Money
China’s desperate attempt to shift its economy
China’s economic strategy is undergoing a significant shift as it seeks to navigate through slowing growth and address challenges in traditional sectors like real estate and infrastructure.
To meet ambitious growth targets, the Chinese government is redirecting its focus towards technology and digital industries while striving to stabilise the old growth drivers.
This shift comes amidst concerns over local government debt and the need for sustainable economic development.
Key Highlights:
The transition from Traditional Sectors:
With concerns over local government debt and challenges in traditional sectors like real estate and infrastructure, China is seeking a new economic model.
The construction of roads, bridges, and high-speed rail lines, which were pivotal for China’s economic growth, is being rationalised to ensure sustainable development.
Real Estate Challenges:
China’s real estate sector, previously a significant contributor to economic activity, has been facing a crisis for the past three years. Declining construction projects and falling housing prices have added to the economic slowdown, compounded by youth unemployment issues.
FILE PHOTO: Containers are seen at the Yangshan Deep Water Port in Shanghai, China.
Ambitious Growth Targets:
Despite economic challenges, China has set an ambitious growth target of around 5% for the current year, similar to the previous year. To achieve this, the government is focusing on stabilising the economy’s old driving forces, particularly real estate, while exploring new avenues for growth.
Chinese President Xi Jinping is advocating for the development of “new productive forces,” emphasising support for cutting-edge sectors such as technology and digital innovation.
This shift reflects the government’s belief in the potential of these industries to accelerate economic growth.
The government is implementing measures to support key sectors, including the creation of “white lists” for real estate projects eligible for financing.
Apple’s big shift away from China
Additionally, initiatives like state-supported housing projects demonstrate efforts to address housing affordability issues.
China’s economic strategy underscores a concerted effort to adapt to changing global dynamics and internal challenges by prioritising innovation and sustainable growth.
The shift towards technology and digital sectors reflects a strategic move towards fostering new economic drivers amid a complex economic landscape.
Money
Australia revises superannuation tax plans for fairness
Australia revamps retirement tax with new thresholds and increased support for low-income earners amid political pressure
Australia revamps retirement tax with new thresholds and increased support for low-income earners amid political pressure
– Treasurer Jim Chalmers announced a 40% tax on retirement balances over $10 million, aiding low-income earners.
– The reform improves the Low Income Superannuation Tax Offset, helping 1.3 million Australians with higher annual payments.
The announcement comes after months of political and industry pressure and represents a major shift from the original policy.
It addresses prior criticisms related to indexation and taxation of unrealised capital gains.
Under the revised policy, balances between $3 million and $10 million will face a 30 percent concessional tax rate.
Both thresholds will now be indexed to inflation to prevent bracket creep affecting middle-income Australians.
The government has also removed taxes on unrealised capital gains, with changes applying solely to realised earnings from 2026.
“This has been a contentious policy,” Chalmers stated, indicating that it affects less than 0.5 percent of Australians, with about 80,000 anticipated to have over $3 million in superannuation next year.
Key Benefits
The reform package significantly improves the Low Income Superannuation Tax Offset (LISTO).
Annual payments will rise from $500 to $810, with an increased eligibility threshold from $37,000 to $45,000 by 2027.
This adjustment will assist approximately 1.3 million Australians, mainly benefiting women.
Eligible workers could gain around $15,000 in retirement, increasing LISTO eligibility to 3.1 million Australians.
The changes could generate about $1.6 billion in net revenue by 2028-29, a decrease from the original $2.5 billion projection due to enhanced LISTO benefits and extended implementation.
Money
Bitcoin declines to $104,782 amid trade tensions
Bitcoin drops to $104,782 as Trump intensifies US-China trade tensions, impacting global markets
Bitcoin drops to $104,782 as Trump intensifies US-China trade tensions, impacting global markets
– Bitcoin dropped to $104,782 due to heightened US-China trade tensions.
– The S&P 500 Index fell over 2% amid escalating market uncertainty.
The decision follows China’s recent restrictions on rare earth mineral exports, which are crucial for various technologies and manufacturing sectors.
The trade dispute affected global markets, resulting in a more than 2% decline in the benchmark S&P 500 Index.
Bitcoin experienced an 8.4% drop at $104,782 by 17:20 ET, while Ethereum, the second-largest cryptocurrency, fell by 5.8% to $3,637 at 17:21 ET.
Money
Gold plunges as investors react to Middle East ceasefire
Gold prices fall over 2% to below $4,000, as investors shift from safe-haven assets after Gaza ceasefire news.
Gold prices fall over 2% to below $4,000, as investors shift from safe-haven assets after Gaza ceasefire news.
Gold prices have fallen sharply, dropping over two per cent to below $4,000 per ounce, as investors took profits following the announcement of a Gaza ceasefire agreement. The deal between Israel and Hamas triggered a shift away from safe-haven assets, with silver and platinum also sliding.
The U.S. dollar strengthened as markets responded to the news, making precious metals more expensive for foreign buyers. Analysts say the pullback is likely temporary, with long-term demand for gold and silver expected to remain strong amid global instability and rising debt levels.
Market experts warn that volatility will continue as geopolitical tensions persist, even as short-term optimism grows around the Middle East peace process.
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