Posts Tagged ‘Malaysia’

China advances ‘code of conduct’ for South China Sea

November 14, 2018

China’s premier has hailed progress on an agreement that would “ensure peace and stability” in the strategic sea. Beijing has continued to fill a void as US influence in the region wanes under Donald Trump.

    
Chinese warships in the western Pacific

Chinese Prime Minister Li Keqiang on Wednesday said Beijing and countries with stakes in the South China Sea are closer than ever before to a “code of conduct” for the strategic thoroughfare.

Ahead of a meeting between China and the 10-nation Association of Southeast Asian Nations (ASEAN), Li said the recent adoption of a draft text for the pact was a major breakthrough.

“The single draft negotiating text is not merely a technical term, but an indication that China and ASEAN have reached consensus on ensure peace and stability, freedom of overflight and navigation in the South China Sea,” Li said. “We have found the way to properly manage and defuse differences.”

Filipino protesters set fire to a Chinese flagTensions in some ASEAN countries, such as the Philippines, have prompted protests against Chinese military maneuvers in the South China Sea

‘Friction’

While China maintains it has a historical right over the South China Sea, ASEAN members such as the Philippines, Malaysia, Vietnam and Brunei also claim land features in the area.

In 2016, an international tribunal found in favor of the Philippines in a territorial complaint, saying China had no historical rights to resources within its so-called “nine-dash line.” The ruling further strained relations between Beijing and Manila.

Since then, Philippine President Rodrigo Duterte has attempted to defuse tensions, in part to attract infrastructure funding and increased trade and investment from Beijing. Duterte said on Wednesday that ASEAN countries have seen significant progress in relations with China.

“Everything’s been excellent between China and the rest of ASEAN except for the fact that there’s friction between the Western nations and China,” Duterte said.

Read more: Southeast Asian nations ‘want to control China’s behavior’

Map showing China's demarcation of South China Sea territory

Peace via free trade

Earlier this week, Chinese Premier Li noted that Beijing will continue to push for free trade in the region at a moment when ASEAN leaders have started to sound the alarm about US protectionist policies.

“Free trade has, in some aspects, prevented war effectively,” Li said in a speech on Tuesday in Singapore. “We are willing to negotiate with all sides to push ahead with free trade internationally, and we’re also willing to discuss a fairer system.”

Li is expected to rally support this week for the Regional Comprehensive Economic Partnership (RCEP), a free trade accord that would comprise more than a third of the world gross domestic product (GDP).

Beijing has stepped in to fill the void left when US President Donald Trump pulled his country out of the Trans-Pacific Partnership (TPP). China hopes to secure its own version by 2019.

https://www.dw.com/en/beijing-advances-code-of-conduct-for-south-china-sea/a-46284818

ls/rt (AP, dpa)

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Wall Street titan Goldman Sachs ‘cheated’ Malaysia: PM

November 13, 2018

Goldman Sachs “cheated” Malaysia, leader Mahathir Mohamad said, after two former bankers from the Wall Street titan were charged over a scandal that allegedly saw billions looted from state coffers.

The US Justice Department unveiled criminal charges this month against ex-Goldman bankers Tim Leissner and Ng Chong Hwa, accusing them of working with a Malaysian financier to launder huge sums allegedly stolen from Malaysian sovereign wealth fund 1MDB.

They are accused of involvement in a sophisticated fraud linked to former leader Najib Razak, allegations that played a big factor in the shock defeat of his long-ruling government at polls in May.

© AFP/File | Mahathir Mohamad said investment bank Goldman Sachs “cheated Malaysia

In an interview with broadcaster CNBC, Prime Minister Mahathir said that “obviously we’ve been cheated”, when asked about Goldman’s dealings in Malaysia.

“There is evidence that Goldman Sachs has done things which are wrong,” said the 93-year-old, who is in his second stint as premier after coming out of retirement to take on Najib, his former protege.

Asked about Goldman’s compliance controls — which are supposed to monitor and prevent risky behaviour at the bank — Mahathir responded: “It does not work very well.”

Goldman Sachs did not immediately respond to requests for comment.

Leissner and Ng have been charged with money-laundering and conspiring to bribe officials in Malaysia and Abu Dhabi to hire Goldman for lucrative consulting contracts.

Goldman underwrote $6.5 billion of bonds issued by 1MDB but US authorities allege that more than $2.7 billion was siphoned off.

Goldman earned $600 million in fees for the bond issue.

Leissner pleaded guilty and has agreed to pay $43.7 million in restitution of ill-gotten gains. Ng has been arrested in Malaysia.

Malaysian financier Low Taek Jho was also charged by the DoJ. Low, allegedly a central figure in looting 1MDB, remains at large.

Goldman Sachs has not been charged over the scandal but its shares fell heavily this week after Malaysia’s finance minister said he wanted a full refund of fees paid to the bank.

In a further blow to the bank’s image, it has emerged that former chief Lloyd Blankfein met with Low at a private reception in a New York hotel in 2009.

Calls for open trade to greet Pence as Trump skips Asia summit

November 11, 2018

Asia-Pacific leaders will join the heads of Southeast Asian states this week in Singapore to renew calls for multilateralism and fresh pledges to resolve regional conflicts ranging from the Rohingya crisis in Myanmar to tensions in the South China Sea.

Notably absent when regional powers such as China, Japan and India seek to enlist support for a multilateral trading system will be U.S. President Donald Trump, whose decision to skip the Asia summit has raised questions about his commitment to a regional strategy aimed at checking China’s rise.

Vice President Mike Pence will attend instead of Trump, and Chinese Premier Li Keqiang, Russian President Vladimir Putin, Indian Prime Minister Narendra Modi and Japanese Prime Minister Shinzo Abe are among those expected to join leaders from the 10-member Association of Southeast Asian Nations (ASEAN).

Image result for mike pence, photos

Mike Pence

Li is expected to rally support for the Regional Comprehensive Economic Partnership (RCEP) pact now being negotiated, showcased to be the free trade deal that will encompass more than a third of the world’s GDP.

The pact includes 16 countries, including China, India, Japan and South Korea, but not the United States.

Trump has demanded trade agreements that are fair and enforceable and based on the principle of reciprocity. He has re-negotiated an existing pact with South Korea and the three-way deal with Mexico and Canada, and pulled out of the Trans-Pacific Partnership (TPP) agreement, which involved four Southeast Asian states.

The United States is also in the midst of a bitter trade war with China which has undermined global markets.

China is pushing the RCEP deal – Assistant Foreign Minister Chen Xiaodong told reporters on Thursday it “will be of great significance for deepening regional cooperation, coping with unilateralism and protectionism, and promoting an open, inclusive and rules-based international trading system.”

However, Li is expected to appeal in Singapore for the need for the world’s two largest economies to work together to resolve trade disputes, reiterating commitment made by Beijing’s top leaders last week for market opening and lowering tariffs.

It was not clear if Li and Pence will hold separate talks on the sidelines of the Singapore meetings, which would be a prelude to a summit scheduled between Trump and Chinese President Xi Jinping at the end of the month in Buenos Aires.

The encounter, if it happens, would come on the heels of high-level talks in Washington where the two sides aired their main differences but appeared to attempt controlling the damage to relations that has worsened with tit-for-tat tariffs in recent months.

Many of the leaders in Singapore will also meet at the Asia-Pacific Economic Cooperation forum in Papua New Guinea next weekend.

ASEAN, which will hold its own summit on Tuesday before being joined by other leaders, also faces the challenge of working through sharp differences over the handling of the Rohingya minority by Myanmar whose military has been accused of “genocidal intent” by the United Nations.

Leader Aung San Suu Kyi is due to attend the Singapore meetings this week while Malaysian Prime Minister Mahathir Mohamad, attending his first multilateral summit since returning to power in May, has served notice he has lost faith in the Nobel peace laureate over the issue.

The Rohingya crisis is one of the biggest man-made disasters involving a member since ASEAN was founded in 1967, and it is one of the thorniest issues yet faced by a group that traditionally works by consensus.

Many diplomats and rights activists say ASEAN’s credibility is at risk if it fails to tackle the matter head-on.

At the meetings, ASEAN and China will try to make headway in negotiations for a code of conduct for the South China Sea, which Beijing claims almost in its entirety while ASEAN members Vietnam, the Philippines, Malaysia and Brunei claim parts of the area. Taiwan is also a claimant.

But an agreement is unlikely to be announced.

Also, ASEAN members states may announce the successful conclusion of agreements with Russia and the United States on cooperating on cyber security.

Reporting by Jack Kim; additional reporting by Ben Blanchard in Beijing and Roberta Rampton in Washington

Reuters

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Labor party leader Luke Foley resigns in Australia in #MeToo alleged inappropriate behavior

November 10, 2018

Image result for Luke Foley, photos

Labor party leader Luke Foley resigns over harassment allegations

The leader of the opposition in Australia’s most populous state was replaced on Saturday after he resigned over a #Metro row sparked by alleged inappropriate behavior.

Former New South Wales (NSW) state Labor party leader Luke Foley resigned on Thursday after being accused of sexually harassing an ABC journalist, four months before a state election he had been in a position to win.

Foley denies the allegations and said he has hired lawyers to sue for defamation over the claims.

NSW Labor deputy leader Michael Daley defeated opposition water spokesman Chris Minns to win the vacant leadership in a caucus meeting on Saturday afternoon.

He promised to build his government on four pillars: investing in schools and hospitals, lowering the cost of living and lowering energy bills.

“We will make Sydney more livable, and stop the unfairness and overdevelopment in the planning system,” he told reporters in Sydney.

Daley also said his party would re-task $2.2 billion earmarked by the state’s conservative Liberal government to upgrade sporting stadiums to instead train young people for employment.

Daley will lead NSW Labor to the March 23 election in Australia’s largest state, but despite Foley’s resignation the scandal is likely to dent Labor’s chance of winning power.

A ReachTel poll in September had Labor and the ruling conservative coalition running neck-and-neck in the state.

The NSW economy accounts for one-third of Australia’s gross domestic product and at $400 billion is larger than the economies of Thailand, Malaysia and the Philippines.

Editing by Nick Macfie

Reuters

China’s Newest Bid for Influence Runs Through the West’s Backyard

November 5, 2018

Beijing is constructing parallel financial and commercial networks across Central and Eastern Europe to challenge the global order

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A highway construction site in Bioce, Montenegro, on June 18. Chinese engineers are building Montenegro’s first-ever highway.

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BELGRADE, Serbia—Europe is distracted by internal discord over immigration and its tense relationship with Russia and the U.S. Seeking to fill the void, China is taking advantage of a historic opportunity to wedge itself into the heart of the West.

Deal by deal, applying experience honed in Asia and Africa, China is constructing parallel financial and commercial networks in Central and Eastern Europe to challenge the global order. It has taken footholds in more than a dozen nations on the periphery of the European Union. Some, such as Hungary, are smaller, more marginalized members. Others, including Serbia, are on the runway for admission.

Chinese workers set a highway through Montenegro’s impassable mountains on pillars as tall as a 50-floor skyscraper—part of an emerging corridor of highways, ports and rail lines that outlines a new Chinese trade route between Greece’s Aegean coast and Latvia on the frigid Baltic.

Chinese technology governs a new international money-transfer system in Serbia. Chinese banks gobbled up a newfangled issue of yuan-denominated bonds from Hungary. Outposts like Košice, Slovakia, are now stops for freight trains from China.

Beijing’s offers of trophy infrastructure and financial lifelines to troubled economies give those countries proposals they aren’t hearing from Washington and Moscow, which both generally view the region through prisms of national security. Nor are they hearing such proposals from Brussels, preoccupied with fraying EU cohesion.

Serbia’s Aleksandar Vučić and Chinese Premier Li Keqiang at a 2014 ceremony to open the China-Serbia Friendship Bridge over the Danube in Belgrade.
Serbia’s Aleksandar Vučić and Chinese Premier Li Keqiang at a 2014 ceremony to open the China-Serbia Friendship Bridge over the Danube in Belgrade. PHOTO: MEDIN HALILOVIC/ANADOLU AGENCY/GETTY IMAGES
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For European politicians, the Chinese alternative promises quick results and less fuss over contracts and transparency than typically found in the West. The catch is that China’s package deals are government orchestrated and require borrowing from its banks to pay its contractors. A few countries, including Montenegro, are taking on large amounts of debt in the process.

Most of the Chinese financial support in Europe is loan-based, helping turn nations into clients of Beijing’s banks. And with each achievement, the Chinese companies building infrastructure and selling software or services gain more credibility in the West. Stretching its engineering capacity and technological innovation westward helps China expand and modernize its economy, as well as bolster alliances.

Last year, Beijing cheered when Greece blocked an EU effort last year to condemn a Chinese crackdown on political activists. Politicians in Brussels suggested that Athens had grown too dependent on China because a Chinese government-run company runs Greece’s main port. Greece called the proposed measure “unconstructive and selective criticism.”

The push is part of China’s Belt and Road Initiative to develop trade, financial and communication networks around the world—a strategy that came out of the global financial collapse a decade ago, to lessen China’s dependence on a U.S.-led economic order it blamed for the crisis. Major infrastructure is the initiative’s calling card.

China Calling

Serbia has welcomed billions of dollars’ worth of deals from Chinese companies.

The $255 million China-Serbia Friendship Bridge marked the beginning of major Chinese construction engineering commissions in Europe.
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Serbia in 2018 chose Zijin Mining Group Ltd. to invest in its largest copper mining and smelting complex, RTB Bor, in a $1.26 billion deal.
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Serbia credits China’s Hesteel Group with saving 5,000 jobs with its 2016 takeover of a steelmaker in the city of Smederevo.
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Chinese engineers are at work on Serbia’s $350 million portion of the Belgrade-Budapest high-speed rail line.
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PHOTOS: GETTY IMAGES; REUTERS; ZUMA PRESS; JAMES T. AREDDY/ THE WALL STREET JOURNAL
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Serbia is emerging as China’s closest partner in middle Europe. China designed and built Belgrade’s first new bridge over the Danube River in seven decades, and helped modernize electrical and phone systems in the country. Most recently, Serbia got a financial-payments network from government-owned China UnionPay. The platform is Beijing’s answer to Visa and Mastercard, giving Serbians a way to use local credit cards overseas. It also gives China’s yuan a route into Europe.

UnionPay says its payment system in Serbia includes chips and other technology standards designed to guarantee “unblocked” international money transfers. That, in effect, could weaken a frequent U.S. tool sometimes used against Chinese companies—economic sanctions—by creating a parallel money-transfer system outside U.S. reach.

“For Serbia, it’s important that such a large international player has chosen to cooperate with it,” said Jorgovanka Tabaković, a prominent national politician and governor of the National Bank of Serbia.

As for its influence in Central and Eastern Europe, China points to its investment in the region, noting that it is a fraction of its pan-Europe exposure. More broadly, it cites a growing global responsibility to promote development and build infrastructure across much of the world. President Xi Jinping has said, in a quote that Chinese officials have repeated, “No matter what stage of development it reaches, China will never seek hegemony or engage in expansion.”

Beijing committed nearly $8.9 billion in government-backed project loans and other development assistance to all of Europe last year, up from about $4 billion in 2016, according to a Wall Street Journal tally of deals cited in a compendium published by the Export-Import Bank of the United States.

That two-year tally is only 7% of China’s global total of $185 billion in loans and assistance for the period.

U.S. officials have cautioned developing nations that China’s outreach has strings attached. In an October speech in Washington, Vice President Mike Pence said of China’s infrastructure loans, “the terms of those loans are opaque at best, and the benefits invariably flow overwhelmingly to Beijing.” Defense Secretary Jim Mattis recently raised similar concerns, saying that “massive debt is piled on countries that fiscal analysis would say they are going to have difficulty, at best, repaying in the smaller countries.”

Outside of Europe, China’s $62 billion infrastructure plan in Pakistan is a factor in the country’s debt funk, which helped cost the ruling party a recent election and nudged the country closer to an international bailout. In August, Malaysia’s newly elected prime minister, Mahathir Mohamad, ordered a freeze on $22 billion worth of Chinese railway and pipeline construction his predecessor had endorsed, citing inflated contract values and excessive borrowing.

Last year, Sri Lanka surrendered a port to Chinese control to defuse a debt bomb. Chinese public works and their big loans are grist for political activists in Angola, Zambia and Kenya.

Lu Kang, a spokesman for China’s Foreign Ministry, countered U.S. criticism on its loans by saying, “We have never heard of any single country [falling] into ‘debt traps’ due to its cooperation with China.”

In Europe, Montenegro faces financial challenges associated with a deal from Export-Import Bank of China and China Road and Bridge Corp. to build its first-ever highway. The government calls it the nation’s “greatest engineering construction challenge in its history,” due to the country’s mountainous terrain.

The highway promises to link Central Europe to a port on the Adriatic Sea facing Italy. Montenegro already owes around $1.1 billion for the current work, which covers a 25-mile midsection that is due to be completed before mid-2019. The cost exceeds the original plans by hundreds of millions of dollars due to unhedged currency swings.

Unless the nation, known for cheap beach holidays, can come up with another $1 billion for a next phase, the four-lane roadway will terminate in a valley of 100 farmers and a general store.

Greece’s Port of Piraeus, pictured on Sept. 15, is managed by Chinese shipping company China Ocean Shipping (Group) Co.
Greece’s Port of Piraeus, pictured on Sept. 15, is managed by Chinese shipping company China Ocean Shipping (Group) Co. PHOTO: KOSTAS TSIRONIS/BLOOMBERG NEWS
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No data capture the breadth of the economic integration across the region, including private flows from investors who scrambled in after Beijing’s official nod in favor of Europe. Some styled themselves as trade middlemen in the continent’s Chinatowns and others formed “friendship” associations to link with local business and academia.

Oil company CEFC China Energy Co. amassed a $1.7 billion empire of property, brewery, soccer, bank and hotel assets in the Czech Republic, but they fell into question earlier this year when the company’s chairman came under investigation by Chinese authorities.

A senior executive at CEFC in Prague said plans were “developing” for China International Trust and Investment Corp. to take over the group’s Europe operations, which would in effect replace a private business with the Chinese state’s oldest-line international investment vehicle.

Beijing has talked about its inroads as a restoration of ancient Silk Road trade routes, but German politician Sigmar Gabriel sees bigger ambitions. “It is not a sentimental nod to Marco Polo, but rather stands for an attempt to establish a comprehensive system to shape the world according to China’s interests,” he said when stepping down in February as foreign affairs minister.

Along Europe’s east-west divide, Serbs, Slovaks, Croats and Czechs remain haunted by the Cold War and Yugoslavia’s bloody 1990s breakup. Those experiences partly cloud their views of the U.S. and Russia. China carries no such historical baggage.

In a near Central European future, a container of Chinese-made mobile phones or automobiles unloading at China Ocean Shipping (Group) Co.’s port in Greece could travel north through Macedonia and Serbia on Chinese toll roads and bridges and slot onto the Chinese-engineered railway to Hungary. China-run warehouses have been proposed in Poland, Lithuania and Belarus. The item might be purchased on the website of e-commerce company Alibaba Group HoldingLtd. , which is expanding its cloud data services in Europe, as the internet traffic moves via the switches installed by Huawei Technologies Co. that dominate the region.

The fast-expanding ties between China and Serbia run from visa-free travel between the two countries to mining, manufacturing and weapons research.

Aleksandar Vučić, then Serbia’s prime minister and now president, meeting China’s President Xi Jinping and his wife, Peng Liyuan, last year in Beijing.
Aleksandar Vučić, then Serbia’s prime minister and now president, meeting China’s President Xi Jinping and his wife, Peng Liyuan, last year in Beijing. PHOTO: WANG ZHAO/AFP/GETTY IMAGES
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A nation of seven million people with an economy similar in size to Vermont’s, Serbia projects political neutrality. Officials have called Beijing a “fourth pillar” of its foreign policy, along with Brussels, Washington and Moscow.

“We do not believe that we should choose between East and West,” Serbian Finance Minister Siniša Mali said in written responses to questions.

Serbian President Aleksandar Vučić describes Mr. Xi as a personal friend and has met him five times in two years. Mr. Xi has met with President Trump three times. Their wives discussed bilateral relations in Beijing on Oct 29.

A poll last year by think tank Belgrade Centre for Security Policy found that Serbians see the U.S. as stronger militarily and politically than China but not far ahead of it economically. In the poll, the U.S. trails China in technology and in trust as an investor.

The nearly mile-long China-Serbia Friendship Bridge, opened four years ago, was the first major piece of infrastructure constructed in Europe by a Chinese team. That led to commissions for its builder, China Road and Bridge, in Croatia and Montenegro.

Even before the bridge’s dedication, according to the term sheet reviewed by the Journal, the clock was ticking on a 18-year requirement for Serbia’s Finance Ministry to wire millions of dollars each January and July to a New York bank account of the Beijing-based project lender, Export-Import Bank of China, until $217.4 million plus fees are repaid. The contract also stipulated that “goods, technologies and services…be purchased from China preferentially,” and that any disputes be settled in China.

Work is now under way by China Railway Signal & Communication Co. in Belgrade for a $3 billion rail upgrade to Hungary. Construction has been delayed on the Hungarian side because the EU challenged a no-bid award to a Chinese contractor. Serbia, unburdened by such rules, fast-tracked approval to the same Chinese contractors for its $350 million portion.

Down the block from Bank of China Ltd.’s new Belgrade office, an 11-floor, $60 million Chinese cultural and corporate center for a government-owned construction business is rising on the former site of China’s embassy. The mission was destroyed in 1999 when American planes dropped five laser-guided bombs on it during the North Atlantic Treaty Organization’s campaign to stop the Balkan conflict.

After taking three bows at a plaque to embassy “martyrs,” Beijing tourist Yang Xiaoyu said he was just 2 years old when the bombs fell. “I feel like our country was quite weak then,” Mr. Yang said. “When we came here today and recalled what had happened then, we feel that our motherland is indeed getting stronger.”

Write to James T. Areddy at james.areddy@wsj.com

https://www.wsj.com/articles/chinas-newest-bid-for-influence-runs-through-the-wests-backyard-1541435003

Trade war’s bark turns to bite in Asia

November 4, 2018

The US-China tariff slugfest has for months triggered warnings that it could impact global economic growth, and recent data indicates the trade tension is indeed beginning to bite.

Manufacturing gauges in several export-reliant Asian countries, as well as China, weakened in October as gloom deepens over the trade outlook.

China’s official Purchasing Managers’ Index (PMI), which measures factory activity, came in at 50.2 in October, down from 50.8 the previous month, the latest sign of weakness in the world’s second-largest economy amid the trade war and a domestic debt problem.

But China’s troubles are bad for the rest of the region, and the world, analysts said.

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© AFP | Manufacturing gauges in several export-reliant Asian countries, as well as China, weakened in October

Asian exporting countries from South Korea to Malaysia saw PMI decreases in October, according to indices compiled by Nikkei/IHS Markit.

Taiwan saw its steepest falls in production and new business in just over three years, purchasing activity by companies fell for the first time since May 2016, and firms anticipate lower factory output in the next 12 months, Nikkei/IHS Markit said.

“Taiwan is feeling the effects of this trade war because China is the factory for many companies in Taiwan. When the estuary is blocked, you feel the effects,” said Sun Ming-te of the Taiwan Institute of Economic Research.

– Paying the price –

South Korea’s PMI slipped to 51.0 in October from 51.3 in September, while a separate Korean business sentiment index for manufacturing sank to its lowest level in two years.

China is South Korea’s largest trading partner, absorbing a quarter of Korean exports.

“The situation may get worse next year due to a prolonged trade war between the US and China, growing default risks at debt-plagued Chinese firms and a slowing global economy that reduces demand for our exports,” said c, an analyst at the Korea Institute of Finance.

Southeast Asian manufacturers were feeling the effects too, with PMI in Malaysia and Thailand slipping below the 50-point level, which indicates contraction in the sector.

It was Malaysia’s lowest PMI since July and Thailand’s lowest in two years.

In an AFP interview last week, Malaysian Prime Minister Mahathir Mohamad complained that US President Donald Trump — who has accused various trading partners of “ripping off” America — “seems to be withdrawing from all commitments overseas”.

Mahathir, 93, said that hurts everyone, including the US.

“We want to remain friendly with the US, and we want to continue trading with the US,” Mahathir said.

“But the trade war that is going on between the US and China is damaging for us. We have to pay a price for that.”

– Vietnam or bust –

The International Monetary Fund warned at its annual meeting last month that the trade friction and other threats would hobble the world economy, lowering its growth forecasts for 2018 and 2019.

The Eurozone posted disappointing PMI figures in October, though due largely to factors other than trade tension.

But not everyone feels the shock yet, with Japan’s manufacturing looking solid last month.

Trump, meanwhile, faces little pressure to tame his trade rhetoric at home, with a rosy US outlook marked by rising wages and low unemployment.

And even in Asia, there will be some winners as conflict re-aligns trading patterns, economists noted.

Vietnam, in particular, looks to gain as foreign manufacturers relocate out of China to escape the trade war crossfire and what many say is an increasingly unfair playing field for foreign companies in China.

Vietnam PMI climbed from a ten-month low of 51.5 in September to 53.9 last month.

“The hard data on exports and industrial production in recent months haven’t been that great. The latest survey nonetheless shows how Vietnam is weathering the US-China trade war better than its ASEAN peers,” Miguel Chanco, senior economist at Pantheon Macroeconomics, told AFP.

“If the trade war escalates, Vietnam will be one of the prime destinations for export-oriented firms looking to move out of China.”

burs-dma/aph/rma

AFP

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Malaysian in 1MDB scandal denies wrongdoing after US charges — “Where did all the billions go?”

November 2, 2018

A Malaysian financier at the centre of a corruption scandal surrounding state fund 1MDB maintained his innocence Friday after the US unveiled criminal charges against him and two ex-Goldman Sachs bankers.

Low Taek Jho, commonly known as Jho Low, and the former bankers were accused by the US Justice Department of conspiring to launder billions of dollars from the fund and bribing officials in Malaysia and Abu Dhabi.

Low allegedly played a central role in plundering 1MDB. He was an associate of Malaysia’s former leader Najib Razak, whose government lost power in May in large part due to allegations that the then premier was involved in the vast fraud.

© AFP/File | Low Taek Jho, commonly known as Jho Low, is accused by the US Justice Department of conspiring to launder billions of dollars from the state fund 1MDB and bribing officials in Malaysia and Abu Dhabi

Since being ousted, Najib has been hit with a barrage of charges linked to the scandal.

A spokesman for 36-year-old Low, who held no official position at the fund but was believed to have huge influence over its workings, said that he “maintains his innocence.

“Mr. Low held no formal position at 1MDB, nor was he ever employed by Goldman Sachs, or the governments of Malaysia or Abu Dhabi.

“The US Department of Justice specifically states that the charges in the indictment are allegations, and that Mr. Low is presumed innocent unless and until proven guilty.

“Mr. Low simply asks that the public keep an open mind regarding this case until all of the evidence comes to light, which he believes will vindicate him.”

Low’s is still at large. His current whereabouts are unknown, although reports have suggested he is in China.

The indictments unsealed Thursday against him, ex-bankers Tim Leissner and Ng Chong Hwa, were the first US criminal charges over the huge fraud, which has spawned investigations around the world.

Charges were filed in Malaysia in August against Low. Ng was arrested in Malaysia on Thursday, according to the DOJ. Leissner has already pleaded guilty and agreed to pay $43.7 million in restitution of ill-gotten gains.

Goldman Sachs underwrote about $6.5 billion in bonds issued by 1Malaysia Development Berhad, a sovereign wealth fund set up to help develop the country, according to the US government.

But more than $2.7 billion went to kickbacks and bribes, according to the charges. Goldman Sachs garnered $600 million in fees and revenues from three 1MDB bond transactions detailed in the indictments.

Low acted as an intermediary for 1MDB but the ex-Goldman bankers concealed his involvement in the bond offerings, and repeatedly circumvented the bank’s oversight tools for countering fraud, according to the charges.

The bank says it is cooperating in the probe.

AFP

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U.S. Justice Department charges ex-Goldman bankers with crimes related to Malaysian 1MDB investment fund scandal

November 2, 2018

The Justice Department has announced multiple charges against two ex-Goldman Sachs bankers linked to Malaysia’s state investment fund scandal.

The agency said Thursday that Tim Leissner, former Southeast Asia chairman, conspired to launder money and violate the Foreign Corrupt Practices Act by paying bribes to government officials in Malaysia and Abu Dhabi.
Actor Leonardo DiCaprio with Jho Low (right) of the movie attend the photocall before the 'The Wolf of Wall Street' World movie Premiere at Cinema Gaumont Opera on December 9, 2013 in Paris, France.
Jho Low (right) is seen with Wolf of Wall Street star Leonardo DiCaprio in 2013. Credit Getty Images
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Leissner has pleaded guilty and will forfeit $43.7 million.
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The Justice Department also unsealed an indictment against Roger Ng, a former Goldman Sachs banker, and Malaysian financier Jho Low, who allegedly played a central role in the scheme to launder billions of dollars from the 1Malaysia Development Berhad fund.
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The US government says Ng and Low also paid bribes to foreign officials.
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Additionally, Ng and Leissner allegedly worked to circumvent internal accounting controls at Goldman, which underwrote more than $6 billion in bonds issued by 1MDB in 2012 and 2013. The bank made about $600 million in fees and revenue for its work with the fund, according to the indictment.
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Ng was arrested earlier Thursday in Malaysia, according to the Justice Department. Low remains at large.
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The news was first reported by the Wall Street Journal.
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Another Goldman banker, Andrea Vella, has been placed on leave, pending a review of alleged conduct related to the 1MDB case, according to a person with knowledge of the matter.
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That move was initially reported by Bloomberg. Bloomberg previously reported that Vella was demoted from co-head of investment banking in Asia to a client-facing role last month.
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A spokesperson for Goldman Sachs (GS) said in a statement that the firm continues to cooperate with all authorities investigating the matter.
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A spokesperson for Low said that Low maintains his innocence, and “simply asks that the public keep an open mind regarding this case.”
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Low held no formal position at 1MDB and was not employed by Goldman Sachs, or the governments of Malaysia or Abu Dhabi, the spokesperson added. Representatives for Leissner and Ng could not immediately be reached for comment.
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The Justice Department has previously filed civil asset forfeiture suits to reclaim goods they said were bought with money stolen from the 1MDB fund. Federal officials have claimed that laundered funds were pumped into New York condos, hotels, yachts and a jet, and used to fund Hollywood films such as “The Wolf of Wall Street.”
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The agency alleges that $4.5 billion from 1MDB was misappropriated by high-level officials at the fund.
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Related:

Justice Department to Charge Former Goldman Bankers in Malaysia 1MDB Scandal

November 1, 2018

Charges will name former Goldman bankers Tim Leissner and Roger Ng, as well as Malaysian financier Jho Low

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Jho Low

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The U.S. Justice Department is planning to announce Thursday morning multiple criminal charges related to a multibillion-dollar Malaysian sovereign-wealth fund scandal, including against two former Goldman Sachs bankers and Malaysian financier Jho Low, according to people familiar with the matter.

Tim Leissner, former partner for Goldman Sachs GS +0.67% in Asia, is expected to plead guilty to conspiracy to launder money and conspiracy to violate the Foreign Corrupt Practices Act, the people familiar said. He will forfeit $43.7 million, they said.

Roger Ng, the other former Goldman banker, and Jho Low, the Malaysian financier who allegedly masterminded the fraud, will be indicted, the people familiar said. Mr. Ng was arrested in Malaysia, while Mr. Low is at large and was last seen in China.

U.S. prosecutors have previously filed civil asset forfeiture suits to seize assets allegedly purchased with funds stolen from the fund, called 1Malaysia Development Bhd, or 1MDB. These are the first criminal charges against individuals from the Justice Department in the case.

Calls to Mr. Leissner’s attorneys weren’t immediately returned. Mr. Ng couldn’t immediately be reached for comment.

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Tim Leissner and Kimora Lee Simmons

U.S. Attorney General Jeff Sessions called the 1MDB scandal “kleptocracy at its worst” in a speech last December.

Starting in Malaysia, a scandal involving the 1MDB fund set up by Prime Minister Najib Razak now involves at least 10 countries, including the U.S. This animation shows how money allegedly misappropriated from 1MDB moved through global wealth centers before being used to buy real estate, art, and other assets around the world, including in New York and Beverly Hills.
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Write to Nicole Hong at nicole.hong@wsj.com, Bradley Hope at bradley.hope@wsj.com and Aruna Viswanatha at Aruna.Viswanatha@wsj.com

https://www.wsj.com/articles/justice-department-to-charge-former-goldman-bankers-in-malaysia-1mdb-scandal-1541077318

Is China a new imperial power?

October 26, 2018

Is China a new imperial power threatening some of the developing economies in Asia and Africa? This is a perception that is being promoted through the media by certain China watchers in universities and think-tanks mainly in the West, by various politicians, and by a segment of the global NGO community.

The peddlers of this perception argue that by giving out loans for development to poor countries, China is snaring them in a debt trap. It is a trap that ensures that they are perpetually under China’s control. Is there such a debt trap? To find out, this article will look at three Asian countries before turning to Africa.

 OCTOBER 26, 2018
Asia Times

Pakistan has taken loans from China for projects under the China-Pakistan Economic Corridor. The US$50 billion CPEC is a network of infrastructure projects that are under construction throughout Pakistan that will connect China’s Xinjiang province with Gwadar Port in Pakistan’s Balochistan province.

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