Posts Tagged ‘Singapore’

Australia Foreign Policy White Paper hits China’s activities in South China Sea — SCS is a “major fault line” in regional order.

December 6, 2017
In this April 21, 2017, file photo, Chinese structures and an airstrip on the man-made Subi Reef at the Spratly group of islands in the South China Sea are seen from a Philippine Air Force C-130. CSIS AMTI via DigitalGlobe, File

MANILA, Philippines — Expressing concern over the scale of China’s activities in the disputed South China Sea, Australia urged all claimants to clarify the full nature of their claims in accordance with international law.

In its 2017 Foreign Policy White Paper released a few weeks ago, Australia stressed its position that the UN-backed tribunal’s ruling on the Philippines’ arbitration case against China is “final and binding on both parties.”

Clarifying that they are not taking sides in the competing claims, Australia considers the South China Sea as a “major fault line” in the regional order.

“Like other non-claimant states, however, we have a substantial interest in the stability of this crucial international waterway, and in the norms and laws that govern it,” the Foreign Policy White Paper read.

Australia noted that they have urged all claimants to refrain from actions that would increase tension in the region. They have also called for a halt on Beijing’s land reclamation and construction activities.

Resolving dispute should be based on international law, in accordance with the United Nations Convention on the Law of the Sea (UNCLOS), Australia said in its foreign policy paper.

“Australia opposes the use of disputed features and artificial structures in the South China Sea for military purposes,” the white paper read.

The Australian government vowed to ensure international law, particularly UNCLOS, will be respected and implemented to protect freedom of navigation in the region.

Meanwhile, China criticized Australia for its “irresponsible comments” on the South China Sea.

Chinese Defense Ministry spokesperson Wu Qian stressed that Australia is not in a position to make comments on the contested waters as they are not a claimant country.

“It has been proven by facts that interference from countries outside the region can only complicate the South China Sea issue and will be of no help to regional peace and stability,” Wu said in a press briefing.

Earlier this year, Beijing also slammed US Secretary Rex Tillerson for his comment that China is using its economic powers to buy its way out of problems.

“China is a significant economic and trading power, and we desire a productive relationship, but we cannot allow China to use its economic power to buy its way out of other problems, whether it’s militarizing islands in the South China Sea or failure to put appropriate pressure on North Korea,” Tillerson said in Sydney last June.

Beijing had been insisting that the situation in the South China Sea has “cooled down” following direct consultations and dialogues with claimant states.

RELATED: China assures Philippines: No military force in South China Sea


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China says it has sovereignty over all the South China Sea north of its “nine dash line.” On July 12, 2016, the Permanent Court of Arbitration  in The Hague said this claim by China was not valid. But China and the Philippine government then chose to ignore international law.


Reading skills falling in US, Canada, France: study — “Smartphones seems to have pushed out books and learning has declined.”

December 5, 2017


© AFP | Reading ability among children aged 9-10 has fallen in the US, Canada, France and several other developed countries, according to a comparative study of 50 countrie

PARIS (AFP) – Reading ability among children aged 9-10 has fallen in the US, Canada, France and several other developed countries, according to a comparative study of 50 countries published Tuesday.Ten countries fared worse, compared with five years ago, in the 2016 PIRLS assessment of pupils in their fourth year of schooling — namely Belgium, Canada, Denmark, France, Iran, Israel, Malta, New Zealand, Portugal and the US.

Eighteen, including England, Russia and Qatar made improvements.

Russia and Singapore topped the boards with 581 and 576 points respectively in the study of 319,000 children, who were assessed on their ability to understand literary and informational texts.

Egypt scored 330 points, while South Africa finished at the bottom with 320 points.

Girls outperformed boys in 48 countries, with an average difference of 19 points, and matched their reading abilities in two — Portugal and Macau.

Boys’ reading skills particularly lagged those of girls in mostly Muslim countries such as Saudi Arabia, Oman and Iran, but the gap was also large in secular South Africa.

The study, conducted by the Netherlands-based IEA international education charity, is the fourth of its kind since 2001.

It contains comparative information on time and resources devoted to teaching reading but does not draw conclusions, or make suggestions, about how countries could improve.

Other findings include:

— Reading standards among French fourth-graders — who scored 511 points to take 34th place out of 50, behind Kazakhstan — have fallen steadily since 2001.

— In South Africa, which was the only African country to participate, girls pulled up six points between 2011 and 2016, while boys dropped 12 points.

— In Iran, reading levels among both sexes shot up between 2006 and 2011 only to plummet in the past five years. The boys’ score fell 41 points between 2011 and 2016, compared with 15 points for the girls.

— In the US, 98 percent of the students had a library in their classroom, compared to just 14 percent in Egypt.


Tech May Be to Blame for Decline in Students’ Reading for Pleasure

Technology Proves to Negatively Effect Reading Skills

Students have put down beloved paperbacks and replaced them with smartphones, iPads and other technology. Kids’ reading for pleasure has dropped tremendously over the past 40 years, and technology may be to blame.

Children have admitted only reading for pleasure once or twice a year, whereas some haven’t ever opened a book unless for a school assignment. In a government study, the rate of nine-year-olds who read for fun once or twice per week fell from 81 percent in 1984 to 76 percent in 2013, reported Education News.

“The same study discovered that today’s children are having a harder time learning how to read,” the article said. “For kids in the fourth grade, only about one-third of them are ‘proficient’ in reading, and another one-third tested under ‘basic’ reading skills.”

Read the full story.

Article by Kassondra Granata, EducationWorld Contributor

Is China chipping away at the Asean bloc?

December 2, 2017

Beijing is forging stronger bilateral ties with its Southeast Asian neighbours, taking attention away from relations between the organisation’s members, observers say

By Laura Zhou
South China Morning Post

PUBLISHED : Saturday, 02 December, 2017, 5:52pm
UPDATED : Saturday, 02 December, 2017, 6:20pm

If the last few weeks are any guide, China’s ties with its Southeast Asian neighbours are on the up.

There’s been a flurry of top diplomatic and military engagement between China and Myanmar, Vietnam and various other members of the Association of Southeast Asian Nations (Asean).

In part, it reflects a change in tack Beijing has taken to try to dispel some of the suspicions in the region over its growing economic clout and militarisation of the South China Sea, one of the world’s most important waterways.

It has done this by a combination of one-on-one diplomatic and economic support.

But diplomatic observers say that by pulling its neighbours closer, Beijing is stretching ties between other countries in the region, testing bonds within the Asean bloc on big issues like the South China Sea.

China’s stepped-up engagement was on show in Beijing on Friday when Chinese President Xi Jinping held talks with Myanmese State Counsellor Aung San Suu Kyi. Myanmar and Suu Kyi have been under fire for their handling of the Rohingya crisis in which more than 600,000 people in Rakhine state have been displaced. But on Friday Xi was talking up ties with Myanmar, saying Beijing will see the China-Myanmar relationship from a wider, strategic point of view.

 Aung San Suu Kyi, Mynamar’s state counsellor, and Chinese President Xi Jinping meet in Beijing on Friday. Photo: AP

The talks came after a state visit by Xi to Hanoi and Premier Li Keqiang to Manila last month. The militaries of China and Vietnam are also teaming up for 10 days of naval drills in the Gulf of Tonkin this month.

One important sign that this renewed engagement is paying off came last month at the Asean summit in the Philippines, where the bloc avoided all mention in its official statement of China’s militarisation of the South China Sea. That’s a big shift from just a year earlier when under the chairmanship of Laos, the statement said some member states were concerned by “land reclamation and escalation of activities” in the disputed waters.

Jay Batongbacal, associate professor at the University of the Philippines College of Law, said China had repeatedly stressed the need to resolve maritime disputes through bilateral talks but was creating a network of ties that put itself at the centre of regional power.

“It is naturally weaving a tapestry of economic and political relations revolving around itself as the common bilateral partner,” Batongbacal said.

“Given that most Asean countries already have China as their leading trading partner, the natural concern is that in doing so Asean may be losing some or much of its centrality as its members must then pay increasing high attention to China relations rather than the intra-Asean relations.”

The biggest change in relations can be seen with the Philippines. Just last year, tense ties between Beijing and Manila peaked when an international tribunal in The Hague found in favour of the Philippines in a maritime dispute over the South China Sea.

The administration of former president Benigno Aquino had asked the tribunal to assess the legitimacy of China’s claims to vast parts of the waters. The tribunal rejected China’s claims but Beijing refused to acknowledge the ruling.

A year down the track and China has pledged a series of investment deals under the new administration of Aquino’s successor, Rodrigo Duterte. Chinese companies are promoting their wares in the Philippines, Beijing has given weapons for Manila’s crackdown on drugs, and China has vowed to build infrastructure in Duterte’s hometown Davao.

Tang Siew Mun, head of the Asean studies centre at the ISEAS-Yusof Ishak Institute in Singapore, said Asean was concerned about China’s use of bilateral ties to limit the bloc’s strategic space and autonomy.

“Such concerns apply to not only China but any other major powers that want to bend the group to their strategic interests,” he said.

But change could come from at least two quarters, including Singapore, which will be taking over Asean’s chairmanship next year. Singapore has been a vocal critic of China’s manoeuvring in the South China Sea and could nudge Asean to take a stronger stand on the dispute.

At the same time, Asean members states have been improving ties with not only China but other powers as well, according to Dindo Manhit, from the Stratbase Albert del Rosario Institute in the Philippines.

In the sidelines of the Asean summit in Manila, representatives from the United States, Japan, India and Australia met for the first time in a decade, marking the revival of a regional coalition to lock horns with rising China.

Du Jifeng, from the Chinese Academy of Social Sciences, said Beijing still needed to be cautious about potential flashpoints in the South China Sea given that Duterte’s policies could change at any time.

“It is a strategic issue to play a soft or tough stance, but when it comes to core issues with national interests, such as territorial sovereignty in the South China Sea, no country would want to the soft one,” Du said.

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China’s man-made Subi Reef in the Spratly chain of islands in the South China Sea, shows Chinese military construction (AP photo) — This is one of seven man made Chinese bases near the Philippines  in the South China Sea.


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China says it has sovereignty over all the South China Sea north of its “nine dash line.” On July 12, 2016, the Permanent Court of Arbitration  in The Hague said this claim by China was not valid. But China and the Philippine government then chose to ignore international law.

The China factor in property market exuberance

December 2, 2017

By Chua Mui Hoong
The Straits Times

A few bullish bids from China developers doesn’t mean the market is heating up, as they may be driven by non-market considerations.

I was at the Queen Victoria Market in Melbourne recently with a friend, browsing, when I came across a stall selling boots.

It’s summer in Australia, but my Singaporean habit of thinking ahead got me thinking of stocking up on winter boots ahead of time. The prices for the iconic Australian wool-lined boots looked reasonable.

“Will these prices go up in winter?” I asked the stallholder, expecting him to say Yes in hopes of making a quick sale today.

“Not this time,” he said. “Maybe a little bit other time, but not now. Business is no good, I have lots more stock in the warehouse, I won’t be raising my price next year.” (Winter is June next year.)

My friend joined in the conversation and soon the stallholder was explaining the situation. “You see this stall, that stall?” he said, pointing to neighbouring stalls selling apparel or household goods. “From China. They come, they pay the rent, they set up shop, all our business affected.”

“Oh, because they can get goods from their China contacts cheaply?” I asked.

“No, no,” he shook his head. “They set up shop here, make money, not make money, they don’t care, they bring their family, their relatives over.”

My friend added: “They set up a business to get an investor visa, then they use it to bring their families into the country. The stall doesn’t matter, they are not out to make money from the business.”

The stallkeeper told us he was from Russia. The shoe business had been in the family for decades. While sales slowed in Melbourne, they had a thriving trade with Russian partners, he said, so his family was innoculated from the China factor.

A couple of days later, in another part of Melbourne, we had lunch at a sushi place. Well, the Google map and cafe name had the word “sushi” in it. There were some sushi and handrolls on the deli counter. But there was also fried noodle, fried rice, sweet and sour pork. The menu listed everything from tom yom soup to wanton noodles.

This was certainly no Japanese sushi joint. The food looked Chinese. True enough, the cafe-owner was an enterprising young man from Guangzhou, China, in his 30s. He had taken over the restaurant just two months ago. His wife and children were now in Australia.

Like the kaypoh, brash Singaporean Chinese  we are, we asked how much he paid for the cafe assignment, and what the rental was.

I looked around the cafe while my friend chatted to the owner in Cantonese, a language I half-understand but am tongue-tied in. Many tradies (Aussie slang for tradesmen of all types, from car mechanics to plumbers to brick layers to builders), Asian and Caucasian, came in. Business was brisk but the cafe was open only from 7 am to about 3 pm.

My friend asked, business prospect to business prospect, if there was money to be made from the joint, which was on a busy minor road, with many car workshops around.

The answer was candid: “Just passable, but it’s a way to get a business going.”

A way to get a business going.

Sometimes, businesses are not quite what they seem. Foreign businesses may enter foreign shores – whether Down Under or Singapore’s sheltered coves – not because of the intrinsic business fundamentals of the destination, but for extrinsic reasons that have little to do with the strengths of the destination market.

In other words, they might be driven by factors beyond the profit motive.

I started mulling over the two recent incidents in Australia when I read reports of the Monetary Authority of Singapore (MAS) issuing a warning about the property market in Singapore.

In its Financial Stability Review issued on Nov 30, the central bank warned about property risks, in remarks that have since been widely picked up by news and social media, with headlines on risks from “excessive exuberance” in the property market.

The report noted: “Recent developments in the property market pose potential risks to stability; market players should proceed cautiously.”

It highlighted the coming stream of new homes to be built on the many land sites recently sold, and from the stream of condo projects sold en bloc for redevelopment.

They could add another 20,000 new units in the next one to two years, more than doubling the current supply of some 17,000 unsold units. Already, 30,000 homes are vacant. Add that to the new stock coming on stream and no wonder MAS warns that a supply imbalance could “weigh on rentals and property prices.”

It urged buyers to be prudent: “Buyers should carefully assess their ability to service their mortgage debt in the long term, taking into account potential interest rate increases and uncertain rentals.”

Or as a Facebook friend summed it up pithily when I shared that MAS report: “In other words, if you cannot afford to play the market, please don’t.”

What might be the source of that market exuberance?

One: Analysts. As I’ve written in a previous article, some analysts talk up the market with rosy projections, predicting things like 30 per cent price jumps in a year.

Two: Developers who place bullish bets on land also have a vested interest in exhibiting exuberance, so they can price their projects higher.

Three: Buyers. The property market, like the stock market, is sentiment-prone. When enough analysts and developers talk it up and buyers believe the hype, a market heats up.

One factor that underpins the growing heat in the private residential market here is the foreign factor – in particular, foreign developers, especially those from China.

There is growing interest from Chinese developers in our condo market. Some entered as construction firms partnering local developers, and went on to develop their own projects. From being developers, winning tenders for government land sales, a few are now venturing into the en bloc market, which is more complex as developers need to work with hundreds of existing home-owners.

How active are the Chinese players in the Singapore condo market?

A report in July cited Cushman & Wakefield data that found that foreign bids made up 34 per cent of all bids this year, up from 25 per cent in 2015.

It also found that when foreign developers win sites, their winning margin over the second-highest bid since 2015 is an average of 5.6 per cent – compared with local developers who win by 3.4 per cent.

Reports as of July indicate that China developers won four of eight government land sales sites. Some winning bids were record-breakers. For example, Hong Kong-listed Logan Property and Chinese developer Nanshan Group’s bid for a residential land parcel in Stirling Road crossed the billion-dollar mark.

Chinese developers are also entering the en bloc fray.

Business Times report in October said: “Chinese firm Kingsford Huray Development, owned by Chinese-citizen-turned-Singaporean Cui Zhengfeng, acquired Normanton Park, a former government housing project off Ayer Rajah Expressway, for S$830.1 million this month.

“This follows the purchase of freehold condominum project Sun Rosier for S$271 million by SingHaiyi Properties and Huajiang International Corporation, both controlled by Chinese tycoon Gordon Tang and wife Chen Huaidan.

“In May last year, Qingjian Realty bought former HUDC estate Shunfu Ville for S$638 million.”

When Chinese developers start to make waves in Singapore’s property market, isn’t that a vote of confidence in Singapore and a sign that the market here is thriving?

Well, yes and no.

China developers are here because this is an open and well-ordered market. But, they may be driven by non-market considerations to bid high.

They may be prepared to bid high because they are fine with lower profit margins. Some want to diversify out of China or offshore their funds and are prepared to take on lower-margin projects.

For others, the private condo market here may just be a gateway – a way to get a foothold into the Singapore corporate sector so they can fish for bigger profits elsewhere – like the Chinese investors who start a business at a market stall in order to get a foothold in Australia and serve as a beach-head for family interests and future business opportunities.

A November report in Singapore Business Review, citing DBS Equity Research, noted: “Local players are also facing tough competition as foreign developers bid to snag a slice of Singapore’s property pie.

“The increased presence of new foreign players in land tenders whose motivations go beyond profit margins – they seek to “plant their flag” in Singapore as well as deploy their internal excess capital and resources – has also resulted in land prices remaining elevated, the report said.”

China developers have their own motives for getting into the local condo market. They play by Singapore rules, but they also march to the beat of their own internal motivations, some of which may not be market-driven.

So don’t be fooled into thinking that the market must be heating up, because a handful of ambitious Chinese developers are bidding up land prices.

It’s easy to get caught up in the signs of market exuberance and believe that when developers pay top dollar for condo sites, that condo prices must therefore rise. It’s understandable to want to spring to catch a wave as it rises.

But buyers should be aware of the fundamentals: a possible supply overhang; and uncertain geopolitics. They should remain sober and analytical before jumping into the market.

China developers can come and go, but Singaporean home-owners are here to stay, and we should all aim for less exuberance and more stable, sustainable growth in the property market.

Innovation and traditional strengths key to Singapore’s role in China’s Belt and Road Initiative

November 26, 2017

 Image may contain: 8 people, people smiling, people standing and indoor

Finance Minister Heng Swee Keat speaking with Singapore students at Tsinghua University on Nov 25, 2017. Mr Heng said that there are opportunities for Singaporeans to learn from and collaborate with their Chinese counterparts.ST PHOTO: LIM YAN LIANG

BEIJING – There is a palpable buzz to the innovation scene in China, and opportunities are growing for Singaporeans to learn from and collaborate with their Chinese counterparts, Minister for Finance Heng Swee Keat said on Sunday (Nov 26).

Singapore also has unique strengths, such as in legal and finance, that it should capitalise on to capture a slice of China’s Belt and Road Initiative (BRI), Mr Heng told reporters at the close of his five-day trip to Suzhou and Beijing.

“I must say that it is a place that is full of buzz and full of young entrepreneurs as well as older ones who are working very well to think about what is the next stage of growth, what they can contribute and how they can better use technology to improve lives,” he said. “I hope that we too can make a contribution in that area.”

Reading the pulse of China’s tech scene was a key goal of the trip for Mr Heng, who is the first minister from Singapore to visit China after last month’s key party congress that put in place the country’s top leadership for the next five years.

Among the places he visited were the Tsinghua University Science Park, where he saw the university’s built-in ecosystem for turning ideas into commercial products, and Didi Chuxing’s office, where he was briefed on how the ride-hailing giant uses big data and analytics with local governments to improve traffic flows.

Image result for Tsinghua University Science Park, photos

He also officiated at the finals of a tech summit where nine start-ups, including three from Singapore, pitched their ideas to investors.

China’s push for greater innovation also comes through various levels of its government, said Mr Heng, who met senior officials such as his counterpart Xiao Jie and Jiangsu party secretary Lou Qinjian during his trip.

“(An) area they have given a lot of thought to is the promotion of innovation – this is a topic that came across very strongly in all my meetings, both at the provincial level, as well as at the central government level.”

With more Chinese companies today looking at going global, a network of deep linkages with innovation hubs across the world is necessary to encourage more of them to use Singapore as a base for their internationalisation efforts.

To this end, the Global Innovation Alliance, which was launched in Beijing last Friday (Nov 24), will give Singapore entrepreneurs a chance to understand the Chinese market and build relationships, while serving as a sort of satellite campus for students to be exposed to China and “understand the buzz that’s happening in these places”.

Mr Heng said while Singaporeans are more keen to go abroad today than just a decade ago, Singapore needs more of them to do so.

“We need to encourage more young people to do so because the more they understand what is happening around our region and the global economy, the better prepared they will be to take on important roles ahead,” he said. “Singaporeans – with our emphasis on bilingual education, with our emphasis on understanding a broad range of areas, a broad range of subjects – are actually very well placed to do this.”

Singapore’s traditional strengths also mean it can be a role player in the BRI to build infrastructure across much of the region, he added.

For instance, it can help write the rules setting out clearly the role of multilateral development banks like the World Bank and the Asian Infrastructure Investment Bank, structure projects so that risks are well understood and financing is sound across different stages, and standardise contracts to build predictability and lessen risk.

Getting the legal instruments right, such as for contracting parties to use a neutral body to be the dispute resolution centre, is also key, said Mr Heng.

Singapore aims to be this international arbitration hub, with the Ministry of Law working hard on this front, he added.

“If we can do this well, it will have a major impact,” Mr Heng said, adding that the government is also looking at different ways to expand trade flows, such as through trade and investment agreements and regulatory coordination.

Mr Heng said that as Asean chair next year, Singapore will look at ways to drive greater cooperation in new technologies, digitalisation and creative solutions. It has designated 2018 as the Asean-China Year of Innovation.

Singapore will also seek to promote deeper understanding between the Chinese and the peoples of Asean, he said.

“The more our economies are closely integrated together, the more our security are interdependent, the more important it is for us to understand people from around the region and promote that friendship (all) across,” he said.

Singapore Starts Mandatory “Settling-in Program” for New Immigrants

November 26, 2017

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Foreign workers taking photos at a photo booth at a Manpower Ministry appreciation dinner on Nov 26, 2017.ST PHOTO: SEOW BEI YI

SINGAPORE – From the second half of next year, new foreign workers will attend a mandatory Settling-in Programme (SIP), similar to that for first-time domestic workers.

This is to help them learn about Singapore’s social norms, laws, as well as their employment rights and obligations, Manpower Minister Lim Swee Say said on Sunday (Nov 26). It will also inform them how and where they can seek help.

The move was welcomed by non-governmental organisations that help foreign workers, saying that employers not paying their employees their salaries or compensating them for work injuries continue to be an issue here and that the new programme will help newcomers know what they are entitled to and where to turn to for assistance.

The programme, to be rolled out in phases, will start with first-time foreign workers in the construction sector, Mr Lim said. Malaysians will be excluded.

He was speaking at a Manpower Ministry (MOM) appreciation dinner for more than 300 partners, including employers, dormitory operators and non-government organisations.

The SIP will be extended progressively to other sectors such as marine, process, as well as manufacturing and services.

About 2,000 foreign workers in the construction sector are expected to attend the SIP each month, according to MOM. Employers will be responsible for registration and course fees.

The ministry conducted a pilot from June to October last year, which involved close to 1,900 workers.

Besides feedback that the course was useful and helped workers understand how MOM can help when they have employment issues, a post-course evaluation found that the workers showed a more positive work attitude after the course.

Of Singapore’s one million or so work permit holders, about 700,000 are non-domestic foreign workers, Mr Lim said at Sunday’s event.

He stressed the need to take strong action against irresponsible employers and employment agencies, adding that Singapore has strengthened its laws and policies in this area over the years.

In 2011, under the Employment Agencies Act, the fine for those operating without a valid licence was raised from a maximum of $5,000 to $80,000 for first-time offenders.

Last year, itemised pay slips and key employment terms in writing also became compulsary, he said.

In April this year, the Tripartite Alliance for Dispute Management (TADM) was set up to strengthen dispute resolution mechanisms here.

“In the first six months of operations, we received 2,500 salary claims from foreign workers. Of the claims that have concluded mediation, about 90 per cent recovered their unpaid salaries in full,” said Mr Lim.

“All foreign workers with valid salary claims are also allowed to change employers. In the first six months of 2017, about 600 of such foreign workers indicated that they wished to change employers and of these, about half found new jobs in Singapore,” he added.

In the first nine months of this year, over 99.9 per cent of the 11,500 injured workers had their cases successfully resolved, he said.

The remaining cases were not resolved because the employers had failed to buy work injury compensation insurance and were facing financial difficulties, he added.

China Stocks Tumble After Latest Signs of Beijing’s Markets Crusade

November 23, 2017

Shanghai shares suffer their biggest one-day drop in nearly a year

A plunge in Chinese stocks follows several days of state media articles sounding concern about the markets.Photo: Ng Han Guan/Associated Press

The long calm in Chinese stocks came to an abrupt end Thursday, with shares in Shanghai suffering their biggest one-day drop in almost a year, following fresh signs of Beijing’s determination to clamp down on market speculation and the country’s high debt levels.

The Shanghai Composite closed down 2.3% at a two-month low, the first time since Aug. 25 that the index has moved more than 1% up or down. It was the market’s largest single-day drop since Dec. 12. Shares in Shenzhen meanwhile dropped 2.9%, finishing at their lowest level for three months.

The sudden plunge in Chinese stocks follows several days during which state media have run articles expressing concern about the markets. Criticism has been focused on the surging value of Shanghai-listed Kweichow Moutai, which has this year become the world’s most valuable liquor company.

China’s official Xinhua News Agency last week urged caution on the recent run-up in Moutai’s shares, even as the company asked investors to look at its rally “rationally.” The state-run news agency discouraged “shortsighted speculation that may wreck havoc on value investing in the long run.” Shares in the maker of the traditional Chinese spirit baijiu fell 2.6% Thursday, bringing its skid in the past week to 12%.

“Given the recent slightly negative rhetoric in state media articles, there’s the impression that the authorities might think that the market’s recent gains, especially those among the blue chips, have been a bit too strong and too fast,” said Deng Wenyuan, an analyst at Soochow Securities.

“It seems that the authorities would like to pour some cold water on a red-hot market so as to manage its momentum,” Mr. Deng said.

The absence from the market of large state-backed funds known as the “national team,” which often emerge in the last trading hour to snap up blue chips to salvage a falling market, spread more nerves among investors, analysts said.

Beijing’s apparent desire to cool the country’s stock market stands in contrast to its approach in early 2015, when state-owned media regularly ran articles encouraging Chinese investors to load up on company shares. The market frenzy stoked by such encouragement peaked in the summer of that year, after which Chinese stocks suffered a series of dramatic falls.

This year, the Shanghai market has moved by more than 1% on just 11 trading days. That compares with 65 times in all of 2016 and 141 times in 2015.

Following Thursday’s fall, shares in Shanghai are still up 8% this year. Shares in Shenzhen, a market more dominated by smaller companies in tech and manufacturing sectors, are down 2.3%, making it one of the world’s worst-performing markets in 2017.

A number of regulatory moves in recent days targeting China’s high levels of leverage and its ballooning shadow banking industry have also chilled the mood among investors.

Beijing has this week taken steps to halt the proliferation of small online lenders. Late last week regulators launched a number of measures designed to cool the growth in so-called wealth management products sold by financial institutions: These often highly leveraged products have helped stoke a series of asset bubbles in China in recent years.

While Chinese stocks plunged Thursday, China’s bond market regained some composure following a selloff in the previous day, after the country’s central bank injected a relatively large dose of funds into the financial system. After taking no action Wednesday, the People’s Bank of China added 100 billion yuan ($15.13 billion) via its daily money market operation.

Yields on the benchmark 10-year government bond closed essentially flat at 3.99%, following a rout last week that sent yields to a three-year high of just over 4%.

Write to Kenan Machado at and Shen Hong at


Shanghai stocks tumble, other Asian stocks slow — Chinese regulators moved to tighten their grip on financial markets

November 23, 2017

The Associated Press

SEOUL, South Korea (AP) — Stocks in Shanghai fell sharply but in rest of Asia, markets were calm Thursday after the Fed minutes largely met investor expectations that it will soon raise interest rates for a third time next month.

KEEPING SCORE: China’s Shanghai Composite Index sank 2 percent to 3,359.92, its lowest level since August, while Hong Kong’s Hang Seng index slipped 0.4 percent to 29,886.99. South Korea’s Kospi finished flat at 2,540.71 and Australia’s S&P/ASX 200 also finished unchanged at 5,986.20. Stocks in Singapore and other Southeast Asian countries were mixed. Japan was closed on a holiday.

FED: Minutes of the Fed’s last meeting that ended Nov. 1 showed that most officials generally believe that it’ll soon be time for another increase in the Fed’s key interest rate. A few Fed leaders think rates should stay where they are until there is more evidence inflation is rising, showing the concerns that the U.S. inflation is falling short of expectations despite the jobless rate falling to the lowest level in nearly 17 years. But the minutes did not change expectations for a December rate hike, analysts said.

ANALYST’S TAKE: While the minutes did not surprise markets, “the statement does clear the air of one raging debate, and that’s 2018 rate hikes unambiguously depend more pressingly on inflation than on growth,” said Stephen Innes, head of Asia trading at OANDA.

WALL STREET: U.S. stocks finished mostly lower on Wednesday retreating from their latest record highs. The Standard & Poor’s 500 index dipped 1.95 points, or 0.1 percent, to 2,597.08. The Dow Jones industrial average slid 64.65 points, or 0.3 percent, to 23,526.18. The Nasdaq composite rose 4.88 points, or 0.1 percent, to a record 6,867.36. The Russell 2000 index of smaller-company stocks lost 2.13 points, or 0.1 percent, to 1,516.76. U.S. markets will be closed Thursday for the Thanksgiving holiday. They will reopen Friday but will close at 1 p.m. ET.

OIL: The price of oil retreated after a jump on reports that key oil producers might extend the cuts in production they made at the start of this year. U.S. crude fell 11 cents to $57.91 per barrel on New York Mercantile Exchange. On Wednesday, the contract rose $1.19, or 2.1 percent, to $58.02 a barrel. Brent crude, used to price international oils, lost 11 cents to $63.21 per barrel in London. It gained 75 cents, or 1.2 percent, to $63.32 a barrel.

CURRENCIES: The dollar rose to 111.26 yen from 111.24 yen. The euro rose to $1.1829 from $1.1819.


Global Stocks Slip After China Tightens Market Regulations

Investors are concerned about China’s move to reign in debt and cool excesses in financial markets

 An electronic stock board at a securities brokerage in Shanghai.
 An electronic stock board at a securities brokerage in Shanghai. PHOTO: QILAI SHEN/BLOOMBERG NEWS

The world’s bourses edged lower Thursday, dragged down by a fall in Chinese stocks after regulators moved to tighten their grip on financial markets.

The Stoxx Europe 600 was down 0.3% during early European trade, following a 2.3% closing fall in the Shanghai Composite, a two-month low. Hong Kong’s Hang Seng was down 1%, a day after closing above 30000 for the first time in a decade, and the Shenzhen Composite slid 2.9%.

Stock markets in the U.S. and Japan were closed for Thanksgiving.

It was the first time since Aug. 25 that the Shanghai Composite finished with a drop or gain of at least 1%, the longest period of calm for what has been a historically volatile benchmark. This year, the index has only had 11 moves of such magnitude, compared with 65 in 2016 and 141 in 2015.

Investors in Chinese assets are concerned about the government’s move to reign in increasing amounts of debt and cool excesses in financial markets.

Beijing is now taking steps to halt the proliferation of small online lenders, days after saying it plans to streamline oversight of asset-management products sold by financial institutions. New draft regulations unveiled Friday spooked Chinese asset managers who are dumping stocks to shore up liquidity, said Nathan Chow, a senior economist at DBS.

On Thursday, selling in some local blue chips weighed on sentiment, said David Millhouse, head of China research at Forsyth Barr Asia.

Meanwhile, the WSJ Dollar Index was broadly unchanged, after falling 0.8% the previous day on the back of the latest Federal Reserve meeting minutes, released Wednesday. Even though officials suggested that rates are likely to go up again in December, investors focused on signs that they remain uncertain about why inflation is so low, which could lead to a slower tightening of monetary future further down the road.

A December rate rise “is not news for the market,” said Commerzbank AG analyst Ulrich Leuchtmann in a daily note to clients. “What is new in the [Fed’s] minutes is something completely different: the first clear indication of uncertainty about its own inflation outlook.”

Brent oil futures fell 0.3% to $63.14 the barrel.

Write to Kenan Machado at and Jon Sindreu at

China’s emergence as a “hegemonic” power a threat to all peace-loving democracies — Steve Bannon

November 18, 2017

Trump’s former chief counselor warns of China’s ‘hegemonic’ aspirations

MITSURU OBE, Nikkei staff writer

Steve Bannon, former chief counselor to President Donald Trump, spoke in Tokyo on Wednesday.

TOKYO — Steve Bannon, the former senior counselor and campaign manager of President Donald Trump — and a noted advocate of Brexit — is building networks in Asia to respond to what he claims is China’s emergence as a “hegemonic” power.

Bannon was in Tokyo this week meeting dissidents and pro-democracy activists from China, and developing sympathetic fraternal relations.

“I understand that people in this room have had tremendous suffering,” he said at one encounter on Wednesday. “People have been imprisoned, people have been unfairly [treated] in their own societies — pushed off to the side — and have lost economic opportunities.”

Bannon told his listeners that China and the U.S. are potentially on course for a collision unless people work together to prevent it happening. He likened today’s world to that of the 1930s and 1940s. He said Japan has “a special sense of what a tragedy can be” with its history from that time, when war with the U.S. and its allies followed from its expansionist ambitions.

“China intends to be the world’s No. 1 economic power by2035, and the global hegemonic power by 2050,” said Bannon, citing the address by Chinese President Xi Jinping at the Communist Party Congress last month. Bannon called Xi’s three-and-half-hour speech “a wake-up call to the world.”

China was once expected to develop into a more democratic, liberal, and market-based society as it grew wealthier. “What we have seen in the last 20 years is anything but,” said Bannon.

“China’s leadership has no intention, ever, of joining the rules-based, international post-war liberal order,” he said. “They have their own plan.” Bannon described Xi’s speech as “more than a warning” to the West.

“It essentially says, ‘the Confucian, mercantilist, authoritative [sic] model has won, and the Judeo-Christian, liberal, democratic, free-market, capitalist West has lost,'” he said. “It couldn’t be more blunt.”

Bannon is the executive chairman of Breitbart News Network, a controversial right-wing website that promotes an anti-globalist agenda among other things.

According to Bannon, China’s mercantilist behavior underpins spreading anti-globalism in Europe and the U.S.

“Brexit and the 2016 campaign in the United States are inextricably linked,” he said. “What links them is China. It’s the exporting of Chinese deflation and the exporting of Chinese excess capacity that gutted the industrial heartland of the U.K. and the upper midwest of the U.S.”

Bannon resigned from the White House in August by mutual agreement, but has still had contact with Trump, his former boss. He is considered the more confrontational of the two.

South China Sea: China Takes Control — “The sheer numbers [of Chinese] are starting to push the Filipinos, the Vietnamese, and the Malaysians out”

November 18, 2017

China is starting to dictate terms in one of the world’s strategic waterways, and the United States is largely missing in action.

A Chinese navy formation, including the aircraft carrier Liaonin, takes part in military drills in the South China Sea on Jan. 2. (Stringer/AFP/Getty Images)

A Chinese navy formation, including the aircraft carrier Liaonin, takes part in military drills in the South China Sea on Jan. 2. (Stringer/AFP/Getty Images)

In his 12-day trip to Asia, U.S. President Donald Trump largely focused on North Korea and trade, all but avoiding the simmering disputes in the South China Sea and steering clear of sharp criticism of Beijing’s increasingly aggressive activities there.

With the Trump administration focused elsewhere for now, China is quietly pressing ahead with its agenda in one of the world’s most strategic waterways, building more military facilities on man-made islands to buttress its expansionist claims and dramatically expanding its presence at sea at the expense of its smaller neighbors.

Beijing’s under-the-radar advances in the South China Sea could be bad news for countries in the region, for U.S. hopes to maintain influence in the Western Pacific, and for the rules-based international order that for decades has promoted peace and prosperity in Asia.

At the Chinese Communist Party congress last month, President Xi Jinping cited island building in the South China Sea as one of his top achievements so far, and touted the “successful prosecution of maritime rights.” Those rights appear at odds with international law: Xi is now assuring nervous neighbors that China will offer “safe passage” through the seas to other countries in the region.

“The South China Sea has fallen victim to a combination of Trump’s narrow focus on North Korea and the administration’s chaotic and snail-paced policymaking process,” said Ely Ratner of the Council on Foreign Relations, who served as an advisor to former Vice President Joe Biden.

China’s recent advances in the South China Sea aren’t as eye-popping as the overnight creation of artificial atolls in recent years, a massive engineering project dubbed the “great wall of sand” by a top U.S. admiral. That’s one reason the disputes got pushed to the back burner on Trump’s big trip.

“Because there’s no sense of immediate or medium-term crisis (in the South China Sea), they didn’t make it a big priority on the trip,” said Evan Medeiros of the Eurasia Group, who oversaw Asia strategy in the Obama White House.

But experts say the quiet moves — including expanding military bases, constructing radar and sensor installations, hardened shelters for missiles, and vast logistical warehouses for fuel, water, and ammunition — are threatening to turn China’s potential stranglehold on the region into reality.

Much of the activity has centered on three reefs converted into artificial islands through large-scale dredging: Fiery Cross, Mischief Reef, and Subi Reef in the Spratly Islands, about 650 miles from Hainan Island in southern China. Satellite imagery in June revealed a large dome had been erected on Fiery Cross with another under construction, suggesting a substantial communications or radar system, experts say. At Mischief Reef, workers were installing two more domes.

With runways, hangars for fighter jets, and communications hardware in place on the artificial islands, China can deploy military aircraft and missiles whenever it wants, solidifying its grip over the area and flouting international maritime law. The three newly built bases in the Spratlys, combined with another on Woody Island, will enable Chinese warplanes to fly over nearly the entire South China Sea, according to Pentagon officials and defense analysts. That could be the precursor to an “air defense identification zone” similar to the one that China slapped onto the East China Sea in 201

And the new bases have given China much greater reach at sea. Beijing has deployed more naval ships, Coast Guard vessels, and a flotilla of fishing boats that act as a maritime militia virtually around the clock. The ships can now dock nearby to refuel and resupply, rather than sail home, extending their time on station and their ability to project Chinese power through the area. That is changing the balance of power as fishing ships and coast guard vessels from other claimant countries like Vietnam and the Philippines are elbowed away from disputed features.

This summer, for example, Vietnam hoped to drill for natural gas off its own coast. But China reportedly summoned the Vietnamese ambassador and threatened military action if Hanoi went forward with development in its own exclusive economic zone. Sensing little backing from Washington, Vietnam quietly backed down and stopped drilling.

“The sheer numbers are starting to push the Filipinos, the Vietnamese, and the Malaysians out,” said Gregory Poling of the Center for Strategic and International Studies.

More than nine months into the Trump administration, contrasts with U.S. policy under Barack Obama toward the South China Sea are apparent — as they are with the initial saber-rattling tone of Trump administration officials. The Obama administration put a focus on diplomacy and consistently sought to uphold international law regarding the disputed waterway, though it often shied away from sailing U.S. Navy ships through the waters to send a tough signal to Beijing.

The Trump administration has taken almost the opposite approach: Navy cruises to assert the right of navigation have become commonplace, but there is little sign yet of a concerted U.S. policy to diplomatically push back against Chinese encroachment or offer encouragement to U.S. allies and partners threatened by Beijing’s advances, former officials, experts and foreign diplomats said.

“By having no South China Sea policy, Trump ensures that all the initiative lies with Beijing,” said Mira Rapp-Hooper, a senior fellow at Yale’s Paul Tsai China Center.

Former U.S. officials and congressional aides said the Trump administration appears to be pulling its punches on the South China Sea, as well as trade issues, in hopes of securing Beijing’s cooperation to cut off North Korea’s access to fuel and cash to fund its nuclear weapons program. So far, China has stopped short of drastic action to squeeze the regime in Pyongyang — and Chinese officials just contradicted Trump’s claims that the two countries have found more common ground.

At the end of his Asia trip, Trump did offer to “mediate” between Vietnam and China, but that spooked officials in Hanoi who fear they could be a pawn in a bigger U.S.-China game centered on North Korea.

The White House did not respond to requests for comment on its approach to the South China Sea.

However, some former Obama officials are cautiously optimistic that the Trump administration, hamstrung so far by short staffing at key positions, especially regarding Asia policy, is starting to craft a more coherent policy toward the region, including a sharper focus on China’s activities in the South China Sea. Joint communiques in Japan and Vietnam stressed continued U.S. support for the rule of law and an end to coercion in maritime disputes, for example.

Ratner, the former Biden advisor, said he expects the Trump administration to chart a more proactive course as it settles into office.

“They appear to finally be getting their policy feet under them and I’m expecting more focus on South China Sea in the months ahead,” he said. “So it’s premature to declare it’ll remain a low priority going forward.”

Dan De Luce is Foreign Policy’s chief national security correspondent. @dandeluc

Image may contain: one or more people, people standing, sky, twilight, cloud, text and outdoor

China’s playbook still working…


Peace and Freedom Note: The South China Sea already had a “legally binding” decision that China did not like — so China ignored the legally binding finding….

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China says it has sovereignty over all the South China Sea north of its “nine dash line.” On July 12, 2016, the Permanent Court of Arbitration  in The Hague said this claim by China was not valid. But China and the Philippine government then chose to ignore international law.