Jack Ma Ends 20-Year Reign Over Alibaba Wealth Creation Empire


Stepping down as chairman: Jack Ma waving while standing for a photograph with Alibaba CEO Jonathan Lu (left) and co-founder and vice-chairman Joseph ‘Joe’ Tsai in front of the New York Stock Exchange. Ma is giving up the reins of Alibaba Group Holding Ltd after presiding over one of the most spectacular creations of wealth the world has ever seen. — Bloomberg

Alibaba co-founder Jack Ma retires as CEO on 55th birthday

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Hong Kong in decline


Losing ground: China’s spectacular rise has affected Hong Kong’s thriving financial services industry, along with development of port services. – Reuters

https://youtu.be/elH1PrASTAU

 

TWO generations ago cheap goods from Hong Kong were labelled simply “Made in Hong Kong,” but their poor quality soon made that embarrassing.

For marketing reasons they were then labelled “Made in the British Empire” or “Empire Made.” Britain, home of the First Industrial Revolution, was better regarded than any Far Eastern outpost.

However, manufacturing could never suffice for Hong Kong’s economy because of limited land and rising property prices.

Enter the space-efficient financial services industry, along with development of port services. Then a generation ago Hong Kong began to face its biggest challenge: China’s spectacular rise.

But if Hong Kong would be part of China again, wouldn’t it also enjoy the mainland’s rising fortunes?

Hong Kongers always had a problem with the first part ever since Britain’s takeover in 1841.

From the late-1970s the West was all for China’s “opening up” policies. Hong Kongers looked across the water to see Shenzhen’s phenomenal rise from old market town to bustling modern metropolis.

Shenzhen had twice Hong Kong’s population and a much faster rate of development. As just one cog in China’s production behemoth, Shenzhen soon buried Hong Kong’s prospect as a manufacturing centre.

In global references Hong Kong-Shenzhen-Guangzhou is the world’s biggest productive mega region, demographically twice the size of the next biggest in Nagoya-Osaka-Kyoto-Kobe.

But Hong Kongers still regarded themselves as a breed apart from the mainland – a “Made in the British Empire” attitude dies hard.

Surely Hong Kong still had superlative status as a leading port and financial services centre?

Not quite, especially when Shanghai would soon outclass it on both counts.

Hong Kong slipped to fifth place among the world’s busiest container ports. Among the world’s Top 10, six are now on China’s mainland.

The Shanghai Municipality’s population is 3.5 times Hong Kong’s, with an area 5.7 times as large, meaning a more relaxed population density of just 62% of Hong Kong’s.

Shanghai’s 2018 nominal GDP was US$494bil (RM2.04 trillion), which was 136.1% of Hong Kong’s. Even Shenzhen is catching up with Hong Kong, falling short by just 3.3%.

Business is Hong Kong’s business, but the mainland is doing better in both performance and prospects.

The Hong Kong stock market is not necessarily stable. Since the 1960s it has experienced a dozen market crashes.

Shanghai’s Stock Exchange market capitalisation of US$5.01 trillion is larger than Hong Kong’s by 26.5%. Hong Kong’s exceeded Shenzhen’s by only 12.8%.

Hong Kong as business enclave has been eclipsed and outdone by the mainland. At the same time its future increasingly depends on the mainland.

Since 1997, Hong Kong dropped from representing 20% to just 3% of China’s GDP.

For China today Hong Kong is just another Chinese city, meaning it is dispensable. Shenzhen and the rest of the mainland do not need a nettlesome Hong Kong for China’s continued rise.

Hong Kong protesters have committed at least a dozen strategic errors.

  1. One, they assume Hong Kong is essential to the mainland’s future when only the reverse is true. There is no equivalence between Hong Kong and the mainland in any way that works for Hong Kong.
  2. Two, protest appeals to mainlanders for support mistakenly attempt to rekindle the spirit of Tienanmen Square protests a generation ago. Those protesters are now part of the system in a prosperous new China, actively engaged in business or government. Their original 1989 complaint of corruption in high places is keenly addressed by Beijing.
  3. Three, attempts to solicit mainlanders’ support are badly confused with prejudice against them. Within days of trying to spread the protest message to mainlanders in July, protesters attacked mainland traders, shoppers and tourists.
  4. Four, protesters violently attacked police personnel, alienating many Hong Kongers including most protesters. It signalled a slide towards civil disorder.
  5. Five, vandalising the Legislative Council building established illegal conduct and further alienated everyone else.
  6. Six, more violence was targeted at the liaison office when sympathisers had thought protesters would never do that. It confirmed the criminality discrediting the protests as a whole.
  7. Seven, besides disrupting traffic and commerce, harassing passengers at the airport and train stations. It did nothing to promote their cause to the general public but quite the opposite.
  8. Eight, protests did not subside even after Hong Kong’s Executive backed down on the extradition Bill. It revealed the unreasonable nature of the protests.
  9. Nine, no protester had demanded democracy for Hong Kong in 156 years of British colonial rule. If they had, they may have a legitimate basis for demanding democracy today.
  10. Ten, it was foolish to unfurl the Union Jack and call for reverting to British rule. Seeking the denial of democracy by a foreign hand exposes the hypocrisy of the protests.
  11. Eleven, it was foolhardy to unfurl “Old Glory,” calling for US intervention during a US-China trade war. With trade a major basis of Hong Kong’s survival, it was politically suicidal.
  12. Twelve, protesters fail to understand that no other country can or would do what is necessary to boost Hong Kong’s fortunes. Only the mainland can do that if it wants to.

Young protesters still to find employment amid poor conditions and rising costs may think they have legitimate grievances.

Yet all the solutions – more investment, better job prospects, even improved governance – can come meaningfully only via the mainland.

Beijing can deploy troops to Hong Kong, but to what end?

Hong Kong’s worst punishment is getting exactly what the protesters want – isolation. That will leave it further behind as the mainland prospers, surging ahead.

Hong Kong can stew in its own juices until tender. Beijing may let the anger fester and rot until then.

Hong Kong’s strength as money-making hub is also its weakness. Its stock market can crash again, which can also send a message to Taiwan.

Hong Kong tycoons are already looking for more places abroad to stash their fortunes. Without decisive mainland investment, the economic enclave can die a natural death.

What’s left of Hong Kong’s Establishment will then surely discipline rowdy mobs. The triads have already shown leadership here, symbolising the decline.

By Bunn Nagara, a Senior Fellow at the Institute of Strategic and International Studies (ISIS) Malaysia. The views expressed are entirely the writer’s own.

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Trade war spurs 1,360% investment jump in Malaysian state of Penang


The Malaysian state of Penang is winning from global investors’ search for safe havens, amid the U.S.-China trade tensions.

Foreign direct investments into its manufacturing sector surged 1,360% to 8.47 billion ringgit (US$2 billion) in the first quarter from a year ago, more than for the entire 2018. The state stands to gain from changes in the global supply chain as it’s well-connected with a strong talent pool and supportive public policies, Penang Chief Minister Chow Kon Yeow said in a Wednesday statement.

The state, already home to companies from Intel Corp. to Dell Technologies Inc., makes up 42% of Malaysia’s manufacturing FDI. Recent investments in Penang include U.S. semiconductor company Micron Technology Inc’s new solid-state drive assembly and testing centre, and Florida-based Jabil Circuit Inc’s purchase of 20 acres of land to expand its facility.

“Malaysia is reaping benefits from business relocation, as well as trade and investment diversions caused by the trade war,” Finance Minister Lim Guan Eng said in a Thursday statement, adding that the rise in investments as well as industrial production signal “healthy” economic growth in the second quarter.

Chow is wary of the near-term outlook and cautions that the investment surge may not be repeated in the second or third quarters. While some companies benefit from the trade war, others are negatively affected as their customers take a wait-and-see approach, he said. Penang’s investment outlook remains “on the right track” over the medium to long term, Chow said.

The state had moved quickly to court investors amid the trade war, signing a cooperation deal with China Chamber of International Commerce, giving subsidized rental rates for small businesses and setting up a seed fund for technology start ups.- Bloomberg

Penang bags big jump in investments 

More than RM8bil recorded in the first quarter of the year

Penang Chief Minister Chow Kon Yeow and State Tourism Development, Arts, Culture and Heritage Committee chairman Yeoh Soon Hin speaking during a press conference at KOMTAR. - LIM BENG TATT/The Star
Penang Chief Minister Chow Kon Yeow and State Tourism Development, Arts, Culture and Heritage Committee chairman Yeoh Soon Hin speaking during a press conference at KOMTAR. – LIM BENG
TATT/The Star

THE state recorded RM8.85bil in total approved manufacturing investments in the first quarter of 2019, exceeding the RM5.78bil it received for the whole of last year.

Chief Minister Chow Kon Yeow said the investments in the first quarter were 768% higher than the investments in the same period in 2018.

“Penang garnered 41 projects at the start of this year,” he said at a press conference held at his office in Komtar.

“They amount to RM8.85bil and will bring in more than 10,000 jobs.

“The state is a key contributor to the country’s foreign direct manufacturing investment (FDI), representing 42% of the country’s total FDI.”

Chow highlighted the many attractions of Penang for investors.

“We boast a robust supply chain, strong talent pool, well-established infrastructure and support services to investors.

‘The combination of all these advantages makes Penang a preferred destination for investments.”

He was quoting the latest data from the Malaysian Investment Development Authority (Mida).

However, Chow was more cautious about the business climate later this year.

He said that while Penang could remain a preferred investment destination in the mid to long run, the US-China trade war would have a huge impact in the coming two quarters of the year.

“We believe the meeting between Presidents Donald Trump and Xi Jinping later this month will be crucial.

“We feel our stellar performance in the first quarter might not be repeated in the second and third quarters of this year.

“Nevertheless, Penang’s investment outlook is on the right track over the medium to long term.

“The state government will continue to focus on bringing in high quality investments that can create high-value jobs and suit the state’s industry profile,” he said.

Penang’s approved manufacturing investments rise more than seven-fold in 1Q19

Penang attracted approved investments worth RM8.8 billion in the manufacturing sector in the first quarter (1Q) of 2019, up 763% from RM1.02 billion in the same period last year.

Chief Minister Chow Kon Yeow said despite the intensifying trade and technology disputes between the United States and China that created uncertainties in the global trade and economic outlook, Penang remained a favoured investment destination.

“According to the Malaysian Investment Development Authority (MIDA), from January to March this year, Penang successfully garnered 41 projects amounting to RM8.85 billion, which represented 35% of Malaysia’s total approved investments in manufacturing,” he told a press conference here today.

The approved manufacturing investments in 1Q19 had already surpassed the full-year approved investment figure of RM5.8 billion in 2018, he said, adding that they were expected to create 10,073 job opportunities in Penang.

Of the total investments approved in the quarter under review, foreign direct investment accounted for RM8.47 billion while the rest was domestic investment, Chow said.

“The optimal combination of robust supply chain, strong talent pool, well-established infrastructure and the state’s support services to investors makes Penang a preferred destination for investments,” he said.

However, Chow, who is also the chairman of the Penang Strategic Investment Advisory Council, said while Penang could be a preferred investment destination in the middle to long run, he was cautiously optimistic on the near-term outlook due to the latest trade war development.

He said there was a truce in the trade war in 1Q but the situation had worsened since.

“US President Donald Trump has threatened to slap tariffs on another US$300 billion of Chinese exports to the US, and the meeting between Trump and China’s leader Xi Jinping later this month is crucial,” he said.

He also cautioned that the superb investment performance in the manufacturing sector in 1Q might not be repeated in the second and third quarters; however, Penang’s investment outlook would be on the right track over the medium to longer term.

“Through InvestPenang, the Penang government will continue to focus on bringing in high quality investments that would create high value jobs and suit the state’s industry profile,” he said.- The Edge Market.
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5G to move Malaysia forward

Pride and prejudice


THE United States ranks low in the credibility stakes. It can no longer wax lyrical about free trade and fair play because the world now knows that when it finds itself facing stiff competition, it uses a ruling the magnitude of a nuclear bomb to retaliate.

Firstly, US president Donald Trump declared a national emergency and barred American companies from doing business with companies deemed a national security risk.

Then, companies like Google and Microsoft stopped making software and services available to Huawei, China’s biggest smartphone vendor.

The ban essentially means that future Huawei phones will no longer get Google play apps, YouTube, and almost certainly no updates to Android Q or other platform-level upgrades since these would require Google’s sign-off, too.

Sure, you can still make calls or use WeChat and other Chinese platforms, but for users in most parts of the world, the phone is pretty much useless.

Word is that Huawei poses a security risk, but no clarification has been forthcoming to what these threats include exactly.

There is a sense of déjà vu here.

The world was once told by the US and its allies that Iraq had weapons of mass destruction, but we learnt in the end there were none. Now, we have the Iran threat, but that’s another story all together.

From what little info has trickled into the worldwide web, the suggestion is that Chinese-manufactured devices have hidden back doors that could potentially allow an attacker to gain special access.

It sounds like a script excerpt from a James Bond movie, with spooks using a master password to break into high security facilities.

But incredibly, Huawei and ZTE Corp, another telecommunications equipment manufacturer, were cleared by the US House of Representatives permanent select committee on intelligence.

The two had been accused of providing “incomplete, contradictory and evasive responses to the committee’s core concerns” during their year-long investigation on the threat they supposedly pose to American interests.

In the end, the committee found no concrete evidence of infringement. But that didn’t stop the two companies from being labelled a national security risk and getting kicked out of the US.

IS, the German internet security watchdog, inspected Huawei laboratories in Germany and found no evidence of espionage, and The New York Times quoted American officials saying that the case against the company had “no smoking gun – just a heightened concern about the firm’s rising technological dominance”.

Rightly or wrongly, in the game of perception, the US has lost its moral ground. Thanks, in many ways, to an impulsive president.

Most of the world’s population thinks the bullying of Huawei is simply Trump’s hallmark. It isn’t about a security risk, but an economic threat.

Outside China, Huawei is arguably the most successful Chinese consumer brand so far. Thanks to a good and relatively cheaper product, it is now the second largest phone vendor in the world.

One strong accusation levelled at Huawei is that it enjoys Chinese government backing, and that China uses its spies to steal US technology for these private companies.

It’s a really warped perspective because, using the same logic, why is the US president taking such a hard line against a private company that’s merely selling phones?

The answer could well lie in the technology race.

Now, it’s about who launches 5G first, the next generation of mobile broadband imminently replacing 4G.

With 5G, we will see exponentially faster download and upload speeds. Huawei is widely renowned for being 12 months ahead of its competitors in the 5G race.

It began to develop its own 5G technology in as early as 2009. In 2013, Huawei hired more than 300 top experts from the wireless industry around the world and announced that they had invested US$600mil (RM2.5bil) in 5G research.

In 2016, Huawei set up a 5G product line for such devices.

What started as a three-man company now has thousands of employees engaged in 5G product development. Following this, in 2017, and then in 2018, Huawei invested almost US$1.4bil (RM5.8bil) in 5G product development.

The South China Morning Post has, however, also reported that apart from its tremendous commercial benefits, 5G – the fifth generation of mobile communication – is revolutionising military and security technology, which is partly why it has become a focal point in the US’ efforts to contain China’s rise as a tech power, and the Western nation’s allegations against Chinese companies is simply symptomatic of its insecurities.

“The future landscape of warfare and cybersecurity could be fundamentally changed by 5G.

“But experts say 5G is more susceptible to hacking than previous networks, at a time of rising security concerns and US-China tensions on various interconnected fronts that include trade, influence in the Asia-Pacific region and technological rivalry.

“These tensions provide the backdrop to controversy surrounding Huawei, the world’s largest telecoms equipment supplier.”

It’s also a fight between China and the US on who leads the artificial intelligence domain, as with 5G advancements, it means “whereas existing networks connect people to people, the next generation will connect a vast network of sensors, robots and autonomous vehicles through sophisticated artificial intelligence.

“The so-called Internet of Things will allow objects to ‘communicate’ with each other by exchanging vast volumes of data in real time, and without human intervention.

“Autonomous factories, long-distance surgery or robots preparing your breakfast – things that previously existed only in science fiction – will be made possible.

“Meanwhile, though, it is being identified by many military experts as the cornerstone of future military technology,” the newspaper reported.

As TV personality Trevor Noah says, humorously, in his show, the 5G war isn’t just about “loading an entire movie in three seconds but about the Chinese spying – which the US also wants to do.”

He sarcastically added that “the US is losing the 5G race and luckily, we have a maniac in our team who’s willing to play dirty.”

As the battle rages on, spilling into the already acrimonious US-China trade war, the controversy has become more bitter, and complicated, with the US egging its allies to ban Huawei from building its next generation of mobile phone networks. So far, Britain, Germany, Australia, New Zealand and Canada have either banned Huawei or are reviewing whether to do so.

Japan, a US ally, seems to have been dragged into the propaganda of persecuting Huawei, too.

In China, the actions against Huawei have stirred a storm of nationalism, with the Chinese calling for a boycott of iPhone, a reaction which could eventually affect other American and European products, at the rate things are escalating.

Even within the Chinese diaspora, the messages of unequivocal support for Huawei have gone viral in the world’s social media sphere.

The irony is that the iPhone is not only assembled in China, but its very inception starts in that country at a much earlier stage, and from a much deeper part of the earth, too.

At least 90% of rare earth minerals – naturally occurring solids whose combination comprises essential iPhone parts – are mined in China, notably in Mongolia, it’s reported.

“Lanthanides, scandium, yttrium and some other alien-sounding names at the bottom of the periodic table (remember your secondary school?) make the iPhone ‘light, bright and loud.’ Its colour screen, glass polishing, circuitry, speakers and vibration unit come from a mix of these rare earth minerals,” it says in Finances Online.

The report added that where American companies would take months to pool thousands of industrial engineers, and even more months to construct new assembly lines to accommodate a trivial but urgent change in an iPhone spec (say, its glass panel needing to curve to hatch on the body six weeks prior to launching), it only takes 15 days in China to do the same.

“To put it in perspective, one production line in China can assemble 72,000 iPhone 5 back plates daily; one factory can have four to five production lines and China can have as much as a hundred of these factories, opening or closing a few of them depending on the current demand.

“The last part – opening and closing plants like a mom-and-pop store – is almost impossible in an American economy.

“It is no longer a city counting the number of manufacturing plants it has, but the manufacturing plant can be counted as a city in many Asian economic zones.”

And it’s common knowledge that Mickey Mouse merchandise is made in China, and likewise all the branded sportswear sold globally. The profits these companies are raking in are simply down to the low cost of operation.

Trump should know and do better. Instead of threatening and bullying Huawei with trumped up charges, he should urge American companies to be more competitive, make better products and keep prices low.

I am dumping my iPhone, upgrading my South Korean Samsung and for the first time, getting myself a Huawei. I hear the camera is really good, and it doesn’t even need a zoom lens for magnification. And that sophistication comes from a license to thrill.

By Wong Chun Wai

Wong Chun Wai began his career as a journalist in Penang, and has served The Star for over 27 years in various capacities and roles. He is now editorial and corporate affairs adviser to the group, after having served as group managing director/chief executive officer.

On The Beat made its debut on Feb 23 1997 and Chun Wai has penned the column weekly without a break, except for the occasional press holiday when the paper was not  published. In May 2011, a compilation of selected articles of On The Beat was published as a book and launched in conjunction with his 50th birthday. Chun Wai also comments on current issues in The Star.

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China digs in for protracted trade fight with US – The Sun Daily

 

Commentary: China fights U.S. trade bullying with “Long March” spiri

Trade war gives US unfavorable image

US President Donald Trump on Thursday announced a $16 billion aid package for farmers to offset their losses from the trade war with China. He said the package “will be paid for by the billions of dollars” from tariffs on Chinese imports.

Bannon promotes economic fascism

All Chinese companies wishing to get to the high-tech mountaintop should learn from Huawei’s composed example. If only there were a group of Chinese companies sharing intellectual property with foreign partners, then certain malicious forces would hesitate at a crackdown.

Fast economic development best way to deal with security challenge

China’s economic potential is far greater than that of the US, the largest economy. There is no doubt that China’s economic prospects are the best in the world. These facts drive China’s core competitiveness. They will make Washington feel its ability falls short of its wishes when it comes to containing Beijing.

US orchestrates self-defeating maneuvers

Chinese people do not know whether we should call US approaches hegemonic politics or profiteering politics. But in short, they are crooked means. The threat of tariffs will not work. Neither will US threats against Chinese companies create a shock wave against China. The US is picking a wrong opponent at a wrong time. It will find no way of crafting a good result from a strategic mistake.

Growing US pressure won’t force China to submit

The US is having a profound effect on the global economic order by abusing national security and trampling on commercial principles. Current US administration is destroying the reputation and national image that generations of Americans have built. Such arrogance and hegemony are by no means good signs for the US.

China won’t flinch in face of tough-talking US


The US will raise tariffs from 10 percent to 25 percent on $200 billion worth of Chinese imports effective Friday, according to a notice posted to the Federal Register.

The announcement was made at 8:45 pm on May 8 (Beijing time). At 11:23 pm, the Chinese Minister of Commerce said that China will have to take necessary countermeasures if the US goes ahead with its plan to increase tariffs on Chinese imports. Although China’s announcement was made in a calm and peaceful manner, it has shown the country’s unswerving resolution to defend its own interests.

Washington has lit the fuse on escalating China-US trade tensions. Beijing had announced it would send a delegation for the May 9 consultations before Washington’s May 8 announcement. At this critical time, Washington’s imprudent move is clearly an extreme means of sending an alarming message to China. Washington must have expected the Chinese delegation would rush to the US and seize every opportunity to reverse the situation. Instead, the Chinese delegation decided to fly to the US one day later than originally planned. This is the way Chinese express their will and determination.

The 11th round of China-US trade talks in Washington on May 9 looks like a “Banquet at Hongmen.” On the one hand, Washington is lighting a fuse on escalating trade tensions; and on the other they still want to continue negotiating with the Chinese delegation. By doing so, they have set a new precedent in the history of trade talks.

Many people may ask: Under such circumstances, why is Beijing still sending the delegation to Washington? In fact, it’s really Washington that should be answering the question: Under such circumstances, why is the Chinese delegation invited to Washington for more trade talks?

The answer is simple. Both China and the US want to finalize a trade deal. Obviously, there are some issues that are difficult to overcome for both sides. It seems that both are now mentally prepared for a transition from truce talks to the mode of “fighting and talking” at the same time.

It is a great pity that after meeting halfway on most of their differences, China and the US have not been able to reach consensus on the last few core issues. Those issues are not supposed to come up as they specifically reflect the unreasonable demands by the US. Their emergence is rooted in the misguided perception that the US is privileged by its strength. That misconception has also motivated the latest unexpected tariff rise announced by Washington.

China has turned down the US demands at the final stage of negotiation. It was not only encouraged by its strength, but also motivated by its belief in the principle of equality. China is not afraid of conflict with the US at the last moment. In the face of the “big stick” of the US tariff threats, China has once again demonstrated its confidence in coping with an escalated trade war.

Since neither side has given up on the idea of making a deal, and it is the ultimate goal of both countries, the latest round of China-US trade talks is expected to be conducted in a climate of uncertainty, including that of a looming escalated trade war. Such a scenario has rarely been seen in the history of trade talks.

Will the US hit the brakes on the trade war at the last minute? Chinese want to know the answer to that question, but Americans are more concerned. Washington has found itself caught in a dilemma between its ambition to gain the upper hand in trade over China and its desire to minimize any negative impacts on its stock market. Beijing is serious about both trade talks and trade wars. Now, it is fully ready to switch to the mode of “fighting and talking.”

China is well prepared for an escalation in trade tensions. A variety of plans are in place, such as countermeasures for any tariff rise, and favorable policies to minimize losses for Chinese enterprises. Mentally and materially, China is much better prepared than its US counterpart.

In the face of the imminent, unique “Banquet at Hongmen,” Chinese have full confidence in their delegation. Members of the Chinese delegation not only have the experience and wisdom to cope with the situation, but they also have the firm support and trust of the entire Chinese society.

Undoubtedly, the delegation will bring both the strong will and goodwill of the Chinese government and people to Washington at this critical juncture.

If there is a new round of tariff conflicts, it would be a repeat, or an enhanced version of what happened in the past. It would definitely incur losses for China and the US, losses that are both direct and indirect, explicit and implicit. Anyway, the total scale of losses on both sides would be roughly the same. If Washington has its mind set on going back down the path of a trade war, then China will fight it to the end. China has always had a firm stand on a trade war: China does not want it; China is not afraid of it; China will launch it when necessary.

Seeking fairness and justice on the global stage sometimes requires a huge price. It also can be costly for different parties to reach consensus. In the past year, China and the US have been locked in a trade war and have had 10 rounds of trade talks. However, the two sides have failed to meet each other halfway to make a deal. Many are wondering how much it will cost the two countries before a final agreement is made. If the latest round of talks in Washington fails to solve the puzzle, then the two countries will have to keep searching for the answer in the future.- Global Times

Read more ..

China ready for any outcomes in trade talks with US

US President Donald Trump’s threat of increased tariffs
on Chinese goods has added more uncertainty to trade talks with China.
Some observers are worried that a tough stance may be …

Source: Global Times | 2019/5/8 20:38:40

China holds winning card in trade conflict with the US

Stocks in the Chinese mainland recovered from a deep
plunge triggered by concerns about an escalating trade battle with the
US on Monday, with the benchmark Shanghai Composite Index gaining

China ready for prolonged US trade war

After US officials threatened to escalate its trade war
with China, rattling global financial markets and angering some US
businesses, there is a distinctive, palpable level of calmness in China.
Many in the foreign press gushed about how calm China was over the
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Malaysia’s economy: Fine growth with minimal inflation


The economy continues to chug along just fine even as it recorded the first inflation of the year in March. The consumer price index (CPI) rose 0.2% in March 2019 from the previous year.

The recovery away from a deflation in the previous two months was driven by the transport and the food & non-alcoholic beverages components of the CPI.

MIDF Research said in its report that the country’s consumer inflation is likely to stay low following the lower capped prices of RON95 and Diesel at RM2.08 and RM2.18 per litre respectively.

Nevertheless, it said that the demand-push factor remains firm amid stable job market and steady wage growth.

Meanwhile, labour force growth has maintained at 2.1% year-on-year (yoy) in Feb 2019 while employment growth inched down to 2.1% yoy while jobs added in the economy was recorded at 34,000.

It noted that the number of unemployed people officially increased by 1.6% yoy.

But it noted also that growth in both the labour force and employment continued to outpace unemployment growth for the last 24 months since Mar 2017.

“The stable job market reflects healthy development of Malaysia’s economy and provides solid support to domestic demand,” the research house said.

Meanwhile, exports dropped 5.3% yoy in Feb 2019, the lowest in more than two years mainly due to a short calendar month on top of the long Chinese New Year (CNY) holidays.

Imports also fell and it declined more than exports at 9.4% yoy.

During the CNY holidays, all Chinese factories were shut down with most of them closed one or two weeks prior to the festive holidays. As the celebration put a halt to mass production, it disrupted the global supply chain resulting in a weak trade performance.

All sectors recorded a negative exports growth: agriculture (-13.7% yoy), manufacturing (-4.3% yoy) and mining (-5.5% yoy).

Despite the poor exports and imports figures, trade surplus maintained at above RM11bil in Feb 2019.

When compared with the previous month, both exports and imports contracted by 22% and 24.8%

respectively.
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Are fears of ringgit weakness exaggerated ?

 

 

FELDA WHITE PAPER reveals SHADY DEALS


 

These penyangak-penyangak left their marks … we are left to clean up. – Tun Dr Mahathir Mohamad
Settlers were facing hardship, yet new cars were bought. – Datuk Seri Anwar IbrahimThese actions were not only irresponsible but criminal in nature. – Datuk Seri Azmin AliFelda only incurred losses after Pakatan took over the government. – Datuk Seri Ahmad Maslan
 

The chairman held positions in as many as 39 Felda subsidiaries. Even more shocking is that billions were used to ‘buy’ political support and a stake in an Indonesian firm was acquired for 344% more than it actually costs. And the agency’s debts rose by 1,100% in 10 years

Video:

 ‘Irresponsible and criminal’

 

KUALA LUMPUR: The Felda White Paper was tabled in Parliament, during which the government accused the previous administration of, among others, shady transactions and conflict of interest.

The Dewan Rakyat was told that some RM2.7bil of Federal Land Development Authority (Felda) money was used to buy political support before the last general election in May 2018.

Economic Affairs Minister Datuk Seri Azmin Ali, in tabling the White Paper on Felda in Parliament yesterday, said it was “corporate malfeasance” that led to Felda suffering massive losses.

He also alleged that former prime minister Datuk Seri Najib Razak was implicated in “shady deals”.

“(Najib), who was known as MO1 and who was the finance minister at the time, was involved in the investment process. These actions were not only irresponsible but criminal in nature,” he claimed.

Azmin cited the purchase of Indonesian company PT Eagle High Plantations Tbk from PT Rajawali Capital at a higher market rate as an example of the abuse of Felda funds.

He added that as of March this year, the RM2.3bil investment was only worth RM500mil.

On Tuesday, Felda director-general Datuk Dr Othman Omar lodged a police report claiming that Najib had pushed it into investing US$505mil (RM2.07bil) in Eagle High.

In the report, he said the amount paid to acquire a 37% stake in the Indonesian company was 344% more than its actual value of US$114mil (RM466.9mil).

Eagle High is part of the Rajawali Group owned by Peter Sondakh, who Othman claimed was close to Najib.

In black and white: Azmin with (from left) Felda chairman Tan Sri Megat Zaharuddin Megat Mohd Nor, his deputy Senator Dr Mohd Radzi Md Jidin and Othman showing the Felda White Paper at Parliament.

Azmin added that Felda’s debts had drastically risen by 1,100% from RM1.2bil in 2007 to RM14.4bil by 2017.

He also said there was a conflict of interest by former Felda chairman Tan Sri Mohd Isa Abdul Samad – referred to as FO1 – by holding positions in 39 other subsidiaries under Felda and Felda Global Ventures (FGV).

Isa, who was appointed as Felda chairman from January 2011 until January 2017, was FGV chairman as well as FIC chairman.

Later, wrapping up his reply to debate on the White Paper, Azmin said the government would adopt a new model in managing land under Felda which had been leased to FGV.

In his winding-up speech, Azmin acknowledged that it was difficult to return the land to settlers as Felda had leased it to FGV under a 99-year agreement.

“However, Felda is in the midst of reviewing the terms of the agreement with FGV so that it would benefit all parties, particularly settlers and Felda, although the land does not belong to them,” he said.

He added the White Paper on Felda would seek a new model to manage Felda land to ensure more profitable economic scale of return.

On claims by opposition lawmakers that Felda had made a loss after Pakatan took over, Azmin clarified that Felda’s true net value was only revealed after an impairment exercise was carried out on its assets.

He said the former Felda management had failed to carry out an impairment exercise to value its investment and kept quiet about it until 2018.

“They did not do the impairment exercise so the books would look good. If the management was honest, they would have carried out an impairment exercise between 2013 and 2016 to determine best value of the investment,” said Azmin.

He said when land was managed by Felda itself, it managed to obtain nett profit of RM1bil to RM2bil.

By Jagdev singh sidhu, martin carvalho, hemananthani sivanandam, rahimy rahim, and tarrence tan The Star

Planting seeds to a new Felda

 New beginnings: The new Felda aims to be run as a well-functioning corporation with better internal controls.

New beginnings: The new Felda aims to be run as a well-functioning corporation with better internal controls.

THE scale of malfeasance was staggering. The White Paper on the goings-on in Felda and its subsidiaries read like a litany of wrongdoings that breached proper governance standards that most companies have to prescribe to.

There were many reasons why the checks and balances within Felda failed, largely because there was none. The concentration of authority within the hands of a few individuals, with little exercise of fiduciary duty by other members of the board, meant a free hand for the few.

The forensic audit conducted by Ernst & Young detailed the collapse of internal controls and oversight in a number of deals done by Felda. Overpriced deals were made and in the end, it was the settlers that bore the brunt of the consequences.

Charges have been filed against former Felda chairman Tan Sri Mohd Isa Abdul Samad, and given the scale of alleged fraud that had taken place, more police reports are about to be lodged in the days and weeks ahead. And more people are expected to face charges.

All of that will mean that justice to what had happened at Felda will be sought. That process will take time, but in the meantime, the main thrust of the White Paper, apart from detailing the cocktail of crimes, was what to do with Felda next.

The key take-away from the report was that there will be a new Felda. The old one, with its own legacy problems, meant that it will be best to start over again with a new focus.

The financial performance of Felda warrants the change as it has been losing money since its unit FGV Holdings Bhd was floated on Bursa Malaysia and its debt ballooned from RM1.2bil in 2007 to RM14.4bil in 2017. And its assets just about doubled. From those numbers alone, it was imperative that financial assistance from the government be extended to rehabi­litate Felda.

The government will inject RM6.23bil into Felda in stages in the form of grants, loans and guarantees and much of that money will actually go towards reworking Felda.

The agency’s debt will be taken care of and so will the settlers’ loans. Housing for second-generation Felda settlers will be built and RM480mil will be given to help pay for their living cost.

In changing Felda from what it is now to what it should morph into, the government will inject RM1bil for the settlers to plant new cash crops.

Relying on palm oil and rubber alone has been good, and the settlers and Felda benefited from that. But in today’s world, other cash crops have gained prominence over the golden crop of Malaysia.

With the price of food, which includes fruits and vegetables, along with livestock, having increasing value, the shift towards these crops is understandable and inevitable.

Settlers will be able to get more income from cultivating such crops and rearing livestock to go along with the lease agreement they can get by agreeing to allot their rights to their oil palm estates to Felda for a steady monthly return.

Felda can then use the economies of scale from the amalgamated lands and better productivity to generate higher returns. The use of modern technology in farming Felda land is also in the right direction.

The other steps put forward by Economic Affairs Minister Datuk Seri Mohamed Azmin Ali is to have better infrastructure in the areas within the scheme, improve development of human capital and a host of other measures that seek to revitalise the prospects of the settlers and their next generation.

The new Felda aims to be run as a well-functioning corporation. Governance, transparency and all the other buzzwords that mean better internal controls and eliminating corruption needed to be done.

Having professionals run Felda is the correct move and with all of this, it is hoped that Felda will shed its sordid past and return the agency to what the settlers and their kin have sacrificed for.

The overarching intention of the revamped Felda is to make sure that only the welfare of the settlers and the agency are taken care of.

It is also a political move to ensure that a key vote bank that helped swing the tide of the last general election remains intact. But beyond the politics, the revamp of Felda is a much-needed move that will only serve to benefit those involved in the scheme and the country.

It is the right thing to do.THE scale of malfeasance was staggering. The White Paper on the goings-on in Felda and its subsidiaries read like a litany of wrongdoings that breached proper governance standards that most companies have to prescribe to.

There were many reasons why the checks and balances within Felda failed, largely because there was none. The concentration of authority within the hands of a few individuals, with little exercise of fiduciary duty by other members of the board, meant a free hand for the few.

The forensic audit conducted by Ernst & Young detailed the collapse of internal controls and oversight in a number of deals done by Felda. Overpriced deals were made and in the end, it was the settlers that bore the brunt of the consequences.

Charges have been filed against former Felda chairman Tan Sri Mohd Isa Abdul Samad, and given the scale of alleged fraud that had taken place, more police reports are about to be lodged in the days and weeks ahead. And more people are expected to face charges.

All of that will mean that justice to what had happened at Felda will be sought. That process will take time, but in the meantime, the main thrust of the White Paper, apart from detailing the cocktail of crimes, was what to do with Felda next.

The key take-away from the report was that there will be a new Felda. The old one, with its own legacy problems, meant that it will be best to start over again with a new focus. The financial performance of Felda warrants the change as it has been losing money since its unit FGV Holdings Bhd was floated on Bursa Malaysia and its debt ballooned from RM1.2bil in 2007 to RM14.4bil in 2017. And its assets just about doubled. From those numbers alone, it was imperative that financial assistance from the government be extended to rehabilitate Felda.

The government will inject RM6.23bil into Felda in stages in the form of grants, loans and guarantees and much of that money will actually go towards reworking Felda.

The agency’s debt will be taken care of and so will the settlers’ loans. Housing for second-generation Felda settlers will be built and RM480mil will be given to help pay for their living cost.

In changing Felda from what it is now to what it should morph into, the government will inject RM1bil for the settlers to plant new cash crops.

Relying on palm oil and rubber alone has been good and the settlers and Felda benefited from that. But in today’s world, other cash crops have gained prominence than the golden crop of Malaysia.

With the price of food, which includes fruits and vegetables, along with livestock, having increasing value, the shift towards these crops is understandable and inevitable.

Settlers will be able to get more income from cultivating such crops and rearing livestock to go along with the lease agreement they can get by agreeing to allot their rights to their oil palm estates to Felda for a steady monthly return. Felda can then use the economies of scale from the amalgamated lands and better productivity to generate higher returns. The use of modern technology in farming Felda’s land is also in the right direction.

The other steps put forward by Economic Affairs Minister Datuk Seri Mohamed Azmin Ali is to have better infrastructure in the areas within the scheme, improve development of human capital and a host of other measures that seek to revitalise the prospects of the settlers and their next generation.

The new Felda aims to be run as a well-functioning corporation. Governance, transparency and all the other buzzwords that mean better internal controls and eliminating corruption needed to be done. Having professionals run Felda is the correct move and with all of this, it is hoped that Felda will shed its sordid past and return the agency to what the settlers and their kin have sacrificed for.

The overarching intention of the revamped Felda is to make sure that only the welfare of the settlers and the agency are taken care of. It is also a political move to ensure that a key vote bank that helped swing the tide of the last general election remains intact. But beyond the politics, the revamp of Felda is a much-needed move that will only serve to benefit those involved in the scheme and the country.

It is the right thing to do.

By jagdev singh sidhu The Star

 

 

 

 

Taking Felda forward the smart way – Nation 

 

 


Police may summon VIPs for Felda probe

 

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MACC starts probe on Felda Global Ventures Holdings Bhd (FGV) 

Making the corrupt fear whistleblowers, not the other way !

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