India, China launch joint training for Afghanistan, plan more projects


Sanjeev Miglani October 15, 2018

NEW DELHI (Reuters) – India and China launched a program on Monday to train Afghan diplomats and China’s ambassador said it would likely be followed by joint programs in other fields to help war-torn Afghanistan.

Such cooperation is the first by the two Asian giants which have long been locked in a tussle for influence in a region stretching from Nepal to Sri Lanka and the island chain of the Maldives.

Within Afghanistan, India and the China have been on opposite sides with China relying on its old ally Pakistan as it seeks to stabilize Afghanistan by various means, including brokering talks to end the Taliban insurgency.

India, on the other hand, has invested billions of dollars in economic projects and training of military officers to strengthen the Afghan government in its fight against the Taliban.

For its part, Pakistan sees the expansive diplomacy in Afghanistan by its old rival, India, as a way to encircle it.

China’s ambassador to India said the joint training of 10 Afghan diplomats at the Indian Foreign Service Institute was the first step in China-India-Afghanistan cooperation that was agreed at a summit between President Xi Jinping and Indian Prime Minister Narendra Modi this year.

“This is just the beginning. China and India have respective advantages. For example, India has remarkable edge in agriculture and medical services, and China in hybrid rice and poverty reduction,” the ambassador, Luo Zhaohui, said in a speech.

“I am sure that in the future days China-India cooperation in Afghanistan will span from training program to more concrete projects.”

Modi and Xi agreed to handle long-standing political differences peacefully at their summit in China, just months after a dispute over a stretch of their Himalayan border near the tiny state of Bhutan rekindled fears of war.

Luo said India-China cooperation in Afghanistan should be extended to countries such as Bhutan, Nepal, the Maldives, Myanmar and even Iran.

In many of these countries, China is helping to build infrastructure as part of its Belt and Road Initiative, which India sees as a bid by China to expand its influence.

China’s call for partnership comes just a week after its embassy in New Delhi said India and China must deepen their cooperation to fight trade protectionism, as it criticized the United States for what it termed provoking disputes.

Reporting by Sanjeev Miglani; Editing by Robert Birsel

Source: Reuters “India, China launch joint training for Afghanistan, plan more projects”

Note: This is Reuters’ report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.

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Exploit China’s Market Opening instead of Waiting for Political Change


Reuters says in its report “China to show off its zeal to import but business awaits policies”, “China will soon host a huge trade fair to highlight its commitment to free trade and show off its willingness to import, but skeptical foreign businesses and diplomats say they want to see concrete policy changes to improve market access.”

Those skeptical foreign businesses will lose the golden opportunity to take and expand their shares in the Chinese market.

China’s policies are very clear for them. It wants to switch to innovation-, creation- and consumption-geared economic growth. To increase consumption, China has to import more goods from abroad, especially goods of fine quality, which usually contain better technology. Such goods will enlighten Chinese scientists and engineers in their innovation and creation. The success of imported goods will give them incentives to develop better goods for Chinese consumers.

Foreign businesses have to export goods better than China’s to grab a share of the Chinese market and develop even better goods to maintain their market share. Otherwise, they will lose their chances in China’s vast and fast growing market.

As for the “substantial new market-opening policies” Reuters says some are waiting for, Chinese leaders have declared China’s new policies that they must be very clear about. What they are waiting in essence is that China will be a free market like an ideal Western one.

Do not forget, China has never been a democracy in Western sense in its thousands years of history. Since the Qin Dynasty more than 2,000 years ago, China has been a centralized empire for most of the time.

Centralism remains the dominate principle in China’s political system as indicated by the stress of Party leadership in Xi Jinping Though on Socialism with Chinese Characteristics for a New Era.

If the Party wants further opening, no other political force can stop that. So will be the case if the Party wants the opposite. However, if you have got and maintained a market share in China and make Chinese people like and get used to using your products, it is difficult for the Party to drive you away even if it wants to close its door because the Party adheres to its doctrine of “putting the people first.”

Judging by China’s ambition as reflected in its Made in China 2025, China wants not only to replace import of high-tech products with Chinese ones but also export its high-tech products abroad. Therefore, it has to open its market so that other countries may not close their markets to Chinese goods.

China has the confidence that it will be a winner in competition. Without such confidence China can never realize its China Dream.

Do you have such confidence to compete with China. If you haven’t, you’d better avoid Chinese market and even close your market to future Chinese high-tech goods.

From that point of view, US trade war against China is suicidal.

Comment by Chan Kai Yee on Reuters’ report, full text of which can be viewed at https://www.reuters.com/article/us-china-trade-expo/china-to-show-off-its-zeal-to-import-but-business-awaits-policies-idUSKCN1MP2OJ.


Growing impact: a third of Japan Inc hurt by U.S.-China trade war – Reuters poll


Tetsushi Kajimoto October 16, 2018

TOKYO (Reuters) – The number of Japanese companies affected by the U.S.-Sino trade war has jumped to a third, soaring from just 3 percent in May with firms fretting about prospects for their exports from China as well as slower Chinese demand, a Reuters poll found.

The survey also showed 53 percent of firms were worried about the fallout from the escalating trade friction and that some, albeit still a small percentage, had begun looking at shifting production of exports out of China to other countries.

Of the companies citing an impact, the vast majority said they were feeling the effect ‘to some extent’, with only 2 percent calling the impact large.

The fear is, however, that the fallout will become much worse.

“If it does become a fully fledged trade war, then this could hit Japanese exports and supply chains, in turn hurting capital expenditure and dampening consumer spending and potentially damaging Japan’s entire economy,” said Masaki Kuwahara, senior economist at Nomura Securities, who reviewed the survey results.

Washington in September levied tariffs of up to 25 percent on $250 billion of Chinese goods as punishment for what it says are unfair trade practices, while Beijing has hit back with tariffs on about $60 billion of U.S. imports.

U.S. President Donald Trump has since threatened to slap tariffs on an additional $267 billion of Chinese imports.

“The trade friction is having a big impact on exports from China of the raw materials used to build products in the United States,” a manager at an auto-sector firm wrote.

“Even if we consider measures to avoid tariffs, there’s a limit to what we can do,” the manager added.

The survey, conducted Sept. 27-Oct. 10, showed non-manufacturers firms were just as worried as manufacturers about the fallout.

“Any direct impact may be small, but sluggish business conditions and anxiety about the future could cause a decline in demand in the medium to long term,” wrote a manager at a construction firm.

Companies responded anonymously to the survey, conducted for Reuters by Nikkei Research. It polled 482 large and mid-sized non-financial firms, about 240 of which responded to the question about on the extent of the impact of the trade war.

Asked if they had an export base in China and were thinking of moving any facilities out of the country, 13 out of 97 firms that responded to the question said they were considering such a move.

Among the firms looking at shifting production, most said they were considering Southeast Asia as an alternative, while some were thinking about bringing output back home. None chose the United States.

Firms that have publicly said they could shift production include Toshiba Machine Co (6104.T) which has said it plans to move output of U.S.-bound plastic moulding machines from China to Japan or Thailand. Mitsubishi Electric Corp (6503.T) is shifting output of U.S.-bound machine tools from its base in Dalian, in northeastern China, to a Japanese plant in Nagoya.

The survey also found that 40 percent of Japanese firms thought the trade conflict could disrupt supply chains over the next three years, with many citing fears that prices for imports of raw materials and parts could surge.

“If major U.S. companies like Google, Amazon and Apple start bringing production home, that could destroy Chinese parts makers with which we do business,” a manager at a machinery maker also wrote.

Only 11 percent of firms said, however, that they were currently considering steps to deal with a potential escalation of trade spats.

Of those considering contingency measures, shifting production as well as diversifying sales and procurement routes were the most often cited.

The International Monetary Fund last week lowered its global economic growth forecasts for this year and next, predicting 3.7 percent for both years instead of 3.9 percent, citing trade policy tensions and the imposition of tariffs as a key factor behind the cut.

Reporting by Tetsushi Kajimoto; Editing by Malcolm Foster and Edwina Gibbs

Source: Reuters “Growing impact: a third of Japan Inc hurt by U.S.-China trade war – Reuters poll”

Note: This is Reuters’ report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.


Egypt minister sees no threats attached to China investment


Fransiska Nangoy, Ed Davies October 14, 2018

NUSA DUA, Indonesia (Reuters) – Egypt is only accepting Chinese investments in projects that are mutually beneficial, its investment minister said on Sunday, amid growing scepticism in some countries about risks tied to ‘Belt and Road’ investments.

The Belt and Road initiative is an ambitious plan to expand the trade corridor for the Asian giant to link Asia, Europe and Africa, pumping credit into building roads, railways and ports in a trillion-dollar infrastructure drive.

Egypt and China had signed deals worth $18 billion as part of the Belt and Road initiative, Investment and International Cooperation Minister Sahar Nasr said in an interview on the sidelines of the International Monetary Fund-World Bank meetings in Bali.
Nasr said Egypt was only accepting mutually beneficial projects.

“If we have more Chinese industries in Egypt, creating jobs for us, making us less dependent on certain imports and in fact exporting to Europe to Africa, its a win-win,” she said.

Nasr said Egypt was taking care to diversify its source of financing, even within the same sector, noting that while China was involved in building a railway, locomotive and train carriages were being sourced from elsewhere.

Malaysia, one of the top recipients of China’s largesse, recently suspended work on a $20 billion rail link between its east and west coasts with the Malaysian prime minister describing terms for the project as “damaging” to its economy.

The Belt and Road initiative has also been met with growing scepticism in countries such as Sri Lanka, which have been saddled with debt that is difficult to repay.

China’s vice finance minister Zou Jiayi on Saturday acknowledged debt issues with some of Belt and Road projects, saying the government would strengthen macro-supervision on the debt sustainability aspect of its overseas investments.

The biggest foreign investors in Egypt are currently European countries, as well as the United States.

Nasr said Egypt, which is undertaking deep reform after a 2016 deal with the IMF, was a bridge between Asia and Africa due to access to the Suez canal and trade agreements with the rest of Africa.

She said China’s Belt and Road investments included energy projects, a railway, real estate and an oil refinery.

The minister is targeting $10 billion in foreign direct investment (FDI) in the 2018/19 fiscal year, up from $7.9 billion in the year ended June 2018.

Nasr also said she wants local companies to invest more because “if the foreign investors don’t think the Egyptian investors are confident and reinvesting in Egypt it will be very difficult for me to bring in FDI.”

Additional reporting by Yawen Chen; Editing by Richard Pullin

Source: Reuters “Egypt minister sees no threats attached to China investment”

Note: This is Reuters’ report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.


China central bank chief says plenty of room for monetary adjustments amid trade row


Yawen Chen October 14, 2018

NUSA DUA, Indonesia (Reuters) – China central bank governor Yi Gang said on Sunday he still sees plenty of room for adjustment in interest rates and the reserve requirement ratio (RRR), as downside risks from trade tensions with the United States remain significant.

China faced “tremendous uncertainties” due to the impact of tariffs and trade frictions and was seeking a “constructive solution” to the current trade tensions, Yi said at a seminar on the sidelines of the annual International Monetary Fund and World Bank meetings on the Indonesian island of Bali.

“We still have plenty of monetary policy instruments in terms of interest rate policy, in terms of RRR. We have plenty of room for adjustment, just in case we need it,” Yi said.

Beijing and Washington have slapped tit-for-tat tariffs on each other and plans for bilateral trade talks to resolve the dispute have stalled, triggering a market rout and putting pressure on China’s already softening economy andweakening currency.

Yi said China’s economic growth would still comfortably reach its full-year target of around 6.5 percent in 2018 with the possibility of overshooting, adding that he was comfortable with current inflation levels.

China has implemented four RRR cuts this year, releasing billions in new liquidity to the market, and used other tools to push down corporate lending rates, but Yi said trade tensions with the United States could hit the economy further.

“I think the downside risks from trade tensions are significant,” the central bank chief said. “Tremendous uncertainties (are) ahead of us.”

Yi said China’s monetary stance was still basically neutral, without an easing or tightening bias, adding that he believed the amount of liquidity pumped into the market was appropriate to stabilize leverage.

In an interview with Bloomberg, Yi said that the central bank was preparing for a range of risks in its currency policy, including a worst-case scenario. But he told Bloomberg that the currency was at a “reasonable and equilibrium level.”

China has sought to reduce its massive debt pile, with a state-led crackdown on shadow banking and excessive lending to unproductive sectors such as real estate.

“Our overall leverage has been stabilized, so that is an achievement. The recent decrease of RRR or other monetary instruments is basically to supply adequate liquidity,” he said.

Yi expected China’s consumer price inflation to come in at around 2 percent for the year, with producer price inflation falling to a range of 3 percent to 4 percent.

Cross-border capital flows had been normal, he added, while China’s economy has shifted away from exports to become more domestically driven.

China’s current account could turn positive this year with “a bit” of a surplus, even though it would still account for less than 1 percent of gross domestic product, Yi said.

Meanwhile, China was seeking a constructive solution to the trade row, while speeding up reforms to strengthen intellectual property right protection and “significantly” opening up financial services.

“We are sincere to show that we are willing to have a constructive solution. And a constructive solution is better than a trade war, which is lose-lose,” he said.

Reporting by Yawen Chen; Additional Reporting by Gayatri Suroyo; Editing by Muralikumar Anantharaman and Richard Pullin

Source: Reuters “China central bank chief says plenty of room for monetary adjustments amid trade row”

Note: This is Reuters’ report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.


China says U.S. arms sales to Taiwan interfere in its affairs


October 14, 2018

WASHINGTON (Reuters) – China accused the United States on Sunday of going on the offensive by sending U.S. Navy vessels into the South China Sea and described U.S. arms sales to Taiwan as interference in Chinese internal affairs.

“It’s not Chinese warships that are going to the coast of California or to the Gulf of Mexico. It’s so close to the Chinese islands and it is so close to the Chinese coast. So who is on the offensive, who is on the defensive? This is very clear,” Ambassador Cui Tiankai told the “Fox News Sunday with Chris Wallace” program, apparently referring to a U.S. destroyer sailing near islands claimed by China in the South China Sea on Sept. 30.

Reporting By Arshad Mohammed; Editing by Andrea Ricci

Source: Reuters “China says U.S. arms sales to Taiwan interfere in its affairs”

Note: This is Reuters’ report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.


China slaps anti-dumping duty on chemical from U.S., Japan


October 15, 2018

BEIJING (Reuters) – China will impose anti-dumping tariffs on imports of hydroiodic acid from the United States and Japan, the Ministry of Commerce said on Monday.

The tariffs will take effect from Oct. 16, with levies set at 123.4 percent on U.S. suppliers and 41.1 percent on Japanese, and will last for five years, the ministry said.

Reporting by Beijing monitoring team; editing by Darren Schuettler

Source: Reuters “China slaps anti-dumping duty on chemical from U.S., Japan”

Note: This is Reuters’ report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.