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June
NZ must free up land, expand housing supply to ease home affordability - IMF
Written by Nur Yasmin
New Zealand needs to keep increasing the supply of houses to address housing affordability, which is still a concern, the International Monetary Fund said on Wednesday, adding that land should be freed up to promote investment.
“The cyclical downturn in (house) prices does not imply that the structural housing shortage has been addressed. There is a strong need to expand housing supply, including for social housing to improve affordability,” the IMF said in a statement issued after its "Article IV" review of New Zealand policies
New Zealand house prices have fallen roughly 16% since their peak in November 2021 as the central bank has aggressively hiked the cash rate with the intent of dampening inflation. However, New Zealand still has one of the highest house-price-to-income ratios in the world.
The IMF report said while prices have fallen, financial stability risks appear contained.
It added that achieving long-term affordability depends critically on freeing up land supply and improving planning and zoning, and fostering infrastructure investment to enable fast track housing developments and reduce construction costs and delays.
More broadly, the IMF said that New Zealand’s economic growth is expected to slow to 1% annually both this year and next while inflation will likely gradually decline to be between 1% and 3% by 2025.
“Risks to the outlook stem from the external environment and a potential need for stronger tightening of monetary and financial condition,” it said. (Reuters)
June
New Zealand says new NATO partnership to cover climate change, security
Written by Nur Yasmin
New Zealand is negotiating a new type of partnership with NATO, which will likely cover areas of common interest including the international rules based order, climate change and cyber security, the country's foreign minister said on Wednesday.
Nanaia Mahuta said in an email to Reuters that NATO is shifting all of its partnership arrangements to a new model called an Individually Tailored Partnership Programme and that New Zealand was currently working out the details.
"Our ITPP will record long-standing areas of mutual interest between New Zealand and NATO, and possible opportunities for cooperation over the arrangement period," she said.
"While the exact areas of work are yet to be agreed, we expect it will cover areas of common interest such as support for the international rules based order, climate change, and cyber security," she said.
New Zealand has been a NATO partner since 2012 but is not a member. A NATO statement in February said New Zealand and NATO were strengthening relations to address shared security challenges.
Mahuta said neither New Zealand nor NATO considers the ITPPs to be a new bloc or formal regional grouping.
New Zealand has only one official ally - neighbouring Australia - although both are part of the Five Eyes intelligence and security alliance that includes Britain, Canada and the United States.
New Zealand has a long-standing nuclear free policy and Mahuta said the ITPP would be in line with that policy.
New Zealand's Prime Minister Chris Hipkins earlier this week confirmed he would be attending the NATO summit in Lithuania as well as visiting China at the end of June.
NATO will set up a liaison office in Tokyo in 2024 and use it as a hub for co-operation with Australia, Japan, New Zealand and South Korea, the Nikkei newspaper said on Tuesday, a plan China has previously described as unwelcome. (Reuters)
June
South Korea sues North for $35 mln over blown up liaison office
Written by Nur Yasmin
South Korea sued North Korea on Wednesday for $35 million in compensation for a liaison office that North Korea blew up in 2020, in a case highlighting the breakdown of ties between the neighbours as the North presses on with its weapons programmes.
North Korea blew up the liaison office, set up in 2018 on its side of the border to foster better ties, after threatening retaliation for North Korean defectors in the South waging a propaganda leaflet campaign.
A South Korean official said the suit, lodged with the Seoul Central District Court, was the first the government had ever filed against the North.
The South Korean Unification Ministry, which handles inter-Korean affairs, said the case had to be filed before June 16 to comply with a three-year statue of limitations under South Korean law.
"This action is taken to preserve national claims and interrupt the statute of limitations of the right to claim compensation for damages," the ministry said in a release.
Reclusive North Korea does not accept queries from foreign journalists. A South Korea official, asked about the likelihood of the North engaging with any such legal process, said it was still necessary to file the suit on time.
The liaison office was the first diplomatic mission of its kind between the rivals and was a symbol of reconciliation at a time of optimism over several projects aimed at reducing tension.
North Korea blew it up in front of state media cameras after complaining of the defectors' campaign of floating propaganda leaflets into the North tied to balloons.
South Korea estimated the cost of the destroyed office and a badly damaged 15-storey building nearby to house South Korean officials, was 44.7 billion won ($35 million).
South Korea said the North's demolition was a "violent" and "illegal" act that undermined trust and infringed on the property rights of the South and its people.
North and South Korea remain technically at war because their 1950-53 conflict ended in a truce, not a treaty.
Nuclear-armed North Korea has over the past year or more been testing various weapons, including its biggest intercontinental ballistic missile, ramping up tension with the South and its main ally, the United States. (Reuters)
June
New Zealand national broadcaster launches review after stories altered
Written by Nur Yasmin
New Zealand's national radio broadcaster said it has set up an independent review of its editorial processes after it published a range of stories on its website, including on Russia's invasion of Ukraine, that were altered to present "a false account of events".
Radio New Zealand (RNZ), which is government-funded but has editorial independence, had by Wednesday corrected 22 stories on its website dating back to April 2022 because of what it termed "inappropriate editing".
The broadcaster, which first revealed the issues last Friday, said its board decided an independent review was necessary. The panel would review editorial processes and "examine factors and warning signs, which led to international wire stories being subedited with inappropriate content," it said in a statement.
Reuters supplied 21 of the altered stories and one came from Britain's BBC, RNZ's list of stories that have been corrected shows.
Most of the corrections RNZ included in the 22 stories indicate the editing had changed the original stories to present pro-Russian interpretations of some events in Ukraine as fact. Stories on other topics, including on China-Taiwan relations and the Middle East, have also been corrected.
In its statement, RNZ said it would continue to audit stories published on its website and restore copy to its original state where issues are identified.
RNZ is a media client of Reuters.
Reuters said it had addressed the issue with RNZ.
"As stated in our terms and conditions, Reuters content cannot be altered without prior written consent. Reuters is fully committed to covering the war in Ukraine impartially and accurately, in keeping with the Thomson Reuters Trust Principles," a spokesperson said.
The BBC did not immediately respond to a request for comment on RNZ's move to review its internal processes. Earlier in the week, a BBC spokesperson referred Reuters' request for comment back to RNZ.
RNZ Board Chairman Jim Mather said the review, to be conducted by three independent experts, was "in the interest of achieving and protecting the highest standards of journalism at RNZ."
"We are focused on restoring the public’s confidence in us," he said.
The panel includes New Zealand media law expert Willy Akel, public law expert and former journalist Linda Clark and former director of editorial standards at the Australian Broadcasting Corporation, Alan Sunderland.
"I am pleased to be asked to be part of the panel on what is a significant review. Issues of trust and integrity in the news media are important, and I look forward to getting to work on this," Sunderland told Reuters.
Clark referred Reuters to the chair of the RNZ board while Akel declined to comment.
Last Friday, RNZ said it had become aware of the editing issue, and had started an "immediate investigation". A staff member had been put on leave while the inquiry took place and was now prevented from accessing RNZ's computer systems, it added. (Reuters)
June
NATO to set up liaison office in Tokyo, strengthen links in region - Nikkei
Written by Nur Yasmin
NATO will set up a liaison office in Tokyo in 2024 and use it as a hub for cooperation with South Korea, Australia, New Zealand and Japan, the Nikkei reported on Tuesday.
The Japanese ambassador to the United States said in May that the U.S.-led military alliance was planning a Tokyo office, the first in Asia, to facilitate consultations in the region - a plan that French President Emmanuel Macron objected to.
The report added that NATO will deepen collaboration with its four major partners in the Pacific, preparing bilateral cooperation documents with each, which will be used as a base for collaboration on issues such as cybersecurity and space.
Japanese Prime Minister Fumio Kishida said last month his nation has no plans to join NATO as a member or semi-member state, and there were media reports at the time that Kishida was arranging to attend a NATO summit in Lithuania in July.
South Korea's presidential office said they had no comment when asked about the report. (Reuters)
June
New Zealand's economy likely in recession as rate hikes take hold
Written by Nur Yasmin
The New Zealand central bank’s aggressive hiking of the cash rate likely pushed the country into a technical recession in the first quarter, a Reuters poll found, giving traction to the idea the cash rate may have peaked.
Gross domestic product (GDP) is expected to be down 0.1% in the March quarter, below the Reserve Bank of New Zealand's (RBNZ) forecast of 0.3% growth, according to a Reuters poll of 13 economists.
This would mean the country moved into a technical recession - two consecutive quarters of negative growth - after the economy contracted by 0.6% in the fourth quarter.
New Zealand's central bank last month signalled it was done tightening after raising rates by 25 basis points to the highest in more than 14-years at 5.5%, ending its most aggressive hiking cycle since 1999.
Yet a handful of economists think the boost to the economy from historically high migration and the return of tourism might force the central bank to do more. The markets still give a 50% chance that there will be a further 25 basis point hike by October.
“Most forecasters, ourselves included and RBNZ and Treasury up until the budget, were all forecasting a recession to start about now. The fact that it started nine months ago, just shows us that we're on a much weaker footing than what we thought,” said Kiwibank chief economist Jarrod Kerr.
He said he expects the next cash rate move to be a cut.
The economy in the first quarter was hurt by Cyclone Gabrielle and the Auckland flash floods, which caused as much as NZ$14 billion ($8.6 billion) in damage. They reduced farm production, hurt tourism and slowed consumer spending.
However, the data has been volatile of late and a number of economists expect growth to be weak or flat rather than negative.
“Whether or not it's weak but weakly positive or weak but weakly negative it is still weak and in terms of the momentum of the economy that’ll be what’s important for the Reserve Bank,” said principal economist at Infometrics Brad Olsen. (Reuters)
June
Japan's Kishida to unveil new child care plan amid election rumours
Written by Nur Yasmin
Japanese Prime Minister Fumio Kishida is set to unveil on Tuesday a package of measures aimed at reversing the dwindling birthrate, by increasing payouts to families with children.
The announcement of his flagship policy comes amid market speculation that Kishida will dissolve parliament this week and call a snap election, a move that could heighten calls from within his ruling party for big spending.
Although an election for parliament's powerful lower house is not due until late 2025, Kishida, who swept to power in October 2021, is keen to boost his grip on power in the party ahead of a leadership race next September, analysts say.
The package, which Kishida is likely to explain at a press conference, may help his party appeal to the public with promises of payouts.
Kishida has said he hopes to double child care spending, now about 4.7 trillion yen ($33.7 billion), by the early 2030s.
Under the plan, the government is likely to earmark about 3.5 trillion yen annually for the next three years for child care allowances and support for those taking child care leave.
The government will also urge companies to allow employees to choose more flexible working styles such as taking three days off a week, according to a draft of the package obtained by Reuters.
Analysts, however, doubt whether the package will do much to stem a chronic decline in the birthrate and Japan's rapidly ageing population.
"While the steps could help families with children, the real problem that must be dealt with is how to support low-income households unable to get married," said Toru Suehiro, chief economist at Daiwa Securities.
There is uncertainty on how the government will fund the measures, with Kishida ruling out the chance of a near-term tax hike, stoking fears of a worsening of Japan's already tattered finances.
The government will work out the details of securing stable sources of funding by year end, officials have said.
Japan's birthrate has been on a steady decline despite a series of government initiatives to reverse the trend, dropping to a record low of 1.26 last year from 1.57 in 1990, government data shows. (Reuters)
June
China's Xi says willing to begin free trade talks with Honduras
Written by Nur Yasmin
China is willing to begin talks on a free trade agreement with Honduras "as soon as possible", Chinese President Xi Jinping said on Monday, during the first visit by the Central American country's president since forming diplomatic ties in March.
Honduras' President Xiomara Castro is on a six-day official visit to China. She launched diplomatic relations with Beijing after cutting ties with Taiwan. The country is also seeking support from China to mitigate its debt burden.
"You have resolutely fulfilled your election promise of establishing diplomatic relations with China, made a historic decision, and demonstrated your firm political will," Xi told Castro during talks in Beijing.
China will actively promote Honduran products to enter the Chinese market, Xi was quoted as saying by state broadcaster CCTV.
Chinese customs said on Monday it had approved the import of Whiteleg shrimp from Honduras.
China also encourages Chinese enterprises to participate in Honduras' projects in areas including energy, infrastructure and telecommunications, CCTV cited a joint declaration as saying.
The Honduran side is willing to provide policy support and facilitation, CCTV reported.
The Chinese leader also emphasised that both sides should deepen political mutual trust, and uphold the "One-China" principle.
"One-China principle is the primary premise and political foundation for the establishment of loyal diplomatic relations and the development of bilateral relations," Xi said.
When Honduras ended its decades-long relationship with Taiwan, the island's foreign minister accused it of demanding exorbitant sums before being lured away by Beijing.
China claims democratically ruled Taiwan as its own territory with no right to state-to-state ties, a position Taipei strongly rejects. China demands that countries with which it has ties recognise its position.
The Honduran foreign ministry said at the time it recognised the People's Republic of China as the only legitimate government that represents all of China and that Taiwan was an "inseparable part of Chinese territory".
The United States is watching with concern as China expands its footprint in its backyard by taking away Taiwan's Central American allies, and has repeatedly warned countries not to believe China's promises of aid.
Xi said that China supports Honduras' "independent choice of development path in line with its national conditions", and opposes any external interference in the Central American country's internal affairs. (Reuters)
June
South Korean leader criticises China envoy over 'inappropriate' remarks
Written by Nur Yasmin
South Korea's president stepped up criticism of China's ambassador on Tuesday, saying the envoy had been disrespectful in suggesting South Korea had made the wrong choice by siding with the United States against China.
The ambassador, Xing Haiming, sparked controversy last Thursday when, in comments to an opposition politician, he warned South Korea against making a "wrong bet" when it came to Sino-U.S. rivalry and urged it to stop "decoupling" from China.
South Korea's foreign ministry summoned Xing on Friday to issue a protest and express "strong regret" over comments that the ministry said were "provocative" and a possible interference in internal affairs.
President Yoon Suk Yeol made his disapproval clear in a cabinet meeting on Tuesday, questioning Xing's approach as a diplomat.
"Looking at Ambassador Xing's attitude, it's doubtful if he has an attitude of mutual respect or promotion of friendship as a diplomat," the Yonhap news agency, citing unidentified people at the meeting, reported Yoon as saying.
"Our people are displeased with his inappropriate behaviour."
Yoon's office did not immediately comment on the Yonhap report but a presidential official said Xing had made "distorted" remarks and the government was awaiting "appropriate measures" by China.
South Korea has been a staunch U.S. ally for decades and is host to nearly some 28,000 U.S. troops but it has developed extensive economic ties with China in recent years.
China's foreign ministry called in South Korea's ambassador on Saturday to express its "serious concern and dissatisfaction" over Seoul's "improper reaction" to Xing's comment.
On Tuesday, it was more conciliatory.
Ministry spokesperson Wang Wenbin said China regretted some South Korean media reports that had been "inconsistent with the facts" in reporting Xing's comments and had even attacked him personally but he also stressed the benefit of good ties.
"Promoting the healthy and stable development of China–South Korea relations serves the common interests of both sides. We hope that the Republic of Korea will meet China halfway," Wang told a regular press conference.
A growing number of legislators from Yoon's ruling party have been calling for Xing to be declared "persona non grata" and expelled.
"If Ambassador Xing does not issue an official apology and continues his rude behaviour, we should consider taking steps to banish him," said Kim Seok-ki, a member of parliament's foreign affairs committee.
Foreign Minister Park Jin said on Monday Xing's remarks violated the Vienna Convention governing diplomats' duties including promoting friendly relations.
When asked about declaring Xing persona non grata, Park said the ministry had "clearly warned that he would be responsible for all consequences".
Xing has decades of experience working in both South and North Korea. (Reuters)
June
Taiwan civil defence handbook includes tips on identifying Chinese soldiers
Written by Nur Yasmin
Taiwan's military released an updated civil defence handbook on Tuesday that for the first time includes a section on how to tell the difference between Chinese and Taiwanese soldiers based on their uniforms, camouflage and insignia.
Taiwan unveiled the handbook last year amid a rise in tensions with Beijing and after Russia's invasion of Ukraine, detailing how to find bomb shelters, water and food supplies via smartphone apps, as well as tips for preparing emergency first aid kits.
Taiwan's defence ministry said they received feedback that the book needed to better reflect war scenarios, given the conflict in Ukraine, which Russia calls a "special operation".
One of the changes includes illustrations of Taiwanese service personnel and "enemy soldiers" wearing Chinese military uniforms.
The Taiwanese soldiers are shown smiling, whereas the Chinese ones have downturned mouths and a severe expression.
It's actually quite hard to distinguish them," All-Out Defence Mobilisation Agency Director Shen Wei-chih told reporters at the defence ministry.
The booklet assumes Chinese soldiers will wear People's Liberation Army uniforms; experts say special forces troops may wear different gear as they try to infiltrate Taiwan during an invasion.
Taiwan's emergency personnel, including police and first responders, are also shown in the new handbook, which will be available for download.
The agency is working on an English translation, Shen said.
Planning for the handbook predates Russia's attack on its neighbour, which has prompted debate on its implications for Taiwan and ways to boost preparedness, such as reforms to the reservist training and extending military service.
China views democratically governed Taiwan as its own territory despite Taipei's strong objections and has ramped up military and political pressure over the past three years to push those sovereignty claims.
Taiwan has also been inspecting bomb shelters to make sure they are suitable and updating signs to make them easier to find; markers may eventually include flashing lights, officials said at the same news conference. (Reuters)