Plenty of economic data came out of China on Friday, but some numbers stood out. Steve Wang reports that Chinese factories unexpectedly throttled back production in key industries. The reduced output in areas ranging from steel, cement and ethylene to sedans in December 2016 nipped a budding uptrend that had only started in October and smacked headline industrial growth back down to a five-month low.
Five of China’s biggest banks will be allowed to temporarily lower the amount of money that they must hold as reserves to relieve pressure in its financial system as demand for cash surges ahead of the Lunar New Year holiday. It is the first reduction in the ratio in a year and comes after the People’s Bank of China pumped a record amount of liquidity into markets this week in a bid to avert a cash crunch heading into the country’s biggest holiday of the year.
And film is still big on China’s radar with Viacom Paramount Pictures getting a whopping US$1 billion cash investment from two Chinese film companies, Shanghai Film Group and Huahua Media. As part of the agreement, Shanghai Film Group and Huahua Media will finance a combined 25% of all Paramount’s films for the next three years, with the option to extend it, says a source.
In Japan, all is not well with Toshiba, writes Peter Langan as bad news crashes down on the giant. Its shares have lost about half their value since the company said last month it may face a writedown at its US nuclear power business, which came on top of a recent accounting scandal. The scale of the writedown has now ballooned to around US$6 billion, forcing Toshiba to ask banks for aid and look at selling stakes in its chip business.
Tsinghua Unigroup Ltd, China’s top state chip manufacturer, revealed plans to build a US$30 billion memory chip factory as the government seeks to boost local production capacity. The firm is targeting a monthly capacity of 100,000 wafers in phase one of the development, which will cost US$10 billion and is located in Nanjing. Tsinghua Unigroup said the project is part of China’s efforts to build a world-leading chip industry.