News From Asia This Week
Israel’s new war cabinet vows to wipe Hamas off the earth
Following a deadly attack by Hamas, Israeli Prime Minister Benjamin Netanyahu has formed an emergency government to lead a war against the Palestinian militant group. Netanyahu, former Defence Minister Benny Gantz, and Defence Minister Yoav Gallant all vowed to destroy Hamas, comparing them to ISIS and emphasising the importance of a coordinated effort in this conflict.
China Weighs New Stabilization Fund To Prop Up Stock Market
Over the last two months the industry and the government in China have been working on a plan that was recently submitted to the top leadership including President Xi, to create a stabilization fund to shore up confidence in its US$ 9.5 trillion stock market. This follows the news from this week that the sovereign wealth fund has stepped into stabilise four large banks.
The CCP seems to have decided to jump in to correct the market.
Chinese navy looks to big data to give it an edge, Minnie Chan has written in SCMP, Hong Kong.
Article in official PLA Daily newspaper highlights role of one of the country’s older frigates in collecting sonar data from foreign vessels. One commander says that collecting such information is now a ‘key task’ during regular training operations.
China’s appetite for U.S. IPOs shows little sign of roaring back
Seventeen Chinese companies have raised US$ 405 Million till October in the US equity market. it is about to broach last year’s number of US$ 468 Million, but nowhere close to US$ 12.6 Billion raised in 2021. The political headwinds, and tensions on almost all fronts between the two countries mean that these ties will be frayed and might not be able to have a resurgent economic tie between the two.
The Weak Yen in Japan
Many big Japanese companies have benefitted from the yen’s depreciation, which is one reason the currency has tumbled so far without much reaction from the BOJ. “The yen is very important for earnings for Japanese exporters,” said Jonathan Garner, chief Asia and emerging market equity strategist at Morgan Stanley. Exporters’ sales are denominated in foreign currency, meaning that their value — denominated in yen — becomes larger the weaker the yen gets.
Data from the BOJ’s quarterly Tankan survey, which measures enterprises’ attitudes in Japan, shows sentiment at Japan’s largest companies at historic highs. Japan’s carmaking giants, such as Toyota and Nissan, are among the big companies profiting from the weak yen, according to analysts.
“Automakers are tremendously benefiting from the weak yen,” said Koji Endo, head of equity research at SBI Securities. Although the weak yen means the cost of imported raw materials used for car manufacturing also rises, this is outweighed by the gains.
“Better earning performance leads to an increase in stock prices, dividends, room for share repurchases and workers’ wages,” he said. “Expectations for wage hikes next year may also rise.” The Nikkei has reported from Tokyo.
At the same time the Japanese customers are facing problems as it has led to an increase in price for just about everything, and the inflation is increasing.
Huawei aims to double smartphone shipments to 70m next year
Huawei has an ambitious target but fears a new USA sanctions. Nikkei Asia has reported citing two senior executives that it proposes to ship 60 to 70 Million phones next year. The company has also been building up its inventory of lenses, cameras, print circuit boards and other parts since earlier this year to meet that goal, multiple supply chain managers and analysts said.The Chinese tech company has been under American trade restrictions since 2019 but has not given up on its ambitions for chip development as evidenced by the new phone it has launched this year. Its efforts have been helped by the fact that its domestic partners had much of the necessary equipment in place before the U.S. and its allies restricted exports of such technology. Will the company be able to reach its goal? We will have to wait and watch.
South Korean arms makers seek to crack U.S. market amid Gaza war
South Korean arms makers are trying to get in to the USA and western market as two conflicts have led the US lawmakers to ramp up bilateral support. Earlier this year South Korean Hanwha won a US$ 3.4 Billion arms contract from the Australian government for armoured vehicles.
China hedges on Israel-Hamas war as U.S. urges stronger stance
Beijing is caught between its stance on Russia-Ukraine war and Israel-Palestine war, as it tries to hedge its bet and this is being seen a failure of the earlier peace proposal mooted by President Xi Jinping. This war posits a complex scenario for the role Beijing envisages for itself in the Middle-East. Beijing’s extremely cautious approach of “immediate ceasefire” does not quite cut it in the region.
On Wednesday Iran president, Saudi crown prince speak for first time since ties restored
Iranian President Ebrahim Raisi and Saudi Crown Prince Mohammed bin Salman discussed the Palestinian-Israeli conflict on Wednesday, in the first telephone call between the two leaders since a China-brokered deal between Tehran and Riyadh to resume ties.The two leaders’ call came as Israel carried out air strikes in the Gaza Strip in retaliation for a deadly attack by Palestinian Hamas militants in Israel. Reuters has reported.
Egypt discusses Gaza aid, rejects corridors for civilians, say sources
Egypt has discussed plans with the United States and others to provide humanitarian aid through its border with Gaza Strip but rejects any move to set up safe corridors for refugees fleeing the enclave, Egyptian security sources said on Wednesday reported by Reuters.
Beyond The Great Wall
Exploring News About China in Depth
China and Saudi Arabia have launched a naval exercise after a hiatus of 4 years.
The two countries have started exploring further engagements in a series of very close cooperation seen lately. The Kingdom of Saudi Arabia and the PRC have started a naval joint warfare training exercise Blue Sword 2023.
“The joint training between the special warfare units of the two navies is of great significance to deepening the pragmatic and friendly cooperation between the two militaries and improving the actual combat training level of the troops,” said an unnamed commander of the Chinese joint training unit.
The Saudi – China cooperation in AI Could Upset The USA
The premier academic institution in the desert Kingdom could face isolation, and even blockades from the USA administration, and science complex if it keeps up its growing AI cooperation with the PRC, fears leading researchers in Saudi Arabia, as reported by the FT on Tuesday.
Professor Jinchao Xu, an American-Chinese mathematician at Saudi Arabia’s King Abdullah University of Science and Technology (Kaust), has launched AceGPT, an Arabic-focused large language model, in collaboration with the Chinese University of Hong Kong, Shenzhen (CUHK-SZ), and the Shenzhen Research Institute of Big Data.
“Many people involved have raised their concerns to leadership about the Chinese relationships jeopardising the supercomputer,” said one of the people aware of the matter. “They don’t want to upset the US government.”
The game as Sherlock would have said is afoot.
The Top EU Diplomat Faces Tense Talk in China
The top EU diplomat is in China, and the timing just got bad. The backdrop of the visit will have two wars in the background and Josep Borrell will have a delicate task: pushing back against Chinese subsidies while ensuring that the US$ 900 Billion relationship does not collapse. The failure of Beijing in condemning the attack by Hamas also puts pressure on the relationship added to the fact that the USA and EU are set to announce Global Steel & Aluminum Arrangement on 20th October, 2023. Mr. Borrell’s visit will also overlap with President Vladimir Putin who arrives very close to scheduled departure of Mr. Borrell.
ARM China Senior Executives Quit To Join Firm Borui Jingxin
Three senior executives are set to depart ARM China and start their own firm backed with financial, and other support from a provincial government in China. This comes on the heels of ARM raising US$ 5 Billion in an IPO. The firm Borui Jingxin but in the event of a fast-escalating tech war is now raising money from the local government in Shenzhen. This will escalate the tech tension between the alliance and China.
Goldman Sachs Sues Malaysian Government Amid 1MDB Settlement Disputes
Goldman Sachs Group Inc. is suing the Malaysian government in an arbitration court over the settlement dispute over the 1MDB scandal deal they had struck with the country in 2020.
China premier balks at US blacklist with visit to sanctioned surveillance giant, calls for digital economy revolution, SCMP reports
- Li Qiang’s inspection tour in China’s economic powerhouse features some of the strongest high-level calls for a digital transformation, with huge hardware and software upgrades in the works
- China expects its collective computational power to increase 52 per cent by 2025
China names Qi Yanjun as second-in-command of the nation’s police force
The massive police force of China has a new minister Qi Yanjun, 59, who as vice-minister, will be responsible for the daily operations of the police force. Qi has been a deputy to President Xi’s favourite law enforcement officer Wang Xiaohong, who is reckoned to be the most powerful officer. Wang was also elevated to the position of state councillor this March, which gives him a higher ranking than other ministers, and he also took a seat on the General Secretariat of the ruling Communist Party, the first police chief to do so since 2007.
China’s graft-busters to ‘delve deep’ in new round of corruption inspections
Chinese authorities led by the head of CCDI (Central Commission for Discipline Inspection) Li Xi have started looking for “major risks” in association with the unfolding corruption probe. The target will probe 5 government departments, and 26 state-owned enterprises. The five departments are the Ministry of Science and Technology, the Ministry of Industry and Information Technology, the State-owned Assets Supervision and Administration Commission, the State Administration of Science, Technology and Industry for National Defence, and the State Tobacco Monopoly Administration. SOEs in the car, steel, shipping, airline and publishing sectors are also in the cross hairs.
Chinese President Xi Jinping visits aircraft maker supplying helicopters for PLA’s Taiwan sorties
Xi stopped at the Changhe Aircraft Industries Corporation on Wednesday as he toured the cities of Jingdezhen and Shangrao in Jiangxi province, a Xinhua report published on Thursday said. “We implement Xi Jinping Thought on strengthening the military and are committed to providing cutting-edge aviation weapons and equipment for national defence and military modernisation,” the company website says, referring to the president’s signature political thoughts and vision for the country.
China starts building the world’s largest deep sea telescope to hunt for cosmic neutrinos
When completed in 2030, the Tropical Deep-sea Neutrino Telescope (Trident) – named Hailing (Ocean Bell) in Chinese – will be the largest and most advanced in the world, according to the project team. The Trident array will be anchored to the seabed 3.5km (2 miles) below the Western Pacific Ocean, where it will scan the surrounding seawater for the flashes of light generated when cosmic neutrinos collide with water molecules.
Chinese Users of the Binance and FTX Exchanges Show Holes in Beijing’s Crypto Ban
The FTX bankruptcy proceedings and the case currently underway in New York City has revealed that 8% of the account holders were from the PRC. This revelation has underscored that the Chinese Crypto ban might not be working as well as envisaged earlier.
Chinese scientists unlock potential of memristor semiconductor building block that could boost artificial intelligence, self-driving cars and more.
The world’s first fully system-integrated memristor chip has been unveiled by a team of Chinese scientists who believe it could not only make artificial intelligence smarter, but also more time and energy efficient.
While the semiconductor has yet to leave the lab setting, it could allow for the development of AI that is capable of more human-like learning, which could have implications for the way smart devices and autonomous driving work, according to the researchers. (Memristor image goes here). A memristor – a contraction for memory resistor – is able to remember the most recent value of current that was passed through it when it was turned on, meaning future resistance can depend on prior history, according to Nature Electronics.
EU struggles to limit China’s involvement in sensitive tech areas
The European Union is looking to tighten export and investment controls on sensitive tech as concern over the bloc’s reliance on China grows. But an equally heavy reliance on Chinese trade and investment threatens to hinder efforts to “de-risk” its economy, as individual members have already found.
The European Commission last week announced four key technologies that could become subject to more stringent oversight: advanced semiconductors, artificial Intelligence, quantum technologies and biotechnologies. Stronger controls on exports or investments abroad are being considered specifically for technologies that the EU says could be used for military purposes or to violate human rights. Nikkei has reported.
China’s Country Garden misses debt payment, warns it lacks cash
The real estate firm Country Garden said in a statement to the bourses in Hong Kong, it has no money to meet the US$ 60 Million debt payment. The company is expected to go down.
China’s Central Huijin Investment Bolsters Stake in Top 4 Banks to Stabilize Stock Market amid Economic Challenges
China’s sovereign wealth fund, Central Huijin Investment Ltd, has taken a significant step to bolster the country’s struggling stock market. In a move similar to its 2015 intervention, Huijin has increased its stake in China’s top four banks, namely the Bank of China, the Agricultural Bank of China, the China Construction Bank, and the Industrial and Commercial Bank of China.
This strategic investment, totaling around $65 million, translates to approximately 0.01 percentage point in each bank. The impact on the market was immediate and substantial, with shares of these major banks soaring between 2.43% and 4.73% in the early hours of Thursday. Moreover, this move caused the CSI 300 index to rise by 0.69%.
Indonesia Makes Tik-Tok Shut Retail Operations
TikTok’s abrupt suspension of its online retail business in Indonesia last week, in order to comply with the government’s social media e-commerce ban, dealt a heavy blow to its rapidly expanding e-commerce operation. This situation is not one of governments picking losers, but rather of losers shaping policy, as declining businesses often seek to protect their remaining profits. The government’s overhaul of Trade Regulation No. 50/2020 created a sharp division between social media and social commerce, which provided the legal basis for the ban, reserving the latter solely for the promotion of goods and services.
The Lao Have A China-Sized Debt Crisis
Laos is a small, land-locked nation situated among some of the world’s fastest-growing economies including world’s second-largest economy, China. Its economy is going through a difficult period. According to the International Monetary Fund, Laos’s public and publicly guaranteed debt stands at 123% of GDP as of 2023, of which more than half is owed to China. Does this debt to China mean that Laos has succumbed to Chinese influence and is over-dependent on it?
China indirectly controls parts of the state infrastructure in Laos. Around 815 projects in Laos have been funded by China since 1989. Power exports to China have formed a key part of landlocked Laos’ development strategy, but the Lao government cannot afford to run its own power grid. The Power grids in Laos are controlled by Électricité du Laos (EDL) a state-owned company. The largest of Chinese-funded infrastructure projects in Laos is a $5.9 billion railway inaugurated in December 2021 that connects the southern Chinese city of Kunming with the Laotian capital, Vientiane.
Chinese state-owned companies hold a 70% share in the railway. The Laotian government, which holds the remaining 30%, incurred $1.9 billion in debt to build it. Diplomatically Laos has widened its reach to counterbalance its relationship with China. ASEAN and US are the primary alternatives that Laos is engaging with. In 2021, Laos’ bilateral trade with China was $3.47 billion with China ($2.22 billion in exports, $1.25 billion in imports) much less than Thailand which
was approximately $5.18 billion ($2.18 billion in exports, $3 billion in imports). Laos also has a good trade partner in Vietnam, with whom bilateral trade amounted to $1.71 billion ($1.22 billion in exports, $499 million in imports) in 2021. The debt keeps on going up and refinancing options become narrower?
