China battles US for AI and robotic space: Who’s ahead?


Robot dominates: Ford F150 trucks go through robots on the assembly line at the Ford Dearborn Truck Plant in
Dearborn, Michigan. Robots are also entering areas such as logistics warehousing, chemicals and plastics factories and F&B industries. — AFP
Humans vs. Robots

NO doubt, the FAANGs – Facebook, Apple, Amazon, Netflix and Google – are making the world a better place.

Still, they are being accused of being BAADD – big, anti-competitive, addictive and destructive to democracy.

Regulators fine them, politicians take them to task, and even their backers warn of their power to cause harm. Much of the techlash is undeserved. There’s fake news everywhere.

Nevertheless, there is justified fear that the tech titans will use their power to protect and extend their dominance, often to the detriment of consumers. Indeed, the big tech platforms do raise worries about fair competition in particular.

In Singapore, the merger of Grab and Uber brings on legitimate concerns in the taxi space. The tricky task for regulators is how to restrain them without unduly stifling innovation.

Today, trust busters have granted tech giants the benefit of the doubt in the fight for artificial intelligence (AI) and robotic space. At some point, who takes the moral and legal responsibility for their mechanical creations?

Like it or not, AI-enabled bots and machines are already here, in the form of drones, driverless cars and medical, educational and domestic robots. To muddle the picture still further, AI is now embodied in physical, sometimes humanoid, form in machines designed to engage directly with people.

Talk is rife about the outright banning of killer robots, which cross the moral red line (only humans are permitted to kill humans!). Already, there is a proposal to create a Robotics Commission in US and Europe to be responsible for moral and legal issues surrounding the use of robotics and AI enabled smart machines. High time too.

Robots and cobots

Armies of robots and collaborative robots (cobots) are spreading throughout factories and warehouses around the world, as the accelerating pace of automation transforms a widening range of industries.

And it is not just in advanced countries but in emerging economies as well where machines are a growing force, with global sales of industrial robots increasing by 18% to a record US$13.1bil in 2016.

These groups are benefiting from mounting demand for sophisticated machines that no longer just weld car bodies and lift heavy loads, but also perform complex functions from electronic component production to arranging chocolates neatly into boxes.

Another trend is the increasing range and type of robot, as they vary from flexible mechanical limbs to smart machines that can work alongside humans. Cobots are specifically designed to interact with people.

The robotics market has been growing strongly and will continue to grow. The spread of robots has piqued the debate over the suitability of humans versus robots as workers, with warning that more machines will take jobs. Consultants McKinsey found that about 30% of tasks in 60% of occupations could be automated.

Advanced automation is partly a response to a shortage of skilled manual labour, with robots often filling “dull, dirty, dangerous and delicate” roles that people simply do not want. Also, the falling cost of robotics systems, and breakthroughs in robotics technology – combining with the rising level of electronic communication between equipment and computers in factories, sometimes called the industrial Internet of Things.

Then there is the shift in some industries from producing a small variety of goods in large batches, to a greater mix of products in smaller batches. All these are basically driven by consumers. Although the largest user remains the car industry (mainly for welding and painting), the main driver of growth is the electronics and electrical sector, chiefly located in Asia and mainly for batteries, chips and display.

But robots are also entering other areas, such as logistics warehouses, chemicals and plastics factories and the food and beverage industries. In total, almost 300,000 units were sold worldwide last year, with three-quarters bound for just five countries: China, South Korea, Japan, US and Germany. Three in every 10 went to China alone.

Once the manual labour “workshop of the world”, it has been the largest buyer of industrial robots since 2013, and its purchases jumped by 27% in 2017. There were increased investments in many developing countries as well, such as Taiwan, Thailand, India and Mexico, as well as in Italy and France.

While there have been improvements in hardware capabilities, such as hydraulics and mobility, perhaps the most important developments are in sensors and software that are making robots more sensitive, flexible, precise and autonomous. The software side of industrial robotics is becoming more and more important.

However, despite the growth, robots still have many limitations when it comes to dexterity, judgment and the ability to improvise. Today, machines are beginning to learn new tasks from humans by imitation. This has opened up big possibilities, especially for cobots, which are smaller, lighter, more flexible and mobile. And, even more critically cheaper, making it more affordable for small and medium-sized enterprises to invest. While usually slower, they have greater adaptability, because they can be assigned to different tasks.

US dominance

True, US roads, airports, seaports and schools are on the slide. But US retains dominance in the most sophisticated fields – defence, elite universities and technology. Sure, US ceded the top spot to China in exports in 2007, in manufacturing in 2011, and absolute GDP by 2030. But Silicon Valley is still where the best ideas, smartest money and the most savvy entrepreneurs reside.

But China is catching up fast: its BAT (Baidu, Alibaba and Tencent) are in the same league as the FAANGs and new stars are coming on fast (Didi Chuxing, Ant Financial and Lufax). China’s e-commerce sales are 2x US’ and China remits 11x more money by mobile phones than US (still scribbling cheques). China plans to lead globally in AI by 2030.

Its VC industry is booming – the entrepreneurial work-ethic in Beijing, Hangzhou and Shenzhen are a sight for sore eyes. Despite the huge progress, China remains far behind. Studies show that China’s tech industry is only about 42% as powerful as US (only 15% in 2012).

But Chinese tech has weak spots: (i) its total market value is only 32% of US; (ii) has two to three huge companies and lots of small ones; (iii) China is puny in semiconductors and business-facing software; (iv) its tech products has not as yet permeated the industrial economy; (v) Chinese non-techs are primitive – only 2.6% as digitalised as US; (vi) Chinese tech investment budget is only 30% as big as US, with foreign sales 18% of what US makes.

However, the gap narrows in the more dynamic parts of tech industry: (a) in e-commerce and internet, Chinese firms are 53% the size of US (in market value); (b) China’s unicorns are now worth 69% of US; (c) its VC activity, 85% of US in 2016; and (d) in “breakthrough” AI innovations, China’s population of AI experts is only 6% the size of US – with their best minds still working in large US techs; while cited AI papers by Chinese scientists are at 89% of US.

At the present pace, China will need a further 10-15 years to catch up. Viewed from China, US giant techs remain as “comfy monopolists”, while Chinese techs are plain “hungry”. Beijing’s blueprint: to create a US$150bil AI-industry by 2030 underlines its desire to beat US.

China’s advantage: sheer numbers of people, data, talent and superior lines of codes being written! At 730 million, China’s online population alone is more than 2x US size, and more tech-savvy. While US faces cut-backs in research money, China is committing ample money and also political capital into its relentless drive to reign supreme in AI.

However, the quality of fundamental research in China remains a problem. It lags behind EU in terms of the number of AI papers in the top 5% of most cited.

Where’s EU?

Few in US and China seriously regard Europe becoming a force in machine learning – the area AI has made the most progress in recent years. The process involves feeding reams of data through algorithms as AI learns to interpret other data.

Europe simply lacks scale; unlike US and China where tech giants have a surfeit of the most vital resource for AI – data; also attracted the best talent & boost the biggest computer clouds. Here, Europe is way behind.

Since US and China have centralised data systems (controlled by very few large firms), Europe can create a more decentralised option. China is expected to hold 30% of world data by 2030; US with just as much. Europe has data too, but needs to pool its diversified resources in research and data. But, Europe has institutional inertia, with much of its funding centered in academic institutions – not the best place for it. To be relevant, Europe has to do much more. Still, no match for US and China.

Silicon Valley: where next?

The stretch of land in the US Bay Area running from San Jose to San Francisco is home to three (Apple, Facebook, Google) of the world’s five most valuable tech giants. All claim Silicon Valley (SV) as their birthplace and home, as do trailblazers such as Airbnb, Tesla and Uber.

The Bay Area has the 19th largest economy in the world, ranking above Switzerland and Saudi Arabia. SV has become a byword for innovation and ingenuity. It has also been at the centre of several cycles of Schumpeterian destruction and regeneration, in silicon chips, personal computers, software and internet services. Its combination of engineering expertise, thriving business networks, deep pools of capital, strong universities and a risk-taking culture have made SV almost impossible to clone.

There is no credible rival for its position as the world’s pre-eminent innovation hub. But there are signs that SV’s influence is peaking. Yes, something is changing. According to a recent survey, 46% of residents surveyed plans to leave the Bay Area in the next few years, up from 34% in 2016. So, many startups are branching out: “Off Silicon Valleying.”

In 2013, SV investors put half their money into startups outside the Bay Area; now it is closer to two-thirds. Reasons: SV has just become too expensive; among the world’s costliest. Young startups pay at least 4x more to operate here. New technologies, from quantum computing to synthetic biology, make lower margins than internet services. There is also the nastier features of Bay-Area life: clogged traffic, discarded syringes and shocking inequality. The Miami-Fort Lauderdale area is now ranked first for startup activity, based on the density of startups and new entrepreneurs.

There are others: Los Angeles (which has a vibrant tech scene), Phoenix and Pittsburgh (have become hubs for autonomous vehicles); New York (for media startups); London (for fintech); Shenzhen (for hardware). None of these places can match the SV on its own; between them, they point to a world in which innovation can be better distributed. The problem is that the wider playing field for innovation is being levelled down, away from the dominant effects of tech giants.

Second, the increasingly unfriendly policies in the West. Rising anti-immigrant sentiment and tighter visa regimes have economy-wide effects: foreign entrepreneurs create around 25% of new companies in America. Unfortunately, SV’s peak looks more like a warning that innovation everywhere is becoming harder. SV is fast becoming more an idea instead of a place. Wall Street went through a similar transformation; its name becoming shorthand for a whole industry.

As tech firms set their sights on disrupting old-fashioned industries, like healthcare and logistics, they may find that it helps to be based in cities that claim deep expertise in these areas – and where garages housing startups are just the stuff of museums and memory.

What then are we to do

The time has come to love robots. Asians do. But not in the West where robots receive terrible press. They worry about robots killing jobs. In Asia, robots are today commonly used in Japan, South Korea, Taiwan and China. ADB’s June 2018 report analysing 12 developing Asian economies in 2005-15 concluded that rising demand had more than compensated for jobs lost to automation. The adoption of new technologies, such as modern machine tools and computer systems in factories and offices, had stimulated higher productivity and economic growth. That transformation, it estimated, had created 124 million new jobs, compared with the 101 million jobs lost to technology.

It is worth noting that there are two types of robots: those that do the work of humans and those that enhance their performance. We hear too much about the first type and too little of the second. Sure, their creations help humans deal with the “3 Ds”: dirty, dull and dangerous tasks. But countries that have the highest adoption of robots also have the lowest unemployment rates. Also, they help address the acute demographic squeeze as societies rapidly age. Some Asian societies prefer robots to immigrants to supplement their shrinking workforces. Robots are increasingly moving out of the factory into homes and hospitals, where they will need new capabilities.

I believe that technologies are always a net job creator over the long run, but, as Keynes put it, in the long run we are all dead. As these technologies make their way into every industry, they will benefit those at the very top with the skills and education to leverage the productivity advantages that AI affords.

Medical specialists, for example, could dramatically increase their income by using AI’s productive analytics to better diagnose and treat patients. But workers doing highly repetitive tasks that can easily be done by machines will not fare so well. This has massive consequences.

A McKinsey report shows that, while digitalisation has the potential to boost productivity and growth, it may also hold back demand if it compresses labour’s share of income and increases inequality. We badly need a kind of digital New Deal. For as many jobs as will be replaced by automation, there are other areas – customer service, big data analysis, etc. – that desperately need talent. Companies that pledge to retain workers and retrain them to develop skills to get stable jobs, should be offered tax incentives to do so. And spend the cash on factory upgrades, technical improvements, and re-training costs.

There are plenty of such projects that workers could be deployed now – including helping to expand rural broadband. It is a way for companies and government to turn a potential difficult employment situation into an opportunity by using this disruption to prepare & train a 21st-century digital workforce, and build public infrastructure to support it.

Credit: What are we to do? by Lin See-yan – Former banker, Harvard educated economist and British Chartered Scientist, Tan Sri Lin See-Yan is the author of The Global Economy in Turbulent Times (Wiley, 2015) & Turbulence in Trying Times (Pearson, 2017).

 

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Open society and closed minds, Trump bragging as UN Laughs at him


 ‘Leadership has always been about generosity to those who are less well endowed and fortunate than you are. Often, it is not generosity of kind, because that would be buying of votes, but generosity of spirit.’ – Tan Sri Andrew Sheng

WHY is it that in the last days of September, 10 years after the failure of Lehman Brothers, the world feels as if it is a dangerous place?

Bankruptcy of Lehman Brothers – Wikipedia

The filing for Chapter 11 bankruptcy protection by financial services firm Lehman Brothers on September 15, 2008, remains the largest bankruptcy filing in U.S. history, with Lehman holding over US$600,000,000,000 in assets. Wikipedia

President Trump’s remarkable speech to the United Nations this week was supposed to re-state the New Order that America has envisioned for the world. And all he got was a laugh.

But it was an important speech, because it spelt out more clearly what everyone knew since January 2017 – his Administration is dismantling what America has stood for since the Second World War.

Out goes the vision of a liberal rule-based stable world under US leadership. What replaces it is a “no holds barred” reality show of bilateral “Art of the Deal” negotiations supposedly to solve what is paining America. Never mind the collateral damage on everyone else, even if they are ultimately American consumers. What everyone heard is that the White House does not care too much about allies or enemies, only what is good for America First, trumped by the speaker’s ego.

Speeches to the United Nations has never been about foreign policy. Speaking in front of 193 member countries, the national leader is actually addressing his home audience, a photo-opportunity to show that as a member of the United Nations, your voice is heard by the whole wide world. Accordingly, other than the famous 1960 case of Soviet Leader Khruschev making his point by banging his shoe at the podium, most national leader speeches to the United Nations are boring homilies. They tend to praise themselves, pay due respect to the UN, and expound what Miss Congeniality says in all beauty contests, “world peace!”

What we got instead from President Trump was raw and edged, “America’s policy of principled realism means we will not be held hostage to old dogmas, discredited ideologies, and so-called experts who have been proven wrong over the years, time and time again.” That statement made a powerful indictment of “experts”, because his supporters feel that it is the elite experts that have run the country for 70 years who have let them down.

If America is doing so well economically, militarily and technologically, why should her middle class feel so insecure? And it is lashing out at everyone else.

The answer lies in not what the speech said, but what it omitted. Everywhere in the world, not least in America, the greatest existential concerns are inequality and climate change. Almost nothing was said about both issues, which are stressing societies and pushing immigration from poorer neighbours across borders to richer nations with cooler climates.

Instead, what was decided was non-participation in the Global Compact on Migration, withdrawal from the Human Rights Council and non-recognition of the International Criminal Court. There was also a barrage against Opec, which contains some of the US’s strongest allies. If other bodies like the World Trade Organisation or even the United Nations do not do America’s bidding, then the cutting of funds or withdrawal is a matter of time. Does that imply that the US will now veto every World Bank or IMF loan to members that she does not like?

In short, it is all about anti-globalisation. In the same breath that “We reject the ideology of globalism, and we embrace the doctrine of patriotism,” Trump appeals to the passion and pride of nationalism. “The passion that burns in the hearts of patriots and the souls of nations has inspired reform and revolution, sacrifice and selflessness, scientific breakthroughs, and magnificent works of art.”

Never mind if a lot of that sacrifice and selflessness was by immigrants and new arrivals.

Outsiders who used to admire America as an open society founded by immigrants with new ideas on how to build a more just society and free economy find instead one that has an increasingly closed mind to global issues. It does seem strange that American innovation, entrepreneurship and dynamism which drew continuously on new talent initially from Europe and then the rest of the world is now walling up its borders, physically, legally and mentally.

There are 40 million immigrants in the US today, representing 13% of the US population. Immigrants founded nearly one-fifth of the Fortune 500 companies, such as Google, Procter & Gamble, Kraft, Colgate Palmolive, Pfizer, and eBay. Today, much of Silicon Valley talent feel like working in the United Nations, diverse, noisy and creative.

The irony of America drawing on global talent and resources is that she has no need to pay for it from exports, but can easily print more dollars. In other words, the Grand Bargain of global trade was the ability of the US to pay for real goods and services with something that can be printed at near zero marginal cost. Even the Europeans are now creating a separate payment system outside the US dollar dominated SWIFT system to avoid being punished for “trading with the enemy”.

When contracts of trust are being renegotiated, no one can feel at ease. One can never solve global problems unilaterally or even bilaterally, let alone calls for more national patriotism. And as the English writer Samuel Johnson scribbled in 1775, a year before US independence from Britain, “patriotism is the last refuge of a scoundrel.”

Leadership has always been about generosity to those who are less well endowed and fortunate than you are. Often, it is not generosity of kind, because that would be buying of votes, but generosity of spirit.

This side of the Pacific, there is awareness that the tensions will not go away with Trump or a change in the November elections. What has happened is that the US establishment has put political interests ahead of economic interests, which means that any settlement will have to go beyond economic considerations.

If trade and political tensions are in for the long haul, can the current US market enthusiasm have sufficient strategic patience?

Now we understand why no one is laughing.

Credit; Think Asian Andrew Sheng

Tan Sri Andrew Sheng writes on global issues from an Asian perspective.


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Tariff war threatens world trading system


TODAY marks another milestone in the escalating global trade war that threatens to shake the foundations of the world trading system and cause economic uncertainty at a time of financial fragility. It’s an altogether bad development that adds more gloom to global economic prospects.

Last week, the United States announced it would slap an additional 10% tariff on US$200bil worth of imports from China. Hours later, China said it would put 5% to 10% extra tariffs on US$60bil of imports from the US.

Both sets of tariff increases come into effect today. But that’s not all.

The US also said it would raise the extra tariffs on the US$200bil of imports from 10% now to 25% at the end of the year. And if China retaliates (which it now has), the US might slap higher tariffs on yet another US$267bil of Chinese imports.

This comes on top of tariffs on an initial US$50bil worth of imports that the US had placed on Chinese imports a few months ago, and equivalent tariffs on US$50bil on US imports that China imposed as retaliation.

And even before that, the US had put extra tariffs on steel and aluminium imports from all countries, except a few that were exempted for the time being.

The US is also threatening to put tariffs on imported auto vehicles and parts, including those from Europe. That is on hold because of a bilateral deal reached, but could be re-ignited if President Donald Trump is not satisfied with Euro­pean behaviour.

The US itself is experiencing negative effects of this trade war. The prices of the initial US$50bil of imported Chinese products have started to go up in the US, raising costs for both consumers and producers.

The Chinese are similarly affected. Exports of both countries are also bound to decline, and this will eventually affect their overall economic growth.

There will be collateral effects on other countries. In Asia, those that are integrated in the global supply chain will find less demand for their exports of components to China. The effect on Malaysia is projected by analysts to be around 0.4 to 0.7 percentage point of GNP in 2019.

This could be offset by positive effects. Some companies producing in China are considering relocating to other countries, including Malaysia, to escape the US’ punitive tariffs. And some Malaysian products may become cheaper than Chinese products, which will now attract extra duties.

But it is likely that the bad effects will outweigh any such good effects, at least in the short run.

It is clear that the US is to blame for the trade war. Its unilateral actions are against the spirit and rules of the trading system, and have in fact undermined its legitimacy and viability.

The steel and aluminium tariffs were imposed under the US security clause of its domestic trade law, while the other tariff increases are under Section 301 of the trade law. The US actions are against various World Trade Organisation (WTO) rules.

Challenges to the US unilateral measures have been taken by China and other countries at the WTO. If the US is found in violation, which is quite likely, it has to stop its actions or face retaliation: the countries that win the cases heard by the WTO panels of experts are allowed to impose equivalent tariffs on US products.

However, the US has engineered a crisis in the WTO’s dispute settlement system so that soon the outcome of successful cases against it cannot be implemented.

This is because the US is now paralysing the WTO’s Appellate Body by refusing to allow new members of the body to be appointed to replace those retiring. Soon there will be only three members left, out of a full body of seven. Two more will be retiring in January 2019. A minimum of three members is needed to sit on a case.

Thus, if a lower-level panel rules against the US’ unilateral actions, and the US lodges an appeal that cannot be heard because there are not enough appellate body members, the panel decision cannot be enforced.

This would make the WTO quite a toothless organisation. There would be no legal remedy to enforce penalties for breaking the WTO laws. Countries that impose unilateral tariff increases can get away with it. In turn, other countries would also do the same.

The rules-based trade system is already starting to break down. We are now seeing blatant protectionism by the US and retaliation by affected countries. Within months, the trade war could spread, with the law of the jungle becoming more prominent.

Tears will not be shed in the developing countries if some rules cannot be upheld anymore, such as the WTO’s TRIPS agreement on intellectual property. The free trade economist Jagdish Bhagwati has said the TRIPS treaty does not belong in the WTO.

But what all members like about the WTO is its role in ensuring the predictability that their exports can sell in the markets of its members, with tariffs at rates agreed to at the WTO.

If that predictability is lost, then there can be a lot of uncertainty, as one country after another can unilaterally impose extra tariffs on other countries, which may then trigger retaliation.

This breakdown of the trading system may be the more serious effect of what started as a US-initiated trade war.

Trump may not care what happens to the system, as he has said many times that the WTO is a terrible organisation that the US should leave. And his recent actions, in fact, seem calculated to undermine, if not destroy it.

It is a new world we are looking at, in a scenario that would not have appeared possible a year or even months ago.

Policy makers, companies, analysts and the public should ponder about this, even as they follow the details of the tit-for-tat trade war that the US is waging against China and other countries.

Martin Khor is adviser of the Third World Network. The views expressed here are entirely his own.

Credit: Global Trend by Martin Khor

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We also hope that the Chinese public gets to know the causes and effects of the event and the steadiness of the Chinese government’s policies. No matter how long China-US trade conflicts last, China is doing what it should. China is honest and principled and a major trade power with intensive strengths. No one can take us down.

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The US is anxious about its temporary gains and losses. One minute it wants Sino-US exchanges, but the next it worries China is taking advantage. Its relevant policies are bound to change all the time. Its latest decision is like the trade war. Washington’s purpose is to drag Beijing down, but it will mostly hurt itself.

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America First? China Is Dominating Global Technology

Vanishing Jobs Growth Spells Deep Trouble for South Korea


 

 
Not-so-nice figures: Moon has seen his popularity slide amid criticism that he’s hurting employment by
aggressively increasing the minimum wage. — AP

Unemployment and jobs growth in South Korea haven’t looked so bad since the wake of the global financial crisis, undermining President Moon Jae-in’s economic agenda.

Data released Wednesday show the unemployment rate jumping to 4.2 percent, the highest since early 2010, and much greater than any economists forecast. Jobs growth slumped to just 3,000 last month, also the worst figure in more than eight years.

Moon, who came into office pledging to create jobs and raise incomes for regular workers, has seen his popularity slide amid criticism that he’s hurting employment by aggressively increasing the minimum wage.

While pay hikes planned for this year and 2019 are here to stay, Finance Minister Kim Dong-yeon said the government would consider adjusting some policies.

He conceded that the jobs market wouldn’t improve much anytime soon.

Disappearing Jobs Growth

  • Number of jobs added: South Korea added just 3,000 jobs in August, the least since 2010

Source: Statistics Korea

Moon’s administration points to the fallout from corporate restructuring and the shrinking working-age population as the source of the problems in the labour market. Businesses counter that hiking the minimum wage 16% this year, with another bump of almost 11% to come next year, has made job layoffs inevitable.

Small business owners in particular, from convenience stores to fast-food franchises, have shed workers.

Adding to the economic unease in South Korea is the risk that US President Donald Trump may hit car exporters with auto tariffs, even after Seoul agreed to renegotiate its trade deal with the US.

Unemployment Spike

South Korea’s unemployment rate in August reached the highest since 2010
  • Seasonally adjusted unemployment rate
Source: Statistics Korea

South Korean bonds climbed and the won fell after jobs figures, which appeared to squash any near-term prospect of the central bank raising interest rates.

The finance minister said economic policies that are geared toward wage-based growth are moving in the “right direction”. Yet the government also acknowledged the need for more communication and market analysis in order to gain trust from companies and the people, he said.

The presidential office described the recent increase in unemployment as inevitable pain that accompanies a change in the structure of the economy, Yonhap News reported.

Like many other countries, South Korea is experiencing a widening gap between the rich and the poor. It’s confounding policy makers and exacerbating political divisions. — Bloomberg

Tariffs won’t make US firms produce in US


“It would not be profitable to build the Focus Active in the U.S. given an expected annual sales volume of fewer than 50,000 units,” automaker Ford Motor Company said in a statement on Sunday.

US President Donald Trump tweeted earlier on Sunday that “‘Ford has abruptly killed a plan to sell a Chinese-made small vehicle in the US because of the prospect of higher US Tariffs.’ CNBC. This is just the beginning. This car can now be built in the USA and Ford will pay no tariffs!” Ford quickly clarified the facts, evidently rebuffing Trump’s tweet.

Likewise, tech giant Apple Inc. wrote a letter to US Trade Representative Robert Lighthizer, saying that a proposed 25 percent tariff on $200 billion of Chinese imports would cover a “wide range of Apple products.”

In another tweet, Trump told Apple to make their products in the US instead of China. Apple hasn’t responded.

According to the US media, the price of iPhone may increase to $2,000 if the company does as told.

The multinational companies that produce automobile and mobile phones have different manufacturing and sales layouts. Car manufacturers tend to produce their products where they are sold, while mobile phone manufacturers optimize their production chain costs worldwide. That’s the natural law of economic globalization which can’t be easily changed by a country’s government.

The White House lacks understanding of the global production and value chains. “Make your products in the United States instead of China” seems naive. Instead of coercing companies to follow demands, imposing tariffs will only scare them off.

Simply making US companies produce in the US can’t deal with the complicated global industry today. We have also learnt from history that neither side will gain in a trade war.

China is the world’s largest automobile and mobile phone market. Setting tariff barriers between Beijing and Washington won’t make US companies give up on China for the sake of their own country. As long as China doesn’t make things hard for US companies, it’s unavoidable that they will place production operations in China. The Chinese market can help them make money, but the White House can’t.

Most American high-tech companies will face difficulties if they leave China. The larger the market is, the higher return the companies will get from their research and development. High-tech companies, if they can’t grow to be giant, don’t usually survive for long, and it would be fatal for many of them to lose the Chinese market.

There hasn’t been a previous US government that dares to instruct multinational companies in production layouts, and the current administration has overestimated its executive power. The global industrial chain today is formed by market rules established over decades and can’t be easily changed by one government.

It would be the White House’s dream to expect that the US is not only the world’s technology and financial center, but also the world’s factory that sells its products globally. If the US doesn’t want to wake up from this dream, then the outside world has to step in and rouse Washington.

Source:Global Times

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1MDB scandal: Cops charge Lows, How Low will Jho go? He proclaims innocence!


‘He helped, among others, bring down a government that had ruled for 61 years, helped
bring criminal charges against a former premier and friend, and catalyzed the return of a 93 year old man to power
… – S. Jayasankaran’
Headline News

 

Cops file charges against the Lows  

KUALA LUMPUR: Police have filed criminal charges against businessman Low Taek Jho and his father for offences under the Anti-Money Laundering and Anti-Terrorism Financing Act 2001 over money allegedly stolen from 1Malay­sia Development Bhd (1MDB).

A source said the charges were filed in absentia by the police with the sanction of the Attorney Gen­eral’s Chambers at the Putrajaya Sessions Court yesterday morning.

According to the charge sheets made available to The Star, Low – also known as Jho Low – is facing eight counolice have filed criminal charges against businessman Low Taek Jho and his father for offences under the Anti-Money Laundering and Anti-Terrorism Financing Act 2001 over money allegedly stolen from 1Malay­sia Development Bhd (1MDB).A source said the charges were fts of money laundering.

In the first, second and third charges, the 37-year-old allegedly received US$261,449,960 from unlawful activities into his BSI Bank Limited account.

In the fourth to eighth charges, he allegedly transferred €41,100,073.22 and US$140,636,225.10 into the account of World View Limited, Caymans Island, in Caledonian Bank Limited, Caymans Island.

The offences were allegedly committed at BSI Bank Limited, No.7, Temasek Boulevard, #32-01 Suntec Tower One, Singapore, between Dec 26, 2013, and June 3, 2014.

Jho Low’s father Tan Sri Low Hock Peng, 66, also faces a charge of money laundering where he allegedly transferred monies from unlawful activity amounting to US$56,449,980 from his bank account into his son’s BSI Bank Limited account.

He allegedly committed the offence at the same BSI Bank Limited on Feb 4, 2014.

All the charges were under Section 4(1)(a) of the Act, which carries a fine up to RM5mil, imprisonment for a term up to five years, or both, upon conviction.

The source said police also applied for warrants of arrest for Jho Low and his father.

The source said a portion of the money was used to purchase the luxury yacht Equanimity, which was seized by Malaysia two weeks ago.

Under Section 401 of the Criminal Procedure Code, an absent person with no immediate prospect of arrest may be tried by the court for an offence in his absence.

In a related development, Inspec­tor-General of Police Tan Sri Mohamad Fuzi Harun said the new charges enabled the Royal Malaysia Police to obtain new warrants of arrest for Jho Low and his father.

“From there, we will ask Interpol to issue a fresh Red Notice alert on the duo. The Red Notice will seek the cooperation of relevant countries in tracking down the wanted persons,” he told The Star.

The Red Notice will also expedite the extradition process, which will be handled by the Attorney General’s Chambers, and to bring the duo back to Malaysia, he said.

“Our priority has always been to track them down and detain them as soon as possible,” he added.

Based on the charge sheets seen by The Star, journalists visited Jho Low’s family home in Tanjung Bungah, Penang, but no one appeared to be home.- The Star.

 Statement by Equanimity (Cayman) Ltd

Despite being owners of the yacht in question, Equanimity (Cayman) Ltd. has received no legally valid notice of any filing related to a Sale Pendente Lite, nor any notice of a pending court hearing in the matter. This would be a requirement under law.

We also note that there are ongoing proceedings before U.S. courts – including a U.S. appellate court – regarding the ownership and custody of the asset, with active requests filed before a U.S. judge within the past 24 hours. Indeed, the U.S. Department of Justice submitted a filing in the U.S. court less than one week ago. For Malaysia to act unilaterally while there are pending court requests in the U.S. would be an affront to the international rule of law. In fact, Malaysia’s seizure of the vessel is already contrary to a U.S. court order appointing the U.S. Government as custodian of the yacht.

The U.S. has previously stated that it had no advance knowledge of Malaysia’s seizure of the yacht, and presumably the U.S. had no advance notice of this current Malaysian action either. It is important to note that, despite conflicting statements coming out of the Malaysian government, the U.S. has not proven its case regarding the Equanimity. The U.S. has only filed unproven allegations in court proceedings, after which the U.S. put the entire case on hold over Claimants’ objections. The result of that is that no party has been able to substantively respond to the allegations, and nor has the U.S. been required to prove them.

In addition, it is indisputably clear that Malaysia’s seizure of the vessel and apparent intent to immediately sell it goes entirely against the interests of the yacht and will drastically reduce – indeed, it is already drastically reducing – its potential sale value. Due to the Malaysian government’s precipitous, ill-conceived, and misguided actions, the yacht is running 24 hours per day, 7 days a week on generator power, which is unsustainable and harmful to the vessel. Moreover, Malaysia has currently docked the yacht in a hazardous environment in which toxins such as water pollution and nearby smoke are greatly damaging it. Because Malaysia apparently does not have – or does not want to spend – the necessary funds to properly maintain the vessel while it is prepared for a value-maximizing sale, Malaysia has instead proposed a “fire sale,” in which the yacht is to be sold for a fraction of its true value.

To move for a sale in Malaysia immediately would be a remarkable violation of due process and international legal comity and would call into question the actual ownership of the yacht for any potential buyer. These misguided actions would create a cloud on the Equanimity’s ownership that could easily take years to resolve in several courts around the world.

Tsuey Shan Ho

Account Manager
cid:image001.png@01D37B19.DFA09BC0Tel +44 (0)20 7092 3992

 

How Low will Jho go?

Superyacht: A file picture showing seized
luxury yacht Equanimity being brought to the Boustead Cruise Terminal in
Port Klang on Aug 7. — Reuters

A man who has never gone to school may steal from a railcar but a man who has gone to a university may steal the entire railroad

–- former US President Theodore Roosevelt

FUGITIVE businessman Low Taek Jho, also known as Jho Low, 38, has described Malaysia’s legal proceedings to quickly sell the Equanimity superyacht as a vindictive “sham”.

According to the rotund reprobate, it was a sham because the boat’s ownership was also being contested in the courts of the United States so the ‘hasty” Malaysian admiralty hearing was, at best, iffy.

But what the corpulent conman seemed not to want to concede was that both governments agreed – unequivocally, unarguably and emphatically – that the yacht was not his to roam the oceans with.

They both agreed that the RM1bil boat was bought with monies that were skimmed out of a Malaysian sovereign wealth fund.

Our man Jho has since been keeping a low profile, so low that no one seems to know where the fat fugitive is.

You might say he was distracted: the bulging bandit even left a multi-million dollar private jet back in Singapore and he hadn’t even complained, once, of the uncivil way the authorities just left it out in the sun for over nine months!

In this case, however, the pudgy pirate brought forth his spokespeople to complain about the way the yacht was kept “under the sun” in polluted waters, and with its batteries running 24/7. In short, it was not being treated as a superyacht should have been.

He should be consistent and set forth similar arguments about his private jet. Did I forget to mention that Singapore issued a warrant of arrest for him way back when?

In fairness to our man Jho, he has maintained that he has not stolen anything at all and all the money was his family’s inheritance to begin with.

The problem with that is that at least three countries – the US, Malaysia and Singapore – disagree with its reasoning. Another problem would be his absence from places where people want to ask him hard questions.

It is said that a fool and his money are soon parted. But Fat Boy and Other People’s Money was soon partying and the money seemed endless.

Mario Puzo, the author of the Godfather, put it like this: “A lawyer with a briefcase can steal millions more than a hundred men with guns.”

Let’s face it. He lived, what the Eagles called, Life in the Fast Lane.

He had a private jet and a superyacht.

He had palatial homes all over the world.

He dated Hollywood actresses.

He helped bankroll a Hollywood blockbuster.

He helped bring down a government that had ruled for 61 years, helped bring criminal charges against a former premier and friend, and catalysed the return of a 93 year old man to power.

He may have had more citizenships than Caesar.

And – wonder of wonders – he had no official position in 1 Malaysia Development Bhd. His name must surely resonate in future history books.

Breaking news! Just got word that Fat Boy and his father have been charged by the Attorney General’s Chambers for money laundering offences involving RM1bil, funds that were allegedly used to buy the yacht.

This will make Malaysia the first country to charge our man Jho. Not bad for an Attorney General who was said to “know nothing” of criminal law.

Now we know why they say money launderers are filthy rich.

What will the dodgy deviant say now?

Catch me if you can?

By S. Jayasankaran

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