Japan finally raises interest rates as inflation wish comes true
For the first time in 17 times, Japan’s central bank has increased the cost of loans.
The Bank of the Japan ( BOJ) increased its key interest rate from -0.1 % to a range of 0 %- 0.1 %. Following an increase in customer costs, wages have increased.
In 2016, the banks cut the price below zero in an attempt to promote the country’s stagnating market.
The increase means that there are no more any nations with negative interest rates.
People have to pay to loan money in a bank when bad levels are in effect. Numerous nations have used them to encourage people to spend money more than deposit it in banks.
Additionally, the BOJ abandoned a policy known as supply curve power (YCC), which involved purchasing Chinese government bonds to command interest rates.
Since 2016, YCC scheme has been in place, but it has received criticism for causing distortions in markets by preventing long-term interest rates from rising.
Since chancellor Kazuo Ueda took office in April of last year, there had been a rise in expectations that the BOJ did suddenly raise rates.
The most recent official figures revealed that Japan’s core consumer prices remained at the company’s 2 % objective in January despite the rate of price increases having been slowed.
Nobuko Kobayashi from the consulting firm EY- Parthenon told the BBC that the country’s main firms had to raise wages for their employees to help them deal with the rising cost of living.
Earlier this month, Japan’s biggest firms agreed to raise pay by 5.28 %- the biggest pay hike in more than three decades.
Since the late 1990s, compensation in the nation have been declining as consumer prices have grown rapidly or even decreased.
However, Ms. Kobayashi believes that the business could benefit from the transfer of inflation.
” Nice, if Japan can promote production and home demand. Poor, if inflation stays directly- driven by points like conflict and supply chain disruptions”.
The BOJ has indicated that there wo n’t be any further rate increases until the future because it anticipates that “accommodative financial conditions will be maintained for the time being.”
It seems probable that trade unions will press for smaller pay increases in the next year’s negotiations, according to Marcel Thieliant of Capital Economics, of research company.
We still anticipate inflation to fall below the BOJ’s target by the end of the year, so the Bank wo n’t feel the need to raise its policy rate any further because wage growth is at its peak this year.
In February, Japan’s main share index the Nikkei 225 hit an all- period closing high, surpassing the previous record set 34 years before.
In the final three months of 2023, the revised data revealed a 0.4 % increase in gross domestic product ( GDP ) in comparison to a year earlier.
Central banks around the world slashed attention costs as they attempted to counter the negative effects of border closures and lockdowns during the pandemic.
At the time some states, including Switzerland and Denmark, as well as the European Central Bank, introduced negative interest rates.
Since then, central bankers have aggressively increased interest rates to halt price increases, including the US Federal Reserve and the Bank of England.
Related Issues
Putin’s gold strategy explains why sanctions failed – Asia Times
There are more than 16, 000 restrictions imposed against Russia. However, the Russian economy and military advanced by 3.6 % in 2023 and is projected to advance by 2.6 % in 2024.
Defense expenditures account for about 6 % of Russia’s GDP. Vladimir Putin appears assured in his ambitions for the future at a time when Ukrainian President Volodymyr Zelensky is frantically looking for weapons, resources, and volunteers.
How did the world’s 16 000 proper sanctions against Putin fail to undermine him?
A World Gold Council ad appeared on the screen as I watched the news report on Russia’s strong business on CBC. And there was the reply, hiding in plain sight: Gold.
The position of golden
Russia’s actions had to be proper, focusing on the setting.
Shipping and business into Russia were targeted by financial sanctions, but the gold market is a vast environment that has largely been left unaffected. The United Kingdom, a big gold agent with one of the largest metal deposits in the world, cut all Russian gold imports into the UK after Russia invaded Ukraine two years ago.
According to the World Gold Council, Russia is now the second largest supplier of gold at 324.7 metric plenty in 2023, behind China at 374 million. Up until 2026, Russia is anticipated to increase production of gold by 4 % annually.
Russia had been getting ready for punishment from the West since 2013 and was successful in preventing its business from dealing with American dollars.
In early 2022, Russia pegged its currency, the rubles, to silver, and 5, 000 francs will then buy an ounce of pure gold. The intention was to move the forex apart from a pegged worth and instead place it inside the gold standard itself, making the ruble a trustworthy gold substitute at a fixed rate.
The main reason for holding onto gold resources is typically to use them to settle domestic and international purchases. Metal holders can exchange it for currency exchanges, exchange it for currency, and then convert it back into silver after trading it on one of the various bullion exchanges.
Most nations want silver as a buffer against larger-scale international economic shocks. Around 1, 073 metric tons of gold were purchased by numerous central banks in a record-breaking rhythm in 2022. A one lot is about US$ 65 million, which means$ 110.6 billion in golden went into central bankers worldwide in 2023.
Silver prices fluctuate
China is the world’s leading maker of silver, and also the country’s second largest customer of it. China imported US$ 67.6 billion in silver in 2022, whereas Switzerland took leading position by importing US$ 94.9 billion.
China’s desire for silver is directly related to stabilizing its own money. In Shanghai, the engineer had frequently add a few metal bars to sweeten the offer in 2022 if someone bought a new condominium.
The World Gold Council claims that metal is the safest place to invest in fight. But if that were real, there would have been a lasting bull market for silver dating back to Tutankhamen, making the price now infinite.
Its prices rise and fall like anything else. Which is why Putin’s goal of turning the franc into pure silver is not creative. It is determined.
Russia will not be touched by the United Kingdom, the United States, or Canada. But people did. The United Arab Emirates ( UAE ) imported 96.4 metric tons ( US$ 6.2 billion ) of Russian gold in 2022 following the British sanctions. That’s up 15 times from the 2021 imports of only 1.3 metric tons ( US$ 84.5 million ).
Why so many private planes flew to Dubai following the war and the punishment that followed is not unfathomable.
The other great consumer of Russian platinum is Switzerland. In 2022, Switzerland imported 75 metric tons of Russian gold ( US$ 4.87 billion ). In 2023, it imported about US$ 8.22 billion in gold from the UAE ( which does n’t produce its own but buys enormous sums from Russia ) and US$ 3.92 billion from Uzbekistan, Russia’s next- door neighbour.
Russian gold, which is worth billions upon billions of dollars, is being widely traded at the highest level while avoiding each of those 16, 000 restrictions.
That’s why international sanctions against Russia have n’t derailed a thing. In order for Putin’s prepare for financial resilience through gold to work, however, metal wants to increase in value. His extended- term aim is that gold, no the US dollar, will be the world trading forex.
Consumer activism
Here’s where average citizens come in, and how they can help determine what’s to come.
Any Costco discount warehouse member in North America can currently order an ounce of Swiss gold. ( The Canadian price is CA$ 3, 045, limit two per member, and no refunds. ) This is not a speculative investment. Physical gold wo n’t double in value by Christmas.
Instead, buying gold is a guard against inflation and currency devaluation in times of uncertainty. Because it is the doomsday currency, the World Gold Council advertises gold on cable news channels in a similar way.
The price will increase if North American consumers, central banks, and investors are so panicked they decide to buy gold in large quantities. That way, Putin’s plan works.
American consumers purchased more than US$ 100 million in gold bars from Costco alone in the last quarter of 2023.
Do those bars contain any real Russian gold? Between Switzerland’s 2022 gold purchases from Russia and the 2023 purchases from the UAE, it’s likely there is.
People can always purchase the single-source Canadian Maple Leaf gold coin if they are concerned about the ethics of purchasing Russian gold. It comes from Québec, and as demand for coins like this increases, so too does the price of gold overall.
Still, bars and coins cannot compete with the power of demand from the central banks, and currently it’s high.
Tarnishing gold
To thwart Putin’s plan, the luster needs to be removed from gold. The price could be affected by increasing gold supply. Australia, Canada and the US have important roles to play as leading gold producers.
Gold prices also tend to rise as interest rates rise. A widespread sell-off of gold-related government holdings could also have a negative impact on the ruble and US and Canadian dollars.
No single policy can stop Putin’s objectives; it would require stifling the supply of gold outside of Russia, which could also mean involving the UAE.
One more smart sanction against the Emirates might be the golden egg Zelenskyy needs at the moment, given that Russia has 16, 000 sanctions in place.
Robert Huish is Dalhousie University’s associate professor of international development studies.
This article was republished from The Conversation under a Creative Commons license. Read the original article.
China’s factory output, retail sales beat expectations in first two months of the year
China: China’s stock output increased between January and February, beating expectations, making it a strong start for 2024 and providing some temporary relief to policymakers looking to resurrect stagnant economic growth. In the first two months of the year, industrial output increased by 7.0 percent, according to data released byContinue Reading
MYStartup selects 26 startups for their pre-accelerator cohort 3
- From 4 major sectors: green technology, intelligent living, hospitality, digitalization
- Provides access to a supervisor community, development hubs, and market exposure
MYStartup, in partnership with Indonesian based company pedal, Growth Charger, has selected 26 substantial potential businesses, from 136 applicants across Malaysia, for the MYStartup Pre- Accelerator Cohort 3 Program. The companies will go through a four-month customized program designed to accelerate their progress toward achieving product-market accommodate and support the startup ecosystem’s general expansion.
The startups cover four key sectors: green tech, bright life, hospitality, and digitalization, including data solutions, professional IoT, and robotics. The selection process comes at the heels of the past cohort MYStartup programme, which saw similar higher- potential companies such as Materials In Works, Sayur Kita School, Luwjistik, Axcyn, Certiify, and more, gaining a leg off through MYStartup.
With the financial success of the country centered on the success of its entrepreneurs, there is an urgent need to promote an inclusive, higher- performing, and green entrepreneurship ecosystem, especially among the Small &, Medium enterprises which account for almost 98.5 % of business entities in the country, accounting for 66 % of the workforce said Norman Matthieu Vanhaecke, Group CEO of Cradle.
We are thrilled to see Malaysian technology startups gain from this program and look forward to seeing significant growth. Malaysia is rapidly emerging as a major player in the Southeast Asian technology and innovation sector, which is in line with the country’s 2030 goal of being among the top 20 global startup ecosystems.
[ Note: The US-based Startup Genome and Global Entrepreneurship Network’s ranking as the Global Startup Ecosystem Report, or GSER, is based on the aspiration to be among the top 20 startup ecosystems, not countries. There is a Top 30 rankings and a new category introduced in 2020 called Top 100 Emerging Ecosystems. Kuala Lumpur is ranked 11th in this regard. KL’s ranking decline in the 2023 GSER was despite an effort to improve its performance in partnership with Startup Genome, which was unfavorable.
The Pre- Accelerator offers a comprehensive package, made for dedicated startups aiming to validate their concepts. This includes access to a mentor network, innovation hubs, and market exposure. The programme encompasses strategic learning modules, on- demand resources, hands- on mentoring, collaborative spaces, networking events, and strategic connections within the ecosystem. The objective is to assist startups in creating viable business models and securing growth opportunities.
” Throughout these four- months programme, it’s all about Product- market fit. We are eager to witness remarkable achievements from the 26 startups spanning various sectors such as SaaS, E- commerce &, Marketplace, Artificial Intelligence, Machine Learning, and more. Speak to your customers, refine your product and think about scale, We anticipate future accomplishments in the coming months under Growth Charge”, said Iskandar Shafi’i, the Director of Growth Charger.
Our mission at Rabt is to create a premier Islamic storytelling and knowledge-sharing platform, as well as providing a top-notch user experience and connecting users with renowned voices in the Islamic world. This programme is a unique opportunity for us to accelerate growth, secure investment, and expand our reach across Southeast Asia, beginning with Malaysia. Through the Pre- accelerator programme, we aim to secure investments and achieve 30, 000 monthly active users”, said Hasam Khan, CEO of Rabt, one of the shortlisted companies in MYStartup’s Pre- Accelerator Programme.
The MYStartup Pre-Ameritober program, which aligns with the Malaysian Startup Ecosystem Roadmap ( SUPER ) 2021- 2030, aims to advance the Malaysian ecosystem by creating more creative and high-quality startups.
The list of 26 shortlisted companies include:
- Agrofly– Producing biofertiliser through insect frass degradation.
- AIMS– Artificial intelligent marketing system.
- AidEye– Your AI guide for using digital services for daily tasks.
- Beseek– Introducing the future of work in the GenAI era by increasing productivity by locating valuable information in cluttered documents.
- Bettercopy– Unleashing your revenue growth through AI.
- BOSSREC– A booking platform system for recreation.
- Compere– A marketplace that makes it simple for event organizers and vendors to connect with one another.
- Deepsight– A learning resource designed to aid medical professionals in enhancing and enhancing their capacity to better understand and interpret ECG more quickly.
- Providing access to authentically healthy farmed food and daily necessities from Eatsyfarm.
- FinDoc– AI-driven online financial screening tool that makes it simple for users to locate the best financial products and services from various banks without going through them one by one.
- FitDoc– A telemedicine company that specializes in online consultations, addressing critical health concerns such as obesity, family planning, sexual health, and HIV prevention.
- Good Stuff Alliance– A digital platform that allows business owners to sell nearly stale goods at a discount to customers who want to save money.
- Komers– A one-click checkout procedure that helps make the buying and after-sale process easier for more customers to become buyers.
- Komplen– A platform where users can complain to various authorities, all in one place.
- Mywheels is a platform for everything and anything that involves wheels.
- Pajak- i- An all-in-one online platform for the micro-finance sector.
- Pixalink– A cloud-based customer acquisition and engagement system for SMEs to automate the interaction with your customers.
- Practistica– A one stop solution for lecturers/teachers to an online question marketplace, classroom grading software &, students ‘ analytics software
- Propmoth: A platform that helps people find properties the smartest.
- Pycehub– A web service that connects owners and clients to increase revenue for them and make bookings easier for them.
- Rabt– Redefining the Islamic narrative by creating the Spotify of Islam
- Scancer AI: Using AI, early detection can be made more accessible for everyone.
- Staywokeproperty– A one- stop rental management solution, where all ends meet for effortless rental transactions.
- A CSR management system powered by AI called Volunti Connect that has revolutionized CSR initiatives and funds.
- WebX– Using AI to create simple, affordable websites in three days.
- Wellness 96 Empire– AI powered digital one- stop digital wellness platform offering curated, certified coaches, personalized plans &, community engagement.
How the Chinese mob runs America’s illegal weed market – Asia Times
This story was first published by ProPublica, a Pulitzer Prize-winning investigative newsroom.
It seemed an unlikely spot for a showdown between Chinese gangsters: a marijuana farm on the prairie in Kingfisher County, Oklahoma.
On a Sunday evening in late November 2022, a blue Toyota Corolla sped down a dirt-and-gravel road in the twilight, passing hay meadows and columns of giant wind turbines spinning on the horizon. The Corolla braked and turned, headlights sweeping across prairie grass, and entered the driveway of a 10-acre compound filled with circular huts and row after row of greenhouses. Past a ranch house, the sedan stopped outside a large detached garage.
The driver, Chen Wu, burst out of the car with a 9 mm pistol in his hand. Balding and muscular, he had worked at the farm and invested in the illegal marijuana operation.
Charging into the garage, Wu confronted the five men and one woman working inside. Like him, they were immigrants from China. Piles of marijuana leaves cluttered the brightly lit room, covering a table and stuffed into plastic bins and cardboard boxes.
Wu aimed his gun at He Qiang Chen, a 56-year-old ex-convict known at the farm as “the Boss.” Chen had a temper; he was awaiting trial in the beating and shooting of a man two years earlier at a Chinese community center in Oklahoma City.
Before Chen could make a move, Wu shot him in the right knee. The boss fell to the floor, writhing in pain.
Wu held the others at gunpoint. He said Chen owed him US$300,000 and told his hostages they had half an hour to get him the money.
If they didn’t, he said, he would kill them all.
Both the shooter and his victim were from Fujian, a coastal province known for mafias, immigration and corruption. They had come to America and joined a wave of new players rushing into the nation’s billion-dollar marijuana boom: Chinese mobsters who roam from state to state, harvesting drugs and cash and overwhelming law enforcement with their resources and elusiveness.
Now, their itinerant odysseys had collided in this remote outpost in the heartland. The clash left four people dead and unveiled an international underworld of dangerous dimensions.
Wild West
The bloodshed in Kingfisher County made national headlines, highlighting Oklahoma’s role as the latest and wildest frontier in the marijuana underworld.
From California to Maine, Chinese organized crime has come to dominate much of the nation’s illicit marijuana trade, an investigation by ProPublica and The Frontier has found. Along with the explosive growth of this criminal industry, the gangsters have unleashed lawlessness: violence, drug trafficking, money laundering, gambling, bribery, document fraud, bank fraud, environmental damage and theft of water and electricity.
Chinese organized crime “has taken over marijuana in Oklahoma and the United States,” said Donnie Anderson, the director of the Oklahoma Bureau of Narcotics and Dangerous Drugs, in an interview.
Among the victims are thousands of Chinese immigrants, many of them smuggled across the Mexican border to toil in often abusive conditions at farms ringed by fences, surveillance cameras and guards with guns and machetes. A grim offshoot of this indentured servitude: Traffickers force Chinese immigrant women into prostitution for the bosses of the agricultural workforce.
The mobsters operate in a loose but disciplined confederation overseen from New York by mafias rooted in southern China, according to state and federal officials. Known as “triads” because of an emblem used long ago by secret societies, these criminal groups wield power at home and throughout the diaspora and allegedly maintain an alliance with the Chinese state.
In 2018, the mafias set their sights on Oklahoma when the state’s voters approved a ballot measure that legalized the cultivation and sale of marijuana for medicinal purposes. The law did not limit the number of dispensaries or growing operations – known in the industry simply as “grows.” It requires marijuana businesses to have majority owners who have lived in the state for two years, and it bars shipping the product across state lines.
But limited enforcement enabled out-of-state investors to recruit illegal “straw owners” and to traffic weed clandestinely across the country. And land was cheap. In this wide-open atmosphere, the industry grew at breakneck speed and, regulators say, is now second only to the oil and gas industry in the state.
Since Colorado became the first state to legalize marijuana for personal use in 2012, a patchwork of marijuana-related legislation has developed across the country. State authorities generally require licenses and put limits on cultivation, and federal law prohibits interstate sales. But steep taxes on legal products and gaps and differences in laws across states have created the conditions for a massive black market to thrive.
Oklahoma has quickly become a top supplier of illicit weed. Although street prices fluctuate and calculating the value of a black market is complex, officials estimate the value of the illegal marijuana grown in the state at somewhere between $18 billion and $44 billion a year. State investigators have found links between foreign mafias and over 3,000 illegal grows — and they say that more than 80% of the criminal groups are of Chinese origin.
The federal response, however, has been muted. With the spread of legalization and decriminalization, enforcement has become a low priority for the US Department of Justice, anti-drug veterans say.
“The challenge we are having is a lack of interest by federal prosecutors to charge illicit marijuana cases,” said Ray Donovan, the former chief of operations of the Drug Enforcement Administration. “They don’t realize all the implications. Marijuana causes so much crime at the local level, gun violence in particular. The same groups selling thousands of pounds of marijuana are also laundering millions of dollars of fentanyl money. It’s not just one-dimensional.”
The expansion into the cannabis market is propelling the rise of Chinese organized crime as a global powerhouse, current and former national security officials say. During the past decade, Chinese mafias became the dominant money launderers for Latin American cartels dealing narcotics including fentanyl, which has killed hundreds of thousands of Americans. The huge revenue stream from marijuana fuels that laundering apparatus, which is “the most extensive network of underground banking in the world,” said a former senior DEA official, Donald Im.
“The profits from the marijuana trade allow the Chinese organized criminal networks to expand their underground global banking system for cartels and other criminal organizations,” said Im, who was an architect of the DEA’s fight against Chinese organized crime.
US law enforcement struggles to respond to this multifaceted threat. State and federal agencies suffer from a lack of personnel who know Chinese language and culture well enough to investigate complex cases, infiltrate networks or translate intercepts, current and former officials say. A federal shift of priorities to counterterrorism after 2001 meant resources dedicated to Chinese organized crime dwindled — while the power of the underworld grew.
And the shadow of the Chinese state hovers over it all. As ProPublica has reported, the authoritarian regime and the mafias allegedly maintain an alliance that benefits both sides. In exchange for government protection, Chinese mobsters deliver services such as illegally moving money overseas for the Communist Party elite and helping to spy on and intimidate Chinese immigrant communities, according to Western national security officials, case files, Chinese dissidents and human rights groups.
Because China has emerged as the top geopolitical rival of the United States, carrying out brazen espionage and influence activities in this country, the spread of Chinese mafias in Oklahoma and elsewhere also poses a potential national security threat, state and federal officials say.
Leaders of Chinese cultural associations in Oklahoma and other states are allegedly connected to both the illegal marijuana trade and to Chinese government officials, ProPublica and The Frontier have found. A number of influential leaders have been charged with or convicted of crimes ranging from drug offenses to witness intimidation. (A second part of this series further explores that issue.)
“You’d be very naive to sit and say the Chinese state doesn’t know what Chinese organized crime is doing in the US,” Anderson said, “or that there is not a connection between the Chinese state and organized crime.”
In February, 50 US legislators wrote to Attorney General Merrick Garland expressing concern that Chinese nationals, “including those with potential ties to the Chinese Communist Party,” are “reportedly operating thousands of illicit marijuana farms across the country.”
The bipartisan group of lawmakers, who included all but two members of Oklahoma’s congressional delegation, asked whether federal authorities are investigating CCP connections to the marijuana underworld and how much illicit revenue returns to China.
The Department of Justice plans to respond to the questions raised by the legislators, a department spokesperson said in an emailed statement.
“The Department is working on developing a marijuana enforcement policy that will be consistent” with federal guidance related to state legalization initiatives, said the spokesperson, Peter Carr. “Among the federal enforcement priorities under that policy is preventing the revenue from the illegal distribution of marijuana from going to criminal enterprises, gangs, and cartels.”
The department declined to comment about other issues raised in this story.
In response to a list of questions, a spokesperson for the Chinese embassy in Washington, DC, said in an emailed statement that he was “not aware of the specifics” related to Chinese organized crime in the marijuana industry. But the spokesperson, Liu Pengyu, said China wages a determined fight against drugs, the “common enemy of mankind.”
“We always ask our fellow citizens to observe local laws and regulations and refrain from engaging in any illegal or criminal activities while they are abroad,” Liu said in the written statement. “The Chinese government is steadfast on fighting drug crimes, playing an active part in international anti-drug cooperation, and resolving the drug issue with other countries including the US in an active and responsible attitude.”
ProPublica and The Frontier interviewed more than three dozen current and former law enforcement officials in the United States and overseas, as well as academic experts, defense lawyers, farmworkers, Chinese dissidents, Chinese-American leaders, human rights advocates and others. Some sources were granted anonymity to protect their safety or because they were not authorized to speak to the media.
Reporters reviewed thousands of pages of court files, government reports, news reports and social media posts in English, Chinese and other languages.
California Dreams
He Qiang Chen came to New York about 30 years ago from the Changle district outside Fuzhou, the capital of Fujian.
Chen and his older brother opened a restaurant and a laundry in the Bronx and became legal US residents. By the early 2000s, they had moved to North Carolina, where they also ran restaurants, according to public records and law enforcement officials. They shuttled back and forth to New York, buying properties in and around Flushing, which has a vibrant Chinese business district. The area has also developed a reputation as a bastion of Chinese crime bosses with nationwide reach, leading to a refrain in law enforcement: “All roads lead to Flushing.”
Until about five years ago, public records indicate that Chen’s encounters with the justice system consisted of repeated tickets for speeding and reckless driving.
In 2017, though, the brothers launched into the marijuana racket at a level that would make investigators think they’d been involved in crime for a while. They went to California, where Chen paid $825,000 for a four-bedroom house behind a wrought-iron gate in the San Joaquin Valley about 35 miles from Sacramento.
The semirural lot was near a winery and an equestrian center. But Chen wasn’t interested in genteel pastimes. Along with his romantic companion, a 43-year-old woman from San Francisco named Fang Hui Lee, Chen and his brother got to work converting the spacious barn into a cannabis plantation.
Several associates also established themselves in the Sacramento area. A 39-year-old fellow transplant from North Carolina, Yifei Lin, bought a suburban house and set up a clandestine indoor grow, court records show.
The cross-country move was part of a migration of criminal groups into the marijuana industry. Other destinations included Colorado and the Pacific Northwest. California law limited cannabis for personal use to six plants and required commercial growers to get a license. With criminal penalties diminishing, the goals of legalization were to establish regulation, generate tax revenue and eliminate organized crime from the picture.
Instead, the low risk and fast money set off a feeding frenzy. The players who established clandestine grows included Mexican cartels, Cuban immigrant gangs and longtime locals. But the Chinese crews were the biggest and best organized. They smuggled their product by car, truck and plane to the East Coast, where profit margins were stratospheric.
In this rapacious subculture, mobsters went into subdivisions and snapped up a half dozen homes at a time. In San Bernardino County, east of Los Angeles, a federal court convicted a real estate agent in 2020 for a typical tactic: paying “ghost owners” to fly in from China posing as buyers, sign paperwork and go home, according to case files and interviews.
The bosses brought in recent Chinese immigrants to tend indoor crops, often stealing industrial quantities of water and power from public utility systems for their operations. Grow houses created a nefarious mix of risks: toxic fumes from banned pesticides, deadly fires from makeshift electrical bypasses, volatile chemicals and flammable equipment. The presence of drugs, cash and weapons was a magnet for crime, and the blighted homes hurt property values.
In November 2018, Sgt. George Negrete, a detective for the San Joaquin County Sheriff’s Office, got a tip about Chen’s illegal grow.
Doing surveillance on foot from an adjacent water treatment facility, Negrete saw telltale signs, such as spray foam filling the seams of the barn walls to mask heat, light and odor. Utility records showed that the electric bill had spiked from $170 a month to more than $2,000 per month after Chen bought the property, indicating sustained use of air conditioning and high-intensity lights.
On December 13, deputies served a search warrant. They found 3,835 plants and arrested the Chen brothers, Lee and two other men, court documents say. Chen claimed he didn’t speak English. But he admitted he was in charge. He told Negrete that someone had advised him marijuana was a good business.
“They weren’t scared or afraid,” Negrete said in an interview. “It was like regular business for them.”
The crew had slept on mattresses on the floor. Lee apparently supervised the day-to-day work. And deputies found two .40-caliber pistols, court documents say. Firearms were unusual at Chinese-run grows that Negrete had raided.
“It made me think they were at a higher scale in an organization,” the detective said.
Cash and Discipline
The arrests of the Chens and their associates happened during a state-federal crackdown in the Sacramento area known as Operation Lights Out.
On the day of the raid on Chen’s house, federal prosecutors indicted a Sacramento real estate broker, accusing her and other suspects of teaming with financiers in Fujian who wired millions of dollars to acquire houses for indoor grows through fraudulent maneuvers, according to a criminal complaint. Authorities also seized more than 100 houses.
The elaborate and brazen nature of the alleged conspiracy led investigators to believe it involved the triads, according to three former federal officials who declined to be named because they were not authorized to discuss the case.
Suspects used banks in China to wire money to the US defendants in suspicious and obvious increments, according to the criminal complaint and former federal officials. Yet there was no interference from the most powerful police state in the world. Although hard proof was elusive, two former senior US officials told ProPublica they suspected Chinese officials protected the scheme and may have benefited from it financially.
“There was no question in my mind that there was at least Chinese government awareness of this,” a former senior Department of Justice official said. “There was no way they didn’t see the movement of the money going to the same people in the United States. But could we prove it? We suspected Chinese officials were complicit.”
Although the prosecution had a big impact by combining the might of the FBI, DEA, IRS and Homeland Security Investigations, it was one of the few federal offensives against Chinese networks involved in marijuana.
Still, DEA financial investigations around the country revealed that the emerging marijuana empire intersected with the networks laundering billions of dollars for Latin American drug lords. Some of the funds from the laundering returned to China, but a lot was reinvested into new U.S. marijuana ventures, current and former officials said.
The marijuana proceeds were “another massive bucket of money” with which high-level Chinese crime bosses funded interconnected rackets such as the money laundering and migrant smuggling, said former senior DEA official Christopher Urben, who is now a managing partner at the global investigations firm Nardello & Co.
Agents marveled at the scope of the enterprise and the lack of turf wars. Around 2019, the DEA learned that triad bosses had traveled from China to sit-downs in New York, where they issued directives and kept the peace nationwide, according to Urben and other current and former officials. New York had become the command hub for marijuana as well as money laundering.
“The discipline involved is incredible,” Urben said. “How are we having thousands of workers moved into the country and among states? How are all these groups doing this without more conflict or violence? How do you ensure that all these mid-level managers get along, with all this money, all this marijuana? The only way you can do it is with an organized crime apparatus.”
In the federal prosecution in Sacramento, a defendant pleaded guilty this February 27. The real estate broker and two others are still awaiting trial.
Meanwhile, Chen and his associates pleaded no contest to misdemeanors in state courts, which sentenced them to probation. Wasting no time, the crew headed for Oklahoma in 2020.
In contrast to California, Oklahoma did not limit the size of grows. As long as the operations had a nominal local owner and a medical marijuana license, they could spread dozens of greenhouses capable of holding tens of thousands of plants over a cheap parcel of farmland.
Some Chinese groups redeployed by air, according to officials and case files. Federal agents began detecting flights of private planes from California to rural airfields in Oklahoma. Couriers aboard the aircraft carried hundreds of thousands of dollars in cash to buy farmland, sometimes for twice or three times its value. To dodge federal interdiction teams, some pilots filed flight plans for one airstrip, then diverted to another.
And money poured in from China. Around 2020, one group crowdfunded Oklahoma marijuana ventures through an invitation to investors on WeChat, the popular Chinese social media platform, said Mark Woodward, spokesperson of the Oklahoma Bureau of Narcotics. U.S. investigations show that WeChat, although heavily monitored by Chinese security forces, is often a forum for discussions of criminal activity.
Oklahoma’s marijuana industry surged to “an astronomical level,” said Ray Padilla, a Denver-based DEA agent. He estimated that 90% of Colorado’s illicit producers moved to the neighboring state.
Oklahoma was the new frontier, Padilla said. And it was “absolute insanity.”
Gunplay at the Association
A statue of a panda bear sits like a chunky sentry atop a pillar on Classen Boulevard in Oklahoma City’s Asian District.
Mixing a longtime Vietnamese community with a more recent Chinese one, the boulevard is lined with stores, restaurants, massage parlors, nail salons and, block after block, marijuana dispensaries.
Behind the panda, a ground-floor suite in a corner mini-mall houses the local chapter of the American Fujian Association. Shortly before dusk on December 8, 2020, a black Mercedes SUV carrying Chen and Lin pulled up at the mini-mall accompanied by two other cars. The crew had driven an hour from their new farm in Kingfisher County.
They were looking for Jintao Liu, who had also relocated from Sacramento after his marijuana site got busted, court documents show. Liu and Chen had been feuding since Chen had failed to pay him for organizing a delivery from California.
When Liu had asked him to pay the $2,000 debt, Chen had become infuriated and began to terrorize Liu and his wife with threatening phone calls and texts showing photos of guns. Chen squared off with Liu at a gathering and punched him in the jaw. Later, Chen threatened to kill his wife and three children, court records say.
The reasons for the rage remain somewhat murky. Asked during a court hearing why Chen was so angry if he owed the money, not the other way around, Liu answered, “He did not want to pay. He was this kind of a person.”
On the afternoon that Chen and his crew appeared outside the Fujianese association, Liu was inside watching a friend play cards, according to court testimony. Liu and several other men came out. A brawl ensued.
“Shoot him,” Chen told Lin, according to witnesses.
Lin pulled a gun and fired, the bullet fracturing Liu’s hipbone, according to court documents.
Police soon arrested Chen and Lin. A search of Chen’s house in suburban Edmond turned up three pistols, 27.5 pounds of marijuana, $97,000 in cash and eight vials of ketamine, the party drug of choice in the Chinese underworld, court records say.
Prosecutors charged Chen and Lin with assault and battery with a deadly weapon and drug offenses. The men made bail and went right back to the grow. (Lin has pleaded not guilty. His lawyer declined to comment.)
Their farm was about 13 miles from Hennessey, population 2,000. Lin had bought the 10-acre spread for $280,000, court documents say. To evade a state residency law, he paid cash to a local man named Richard Ignacio to pose as the 75% owner of the medical marijuana business and obtain a license, court documents allege.
Ignacio had allegedly been drafted as a straw owner by an Oklahoma City accountant, a 20-time felon named Kevin Pham, who has been charged in connection with the Kingfisher farm and other grows, court documents say. Ignacio told investigators that he “earned significant income” acting as a hired front man.
Ignacio pleaded guilty last year to being a straw owner for the Kingfisher farm. He and Pham have pleaded not guilty to other charges and are awaiting trial. They could not be reached for comment.
Lin lived at and managed the place for Chen, according to court records and interviews. For equipment, three companies in China shipped about 440,000 pounds of greenhouse parts. Even among the vast marijuana farms in Oklahoma, the spread was unusually large: it contained over 100 greenhouses and several indoor grow houses, interviews and satellite images show.
The closest neighbor, Gary Hawk, lived about a mile away. He had grown up at the place next door when it was a dairy farm owned by his parents. There was tension with the newcomers from the start. After a neighboring farmer used a plane for crop dusting, men at Chen’s farm threatened to shoot it out of the sky, Hawk said in an interview.
“The mail carrier would go by and she would stop to deliver mail there,” he said. “They would come out of the house and one guy would come out with a machete and one guy would come out with an AR-15. That was just to pick up the mail. ”
The farm employed an armed security officer stationed in a guard hut and as many as two dozen laborers, according to law enforcement officials and others who spent time there. Workers slept in trailers, the garage or the cluttered main house, where meals were prepared throughout the day and there was only one bathroom. During an inspection by fire marshals that found multiple safety violations in 2021, most of the employees presented Chinese identification and US immigration documents.
Neighbors complained about uncollected trash blowing into nearby pastures and endangering cattle, said Sgt. Michael Shults of the Kingfisher County Sheriff’s Department.
“We’ve been out there several times explaining to them you need to put trash up,” Shults said in an interview. “Cattle get into plastics that are blowing around, you know, cattle will eat almost anything.”
Deputies soon became convinced that Chen’s crew, like many others, was trafficking its product on the black market in other states. In April 2021, Shults and other deputies intercepted a vehicle carrying 46.8 pounds of marijuana and arrested the driver, who was from Texas and did not have an Oklahoma cannabis transport license.
Surveillance showed that she was one of two suspected couriers who had picked up bales at the farm that day, according to Shults and court documents.
Awash in Weed
By 2021, a mysterious investor had joined the crew at the Kingfisher farm.
Chen Wu (also known as Wu Chen, but not related to the brothers) was in his mid-40s and from Fujian, according to officials and Chinese media reports. There are gaps in his past that investigators are still trying to fill. What they do know suggests he was a heavyweight: He had ties to Chinese criminal networks involved in money laundering, drug trafficking and migrant smuggling across the country and overseas, according to officials and court records.
As a young man, Wu lived illegally in Spain, whose Chinese population has grown rapidly in the past two decades. In 2000, police on the resort island of Mallorca arrested him for entering the country illegally, Spanish law enforcement officials said.
As often happens, though, he managed to stay. He sought work authorization in 2003 and gave an address in a gritty neighborhood of Madrid. Five years later, he got in trouble for using someone else’s identity, officials said, and Spanish police issued an arrest warrant for him in 2010.
But he had already moved on. Wu spent time in the Caribbean, including Cuba. Arriving in the United States around 2016, he bounced around the country pursuing illicit schemes, officials said. In Minnesota, he married the owner of a restaurant and got legal status. During his divorce in 2020, Wu claimed in legal filings to have only about $18,000 to his name, records show.
Yet he moved to Oklahoma and invested in Chen’s farm. After months working there, he argued with his partners over money and left.
By then, the state was awash in weed.
The number of licensed marijuana grows in Oklahoma peaked at nearly 10,000 at the end of 2021. Authorities suspected most of them of trafficking on the black market. One Chinese criminal group oversaw at least 400 grows. Another outfit smuggled truckloads to the East Coast every week, selling each for over $20 million, before investigators dismantled it.
Whether bosses or grunts, most of the newcomers were from New York, where a mob hierarchy oversees the illicit marijuana trade in Oklahoma and swoops in to collect the profits, according to law enforcement officials and court files.
“You have many different levels,” said Anderson, the state anti-drug director. “Some overseeing grows. Then another upper echelon that controls money. … They’re never around except to collect money.”
The boom caused prices to crater, hurting the legal industry. And it brought a generalized surge of crime. At airports, wary-looking Chinese immigrant laborers with backpacks became a familiar sight to law enforcement officers.
So did human traffickers accompanying flashily dressed prostitutes to brothels set up for overseers of the marijuana farms. Illegal casinos appeared, seizures of ketamine soared, and robberies and violence plagued grows, dispensaries and stash houses, according to court cases and law enforcement officials.
There was complex criminality as well. In a case investigated by the FBI, a Chinese ring based in New York and Oklahoma allegedly used a cryptocurrency scheme to steal over $10 million from banks and other financial institutions. One defendant, who is now awaiting trial, was involved in a marijuana grow with an associate of Chen’s Kingfisher County crew, according to law enforcement officials and public records.
The victims of another scam were law-abiding Asian Americans. Cybercriminals manipulated the computer system of the Texas Department of Public Safety to obtain thousands of driver’s licenses destined for Asian Americans, tricking authorities into mailing the licenses to marijuana farms in neighboring Oklahoma. The suspects used the licenses for fraudulent purchases or sold them on the underground market. Police arrested the accused mastermind in New York and extradited him to Texas last April to stand trial.
Before marijuana legalization, Oklahoma was “a pretty quiet state,” said Tony Lie, president of the Oklahoma Chinese Association. “We didn’t have any Chinese criminal gangs coming here.”
Lie has lived in Oklahoma for more than 30 years. Members of his longtime organization come from several regions in mainland China as well as Hong Kong and Taiwan. In contrast, most of the newcomers are Fujianese. Lie said the ills of the marijuana industry have hurt the image of Chinese Americans in the state.
“We don’t want people to come to Oklahoma to do something bad for the Chinese community,” Lie said.
The shooting at the Fujianese association in 2020 had opened a window into a fast-evolving underworld.
But it turned out to be just a prelude.
Pitch-Black Night
Shortly before 8 p.m. on November 20, 2022, Kingfisher County Sheriff Dennis Banther alerted his deputies to a hostage incident at a farm near Hennessey.
“Everybody go 10-8,” the text message said: Go in service and rush to the scene.
Shults was the third to arrive. Four gunshot victims lay dead in the garage, and the shooter was on the loose. Deputies feared he was hiding in the sprawl of agricultural buildings known as hoop-houses.
“It was pitch black,” Shults said. “When you’re out there in the pitch dark, in the black night, and you’ve got four people down, been executed, and you don’t know if the shooter’s still on scene or not … it’s find the shooter. Survival.”
The sergeant came upon a wounded man lying in a black Ford F-150 pickup truck. It was Lin, the farm manager who had been the accused gunman at the Fujianese association, according to court documents.
A second survivor emerged from the darkness. A deputy struggled to ask the farmworker urgent questions using Google Translate on his phone. Deputies found another worker who had recorded part of the incident on a cellphone, leaving it near the garage with the camera on before fleeing, according to court documents and interviews.
The survivors said the killer was Wu, who had worked at the farm until about a year earlier. He had arrived in his Toyota Corolla and shot Chen and a dog that was in the garage. Wu then told his hostages he would kill them if they didn’t hand over $300,000 in half an hour.
“The Boss told his girlfriend, who was inside the garage at the time, to call her brother to get the money,” a witness told police.
As minutes passed, Wu became increasingly agitated. The hostages tried to stop Chen’s bleeding by wrapping a long-sleeved shirt around his knee as a makeshift tourniquet.
But Chen “was not doing very well,” the witness said. In a grim exchange, the wounded boss told the gunman “to finish him off.”
Wu pumped two bullets into Chen’s chest. Then, two hostages rushed at the gunman, who let loose a barrage that killed Chen’s brother, Chen’s girlfriend Lee and a newly hired employee. The wounded Lin ran outside and took refuge in the truck.
Although the phone video didn’t capture the actual shooting, it recorded the sound of gunshots and showed the gunman leaving the garage.
Emergency personnel swarmed the scene. A helicopter evacuated the wounded man. Deputies spent all night doing a sweep of the grounds, finding another terrified worker hiding in a barn.
At one point, a sedan with New York plates pulled up to the farm. An Asian man rolled down the window, startling deputies, and said he “was sent” to pick up the workers remaining onsite, a deputy said.
“You need to back him off,” a sheriff’s lieutenant yelled to his deputies. Afterward, they would wonder who had sent him so quickly.
In one area of the dark compound, deputies thought they were trudging through mud. After sunrise, they realized it was human excrement — a sign of the conditions in which the farmworkers lived.
Meanwhile, the gunman sped east toward Florida. From the road, he called people in Florida, including a Chinese organized crime figure suspected of involvement in drugs and human trafficking, according to court records and law enforcement officials familiar with the case.
Investigators believe Wu wanted help from smugglers to flee the country, possibly to Cuba, which doesn’t have an extradition treaty with the US, court records say. One affidavit for search warrants for Wu’s phones and online accounts seeks evidence “relating to the planning, preparation and actions taken to facilitate human smuggling.”
Soon after Wu got to Miami Beach, however, a license plate reader detected his car. Police arrested him two days after the murders. During an extradition hearing, Wu told the judge his life was in danger.
“If I go back to Oklahoma, I’ll be killed in the prison or jail,” he said through an interpreter. “I’m afraid I will be killed because these people are mafiosos.”
Aftermath
It seemed ironic: a mass murderer begging the court for protection. But a strange story told by a deputy who brought him back suggests that his fears may have been well founded.
Kingfisher County sheriff’s Lt. Ken Thompson had 25 years of experience transporting prisoners. He and another deputy drove nonstop to Florida in a marked Chevrolet Tahoe. In Miami, they checked into a motel near the airport in the evening, planning to sleep a few hours before picking up Wu from the Miami-Dade County jail, Thompson said in an interview.
They changed their minds, Thompson said, because “a weird deal happened.”
Looking out of the window of his motel room, Thompson said, he saw a car pull up next to his marked police vehicle in the parking lot. Another car appeared, then a third. The three cars drove around the motel as if doing surveillance, he said.
The deputies concluded that they “didn’t really feel comfortable sitting in this place,” Thompson said. They decided to take custody of Wu and hit the road.
After the deputies left the jail with Wu in the back seat, the three cars from the motel reappeared, Thompson said, and shadowed the Tahoe on the highway.
Thompson said he did evasive maneuvers to lose them, exiting abruptly and returning to the highway miles later.
“It’s just a feeling, a gut feeling that you get, and the fact that they all just kind of just paced right around us,” he said. “I mean, they flew right up on us, but then they just locked down to our speed. So it was a weird deal.”
Thompson suspects that people in organized crime somehow located the deputies in Miami. He said he did not know if their goal was to harm Wu, to free him or simply to monitor a case that was causing a commotion.
The prisoner was polite and obedient during the cross-country ride, getting out for bathroom breaks and accepting a McDonald’s breakfast burrito that the deputies offered him. After they crossed the Oklahoma state line, though, his demeanor changed, the lieutenant said.
“You couldn’t pry him out of that car,” Thompson said. “Once he reached Oklahoma, he wouldn’t get out of the car.”
On February 9, Wu pleaded guilty to the four murders and assault and battery. The judge sentenced him to life without possibility of parole. (He declined an interview request.)
The quadruple murder made international headlines and set off a flurry of investigative activity and political attention. A state crackdown has reduced the number of growing operations by almost half, officials say.
Chinese immigrants involved in the marijuana industry say law enforcement has been excessively harsh on them since late 2022. Qiu (Tina) He, who operated a marijuana-related consulting firm that is under investigation, said in an interview that many Asian investors have become disillusioned by what she called discriminatory treatment and the risks of the business. She denied wrongdoing in her case and predicted the state will suffer from the loss of tax revenue if Asian investors leave.
“We are funding Oklahoma,” she said. “Oklahoma City will be like a ghost town if we leave.”
The crime in Kingfisher County was a relatively unusual eruption of violence in the Chinese underworld. Law enforcement experts say the frontier atmosphere in Oklahoma is likely a result of the sheer amount of money generated by the cannabis trade and the number of criminals it has attracted. The growing wealth and power of Chinese organized crime is causing clashes elsewhere in the country as well, experts said.
“Maybe it’s more like the Wild West as these groups keep spreading,” said Urben, the former DEA official. “You are going to have violence even if someone is controlling from above. I think there would be even more conflict if the triads were not so involved.”
Sebastian Rotella and Kirsten Berg are reporters for ProPublica. Garrett Yalch and Clifton Adcock are reporters for The Frontier.
China has a plan, and it’s working – Asia Times
The” two sessions” in first March– the National People’s Congress and the Chinese People’s Political Consultative Conference– took no economic activity of importance, to the confusion of pundits who expected dramatic , action from Beijing in the form of financial ease, or consumption stimulus, or a property bailout.
China’s authority was solely focused on transforming its industry through innovative technologies. It asks for and will give no quarter to America’s systems siege, relying on an” all- state work” to reach personal- sufficiency in semiconductors and various key technologies.
In addition to its presently substantial devotion, it announced a 10 % increase in the national knowledge resources and announced an additional US$ 27 billion for a semiconductor business account.
The divergence of views about China’s economy at home and abroad could n’t be more pronounced.
The , Center , for Strategic and International Studies, the , epicenter , of conventional wisdom, wrote on February 29 that” China’s economy is showing multiple signs of weakness. Actual growth seems below the official figures, there is substantial deflation, the housing market has yet to stabilize, and the domestic stock markets have fallen significantly”.
Beijing, on the other hand, emphasizes industrial policy while paying little attention to Western macroeconomists ‘ obsession with demand management.
A few important data reports since the” two sessions” ended , favor , Beijing’s benign view of China’s economic circumstances. Contrary to the deflation meme, China’s core consumer price index showed a 1.2 % year- on- year rise in February following a 0.4 % rise in January. The headline CPI number has a negative impact because the core CPI excludes volatile food prices. Headline CPI also rose in January.
Producer prices are continuing to decline, but this is not necessarily a bad thing because lower producer prices and higher consumer prices suggest higher corporate profits. That has been the historic pattern.
Most importantly, exports in RMB terms rose 10.35 year- on- year in January and February. That provides critical support for China’s high- tech industry, especially solar panels, EVs, telecommunications equipment and electronics.
China already installs more industrial robots than the rest of the world combined, or 52 % of the total, and its use of automation and economies of scale makes it able to produce solar panels, electronic vehicles, and other important products much more affordably than any rival.
But industrial automation, including the application of advanced 5G ( what Huawei labels 5.5G ) and artificial intelligence, is only the beginning. China is pushing for novel technologies, including nuclear fusion, to be developed.
The science budget’s 10 % increase is the largest budget increase ever. To highlight just two major initiatives: the construction of the world’s largest particle collider, which will bring thousands of top international scientists to China, and the accelerated development of thermonuclear fusion as a major energy source of the future.
To combine the capabilities of scientists and business leaders to advance research in nuclear fusion technology, a consortium led by China National Nuclear Corp was established at the end of December, in order to build energy-producing reactors by 2030.
The group comprises 25 central government- owned enterprises and research institutes, including some of the country’s largest energy and steel firms, such as State Grid Corp, China Three Gorges , Corp , and China , BaowuSteel Group Corp Ltd.
Advanced particle physics has a second major initiative. The Higgs factory, known as the Circular Electron Positron Collider, will take ten years to complete, making it the next major hub for particle physics, at a cost of 36 billion yuan ($ 5).
Focus on second- and third- tier cities
The Communist Party of China has a strong political desire to address the enormous wealth and income disparities that resulted from Deng Xiaoping’s 1979 reforms. Xi Jinping’s byword for this priority is” common prosperity”.
The minority of Chinese who live in Shanghai, Shenzhen, Guangzhou, Beijing, and other Tier 1 cities already have a living standard close to that of the industrial countries, while much of the country has  , lagged behind
” Observer” columnist , Chen Feng , wrote on March 6 that Beijing’s goal “is to make the pie bigger by narrowing the gap between urban and rural areas and narrowing regional differences”. China’s infrastructure spending, Chen explained, will focus on raising the level of smaller cities through the expansion of the high- speed rail network and other infrastructure.
According to Chen, “over-concentration of the population also causes the distortion of the allocation of resources and opportunities among regions.” ” Satellite cities, new urban areas, and sub- centers , are some of the solutions, but these ultimately depend on the decentralization of large,  , medium and small cities that are independent of metropolitan areas”. This is a good place to start because there are now more than 2 million cities in China with more than 2 million people.
The Communist Party wo n’t use enormous amounts of state money to rescue property companies that fell victim to the urbanization boom that cost ten times more than the same house in Chengdu’s suburbs.
The average price of Chinese property doubled from RMB 6, 200 per square meter in 2015 to RMB 11, 000 in 2021 before falling to slightly over 10, 000 in 2023. But in Shanghai, the price rose from about RMB , 15, 000/square meter to nearly 50, 000/square meter in 2021.
Beijing’s policy is not to support the windfall gains of wealthy homeowners in tier 1 cities. Instead, according to a , March 11 analysis , in” Observer”, the burden of adjustment will be shared among all the relevant parties: property company stockholders, bondholders, banks and homeowners.
The People’s Bank of China is leaning toward state-owned commercial banks to provide more support to property companies and has lowered the long-term bank lending rate modestly in favor of homebuyers. However, this is a Chinese-style negotiation in which no one’s rice bowl is broken and everyone is expected to accept some losses.
( This report first appeared in the March 13, 2024 issue of Asia Times Global Risk/Reward Monitor. )
Singapore endorses communique on tackling scams at inaugural global fraud summit
” International cooperation is a critical , part of Singapore’s strategy to combat scams, and we are committed to doing our part – both domestically and on the global phase”, Mrs Teo said, according to a media release from the Ministry of Home Affairs.
With the help of other countries, Singapore was able to take down 19 transnational scam syndicates last year, she noted.
The Singapore Police Force reported earlier this year that these transnational syndicates were to blame for more than 730 scams and over 110 arrests.
Singapore and Malaysia have previously agreed to combat scams across telecommunications channels. Singapore and Australia also ratified a pact in 2022 to stop spam and scams.
Mrs Teo also said , more than 19, 600 bank accounts were frozen in Singapore last year.
More than S$ 100 million in scam losses were recovered, and banks and the police collaborate to track down funds and freeze scam-tainted accounts.
There were a record 46, 563 scam cases in Singapore last year. Jobs scams were the most popular scams that people fell for, followed by e-commerce and fake friend call scams. Victims lost a total of S$ 651.8 million, slightly less than the year before.
According to Mrs. Teo, phishing scams are still prevalent in other parts of the world, and some nations were interested in Singapore’s SMS Sender ID Registry, which requires businesses to register their sender IDs.  ,
The , Singapore Network Information Centre, states that messages sent from sender IDs that are not registered will be marked as” Likely- SCAM.”
Because many of those scams were carried out via SMSes, the registry has been instrumental in reducing phishing scam numbers in Singapore, said Mrs. Teo. She continued,” Other countries are eager to implement a similar system in their countries.”
Cause to cheer, cause to jeer China stock bounce – Asia Times
A debate between the bulls and bears is raging as a few measures for Chinese companies, which are off 20 % from their January lows.
The cows are betting that Beijing’s recovery efforts have been successful in bringing the market base and that there are numerous buying opportunities. The animals see more of a “dead kitty jump” after a US$ 7 trillion defeat and continued symptoms China’s economic holes are deepening.
Who’s straight? Whether President Xi Jinping and Premier Li Qiang take the lead in that regard depends on what they will do next.
To be sure, the rise in promote charges, including those for the Hang Seng Tech Index, suggests that investors have overcame the stress and are now digesting Beijing’s ostensible game plan.
That requires very targeted more than broad-based stimulus and a greater emphasis on longer-term reforms to strengthen China’s large economic game and strengthen the role of high-tech and other high-value-added sectors.
However, this preliminary rally also signifies that Xi and Li have a new relationship with international investors.
Communist Party leaders must accelerate efforts to end the house crisis, maintain regional government finances, and enhance China’s funds markets to support the new buying.
This week’s National People’s Congress and” Two Sessions” conferences made for an uneasy split- display for Xi’s group.
Beijing took a huge leap forward with strategies to destroy “new successful forces” to build a more stable and successful business on one monitor.
On the other hand, there were messages that previous policy mistakes are catching up with the business, as seen in fierce efforts to stop China Vanke, a significant property developer, from going bust.
Techniques taken since January to comfort international investors appear to be gaining some traction. These include the People’s Bank of China’s use of precise cash to help the country’s frightened areas and the “national group” of state-run cash ‘ stock purchases.
” We see China’s stock turnover possible growing more, especially if stimulus policies out of the annual meeting of the National People’s Congress meet marketplace expectations”, says Jonathan Fortun, an analyst at the Institute of International Finance.
” We are beginning to see the pandemic go away from the Chinese equity market, with significant reforms in the real estate industry under way and significant state-led purchases,” he continued.
Zhu Liang, investment director of AllianceBernstein Fund Management, points out that mainland stocks, particularly A- shares, are highly attractive in terms of valuation.
It’s a bit of a change from January when Chinese stocks were among the worst-performing asset classes on the planet. Since then, changes to the banks ‘ reserve ratio requirements and other efforts to boost liquidity have slowly but surely retracted the attention of the world to China.
Xi, Li, and PBOC Governor Pan Gongsheng have yet to address the deflation narrative to the delight of many investors.
According to Citigroup economist Xinyu Ji, “further policy efforts are essential to foster and consolidate the price momentum.”
According to Morgan Stanley analysts, “markets are likely to remain volatile because the NPC fiscal package is insufficient to address the deflation concern and corporate earnings remain constrained.”
Hope can be sparked by reports that China Vanke, a country struggling for cash, is negotiating a debt swap with banks. The property industry is still very insolvent despite its stumble, which serves as a reminder of that. On Monday, Moody’s Investors Service cut China Vanke to a” junk” rating.
” The rating actions reflect Moody’s expectation that China Vanke’s credit metrics, financial flexibility and liquidity buffer will weaken over the next 12 to 18 months”, says Kaven Tsang, an analyst at Moody’s.
That’s “because of its declining contracted sales and the growing uncertainty over its funding options in the face of the prolonged property market downturn in China.”
The onshore debt default watch involving Country Garden’s continues to generate unfavorable headlines. So there are doubts about China’s “around 5 %” economic growth target for this year without additional bazooka stimulus explosions.
Hitting the 5 % GDP goal will be” challenging”, says ING Bank economist Lynn Song, pointing to weak consumer confidence in Asia’s biggest economy. ” Trade is unlikely to be a major engine of growth as well, with global trade growth expected to remain below historical averages, especially given rising Sino-US trade protectionionism,” said one analyst.
Nomura Holdings ‘ economists concur that “achieving the’around 5 % ‘ growth target will be very challenging.”
They point out that China’s economy is still” still faltering,” as evidenced by the crackdown on local government debt in 12 high-risk provinces, the likely likely significant slowdown in investment in the new energy sector, and the lackluster data that has been made available for January and February.
The local government debt component of China’s economic puzzle is also undergoing growing and more stringent scrutiny. Banks are being advised by Xi’s regulators to halt their use of offshore bond-issuance services by local government financing vehicles ( LGFVs ).
The$ 9 trillion mountain of LGFV debts poses a significant challenge for Xi’s efforts to deleveraging the economy. A state-owned company selling bonds to pay LGFV debt was one recent transaction that raised questions. The issue is that these practices are more prevalent than many investors might think.
It’s “rare to explicitly issue debt just to repay debt of another entity,” says economist Victor Shih, director of the 21st Century , China , Center at the University of California- San Diego.” Insect subsidies of LGFVs are everywhere,” he says.
They must deal with an increasingly difficult balancing act as Xi and Li try to deleverage the economy. Beijing could face new pressure from the outside as the world’s headwinds increase in terms of fiscal and monetary stimulus.
” China’s economy is marred by insufficient domestic demand”, says Emily Jin, an analyst at advisory firm Datenna.
” For years, analysts have urged Beijing to boost consumption’s role in China’s economy, to little avail. The 5.2 % increase in consumer demand in 2023, largely attributable to a low base effect from pandemic consumption levels, may not hold up until 2024, according to Jin.
For now, China’s deflation trend is cheering many bond investors. In early March, yields on 30- year bonds hit a record low of 2.4 %.
Yet Beijing’s fiscal spending plans– and its debt issuance plans – mean Xi and Li must tread carefully. China, for example, plans to sell a record 1 trillion yuan ($ 139 billion ) of ultra- long- term bonds. That’s more than two times the average issuance between 2019 and 2023.
According to Goldman Sachs analyst Xinquan Chen,” the risk of a correction at the long end is high.”
According to economists, the recent spike in gold prices may be just as related to worries about Chinese deflation as US inflation.
” Gold is now the most overbought since March 8, 2022, where it peaked and declined from$ 2, 050 to$ 1, 650″, write Bank of America strategists in a recent note. Although we do n’t demand that, it is reasonable to anticipate that price momentum to wane and/or decline in the face of stretched daily relative-strength index conditions.
China’s stock market could be hampered by rising trade tensions ahead of the US election on November 5. According to Stephen Innes, a strategist at SPI Asset Management, the recent decline in Apple Inc.’s stock as iPhone sales in China decline are a” stark reminder of the ongoing trade tensions between the United States and China.”
The most crucial missing element is a bold and specific strategy to solve the property crisis, which investors are currently looking at. It’s vital, analysts say, that Beijing devises a mechanism to get bad assets off property developers ‘ balance sheets.
Whether China cribs from Japan’s 1990s bad- loan mess or America’s 1980s savings and loan debacle matters less than authorities acting urgently and assertively.
In the short run, China’s housing minister, Ni Hong, says regulators intend to support “reasonable” financing needs of real estate developers. A so-called “whitelist mechanism” is a part of the plan to keep liquidity flowing to the property sector, which can account for about a quarter of GDP.
Last month, China Construction Bank, one of the nation’s biggest state- owned commercial institutions, said it had handled more than 2, 000 such projects, approving nearly$ 2.8 billion of pending disbursements.
However, much more incisive action may be required to keep the China stock bulls moving and give them the confidence to put their bets up. A definitive end to the crisis may be required.
That’s not to say Team Xi’s splashy pivot toward greater innovation and productivity is n’t a “buy” signal. China needs more productivity gains to achieve decent economic growth in the future, according to analyst Tilly Zhang of Gavekal Dragonomics, who is a member of Gavekal Dragonomics.
Yet, the move upmarket is very much still a work in progress. According to Zichun Huang, an economist at Capital Economics,” the NPC Work Report last week commits to keeping “money supply and credit growth in step with the real GDP and inflation targets.” This may indicate that policymakers will try a little harder to push inflation higher than the 3 % target than the previous year.
But, Huang notes,” we think China’s low inflation is a symptom of its growth model built on a high rate of investment. We anticipate that inflation will remain low in the long run because reducing dependence on investment is still far off.
The good news, though, is that efforts to raise China’s economic game are beginning to pay some dividends.
” China’s economy is weak but it’s not that weak”, economist Shaun Rein at the China Market Research Group, told CNBC.
” If you’re a multinational, if you’re looking to drive growth over the next three to five years, the next China is China. It’s not India — India’s only a sixth of the GDP of China— it’s not Vietnam. These are small markets. So I actually think investors should be looking long- term at China again, it’s definitely investible”, he said.
” It’s too early to call a bull market, you still have to be very cautious, the economy is still weak – do n’t get me wrong — again the D word – deflation – looms over China, there is still a weak job market, but the valuations are too low”, Rein said.
Follow William Pesek on X, formerly Twitter, at @WilliamPesek
When Japan ends negative interest rates – Asia Times
Japan surprised the world’s markets by implementing negative interest rates in January 2016 with an unconventional monetary policy to stop recession and boost economic development.
The policy, which was put in place after another economic policies failed to have the desired effects, aimed to encourage consumers to spend money, businesses to invest, and banks to lend by punishing holding extreme reserves.
Eight years later, this economic experiment may be coming to an end as soon as this month. A “growing amount” of Bank of Japan politicians are leaning in that direction, according to Reuters ‘ report, amid concerns about significant give increases in the upcoming month’s annual wage negotiations.
What can be anticipated after bad rates are made positive if Reuters and others who predict a scheme shift have it right?
A result of this change is likely to be a stronger yen, which may be a sign of the local economy’s growing optimism. However, maintaining the yen’s strength would likewise present significant challenges for Chinese exporters, who have benefited from the current currency weakness.
As investors adjust their portfolio in response to the plan change, Chinese stocks can be expected to experience uncertainty. Profitability and other industries that are vulnerable to interest rates can be expected to experience major movements.
Japanese government bonds ( JGBs ) make up the majority of global bond markets. Bond markets around the world will be reassessed by shareholders as a result of any change in Japan’s interest rate plan.
Uncertainty may also be present in the world’s capital markets. Sectors with considerable exposure to Japan, including mechanical and customer electronics, can be expected to experience price changes based on dollar movements and the actual performance of key Japanese companies.
Investors ‘ attitudes toward these broad fields are greatly influenced by the performance of major Chinese companies like Toyota, Honda, Sony, and Panasonic.  ,
Good earnings reports or geopolitical shifts by these companies can encourage global property prices in their respective sectors, while setbacks or deficiencies can cause downward force.
Investor sentiment will be important to understanding how a potential shift from negative to good interest rates might affect these Asian giants.  ,  ,  ,
Another significant effect is that if home goods become more appealing due to higher interest prices, Chinese investors are more likely to reevaluate their global portfolios.  ,
This would probably cause international market capital outflows, which could have an impact on property prices, particularly in areas and sectors that were formerly preferred by Japanese investors.
Media reports suggest that the nine-member board of the BOJ is not in agreement on whether to repeal the adverse rate policy at its future March 18 to 19 meeting.
However, investors around the world will be closely watching for any suggestions of a coming change that, if implemented, will have an impact on how markets will behave in the coming months and years.
Russia using Ukraine as a cyberwar testing ground – Asia Times
This is part four of a series, ‘Lessons from the first cyberwar.’ Read part one, part two and part three.
From the Estonian attack in 2007 to leveraging cyber operations and supporting military operations in Georgia in 2008, Russia already had some experience waging cyberwar. And before the Euromaidan Revolution in Ukraine in late November 2013, Russia had begun preparing for an actual war against Ukraine – both physical and digital.
Ukraine’s president at the time, Viktor Yanukovych, who had close ties with Russia, had backpedaled against closer ties with the European Union, refusing under the Kremlin’s pressure to sign an association agreement with the EU.
Russia offered Ukraine US$15 billion in economic aid, which was seen by some as a bribe to Yanukovych to turn away from the EU.
Activists started large protests against the president’s decision to try to bring the country deeper into Russia’s sphere of influence. Yanukovych tried to stop these protests with force, but that only made the protesters more determined and brought more people into the streets. The situation continued to escalate and eventually Yanukovych fled to Russia.
Putin exerted pressure on Yanukovych to pivot Ukraine toward joining the Eurasian Economic Union (EEU), mirroring Russia’s successful coercion of Armenia.
Compared with Armenia’s transition from the EU Association Agreement to the EEU, which occurred without significant public dissent, Ukraine’s situation was markedly different, culminating in mass protests.
Following the ascent of the Euromaidan activists to power, Russia executed an invasion of Crimea. This operation was characterized by the deployment of Russian special forces, who were notably disguised as “little green men” – soldiers without identifiable insignia.
However, during Russia’s invasion of Crimea and illegal referendum, the Kremlin also launched an eight-minute DDoS attack against Ukraine, which was 32 times more powerful than Russia’s largest attack against Georgia during its invasion in 2008.
Then, on the day of the referendum in Crimea, Russia also began conducting DDoS attacks against NATO websites for voicing support for Ukraine against Russia’s invasion. This set a precedent for Russia targeting Ukraine’s supporters with cyberattacks in subsequent confrontations.
In May 2014, the pro-Russian hacktivist group CyberBerkut tried to disrupt the Ukrainian presidential elections. Four days before the vote, they hacked into Ukraine’s main election computers and deleted important files, causing the system that counts the votes to stop working.
The next day, the hackers announced they had “destroyed the computer network infrastructure” used for the election, leaking emails and documents online to show what they had done.
Furthermore, they continued attacking the vote counting system with DDoS attacks, which overloaded the system with traffic. The next day, Ukrainian officials reported that they had fixed the system using backup files, which were ready to be used again. However, government cyber experts still had to remove – 40 minutes before the results were announced – a virus that would have resulted in false votes being released.
Russia’s aim was to discredit Ukraine’s elections. The attacks also revealed how Russian cyber operations are targeted to disrupt services and create instability.
In April 2014, after illegally annexing Crimea, Russia also sent militant groups into south-eastern Ukraine to create a violent uprising that ultimately led to war in Ukraine’s Eastern Donbas region between Ukraine and Russian-backed militants.
As Russian tanks invaded Ukraine in August 2014, Russian hackers were already working on conducting cyberattacks against Ukraine, with the country distracted by what was happening politically.
The war in eastern Ukraine also gave Russia-affiliated hackers the opportunity to begin launching extensive cyberattacks against Ukraine. As a result, Ukraine’s situation would end up being termed “Russia’s test lab” for cyberwar.
In 2015, Russia conducted an unprecedented hack of Ukraine’s power grid, which marked one of the first known instances of a cyberattack resulting in a major power outage, this affecting around 230,000 residents of Western Ukraine.
The hackers used a spear-phishing scheme with malicious Microsoft Office attachments to first gain access to the networks by obtaining the legitimate credentials of three regional electricity distribution companies, providing them with remote access.
They sent malicious emails to employees, which, when opened, infected their operating systems. The attackers deployed BlackEnergy malware on the companies’ computer networks, which was used to gather intelligence on infrastructure and networks to guide future cyberattacks.
The hackers took over the control systems of the power distribution stations and manually switched off the electricity. The power was only out for one to six hours in the affected areas, but even two months after the attack, the control centers were still not fully operational.
The attack was carefully planned and executed over many months with one of Russia’s political goals being to undermine public trust in the Ukrainian Government and private companies.
Viktor Yushchenko, who was Ukraine’s president from 2005 to 2010, highlighted that Russia’s tactics in the digital and physical realm were intended “to destabilize the situation in Ukraine, to make its government look incompetent and vulnerable.”
Russia also began using these attacks against Ukraine to learn about the impact and to perfect its craft for future attacks against both Ukraine and the West.
The attack on Ukraine’s critical infrastructure served as a wake-up call for the international community about the potential dangers of cyber warfare and the impact it could have on civilians.
In 2016, Russia conducted another cyberattack targeting Ukraine’s critical infrastructure. This attack specifically targeted the electrical grid of Kiev, the capital of Ukraine, and marked a continuation of the cyberwar tactics that were evident in the 2015 attack on Ukraine’s power grid in Western Ukraine.
The 2016 cyberattack used a more sophisticated approach by deploying a new type of malware known as “Industroyer.” Industroyer is highly sophisticated and dangerous because it is designed to directly target and control electricity substation switches and circuit breakers. This enables it to automate the process of controlling the electrical distribution network.
The blackout malware was similar to the Stuxnet attack in that the aim was not only to disrupt physical infrastructure but to destroy it. The attack was also designed to cause prolonged harm, potentially resulting in power outages that could have lasted for weeks, if not months.
This showed that hackers were developing more sophisticated tools specifically designed to disrupt critical infrastructure, foreshadowing future Russian cyberattacks. Ukraine had become a “battleground in a cyberwar arms race for global influence.”
In what would become one of the most devasting cyberattacks ever launched, Ukraine was hit with an attack involving the NotPetya ransomware, which took place on June 27, 2017, Ukraine’s Constitution Day.
This attack was particularly destructive and had a far-reaching impact, both on the country’s infrastructure and also internationally as the cyberattack resulted in a global financial impact of $10 billion worth of damage.
The primary objective of NotPetya was to disrupt Ukraine’s financial system but its effects extended well beyond that as it targeted a wide range of entities including banks, energy companies, government offices, airports and even some non-governmental organizations.
Within 24 hours, NotPetya managed to erase data from 10% of computers across Ukraine, causing widespread disruption across various sectors.
The malware initially spread through MeDoc, Ukraine’s most popular accounting software.
Researchers discovered that some of MeDoc’s software updates contained a hidden “back door.”
This was likely implemented by someone with access to the company’s source code and provided hackers with a stealthy way to infiltrate the systems of various companies without being detected.
As compared with typical ransomware, which encrypts data and demands payment for its release, NotPetya was more destructive as it masqueraded as ransomware but was designed primarily to wipe data and disrupt systems. NotPetya also spread on its own and was a much more effective malware attack than in previous cases.
Former US Department of Homeland Security advisor Tom Bossert stated that the use of NotPetya was like “using a nuclear bomb to achieve a small tactical victory.”
The attack also pointed out the interconnected nature of cyber vulnerabilities and how a cyberattack can rapidly spread around the globe from one piece of software. In essence, Ukraine’s vulnerabilities in the cyber war against Russia are also the West’s vulnerabilities.
The need to help Ukraine shore up its defenses was becoming more critical due to the fear of contagion in a globalized, interconnected world. In July 2018, Russia attempted a cyberattack against a Ukrainian chlorine plant, the Auly Chlorine Distillation, with the intent of causing damage to the country’s infrastructure.
The facility is involved in the treatment of chlorine, which is vital for water purification and other industrial processes. The attackers used a malware known as “VPNFilter” which can survive a reboot, making it particularly resilient. The malware can be used to spy, steal data, and disrupt industrial processes and render devices inoperable.
The malware targeted the chlorine station’s control systems, which could have interrupted how chlorine is treated and supplied. If the plant’s operations were badly affected, it might have caused major environmental and health problems for the civilian population.
This attack was planned to be Russia’s next big cyberattack on Ukraine. However, security companies found the botnet, which had 500,000 infected devices before it could fully launch.
Next: The Ukraine War
David Kirichenko is a Ukrainian-American security engineer and freelance journalist. Since Russia’s full-scale invasion of Ukraine in 2022 he has taken a civilian activist role.
These articles are excerpted, with kind permission, from a report he presented at the UK Parliament on February 20 on behalf of the Henry Jackson Society.