TrendLines

February 25, 2019

BROWSING - Barry Whalen

He who controls the past controls the future.
He who controls the present controls the past.
 - George Orwell.

ALL the evidence is that the Party is fully committed to continuing the current line of 'socialism with Chinese characteristics for a new era'. Within the foreseeable future, there will be no deviation from Deng Xiaoping's line that the Party's power has to be maintained for at least a hundred years . . .
GEORGE ORWELL's masterpiece "1984" is banned in China, and it's not hard to understand why. "Big Brother" and the classic quote "all animals are equal, but some animals are more equal than others" has an eerie resonance in Beijing's corridors of power.
Orwell holds up a mirror to China's reverence for its Communist past as a determinant of its future, and highlights not only the absurdities of the Marxist-Leninist class struggle, but the way it has been consigned to the dustbin of history.
History is an important tool for the Communist Party of China (CPC) to use in legitimising its hold on power.
To the Chinese, the past determines the present, and probably everything you want to know about  the "restored" China you can find in Dutch Sinologist Hendrik Schulte Nordholt's weighty analysis, China and the Barbarians : Resisting the Western World Order (Leiden University Press, 2018).




February 25, 2019

RAPID growth of Asia's stock markets is driving change in global financial markets - and in M&A. The OECD says integration of Asia's financial markets with the global market has begun . . .
ASIAN companies are now the world's largest users of public equity financing, raising US$81 billion in 2017. Almost twice as many initial public offerings as the annual average between 2000 and 2016 came to market in Asia in that single year. A record number of 1,074 companies listed in Asia in 2017.
In its annual analysis of the global financial market, the Paris-based OCED notes that, on an international scale, the most important development has been the rapid growth of Asian stock markets - both in absolute and in relative terms.
This has, in turn, led to a rise in the number of global pension funds and other institutions investing in Asian equities and Asian corporate bonds. There has also been an increase in mergers and acquisitions.
According to the OECD, integration of Asia's financial markets with the global market has begun. Among the most significant developments, it says, is the implementation of Stock Connect in Hong Kong, which paved the way for foreign investors to buy Chinese A-shares.




February 25, 2019

NOT all countries will converge to a Western diet, says McKinsey, with India the standout example. Successful producers will be those that monitor demand shifts . . .




February 1, 2019

Global businesses are prioritising quality products, partnerships and millennials as the key to driving sales in China . . .




February 1, 2019

The indirect impact of tariffs if particularly prevalent in the transport sector (including the car industry) because it involves a complex multinational production chain . . .




February 1, 2019

HONG KONG has already coined a new phrase - the 'one-hour living circle' - to describe the new-found connectivity of Guangdong, Hong Kong and Macao following completion of the West Kowloon terminus for China's high-speed train, and opening of the Hong Kong-Macao-Zhuhai Bridge.




February 1, 2019

ALL the building blocks are now in place for China's Greater Bay Area to one day rival Silicon Valley in terms of innovation and advanced manufacturing. Achievement of that dream  has been put in the hands of Chinese Vice Premier Han Zheng . .




December 12, 2018

MALAYSIA is offering incentives and full foreign ownership of private hospitals and specialist services as it further develops its healthcare sector -- and looks to the UK and Australia for an aged care model . . .

MALAYSIA is looking to Australia to source a template for expansion of aged healthcare facilities. It wants to provide a mix of Government and private services.
Shahrol Shahabudin, MIDA Division Director for Healthcare, Education and Hospitality, says that, while the Government has been expanding its hospital and medical infrastructure -- and servicing a growing medical tourism sector -- there is now increasing demand in Malaysia for aged healthcare.
That need is currently being addressed. Apart from Australia, the Government is also looking at the aged care model adopted by the UK.
A South Australian aged care provider, ACH Group, recently signed an MoU with Malaysia's Aged Care Group (ACG) to share knowledge in providing care for older people in both Australia and Malaysia.
ACH sees the agreement as an opportunity to learn how best to provide care to different populations in a multicultural society.




December 12, 2018

RUSSIA, China, the United States and North Korea are all key players in South Korean President Moon's grand plan to "connect" a newly-burgeoning economic region of Northeast Asia, a "community of peace and prosperity". Again, the key is Pyongyang. Can it be counted on as a consistent, willing partner? Or will its traditional recalcitrance to 'reform' again dash all hopes . . .

SEOUL -- Since his election to the Presidency of South Korea in May 2017, Moon Jae-in has been pursuing an ambitious policy intended to achieve multiple political, strategic, economic - and even, presumably, personal objectives.
The Busan-native, born of North Korean refugee parents from the evacuation from Hungnam, North Korea, in 1950, Moon has brought, under his far-reaching New Northern Policy, a number of policy initiatives and economic investment projects (many recognisable to ATI readers) involving Russia, China and, especially, North Korea.
The New Northern Policy has its own Presidential Committee on Northern Economic Co-operation, involving four Ministers collectively responsible for Foreign Affairs, Economy, Finance and Trade.
Its Chairman, Song Young-gil, citing President Moon's "dream" of "being able to board a train in Busan . . . pass through Rajin-Khasan and reach Europe by the Trans-Siberian Railway", sees it as "a vision" that not only seeks to "connect" South Korea to "countries in the northern region" but also "aims to develop Northeast Asia . . . into a community of peace and prosperity".
The Policy, which ultimately seeks to enlist support from Russia, China, Mongolia, and the Eurasian Economic Union, makes specific reference to the resurrection of previous economic projects (the ROK-Russia gas pipeline, the Rajin-Khasan railway) again familiar to long-term ATI readers.




December 12, 2018

THE U.S./China trade war is not a "trade' war. Rather it is the U.S. trying to contain China's economic development, according to analysis by the French banking group, Natixis.

WHILE the measures taken by both the U.S. and China seem to focus on trade, their impact is actually going beyond trade if one delves into the product classification of what is involved in the conflict, Natixis says.
'In our initial Natixis research, we decompose the products covered by the tariff list by their level of technologies, and find that:
1) The first round of the U.S. tariffs aim at China's high-end exports with a view to contain China's technological advance, with seven per cent of the tariffs on the very high technology products and 55 per cent on the high technology products. Some of the products included in the U.S. tariffs list have not yet been Chinese exports to the US, so the U.S.' true intention of the tariffs is not in reducing the trade deficit with China, but to contain China moving up the technology ladder;
2) China's retaliation to the first batch of tariffs focusses on low-end non-intermediate products (such as agriculture), rightly so as China should not impose tariffs on what it needs to move up the ladder (such as aircraft and semiconductors);
3) The second batch of U.S. tariffs focusses on low-end intermediate exports from China with the intention to reduce China's role in the global value chain and to push reshoring to the U.S. and to other production locations.
But the US has silently removed some key products which would be expensive to substitute in terms of an increase in prices for the final consumer (such as white goods for which China has become the largest supplier by far).
4) The second round of China's retaliation is quite similar to the first but with somewhat more high-technology products, as China's imports from the US are limited.
The trade impact of the trade war is limited, but the overall economic impact could be broader. As regards the economic impact of the trade measures, they are not large enough to justify such a negative market reaction if we only focus on the trade dimension of the measures.
In our assessment of the trade war impact, we take into consideration two key parameters, namely, tariff pass-through rate and the price elasticity of demand.




December 12, 2018

RAPID growth of Asia's stock markets is driving change in global financial markets - and in M&A. The OECD says integration of Asia's financial markets with the global market has begun . . .

ASIAN companies are now the world's largest users of public equity financing, raising US$81 billion in 2017. Almost twice as many initial public offerings as the annual average between 2000 and 2016 came to market in Asia in that single year. A record number of 1,074 companies listed in Asia in 2017.
In its annual analysis of the global financial market, the Paris-based OCED notes that, on an international scale, the most important development has been the rapid growth of Asian stock markets - both in absolute and in relative terms.
This has, in turn, led to a rise in the number of global pension funds and other institutions investing in Asian equities and Asian corporate bonds. There has also been an increase in mergers and acquisitions.
According to the OECD, integration of Asia's financial markets with the global market has begun. Among the most significant developments, it says, is the implementation of Stock Connect in Hong Kong, which paved the way for foreign investors to buy Chinese A-shares.
"As a consequence, stock exchanges and investment banks in Asia have increasingly become important actors in globally-connected capital markets," says Mats Isaksson, OECD's head of Corporate Governance and Corporate Finance.
Isaksson is author of the OECD Equity Market Review of Asia, launched at the 2018 Asia Roundtable on Corporate Governance.
Thousands of Asian companies are now listed or traded on markets other than their local exchanges, and investment banks from non-Asian markets - in particular from the United States and Europe - play a significant role in Asian markets, together with other globally active intermediaries and service providers.




November 2, 2018

WITH China running out of room to retaliate on goods as the U.S. ramps up tariffs, it could opt to pursue non-tariff actions affecting services and investments from the U.S. says ratings agency Standard and Poor's . . .

HONG KONG -- With China retaliating against the U.S. announcement of tariffs on US$200 billion of Chinese imports -- by imposing 5% to 10% tariffs on U.S. imports valued at US$60 billion effective September 24 -- ratings agency Standard and Poors is predicting what it calls "the shock arising from this escalation by both sides" to eventually have a larger proportionate impact on the U.S. economy than on China's.
U.S. tariffs imposed or to be imposed on Chinese imports now total US$250 billion, which represents about 50% of the US$505 billion value of China's annual exports to the U.S., S&P says.
Chinese tariffs imposed or to be imposed on U.S. imports now total US$110 billion, representing about 85% of the US$130 billion value of U.S. annual exports to China.
 "In the event of a trade war that sees
escalation of the current U.S.-China trade dispute to one where 25% tariffs are imposed on all non-fuel goods between the two largest economies, with a shock to confidence added in, roughly 1.2% cumulatively could be shaved off U.S. GDP over 2019-2021," S&P says.
"For China, the loss to GDP would be around one per cent.




October 24, 2018

COMPARISON with China  will get in the way of understanding the opportunities in India, warns a new report to the Australian Government . . .

TRANSFORMATION of the Indian economy now under way should generate annual growth of between six and eight per cent over the next two decades, according to a new Australian Government report.
The report urges Australian business not to put India in the "too hard" basket, but rather to seriously consider opportunities that will come from the Indian sub-continent.
"Over the next 20 years, no single market in the world will offer more growth opportunities than India," says Peter Varghese, author of the report.  "India will be the world's fastest-growing economy. By 2025, it will overtake China in population and is forecast to become the world's third-largest economy by 2035, as measured by exchange rates."
Varghese says India will not be another China, and that it is a mistake to try to compare the two Asian giants. "India needs to be seen in its own terms," he says. "It has the scale of China, but it will not be another China. Indeed, comparison with China will get in the way of understanding the opportunities in India."
Varghese addressed a luncheon hosted by CEDA (the Committee for Economic Development of Australia) in Sydney to launch the report. A briefing followed in Melbourne.
He said the fundamental difference between India and China was that no Indian Government could ever direct the country's economy -- or control the allocation of resources.
"China has the discipline for economic planning that stems from its political system, and the competence of its State institutions," he said. "There is no counterpart of the Chinese system in India."




October 19, 2018

COMPANIES trading across multiple jurisdictions - and SMEs lacking the resources of the large multinationals to trade digitally - are likely to benefit most from new trade finance platforms being developed in Asia . . .




October 10, 2018

THAILAND is approaching capacity in terms of how many visitors it can handle. A rethink may be needed as the Government promotes Thailand 4.0 . . .

BANGKOK — In early July, while the world focussed on a dangerous and dramatic effort to rescue 13 young football players trapped in a flooded cave in northern Thailand, a tragedy was unfolding further south with the potential to inflict some serious economic damage on Thailand’s economy and reputation.
On July 5, two boats carrying 130 tourists capsized in stormy seas off the popular resort island of Phuket. Forty-seven tourists, all from China, perished.
While the disaster received little media attention globally, it was big news in China, where tour operators began cancelling bookings to Thailand as outraged and nervous Chinese citizens changed their minds about traveling to a country that ranked second among their preferred holiday destinations.
 Tourism is an essential source of revenue for Thailand.
 In 2017, it directly accounted for about 9.4 per cent of gross domestic product, or US$42.2 billion, and indirectly about 21 per cent, or US$95 billion, according to the World Travel and Tourism Council.
 Thailand welcomed over 35 million tourists last year, and more than 9.8 million of them came from China. But within a month of the ferry disaster, over 600,000 Chinese tourists had cancelled their trips to the Kingdom.
 Alarm bells have begun ringing in Thailand.
 Can the country’s tourism industry recover from the fallout of the Phuket boat tragedy? Is the Kingdom truly less safe than other comparable destinations in the region?
 And if tourism takes a prolonged hit, how will that affect the overall economy, which has finally been showing solid growth over the last 18 months following a period of zero growth four years ago?
 Kudos should be given to Tourism Minister Weekrasak Kowsurat.
 Rather than issue hollow assurances that the Kingdom is a paragon of safety, he acknowledged mistakes, accepting responsibility and looking for concrete steps to take.
 He urged Government agencies to begin solving a series of safety-related problems if they wanted to see the country’s reputation restored and improve.
 “If we become known as a country that does not compromise on safety, it will become another plus point for us to be recognised for not being “lax” in our standards,” Weerasak said.
Prime Minister Prayut Chan-o-cha threw his support behind his Minister.




October 10, 2018

China’s US$12 trillion bond market has become too big for global investors to ignore.   China is now the world’s second-largest debt market, behind the US . . .  




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