Access to finance is critical to agriculture’s future, said SC chairman
Capital market could help Malaysia achieve its food security agenda
The Securities Commission Malaysia (SC) encourages the broader adoption of financial technology (fintech) in agriculture to help achieve the country’s food security agenda.
SC Chairman Awang Adek Hussin (pic) said access to finance…Continue Reading
In January, six former senior management staff members of KOM were given stern warnings by CPIB over the Petrobras case.
The warnings were in lieu of prosecution for offences punishable under the Prevention of Corruption Act.
The offences relate to bribe payments to Petrobras officials, pertaining to rigs-building contracts which Petrobras or its related companies had awarded to KOM.
The six former employees were not prosecuted over the multimillion-dollar bribery case due to insufficient evidence to establish their guilt beyond a reasonable doubt, said Minister in the Prime Minister’s Office Indranee Rajah in Parliament on Feb 6.
“Simply put, there is a lack of sufficient evidence, either documentary or through witnesses, which would establish any criminal charge beyond a reasonable doubt against a specific individual,” she said then.
In its statement on Wednesday, CPIB said it “investigates without fear” and would not hesitate to take action against any parties involved in corrupt activities.
China’s Comac C919 passenger jet made its first commercial flight from Shanghai to Beijing on May 28, completing a state-backed development, manufacturing and qualification process dating back to 2007 that now promises to shake up the global civil aviation business.
China Eastern Airlines, the local airline that flew the plane’s first flight, took delivery of the C919 last December. The short- to medium-range plane is expected to go head to head soon with the Airbus A320 and Boeing 737 for local sales and global markets.
One passenger reputedly told China’s Communist Party-run Global Times: “I am so excited to be one of the first passengers to fly on the C919. I am so proud that China now has such advanced aircraft manufacturing industry.”
The state-run Beijing Daily triumphantly declared: “After generations of endeavor, we finally broke the West’s aviation monopoly and rid ourselves of the humiliation of ‘800 million shirts for one Boeing.’”
Critics were quick to note that the C919’s engine, avionics and other key components are procured from US and European suppliers. The Wall Street Journal, for one, reported the C919 “faces a steep path to success.”
But the fact remains that Comac’s assembling of a modern passenger aircraft marks a major Chinese accomplishment.
To put things in one comparative perspective, Japan’s Mitsubishi Regional Jet, also announced in 2007, has suffered numerous humiliating setbacks and was embarrassingly renamed Mitsubishi SpaceJet before it was altogether canceled in February of this year.
A comparison with Boeing is also instructive. Airbus took a slight lead over Boeing in the China market a decade ago, but the gap abruptly widened in 2019 after Boeing 737 MAX aircraft crashed in Indonesia and Ethiopia due to defective flight control software.
In 2022, Airbus sent more than 100 aircraft in China while Boeing delivered fewer than 10. US-China trade tensions also appear to have contributed to Boeing’s poor performance in China, where Airbus has no such problem.
Airbus now accounts for more than 50% of commercial aircraft in service in China and appears likely to maintain or increase its market share with the establishment of a second A320 assembly line at its factory in Tianjin, China.
The agreement setting this in motion was signed during French President Emmanuel Macron’s visit to China in early April. Airbus CEO Guillaume Faury was one of about 60 French business executives who accompanied Macron.
Although the 737 MAX is now back in service and China Southern Airlines is reportedly planning to order 103 new aircraft from Boeing (and 111 from Airbus), data from Aviation Week shows orders for 697 C919 aircraft, most of them from Chinese airlines and leasing companies.
If current trends hold, it seems that Comac could – in fact, is likely to – soon overtake Boeing to become the second-largest commercial aircraft supplier in China.
This, of course, will depend on whether or not Comac can assemble hundreds of aircraft in time to meet delivery schedules while avoiding the quality problems that have plagued Boeing. In April, Boeing revealed that deliveries of a number of 737 MAX aircraft had been delayed due to quality problems at US subcontractor Spirit AeroSystems.
The Chinese government wants the C919 to have 10% of China’s domestic commercial aircraft market by 2025. Five years from now, Comac wants to be producing 150 C919 aircraft per year. China Eastern will reportedly take delivery of its second C919 in June.
However, there are concerns that the US Department of Commerce may try to ground the C919 by imposing new export restrictions on its US suppliers.
In January 2021, then-President Donald Trump had the Department of Defense add Comac to its list of companies owned or controlled by the Chinese military. As a result, US investments in Comac were banned.
In April of this year, US Senators Marco Rubio and Rick Scott of Florida sent a letter to Under Secretary of Commerce for Industry and Security Alan Estevez complaining about the department’s failure to add Comac to its Military End User (MEU) list.
The senators wrote that:
“COMAC also works closely with Western aerospace companies, including firms that produce jet engines and many other components used in commercial and military aircraft. Given the CCP’s [Chinese Communist Party’s] commitment to acquire dual-use aerospace technologies through trade as well as forced joint venture and partnerships, these firms, and U.S. national security by extension, are at risk.”
For reference, Comac is owned by the State-Owned Assets Supervision and Administration Commission (SASAC) of China’s State Council (the chief administrative organ of the People’s Republic), state investment company Shanghai Guo Sheng, Aviation Industry Corporation of China (AVIC, which is on the MEU list), Aluminum Corporation of China, China Baowu Steel, Sinochem, China Electronics Technology and other corporations.
Until now, it is not clear if the US Commerce Department will heed Rubio and Scott’s plaintive call. If it does, several US companies could be affected, including GE, Honeywell, Rockwell Collins and Parker Aerospace.
The Global Times commented that “The maiden commercial flight by China’s first domestically-manufactured large passenger aircraft… ushers in a new era for the cooperation between Chinese manufacturers and foreign companies.”
If that optimistic view is squelched, an aggressively nationalist response would be all but certain, to the detriment of US aerospace companies and the advantage of their Chinese competitors and Airbus. Mass production of the C919 would be delayed but not abandoned.
As Wang Yanan, chief editor of China’s Aerospace Knowledge magazine, puts it: “We must have our own manufacturing capabilities for regional aircraft and large commercial airliners.”
Some 200 Chinese subcontractors supply the C919’s fuselage, wings, forged parts and other basic components and materials. Avionics and engines are likely to follow, with or without US sanctions.
Aero Engine Corporation of China is already developing an alternative to the LEAP jet engine manufactured by CFM International, a joint venture between GE Aviation of the US and Safran Aircraft Engines of France that powers the C919.
The question is, does the US want to participate in or decouple from the world’s most promising civil aviation market?
Follow this writer on Twitter: @ScottFo83517667
Earlier on Wednesday, Mr Fadillah said on Facebook: “We have suggested that (the EU) hold discussions through either a task force or a dialogue involving producing countries, industry players, representatives of non-governmental organisations (NGOs) and smallholders so that there will be clarity in terms of established guidelines and so thatContinue Reading
China is an important economic player in Africa. In 2021 alone, China accounted for nearly US$5 billion in foreign direct investment in African countries. The rapidly increasing Chinese presence across Africa has become a contentious issue both for Beijing and African governments.
In particular, mega-projects funded by China have resulted in public controversies about the relationship between external investments and public debt. China is Africa’s biggest bilateral lender.
In 2020, it held over $73 billion of Africa’s public debt and nearly $9 billion of its private debt. Due to this, US Treasury Secretary Janet Yellen has accused China of leaving countries “trapped in debt.”
Kenya has been no exception. China’s involvement in the construction of Kenya’s Standard Gauge Railway is a typical example of controversies brought by China-supported investments.
These include issues of increasing socio-economic inequalities between different population groups advanced by large-scale investments, local labor mistreatment by Chinese managers, accusations of neo-colonialism, and the long-term sustainability of loans issued by the EXIM Bank of China for projects.
In 2022, with a total debt of $6.8 billion, China was Kenya’s biggest bilateral creditor. Out of this amount, $5.3 billion was advanced by the EXIM Bank of China to finance the Standard Gauge Railway.
It is against this background that our study asked if Chinese actors indeed determined how mega-infrastructures are realised in African countries. We examined the specific ways in which Chinese state-owned enterprises are involved in the construction of Kenya’s Standard Gauge Railway. We analyzed how infrastructure development was realized on the ground and how Chinese construction companies shaped the process.
The study showed that the decisions of Chinese state-owned enterprises in Kenya do not necessarily present a grand Chinese strategy. Instead, they result from changing political and economic circumstances in China, and reflect both state and private Chinese interests.
Acknowledging these dynamics is important because it demonstrates how narratives about China’s involvement in mega-infrastructure development might overemphasise the power of the Chinese state.
Simultaneously, this highlights that African governments have more power to influence their industrial development and the sustainability of large-scale projects than mainstream narratives acknowledge.
Alongside other large projects, such as the Lamu Port-South Sudan-Ethiopia Transport Corridor, the Standard Gauge Railway is central to Kenya’s national development program Vision 2030. This is supposed to industrialise the country and advance socio-economic development.
But the sustainability of the railway project and its contribution to government debt has been widely debated. In 2022, according to the National Treasury, Kenya’s debt stood at KSh9.15 trillion ($74.1 billion), equivalent to 67% of the country’s GDP. There are also concerns whether Chinese contracts protect national interests.
We took a closer look at the project to see if these fears were well founded. Between May 2019 and September 2020, we conducted interviews during multiple visits to Chinese construction camps alongside the railway construction sites.
We interviewed managers and employees in construction and operational departments of China Road and Bridge Corporation, the main railway project contractor. We interviewed informants from the public sector in Kenya, including from Kenya Railways Corporation and Kenya Ports Authority. We also spoke to local government workers, private sector representatives, lawyers and scholars.
Our research is unique because we directly engaged with the Chinese actors that built Kenya’s new railway. Their perspectives have been lacking in both public and academic debates. This is because public engagement of Chinese contractors is usually strictly guarded due to the state ownership of these enterprises.
Our interviews revealed that in Kenya, China Road and Bridge Corporation constantly shifted its strategies. It also adapted to local circumstances in the country and across East Africa, rather than only imposing its strategic priorities.
This compromised its own interests of economic productivity and its public image. Our finding runs counter to any grand visions of transformative infrastructure development, the lens through which Kenya’s rail project has been interpreted.
We found that the Chinese entity had adopted a method called the “Early Entry Scheme” to resolve issues of delayed land compensation. This involved direct, case-by-case negotiated payments to landowners. As a result, owners vacated land for project construction before the land settlement was officially approved by the National Land Commission of Kenya.
This is uncommon among international contractors. Land compensation for a national infrastructure project is usually a responsibility of national governments. But with the delayed national compensation process, the China Road and Bridge Corporation resorted to the Early Entry Scheme.
In Kenya, this scheme was driven by various concerns. Cost-saving was one. The Chinese company had learnt from the first phase of the project that the late delivery of even a small parcel of land could raise the cost of the project if labour and equipment were idle.
Another concern was political. For a flagship project funded by the Chinese government, on-time delivery was crucial to promote China’s image as an efficient development partner.
Another interesting aspect of the project was how the Chinese company became the main operator of the Standard Gauge Railway – not just the construction contractor. According to our interviews, operating the railway would not benefit the company financially.
But the stakes were too high to leave it to chance. Operational challenges that a new company could experience might have affected the public image of the project, as well as the corporation itself. Therefore, the company had to balance its short-term financial interests with long-term reputational concerns.
So far, there hasn’t been clear evidence of the Standard Gauge Railway contributing to Kenya’s national economic development. The current investment in the railway between Mombasa and Naivasha (120km away from Nairobi) is not enough to boost the economy.
This could only be realised if the railway connected global maritime trade to the hinterland of East Africa, to accelerate transport efficiency at a regional scale. But the Kenyan and Ugandan governments did not manage to agree on financing terms to extend the project.
For this reason, in 2018, the Exim Bank discontinued funding for extending Kenya’s railway line to Uganda. This shows that Beijing’s strategies of infrastructure development are not set in stone but change, and can even be reversed, due to shifting circumstances in overseas regions.
Still, there are clear winners. Though the long-term profitability of Kenya’s Standard Gauge Railway remains in question, China Road and Bridge Corporation managed to enhance its global market position.
In Kenya alone, despite the controversies that surround the new railway, the corporation was given new tenders to complete other key national projects, such as the Nairobi Expressway.
As we show in our study, this is not necessarily an outcome of a grand strategy in Beijing. Instead, this is a result of dynamic and ever-changing efforts of Chinese companies that try to align multiple demands between their own economic interests and various political priorities in China and across Africa.
This highlights that African countries are not passive recipients of Chinese-funded projects. They have an important role to play in counterbalancing Chinese actors to shape how these projects are realised on the ground.
Gediminas Lesutis, Marie Curie Fellow, University of Amsterdam and Zhengli Huang, Post-doctoral Researcher, Tongji University
This article is republished from The Conversation under a Creative Commons license. Read the original article.
Both startups will receive pre-seed funding of up to US$10,813
The two were chosen from the 26 Malaysian startups that joined the cohort
Nine aspiring Malaysian startups showcased their innovative solutions in front of a live audience of investors, industry experts, and fellow entrepreneurs during 1337 Ventures’ much-awaited Alpha Startup Pre-Accelerator programme. The pre-accelerator…Continue Reading
SINGAPORE: Perromart, a popular pet supplies e-retailer, has been sold to a new operator after customers lodged nearly 200 complaints with Singapore’s consumer watchdog over the last five months.
Perromart’s previous sole owner, 25 Holdings, became insolvent and was placed under receivership in March, its new receiver and manager Farooq Mann told CNA on Monday (May 29).
This means it was unable to meet its debt payments on time. Companies can take several routes to rescue the business and avoid bankruptcy, including receivership – a court-appointed tool to help creditors recover funds they are owed.
Perromart – which branded itself as Singapore’s largest online pet store – first came under fire in January when customers turned to social media to air their grievances over delayed or unfulfilled orders.
At the time, its co-founder Roy Lim told CNA the company was unable to catch up on orders and support tickets due to supply chain disruptions and manpower issues stemming from the Christmas, New Year and Chinese New Year holiday periods.
Mr Lim said these were “not excuses” and that Perromart would improve its processes and operational turnaround time, as well as “launch new services that include predictive delivery based on respective products”.
However, in March, Mr Mann was appointed receiver and manager of Perromart after it became insolvent.
It has since been sold to an operator in the same industry, but Mr Mann said he was not at liberty to disclose the buyer’s name at the moment.
“The incoming owner-operator of the business is confident that the new business will be able to provide excellent customer service to all existing and new customers,” added the managing partner of Mann & Associates PAC.
The new owner-operator intends to continue operating at Perromart’s new warehouse in Kallang. Perromart had announced in February that it was in the midst of moving there.
Mr Lim did not respond to further queries from CNA on the receivership.
When a user sends questions to the WeChat account of China Merchants Bank, for example, it will bring up an AI chatbot called “Little Zhao”, which is able to answer basic inquiries. So far, Xiao-I has served more than 1,000 business clients across over 50 industries, mostly based in mainlandContinue Reading
By late 2022, Comac had received orders from 32 companies for 1,035 C919 planes, Shanghai’s municipal science and technology commission said in February. China is trying to raise the proportion of domestic parts used in the C919, and the alternative CJ-1000A engine is under development. According to a report publishedContinue Reading
Nvidia, a California-based graphic processing unit maker, is going to build a world-class artificial intelligence research center in Taiwan to accelerate its Omniverse project, a computing platform that supports 3D applications.
The announcement was made after the United States firm’s share price surged 24.6% to US$380.6 in a single day on May 24. On Tuesday, the valuation of Nvidia hit $1 trillion, making it the first US chipmaker to join the trillion-dollar club.
Because of this, Nvidia’s founder and chief executive Jensen Huang quickly gained the nickname “One-trillion man” in Taiwan, on top of his reputed status as the “godfather of AI.”
Nvidia’s shares had dropped by 50.3% to $146.14 at the end of last year from $291.11 a year earlier as the US kept tightening the export of high-end chips to China. Last August, the US government banned Nvidia from selling its A100 and H100 chips to China and Russia.
The shares have rebounded by 166% so far this year as the company vowed to invest in AI technology.
Nvidia will hire 1,000 people and invest up to TWD24.3 billion (US$790 million) in its new AI research center, or AI University, which will be jointly managed by the National Taiwan University. It has secured a subsidy of TWD6.7 billion from the Taiwanese government for this project.
Meanwhile, Huang told the Financial Times that further escalation of the chip war between China and the US would cause enormous damage to US companies .
He said China will make more semiconductors itself if it can’t buy them from US companies. He said US lawmakers should be thoughtful while regulating or they will hurt the technology sector.
Huang also told a global media roundtable at the Computex Taipei industry expo on Tuesday that existing chip makers should continue to work hard to stay competitive and not underrate China’s ability to catch up in the industry.
He said China will cultivate its own chip companies amid the US sanctions, and that is why many GPU startups have been created in the country.
Currently, key Chinese GPU and AI chip makers include MetaX, Birentech, Enflame and Horizon. Many of these companies outsource their chip production to overseas foundries such as Taiwan’s TSMC.
Last October, media reports said Washington asked TSMC not to produce high-end chips for Birentech after the Shanghai-based firm claimed that its BR100, a 7 nanometer GPU chip, is faster than the A100 in AI processing.
In August 2022, Nvidia’s A100 and H100 chips were added to a US export control list as the government said the products could be routed to or utilized by a “military end use” or “military end user” in China and Russia. Nvidia was also barred from shipping its DGX, an AI server, to China if a unit contained one of the two chips.
At the same time, the US government also restricted sales of AMD’s MI250 Accelerator AI chip to China.
Last November, Nvidia said it would relocated its regional warehouse from Hong Kong to Taipei. It also introduced to the Chinese markets the A800, which is similar to the A100 but works at 400 gigabytes per second while the A100 operates at 600 gigabytes per second. Due to this difference, the A800 satisfies the US government’s export requirements.
Nvidia has a 60–70% share in the global GPU market while some cloud service providers, which develop application-specific integrated circuit chips, seize over 20% of the market, according to TrendForce, a Taiwan-based industry data provider.
Nvidia will be able to maintain its market dominance with a strong demand of its A100 in the US and A800 in China, as well as the growing demand arising from the development of chatbots and AI computations, said TrendForce analysts. Globally, GPU chip shipments will grow 46% year-on-year in 2023, they added.
Currently, Nvidia can still sell or ship high-performance computing hardware to China by obtaining a special export license. However, it remains possible that Nvidia will be banned from selling its A800 to the country one day.
Anton Shilov, a columnist at Tom’s Hardware, wrote in March that Nvidia will lose hundreds of millions of dollars in revenue if it cannot get licenses to sell the A800 and other products to Huawei and Inspur. He said it will not be easy for the company to replace these two Chinese customers with others.
His comments came after Inspur, the world’s third largest server maker, was added to the US Department of Commerce’s “entity list” in early March this year. Huawei has been on the list since 2019.
Nvidia has spent two years preparing for the launch of its Taiwanese AI project, which will help Taiwan nurture AI talents and offer a platform for academic use, said the Ministry of Economic Affairs. The project will be implemented within the five years ending March 2027, it said.
Separately, the company said Monday that it will build an AI cloud supercomputer in Israel for several hundred million dollars. The facility, supported by 800 technology startups and tens of thousands of software engineers, is expected to commence operation by the end of this year.
In a two-hour speech at 2023 Computex Taipei on Monday, Huang told an audience of 3,500 people about Nvidia’s AI development plan.
He said Taiwanese electronic makers can use Nvidia’s Omniverse, Isaac Sim and Metropolis to build virtual factories, simulate robots and conduct automated inspections, respectively. He also displayed how AI technology can be applied in online games, content generation and music production.
Read: China leads US in tech that matters most: report
Follow Jeff Pao on Twitter at @jeffpao3