Ayutthaya faces threat of flooding

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Properties and historical sites are at risk.

PUBLISHED: 05:04 on October 5, 2023.

Ayutthaya faces threat of flooding

The rapidly expanding Chao Phraya River, which is threatening to flow and disaster houses and historic sites, has dykes built along its banks by the Ayutthaya state.

According to the authorities, the river’s climb is being caused by an increase in the amount of water coming from inland provinces. Professional estates in the province reported on Wednesday and nbsp that no flooding had already affected them.

The historic site of Wat Chaiwatthanaram, one of the most flood-prone areas along the Chao Phraya, was visited by Ayutthaya government Niwat Rungsakorn, his lieutenant Pairat Petyauan, representatives from the Office for Prevention and Mitigation in Phra Nakhon Sri Attaya and the 3rd Regional Office of Fine Arts Department, as well as local authorities.

To protect the historical riverside sanctuary, a material dyke that was 1.9 meters tall and 165 meters long was tested for strength.

According to Mr. Niwat, the Chao Phraya barrage in upstream Chai Nat province is spewing water at a rate of 1, 449 cubic meters per second( m3 / s ), which is causing floods in the districts of Phak Hai, Bang Ban, Sena, and Bang Pa in Ayutthaya.

Residents have been urged to keep an eye out for updates on the overflow condition and to get ready for departure if necessary, he continued.

However, over 1.8m flood barriers have been built around professional estates in Ayutthaya.

The risk of flood in the business estates is low, according to Veeris Ammarapala, government of the Industrial Estate Authority of Thailand. He claimed that the majority of places have effective restrictions and a fully usable drainage system.

Since the devastating storms of 2011, powerful flood prevention measures have been put in place at business holdings.

But, Pol Lt Gen Kamronwit Toopkrajang, the head of the Pathum Thani Provincial Administrative Organization, stated that due to significant flooding in the Sala Khru city of Nong Suea, portions of Moos 1 and 10 have been designated as hazard areas.

He said the Pathum Thani PAO is deploying 20 water pumps after inspecting the Raphiphat network’s clear in the Nong Suea area because more fluids from Saraburi and Nakhon Nayok is anticipated to arrive there immediately.

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Japan's yen stuck in a 'Groundhog Day' time loop

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TOKYO- The international financial system’s rendition of” Groundhog Day” is a plunging renminbi.

Currency traders have frequently had to worry about whether the Ministry of Finance and Bank of Japan will step in to stop the dollar’s drop since 1993, when the precious Bill Murray movie stars a meteorologist trapped in the middle of the worst day of his career until he changes program hit venues.

Currently, the goal is to prevent a hankering that is currently trading at 150 to the money from rising to 160 in the coming days. At a time when the US Federal Reserve is implying additional interest rate increases, that is simpler said than done.

However, as this most recent movie hits a nearby economic nyse, the stakes are higher. Japan is even more stuck between the proverbial stone and a hard place than it has been over the past 30 years as US provides continue to rise and China’s economy stagnates.

After all, it wasn’t until 1993 that Tokyo started to accept the fallout from the collapse of the 1980s” bubble economy” time. Banks in Japan were left with trillions of dollars’ worth of dangerous loans as a result of the real estate collapse.

Today, economists typically use that time period as a cautionary tale for the current real estate crisis in China. However, Japan has not yet fully recovered from the 1990s in many ways. Take a look at the BOJ’s” Groundhog Day” get-it-right situation with statistical moderation.

In the 1993″ Groundhog Day” humor, Bill Murray plays Phil Connors. The dollar’s” Groundhog Day” conundrum is not amusing. Photo: Screengrab, Columbia Pictures, and YouTube

When Governor Kazuo Ueda arrived at BOJ offices in April, there was a lot of rumor that QE’s days were numbered. Ueda’s career did not result in the happy ending traders had anticipated; rather, it only made the story more complicated.

Ueda stooped down just this week to refute the idea that the BOJ may cut back on cash. He emphasized that there is” also a long way to come” before the BOJ abandons its extremely loose monetary policy. This could indicate 2025 or afterwards based on the rate at which father Haruhiko Kuroda operated.

According to Mohamed El – Erian, chief consultant at Allianz,” The FX weakness reflects policy decisions within the forex and curiosity rates.” The” trade-off facing the Chinese authorities” is” accentuated by both the government of yield-curve power monetary policy and higher provides globally.”

News that the Financial Services Agency will start conducting stress testing on about 20 banks is a crucial clue. The evaluation should be finished by July 1st, 2024, but chances are it will take longer.

Discussions about the findings would therefore take place between regulatory bodies, government agencies, the BOJ, and the office of the prime minister. All of this suggests that the BOJ is hesitant to” taper” until it is certain that ending QE won’t cause meltdowns akin to those at Silicon Valley Bank.

Governor of the Bank of Japan Kazuo Ueda. Wikipedia image

Time, however, is not on Tokyo’s area. The japanese will experience even more extreme downward pressure as US Fed Chair Jerome Powell considers another price increase or two. This occurs as Japan struggles with two additional 30-year goals, including the best Nikkei Stock Average protest since the first 1990s and the highest inflation rate.

The problem of inflation is difficult for Ueda’s group. Tokyo has been struggling with recession since 1999, when the BOJ became the first significant central banks to reduce rates to zero. The group led by then-governor Masaru Hayami pioneered QE in 2000 and 2001.

Unfortunately, though, Tokyo’s long-desired inflation arrived before the second-largest economy in Asia was prepared. Instead of increasing demand at home, it is primarily being imported due to rising power and food expenses.

As a result, the 126 million people in Japan are cutting back on household spending, and business leaders are changing their minds about wage increases.

As the hankering declines, Saudi Arabia reduces oil production, and Russia continues its invasion of Ukraine, Japan runs the risk of importing yet more inflation. Citizens are being reminded by this powerful how little the Liberal Democratic Party of Prime Minister Fumio Kishida has done to boost incomes over the past 30 years.

According to economist Yasunari Ueno at Mizuho Securities, Kishida’s” government would gain nothing diplomatically by showing the Chinese people that it is committed to addressing the import price spike brought on by a weaker yen.”

Local advertising is evaluating Kishida’s state at the two-year mark this week. The general consensus is that Kishida has brought balance to Tokyo but has not implemented any reforms to lower bureaucracy, renew innovation, overhaul labor markets, or encourage businesses to share hefty profits with a workforce that lacks confidence in the future.

A Nikkei Stock Average that has reached 30-year spikes collides with this striking reality. Due in part to initiatives to improve corporate governance, extend boardrooms, and boost returns on equity since 2014, Asian businesses are once again popular with international investors.

In 2020, Warren Buffett’s Berkshire Hathaway attracted sizeable and headline-grabbing opportunities in Japan Inc. Interest charges are” less expensive than completely, and the real effective exchange rate has fallen ,” according to CLSA planner Nicholas Smith,” making Japan cruelly aggressive.”

yet fiercely aggressive enough to start a moral cycle of rising consumption and fat paychecks? Information of this dynamic is currently virtually nonexistent.

Kishida has vowed to quicken the process of financial revamping. His” new capitalism” initiative to promote gross domestic product ( GDP ) advantages has largely failed. As a result, the BOJ is now in the driver’s seat and must help development.

Opening a way for the US$ 1.6 trillion Government Pension Investment Fund, the largest of its kind in the world, to finance an upsurge in startups is another strategy that has failed. Kishida had pledged to attract more foreign funding in addition to utilizing GPIF’s sizable property pool.

To entice international talent to Tokyo, ideas include creating English-only unique enterprise zones. The hourly minimum wage was recently increased to 1,000 yen( US$ 6.69 ) by Kishida’s party. In, say, 2003, both concepts might have been helpful. In 2023, not so much.

The financial benefits of Kishida’s” new capitalism” have not been delivered. Screengrab image

Ueda is under increasing stress hardly to budge due to political unrest. The japanese will continue to be under downward stress as the BOJ maintains its fire. Shunichi Suzuki, the finance minister, stated on Tuesday that” all methods” are being taken to put a stop to the renminbi.

The Ministry of Finance and the BOJ were rumored to have intervened in marketplaces later that evening or early the next morning. Authorities have yet to provide confirmation.

The chief of the money for the finance ministry, Masato Kanda, will declare that” We may continue with the existing position on our response to excessive dollar moves.”

While we are essentially like Gulliver in the market, he continued,” we are even coming and going as a business person, so typically we didn’t say whether or not we’ve intervened each time.”

According to researcher Edward Moya at OANDA,” A good Chinese money treatment may have also put a major in place for the dollar, which is providing some support for oil.”

A change in BOJ policy, according to analysts at MUFG Bank,” even becomes more probable, and we would expect solid opposition to yen weakness at levels over 150.00.”

However, among those who are unsure whether the Tokyo authorities’ decision to buy yen did succeed this time is planner Marc Chandler at Bannockburn Global Forex. He explains that the” BOJ intervened three times last season, nothing during the US day area.”

Representatives from BOJ are equally likely to rely more on jawboning industry. According to dealer Takehiko Masuzawa at Phillip Securities Japan,” It appears that Ueda’s new remarks were intended to stop the yen from falling against the money.” These remarks” are operating almost the same as federal action.”

Given the main company’s growing concern with the yen, Stefan Angrick, an economist at Moodys Analytics, claims that” the shift in tone is probably an effort to avoid sounding overly dovish.”

The worries about the yen, according to Angrick, are” understandable given that the price is creeping towards 150 ( yesen ) to the dollar, the level that last prompted FX intervention in October 2022.” However, it has also increased the obscurity of the BoJ’s contacts.

According to Angrick, the BOJ’s purposes become more difficult to discern with each new policy change and every new guide to acting with flexibility.

When rates spend more time above zero than below,” A 0 % target for long-term rates carries little meaning ,” he observes. This” creates a policy stance that aims to avoid the appearance— and cost — of tightening while raising interest rates ,” says Angrick. Potential coverage is now more difficult to predict as a result of all of this.

According to Angrick’s” best guess ,” recent styles” will see the BOJ hold major economic policy levers stable for the time being ,” but due to the central banks’ increased emphasis on the yen and confusing communication, there is now a greater chance of policy surprises and missteps.

US interest rate increases hurt the renminbi. Photo: Facebook

However, according to planner Win Thin at Brown Brothers Harriman, the US continues to play a significant role in this situation. We believe that quarter-end balancing is most likely the cause of this money weakness, which is corrective in nature. Investors should be on the lookout for a chance to go long dollars suddenly at lower levels, though we’re not sure how long this revision lasts.

The japanese does more than just convey that trust in Japan is dwindling as it moves toward 160. It gives China more leeway to accept a weaker yuan in order to increase imports. As one of the most divisive US elections in history heats up, all of this runs the risk of raising questions about Asiatic money policy in Washington.

Although Asia investors have seen previous iterations of this film, the upcoming plot twists may cause the world’s economic structure to collapse in a chaotic manner.

At @ WilliamPesek, follow William Peserk on X, formerly Twitter.

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China rebukes EU after formal launch of EV subsidy probe

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BRUSSELS: & nbsp, China expressed dissatisfaction on Wednesday( Oct. 4 ) in response to the European Union’s request that it participate in consultations on its investigation into subsidies for electric vehicles within a” very short” period of time. The comments were made as the European Commission officially began its investigationContinue Reading

Rain hampers search for Indian soldiers missing in flood

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GUWAHATI, India: According to defense officials, a flash flood in northern Sikkim position on Wednesday( Oct 4) prevented the hunt for the 23 Indian soldiers who were reported missing. Gangtok is the state’s capital. ” Some cars are reported submerged under the slush, and 23 workers have been reported lacking.”Continue Reading

1.5m sandbags to fortify Chao Phraya banks

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As rain is expected to last all week, some provinces are getting ready for flooding.

Published on October 3, 2023, at 19:52.

1.5m sandbags to fortify Chao Phraya banks
On May 10, a person is seen strolling on boulders that the Bangkok Metropolitan Administration had piled up to stop flooding along the Chao Phraya River’s bank close to the Saphan Pla business on Charoen Krung Road in the Sathon neighborhood. Wichan Charoenpakul( picture )

In order to prevent flooding after the Chao Phraya Dam releases more water as a result of increased rain, the Bangkok Metropolitan Administration did erect 1.5 million bags along the river’s businesses.

According to Surat Charoenchaisakul, chairman of capital drainage and sewage, officials are keeping an eye on water levels along the Chao Phraya’s distributaries, such as the Bangkok Noi, Maha Sawat, and Phra Khanong rivers.

By mid-October, the boulders may be stacked along the river, he continued.

Storm cautions and support are available to riverside residents through the BMA’s platforms: dds. Bangkok. move. th, web. the Traffy Fondue mobile app, the BMA Twitter ( X ) account, and prbangkok.com.

Up until Friday, Thailand’s northeast, central, and southern regions are expected to experience heavy rains, which will cause the Chao Phraya Dam in Chai Nat to produce between 1,350 and 1,750 cubic meters of water per second( m3 / s ).

The Chao Phraya in Nonthaburi province may have its water level raised by an additional one to 1.5 meters as a result of the dam’s 1, 000 to 1, 400 m3 / s water release.

Bags should be stacked along riverbanks, according to the Department of Disaster Prevention and Mitigation, and residents should keep an eye out for disaster updates.

More details can be found at the department’s hotline, 1784, or @ 3384DDPM, the official LINE account for the center.

The Yom River lacks a bridge to restrict the amount flowing inland, according to Deputy Prime Minister Somsak Thepsutin, who visited flood-affected Sukhothai on Monday.

Sukhothai was experience twice the harm it has in recent times due to rising water levels from northern regions like Kamphaeng Phet, Phayao, and Phrae, according to Mr. Somsak.

In Sukhothai, severe flooding has affected 4, 000 homes and more than 100 000 ray of agricultural lands, he continued.

The disaster scenario was the first subject discussed at the cupboard meeting yesterday, according to Prime Minister Srettha Thavisin.

He claimed that each flood-affected constituency’s MPs had been briefed to explore the affected areas and evaluate potential compensation for flood victims, particularly producers.

” On Friday, I’ll travel to Ubon Ratchathani to get ready for the impending extreme storms in the region. According to Mr. Srettha, the state experienced significant and protracted floods last year that heavily damaged agricultural fields.

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China's economic ills infecting the rest of Asia

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The latest assessment of China’s decline from the World Bank is reassuring for the rest of Asia. However, the likelihood is not really awake enough.

The biggest market in Asia’s property sector is still receiving negative news, which is having an impact on global markets. The consensus among economists is that the multilateral lender is still far too optimistic as the World Bank lowers its 2024 China growth projection from 4.8 % to 4.5 %.

Consider the most recent assessment of the region’s consequences by the Asian Development Bank of China. The ADB issues a warning that” dangers to the prospect have intensified” as weaknesses in China’s house sector” hold back local growth.”

Investors have fled as a result of the struggles of China Evergrande Group & nbsp, which resumed trading on Tuesday. A significant debt restructuring plan has failed, the creator, which filed for default in 2021, just acknowledged. Authorities have prohibited the organization from issuing new loan because its president, Hui Ka Yan, is the subject of a criminal investigation.

According to researcher Thomas Gatley at Gavekal Dragonomics, that” threats to bring even more harm to China’s real estate sector and the broader business.”

Additionally, Gatley notes that” the likelihood of a government policy failure that disrupts markets and the economy has increased.” He therefore issues a warning that” as engineers delay or fail to make payments to their manufacturers, the financial strain of house developers is spilling over onto other businesses.”

For Asian neighbors who are relying on President Xi Jinping’s team to stabilize growth, the fact that the property sector in China accounts for up to 30 % of the gross domestic product ( GDP ) is terrible news. As a result, there is talk in Asia about andnbsp, disease risks, and the state’s 2024.

According to researcher Rick Waters at the Eurasia Group firm,” Industry and homebuyer attitude will likely continue to diminish and contribute to financial uncertainty as defaults snowball through the industry and Beijing withholds relief.”

In order to maintain the real estate industry, Beijing is in fact implementing a number of steps. The government is making an effort to ease monetary pressures without re-inflating real estate bubble, in contrast to earlier instances of slowing progress.

Regulators pushed commercial banks to reduce payment ratios for first-home purchases to 20 % and to 30 % in late September. Lenders reduced current first-time loan rates for borrowers with 40 million or more.

Guangzhou was China’s second top-tier city to end restrictions on purchasing more than two properties for people or one for nonresidents last quarter. Different cities can be seen doing the same.

Homebuyer trust will be lower despite easing measures, according to Waters, as more developers face definition and liquidation. Rates and sales will likely continue to decline in lower-tier cities.

Widespread Asia is starting to have issues with China’s real estate problems. Photo: Twitter

We believe that more top-tier places with district-specific restrictions will follow suit to encourage non-core areas and possibly key areas as well, according to Karl Shen, an scientist at Fitch Ratings. Given that their house sales are typically more constrained by policy, for policies, if they are implemented, may further focus demand in larger cities. Given top-tier cities’ little share in full, this will add little to the federal new homes market.

Officials warn Beijing to do more to encourage developers to fix balance sheets and prevent more defaults, saying that it may take China’s real estate market as long as a time to recover.

Selling in China’s largest cities may start to increase again in the next four to six months, according to Li Daokui, a past member of the monetary policy committee at the PBS and nbsp. However,” it will take anything from six months to one time for a great treatment” in smaller cities.

The World Bank’s most recent forecast simply contains a small amount of encouraging information: South Asian growth is expected to significantly accelerate in 2024, excluding China, thanks to better prospects for manufactured goods and commodities.

However, as economists at the World Bank note,” what happens in China matters for the entire place.” A 1 % decrease in its progress is correlated with a 0.3 percent point decline in regional development.

or perhaps even more, as the loss of Asia’s primary development website has a negative impact on investor, household, and business confidence throughout the region. Negative threats include political unrest as well. They include the possibility of Saudi Arabia announcing new oil production reductions, raising the risk of international prices.

According to Aaditya Mattoo, chief economist for East Asia and the Pacific at the World Bank, experts in the region predicted that China’s post-pandemic treatment may be” more prolonged and more important than it turned out to be.”

Rather, governments from Bangkok to Jakarta to Seoul are dealing with the reality of stagnant wages, poor retail sales, sweet private business expense, and elevated home debt levels that may spread throughout the area.

According to Mattoo,” this entire region, which had bizarrely benefited from trade tensions between the US and China, is now suffering trade diversion apart from it.”

China’s” third quarter has started on a weak note ,” according to economist Stephen Innes at SPI Asset Management,” with weakening exports and imports in July ,”” a significant property developer reportedly missing bond payment ,” and” consumer price inflation joining producer price in the negative year-over-year territory, although primarily due to food prices.”

The two main drivers of China’s development, exports and real estate, are facing significant setbacks, according to Innes, which are having a negative effect on both the local and global ASEAN chance markets.

Following Covid-19, the Association of Southeast Asian Nations ( ASEAN ) economies are dealing with rising debt levels. The region’s ability to manage this overhang while also investing in domestic infrastructure, increased productivity, and human capital is clearly and currently in danger due to rising & nbsp, US debt yields, etc.

In the meantime, Jerome Powell, chairman of the US Federal Reserve, is making hints about a 12th tightening walk in the upcoming 18 times, adding to the pressures on Wall Street and the world’s largest economy.

Jerome Powell, chairman of the US Federal Reserve Board, is in charge of how the world market will turn out. Asia Times Files, AFP, and Mandel Ngan

The combined effects of the Fed’s most extreme tightening since the mid-1990s are having a negative impact on US growth. According to Goldman Sachs planner David Kostin, solid and long-term rate increases are starting to hurt corporate profits and returns on capital.

The main risk for S & amp and P 500 ROE will be higher interest expenses and lower leverage in the new” higher-for-longer” rates environment, according to Kostin. It would be a departure from the traditional trend for” a situation in which interest cost and leverage consistently weigh on ROE.”

The world keeps getting more expensive, according to Capital.com scientist Kyle Rodda. The increase in oil increased the upwards pressure on bond yields, and the combination of higher fuel, higher yield and a higher ruble does not typically portend properly for equities.

There is some hope that the Fed’s tightening cycle is truly coming to an end, to be sure. According to scholar Rubeela Farooqi at High Frequency Economics,” Nevertheless, spending remains optimistic and inflation is slowing, which will be pleasant news to politicians.”

The Federal Reserve Bank of Chicago’s president, Austan Goolsbee, expressed optimism that the US is moving toward taming inflation without a formal recession next year.

According to Goolsbee,” The Fed has the opportunity to accomplish something very uncommon in the background of northern banks: to thwart inflation without tanking the economy.” The gold route may be studied for years if we are successful. If we don’t succeed, it will also be researched for a long time. But this strive to be successful.

Additionally, there is hope that China’s economy will start to recover more quickly than naysayers anticipate.

According to Morgan Stanley scholar Robin Xing,” a northern government-led, detailed plan to reduce local bill danger may be unveiled before / at the Third Plenum this drop.” ” From the third quarter 2023 onward, the business may be able to recover modestly thanks to the combination of these steps.”

The housing market will likely maintain in half a year, according to Yao Yang, dean of Peking University’s National School of Development. He claims that officials used to” overshoot” in their real estate onslaught. The central authorities will now” slowly release up on the supply side, very.”

After four consecutive months of collapse, China’s fresh home prices increased substantially in September. Developers accelerated launches to take advantage of Beijing’s new support measures as a result of the respite.

According to China Index Academy, a real estate consulting, the regular price increase starting in August was the largest month-over-month gain since October 2021. Just 30 of the 100 island places polled reported drops in new home prices.

The commencement of investing in China Evergrande stocks on Tuesday, along with a strong rallying price of up to 42 % on the Hong Kong Stock Exchange, may psychologically benefit the company.

Stocks of the business and subsidiaries like Evergrande Property Services Group were suspended on September 28. Hui, the leader of China Evergrande, was reportedly detained by police a moment earlier.

However, according to scientist Liu Jieqi of UOB Kay Hian Holdings, reform is still desperately needed. The” only option for debt restructuring ,” a move that” faces great uncertainties ,” continues to be the conversion of all debt to shares of Evergrande or of its arms.

Others, however, contend that China’s 2024 is a negative sign given the recent failure of designer Country Garden.

According to analysts at Barclays,” Country Garden was associated with China’s mass-market cover and urbanization story.” What little trust remained in the market was” shaken” by its difficulties making loan repayments.

Kenneth Rogoff, an analyst at Harvard University, adds that” the entire business is in trouble” as a result of China’s$ 18 trillion economy experiencing years of severe home shortages. Since the majority of China’s riches might collapse, how can you avoid the Chinese people from going into a stress mode? Rogoff queries. ” It’s not simple.”

The fact that” Chinese households no longer view cover as a healthy investment” presents an additional challenge, according to Société Générale analyst Michelle Lam.

President Xi Jinping and Chinese Premier Li Qiang. Xinhua image

In order to persuade homes to invest in stocks, Xi and Premier Li Qiang have intensified efforts to strengthen China’s money industry. and to create stronger social safety nets to persuade customers to spend more money and protect less. The switch from funding and property-led development is, at best, still in the early stages. That’s accurate both in China and elsewhere.

According to Mattoo, reforming the services sectors to take advantage of the digital revolution will be the next major driver of progress in a location that has truly prospered through trade and manufacturing investment.

In the interim, Asia is in danger. not just from China, either. The World Bank notes that the protectionist policies andnbsp of US President Joe Biden directed at China are having a negative impact on technology and electronics exports. Indonesia, Malaysia, the Philippines, Thailand, and Vietnam are among the countries under consideration.

According to Mattoo,” The care under these rules is discriminatory against nations that are not exempt from the local information requirements.”

2024 appears to be the year to lock those seatbelts, with China’s downturn and Washington struggling with recession rumors.

At @ WilliamPesek, you can follow William Peserk on X, formerly known as Twitter.

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Private sector crucial in the battle against climate change: ADB special advisor

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Many of the world’s poorest countries are the least responsible for climate issues, but are bearing the brunt of the crisis. They are struggling to cope with natural disasters devastating infrastructure and livelihoods, and extreme temperatures affecting livestock and crops.

“Most of our developing member countries contribute virtually nothing to the climate problem. They are low emitters, per capita and national. However, they’re feeling the impacts,” he said.

“Helping them to move towards net zero is not about their commitment to low carbon but rather, energy security and better air quality in their cities.”

Where governments may have failed to act, Mr Evans is, however, optimistic about increasing interest from the private sector on investing in sustainable developments, green initiatives and climate-friendly adaptations.

“My optimism is not based on what governments are doing, but rather, based on what the private sector is doing,” he said.

“The interest of the private sector in working with us and with other multilateral development banks, to use the sovereign funding and the public sector money that we have, to help enable them to invest in climate actions, is making tremendous progress right now.” 

ASIA PACIFIC PLAYS CENTRAL ROLE

The ADB has said the battle against climate change will be won or lost in Asia Pacific.

The region is home to 60 per cent of the global population – some 4.3 billion people, and includes the world’s top two most populous countries India and China.

It has five of the 10 largest emitters in the world – China, India, Indonesia, Japan, and South Korea – and accounts for about 45 per cent of global greenhouse gas emissions.

Asia Pacific is also where 40 per cent of the world’s climate-related disasters have happened since the start of the century, with increasing frequency and intensity.

Hence, the region plays a central role in global climate efforts.

The ADB said the battle against climate change will be costly, with an estimated US$1.7 trillion needed every year to invest in infrastructure in the region.

FUNDING PLAN TO COMBAT CLIMATE CHANGE

The bank recently launched a new funding programme to support lending efforts that help the region reduce greenhouse gas emissions and build infrastructure resilient to the impact of climate change.

Known as the Innovative Finance Facility for Climate in Asia and the Pacific (IF-CAP), wealthier nations such as the United States, United Kingdom, Denmark, Sweden, Japan and South Korea will guarantee some loans and shoulder losses in cases of default.

The initial target is US$3 billion in guarantees. The bank believes this will help to generate five times as much – some US$15 billion – in new climate loans.

“The IF-Cap works by taking guarantees from donor countries and using that to essentially carve out part of our existing sovereign portfolio. These are existing loans that developing countries take with ADB that have sovereign guarantees. We have a very, very low risk of default for these kinds of loans,” said Mr Evans.

The plan will support projects that address mitigation with a focus on reducing greenhouse gas emissions, and adaptation with an aim to build resilience against the impacts of climate change.

The bank said these investments could cover a wide range of sectors, such as transportation, energy, urban, and agriculture.

While the lender has made progress in multiple areas including increasing resilience to flooding, cooling efforts in cities with high temperatures, rehabilitating wetlands, promoting renewable energy including wind and solar, more needs to be done, said Mr Evans.

“We have in both the urban sector and rural sector, a number of initiatives that are paying back dividends now, in terms of building resilience. We have many success stories, but we’re not at the scale we need to be. We need to bring this all together and scale it up,” he said.

“The risks from climate impacts are severe. Every greenhouse gas emission reduced is important. Every household can play a role in that. Not so much in the poorer countries, but in the middle income countries, and in the richer countries, every household needs to play a role in reducing their carbon footprint.”

On Friday, the bank unveiled new capital reforms to boost lending by US$100 billion over the next decade as part of its continued mission to tackle climate change.

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Evergrande: Why should I care if China property giant collapses?

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A man and children cycle past the Guangzhou FC football stadium, which is being built by Evergrande.Getty Images

A crisis at the world’s most indebted company has worsened after its chairman was placed under police surveillance.

It follows earlier reports that other current and former executives at Chinese property giant Evergrande had also been detained.

Evergrande suspended the trading of its shares in Hong Kong on Thursday until further notice.

It marks another low for the firm which was declared to be in default in 2021 after missing a crucial repayment deadline, triggering China’s current real estate market crisis.

What does Evergrande do?

Businessman Hui Ka Yan founded Evergrande, formerly known as the Hengda Group, in 1996 in Guangzhou, southern China.

According to the company’s website, Evergrande Real Estate currently owns more than 1,300 projects in more than 280 cities across China.

The broader Evergrande Group encompasses far more than just real estate development.

Its businesses range from wealth management to making electric cars and food and drink manufacturing. It even owns a controlling stake in what was one of the country’s biggest football teams, Guangzhou FC.

Mr Hui was once China’s richest person with his fortune estimated at $42.5bn (£34.8bn) by Forbes, but his wealth has plummeted since then, largely as Evergrande’s problems have grown.

Why is Evergrande in trouble?

Evergrande expanded aggressively to become one of China’s biggest companies by borrowing more than $300bn.

In 2020, Beijing brought in new rules to control the amount owed by big real estate developers.

The new measures led Evergrande to offer its properties at major discounts to ensure money was coming in to keep the business afloat.

Now it is struggling to meet the interest payments on its debts.

This uncertainty has seen Evergrande’s shares lose 99% of their value in the past three years.

In August, the firm filed for bankruptcy in New York, in a bid to protect its US assets as it worked on a multi-billion dollar deal with creditors.

Why would it matter if Evergrande collapses?

There are several reasons why Evergrande’s problems are serious.

Firstly, many people bought property from Evergrande even before building work began. They have paid deposits and could potentially lose that money if it goes bust.

There are also the companies that do business with Evergrande. Firms including construction and design firms and materials suppliers are at risk of incurring major losses, which could force them into bankruptcy.

The third is the potential impact on China’s financial system: If Evergrande collapses, banks and other lenders may be forced to lend less.

This could lead to what is known as a credit crunch, when companies struggle to borrow money at affordable rates.

A credit crunch would be very bad news for the world’s second largest economy, because companies that can’t borrow find it difficult to grow, and in some cases are unable to continue operating.

This may also unnerve foreign investors, who could see China as a less attractive place to put their money.

Is Evergrande ‘too big to fail’?

The very serious potential fallout of such a heavily indebted company collapsing has led some analysts to suggest that Beijing may step in to rescue the company.

However, Jackson Chan from financial markets research platform Bondsupermart does not think that will now happen.

“To be honest, Evergrande has already collapsed,” says Mr Chan, adding that he believes “it is on the brink of a forced liquidation”.

This could have a major effect on China’s economy as the property sector contributes roughly a quarter of its growth.

Mr Chan also suggests that the country could be following a similar path to Japan in the 1980s, when it slipped into decades of economic stagnation.

However, others think it is unlikely that Evergrande will be allowed to completely collapse.

“That could spiral, affecting other indebted companies and further hurt the overall property sector which is very important to the growth of the economy,” Dexter Roberts, director of China affairs at the Mansfield Center at the University of Montana, told the BBC.

“At the same time, many people whose household wealth is mainly in their apartments will also be badly hurt,” he added.

Mr Roberts, who spent more than two decades in China as a journalist, said “the old Evergrande no longer exists” and while the authorities may keep it afloat, “it will be as a radically diminished company.”

Reporting by Peter Hoskins and Mariko Oi

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EU rethinking China business ties, state by state

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Western nations and multinational corporations, severely impacted by Covid-19 restrictions and supply chain disruptions, are reevaluating their approaches toward China. While many Western businesses view China as a vital market, there is considerable uncertainty about the Chinese economy’s potential recovery.

Amid the backdrop of uncertain economic trends in China and globally, the interactions between the world’s two largest economies, China and the United States, hold significance. Relations are continuing to deteriorate. Chinese President Xi Jinping even accused the United States of trying to hinder China’s technological advances in March 2023.

Geopolitical tensions also exist, particularly over the Taiwan issue. While a military resolution to the matter remains largely hypothetical, the dynamics within the business community demonstrate that political tensions tend to take a backseat to economic considerations.

Since China lifted its restrictive Covid-19 measures in late 2022, it has reopened to foreign visitors and businesspeople. But despite political criticism of Beijing’s assertive stance in the South China Sea and Taiwan, Western businesses recognize the Chinese market’s importance to their companies or personal wealth accumulation. 

If they ever need to take definitive actions, they would prefer to “de-risk” rather than completely sever ties with China.

The CEOs of prominent US companies such as Apple, Pfizer and BHP attended the China Development Forum in Beijing in April 2023. Elon Musk, Tesla founder and currently the wealthiest individual on Earth, visited China two months later. 

China is Tesla’s second-largest sales market after the United States, accounting for around one-quarter of total revenue. In June, Microsoft CEO Bill Gates held a meeting with Xi in Beijing, during which the Chinese leader referred to Gates as the first “American friend” he has encountered in recent times.

One of Xi’s few American friends these days. Image: Twitter

Poor economic data indicates that even Chinese consumers harbor doubts about the future trajectory of China’s economic development. Statistics reveal challenges in the real estate sector, traditionally a key driver of China’s GDP. 

Despite recent efforts by Chinese banks, such as slashing interest rates to stimulate consumption and investment, the outlook for the Chinese economy remains lackluster.

As the Washington–Beijing relationship deteriorates, European Union member states are adopting divergent strategies in their interactions with China. These strategies are influenced by multiple drivers, including each nation’s economic interests, historical experiences with authoritarian regimes during the Cold War, and values such as freedom and democracy.

For example, Lithuania adopts a distinct and principled policy towards China. Lithuania actively champions the fundamental values and democratic principles of the European Union. 

It openly cultivates political relations with Taiwan and does not shy away from critiquing human rights violations in authoritarian regimes. After Lithuania agreed to exchange diplomatic offices with Taiwan, China effectively imposed an unofficial blockade against Lithuanian imports.

France – the second-largest economy in the European Union – adopts a more prudent approach when it comes to engaging with China. During French President Emmanuel Macron’s visit to China in April, he led a delegation of business leaders to forge new agreements. While this does not imply indifference to human rights issues, France recognizes the crucial significance of its business ties with China.

There is also a divergence in political approaches towards China within individual countries. In Germany, there is a faction characterized by a “business first” approach, exemplified by individuals as well as German manufacturers with business operations in China.

On the other side, there is a cohort of EU advocates who closely align themselves with the US stance on China, including the German Foreign Minister Annalena Baerbock. 

This group advocates for reduced reliance on Chinese exports, intensified scrutiny of Chinese investments within the European Union and more stringent regulations on outbound investments into China. The Netherlands’ ban on exports of ASML chipmaking machines to China in June 2023 is in line with this policy.

Many European officials are increasingly aligning with US views on China while safeguarding their economic interests. For example, the Italian government has indicated its intention to pull out of China’s Belt and Road Initiative. 

European Commission President Ursula von der Leyen is pushing for export controls on sensitive technologies. Hungary and Poland are both stepping up their economic cooperation with China. For the seventh consecutive year, China is Germany’s largest trading partner, with bilateral trade reaching US$322 billion in 2022.

As its overall trade deficit with China rises to unprecedented levels, the European Union is becoming more pragmatic about future economic cooperation with China. This leads to the de-emphasizing of China for many multinational companies and calls for “decoupling.”

Germany’s latest China strategy affirms the pressing need to establish effective frameworks for future engagements with Beijing.

German Foreign Minister Annalena Baerbock sees China through an American lens. Image: Twitter / Screengrab

Despite undeniable evidence of worsening relations between the United States and China, Western businesses continue to maintain ties with China. But even within the European Union, member states have varying approaches when it comes to dealing with China. 

While at the EU level, China is perceived as a competitor, at the national level, each country possesses a unique set of business interests related to China, which shape their official policies.

Striking a balance between accommodating these interests and upholding EU approaches is an arduous task for every country.

Marian Seliga is head of China Desk and advisor to the board at J&T Banka, Czech Republic.

This article was originally published by East Asia Forum and is republished under a Creative Commons license.

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