China freezes new Tencent apps


It has also been ordered to stop updates of existing apps
Chief Investment Office25 Nov 2021
    Photo credit: AFP Photo


    JAPAN

    Japan plans to issue JPY22.1t (USD192b) in bonds to help pay for another extra budget in the pandemic, as Prime Minister Fumio Kishida looks to shore up the recovery before next year’s elections, the Nikkei newspaper reported Wednesday (24 November).

    Some JPY6t carried over from previous stimulus and another roughly JPY6t in unexpected tax revenue were not enough to cover the general expenditures of a JPY36t extra budget put together to finance Kishida’s stimulus plan, the Nikkei said, without identifying where it got the information.

    With the new borrowing plan, Kishida is signalling his willingness to add more to Japan’s growing mountain of debt as he lays the groundwork for what he says will be a new kind of capitalism.

    Some analysts have questioned the need for so much spending now, given that the worst of the pandemic appears over, and the economy was forecast to rebound on its own.

    Kishida, who had been known for being fiscally cautious, surprised investors last week (ended 19 November) by unveiling a record fiscal package of JPY56t, following a report days earlier that the economy shrank last quarter for the fifth time in eight quarters. 

    Still, with vaccination rates now over 75% and restrictions on economic activity largely lifted, the recovery already looked poised to pick up.

    At the same time, the government failed to spend more than JPY30t it budgeted for stimulus last year, suggesting that it may be difficult to inject all of the new money into the economy quickly. Japan’s Cabinet is expected Friday to approve the budget and detail its spending priorities.

    The plan sketched out last week includes cash payments to households with children, handouts for smaller companies, and higher salaries for caregivers on government payrolls.

    New borrowing will add to the developed world’s heaviest government debt burden. Even without the latest stimulus factored in, the International Monetary Fund calculates that Japan’s government debt will reach 257% the size of gross domestic product in 2021.

    Still, the Bank of Japan’s (BOJ) yield curve control programme, which involves purchasing government debt, will likely keep yields within a tight band, despite the new issuance.

    The BOJ’s says the primary purpose of its bond purchases is to help spur price growth, but the programme plays a key role in keeping the government’s borrowing costs down. – Bloomberg News.

    The Nikkei 225 Index climbed 0.71% to 29,510.50 in early Thursday trading. It shed 1.58% to 29.302.66 the previous session.

     

    MAINLAND CHINA & HONG KONG

    Tencent Holdings has been ordered to stop rolling out new apps, as China’s tech industry regulator reviews their compliance with new privacy laws introduced this month, according to people with knowledge of the matter.

    The Ministry of Industry and Information Technology (MIIT) has also ordered a temporary halt to updates of existing apps, though current versions of products can still be downloaded and used, the people said, asking not to be identified as the information has not been made public. Tencent, which owns the WeChat super-app and QQ messaging service, said in a statement that it is working to enhance user protection features within its apps and regularly cooperates with relevant government agencies to ensure compliance.

    China on 1 November began implementing a new Personal Information Protection Law that more tightly governs how tech companies handle user data, part of a broader effort by Beijing to rein in its Internet giants and wrest control over the vast reams of data they collect. Tencent has been targeted by the MIIT because nine of its products were found on four previous occasions to violate data protection rules, triggering the freeze, the people said.

    The MIIT has ordered that all new apps and updates from 24 November until the end of the year will need to undergo a review by the regulator before they are made available, state broadcaster CCTV reported without saying where it obtained the information. The reviews are expected to take about seven days, according to the report.    

    Earlier this year, Tencent suspended new user registrations for WeChat, citing unspecified technical upgrades. That suspension lasted roughly a week before the Shenzhen-based tech firm resumed new sign-ups. – Bloomberg News.

    On Wednesday (24 November), the Hang Seng Index added 0.14% to 24,685.50 while the Shanghai Composite Index climbed 0.10% to 3,592.70.

     

    REST OF ASIA

    Singapore expects gross domestic product to expand 3% to 5% next year, a slower pace than this year as its rebound from the worst of the pandemic steadies.

    The first official forecast for 2022 compares with about 7% this year, the Ministry of Trade and Industry said Wednesday (24 November), reflecting the impact from easing pandemic restrictions and a stabilising global economy.

    Manufacturing and trade will remain strong on robust external demand, Gabriel Lim, permanent secretary in the trade ministry, said at a briefing, adding downside risks globally include supply bottlenecks and a resurgence in infections. Travel, consumer, and construction will show recovery, though activity levels may not reach pre-Covid levels next year, he said.

    The growth outlook comes as the city-state seeks to move on from its biggest surge in virus cases, which had complicated its rollback of social curbs. While the island continues to open up its borders amid a fall in infections, the government has signalled a further easing of restrictions within the country is unlikely this year. – Bloomberg News.

    South Korea’s Kospi Index dipped 0.39% to 2,982.12 in early Thursday trading. It closed 0.10% lower at 2,994.29 the previous session.

    Australia’s S&P/ASX 200 Index slipped 0.07% to 7,394.30, adding to its loss of 0.15% to 7,399.40 the previous session.

    The Taiwan Stock Exchange Weighted Index lost 0.13% to 17,642.52.

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