Timely superpower funds from China to ease woes


Fruitful talks: Top Malaysian businessmen having a meeting with Li (centre right) on Nov 23. Also present was Prime Minister’s Special Envoy to China Tan Sri Ong Ka Ting (centre left)

Republic’s generous gesture is like prescribing right medicine to a sick patient, say top businessmen.

LAST Monday, Chinese Premier Li Keqiang announced numerous measures to help Malaysia stabilise its financial market, and their positive impact was felt the next day with the gains in ringgit and bonds seen.

For the country, the most significant measure had to be Beijing’s pledge to buy up Malaysian government bonds, which have been hit by foreign dumping since the second half of last year after crude oil prices began to plunge.

For 1Malaysia Development Bhd (1MDB), the sale of its power assets under Edra Global Energy Bhd to state-owned China General Nuclear Power Corporation for RM9.83bil cash was a huge relief. This transaction will help 1MDB cut its debts of RM42bil by about 24%.

And for Prime Minister Datuk Seri Najib Tun Razak, China’s choice of Malaysia to issue the first “silk-road” bond and plan to invest more here is a major diplomatic victory.

As expected, sentiment on the capital market improved the following day. The ringgit rose the highest among emerging-market currencies, while stocks and bonds gained, due mainly to the power deal, according to Bloomberg. The ringgit strengthened 1.3% to 4.2495 a dollar in Kuala Lumpur while the KLCI index rose 0.5%.

On the sale of power assets, Credit Suisse said in its research report on Nov 24: “The sale of the 1MDB power unit is the first step towards resolving 1MDB’s RM42bil debt. We see this news as positive for the ringgit. The sale of 60% of Bandar Malaysia will likely be concluded by year-end. We believe 1MDB would then be wound down.”

Strong ties: (picture left) Najib showing the development of Putrajaya to Li during the latter’s recent visit to Malaysia and (picture above) Ter (left) sharing a light moment with Li during a meeting as Ong (centre) looks on.Strong ties: (picture left) Najib showing the development of Putrajaya to Li during the latter’s recent visit to Malaysia.

Strong ties: Najib showing the development of Putrajaya to Li during the latter’s recent visit to Malaysia.

To recap, at the Malaysia-China High-Level Economic Forum on Nov 23 in Kuala Lumpur, Li said: “It is imperative to stabilise the financial market. So, we want to assume a market role by purchasing your treasury bonds in accordance with market principles.”

The Chinese premier also said that in the next five years, China was expected to import foreign goods worth US$10 trillion (RM42.6 trillion) and this demand could unleash business opportunities for Malaysian firms.

“A waterfront pavilion gets the moonlight first,” he said, citing a Chinese proverb. This means that Malaysia, being close in terms of distance and diplomatic ties with China, will enjoy the most benefits generated by China’s economic policy.

Li was in Malaysia for four days from Nov 20 to 23 to attend the Asean-East Asia Summit and to hold bilateral talks with Najib.

But Li, who was paying his first official visit to Kuala Lumpur as premier, did not reveal how much Beijing would invest in Malaysian bonds. However, businessmen who know China well believe this bond purchase could be major.

“As the Chinese Premier handles China’s economic policy and affairs, I believe this bond purchase will be significant enough to stabilise the ringgit that is grossly under-valued,” says Datuk Ter Leong Yap, president of the Associated Chinese Chamber of Commerce and Industry of Malaysia (ACCCIM).

Ter was among the 10 corporate captains whom Li met with before speaking at the forum. Ter, in this private meeting, says he had proposed that China buy Malaysian bonds to halt the ringgit’s decline.

Malaysian top businessmen meeting with Premier Li on Nov 23 of 2015.Malaysian top businessmen meeting with Premier Li on Nov 23 of 2015. –

Ter (left) sharing a light moment with Li during a meeting as Ong (centre) looks on.

The ringgit, seen as facing further decline due to the impending hike in US interest rates, has been hit by three waves of outflow of foreign funds.

The first came after the crude oil price plunge, the second after the 1MDB saga was highlighted and the third, political instability amid calls for the resignation of the Prime Minister.

The ringgit has lost about 20% of its value to the dollar so far this year. Its fall is the biggest among currencies in the region.

The outflow of funds has not only hit Malaysia’s economy and investor confidence, but also reduced its international reserves tremendously.

Li also announced that China would provide a 50 billion yuan (RM33bil) quota under the Renminbi Qualified Foreign Institutional Investor (RQFII) programme for Malaysian institutional funds to purchase shares and bonds directly in the world’s second largest economy.

In response to this announcement, Bank Negara Malaysia said the RQFII programme would complement the renminbi clearing bank arrangement in Malaysia. And collectively, the initiatives will support the growing bilateral trade, investment and financial flows as well as position Malaysia as an offshore renminbi centre in the region.

In conjunction with Li’s visit, China Construction Bank (Asia) Corporation Ltd announced it would list the world’s first ever 21st Century Maritime Silk Road bond of one billion yuan (RM667.1mil) on Bursa Malaysia. The notes will support China’s “The Land & Maritime Silk Road” initiative.

“These announcements, together with the bond purchase, are significant for Malaysia as they imply that this big economic power is reading Malaysia positively and has confidence in our country. Confidence crisis is a major reason for people dumping the ringgit.

“By making announcements to invest in Malaysia and invite local funds to invest in China, Li is sending two strong signals: China is reading Malaysia positively and this superpower has confidence in Malaysia,” said Ter in an interview.

Chinese daily Nanyang Siang Pau describes Li’s announcements as “gifts” that will stabilise Malaysia’s financial market, while China Press sees these as “timely rain after a long drought”.

During one of his speeches here, Li told Malaysia to get ready for the influx of Chinese tourists, as his government would encourage its people to visit the country.

Chinese tourists, who form a significant portion of in-bound visitors, have declined since the dis­appearance of Flight MH370 last year.

As tourism is high on Najib’s agenda to bring in the much-needed foreign exchange earnings, this influx will cheer Malaysia up.

But China’s generous gesture is not to be taken that it’s all about friendship, though both countries say bilateral ties have been lifted to a new height now. There is the interplay of diplomatic and economic reasons.

It is public knowledge that Beijing appreciates Malaysia’s stance to play down China’s dispute with other nations in the disputed waters of South China Sea, in which China, Japan and several South-East Asian nations, including Malaysia, are territorial claimants.

China’s construction on islands and reefs in the disputed waters has caused diplomatic tension, heightened recently by the United States’ move to send a warship within 12 nautical miles of a Chinese reef in the area.

There are also investment returns and economic benefits in the long run for the Chinese.

“China’s investments in Malaysia is a smart move, contrarian investing at its finest. What the wise man does at the beginning, the fool does at the end. Our fundamentals are intact, ringgit tremendously undervalued,” says Ian Yoong Kah Yin, business development director of Red Sena Bhd.

This former investment banker at CIMB believes Chinese investments will pay as the ringgit should improve to 3.70-3.90 to a dollar by the end of 2016, from current levels of around 4.25 to 4.30.

In response to China’s timely aid, Najib pledged that Malaysia was committed to awarding the Johor Baru-Gemas double-track rail project to a consortium of Chinese companies. Indeed, China’s state-owned construction giants have been awarded local projects worth over RM15bil in the last three years.

Najib also took note of China’s interest in the high-speed rail project between Kuala Lumpur and Singapore, but said this would be decided via international tender.

Referring to the bilateral trade target of US$160bil (RM683mil) by 2017, the Prime Minister said there should be doubling of efforts to reach the level. Annual bilateral trade has exceeded US$100bil (RM426bil) since last year.

Summing up Li’s visit to Malaysia, QL Resources Bhd’s Dr Chia Song Kun says: “All these measures announced by Premier Li during our most trying times will certainly help Malaysia, be it from the economic or political aspect.”

The vice-president of the Selangor/Kuala Lumpur Chinese Chamber of Commerce adds: “Our country is facing a confidence crisis and this has undermined business and consumer confidence. China’s move this time is like prescribing the right medicine to a sick patient.”

By Ho Wah Foon The Star/Asian News Network

A superpower, but not a threat

Premier Li’s visit to Malaysia serves as ‘silent counterattack’ over South China Sea conflict.

600-year-old bond: Li (second from right) and his wife Cheng Hong touring the Cheng Ho Museum during their visit to Malacca. — Bernama

“WE come in peace, as always,” is the strong message sent out by China’s Li Keqiang to Malaysia and other countries in the region during his recent visit.

When the Premier made repeated refe­rence to Admiral Zheng He (or Cheng Ho) in his speeches, he reiterated that the prominent navigator had embarked on his voyages with friendship and peace in mind.

Admiral Zheng He and his Chinese fleet of the Ming Dynasty did not invade the lands they visited 600 years ago, and China has no plans to do so now, too.

China wishes to assure its neighbours that its rise as a superpower in the realms of politics, economy, and military should not be seen as a threat.

On the contrary, it is now offering vast opportunities to cooperate for mutual benefit while insisting on harmonious ties with other countries.

Li, who was on his first official visit to Malaysia as the Premier of China, had inclu­ded Malacca in his itinerary.

Dotted with historical landmarks, the state has a meaningful position in the relations between Malaysia and China.

It was where it all began.

From the Sky Tower observatory deck on the 43rd floor of The Shore shopping complex, Li looked out at the Strait of Malacca, which Admiral Zheng sailed through to dock at the port of Malacca during his voyages.

At the Baba Nyonya Heritage Museum, Li learned about Peranakan culture that came into existence from the interactions between people from the two lands. He also toured the Cheng Ho Cultural Museum, where Admiral Zheng’s warehouse once stood.

But Li’s visit to the state was more than just a walk down memory lane.

Malacca is now the “friendly state” to China’s southern province of Guangdong. This is the first of such status approved by the Cabinet, as the usual practice has been establishing a sister city tie with another foreign city instead of a state-to-state pact.

According to the Chinese Foreign Ministry, Guangdong province is now “actively dovetailing development with Malacca, and making preparations to build a modern seaside industrial park integrating maritime high-tech industries, deep-water wharf and logistics centres”.

The Strait of Malacca is included in the route of the 21st-century Maritime Silk Road, together with the land-based Silk Road Economic Belt, which represents China’s great ambitions to boost connectivity and cooperation with countries in the world.

Malacca Port is also one of the six Malaysian ports to form an alliance with 10 Chinese ports, as specified in a memorandum of understanding signed between both coun­tries during Li’s visit.

Li’s stopover in Malacca, although brief, has reverberating effects. Besides giving an official stamp of approval to the bilateral project in Malacca, Li wanted to get across the message of peaceful exchanges, harmony and inclusiveness.

China Foreign Affairs University vice-president Jiang Ruiping told state-owned news agency, China News Service, that Admiral Zheng’s friendly diplomacy is still relevant today.

It serves as a “silent counterattack” at a time when the international community plays up the South China Sea issue, referring to the territorial row between China and a few South-East Asian nations including Malaysia.

China’s assertiveness over the waters, as illustrated by its recent reclamation activities, has prompted the United States to patrol in the disputed waters. The US Navy has received the support of Japan, which is also embroiled in a territorial dispute with China over islands in the East China Sea.

Opposing the interference from countries outside the region, Li, when speaking at the Asean-China Summit in Kuala Lumpur during his visit, said China sees the high-profile intervention as an act that does no good to anyone.

He said China is committed to peaceful settlement of the dispute through negotiation and consultation.

“Together with our Asean friends, we have the confidence to make the South China Sea a sea of peace, friendship and cooperation for the benefit of all countries in the region.”

By Tho Xin Yi Check-in China

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A new journey to make history 

Related:

1MDB exits power business, sells it to China for RM9.83bil …

 

Ringgit at 5-week high – The Star Online

 

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TPPA a bad deal for Malaysia, can’t isolate China, only trade growth defines merits of TPP


KUALA LUMPUR: United Nations assistant director-general and coordinator for economic and social development, food and agriculture organisation, Dr Jomo Kwame Sundaram (pix) has called on the government not to join the Trans Pacific Partnership Agreement (TPPA) as it provides little benefit for Malaysia.

“I am extremely disappointed. I think it is going to affect, not only the Malaysian business community, but also Malaysian consumers and citizens adversely,” he told reporters on the sidelines of the Khazanah Megatrend Forum 2015 .

On Monday, the Ministry of International Trade and Industry (Miti) said the recently concluded TPPA negotiations had agreed to take into consideration almost all of Malaysia’s concerns and sensitivities such as government procurement, state-owned enterprises and bumiputra issues.

The TPP is a trade agreement initiative involving 12 countries namely Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the US and Vietnam.

Miti said the TPPA will be presented to parliament once the complete and official text of the agreement is prepared.

Bloomberg reported that Malaysia’s state-owned enterprises may suffer from the deal, which calls for equal access to government procurement even though electronics, chemical products, palm oil and rubber exporters benefit from it.

Jomo said that the TPPA is politically motivated, in that it is an attempt by the US to try and isolate China, with minimum trade advantages for Malaysia.

“For example, if Malaysia produces solar panels it can’t be sold in the US and elsewhere. These are all contravening the bilateral agreements. You cannot expect the TPPA to overcome that,” he explained.

On intellectual property rights, Jomo said that the most significant implication is the cost of medication.

“They have exclusive rights and have been depriving people from the benefits of this. This is scandalous and inhumane, it cannot explain why Malaysia agreed to this,” he said.

In a statement late on Monday however, Miti had reiterated that the TPPA should not hinder the public’s access to affordable drugs and healthcare, while ensuring the necessary incentives for pharmaceutical innovators to produce new drugs and medicines.

Even though there will be “small” benefits, Jomo said the government should look at it as a whole, especially from the cost perspective.

He also said foreign complainants will have more legal resources for dispute settlement through new arbitration panels compared with those from developing countries.

“Even in the negotiations, they (developing countries) are not very well prepared, and everyone knows most of the developing countries just accepted what was given to them. It was the developed countries such as Australia, New Zealand and Japan that were insisting on it and the US compromised to them,” he added.

Meanwhile, Miti secretary-general Tan Sri Rebecca Fatima Sta Maria stressed that the full text of the TPPA will be made available to the public soon.

“We’ve nothing to hide, at the end of the day, the important thing is we want to be sure this works for Malaysia,” she said.

She does not foresee the TPPA taking effect in the next two years considering it has to be approved by every participating country

It will be a long process, maybe two years or more, I don’t know,” she added.

A cost benefit analysis commissioned by Miti to determine the attractiveness of the deal is yet to be completed.

TPPA cost benefit analysis still pending

Should have been finalised earlier for the sake of public understanding

PETALING JAYA: The cost benefit analysis on the Trans-Pacific Partnership Agreement (TPPA) should have been finalised and released earlier for the sake of public understanding, Bantah TPPA group chairman Mohd Nizam Mahshar said in a statement yesterday.

Commenting on the conclusion of the TPPA negotiations, he said the cost benefit analysis should have been finalised and released earlier, to provide the public and interested parties with a greater understanding of the TPPA and its implications.

The release of the cost benefit analysis has been delayed for months.

“Until now, it has not been released and we only have three months from the official date of the negotiation’s conclusion to the date that it has to be signed,” he added.

International Trade and Industry Minister, Datuk Seri Mustapa Mohamed said in a Facebook posting yesterday that the contents of the TPPA deal will be made public next month and presented to parliament for debate within the next two months.

The minister said it would also include the completed cost benefit analysis.

“This does not mean a thing. Even though debated by parliamentarians, the agreement cannot be amended,” Mohd Nizam said.
“From this day to the next 90 days Malaysia has only two choices, either to take the TPPA agreement as a whole or to reject it completely. We still have a say if we choose to speak up,” he added.

Nizam said despite the conclusion of the negotiations, the group is maintaining its position that the TPPA deal will not benefit the country’s trade or economic health.

He said the possible impact includes restrictions of policy space, intrusions on legal and political sovereignty, huge impact to small and medium enterprises and infant industry, access to affordable medicine, as well as intellectual property effects to knowledge and information institutions and industries.

Meanwhile, the recently formed coalition party Parti Amanah Negara said it hoped all comments from the public will be considered seriously.

“We also hope all necessary action will be taken and the debate will not merely be an exercise in ‘public relations’,” its communication director Khalid Abd Samad said in a statement.

He added that the minister previously had acknowledged that there were several concerns regarding the TPPA, saying among the concerns in the agreement is that it seeks to ensure free competition with minimal government control or intervention.

“This will only result in stronger companies overcoming all others and dominating the market,” Khalid said, explaining that local companies, which are much smaller than the United States multinational companies and other member countries will not be able to compete and therefore become sidelined.

Commenting on the intellectual property rights issue, Khalid said it would have a direct impact specifically on the price of medicine, and enforcement of intellectual property rights would cause higher prices of medicine.

“Even though this may be good for the pharmaceutical companies, it will certainly have a negative effect on the population as a whole,” Khalid added, saying that the party is worried that the deal will only bring short-term benefits, while increasing the country’s dependency on specific sources of revenue.

Meanwhile, Asian Strategy and Leadership Institute’s Centre for public policy studies chairman Tan Sri Ramon Navaratnam said the Ministry of International Trade and Industry should hold several town hall meetings to explain the TPPA deal to the public.

“We cannot afford to leave important national agreements and treaties only to politicians to decide, as they may have their own political deals to settle. We all have to actively participate in the debate outside parliament as well,” he added. – The Sunbiz

TPP cannot ‘isolate China’ – Chinese economy increasingly open, inclusive: economist

The US-led Trans-Pacific Partnership (TPP) trade agreement will not isolate China or seriously hurt the Chinese economy, experts said Wednesday, adding it could lead the world’s second-largest economy to reach similar deals with other nations, after a deal was reached on the TPP earlier this week.

Amid widespread online pessimism over the trade pact among 12 Pacific Rim nations that some believe deliberately excluded China, Chinese economists said such anxieties have been overblown.

Huang Wei, director of the Institute of World Economics and Politics at the Chinese Academy of Social Sciences, said the TPP will affect China, but will have a “minimal negative impact” on the Chinese economy in the long run because of the economy’s size and its irreplaceable role in regional and global markets.

Huang believes the TPP creates more of a “psychological effect” on China that the country has been left out by its neighbors and trading partners from such a significant trade agreement. “But don’t turn pale just at the mention of a tiger,” she told the Global Times on Wednesday.

She said, if anything, the trade accord will push China to further engage with regional and global economies and pursue more trade agreements with countries in Asia and around the world, which will help the Chinese economy grow and better compete globally.

Chen Fengying, an expert at the Institute of World Economics Studies under the China Institute of Contemporary International Relations, also believes that the TPP will not isolate China from the regional economy and could even be beneficial.

“Given the important role China plays in regional and global economics, a single agreement won’t isolate China,” Chen told the Global Times Wednesday. She added that if the TPP can help build a more open and prosperous Asia, it will be conducive for the Chinese economy.

Both Huang and Chen’s comments come after trade ministers from the US, Canada, Mexico, Chile, Peru, Japan, Malaysia, Vietnam, Singapore, Brunei, Australia, and New Zealand reached a deal.

After days of negotiations on the details of the deal in Atlanta, US officials announced Monday that an agreement had been reached, ending years of talks, though the deal still needs to go through the legislative process of each country before it can be signed and implemented.

Prevailing issues

Some posts on popular social media platforms in China suggested Wednesday that China’s own issues in areas such as intellectual property protection, environmental standards and currency policies prevented it from being included in the deal, while others said the US is trying to single out China and counter China because the US feels its economic and political dominance is being threatened.

Experts said understanding the TPP’s impact should not only be based on the “US conspiracy theory” or the “China-deserves-it” angle.

Zhang Jianping, a foreign trade expert at the National Development and Reform Commission, told the Economic Daily that China lags behind in meeting the TPP’s requirements, such as environmental, finance and labor standards. It will take a long time for China to reach those standards, and that is why China held back in joining the TPP, he said.

Chen also said that intellectual property protection, environmental standards and other factors might have been reasons why China did not sit at the negotiating table, but such a move has pushed China to improve in such areas, as it holds numerous trade talks with countries in Asia and beyond, including TPP member-nations.

China engages world

China has reached separate free trade agreements with Australia, New Zealand, Chile, Peru, and Singapore, who are also involved in the TPP, while continuing talks with the US, Japan and other countries on free-trade deals.

China is also engaged in regional multilateral trade talks, such as the Free-Trade Area of the Asia-Pacific (FTAAP) with Asia-Pacific Economic Cooperation (APEC) economies, and the Regional Comprehensive Economic Partnership (RCEP) with the Association of Southeast Asian Nations (ASEAN) and Japan, South Korea, Australia, New Zealand and Indonesia.

All these efforts and other projects such as the “Belt and Road” initiative and the Asia Infrastructure Investment Bank (AIIB) show the Chinese economy is moving toward being more open and inclusive, Chen said. It will help the country to maintain its increasing influence over regional and global trade, she added.

Chen also said she believes these trade deals are not mutually exclusive, saying they can complement each other by building a more open and fair regional economy in the Asia-Pacific.

China’s Ministry of Commerce said Tuesday that China is open to any trade agreement “compatible” with rules established by the World Trade Organization, and that is conducive to the regional economic integration of the Asia-Pacific region.- Global Times

Only trade growth will define merits of TPP


Only trade growth will define merits of TPPLabourers work at a garment factory in Sai Dong, outside Hanoi, Vietnam. [Photo/Agencies]

At a critical moment when trade is set to grow less than the global economy for the first time in the last four decades, there is no reason not to welcome the ambitious pact that 12 Pacific Rim countries reached on Monday to create the largest free trade area of the world.

That is why China’s Ministry of Commerce said on Tuesday that the Trans-Pacific Partnership is one of the key free trade agreements for the region and China is open to any mechanism that follows the rules of the World Trade Organization and can boost the economic integration of the Asia-Pacific.

As a top global trading power that has hugely contributed to and benefited from the global trade growth for the last two decades, China sincerely hopes the TPP pact and other free trade arrangements in the region can strengthen each other and boost trade, investment and economic growth in the Asia-Pacific, to benefit not just the region but also the rest of the world.

It is also the common wish of the international community that, as a long-term driving force, the current slow pace of global trade growth should be revived through deeper and wider reforms of the international trade system to fuel a sustainable global recovery from the 2008 financial crisis.

The appealing promise that the TPP may reshape industries and liberalize commerce in 40 percent of the world’s economy has understandably given rise to praise such as the “most ambitious trade pact in a generation”.

Yet the real implications of the TPP deal are far from clear since it has been largely negotiated under a blanket of secrecy to facilitate give-and-take among the signatories.

The power of a successful trade deal is to maximize as much as possible each participant’s comparative advantages in global trade while minimizing predictable political opposition from various domestic vested interests.

Nevertheless, even before the five-year marathon talks have secured a really workable arrangement, US President Barack Obama hastened to paint the pact as a way of stopping China from writing the rules of the global economy in an illusion that he may easily win over the domestic political support he expects.

However, if the deal is based on the political priority of one partner, rather than the shared benefit of all partners, it would be hard to believe that it can ensure free market trade as it is being touted.

The world needs a trade-boosting deal. The United States has a huge onus to prove the merits of the TPP.  – China Daily

Japan security bills, Abe fans anti-China flames with defense paper


By Li Feng

Abe fans anti-China flames with defense paper

People hold placards during a rally against Japan’s Prime Minister Shinzo Abe’s administration and his security-related legislation in front of the parliament building in Tokyo July 15, 2015. [Photo/Agencies]

The Japanese Cabinet on Tuesday approved its annual defense white paper, in which it accuses China of raising regional tensions in the East China Sea and South China Sea. China’s Ministry of Defense expressed strong dissatisfaction and opposition toward the 429-page document later the same day, saying it “tarnishes the image of China’s military” and deliberately plays up the “China threat” theory. Comments:

By defaming China as a regional security threat in its defense white paper, the Japanese administration led by Prime Minister Shinzo Abe is clearly aiming to add necessity and legitimacy to the new security bills, which breach Japan’s pacifist Constitution, and complicate Asia-Pacific security issues such as the South China Sea disputes. It will be unfortunate for both Japan and East Asia if Abe remains adamant on challenging China.

Xinhua News Agency, July 21

Japan’s defense white paper for 2015 is not conducive to safeguarding peace and stability in East Asia. The so-called threat is not from China but Japan itself.

Kamakura Takao, an emeritus professor of Saitama University, Japan, July 21

Two new implications in Japan’s latest defense white paper should be noted. First, the document is in line with the new security bills that Abe is trying to muscle through, offering excuses for the country’s overseas military deployment. Second, as a non-stakeholder in the South China Sea issues, Tokyo may propose to participate in the US patrols in the area to expand its regional presence, and, of course, conduct more overseas military operations. It is a dangerous move that other regional powers should pay close attention to.

Qian Feng, vice-president of Asia Times, July 22

In the past, Japan used to see the Soviet Union and the Democratic People’s Republic of Korea as the top threats. Now China has become the No 1 “threat”. Confronted with the “unexpected” opposition to his security bills in Japan, Abe has resorted to the defense white paper to defuse public rage and convince peace-loving Japanese that the bills’ passage is necessary.

Ny Huang Dahui, director of the East Asia Research Center of Renmin University of China, July 21

Source: Asia News Network/China Daily

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II…

Asian voice carries greater weight now


AIIB President_ Jin LiqunSelect head: Jin Liqun is the president-designate of the AIIB. – EPA pic >>

CHINA’S setting up of the AIIB (Asian Infrastructure Investment Bank) is a most significant event in contemporary history.

It represents another shift eastwards in the global balance of power, particularly from the US to China. However, other Asian – particularly Asean – countries have also to reflect on what it means to them.

The US AIIB dilemma is a useful point over which to ponder. It has very little to do with transparency, governance and environment. It has to do with the power equation with China. Predominance and control.

Clearly the US is struggling to come to terms with China’s rise. This is not to say America opposes it, but it is a hard thing for the US to swallow, to play second fiddle. And the AIIB is the first big test of that adjustment.

With the launch of the AIIB, China has also shown how it can make good things happen with support not just from Asia, but also beyond. It is becoming a global power with considerable reach and influence.

Controlling about 30% of the capital of the AIIB China, as the promoter, has shown itself as a leader that can control the future of other countries. How Beijing exercises that leadership remains to be seen, but insofar as member state expectations are concerned, they see Asian countries for the first time in living memory controlling an international institution of considerable weight – and with it their economic prospects.

To sustain Asian economic growth trajectory, US$8 trillion of national infrastructure development is needed up to 2020, not counting US$290bil in regional connectivity infrastructure. Indonesia alone needs US$230bil, Myanmar US$80bil. With the potential of the US$100bil AIIB, plus the US$40bil Silk Road Fund for “One Belt One Road”, there is for the first time some good hope of meeting this need.

The US, in its difficult adjustment, points to potential future problems rather than the promise of the AIIB. How “lean, clean and green” will the AIIB be? As if the US dominated Bretton Woods institutions have been pristine, but that does not mean it is a question that should not be asked about AIIB.

So, as the Asian countries get in line, eyes glued on the lolly, they should not hold back from asking questions and seeking answers on how the AIIB is going to operate.

Another issue raised primarily by the Americans is over procurement and personnel appointments. Again, as if the IMF, World Bank and ADB did not come with strings attached by largely senior Caucasian officials from the institutions. But, having suffered from such suppression in the past, Asian countries should want to know what the future holds with the AIIB on procurement and personnel.

With the AIIB headquartered in Beijing and China putting up most of the money, it is only to be expected there will be a Chinese bias on both scores. The president-designate Jin Liqun, however, is suave and affable, better than some of the boorish heads past and present of the Bretton Woods institutions. Nevertheless, it is not undignified to ask about other appointments and their distribution. This horse-trading occurs at international level.

On procurement, Chinese companies are already assuming they will have first-mover advantage contractual right – but this does not necessarily reflect what the Chinese government thinks or mean that the AIIB will be biased for them.

Indeed, Chinese Prime Minister Li Keqiang during his visit to France this week admitted China lacked advanced technologies and looked forward to “form joint ventures or cooperatives” with the developed world. This was stated on the occasion of a historic deal with France to carry out joint projects in Asian and African countries.

And it follows a considerable period during which China was intent on muscling out developed countries in its economic expansion to African and some Asian countries.

Thus, China’s tendency of blowing hot and cold has been a problem in gauging Beijing objectives and mode of operation.

A former US ambassador to the ADB recently related how the poorest Pacific countries failed to receive Chinese support at board level for projects as they had recognised Taiwan. Again, not that the US was ever reticent about such political power play.

Still, it would not be remiss to ask how far China would penalise countries on the wrong political wave-length, even if it would be too much to expect Beijing to support a state opposed to and in conflict with it.

How would the Philippines and Vietnam score in the AIIB on the Chinese political barometer given their adversarial position in the South China Sea dispute? Indeed, the other claimant states, such as Malaysia and Brunei. Of course, if they are willing to become vassals of the Chinese state in return for largesse, it is entirely up to them. But it is not to be expected the proud sovereign states of South-East Asia would stoop to this, but who knows.

In the AIIB, Asean states will each have a very small stake, even if Indonesia might be among the top ten shareholders. Together they might represent something a little more significant. Would they then not want to develop a common position in areas of infrastructure and connectivity development that would be of shared benefit?

Asean leaders do not seem to discuss strategic issues such as, now, the meaning and significance of the AIIB to future regional order. Generalised, but not inaccurate, assertions are made about its good in terms of infrastructure and economic development. But there is more to it than that.

When they meet, Asean leaders follow a well-scripted agenda that does not include a free flow of discussion. Foreign ministries often are hell-bent on avoiding this, because they think strategy and state secrets must at all cost be protected. They should give the leaders greater credit than assumed stupidity. These discussions must take place beyond other broad issues, such as the Middle East etc, or immediate issues, such as refugees and migrants.

Strategic issues are so critical to Asean’s future place in the regional order. Deficient discussion, or avoidance of it altogether, erodes Asean role in the evolving system. More time must be set aside at Asean summits for discussion on these issues.

The economic ministries too must not just look at issues and targets one by one and in a rush without presenting the bigger picture. There is great strategic content in the minutiae which is hardly highlighted or discoursed.

If Asean meetings and summits go on like this, community or no community, the region will miss the wood for the trees.

Comment by Munir Majid The Star/Asian News Network

Tan Sri Munir Majid, chairman of Bank Muamalat and visiting senior fellow at LSE Ideas (Centre for International Affairs, Diplomacy and Strategy), is also chairman of CIMB Asean Research Institute.

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Mara in Aussie property scam


Mara_Aussie

Top Malaysian government officials and a former politician were alleged to spend RM65 million of public funds to purchase an apartment block in Melbourne, Australia, overpaying by RM13.7 million to allow for kickbacks back home.

Australian newspaper The Age, which made the allegations in an exclusive report today, also claimed the involvement of Mara, a government investment agency, which purchased the property in 2013.

The Age’s investigative report said that a group of Malaysian officials, using the Malaysian government’s investment funds, bid up the price for the Melbourne apartment block from A$17.8 million (RM51.5 million) to A$22.5 million (RM65 million).

The extra $4.75 million (RM13.7 million) was then laundered out of Australia and allegedly paid as bribes in Malaysia.

“The Malaysian firms that received the alleged kickbacks are closely linked to a senior figure at the Malaysian government investment agency, Mara.

“Another figure involved is a senior Malaysian official and former politician with close links to a Malaysian cabinet minister,” said the report.

Malaysiakini has e-mailed Rural and Regional Development Minister Mohd Shafie Apdal under whose watch Mara falls, Mara’s director-general Ibrahim Ahmad and its deputy director-general Salmah Hayati Ghazali for their responses to the corruption allegations.

The student hostel apartment bought by Mara was called the Dudley International House apartment block, located at the suburb of Caulfield.

The Age said about 150 Australian creditors, including tradesman and builders, have been left out of pocket or are facing bankruptcy after a company linked to the deal collapsed.


Money-laundering hub

The same group of high-ranking Malaysians were implicated in a deal involving A$80 million (RM231 million) worth of Australian property, including office or apartment blocks in Swanston, Queen and Exhibition streets in Melbourne’s CBD.

The newspaper said this was the first hard evidence of Australian property prices being inflated as real estate is used as a safe haven or money laundering hub by corrupt Malaysian government officials.

In May last year, Bernama reported that several Mara board directors and executives, headed by its chairperson Annuar Musa (photo) were in Melbourne to inspect two properties Mara had acquire, at a cost of about A$60 million, to house its students.

The 12-storey building at 746, Swanston Street, minutes away from the University of Melbourne and RMIT University, has 281 apartments, while the five-storey Dudley International House in the suburb of Caulfield, will accommodate 113 Mara students attending Monash University. The Swanston Street building was formerly a hostel for nurses.

Spokesman for the Mara group, Zainal Zol said Mara had more than 1,000 students in Australia with 309 based in melbourne and more than 500 in Sydney.

He said the visiting Mara leaders were pleased with the agency’s property acquisitions here.

The Bernama report also said executives from UEM Sunrise Berhad, one of Malaysia’s largest property developers and an arm of UEM Group Berhad, which is owned by Khazanah Nasional Berhad, were also in Melbourne to negotiate the development of two prime land parcels it had acquired in Melbourne’s CBD, in LaTrobe Street and MacKenzie Street.

Led by UEM managing director, Izzaddin Idris, they met the Victorian State Planning Minister Matthew Guy, Melbourne Lord Mayor Robert Doyle and Malaysian-born Ken Ong, head of the Melbourne City Council planning committee, to brief them on the projects.

Mohd Rameez said he was confident that both apartment developments will go ahead, thus enhancing Malaysia’s presence in Melbourne.

Malaysiakini has also e-mailed and texted Annuar who is also Umno supreme council member and BN Ketereh MP for his comments.

Sources: Malaysiakini, The Sun Daily, The Star/Asia News Network

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Remembering the legacy of Bandung, Sandakan death and Hiroshima bombing


THIS year marks the 60th anniversary of the historic Bandung Conference
and the 70th Anniversary of the end of the Second World War.
 A copy of the final “atomic bomb” leaflet, I think? I don’t read Japanese, but this was attached to the above memo. If you do read Japanese, I’d love a translation. Please ignore my thumb in the corner — it’s hard to photograph documents that are bound like these ones were.  http://blog.nuclearsecrecy.com/2013/04/26/a-day-too-late/

In order to commemorate the past, a series of conferences and events have been held, the most recent being the Afro-Asian Conference hosted by Indonesia President Jokowi this week. The first Bandung Conference was called by the first Indonesia President Sukarno in April 1955 among newly independent Asian and African nations, beginning what was later known as the Non-Aligned Movement against colonialism. Twenty-nine countries participated, representing 1.5 billion people or just over half of the world’s population. It was the first time that leaders of these countries met to discuss their future after the end of colonialism.

The conference was historic because it was attended not only by Indian Prime Minister Jawaharlal Nehru, but also Egyptian President Gamal Nasser, Chinese Premier Zhou Enlai, Muhammad Ali Jinnah of Pakistan, U Nu of Burma, Nkrumah of Ghana and Tito of Yugoslavia, all giants not only in their countries, but makers of history in the 20th century.

The United States did not attend because it was not sure whether it sided with the European colonial powers or its new role as an ex-colony liberating the world.

The Bandung Conference was a conference of hope that the newly independent nations would build themselves into a zone of peace, prosperity and stability. On the whole, despite some failures, they succeeded. By 2013, these countries together have a GDP of US$21.2 trillion or 28.1% of world GDP, significantly improved compared with their share of less than one-fifth of world GDP in 1955.

Aug 6, 2015 will also mark the 70th anniversary of the horrific atomic bombing of Hiroshima, which led to the end of World War Two on the Pacific side.

Lest we forget, World War Two was a horrific period, since the world lost between 50 million and 80 million people or 3% of world population. Japan lost 2-3 million during that war, but the rest of Asia suffered estimated losses of up to 10 times that number.

Even though memories are fading, there is still a generation who remembered the hardships and atrocies of war, from personal experience of family being killed, bombed or flight as refugees. Even a remote country like Australia could not escape that war. Australian soldiers fought heroically in Kokoda Trail to repell the Japanese invasion of Papua New Guinea in 1942. If not stopped, Australia could have fallen to Japanese hands, changing the course of history.

Image result for sandakan death marchBut the 625 Australian deaths defending the Kokoda Trail paled in comparison to the Sandakan Death March, in which 2,345 Australian prisoners of war died marching from their prisoner of war camp in Sandakan across primitive jungle in Sabah. Only six Australians survived those marches in early 1945, only because they escaped. One in 12 of every Australian who perished in the war died in that death march.

My impressions of this incident are indelible, growing up in Sandakan and following the trail across Sabah on a road built by the Australians to commemorate their dead. It fascinated me that man could be that cruel to other human beings to send them across the virgin jungle without food to certain death.

On June 9, 2014, when Japanese Prime Minister Shintaro Abe addressed the Australian parliament, he did mention Kokoda and Sandakan. In it, he did not offer an apology, but he did sent his “most sincere condolences towards the many souls who lost their lives.” This was very Japanese English, because one gives condolences to the living, not the dead.

Image result for Hitler's Abe imagesIn the Afro-Asian Conference this week in Bandung, he rephrased his words as follows, “Japan, with feelings of deep remorse over the past war, made a pledge to remain a nation always adhering to those very principles (of Bandung) throughout, no matter what the circumstances.”

We note that he is already shifting the official Japanese view on the war from his predecessors Murayama and Koizumi, who offered “deep remorse and heartfelt apology,” in their statements about the war in the 1995 and 2005 anniversaries respectively.

I always thought that the difference between remorse and shame is one that differentiates Western and Asian values. A remorse is a feeling of regret that something has happened but there is no sense of guilt. Shame is a feeling you have injured someone else and you feel guity about it, and you want to make amends.

There is a sharp difference between the German and Japanese attitudes. Seventy years after the war, the German courts are going to try the 93-year old “bookkeeper of Auschwitz”, whereas the Japanese are still revising their history books on what really happened.

What makes Abe’s “deep remorse” poignant is that he is a leader of a faction that wants to re-arm Japan by changing its constitution and he regularly visited or sent ritual offerings to the Yasukuni shrine, which contains the shrines for 14 class A war criminals. Even the Japanese emperor has not visited Yasukuni after these enshrinements.

Most Asians like myself have great respect for Japan, but feel uneasy that the Japanese are beginning to whitewash their role in the war. The Yasukuni shrine has an accompanying museum that seems to suggest not only that the Nanking massacre did not occur, but that US actions to deny Japan energy resources pushed it into war. But these do not explain why Japan invaded China in 1937.

On the commemoration of the 70th anniversary of the end of the Pacific War, will the US leader express an apology or remorse for bombing Nagasaki or Hiroshima? If the Japanese want to understand how the rest of Asia feels about its actions during World War Two, just changing the history book will not solve the deep sense of injustice that war brought to the region. Could those who died or suffered during that period appeal to the rule of law that Abe-san so proudly proclaim today?

All of us want to move on, but not through denying the past. As the philosopher Santayana said, those who cannot remember the past are condemned to repeat it.

Think Asian by Andrew Sheng

 President of Fung Global Institute
http://ineteconomics.org/people/andrew-sheng
Sheng is Malaysian Chinese. He grew up in British North Borneo (todaySabah, Malaysia). He left Malaysia in 1965 to attend the University ofBristol in England, where he studied economics.

Datuk Seri Panglima Andrew Sheng (born 1946) is a Distinguished Fellow of Fung Global Institute, a Hong Kong based global think tank. He started his career as an accountant. He served as Chairman of the Hong Kong Securities and Futures Commission (SFC) before his replacement by Martin Wheatley in 2005.

THE AUTHOR IS CHIEF ADVISOR TO THE CHINA BANKING REGULATORY COMMISSION, A MEMBER OF THE BOARD OF MALAYSIA’S KAZANAH NASIONAL BHD AND A MEMBER OF THE INTERNATIONAL ADVISORY PANEL TO THE AUSTRALIAN TREASURY’S FINANCIAL SYSTEM INQUIRY

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FireEye threats of cyber espionage loom with the coming 26th Asean Summit in Malaysia


Photo by hfuchs/Relaxnews.

PETALING JAYA: Regional government and military officials, businessmen and journalists involved with the coming 26th Asean Summit in Kuala Lumpur could be among the targets of a recently discovered cyber espionage group, claims an Internet security firm.

FireEye, which exposed the presence of the APT30 group of hackers snooping on governments and businesses, including those in South-East Asia, said some of its previous attacks had been launched before key Asean meetings.

“Based on previous experience, I believe that this group and possibly others will try to use that meeting (26th Asean Summit) as part of their ruse to potentially target businesses and governments in the region,” said Bryce Boland, FireEye’s chief technology officer for Asia Pacific in a telephone interview here yesterday.

In its report, FireEye, which is based in the United States, said APT30 had a distinct interest in organisations and governments associated with Asean.

The group had released a malware in the run-up to the 18th Asean Summit in Jakarta in 2011 and the Asean-India commemorative Summit in 2012.

One of the domain names it used to command its malware was aseanm.com

AFP had reported that the APT30 group was “most likely sponsored by China” and that there was no immediate reaction from the Chinese government, which had always denied allegations of cyber espionage.

The two-day Asean Summit from April 26 is expected to discuss various issues, including maritime disputes between China and Brunei, Malaysia, Vietnam and the Philippines in the South China Sea, and the formation of a single market and production base in the region.

“The hackers are after intelligence and information, primarily about political changes, political positions, especially over disputed territories, border disputes and trade negotiations,” said Boland.

“We have also seen that when they target journalists, they are specifically looking for information in relation to understanding concerns about the legitimacy of the PRC (People’s Republic of China),” he said.

The group has also attacked businesses to steal information on deals, manufacturing plans and intellectual property such as schematic diagrams.

According to the FireEye report, Malaysia is one of seven countries with targets hit by the group, which has operated largely undetected for the past 10 years.

Others are Thailand, Vietnam, South Korea, Saudi Arabia, India and the United States.

Boland said the group mostly attacked their targets via spear phishing emails with attachments that appeared to be from a known contact but were in reality sent by the hackers.

The attachment, which can be in the form of a document with an Asean-related title, will contain a customised malware that is activated the moment that it is opened.

It allows the attacker to gain control of the victim’s computer and retrieve information from it.

Boland advised computer users not to open suspicious e-mails.

“Businesses and governments should ensure that their IT infrastructure not only protects them from attacks but can detect the extent of damage done in the event of a successful hack.”

By Razak Ahmad The Star/Asia News Network

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