Posts Tagged ‘Singapore’

China’s ‘One Belt, One Road’ — Should Anyone Invest? — Isn’t That Too Early To Say? — What’s The U.S. National Strategy?

April 25, 2017

The Folly of Investing in China’s ‘One Belt, One Road’

Beijing seeks foreign money for an infrastructure-led growth model just as the initiative begins to fail.

The 'Golden Bridge of Silk Road' structure on April 18 outside Beijing’s National Convention Center, site of the Belt and Road Forum for International Cooperation.
The ‘Golden Bridge of Silk Road’ structure on April 18 outside Beijing’s National Convention Center, site of the Belt and Road Forum for International Cooperation.PHOTO: ASSOCIATED PRESS


April 24, 2017 12:45 p.m. ET

On May 13, Beijing will host a summit meeting of countries participating in its massive infrastructure initiative known as “One Belt, One Road”—a belt of overland corridors and a complementary road of sea routes linking China to Eurasia and Africa. Neighboring countries may benefit from Beijing’s investment, but investors have reason to be wary.
The summit follows President Xi Jinping’s January star turn at the Davos World Economic Forum where he touted OBOR as an investment opportunity: “Over three years ago, I put forward the ‘Belt and Road’ initiative. Since then, over 100 countries and international organizations have given warm responses and support to the initiative . . . and our circle of friends along the ‘Belt and Road’ is growing bigger.”
OBOR and the associated Asian Infrastructure Investment Bank (AIIB) raise important geostrategic questions: What risks will OBOR recipients incur when all roads lead to Beijing? How will China extract its pound of flesh from developing nations who borrow but cannot repay? Will OBOR facilitate China’s overseas military basing?
Putting those concerns aside, some in the U.S. agree with Mr. Xi that OBOR offers investment opportunities. There are several problems with this view.
OBOR has a number of red flags that should give prospective backers pause. First, it was announced in 2013, meaning it was conceived using financial assumptions that are now unrealistic. The cash-flow projections were made at a time when China’s double-digit GDP growth seemed unstoppable.
The Communist Party, striding through the financial wreckage of 2008 unsullied, saw its decades of propaganda about Western decline seemingly coming true. Basking in boom times, OBOR’s architects certainly didn’t plan for a halving of growth.
Fast forward to 2017 and China is achieving a more modest 6.5% GDP growth target, and then only through massive expansion in borrowing. We saw in 2008 what happens when people and businesses borrow recklessly on the assumption that prices and incomes will always rise.
China has spent trillions propping up its stock market and currency with questionable results, and its foreign-currency reserves have fallen by more than $1 trillion since their peak in June 2014.
China’s debt-to-GDP ratio has skyrocketed to 282% from 150% over the past decade. This year China’s capital outflows surged to a record $725 billion, suggesting the country’s own citizens are skeptical of its growth prospects.
Second, OBOR outlays are snowballing as other huge ventures with dubious returns take ever-bigger bites of China’s finances. The People’s Liberation Army is building armadas of advanced warplanes, warships and missiles, while China’s space program envisages a space station by 2022 and a man on the moon by 2036.
Meanwhile, China spent billions to encase disputed South China Sea coral reefs in concrete. That has no economic payoff. As well as antagonizing neighboring countries, it destroyed an ecosystem that sustains millions of fishermen, many of whom are Chinese.
China’s politically directed investments in excess infrastructure, “zombie” firms, vanity projects and tens of billions in bad loans to Bolivia, Brazil, Libya, and Venezuela, among others, are notoriously unproductive. Stack China’s losses and obligations on top of slowing growth and it’s no wonder Beijing is eager to find new OBOR investors.
Third, the initiative is unlikely to deliver on its promises. A 2016 report from the Center for Strategic and International Studies states Chinese officials privately expect to lose 30% of their investments in Central Asia, 50% in Myanmar and 80% in Pakistan.
That shouldn’t come as a surprise. A 2016 Oxford University study found costs exceeded benefits for a majority of infrastructure investments in China since 1986. It predicts that unless China shifts to fewer and higher-quality infrastructure investments, the country is headed for a financial crisis. The infrastructure-led growth China touts as a development model should be avoided.
In March Chinese state media quoted Zhang Tao, the International Monetary Fund’s deputy managing director, as he reassured the world that “China will remain a strong engine of global recovery with its ongoing economic reforms.” Even as Mr. Xi burnishes his globalist credentials, Beijing has been tightening decidedly nonglobalist capital controls, trying to stem a torrent of capital flight.
These actions resemble the strategy of a property developer whose financing fell through while his condo tower is half-built: exude strength and confidence to attract desperately needed investors while obscuring imminent insolvency. If OBOR is so successful, why would the Communist Party ask foreigners for help?
At next month’s summit, Mr. Xi will no doubt reiterate the message that China is an unstoppable development juggernaut poised to seize the mantle of globalism from the U.S. Beijing will pressure financial institutions to buy the debt of the AIIB and OBOR-related entities, because it’s an $8 trillion “sure thing.” The smart money will stay far away.
Mr. McCabe is a federal employee at the U.S. Pacific Command. The views expressed here are his own.


China’s One-Belt-One-Road initiative is not just about economics

April 25, 2017, 12:56 AM IST in ET Commentary | Edit Page, India, World | ET

By: Sanjaya Baru

Britain used to be called a nation of shopkeepers. China can be called a nation of contractors. Having built its way up to become a $10-trillion economy, China is saddled with over-construction at home and is looking for new construction opportunities worldwide.

The One-Belt-One-Road (Obor) initiative is partly driven by the need to sustain investment, even as domestic consumption and world trade are unable to sustain growth. This much is obvious. But this is not the full story. China’s long-distance construction activity, both across China itself (from the east coast to Xinjiang and Tibet) and across Eurasia, has been driven as much by these economic calculations as it has been by geopolitical ones.

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There is no other part of Obor that is manifestly geopolitical in its scope than the $46-billion China-Pakistan Economic Corridor (CPEC). Even Pakistani analysts have questioned its economics. Yet, China insists that the CPEC is only about economics.

Responding to Indian concerns about the CPEC passing through territory that is still legally India’s — Pakistan-Occupied Kashmir (POK) and Aksai Chin — Chinese foreign minister Wang Yi recently said that the CPEC was an economic project for the “purpose of serving economic cooperation and development. It has no direct link with political and boundary dispute.” Wang then dangled a carrot, stating, “Obor is for common development of all participants. So, we welcome India to take active part in building the Obor.” Ah! Construction projects?

Geopolitical analysts have long argued that China’s rise has so far been unique in that, unlike most other ‘Great Powers’, it has become one without firing a single shot. This is not entirely true since China has fired at least three times in the past half-century: at the Soviet Union, at India, and at Vietnam. But it is true that China’s has so far risen more as a ‘geoeconomic’ power, using its economic muscle to browbeat difficult neighbours and economic partners. Consider some recent actions on the economic front that China has taken, or threatened to take, in the case of Britain, the Philippines, Mongolia and so on.

Make Trade, Not War

As a geoeconomic power, China has used its economic muscle to achieve geopolitical aims. This is not news. Over the last two decades, China has locked the West and Russia into a relationship of economic dependence by offering to their consumers lowcost consumer goods. Russia President Vladimir Putin knows better than anyone that restive Russian citizens have been kept happy with access to low-cost goods from China. Deprived of that source, the Russian consumer would become sullen.

The US has so far shied away from fighting its dependence on China and President Donald Trump is the first leader to insist that Americans ‘buy American’ and China better get used to ‘fair trade’ terms rather than ‘free trade’. The proof of that puddingwill be in the eating. It was not happenstance that the first Chinese to call on Trump was Alibaba executive chairman Jack Ma.

It is only pure economists, innocent about geopolitics, who insist that trade is a win-win game and economic interdependence contributes to peace. It was one of the pious tenets of the Washington Consensus in economics that no two trading partners have ever gone to war.

Leonid Brezhnev’s Soviet Union and Mao Zedong’s China disproved that dictum, just as Margaret Thatcher’s Britain did when it attacked Argentina, a trade partner.

There are many such examples. So, China’s assurance that Obor is ‘merelyan economic and development project’, and that India should not object to it merely because of territorial disputes, carries little weight, if any. The list of 28 heads of state and government who have confirmed their attendance at the Obor Summit on May 14-15 in Beijing is a mix of Asean (Association of Southeast Asian Nations) and European Union (EU) countries, Russia, and a couple of African nations. This is not a particularly high-profile gathering. So, there is no reason why Prime Minister Narendra Modi should attend it.

The Modi government’s stance, that China needs to explain to it the Obor initiative and the CPEC project before it can take a view, has widespread political support at home cutting across party lines.

Reliance on Geo
China’s economic initiatives on the foreign trade, investment and infrastructure construction fronts have underscored the wisdom of Nobel laureate economist and professor Thomas Schelling’s famous words, “Aside from war and occasionally aside from migration, trade is the most important relationship that most countries have with each other. Broadly defined to include investment, shipping, tourism and the management of enterprises, trade is what most of international relations are about. For that reason, trade policy is national security policy.”

In short, the Obor initiative, much less CPEC, is not just about economics. Without doubt it is about geoeconomics — the deployment of economic instruments in pursuit of geopolitical objectives.

The writer is Honorary Senior Fellow, Centre for Policy Research

DISCLAIMER : Views expressed above are the author’s own.

 A Chinese cargo train, to be used as part of China-Iran efforts to revive the Silk Road, arrives in Tehran in February 2016. Photo: EPA
One Belt & One Road Initiative: Beyond physical infrastructure

2017-04-24 09:25:47


At the China Institutes of Contemporary International Relations (CICIR)-organised forum on The Belt and Road Initiative: Risk Management, which was held in Beijing, Pathfinder Foundation Executive Director Luxman Siriwardena, in his presentation emphasised the potential of the initiative for economic development of Sri Lanka, as it enables the country to enhance its strategic value in the Indian Ocean.

Infrastructural development projects such as the Hambantota port, Mattala airport and Colombo International Financial City (Colombo Port City), could greatly benefit and probably become financially viable in the medium-term with the success of the Maritime Silk Road.

However, he emphasized that while the development of physical infrastructure is a necessary condition by itself, it is insufficient for sustainable long-term growth and development of Sri Lanka’s economy. He added that Sri Lanka needs to move from the current policy environment of uncertainty and inconsistency to a more predictable one.
He also made a case for reforms in areas affecting private sector initiatives and doing business. To maximize benefits of the Belt and Road (B&R) initiative, which is a positive development in the current global environment, Sri Lanka needs to vigorously pursue a reform agenda and take robust measures to eliminate corruption at all levels.

The forum was participated by 26 foreign and 20 Chinese scholars. CICIR is China’s premier policy think tank, which cooperates closely with the Pathfinder Foundation. The focus of the forum was to seek ways and means of enhancing mutual benefits and win-win outcomes through the OBOR initiative.

In-depth analysis of risks and challenges resulting from the B&R initiative as well as prospects for achieving higher level of economic prosperity by the participating countries, including Sri Lanka, were among the main topics of discussion.

The B&R initiative, also known as the One Belt One Road (OBOR) initiative, could be considered as China’s grand plan for economic and social development of the countries along the OBOR. This initiative gives priority to facilitating multidimensional connectivity among all the participating countries.

It is considered that connectivity is an integral element of building of the B&R initiative. In this context, connectivity includes not only the physical connection of infrastructure but also the soft connection of policies, rules and regulations and people-to-people connections.

The first session of the forum was devoted to examining the ways and means of enhancing mutual benefits, on which the keynote presentation was made by former US Under Secretary of State for Political Affairs Marc Grossman.

He opined that the B&R initiative, though Chinese in origin and concept, has now entered a phase, where broader section of the international community could participate and reap benefits resulting in upliftment of their living standards.

His positive view of the Chinese initiative was particularly interesting as President Xi Jinping in his meeting with President Trump made a request for the United States to participate in the implementation of the B&R initiative.

In addition to the participation in the Belt and Road Forum, the Pathfinder Foundation Executive Director also had discussions with Xu Yongquan, Deputy Director General of China Centre for Contemporary World Studies (CCCWS), a prominent and influential think tank of the Communist Party of China.

During the meeting with Xu, it was agreed that the Pathfinder Foundation and CCCWS would continue to explore the ways and means for strengthening China-Sri Lanka economic and other relations. As a follow up to this discussion and on the recommendation of the CCCWS, the Pathfinder Foundation has already taken steps to join the Silk Road Think Tank Association (SRTA).

In addition, negotiations are underway to conduct a B&R conference with the participation of leading regional think tanks.


– See more at:

Asian stocks near 2-year high, euro steady as French vote lifts mood — UK deficit falls to lowest level since 2008

April 25, 2017

Image may contain: one or more people

A businessman looking at an electronic share indicator at the window of a securities company in Tokyo.PHOTO: AFP

SINGAPORE (REUTERS) – Asian equities hit a near two-year high on Tuesday (April 25), buoyed by a jump in risk appetite following the centrist victory in the first round of the French presidential election that also lifted the euro and pressured safe-haven assets.

The Canadian dollar slid after the US announced new duties averaging 20 per cent on Canadian softwood lumber imports. The US dollar strengthened 0.4 per cent to C$1.3549.

European stocks also look set for a strong start, with financial spreadbetter CMC Markets expecting Britain’s FTSE 100 to open up 0.2 per cent and Germany’s DAX to start the day 0.3 per cent higher. France’s CAC 40, which jumped 4.1 per cent to post its biggest one-day gain in almost five years on Monday, is set to open up 0.4 per cent.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.6 per cent, hovering near the highest level since June 2015 hit earlier in the session, on its fourth straight day of gains.

“Asian markets appear to be still lingering in the glow of relief after the French election,” said Jingyi Pan, market strategist at IG in Singapore. “The jubilance in markets overnight has also added to the optimism.”

US President Donald Trump’s promise of an announcement on a tax reform plan on Wednesday could offer further impetus to markets, she added.

Japan’s Nikkei rose more than 1 per cent to a three-week high. South Korea’s KOSPI also advanced 0.7 per cent to the highest level since April 2015.

Chinese shares rose 0.1 per cent, while Hong Kong’s Hang Seng gained 0.9 per cent. The Chinese index posted its worst day in 2017 on Monday amid signs Beijing will tolerate further market volatility as regulators clamp down on shadow banking and speculative trading.

Indonesian stocks opened at an all-time high, and Malaysian stocks hit their highest level since May 2015.

Australia and New Zealand are closed for the Anzac Day holiday.

“The risk-on sentiment is resulting in foreign inflows into Asia supporting asset prices, and investors are putting North Korean tensions to one side for now,” said Khoon Goh, head of Asia research at Australia and New Zealand Banking Group.

North Korea conducted a massive live-fire drill on Tuesday on the 85th anniversary of the foundation of its army, media reports said on Tuesday. South Korea’s defence ministry could not immediately confirm the report.

Polls show Emmanuel Macron defeating anti-euro nationalist Marine Le Pen by as much as 30 percentage points in the second round of the French presidential election in two weeks.

Overnight, the MSCI World index surged 1.6 per cent to touch an all-time high, and holding near that level on Tuesday.

The pan-European STOXX 50 index soared 4 per cent, its best day in nearly two years.

On Wall Street, all three major indexes jumped more than 1 per cent, with the Nasdaq closing at a record high.

The euro was steady at US$1.08645, retaining most of Monday’s 1.3 per cent gain. On Monday, it posted its strongest one-day performance in 10-1/2 months, which lifted the common currency to a 5-1/2-month high.

The euro’s earlier gains had weighed on the dollar index, which touched a four-week low overnight. The index, which tracks the greenback against a basket of trade-weighted peers, was marginally higher at 99.134, failing to make up most of Monday’s 0.9 per cent loss.

The dollar advanced 0.3 per cent to 110.05 yen on Tuesday, extending Monday’s 0.5 per cent jump as investors sold off the safe-haven yen.

A strong earnings season in the US has also lifted investors’ spirits, with 77 per cent of the 100 S&P 500 companies that have reported first-quarter results so far beating profit expectations.

This week is set to be the busiest in at least a decade, with over 190 S&P 500 companies reporting first-quarter results, including heavy weights Alphabet and Microsoft .

In commodities markets, oil prices crept higher after six straight sessions of losses, although gains were capped by fears that pledged output cuts by major producers may not be able to rein in oversupply.

US crude gained 0.5 per cent to US$49.47 a barrel, but hovered close to the lowest level in almost four weeks hit on Monday.

Global benchmark Brent climbed 0.5 per cent to US$51.84 after also hitting a four-week low overnight.

Gold slipped 0.15 per cent to US$1,273.22 an ounce, remaining near a two-week low touched overnight.

UK deficit falls to lowest level since 2008
  • FTSE 100: +0.28pc
  • DAX: -0.01pc
  • CAC 40: +0.38pc
  • IBEX: -0.13pc

 David Cheetham, of XTB, said: “After some sharp moves on the European open yesterday, this morning has seen a sense of calm restored as markets continue to digest the recent political events in France. The FTSE 100 has added to Monday’s gains and has now recovered most of the losses seen last week following the announcement of a snap general election in the UK. In an interesting divergence which reveals a shift in driving forces on the markets, the pound remains well supported and not far from 2017 highs seen last week against the US dollar with the inverse correlation between these two subsiding somewhat in recent trade.”


Resurgent euro keeps pound under pressure

The pound remains under pressure today at the hands of a resurgent euro, which rallied yesterday as markets began to price in a Macron presidency.

Although it regained some momentum in early trade, the pound remains down 0.04pc on the day at 1.1783 against the euro.

Yesterday, the pound suffered its worst day against the euro since early January, falling around 1.4pc.


Institute of Chartered Accountants: Significant amount of work to do to repair public finances

Commenting on UK public finances, Ross Campbell from the Institute of Chartered Accountants in England and Wales said: “Whatever the outcome on June 8, it’s important to recognise there is still a significant amount of work to be done to repair the public finances – which are projected to stay in deficit for years to come.

“Whoever is Chancellor after the election will need to employ robust fiscal measures to tackle the massive level of public indebtedness we currently see today.

“While Brexit may dominate the pre-election narrative, it is equally important that all party manifestos tackle structural problems that plague the UK’s economy – including the longstanding problems of Government spending more that it earns and a lack of incentives to drive economic growth.”

Most of the larger UK March Public Finances deficit was higher debt interest presumably on RPI Index Linked Bonds.

He suggested that extra investment in infrastructure projects was needed “to spearhead the UK’s economic reboot in a post-Brexit landscape”.

Read the full report by Tim Wallace here


IHS Markit: UK public finances figures ‘pleasing and welcome news’ for Chancellor Hammond

Weighing in on the UK public finances data, economist Howard Archer, of IHS Markit, said the figures were both “pleasing and welcome news” for Chancellor Philip Hammond as he essentially met the markedly lowered 2016/17 fiscal target contained in the March budget.

Go to The Telegraph:

Hong Kong is not Taiwan, but its commitment to democracy is no less significant

April 23, 2017


Gary Wong says it rankles when democracies such as Taiwan say the city lacks a free soul, but the best comeback would be to unite and succeed in the quest for universal suffrage

By Gary Wong Chi-him
Aouth China Morning Post

Sunday, April 23, 2017, 11:01am

Dissonance and infighting hit Trump’s Asia policy

April 13, 2017

Far from being disciplined by the rituals and responsibilities of office, the Trump administration continues to be hobbled by policy dissonance and bureaucratic infighting.

To be fair, US President Donald Trump’s highly-anticipated summit with Chinese President Xi Jinping went largely according to script. Although there were no specific agreements on thorny issues such as trade and North Korea, both sides agreed to establish new and effective mechanisms for high-level dialogues to properly manage areas of conflict and expand areas of cooperation.

United States National Security Adviser H.R. McMaster, who replaced Mr Michael Flynn, has played a key role in restoring the National Security Council (NSC) to its more conventional form, booting out ideologues such as former White House chief strategist Steve Bannon and restoring Mr Daniel Coats, director of national intelligence, and General Joseph Dunford, chairman of the Joint Chiefs of Staff, to the influential principals committee of the advisory body. The other victim of the McMaster-led shakeup is Ms Kathleen MacFarland, the former No. 2 at the NSC, tipped to become the next ambassador to Singapore.

Nonetheless, a cursory look at Washington politics nowadays reveals a flailing superpower in search of a coherent strategy, particularly in Asia. Both major and smaller regional allies and partners in the region may well worry about strategic neglect under the current American administration.

Meanwhile, China has fortified its position in the South China Sea and stepped up its economic charm offensive across South-east Asia, particularly the Philippines.

US President Donald Trump has been in office for nearly three months and his Asia policy has been far from encouraging, says ays the writer.  PHOTO: REUTERS

Nonetheless, tossing aside its predecessor’s pivot to Asia policy, the new US administration has vowed to remain active and engaged in Asia, although under its own formulation.


But almost three months into office, the Trump administration has yet to assemble a full-fledged Asia team, namely the senior officials in the State Department, the National Security Council (NSC) and the Pentagon, who are tasked with formulating, implementing and overseeing America’s day-to-day policies in the region. Mr Matthew Pottinger, a veteran China hawk, is widely expected to take over as the chief Asia-focused figure in the NSC.

Partly, this is due to bureaucratic infighting and political vendetta. Both Defence Secretary James Mattis and Secretary of State Rex Tillerson have failed to install preferred deputies in the Pentagon and the State Department, respectively, due to fierce opposition from the White House.

For instance, proposed undersecretaries Mary Beth Long (for the Pentagon) and Elliott Abrams (for the State Department) were reportedly turned down by the Trump administration due to their earlier participation in the Never Trump movement, which featured 150 leading Republican national security experts who opposed Mr Trump’s candidacy last year.

Other prominent Republicans such as Mr Robert Zoellick (former World Bank president), Mr Tom Ridge (former secretary for Homeland Security) and Mr John Negroponte (former national intelligence director) were similarly frozen out. Dr Patrick Cronin, a widely respected Asia expert who was designated to become the director of the Pentagon-funded Asia-Pacific Center for Security Studies, reportedly became the latest victim of a seeming political purge of past critics.

The appointment of Asia-focused assistant secretaries has also been affected, given many leading experts’ earlier criticism of Mr Trump’s campaign agenda. The seeming prioritisation of loyalty over meritocracy could, and already has, left a discernible competence gap in American government.

The other area of concern is policy dissonance. After months of threatening to abandon allies and get tough on China, Mr Trump has ended up reassuring Japan of his “100 per cent” support, while repeatedly extending an olive branch to Beijing by emphasising cooperation rather than conflict.

In the South China Sea, the Trump administration initially adopted a tough language, contemplating a naval blockade against China and stepping up so-called freedom-of- navigation operations close to Chinese-made artificial islands in the Paracels and the Spratlys.

As a result, many South-east Asian countries were concerned about unnecessary and dangerous escalation in the maritime disputes. However, latest reports suggest the Pentagon has struggled to get the White House’s permission to dispatch, on a more regular basis, larger ships and naval assets close to Chinese-occupied land features in the South China Sea.

However, the biggest area of concern is the prospect of diminished American leadership and optimal strategic engagement.

The US State Department, crucial to development of a nuanced strategy in Asia, is grappling with steep budget cuts of up to 28 per cent alongside personnel reduction, the purging of ambassadors from the Obama administration, and numerous resignations among demoralised members of the diplomatic corps.

As Mr Trump’s generals and diplomats have warned, the massive reduction in America’s overseas development aid will inevitably have a negative impact on American soft power and conflict-prevention strategy around the globe.

At the same time, China is rolling out major infrastructure projects under its One Belt, One Road and Maritime Silk Road initiatives. The China Development Bank and the Export-Import Bank of China, along with the China-led Asian Infrastructure Investment Bank, are also expected to play crucial roles in bankrolling development projects across Asia with Chinese know-how and technology.

The Philippines, America’s oldest ally in Asia, has received a pledge of up to US$50 billion (S$70 billion) from China, which recently sent both its commerce minister and vice-premier to Manila and Davao, the hometown of President Rodrigo Duterte, who has increasingly gravitated towards Beijing and away from Washington.

The Trump administration, which nixed the Trans-Pacific Partnership Agreement (TPP) on its first day in office, has put no tangible economic initiative on the table, yet. And it is far from clear whether Mr Trump or any senior American official will meaningfully attend the East Asia Summit and Asia-Pacific Economic Cooperation leaders’ meeting later this year in the Philippines and Vietnam respectively.

So far, top American officials have been on a series of back-to-back visits to North-east Asia and Europe, but South-east Asia has been left out. Vice-President Mike Pence is slated to visit Indonesia in the coming days, but there are concerns that the trip will be mostly a jet fuel stop and vacuous exercise in handshake diplomacy, with no concrete agreements on the table.

While one can argue that it’s still too early to judge the merits of Mr Trump’s Asia policy, the first months have been far from encouraging. In the highly dynamic world of Asian geopolitics, time and initiative is of essence.

•The writer is a political science professor at De La Salle University in the Philippines, and the author of Asia’s New Battlefield: US, China, And The Struggle For The Western Pacific.

•S.E.A. View is a weekly column on South-east Asian affairs.

Asian markets dip as dollar retreats after Trump says: “I think our dollar is getting too strong.”

April 13, 2017



Asian markets dipped as the dollar retreated following comments by US President Donald Trump expressing concern about a strong greenback. © AFP


Asian markets were mostly weaker Thursday, as the dollar retreated following comments by US President Donald Trump expressing concern about a strong greenback.

Geopolitical tensions also continued to weigh on investor sentiment, as ties between the US and Russia turn increasingly frosty over Moscow’s backing for Syrian President Bashar al-Assad.

But Trump’s praise for Chinese President Xi Jinping Wednesday raised hopes of easing friction between the two superpowers over dealing with North Korea’s nuclear programme.

The dollar slid after Trump told The Wall Street Journal that he was worried about its strength and said he favoured low interest rates.

“I think our dollar is getting too strong, and partially that’s my fault because people have confidence in me. But that’s hurting — that will hurt ultimately,” Trump told the paper.

Trump also reversed course on an earlier vow to label Beijing a currency manipulator, that had sparked fears of a potential trade war between the world’s two largest economies.

China for years was accused of keeping its currency artificially low to make its exports cheaper and more competitive compared to US goods.

“They’re not currency manipulators,” Trump said flatly in the interview.

He went out of his way to praise Xi, saying he was “very impressed” following a meeting between the two leaders in Florida last week.

“I think we had a very good chemistry together. I think he wants to help us with North Korea,” Trump said in a Wednesday press conference.

Greg McKenna, chief market strategist at CFD and FX provider, AxiTrader, said, “What’s important here, and worth noting for investors and traders, is that President Trump has shown a willingness to change previously strongly held and articulated positions when he has been convinced — or informed — of the reality.”

The yen jumped against the greenback following Trump’s interview, trading at 108.83 in Asia, down from 109.07 in New York.

Tokyo ended the morning 1.1 percent lower while Hong Kong lost 0.2 percent. Sydney and Singapore also registered losses.

Shanghai edged up marginally as did Seoul, adding less than 0.1 percent.

The stronger yen hit exporters with Toyota falling 1.81 percent while smaller rival Mitsubishi Motors lost 2.29 percent in morning deals.

Toshiba fell 1.98 percent as speculation swirls over its plan to sell a prized memory chip unit to plug huge losses.

Tensions continued to mount between Washington and Moscow with Russia using its UN Security Council veto on Wednesday to swat down a US-backed resolution demanding Syrian cooperation in probing last week’s suspected chemical attack.

“The meeting between Russia and the US Secretary of State overnight couldn’t really be characterised as having released tensions… the body language is awful and Russian president Putin said that trust between the two nations had diminished,” McKenna said.

Oil markets pared back gains which had followed a US missile strike in Syria on Friday that had raised speculation about the impact on exports from the crude-rich Middle East.

– Key figures at 0250 GMT –

Tokyo – Nikkei 225: DOWN 1.1 percent at 18,340.44 (break)

Hong Kong – Hang Seng: DOWN 0.2 percent at 24,263.28

Shanghai – Composite: UP less than 0.1 percent at 3,507.34

Euro/dollar: FLAT at $1.0671 at 2100 GMT

Pound/dollar: UP at $1.2564 from $1.2544

Dollar/yen: DOWN at 108.83 yen from 109.07 yen

Oil – West Texas Intermediate: DOWN 10 cents at $53.01 per barrel

Oil – Brent North Sea: DOWN 9 cents at $55.77 per barrel

New York – Dow: DOWN 0.3 percent at 20,591.86 (close)

London – FTSE 100: DOWN 0.2 percent at 7,348.99 (close)

Singapore: Case involving misappropriation of millions of church funds goes to Court of Appeal — Church funds used to fuel the pop music career of Pastor’s wife, Ms Ho Yeow Sun

April 10, 2017

City Harvest verdict: AGC to take case to Court of Appeal

Image may contain: 6 people

Clockwise from top left: Kong Hee, Tan Ye Peng, Serina Wee, John Lam, Chew Eng Han, Sharon Tan.PHOTOS: ST FILE

SINGAPORE – The Attorney-General’s Chambers (AGC) said on Monday (April 10) that it will be taking the case involving the misappropriation of millions in City Harvest Church (CHC) funds to the Court of Appeal on questions of law.

Church founder Kong Hee, 52, and five other leaders had their sentences slashed last Friday after a three-judge High Court panel reduced their convictions for criminal breach of trust (CBT).

The six were originally convicted for CBT as agents, under Section 409 of the Penal Code. But in a two-one split decision, the High Court ruled that the six church leaders are not considered agents under the provision and replaced the offence with basic criminal breach of trust, under Section 406.

In a statement on Monday, the AGC said: “Having carefully considered the written grounds, the prosecution is of the view that there are questions of law of public interest that have arisen out of the High Court’s decision, including and in particular, whether a director or a member of the governing body of a company or organisation who is entrusted with property, or with any dominion over property, is so entrusted in the way of his business as an agent for the purposes of section 409 of the Penal Code.

“The prosecution has accordingly filed a criminal reference today, to refer these questions of law to the Court of Appeal.”

Under the Criminal Procedure Code, the Court of Appeal, in hearing and determining any questions referred to it, may make such orders as the High Court might have made as the Court of Appeal considers just for the disposal of the case.

The AGC statement said that if the Court of Appeal agrees with its submissions, the prosecution intends to ask the apex court to “reinstate the appellants’ original convictions under section 409 of the Penal Code and make necessary and consequential orders in relation to the sentences given”.

Kong, deputy senior pastor Tan Ye Peng, former fund manager Chew Eng Han, former finance manager Serina Wee, former finance committee member John Lam, and former finance manager Sharon Tan, were originally sentenced to between 21 months and eight years’ jail.

They were found guilty, after a marathon trial that started in 2013, of misappropriating millions in church funds to fuel the pop music career of Kong’s wife, Ms Ho Yeow Sun, in a church mission known as the Crossover Project.

Image result for Ho Yeow Sun, singapore, photos

Church leaders were found guilty of misusing around $50 million of church monies to fund pop music career of the Pastor’s wife, Sun Ho aka Ho Yeow Su.  Photo: Ms Ho displaying her dare-to-bare attitude in her China Wine video (above) in 2007 that attracted much attention.YouTube Video Screen Grab*

They had channelled $24 million from CHC’s building fund into sham bonds in music production company Xtron and glass-maker Firna. This money was in fact used to fund the Crossover Project. Later, another $26 million was used to cover up the initial misdeed.

The prosecution appealed for higher sentences. The six appealed against their conviction and sentences.

On Friday, the jail terms were drastically reduced.

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Kong’s original sentence of eight years was cut to 3½ years.

Tan Ye Peng, 44, had his 5½ years in jail cut to three years and two months.

Former fund manager Chew Eng Han, 56, who originally got six years in jail, had it reduced to three years and four months. Former finance manager Serina Wee, 40, had her five-year jail term halved to 2½ years.

The three-year sentence of former finance committee member John Lam, 49, was also halved. Former finance manager Sharon Tan, 41, will be jailed for seven months instead of 21 months.

Erroneous history in political discourse (Here’s a shocker: Leaders and governments lie to us) — Shame on those naive enough to believe lies

April 10, 2017

By Antonio Montalvan II
Philippine Inquirer

April 10, 2017

Neither once nor twice, but many times have we heard it spoken extemporaneously on many a presidential trip to the provinces. Each time it is said, the applause cannot be ignored, but those who can spot the difference probably cringe on their seats. The gist of the statement goes this way: Islam came to Mindanao during the Srivijayan Empire.

The redundancy takes on an imperious character because the facts are easily at one’s fingertips. First of all, what was the Srivijayan Empire (also written as Sri Vijaya)?

Srivijaya was a thalassocracy that flourished in Sumatra, Indonesia, from the seventh century to the 12th. “Thalassocracy,” from the Greek word thalass which means sea, refers to a city-state with a maritime realm. In the case of the Indonesia-based Srivijaya, its seaborne mercantile influence gave rise to a hegemon over much of Southeast Asia.

That Srivijaya rose to become a hegemon also means that the context of its influence was not only merchandise. Trade ties were cemented by political allegiances so that the Maharaja of Srivijaya rose to prominence from around what is today the city of Palembang in Sumatra.

By suppressing neighboring kingdoms, the empire controlled trade in the Strait of Malacca, Sunda Strait, South China Sea, and in the Java Sea. Having controlled those choke points, it also transported its ritual culture. The Srivijayan kings were instrumental in spreading Vajrayana Buddhism, an esoteric system of beliefs that traced its roots to medieval India.

The northeastern corner of an Indonesian national monument. In this section the Majapahit Empire is depicted including Gajah Mada at the nearest right. Jakarta, Indonesia.

The Majapahit Empire: The Short Life of an Empire that Once Defeated the Mongols

Its name may sound Sanskrit; but Srivijaya was not ruled by overlords that subscribed to the Hindu religion, although its brand of Buddhism came from India.

Recent archaeological finds indicate that there was a density of Buddhist temple-sanctuaries in Srivijaya. The ritual religion of Srivijaya, therefore, was definitely not Islamic. In the Philippines, however, where Srivijaya influence primarily took root through trade, Buddhism was not effectively transferred pervasively, although a few material traces may exist.

Srivijayan prestige and fortune declined in the 12th century, including in Palembang. The last king to rule from there was its king in 1156.

What followed was the rise of one of the greatest and most powerful empires in Southeast Asia, the Majapahit Empire. Based in Java, Sumatra’s longtime rival, the Majapahit was another thalassocracy of tributary states that included present-day Sulu, Southern Thailand, Indonesia, Malaysia, Singapore (erstwhile known as Temasek), Brunei and East Timor.

Its rule began in the year 1293 and ended around 1500.

From the time it began, Majapahit was a Hindu kingdom. But because of vigorous trade, there was the conspicuous presence of Arab and Muslim Indian traders in some of its cities. In the late 15th century, the Majapahit ruler converted to Islam.

Image result for Majapahit Empire

As trade was the impetus for the conversion of the Majapahit Empire into Islam, so was it in the Philippines. The first mosque in the Philippines, in the island of Simunul in Tawi-Tawi, was built in 1380; today it is indicated by a marker of the National Historical Commission of the Philippines as officially declared a National Cultural Treasure by the National Museum of the Philippines.

While Islam reached parts of Luzon, many other areas of the archipelago were never Islamized. One of them is Northern Mindanao, which was only a tributary
under Sultan Kudarat.

I wish I could write broadsheet historiography as stimulating as my friend Ambeth Ocampo does, but I wish to make a political point when we hear redundant errors stated and watch the tragedy of people believing in them.

The powers of the Philippine presidency, it goes without saying, are immense. They include the commissioning of good and honest research by whoever occupies Malacañang. An error in data, no matter how trifling, is unforgivable.

There are those who postulate that the message is more important than the messenger. But what if the message is wrong Miseducation is a serious error in governance.

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“You can keep your doctor….”


  (November 24, 2015)

 (December 28, 2015)

Chinese J-11 Fighters Deployed To Woody Island In South China Sea

China posted pictures of an armed J-11 Flanker fighter


 (Philippine Star)

Image may contain: ocean, outdoor, water and nature




 — From March 25, 2017 with links to other related articles

 (Contains links to several previous articles on the South China Sea)


Image may contain: sky, outdoor and water

A combined task force of Chinese and Russian warships trained together in the western Pacific in 2016 and 2014. Reuters photo

Students burn a replica of Chinese surveillance ships in Manila in March 2016.

Students burn a replica of Chinese surveillance ships in Manila in March 2016. Photographer: Ted Aljibe/AFP via Getty Images

No automatic alt text available.

On July 12, 2016 a ruling of the Permanent Court of Arbitration in the Hague said China’s nine-dash line claim (shown above) was invalid and not recognized in international law.

1MDB probe progressing despite Malaysia being uncooperative: Swiss AG

April 7, 2017

BERN, Swtizerland: Swiss Attorney General Michael Lauber expressed confidence on Wednesday that his money laundering probe into scandal-hit Malaysian fund 1MDB would bear fruit despite Malaysian authorities’ refusal to cooperate.

“It’s not hopeless, in fact it’s the opposite,” Lauber told a news conference, saying the probe was making progress based on money-laundering reports, bank documents and work with Singapore and other countries.

“It would have been very desirable from our perspective if Malaysia had cooperated,” he said. But “we’re still confident that we can successfully conclude the process in this area, in particular in the open cases against the two banks,” he said, referring to Swiss private banks BSI and Falcon.

Malaysia again rebuffed Switzerland’s request for legal assistance in probing 1MDB, Lauber’s office had said in November.

Swiss bank UBS has received a written reprimand from Finma, Switzerland’s financial regulator, over its role in the scandal surrounding Malaysia’s 1MDB state investment bank.

The move followed a fine imposed on UBS last October by Singapore’s monetary authority for 1MDB-linked rule breaches.

In a statement late on Tuesday, Finma said it had found no “systemic, severe” violations of rules by UBS but said the background to a significant business relationship and subsequent transactions had not been checked properly in Singapore.

Its reprimand was part of its oversight of checks against money laundering. UBS had no comment. The written warning followed sanctions ordered by Finma in 2016 and earlier this year against three other banks – BSI, Falcon Private Bank, and Coutts. Finma said three other cases remained open, without giving details.

Spent US$35 million in congregation funds on his wife’s singing career

April 7, 2017
Friday, April 7, 2017, 2:45pm

US reaffirmed commitment to Asia-Pacific region and bilateral defence ties with Singapore: Ng Eng Hen

April 6, 2017


SD Mattis meets with Singapore’s Minister of Defence Ng Eng Hen

US Defence Secretary James Mattis and Singapore’s  Ng Eng Hen at the Pentagon, in Washington, DC. PHOTO: AFP

SINGAPORE – United States Defence Secretary James Mattis has reaffirmed the US commitment to the Asia-Pacific region and expressed a desire to deepen bilateral defence ties with Singapore, said Defence Minister Ng Eng Hen.

He also revealed in a Facebook posting on Thursday (April 6) morning that Mr Mattis will be attending the Shangri-La Dialogue in Singapore, an annual security dialogue that is usually held in late May and often features top brass military and defence personnel.

Dr Ng, who is making a working visit to the US, met Mr Mattis at the Pentagon on Wednesday (US time), and described their meeting as “warm and productive”.

“We discussed common security challenges including the threat of terrorism and ways to deal with them. I look forward to returning the warm hospitality when Secretary Mattis attends the Shangri-La Dialogue in June this year,” wrote Dr Ng.

According to a transcript of an interview with Channel NewsAsia in Washington DC, Dr Ng described Mr Mattis, a former Marine Corps general, as someone who has strategies and plans, and vast experience in the US military.

“He gave a reassuring calm, and in his words, he’s now become the ‘Secretary of Reassurance’. So I was very happy with the outcome of that,” said Dr Ng.

“I think it bodes well from the security point, America’s commitment to the region, and not only commitment to the region, but commitment towards Asia-Pacific’s stability… There is much reassurance and confidence that Secretary Mattis is there.”

Dr Ng added that both countries remain committed to the enhanced Defence Cooperation Agreement, signed in 2015, which will further collaboration in new areas such as humanitarian assistance and disaster relief, cyber defence, biosecurity and public communications.

Singapore also remains committed to facilitating the use of Changi Naval Base and its air bases by American forces, said Dr Ng.

He said the purpose of his trip from Sunday to Wednesday (April 2 to 5) was to get a better feel of how to engage the US as there have been “several levels of uncertainty, unpredictability, new administration” under President Donald Trump since Mr Trump took office on Jan 20.

“We thought the best way to do that is to meet the individuals, the ambassadors, and we lined up a significant number of calls with old friends of Singapore who understand the politics, who understand the history of Singapore and relations with the US, and understand our region,” said Dr Ng.

He said it has been a very useful trip,  calling it not only a voyage of discovery, but also one of reassurance and reaffirmation by many strong friends and supporters of Singapore in Washington, “who have given us very good guide posts and who also gave us strong assurance that you can call on them if need be”.

Asked about the upcoming Mar-a-Lago Summit meeting between US President Donald Trump and Chinese President Xi Jinping in the US, Dr Ng said it is a “good development” that both leaders are meeting, as it is better for both countries to be cooperating than to be in an antagonistic relationship.

He said Singapore believes it would be healthy for the US and China to agree to avoid trade wars and to help both sides grow economically.

“Because from Singapore’s perspective, we benefit whenever global trade goes up. And, simplistically, if there are protectionist measures from any one country, retaliation, the effect is, as we’ve known from past experience is that global trade just goes down,” added Dr Ng.