the median growth forecast of 31.1% in a Reuters poll. LSEG data showed it was the largest rise in exports in 20 years. Among key markets, exports to Taiwan, the United States and China rose, while shipments to Indonesia were lower than a year earlier, said Enterprise Singapore, a government agency. Electronics exports to the US rose by 303% on an annual basis, and those to Taiwan rose by 218.6%, the data showed. DBS senior economist Chua Han Teng said Singapore’s export cycle has become increasingly interconnected with other artificial intelligence players, such as Taiwan and South Korea. Singapore’s electronics exports to those countries also increased by triple-digit percentages in May. In the near-term, he

Singapore’s central bank have slightly cut their growth outlook for the country for 2026, while six out of the 10 are also expecting monetary policy to remain unchanged next month, a survey showed yesterday/ Most of the respondents in the Monetary Authority of Singapore’s June quarter survey cited a prolonged or escalating conflict in the Middle East as one of the major downside risks for the city-state, while 15% of the economists flagged the potential bursting of the AI bubble. The survey was sent out in May, before the ceasefire agreement signed by the United States and Iran on Monday, with 22 economists and analysts responding. The median forecast for growth this year dropped to 3.5% from 3.6% in the previous survey, with growth in 2027 projected at 2.5%. Respondents expect core inflation for 2026 at 2% and headline inflation at 2.3%, higher than the 1.5% projected for both in the previous survey. Singapore’s economy in the first quarter beat expectations with 6% growth. The government, however, has warned that downside risks have risen significantly.