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British chip giant Arm Holdings signed an agreement with Malaysia on Wednesday to bolster the Southeast Asian country’s efforts to produce high-end semiconductors amid the US-China tech trade war.Malaysia is a key player in the vital chips sector but has been largely focused on packaging, assembly and testing services — the lower end of the market.The agreement will see Softbank-owned Arm provide chip designs and other technology, helping Malaysia to move into more value-added production such as wafer fabrication and integrated circuit design.The Southeast Asian nation is paying $250 million over a decade to receive support from the British company, journalists were told at a briefing by Malaysia’s economic ministry.”Through a comprehensive partnership with Arm, we have conceived one of the most ambitious technological plans Malaysia has ever seen — to pioneer Made-by-Malaysia AI chips,” Prime Minister Anwar Ibrahim said in remarks before witnessing the signing.”These chips will be designed, manufactured, tested and assembled here, and sold to the rest of the world.”In addition, Arm will also establish its first office in Southeast Asia in Kuala Lumpur, aiming to expand the company’s reach in the region as well as Australia and New Zealand, Anwar said.”We won’t let you down. This is going to be an extremely exciting 10 years and more,” said Arm chief executive Rene Haas.- ‘Red carpet’ -Malaysian Economy Minister Rafizi Ramli said the collaboration would enable Malaysia and Arm “to build a complete supply chain in advanced industries such as AI (artificial intelligence) data servers, autonomous vehicles, IoT (internet of things), robotics and others.”He said that around 10,000 local semiconductor engineers would be trained under the deal.Dedi Iskandar, Asia Pacific regional director at datacenterHawk, said the agreement would make Malaysia “as one of the elite countries in Asia Pacific that possess advanced AI chip design capabilities other than Taiwan, and Singapore.””Malaysia is laying the red carpet and showing the world that they are serious in this tech war,” he told AFP.Tensions between Washington and Beijing over advanced tech, especially semiconductors, in recent years have forced many firms to look into relocating their manufacturing from China to other countries including Malaysia, Vietnam and India.”This deal creates equilibrium to the region as Taiwan is always a sore thumb between China and US tech war, and Malaysia are friends to both of them,” added Dedi.A prominent player in the industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech firm Bosch.Malaysia’s northern island of Penang, home to a number of facilities, is often dubbed the country’s Silicon Valley.And in April 2024, Anwar announced plans to build a massive semiconductor design park, an effort to move Malaysia beyond chips production.

Markets rallied Wednesday as investors welcomed China’s economic targets and a US official signalled that President Donald Trump could dial down tariffs on Canada and Mexico.Global stocks had tumbled Tuesday after China, Mexico and Canada hit back at US tariffs and fears grew that Europe could be Trump’s next target.There was speculation some tariffs could be walked back after US Commerce Secretary Howard Lutnick told Fox Business he thought Trump would “work something out” with regards to Canada and Mexico.”Somewhere in the middle will likely be the outcome, the president moving with the Canadians and Mexicans, but not all the way,” he said.Investors also welcomed China’s economic targets for the coming year, with Hong Kong climbing more than two percent to lead Asian gains.China set an annual growth target of around five percent and vowed to make domestic demand its main economic driver, as lawmakers attended the annual meeting of the National People’s Congress.Beijing also announced a rare hike in fiscal funding, allowing its budget deficit to reach four percent this year.It comes alongside a pledge to create 12 million new jobs in China’s cities and a push for two percent inflation this year.The world’s second-largest economy is also planning to increase defence spending by 7.2 percent, the same as last year.But observers have tempered expectations for an expected stimulus given that China is facing strong economic headwinds.These include a persistent property sector debt crisis, stubbornly low consumer demand and stuttering employment for young people.”We remain sceptical that it will be sufficient to prevent growth from slowing this year, especially given the headwinds on the external front and the lack of a more pronounced shift in government spending towards support consumption,” said Julian Evans-Pritchard, head of China economics at Capital Economics.US tariffs, which are expected to hit hundreds of billions of dollars in total trade between the United States and China, also weighed on investors’ minds.Trump signed an executive order on Monday to increase a previously imposed 10 percent tariff on Chinese goods to 20 percent.He also pushed ahead with 25 percent tariffs on US imports from major trading partners Canada and Mexico early this week.China responded by saying it would impose levies of 10 and 15 percent on a range of US agricultural imports.Similarly, Canada announced 25 percent levies on $155 billion worth of US goods.”There’ll be a little disturbance, but we’re OK with that. It won’t be much,” Trump said on Tuesday during his first address to a joint session of Congress since returning to the White House.Markets responded positively to China’s ambitious economic targets and the prospect of tariff relief, with Hong Kong gaining 2.8 percent.Hong Kong firm CK Hutchison rose more than 20 percent after the company agreed to sell its lucrative Panama Canal ports to a US-led consortium under fierce pressure from Trump.Bangkok and Jakarta were also two percent higher while Seoul, Taipei and Manila were up around one percent and Tokyo, Shanghai, Kuala Lumpur and Singapore were all in the green. Sydney and Wellington slipped.The rally extended to Europe, with London, Paris and Frankfurt all opening up.- Key figures around 0815 GMT -Tokyo – Nikkei 225: UP 0.2 percent at 37,418.24 (close) Hong Kong – Hang Seng Index: UP 2.8 percent at 23,594.21 (close)Shanghai – Composite: UP 0.5 percent at 3,341.96 (close)London – FTSE 100: UP 0.5 percent at 8,806.92Euro/dollar: UP at 1.0668 from 1.0485 on TuesdayPound/dollar: UP at $1.2825 from $1.2694  Dollar/yen: UP 149.41 from 149.32 yenEuro/pound: UP at 83.19 pence from 82.60 pence West Texas Intermediate: DOWN 0.50 percent at $67.92 per barrelBrent North Sea Crude: DOWN 0.07 percent at $70.99 per barrelNew York – Dow: DOWN 1.6 percent at 42,520.99 (close)

China set an ambitious annual growth target of around five percent on Wednesday, vowing to make domestic demand its main economic driver as an escalating trade war with the United States hit exports.Beijing also announced a rare hike in fiscal funding, allowing its budget deficit to reach four percent this year as it battles stuttering employment for young people, stubbornly low consumer demand and a persistent property sector debt crisis.The headline growth figure announced by Premier Li Qiang at an annual Communist Party conclave was broadly in line with an AFP survey of analysts, although experts say it is ambitious considering the scale of China’s economic challenges.Some 12 million new jobs will be created in Chinese cities under the plans as Beijing pushes for two percent inflation this year.A government work report vowed to make domestic demand the “main engine and anchor” of growth, adding that Beijing should “move faster to address inadequate domestic demand, particularly insufficient consumption”.And in a rare move, Li said China would hike its fiscal deficit by one percentage point — its highest level in well over a decade — which analysts have said will give Beijing more latitude to tackle its economic slowdown.The growth target will be “tough but possible”, said Dylan Loh, an assistant professor at Singapore’s Nanyang Technological University.He said low consumption was a “confidence issue”, adding that “if people are, in their own calculations, worried about spending — especially on big-ticket items — it is far harder to address”.Another analyst said Beijing’s policies were not yet “big enough to really significantly drive up the consumer sentiment”.”We need to see a very broad-based recovery of employment, income as well as the property market before we can really see a change in consumption patterns and retail sales trend,” Yue Su, Principal Economist at The Economist Intelligence Unit, told AFP.Major Asian markets traded up on Wednesday, reversing their losses a day after US President Donald Trump imposed more blanket tariffs on Chinese imports following a similar move last month.US tariffs are expected to hit hundreds of billions of dollars in total trade between the world’s two largest economies.”Internationally, changes unseen in a century are unfolding across the world at a faster pace,” the government work report said.”Unilateralism and protectionism are on the rise,” it warned.”Domestically, the foundation for China’s sustained economic recovery and growth is not strong enough,” the report said.- Fight to the ‘bitter end’ -Chinese exports reached record levels last year.Sentiments were clouded by a broadening trade war under Trump as thousands of delegates congregated in Beijing’s opulent Great Hall of the People for the opening session of the National People’s Congress, the second of China’s “Two Sessions” political meetings this week.Beijing announced its own measures on Tuesday in retaliation for Washington’s latest tariff hike and vowed it would fight a trade war to the “bitter end”.The moves will see China impose levies of up to 15 percent on a range of US agricultural products including soybeans, pork and wheat starting from early next week.Beijing’s countermeasures represent a “relatively muted response” in comparison to Trump’s all-encompassing tariffs, wrote Lynn Song, chief economist for Greater China at ING.”The retaliation could have been a lot stronger, and with every further escalation the risks are also rising for a stronger response,” he said.Analysts say authorities could announce further plans to boost the economy this week, adding to a string of aggressive support measures announced late last year.China also disclosed on Wednesday a 7.2 percent rise in defence spending in 2025, as Beijing rapidly modernises its armed forces in the face of regional tensions and strategic competition with the United States.However, online comments bemoaned the spending rise as “too little”.Another wrote: “We must strengthen ourselves to achieve world peace.”Geopolitical tensions between Beijing and Washington are set to intensify this year, analysts say.The status of self-governed Taiwan — claimed by China as part of its sovereign territory — is chief among the sources of friction.The defence spending will finance Beijing’s frequent dispatches of military aircraft around Taiwan, intended to put pressure on authorities in the democratic island.

Chinese lawmakers told AFP Wednesday they were confident in the country’s prospects despite a host of gnarly challenges, after a morning of meticulously choreographed fanfare at an annual political gathering in Beijing.Following the opening session of the National People’s Congress (NPC) in Beijing’s opulent Great Hall of the People, representatives emerged into Tiananmen Square, brightly lit by the mid-morning sun.”The international situation is very turbulent now, especially the Russia-Ukraine war and the Israeli-Palestinian war,” Liu Hui, an NPC delegate from the central province of Jiangxi, told journalists.”But China is very stable internally, and we also have strong confidence, such as in improving our economy,” he hastened to add.Wednesday’s proceedings — part of the country’s biggest annual political gathering known as the “Two Sessions” — saw the government disclose highly anticipated spending plans for the year ahead.An official “work report” presented in a speech to delegates by Premier Li Qiang showed that Beijing is eyeing national growth this year of “around five percent” — the same as 2024.The world’s second-largest economy has charted an uneven course since the pandemic, bogged down by lacklustre domestic consumption and a prolonged debt crisis in the vast property sector.Many economists view the newest goal as ambitious.And just a few weeks in, US President Donald Trump’s second term threatens to significantly exacerbate trade headwinds facing the export powerhouse this year.But Liu said after the session that he “warmly welcomed” Trump’s second term.”No matter who is (US) president, as long as they are beneficial to global development and help global stability, unity and economic development, I will welcome them with open arms,” he said.Earlier, nearly 3,000 representatives rose to their feet and fervently applauded as President Xi Jinping and other top leaders entered the cavernous auditorium.- ‘Bright road ahead’ -Attendees then sang along as a military band played China’s national anthem ahead of Li’s speech.Yin Jianmin, an NPC representative from the poor, arid northwestern province of Gansu, told AFP outside the hall that Li’s words showed her that “China is strong and will develop better and better”.”At the same time, the report pointed out a very bright road for our Chinese private entrepreneurs,” she added.Yin, 64, currently serves as head of a natural gas company and was in Beijing to attend her third annual “Two Sessions”.”I also hope that entrepreneurs from all over the country will come to Gansu to invest and develop,” she said.

Under fierce pressure from US President Donald Trump, Hong Kong firm Hutchison said Tuesday it had agreed to sell its lucrative Panama Canal ports to a US-led consortium.CK Hutchison Holdings said it would offload a 90-percent stake in the Panama Ports Company (PPC) and sell a slew of other non-Chinese ports to a group led by giant asset manager BlackRock.The sellers will receive $19 billion in cash, the company said in a statement.Hutchison subsidiary PPC has for decades run ports at Balboa and Cristobal on the Pacific and Atlantic ends of the interoceanic waterway.But since taking office in January, Trump has complained that China controls the canal — a vital strategic asset that the United States once ran. “To further enhance our national security, my administration will be reclaiming the Panama Canal, and we’ve already started doing it,” he said in a speech to Congress Tuesday. “We’re taking it back.”Trump had refused to rule out a military invasion of Panama to regain control, sparking angry protests and a complaint to the United Nations by the Central American nation.In a joint press release with the buyers, Hutchison said the deal was motivated by business, not politics.”I would like to stress that the transaction is purely commercial in nature and wholly unrelated to recent political news reports concerning the Panama Ports,” co-managing director Frank Sixt said.”This transaction is the result of a rapid, discrete but competitive process in which numerous bids and expressions of interest were received,” said Sixt, who described the chosen agreement as “clearly in the best interests of shareholders.”BlackRock CEO Larry Fink said the transaction demonstrated his consortium’s capacity to “deliver differentiated investments for clients.””These world-class ports facilitate global growth,” he added.The Panamanian government, for its part, said the sale was “a global transaction, between private companies, driven by mutual interests.”It added that an audit launched into the PPC by the Panamanian comptroller’s office that oversees public entities will continue in spite of the sale.- 43 ports -The deal entails 43 ports comprising 199 berths in 23 countries.CK Hutchison Holdings is one of Hong Kong’s largest conglomerates, spanning finance, retail, infrastructure, telecoms and logistics.It is owned by Hong Kong billionaire Li Ka-shing.Shares in CK Hutchison soared 25 percent in Hong Kong on Wednesday after the sale was announced. In February, Marco Rubio visited Panama on his first overseas trip as secretary of state, proof of the canal’s importance to the new administration.Rubio won a commitment from Panamanian President Jose Raul Mulino to exit the Belt and Road Initiative, China’s signature infrastructure-building program.He also pressed for free passage of US vessels through the Panama Canal, which was denied.Since 1999, the canal has been run by the Panama Canal Authority (ACP) — an autonomous entity whose board of directors is appointed by Panama’s president and National Assembly. The 80-kilometer (50-mile) long canal handles five percent of global maritime trade, and 40 percent of US container traffic.Beijing has consistently denied interfering in the canal.

Taiwanese chip-making giant TSMC plans to invest a whopping $100 billion in the United States, after US President Donald Trump threatened to slap tariffs on overseas-made chips.Taiwan Semiconductor Manufacturing Co is the world’s biggest maker of the critical technology that has become the lifeblood of the global economy.This week’s announcement takes the total amount TSMC has pledged to invest in the United States to $165 billion, which the company says is the “largest single foreign direct investment in US history”.It follows Trump’s accusations that Taiwan stole the US chip industry and his threats to impose tariffs of up to 100 percent — and Taipei’s promises to invest more in the United States.AFP looks at what TSMC’s investment could mean for Taiwan.- ‘Silicon shield’ -Semiconductor chips are used in everything from smartphones and televisions to electric vehicles and missiles — and more than half of them are made in Taiwan.The concentration of chip manufacturing on the island has long been seen as a “silicon shield” protecting it from an invasion or blockade by China — and an incentive for the United States to defend it.China has upped military pressure on Taiwan in recent years to press its claim of sovereignty over the self-ruled island, where TSMC has its headquarters and the bulk of its fabrication plants.That has fuelled calls for the firm to move more of its production off the island to avoid supply disruptions if China did attack. Trump recently warned of import levies of 25 percent, or higher, on overseas-made chips, which one analyst has said could trigger a recession in the industry.While TSMC’s latest investment might deflect the threat of tariffs, there are fears it could hurt Taiwan’s economy and weaken its “silicon shield”. “The more TSMC produces in the United States, the less important Taiwan will be in geopolitics and the less incentives the United States will have to help Taiwan in the future,” said Ko Ju-chun, a lawmaker with the main opposition Kuomintang party.- Control of TSMC -Taiwan’s leaders are aware of the risks as they try to stay onside with their most important security backer Washington and protect the island’s status as a chip-making powerhouse.President Lai Ching-te’s office said Tuesday the government would review TSMC’s deal “in accordance with the law” and ensure that the “most advanced” chip-making processes stayed in Taiwan.TSMC had already pledged to invest more than $65 billion in three factories in the US state of Arizona, one of which began production in late 2024. The $100 billion investment will be used to expand its US footprint further, with three new fabrication plants, two advanced packaging facilities and a research and development team centre.Richard Hu, deputy director of the Taiwan Center for Security Studies think tank, said Trump wanted to prevent TSMC from falling into China’s hands and to make it a “technological asset of the United States”.”Trump’s ultimate goal is to ensure that the US can fully or critically control TSMC’s semiconductor production, making it a de facto part of America’s chip industry,” Hu said.- Defence guarantees -Taipei security analyst Su Tzu-yun was more optimistic, telling AFP that TSMC’s investment would make Taiwan “safer” and help grow the chip industry.It would also build trust between Taipei and Washington, and ease Trump’s concerns about US economic security, said Su, from the Institute for National Defense and Security Research.”I think the importance of Taiwan is not only TSMC but also the geostrategy,” Su said, noting the importance of global shipping lanes near Taiwan. However, James Yifan Chen of Tamkang University said higher manufacturing costs in the United States would drive up prices of products using TSMC chips.And there were no guarantees the investment would make the mercurial Trump more inclined to defend Taiwan.”The deal’s effect on US willingness to defend Taiwan is unclear,” said Wen-Ti Sung, a nonresident fellow with the Atlantic Council’s Global China Hub.”It really depends on how Trump feels on any particular day, and whether Beijing will attempt to outbid Taiwan subsequently.” 

China on Wednesday set an annual growth target of around five percent, vowing to make domestic demand its main economic driver as an escalating trade war with the United States hit Beijing’s exports.Beijing also announced a rare hike in fiscal funding, allowing its budget deficit to reach four percent this year as it battles stuttering employment for young people, stubbornly low consumer demand and a persistent property sector debt crisis.The headline growth figure announced by Premier Li Qiang at an annual Communist Party conclave was broadly in line with an AFP survey of analysts, though experts say it is ambitious considering the scale of the country’s economic challenges.Under the plans, some 12 million new jobs will be created in Chinese cities as Beijing pushes for two percent inflation this year.A government work report vowed to make domestic demand the “main engine and anchor” of growth, adding that Beijing should “move faster to address inadequate domestic demand, particularly insufficient consumption”.And in a rare move, Li said China would hike its fiscal deficit by one percentage point, something that analysts have said will give Beijing more latitude to tackle its economic slowdown.Dylan Loh, an assistant professor at Singapore’s Nanyang Technological University, said Beijing’s growth target would be “tough but possible”.He said low consumption was a “confidence issue”, adding that “if people are, in their own calculations, worried about spending — especially on big-ticket items — it is far harder to address”.Major Asian markets traded up on Wednesday, reversing their losses a day after US President Donald Trump went ahead with imposing more blanket tariffs on Chinese imports following a similar move last month.US tariffs are expected to hit hundreds of billions of dollars in total trade between the world’s two largest economies.”Internationally, changes unseen in a century are unfolding across the world at a faster pace,” the government work report said.”Unilateralism and protectionism are on the rise,” it warned.And “domestically, the foundation for China’s sustained economic recovery and growth is not strong enough,” added the report. – Fight to the ‘bitter end’ -Chinese exports reached record levels last year.But as thousands of delegates congregated in Beijing’s opulent Great Hall of the People for the opening session of the National People’s Congress, the second of China’s “Two Sessions” political meetings this week, sentiments were clouded by a broadening trade war under Trump.Beijing on Tuesday announced its own measures in retaliation for Washington’s latest tariff hike — and vowed it would fight a trade war to the “bitter end”.The moves will see China impose levies of up to 15 percent on a range of US agricultural products including soybeans, pork and wheat starting from early next week.Beijing’s countermeasures represent a “relatively muted response” in comparison to Trump’s all-encompassing tariffs, wrote Lynn Song, chief economist for Greater China at ING.”The retaliation could have been a lot stronger, and with every further escalation the risks are also rising for a stronger response,” he added.Analysts say authorities may announce further plans this week to boost the economy — adding to a string of aggressive support measures announced late last year.- More help needed -Also on Wednesday, China disclosed a 7.2 percent rise in defence spending in 2025, as Beijing rapidly modernises its armed forces in the face of regional tensions and strategic competition with the US.Geopolitical tensions between Beijing and Washington are set to intensify this year, analysts say.The status of self-governed Taiwan — claimed by China as part of its sovereign territory — is chief among the sources of friction.The defence spending will finance Beijing’s frequent dispatches of military aircraft around Taiwan, intended to put pressure on authorities in the democratic island.It also came after Trump proposed a coordinated halving of the military budgets of the United States, Russia and China.China has not agreed to such a move, with a foreign ministry spokesperson suggesting last month that any reductions in military expenditure should be conducted by Washington first.

Australia’s plan to exempt YouTube from a world-leading teen social media ban is “illogical” and a “mockery”, rival tech giants Meta and TikTok said Wednesday. Prime Minister Anthony Albanese last year unveiled landmark laws that will ban under-16s from social media by the end of 2025. While popular platforms such as Facebook, TikTok and Instagram face heavy fines for flouting the laws, Australia has proposed an exemption so children can use YouTube for school. TikTok’s Australian policy director Ella Woods-Joyce said YouTube had been handed a “sweetheart deal” that gave it an unfair advantage. “Handing one major social media platform a sweetheart deal of this nature — while subjecting every other platform in Australia to stringent compliance obligations — would be illogical, anti-competitive, and shortsighted,” said Woods-Joyce. “The government’s arguments citing unique educative value do not survive even the most cursory of closer examinations,” she added in a submission to a government agency released Wednesday.It would “further entrench Google’s market dominance”, she said, referring to YouTube’s parent company. Meta — the parent company of Facebook and Instagram — made similar arguments against the exemption. “This proposed blanket exception makes a mockery of the government’s stated intention, when passing the age ban law, to protect young people,” Meta said in its own submission to the communications department.”YouTube has the very features and harmful content that the government has cited as justifying the ban.” Both companies argued they produced video content that was virtually indistinguishable from YouTube’s.While a host of countries from France to China have mooted similar measures, Australia’s looming ban would be one of the strictest in the world. Firms face fines of up to Aus$50 million (US$31.3 million) for failing to comply. Albanese has painted social media as “a platform for peer pressure, a driver of anxiety, a vehicle for scammers and, worst of all, a tool for online predators”. But officials are yet to solve basic questions surrounding the laws, such as how the ban will be policed.The ban is set to come into effect by December 2025.

China is pushing for economic growth of “around five percent” in 2025, an official document seen by AFP on Wednesday showed, an ambitious goal as Beijing faces down an intensifying trade war with the United States and deepening economic doldrums at home.The goal came with China already buffeted by strong economic headwinds, including a persistent property sector debt crisis, stubbornly low consumer demand and stuttering employment for young people.It is also broadly in line with an AFP survey of analysts ahead of its official announcement later in the morning by Chinese Premier Li Qiang in the opening speech of the country’s rubber-stamp National People’s Congress (NPC) parliament, which starts at 9:00 am.Experts say that figure is ambitious considering the economic challenges facing the country.It came alongside a pledge to create 12 million new jobs in China’s cities and push for two percent inflation in 2025.Thousands of delegates will congregate in the morning for the opening session of the NPC, the second of China’s “Two Sessions” meetings this week.The world’s second-largest economy has struggled to regain its footing since the pandemic, as domestic consumption flags and a persistent debt crisis in the vast property sector drags on.Adding to the hurdles is US President Donald Trump, who this week slapped more blanket tariffs on Chinese imports following a similar move last month.US tariffs are expected to hit hundreds of billions of dollars in total trade between the world’s two largest economies.The Chinese economy faced “many difficulties and challenges,” NPC session spokesman Lou Qinjian said at a press conference ahead of Wednesday’s main event. “World economic and political uncertainty is increasing,” said Lou.”Domestic demand is insufficient, and some companies are facing difficulties in production and operation,” he admitted.- Fight to the ‘bitter end’ -Chinese exports reached record levels last year.But a broadening trade war under Trump would mean that the country will now need to rely on other drivers of economic activity.Beijing on Tuesday announced its own measures in retaliation for Washington’s latest tariff hike — and vowed it would fight a trade war to the “bitter end”.The moves will see China impose levies of up to 15 percent on a range of US agricultural products including soybeans, pork and wheat starting from early next week.Beijing’s countermeasures represent a “relatively muted response” in comparison to Trump’s all-encompassing tariffs, wrote Lynn Song, chief economist for Greater China at ING.”The retaliation could have been a lot stronger, and with every further escalation the risks are also rising for a stronger response,” he added.- More help needed -Analysts say authorities may announce plans this week to boost the economy — adding to a string of aggressive support measures announced late last year.Experts warn that the existing measures don’t go far enough in providing the stimulus that could right China’s wobbly economy.”Guidance from Beijing notes that the fiscal deficit will increase substantially this year,” Harry Murphy Cruise, head of China and Australia economics at Moody’s Analytics, told AFP.”We expect an official fiscal deficit of four percent of GDP (up from three percent) and record high issuance of special government bonds,” he said.Wednesday’s proceedings are also expected to see the government release information on its planned defence spending in 2025.Geopolitical competition between Beijing and Washington is set to intensify this year, analysts say.The status of self-governed Taiwan — claimed by China as part of its sovereign territory — is chief among the sources of tension.That spending will finance Beijing’s frequent dispatch of military aircraft around Taiwan, intended to put pressure on authorities in the democratic island.It also comes after Trump proposed a coordinated halving to the military budgets of the United States, Russia and China.China has not agreed to such a move, with a foreign ministry spokesperson suggesting last month that any reductions in military expenditure should be conducted by Washington first.

Stock markets were in gloomy mode Tuesday as China, Mexico and Canada hit back at US tariffs and fears grew that Europe could be President Donald Trump’s next target in the growing global trade war.Wall Street stocks tumbled for a second straight session while European markets closed down sharply amid worries a prolonged trade spat may knock the world economy out of kilter.Frankfurt plunged more than 3.5 percent for its worst session in almost three years, while London shed 1.3 percent and Paris gave up 1.9 percent. “The headlines surrounding an impending global trade war have become too loud to ignore on the once-booming trading floor of Frankfurt,” noted Konstantin Oldenburger, analyst at CMC Markets.   “The sounds of trade disruptions are growing louder and are becoming increasingly difficult to ignore, even though Trump has yet to impose any direct tariffs against Germany or the European Union.”Of the 11 industrial sectors in the S&P 500, 10 finished in negative territory, with technology flat.The biggest losers in the Dow included Boeing, which slid 6.6 percent, 3M, which dropped nearly five percent and American Express, which sank 4.1 percent.”The longer the tariffs last or are in effect, the longer that this market will decline,” Sam Stovall of CFRA Research said.”Investors are worried that we are headed for a recession and a bear market.” US tariffs of 25 percent for Canadian and Mexican goods came into effect on Tuesday along with the doubling of levies on Chinese imports to 20 percent. The three countries announced retaliatory moves.”The US administration is continuing to cause even more global upheaval and overnight by far the broadest set of tariffs yet has come into effect,” said Deutsche Bank analyst Jim Reid.But Reid added “there is still some market doubt as to whether all these tariffs will persist for a prolonged period of time.”The European Union warned that the tariffs on Canada and Mexico risk “disrupting global trade,” and urged Washington to reverse course.”These tariffs threaten deeply integrated supply chains, investment flows, and economic stability across the Atlantic,” said EU trade spokesman Olof Gill.Amid fears the EU will be the next target, French Economy Minister Eric Lombard insisted that the bloc would be tough in negotiations.”We have negotiators who are playing hardball, we will play hardball but… we need to reach a balanced deal to protect our economies,” Lombard said.- China congress and eurozone rates -Traders have their eyes on other major economic events this week.Investors hope China will announce a huge economic stimulus package at its annual parliamentary meeting, the National People’s Congress.On Thursday, the European Central Bank is expected to cut interest rates again to try to boost a floundering eurozone economy.The key scheduled economic event Friday will be US jobs data.- Key figures around 2130 GMT -New York – Dow: DOWN 1.6 percent at 42,520.99 (close)New York – S&P 500: DOWN 1.2 percent at 5,778.15 (close)New York – Nasdaq Composite: DOWN 0.4 percent at 18,285.16 (close) London – FTSE 100: DOWN 1.3 percent at 8,759.00 (close)Paris – CAC 40: DOWN 1.9 percent at 8,047.92 (close)Frankfurt – DAX: DOWN 3.5 percent at 22,326.81 (close) Tokyo – Nikkei 225: DOWN 1.2 percent at 37,331.18 (close)Hong Kong – Hang Seng Index: DOWN 0.3 percent at 22,941.77 (close)Shanghai – Composite: UP 0.2 percent at 3,324.21 (close)Euro/dollar: UP at 1.0611 from $1.0487 on MondayPound/dollar: UP at $1.2789 from $1.2701 Dollar/yen: UP 149.75 from 149.50 yenEuro/pound: UP at 82.96 pence from 82.57 pence West Texas Intermediate: DOWN 0.2 percent at $68.26 per barrelBrent North Sea Crude: DOWN 0.8 percent at $71.04 per barrel