ASIA BUSINESS OUTLOOK9DECEMBERNEWSROOMSOFTBANK CEO ANNOUNCES $100B INVESTMENT PLAN FOR THE USChina experienced record capital outflows of US$45.7 billion in November, driven by global market turbulence following Donald Trump's U.S. presidential election win, according to data from the State Administration of Foreign Exchange (SAFE). Cross-border payments from portfolio investments totaled US$234.6 billion, while receipts reached only US$188.9 billion, marking the largest monthly deficit on record. The depreciation of the yuan against the U.S. dollar, driven in part by Trump's tariff threats, has added to the pressure. This comes as the U.S. dollar strengthened globally following Trump's victory, influencing portfolio flows across emerging markets, including China. The outflows were particularly evident in China's bond market, with the central bank reporting that foreign institutions reduced their holdings of onshore bonds for the third consecutive month in November. Simultaneously, data from the Institute of International Finance (IIF) confirmed similar trends, noting outflows from both Chinese bonds and equities.The Stock Connect scheme, a major avenue for foreign investors to purchase mainland shares, also played a role in the capital outflows. The program facilitates forex transactions through Hong Kong, contributing significantly to cross-border yuan movements.Looking ahead, BNP Paribas noted that China's economic recovery in Q1 2025 will depend heavily on the speed and scale of stimulus implementation announced during the recent Central Economic Work Conference (CEWC). Measures such as increasing the budget deficit, issuing more debt, and loosening monetary policy will be critical, particularly as the market awaits clarity on potential U.S. tariffs. SoftBank Group CEO Masayoshi Son, alongside President-elect Donald Trump, announced a $100 billion investment in the United States over the next four years, aimed at bolstering the U.S. economy and creating 100,000 jobs. The investment will focus on artificial intelligence and related infrastructure, aligning with Trump's commitment to economic growth during his second term, which begins on January 20.The announcement, made during a flag-bedecked event at Trump's Mar-a-Lago club in Palm Beach, Florida, reflects Trump's efforts to attract significant foreign investment to support economic expansion and combat inflation. Trump hailed the pledge as a show of "monumental confidence in America's future" and jokingly encouraged Son to raise the investment to $200 billion, prompting laughter from Son, who replied, "I'll try."While the scale of the pledge is substantial, it remains unclear how SoftBank plans to finance the investment. As of September 30, SoftBank's balance sheet showed approximately $27 billion in cash, and its Vision Fund 2 reportedly has $3 billion remaining to deploy. A source familiar with the matter suggested that capital for the investment could come from Arm Holdings, the British-based chipmaker in which SoftBank holds a major stake.Trump praised Son as "one of the most accomplished business leaders of our time", reinforcing his administration's narrative of fostering job creation and technological innovation through global partnerships. The investment pledge further positions AI development as a cornerstone of the U.S. economic strategy under Trump's leadership. TRUMP'S TARIFF THREATS RESULTS IN MASSIVE DEPRECIATION OF YUAN
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