Over the past week, there has been a deluge of grim economic data, especially from Southeast Asia. We’ve been greeted with headlines such as Singapore trimming its 2022 GDP growth forecast to 3-4% as well as Thailand’s central bank raising its key policy rate by 25 basis points to 0.75%, expected to weigh on consumer sentiment and demand.
As economic headwinds and the scourge of inflation take a toll on the bottom lines of businesses, even China’s tech giants can’t escape unscathed.
A good example is Alibaba, whose revenue growth ground to a halt on the weak Chinese economy, partly driven by a two-month COVID-19 lockdown in Shanghai. For the April-June quarter this year, the Chinese e-commerce giant posted a largely unchanged revenue of RMB 205.56 billion (USD 30 billion).
Meanwhile, the Chinese government is not resting on its laurels when it comes to an economic slowdown. Amid the global hype over digital currencies, China is aiming to stimulate consumption in its pandemic-hit economy through its digital yuan, e-CNY.
The adoption of the e-CNY as a supplementary or alternative currency to the conventional cash-based CNY is also expected to improve the convenience of capital flow, make China’s financial industry more accessible to the rest of the world, and enhance the global competitiveness of the RMB. It remains to be seen if this strategy will work.
Read more about China’s growing e-CNY industry and how it is reshaping the future of digital payments here.
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