International News 15/05

May 15, 2024 No. 75

The South Korean government has allocated 10 trillion won to the chemical industry as part of a wider economic stimulus package.

South Korea is planning to invest over 10 trillion won (approximately Rp 117.1 trillion) to support chip investment and research in the country. The South Korean government is seeking to gain a competitive advantage in the semiconductor industry by implementing a stimulus package targeting chip materials, equipment manufacturers, and companies in the semiconductor supply chain. The Finance Minister, Choi Sang-mok, has indicated that the details of the stimulus package will be announced in the near future. The support programme may include loan offers and funding from state and private financial institutions. South Korea has also constructed a mega chip cluster in Yongin, which is expected to become the world's largest advanced technology complex. President Yoon Suk Yeol has previously committed to leveraging all available resources to emerge victorious in the semiconductor industry.

The initial public offering of shares in this Chinese electric car manufacturer was a resounding success on the first day of trading on Wall Street.

Chinese electric car manufacturer Zeekr made a successful debut on the New York Stock Exchange, with its shares closing 34.6% higher than their IPO price. This marks Zeekr as the first Chinese EV manufacturer to list in the US since regulatory tensions halted new entrants in 2021. While global EV companies have faced challenges, with Tesla experiencing stock market declines and other startups struggling to maintain valuations, Zeekr has gained investor confidence due to its impressive sales growth and global ambitions. As a premium brand under Geely, Zeekr is targeting the European market and has already delivered nearly 200,000 vehicles since its launch. CEO Conghui An has set the ambitious goal of making Zeekr the "Volkswagen Group of the new energy vehicle era." Zeekr's successful debut on Wall Street coincides with a pivotal moment in US-China relations.

For the first time, China's loan value has declined.

China's loans in April 2024 experienced a decline for the first time, attributed to a reduction in sales of government bonds and a weakening of credit demand. According to data from the People's Bank of China, the value of aggregate financing dropped by nearly CNY200 billion compared to the previous month. This marks the first decline in China's loan value since 2017 and the first since October 2005 when excluding state funding data. Bloomberg Economics' analysis revealed that the government has been paying more debt securities than issuing them, contributing to the contraction in loans. Additionally, there has been a decrease in the number of people seeking loans from non-bank financial companies, and financing from shadow banking has also decreased. Total new lending by financial institutions in April was lower than projected, with a drop in loan growth from the previous month. However, some remain optimistic about the outlook, with efforts to boost bonds.