Commentary: Can Singapore presidential hopefuls be overqualified?

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NOT A JOB ANYONE CAN DO

It should not be surprising that the elected presidency was conceived, and is best understood, as an institution with eligibility restricted to a select group.

In response to a parliamentary question in May, Minister-in-charge of the Public Service Chan Chun Sing stated that there were 50 public service positions that fulfil the public sector service requirement to run in the next presidential election. These include the positions of minister, chief justice, Speaker of Parliament, attorney-general, chairman of the Public Service Commission, auditor-general, accountant-general or permanent secretary.

For potential presidential candidates looking to qualify under the private sector service requirements, there were more than 1,200 companies with average shareholders’ equity at or exceeding S$500 million (US$372 million).

This, of course, does not tell us how many of these eligible individuals will have the gumption to run in a bid for the highest office in Singapore.

It does not help that in a well-governed country, many may not find compelling reasons to step forward and serve. Moreover, the president and his or her family are not exempted from public glare and scrutiny and so sacrificing that comfortable privacy may be a deterrent to seeking elected office.

Singapore’s current and past elected presidents had entered office with impressive credentials and brought their personalities to bear on the office. In that regard, the office of Singapore’s head of state has moulded into a symbol of national unity and a crucial governance guardrail.

Having a capable and wise person to represent our country internationally and to safeguard the vast national reserves is not a job anyone can do. Instead of being a promoter and protector of good governance, the presidency can expedite the road to ruin.

In my view, there can never be an overqualified president.

Eugene K B Tan is associate professor of law at the Singapore Management University and a former Nominated Member of Parliament.

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Countries worldwide tackle water stresses

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In May, the Arizona Department of Water Resources imposed restrictions on the construction of new housing in the Phoenix area, citing a lack of groundwater. The decision aims to slow population growth in one of the fastest-growing regions in the US and underlines the dwindling water resources in the country’s drought-stricken southwest.

As water levels in the Colorado River have declined, the states dependent on it (Arizona, California, Colorado, New Mexico, Nevada, Utah and Wyoming) are increasingly at odds over how to distribute the declining supply.

The US is not alone in contentious domestic debate over water supplies. Australian states have constantly quarreled over water rights across the Murray-Darling Basin. Disruptions to water supply or perceived misuse can cause immediate social unrest, and Iran and France have seen violent protests regarding water recently.

Constant and affordable access to fresh water is recognized as a basic human right by the United Nations. And in addition to providing a foundation for life, fresh water is crucial for industry and manufacturing, energy production, agriculture, sanitation, and other essential societal functions.

But around the world, its availability is threatened. Desertification, climate change, man-made water diversion, dam building, pollution, and overuse have seen rivers, lakes and aquifers dry up. Since 2000, the world has added almost 2 billion people, putting further strain on global water infrastructure and supplies.

Causes of water stress

Poor water management and infrastructure also play a major role in water scarcity around the world. In Iraq, up to 14.5% of the country’s water is lost to evaporation and two-thirds of its treated water is lost because of leaks and poor infrastructure. Up to 25-30% of South Africa’s water is lost to leaks, while even in many industrialized countries, up to 15-20% of water supply is lost.

Inequality can also exacerbate water stress. Amid Cape Town’s water shortages in recent years, 14% of the population has been found to be responsible for more than half of the freshwater use in the city. Across Africa, one in three people already faces water scarcity, where “the availability of natural hygienic water falls below 1,000 cubic meters per person per year.”

On top of government control of water supply and infrastructure, multinational companies such as Nestlé SA, PepsiCo Inc, the Coca-Cola Company, and the Wonderful Company LLC play a huge role in the global water industry. 

In 2013, former Nestlé chief executive officer Peter Brabeck-Letmathe was forced to backtrack after a 2005 interview resurfaced where he stated it was “extreme” that water was considered a human right.

However, water privatization has increased significantly over the last few decades. In 2020, Wall Street allowed water to begin trading as a commodity, and now, “farmers, hedge funds and municipalities alike are now able to hedge against – or bet on – future water availability in California.”

Monetization has even seen Fiji, the world’s fourth-largest water exporter in 2021, face water supply shortages over the last few years.

Tap water remains drinkable only in certain countries, but fears of contamination can occur rapidly and incite alarm.

After thousands of liters of a synthetic latex product spilled into the Delaware River in March, Philadelphia authorities shut down a nearby water treatment plant. While it was ultimately deemed that tap water was still safe to drink, government warnings and alarm on social media led to panic-buying of water.

Contamination can also lead to longer-term damage to public faith in water infrastructure. After heightened levels of lead were found in Flint, Michigan’s drinking water in 2014 (together with the tepid government response), the local population remained hesitant to resume drinking it even after it had been declared safe.

International disputes

Water security also has a major impact on relations between countries. The US and Mexico have historically competed over water rights to both the Colorado River and the Rio Grande. Strong population growth on both sides of the border in recent decades, coupled with drought, has exacerbated bilateral tensions.

In 2020, tension over Mexico’s inability to meet its annual water-delivery obligations to the US from the Rio Grande, laid out in the 1944 Water Treaty, saw farmers in northern Mexico take over La Boquilla Dam, weeks before the deadline. While the crisis was eventually resolved, the fundamental issue of strained water flows remains ongoing.

Iraq has meanwhile increasingly accused Iran of withholding water from tributaries that feed into the Tigris and Euphrates rivers, with Iran accusing Iraq of failing to use water responsibly. Iraq and Syria have also disputed Turkey’s construction of dams and irrigation systems that have hindered the traditional flows of the Tigris and Euphrates rivers.

Relations among Egypt, Sudan and Ethiopia have similarly deteriorated since construction of the Grand Ethiopian Renaissance Dam (GERD) began in 2011. The project has aggravated regional fears over Nile River water shortages, and though outright conflict has so far been avoided, it has inflamed concern over supply in Sudan, which saw deadly clashes over water shortages this year.

China has been labeled an “upstream superpower” because several major rivers begin in that country. The construction of dams and hydropower plants on the Mekong River has caused friction with Laos, Thailand, Cambodia and Vietnam, while Kazakhstan and China have often disagreed over water rights regarding the Ili River.

Fears have also arisen that India and China, the world’s two most populous countries, could come into conflict over the Brahmaputra River and Indus River. But India and downstream Pakistan have their own disputes over rights in the Indus River basin that have raised regional concern.

Instrument of war

Other countries have weaponized water as part of a wider conflict. Ukraine and Russia have both used water to harass each other since the first round of unrest between them began in 2014. Ukraine almost immediately cut off Crimea from water supply from the North Crimean Canal, shrinking the peninsula’s arable land from 130,000 hectares in 2013 to just 14,000 in 2017.

Russia reopened the canal after the start of the war in Ukraine in 2022. Additionally, Russian forces have since been accused of withholding water to some Ukrainian regions, deliberately flooding others, and targeting Ukraine’s water infrastructure. Both Russia and Ukraine accused each other of blowing up the Kakhovka Dam and hydroelectric power station on the Dnieper River on June 5, which flooded downstream communities.

Islamic State (ISIS) was instrumental in causing water shortages during its rise across Syria and Iraq a decade ago, by polluting and cutting off water supplies and flooding regions. The Taliban also repeatedly attacked water infrastructure in Afghanistan throughout the US-led occupation of the country.

Long-standing disputes between the Taliban and Iran over access to the Helmand River also resulted in deadly clashes at their mutual border this year. And in recent years, cyberattacks have increasingly targeted the vulnerable water infrastructure of the US.

Relief in sight

Fortunately, the future of water stress may be less dire than feared. Global population growth has slowed significantly over the last few decades and the population is expected to peak by the end of the century. Furthermore, regions experiencing water stresses are typically not high-population growth areas.

The global community is also taking renewed steps to address global water security, with the UN holding in March its first summit on water since 1977.

And even countries with long-standing disputes have recognized the importance of maintaining water supplies.

The 60-year-old Indus Water Treaty between India and Pakistan has largely held despite persistent tensions between them. China has initiated cooperation with downstream states on transportation and water flows, including the Lancang-Mekong River Dialogue and Cooperation forum to share data and prepare for shortages and flooding.

There have also been recent breakthroughs regarding the GERD. Sudan’s de facto leader, Abdel-Fattah Burhan, recently came out in support of the dam, noting it could help regulate flooding. Greater cooperation between Ethiopia and Egypt could see less water evaporate from Egypt’s Aswan High Dam if it can be stored in the GERD during warmer months.

And though seawater desalination remains expensive and energy-intensive, it is becoming more efficient and widespread. In Saudi Arabia, 50% of the country’s water needs are met by desalination, while Egypt plans to open dozens of new desalination plants in the coming years. Currently, 70% of the world’s desalination plants are in the Middle East.

Domestic US initiatives are also promising. California’s Orange County recycles almost all of its waste water back to the nearby aquifer through the world’s largest water reclamation plant, which opened in 2008. Arizona, California, and Nevada also agreed in May to reduce water intake by 10% over the next three years, and Arizona’s decision to suspend housing construction may mark the beginning of more restraint over domestic water consumption.

Ongoing domestic and international cooperation will nonetheless be required to resolve water disputes and create sustainable water-management practices. Preventing the use of water as geopolitical leverage or a tool of war, coupled with effective management of climate change and pollution, will be integral to avoiding wars over water in the future.

This article was produced by Globetrotter, which provided it to Asia Times.

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ChatGPT disrupts Asian property industry, but it’ll be a while before an AI agent sells you a home

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Midland Realty is adopting ChatGPT for analysis of market statistics and client data to predict trends and provide personal recommendations; automation of business procedures; writing letters; analysing sales brochures; preparing sales proposals; video production; providing question-answering chatbots. The agency has organised 25 AI courses with over 2,000 attendees as ofContinue Reading

12.5m more skilled staff eyed by 2027

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11 industries being targeted for upgrade

Students stop at a booth at Job Expo Thailand 2023 at the Bangkok International Trade & Exhibition Centre on Friday. The June 8-10 event is organised by the Department of Employment and has over 500,000 jobs up for grabs at 400 companies.  (Photo: Somchai Poomlard)
Students stop at a booth at Job Expo Thailand 2023 at the Bangkok International Trade & Exhibition Centre on Friday. The June 8-10 event is organised by the Department of Employment and has over 500,000 jobs up for grabs at 400 companies.  (Photo: Somchai Poomlard)

Thailand aims to produce around 800,000 skilled workers next year in targeted industries, including intelligent electronics, next-generation automobiles and healthcare.

Deputy Prime Minister Prawit Wongsuwon chaired a meeting of the national workers’ skill development committee at the Five Provinces Bordering Forest Preservation Foundation on Friday to discuss incentives to develop more skilled workers.

The meeting agreed to draft a skilled worker development plan which will be executed by provincial organisations to create 12.5 million skilled workers by 2027.

Provincial governors have been assigned to draft development plans to create more skilled labour in 11 targeted industries.

Four of the 11 industries have finalised their desired number of workers: 24,500 people in next-generation automotive services, 713,432 in digital services, 357,300 in processed food, and 298,100 for Thailand’s medical hub.

Provinces will be offering students in local schools and colleges the chance to join skills training and worker development programmes based on local demand. Gen Prawit said prisoners would also be included in the training.

Skills development training at the provincial level will lessen the chances of workers wanting to migrate to cities and will also improve the lives of local people, he said.

Gen Prawit said the public and private sectors must collaborate to create more skilled labour to meet the demands of growing industries.

He added that the Ministry of Higher Education, Science, Research and Innovation and the Department of Skill Development should join hands to foster new jobbers.

Meanwhile, Job Expo Thailand 2023, which started on Thursday and ends on Saturday, saw large numbers of job-seekers. It is being held at Event Halls 100-102, Bitec Bang Na, organised by the Ministry of Labour and private companies.

The expo offers job opportunities for new graduates, senior citizens and people with disabilities. With over 29,000 positions in the private sector and 81,000 offered by recruitment companies, people can seek jobs in real estate, communications, manufacturing, finance, insurance, sales, construction, health and academia.

Nawaporn Rod-iam, 23, said she is a finance graduate working at a private company who is looking for a new job with higher pay that will also allow her to gain more skills.

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China, US move closer to high-level official talks

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The China and the United States governments are getting closer to resuming high-level dialogue as media reported that US Secretary of State Antony Blinken will visit Beijing within several weeks, or as soon as next week.

CNN reported on Tuesday that Blinken will travel to China in the coming weeks. Politico reported on Thursday that his trip may occur next week.

Beijing has so far refused to comment on Blinken’s itinerary. It said the US and China should maintain dialogue but Washington must show sincerity and stop “saying one thing but doing another.”

Some Chinese commentators said it shouldn’t be surprising if Blinken visits Beijing, given that there have been several rounds of talks between US and Chinese officials over the past month. But they said Beijing will have limited expectations for meetings with US officials.

If confirmed, Blinken’s trip will mark the highest-level visit of a US official to China since then-Secretary of State Mike Pompeo visited the country in 2018. It will show an easing of Sino-US political tensions, which have been heightened by the Chinese balloon incident in late January.

Due to rising hopesof a bilateral thaw between the world’s two largest economies, the Dow Jones index has increased 258 points, or 0.8%, to 33,833.61 on Wednesday and Thursday. The Shanghai Composite index has also surged by 31 points, or 1%, to 3,231.41 on Thursday and Friday.

Choosing sides  

On Friday, the Chinese foreign ministry called on all US diplomats to implement Blinken’s promise that Washington will not require other countries to choose sides between the US and China. 

“We hope US diplomatic missions around the world will truly treat other countries’ development of relations with China with an open and inclusive attitude, stop suppressing Chinese companies including Huawei Technologies everywhere, stop coercing allies to restrict chip exports to China, stop luring other countries to give up their cooperation with China and stop spreading false information such as ‘China’s debt trap’,” Wang Wenbin, a foreign ministry spokesperson, said in a regular media briefing on Friday.

US President George Washington. Photo: Wikimedia Commons

To describe the Sino-US relations, Wang used a quote from the first US president, George Washington, who said, “A slender acquaintance with the world must convince every man that actions, not words, are the true criterion of the attachment of friends.”

“We care about what the US says, but we care even more about what actions it takes,” he said.

Prior to this, Wang said on Wednesday that China and the US should maintain necessary communication but the responsibility for the current challenges facing China-US relations does not lie with China.

“The US needs to respect China’s core interests and major concerns, stop interfering in China’s internal affairs, stop harming China’s interests, and stop calling for communication on the one hand and making provocations on the other,” he said.

On Thursday, Blinken told the media during his visit to Saudi Arabia that the US is not asking anyone to choose between Washington and Beijing. He said Washington is only trying to demonstrate to other countries the benefits of having a partnership with the US. 

Last December, China and Saudi Arabia signed a series of strategy deals, including one involving Huawei, during Chinese President Xi Jinping’s three-day visit to Riyadh. On March 10, Saudi Arabia and Iran agreed to reestablish diplomatic relations and reopen embassies after years of tensions. Chinese media said Beijing had contributed to the talks between Saudi Arabia and Iran.

‘De-risking’ plan

On May 20, G7 leaders said in a joint statement that they have a common interest in preventing a narrow set of technological advances from being used by some countries to enhance their military and intelligence capabilities to undermine international peace and security. 

They said G7 countries are not decoupling with China but they also recognize that economic resilience requires “de-risking and diversifying.”

On Tuesday, the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned a network of seven individuals and six entities in Iran, China and Hong Kong in connection with Iran’s ballistic missile program. 

“As a Chinese saying goes, ‘Good faith makes good things happen.’ Dialogue should be based on mutual respect and aim for real results,” Xie Feng, China’s Ambassador to the US, told the American business community during an event of the US-China Business Council on Wednesday. 

“It surely is not the right way to seek dialogue and cooperation while putting the other on the sanction list,” he said. “Dialogue conducted only for its own sake will not work either. Saying one thing but doing another could only bring unintended results.”

“For high-level interactions, whole-process management is essential – fostering a good atmosphere in advance, accumulating outcomes in the process, and delivering on them afterwards,” he said.

He added that to many Chinese people, the word “de-risking” may be just another name for “decoupling.” He said the US should not use national security as an excuse for protectionism.

Diao Daming, an associate professor at the Renmin University of China in Beijing, told the Global Times on Wednesday that the US is trying to test China’s reaction to Blinken’s potential visit through media hype and is trying to shape its own image as a promoter for communication.

He said the series of actions recently taken by the US reflects Washington’s duplicity and self-contradiction.

China’s demands

In April, media reported that US President Joe Biden would sign an executive order to restrict US companies and private equity and venture capital funds from investing in China’s microchips, artificial intelligence, quantum computing, biotechnology and clean energy projects and firms. But there has been no update so far.

On May 8, China’s Foreign Minister Qin Gang met with US Ambassador to China Nicholas Burns in Beijing. On May 11, top Chinese diplomat Wang Yi and US National security adviser Jake Sullivan met in Vienna. On May 25, China’s Commerce Minister Wang Wentao met with US Secretary of Commerce Gina Raimondo in Washington, DC. The three meetings were described by both sides as candid and constructive.

On May 8, 2023, State Councilor and Foreign Minister Qin Gang met with US Ambassador to China Nicholas Burns in Beijing. Photo: Chinese Foreign Ministry

“Proven by the three meetings, the tensions between the US and China have eased over the past one month,” a Guangdong-based commentator writes in an article published on Friday. “If US officials have to visit China, there is no harm for Chinese officials to meet them.”

“But when Blinken visits China, the Chinese government should issue an official warning to the Biden administration that if it continues to cross China’s red line over Taiwan issues and take extraordinary actions, the responsibility of shaking the Sino-US relations or causing military conflicts in the Western Pacific region will lie with the US,” the commentator says.

He says the Biden administration has not cancelled the extra tariffs and sanctions imposed on China but hopes that China will continue to buy US food, natural gas, airplanes and semiconductors, instead of purchasing goods from Brazil, Russia and France. He says Beijing must tell Americans that China will not purchase goods from countries that hurt its interest.

He adds that Blinken should answer why the Russian-Ukrainian conflicts have shown signs of spillover, which is bad news for Europe. He says problems will be resolved only if the US is willing to work with China.

Read: US-China trade talks end in more chip war salvos

Read: With Micron ban, China says no to ‘de-risking’

Follow Jeff Pao on Twitter at @jeffpao3

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Russia slowly shifting toward a total war economy

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As Russia’s progress in Ukraine has stalled, with enormous losses in material and people, the frustrated head of the Wagner mercenary force Yevgeny Prigozhin has called for Russia to shift to a total war economy:

The Kremlin must declare a new wave of mobilization to call up more fighters and declare martial law and force ‘everyone possible’ into the country’s ammunition production efforts. We must stop building new roads and infrastructure facilities and work only for the war.

His words echo similar sentiments expressed by the head of Russia’s state broadcaster RT, Margarita Simonyan – an influential supporter of the Russian president, Vladimir Putin – who said recently:

Our guys are risking their lives and blood every day. We’re sitting here at home. If our industry is not keeping up, let’s all get a grip! Ask anyone. Aren’t we all ready to come help for two hours after work?

Already facing Western sanctions since its annexation of Crimea and occupation of territory in Ukraine’s eastern provinces in 2014, Russia has had to adapt to life under an increasingly harsh series of economic punishments.

And, while Putin had apparently planned for a relatively short “special military operation”, this conflict has become a protracted and expensive war of attrition.

The Economist has estimated Russian military spending at 5 trillion rubles (US$60.5 billion) a year, or 3% of its GDP, a figure the magazine describes as “a puny amount” compared to its spending in the second world war. Other estimates are higher – the German Council on Foreign Relations (GDAP) estimates US$90 billion, or more like 5% of GDP.

But the international sanctions have hit the economy hard. They have affected access to international markets and the ability to access foreign currency and products. And the rate at which the Russian military is getting through equipment and ammunition is putting a strain on the country’s defense industry.

So the Kremlin faces a choice: massively increasing its war efforts to achieve a decisive breakthrough, or continuing its war of attrition. The latter would aim to outlast Ukraine in the hope that international support may waver in the face of a global cost of living crisis.

Equipment shortages

Russia has lost substantial amounts of arms and ammunition.

In March 2023, UK armed forces minister James Heappey estimated that Russia had lost 1,900 main battle tanks, 3,300 other armored combat vehicles, 73 crewed, fixed-wing aircraft, several hundred uncrewed aerial vehicles (UAVs) of all types, 78 helicopters, 550 tube artillery systems, 190 rocket artillery systems and eight naval vessels.

Wanted: more modern tanks. Photo: Russian Defense Ministry Press Service via AP

Russia has to contend with several important military-industrial challenges. For one, its high-technology precision-guided weapons require access to foreign technology.

This is now unavailable – or restricted to sanctions-busting deals which can only supply a fraction of what is needed. Most of the high-tech electronic components used by the Russian military are manufactured by US companies.

So it has to substitute these with lower-grade domestic components, which is probably why the Russian military is using its high-tech weaponry sparingly. But the artillery shells on which it has been relying are running short.

US think tank the Center for Security and International Studies has reported US intelligence estimates that since February 2022, export controls have degraded Russia’s ability to replace more than 6,000 pieces of military equipment.

Sanctions have also forced key defense industrial facilities to halt production and caused shortages of critical components for tanks and aircraft, among other materiel.

Make do, mend – and spend

There are clear signs of increasing efforts to address the shortages.

According to a report in the Economist, Dmitri Medvedev, deputy chairman of Russia’s security council, has recently announced plans for the production of 1,500 modern tanks in 2023. Russian news agency Tass reported recently Medvedev also plans to oversee a ramping up of mass production of drones.

The government is reported to be providing substantial loans to arms manufacturers and even issuing orders to banks to do the same. Official statistics indicate that the production of “finished metal goods” in January and February was 20% higher compared to the previous year.

The GDAP reported in February: “As of January 2023, several Russian arms plants were working in three shifts, six or seven days a week, and offering competitive salaries. Hence, they can increase production of those weapon systems that Russia is still able to manufacture despite the sanctions.”

So it appears the Kremlin is playing a delicate balancing act of redirecting significant resources to the military and related industries while trying to minimize the disruption of the general economy, which would risk losing the support of large sections of the population.

There appears to be little shortage of consumer goods in Russia, but shoppers say quality has deteriorated. Photo: EPA-EFE via The Conversation / Maxim Shipenkov

The International Monetary Fund has projected Russia’s economy to grow by 0.7% this year (which would trump the UK’s projected growth of 0.4%). This will largely be underpinned by export revenues for hydrocarbons as well as arms sales to various client countries happy to ignore Western sanctions.

Meanwhile diversifying import sources has kept stores stocked. However, Russian public opinion pollster Romir has reported that while most people aren’t worried about the absence of sanctioned goods, about half complained that the quality of substituted goods had deteriorated.

So ordinary Russians – those who haven’t lost loved ones on the battlefield or to exile – remain relatively sanguine about everyday life. But a longer, more intense conflict, requiring a shift to a total war economy, could be a different matter altogether.

Christoph Bluth is Professor of International Relations and Security, University of Bradford

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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Sequoia split anticipates new China sanctions

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Sequoia Capital, one of Silicon Valley’s oldest and most successful venture capital funds, is dividing itself into three independent regional businesses to simplify management and reduce political risk.

The company’s operations in the US and Europe will continue to use the name Sequoia Capital. Operations in India and Southeast Asia have been combined and rebranded as Peak XV Partners. Peak XV was the original designation given by British surveyors to Mount Everest. Operations in China will be called HongShan, which means Sequoia.

On June 6, Sequoia announced that “It has become increasingly complex to run a decentralized global investment business… This has made using centralized back-office functions more of a hindrance than an advantage… We will move to completely independent partnerships and become distinct firms with separate brands no later than March 31, 2024.”

The company’s statement, which also mentioned “market confusion due to the shared Sequoia brand” and “portfolio conflicts,” was signed by Roelof Botha, managing partner of Sequoia Capital; Shailendra Singh, managing director of Peak XV Partners; and Neil Shen, founding and managing partner of Sequoia China.

Not mentioned in the statement, but almost certainly a factor in the division decision, are widespread expectations that the Biden administration will soon issue new, tighter restrictions on US investment in China. This is a concern for both US and Chinese investors and Sequoia has reportedly hired consultants to advise it on the issue.

What types of investment might be restricted is not yet known but media reports line up the usual suspects: semiconductors, quantum computing and artificial intelligence (AI).

US Treasury Secretary Janet Yellen has said that any new restrictions would be “narrowly scoped and targeted at technologies where there are clear national security implications.” But what Treasury considers “narrowly scoped” could affect a wide swath of high-tech venture capital investments.

Photo: Reuters/Joshua Roberts
US Treasury Secretary Janet Yellen eyes new restrictions on investing in China. Photo: Agencies

In a report issued at the beginning of May, the Peterson Institute for International Economics wrote that:

“The US government must finally decide whether its primary concern is with the effects of capital or knowhow/technology transfer. If it is capital, the impact on China will be small. China’s venture capital sector was managing around $280 billion at the end of 2019, compared to $403 billion in the US. A recent report from the Center for Security and Emerging Technology found that only 37% of fundraising rounds by value for Chinese AI companies included any US investor. Clearly, Chinese AI firms and presumably also tech startups in other sectors do not rely on US capital.”

The Peterson Institute is not alone in thinking that new investment restrictions might be ineffective. On May 25, Patrick McHenry, chairman of the US House of Representatives Committee on Financial Services, sent Secretary Yellen a highly critical letter requesting detailed evidence that Treasury would achieve its purported goals. In part, it reads:

Dear Secretary Yellen,

I am writing in regard to the Administration’s proposed Executive Order on outbound investment, the imminent release of which has been rumored since last year.

According to briefings provided by the Administration, the Department of the Treasury (Treasury) may transform CFIUS into a committee on foreign investment in the United States and China, prohibiting deals in certain Chinese technology sectors and mandating investor notifications in others. As we prepare for your testimony before the Committee, I would request your feedback on the following matters.

Last year, China recorded a current account surplus of $417.5 billion, the highest level since 2008. The last time an Administration tried to restrict financing against a large current account surplus country [Russia], in 2014, it failed. Do Treasury and the Administration really believe that investment restrictions will be effective this time – particularly against a surplus country that holds $3 trillion in reserves?

… Given Treasury’s longstanding principle that coercive measures must achieve clear objectives, it is unclear why the Administration now wants to repeat the same policies in China but expects different results.

The Administration further claims that U.S. investments in early-stage Chinese companies may require the declaration of a national emergency. However, U.S. venture capital deals in China have fallen by 87 percent since 2018.1 At their height, these investments were concentrated in later-stage companies. Moreover, U.S. venture capital firms typically acquire control, substantive decision-making rights, board seats, or material nonpublic technical information when they invest.

As your colleagues in the Office of Investment Security know, these represent potential national security risks to the target country – in this case, China. It is inexplicable that the Administration hopes to rescue China from these risks before Beijing can. At a time when the Chinese Communist Party is already cracking down on Western firms and business intelligence services, the Administration should reject an E.O. that advances Beijing’s goals.

And that’s not all. The Peterson Institute report ends with this comment: “Whatever Washington decides, its rules could remake the US government’s relationship with its firms, investors and the world.” That, of course, is already happening.

Sequoia Capital was founded in 1972 by Don Valentine, “the grandfather of Silicon Valley venture capital.” It was an early investor in Apple Computer, Atari, LSI Logic, Oracle, Cisco, Electronic Arts, Google and Nvidia. Having started as a $3 million fund, it reportedly had approximately $85 billion under management in 2022.

Sequoia entered China in 2005 and India in 2006. In China, where its investments have included Alibaba, ByteDance, Meituan and JD.com, assets under management have risen to as much as $56 billion. It is the largest venture capital company in India with assets valued at about $9 billion.

Sequoia had a financial hand in Alibaba’s success. Image: Agencies

This was achieved with what is regarded as unusually decentralized decision making:

“Our founder-focused, local-first approach has been key to our success in each region… Sequoia China has made substantial investments in healthcare and traditional consumer sectors alongside technology investments… Sequoia India has been instrumental in cultivating the startup ecosystem in India and SEA [Southeast Asia… Each entity is now a market leader.”

Once back-office functions, infrastructure and profit-sharing have been completely separated, there will be three venture capital firms instead of one, two of them domiciled outside the US. An example has been set. Sequoia will probably not be the only investment firm to take this route around US sanctions.

Follow this writer on Twitter: @ScottFo83517667

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As haze beckons, Malaysia wants its plantation firms in Indonesia to formally report forest fire measures

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Transboundary haze has sometimes become a flashpoint for ASEAN countries.

In 2019, Indonesia said some forest fires in its territory had started on land used by subsidiaries of Malaysian companies, as the neighbours traded blame for blazes that spread haze across the region.

“It will definitely be good for the plantation companies to illustrate that we are playing our part,” Mr Nik Nazmi said on Friday, noting that these are big, listed players who want to be seen as “doing the right thing”.

The minister said he has received reports from such companies before, but is looking at “institutionalising” it with the Malaysian stock exchange. When asked if this means putting it into law, he said the government will have to work out the “best” way.

“We want greater transparency, because with transparency comes accountability … So through that, rather than a punitive approach … transparency is how we see it is best to deal with (the issue),” he added.

Despite that, Mr Nik Nazmi said Malaysia is still considering whether to move with a law to penalise local companies that burn their Indonesian plantations and cause haze in Malaysia.

Farmers usually take advantage of dry conditions to burn and clear the land of vegetation in preparation for crop cultivation.

The law, drafted during the Mahathir Mohamad administration in 2019, has been shelved by previous governments.

Singapore has introduced its own Transboundary Haze Pollution Act and in 2015 investigated four Indonesian companies in relation to causing or condoning fires that resulted in unhealthy levels of haze in Singapore.

But the law has produced no prosecutions amid difficulties in obtaining evidence in other jurisdictions.

“We want to see how effective it is. For example, in the Singapore experience, how many prosecutions, how many were successful and all that,” Mr Nik Nazmi said.

“For us, it has to go beyond having a symbolic legislation. So, we will look at it through a very broad lens.”

In the bigger picture, Mr Nik Nazmi said the ASEAN members he met agreed to play their part in tackling transboundary haze.

“We were all committed that if anything happens, we will all assist one another. We won’t just say: ‘Oh, this is an Indonesian problem, Singaporean problem or Malaysian problem,’” he said.

“But where we can and where is needed, the assistance within the ASEAN family will be given to deal with this issue. So … we are in it together.”

Mr Nik Nazmi said ASEAN has also made “good progress” on sharing weather data and monitoring resources to propose a “very powerful” approach in fighting haze, pollution and forest fires.

This includes countries sharing data from their respective weather stations and geological departments to conduct weather surveys, he said.

“Now with all the big data technologies that are coming into play, sharing of data will be very crucial,” said Mr Nik Nazmi.

“Moving forward as we go towards El Nino and all that, we really have to ensure that this cooperation is being built upon, so that we can face even the worst possibilities.”

El Nino is expected to bring about reduced rainfall and a higher risk of haze in the region, and Singapore last month advised people to prepare N95 face masks and air purifiers.

Mr Nik Nazmi said on Friday that Malaysia has not gotten “to that level yet”, although authorities continue to monitor the situation. Potential measures include N95 masks, postponing outdoor activities and increasing hydration, he said.

“The plan is already there, but we will obviously monitor which stage of the situation we are at before we make the necessary announcements,” he added.

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