Singapore pulling all stops to avert a housing collapse

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Singapore’s housing market is going through some big changes. It has a dual market structure consisting of a public and a private market. The public housing market is divided into a primary and a secondary (resale) market.

The Housing & Development Board is responsible for building and selling public housing flats at concessionary prices in the primary market to Singaporeans.

The primary public housing market is regulated and only open to Singaporean families, subject to a monthly household income cap of 14,000 Singapore dollars (US$10,400). After meeting the minimum occupation period of five years, owners can sell their flats in the secondary public housing market to Singaporean citizens and permanent residents who do not own private houses.

The private housing market is a laissez-faire market that supplies non-landed houses, such as apartments and condominiums, as well as landed houses, such as terrace, semi-detached and detached houses. Foreigners are prohibited from owning public housing flats. While they can buy and sell non-landed apartments and condominiums, they can only buy landed houses on Sentosa Island.

Despite Covid-19-related disruptions to supply chains and economic activities, the benchmark private residential property price index experienced 12 consecutive quarters of growth of 25% total after exiting the “circuit breaker” in June 2020. The resale public housing price grew by 28% over the same period.

The government introduced three rounds of cooling measures to pre-empt housing prices from diverging from economic fundamentals. On December 16, 2021, the government raised the Additional Buyer’s Stamp Duty (ABSD) — a form of transaction tax when buying private residential Singaporean properties — for foreigners from 20-30%.

The ABSD was also raised to 17% and 25% for Singaporean citizens and permanent residents respectively when buying second properties and 25% and 30% respectively when buying third and subsequent properties. Property developers also pay the ABSD of 40% — but 35% is remittable if developed units are sold within five years of the land acquisition date.

Another intervention occurred on September 29, 2022, when government agencies raised the medium-term interest rate floor — which is used to calculate the loan quantum granted by private financial institutions for property purchases — from 3.5-4%. The government also imposed a 15-month wait-out period for private owners to insulate first-time home buyers against intense competition in the public resale market.

The government is concerned about high housing prices weakening its social compact. Although foreign investments only constituted 7% of private property sales in 2023, they significantly drove up private housing prices, especially in the luxury housing segment. The latest ABSD rate hikes were intended to check the flows of oversea “hot money”, which have inflationary effects on the private housing markets.

On April 26, 2023, the government increased the ABSD from 30-60% for foreigners when buying private residential properties in Singapore. Singaporean citizens and permanent residents will now have to pay ABSD of 20% and 30% respectively — an increase of 3% and 5% — when purchasing second private properties for investment purposes.

Private residential property prices are already at historically high levels, with average launch prices ranging from S$2,000-S$2,900 (US$1,485–$2,153) per square foot. The current median housing price is 14 times that of medium-income — such high prices will make the private housing market unaffordable and inaccessible for medium-income families.

Using a recent project launched after the new ABSD rule, Blossoms by the Park, a local buyer purchasing a 3-room unit at S$2.28 million (US$1.7 million) will make a down payment of S$570,000 (US$423,000), based on a loan-to-value ratio of 75%.

Because of the 4% interest rate floor, their monthly mortgage payment will be S$10,360 (US$7,693). Based on the total debt servicing ratio of 55%, their monthly income must be at least S$18,840 (US$13,990) to obtain a mortgage loan from a local bank. This means that only the top 10% of Singaporean households by income could afford the unit in the Blossoms by the Park.

Interest rate hikes and geopolitical tension add significant risks to investing in private real estate markets. If macro-risks trigger negative economic outcomes — such as recession and unemployment — private housing market prices could spiral, leading to more socioeconomic consequences.

While the potential effects of the new ABSD of 60% are unclear, the costs of inaction could be more detrimental regardless of the direction private housing prices go.

A market failure could have a widespread impact on every stakeholder In the market. Developers may not recover the costs of investments and local buyers will face a negative equity situation when their housing value drops. Foreigners will lose money by selling their properties below the original costs. 

The housing market crash would destabilize Singapore’s financial system when borrowers default on their mortgage loans. But the economic costs of inaction would be higher than an intervention that curbs short-term foreign investment flows into the property market.

Tien Foo Sing is the Provost’s Chair Professor at the Department of Real Estate, Business School, National University of Singapore. The views expressed here are the author’s and do not represent the views of their companies and affiliates.

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

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Multilateralism gives Asian countries agency to shape regional developments amid big power rivalry: DPM Wong

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Mr Wong, who is also Singapore’s Finance Minister, warned that competing regional blocs will make it harder for Asia’s developing countries to sit at the same table as more advanced nations.

To prevent this, the bloc is working to maintain more open economic cooperation, with broad participation across the globe.

While still actively engaging long-standing partners within Asia, the US and the European Union, ASEAN is also forging new ties in other regions including Africa, the Middle East and Latin America.

In his speech, Mr Wong called on economies to not undermine the multilateral trading system, saying rising protectionism will leave all countries worse off.

While he said it is understandable why nations and companies want to de-risk or diversify, Mr Wong also warned that taking it too far could prompt reactions and unintended consequences.

“No one wants to be overly reliant on a single supplier for raw materials, key components, or technology,” said Mr Wong.

“But it is hard to see how de-risking, at its current ambition and scale, can be strictly confined to just a few ‘strategic’ areas without affecting broader economic interactions … Over time, we will end up with a more fragmented and decoupled global economy.”

The term “de-risk” was introduced at the recent Group of Seven (G7) summit, where leaders pledged to de-risk without decoupling from China to reduce economic reliance on Beijing.

ENGAGEMENT WITH JAPAN

On Wednesday, Mr Wong visited Japanese companies working on a hydrogen supply chain network.

As a leader in green technology, Japan can play a key role in facilitating sustainability financing and projects in Southeast Asia, he said.

Mr Wong also welcomed Japan’s intention to cooperate more in regional security.

“Japan has historically adopted a low-key posture in security. But with the passage of time, there is scope for Japan to make a greater contribution in this area,” he noted.

“We hope that Japan will continue to build on the momentum of its recent engagements with regional countries and further contribute to Asia’s stability, security and growth.”

Mr Wong said that despite an increasingly dangerous and troubled world, there are reasons for optimism. 

“Asia’s dynamism, shaped by its diverse cultures, resilience and adaptability, offer hope,” he said.

“We can also take heart that countries in the region share a deep commitment to collaboration and a common interest to work together.”

On Friday, Mr Wong is expected to meet Japanese political leaders including Prime Minister Fumio Kishida to further strengthen bilateral ties.

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Stopping the scroll: Vietnam threatens TikTok ban

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On the outskirts of Ho Chi Minh City, Phuong sees nothing worth scrolling for on TikTok. 

“It is an addictive app with bullshit, spam, fake news and unverified content,” he said, asking to be referred to by a pseudonym due to fears of official retribution from speaking with the press.

Phuong, 33, describes himself as a social activist, says he’s been routinely harassed by the police for his outreach and has seen friends arrested for expressing views critical of the government. So despite his misgivings about the video-sharing app, he sees cause for alarm in growing threats from Vietnam’s Ministry of Information to ban TikTok if the company refuses to censor what the state deems “toxic” content.

“I think that controlling TikTok can have a lot of impact on freedom of speech. A lot of people use [it] to express their views,” Phuong said. “[Authorities] want to control all the media, communication and information platforms.” 

TikTok went live in Vietnam in 2019 and has soared in popularity since then.

From a choreographed handwashing dance to quell the spread of Covid-19 to the recorded gaffe of Minister of Public Security General To Lam being hand-fed chunks of a nearly $2,000 gold-leaf-encrusted steak by the internet-famous “Salt Bae”, the platform has won the public’s attention.

TikTok now boasts nearly 50 million local users – a number that ranks the socialist state sixth of 10 countries globally with the most on the app, according to research firm DataReportal.

But that success has also caught the eyes of the state, which has promised a probe of the company’s office in Ho Chi Minh City in late May. This comes amidst a recent campaign of dialled-up government rhetoric against the app. Rattled by the flood of unruly content, authorities look ready to tighten their hold over TikTok as the latest step of a decades-long battle to wrangle Vietnamese cyberspace.

At a 6 April news conference, the Information Ministry described the app as a “threat to the country’s youth, culture and tradition” and warned of an outright ban.

A “comprehensive inspection” of the company that began on 15 May is not typical in its scope, said Kent Wong, a partner at business law firm Ho Chi Minh City-based VCI Legal in Ho Chi Minh City. Other large tech platforms, such as Youtube and Facebook, have avoided similar visits by keeping their offices out of the country.

“Having a local office in Vietnam is like wearing a football jersey to be grabbed onto,” Wong said. “This may be an exemplar for other platforms not to establish a presence in Vietnam, or face being a constant target for government inspections and investigations.”

These regular check-ins from officials serve to bolster the government’s tight system of online control. This includes regular crackdowns on activists, journalists and bloggers for “spreading anti-state propaganda” with speech perceived to be critical of authorities.  

The government also makes frequent take-down requests of social-media sites, with the Information Ministry reporting that TikTok has already removed 2.43 million videos uploaded by users in Vietnam in the first quarter of this year.

Future controls could ramp that number up, but domestic concerns may just be a portion of Hanoi’s motivation.

Similar to bans and investigations of TikTok by neighbours in Southeast Asia and beyond, experts say the Vietnamese government could be concerned about data security, national sovereignty and China’s influence over ByteDance, TikTok’s Beijing-based parent company. 

Nguyen Khac Giang, visiting fellow at the ISEAS-Yusof Ishak Institute, said an “all-out attack on TikTok” in the Vietnamese press would likely lean on articles about how the app “corrupts young people, how it wastes their time.”

“[But officials] want to know what TikTok is up to in the Vietnamese market,” Giang said. “They are worried it may promote some content that could supplant information about Vietnam’s national sovereignty or maritime disputes.”

The probe

The ongoing investigation of TikTok’s downtown Ho Chi Minh City office spans eight ministries and agencies digging into the company’s Vietnam operations.

A TikTok Vietnam spokesperson told the Globe by email that an “upcoming planned visit” would include inspections from the Information Ministry, Trade Ministry and the General Department of Taxation.

The inspectors are expected to dig into the company’s content distribution, e-commerce deals, advertisements and tax liability. Officials at the April press conference announcing the investigation said its purpose will be to “evaluate the impact TikTok has and its capacity to abide by the law”.

Despite the tough state rhetoric specifically against the app, TikTok’s spokesperson said the probe was “in line with local law for companies operating in Vietnam, not only TikTok.” 

“We welcome the opportunity to listen and address any concerns, as well as share the progress we’ve made in Vietnam in the past four years,” they stated.

In general, more legal guidelines for tech firms’ operations are incoming. Vietnam’s first comprehensive data privacy law will take effect on 1 July and a draft law on e-transactions is expected to reach the National Assembly this year. 

Enforcing these laws will likely incur new costs on both the state and private businesses alike, said Wong. On the other hand, he added, for measures pointed at online content, the “subjective and arbitrary” guidelines used to identify offending posts could motivate companies to leap into compliance. 

“Being constantly concerned about receiving a ‘knock on the door’ or being banned, social media enterprises like TikTok will need to quickly adjust their activities,” Wong said.  

Dissent and geopolitics

The government’s concerted approach to regulating TikTok has been years in the making.

The internet wasn’t a primary concern for the ruling party until the mid-2000s. But by the early 2010s, authorities were shaken by Vietnamese activists flocking to the internet – especially during the Middle Eastern social-media-connected protests known as the Arab Spring. 

Command of the online space then became a priority, said Giang from ISEAS, and spurred a military push to suppress dissent online – an effort led by the notorious Task Force 47, a reportedly 10,000-member group. This motivation also led to the wide-ranging 2018 Law on Cybersecurity, which attempted to localise international tech platforms while expanding government control of online content.

Phil Robertson, deputy director of Human Rights Watch Asia Division, said TikTok has not yet become a significant platform for Vietnamese activists. Still, some have taken to the platform to “badmouth” police and to express discontent over land confiscation. 

“TikTok has potential of becoming an important platform to reach out to a big number of young audiences,” Robertson said. “The Vietnamese authorities restrict or even ban anything that poses a potential risk of getting too popular and thus out of control for them.”

But the clampdown on the Chinese-owned TikTok also showcases Hanoi grappling with the threat of “political interference”, Giang said. 

Vietnam and China have a long history of maritime disputes in the South China Sea. Hanoi rejects the “nine-dash line” which shows the sprawling extent of China’s claims in the hotly disputed, resource-rich waters. Any maps shared on TikTok which mislabel Vietnamese islands in the South China Sea, including Hoang Sa and Truong Sa, or show the nine-dash line could be seen as a threat, Giang said.

High sensitivity over maps of China’s nine-dash line has precedent in Vietnam. The government there ordered Netflix to take down an Australian spy-drama which included the nine-dash line in 2021, and the same year there was an uproar over a map on the clothing retailer H&M’s website showcasing China’s disputed maritime claims. 

Worries from the government in Hanoi over China’s potential political interference through curated TikTok content would not be unique. India banned the app in 2020, and Australia and New Zealand have banned it from government devices. The U.S. government officially prohibits state and federal employees from using the platform.

In Singapore, TikTok is only allowed on a “need-to basis” for government employees and Malaysia has banned political advertisements on the site. 

“When I was in [Singapore] in November last year, officials were telling me that they were very aware of some pro-China narratives that have taken hold… and that was coming across in social media apps,” said Hunter Marston, a Southeast Asia geopolitical analyst and PhD researcher at Australian National University. “TikTok would be an easy avenue for that to take hold.” 

Elsewhere in the region, governments have embraced the app for their own purposes. In the Philippines, TikTok played a key role in the campaign of President Ferdinand “Bongbong” Marcos Jr. – with influencers producing a steady stream of bubbly content revising the authoritarian history of Ferdinand Marcos Sr. 

“[TikTok] is open to Chinese influence inserting subtle messaging and this has been big in the Philippines, especially around Marcos Jr.’s election. TikTok was huge in disseminating misinformation,” Marston added. “[Banning] would be an easy way for Vietnam to prevent that from entering the discourse in Vietnam.”

Moral Panic

Some observers see the threats to ban TikTok as a fearful attempt by authorities to preserve conservative Vietnamese values.

Giang said the TikTok censure fits within Hanoi’s fight against so-called “ideological deterioration”, led by the country’s most powerful figure, General Secretary Nguyen Phu Trong.

“TikTok has a huge impact on the younger generation,” Giang explained. “If the Vietnamese government cannot find a way to control it – by frequent reports, by more censorship, maybe by pushing them to promote what they want them to promote – then there will be an issue for national security and losing younger generations.”

A Hanoi-born millennial agreed, declining to give his name for potential repercussions for discussing the government. 

“There is an ongoing moral panic that the state and many nationalists are pushing, banking on the fear that TikTok is ruining our youth and destabilising the nation,” he said, noting the general secretary frequently emphasises “the importance of controlling popular culture.” 

“They fear that the control may be slipping from them, and they do not even have the capacity to moderate this platform. So they do rely on public outrage,” the millennial added. “I’ll be honest, they care more about preserving stability and trust in the party than about protecting youth from hateful ideologies.”

The social activist Phuong surfs past harmful posts on social media but has concerns about the younger generation’s ability to do so. 

Still, he has a bigger issue with the potential of the government to use TikTok to push its own agenda.

“I think the Communist Party will influence TikTok to release news that benefits their party,” Phuong said. “Even [they] will release political fake news to deceive the people.” 

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Japan boldly igniting a national fusion revolution

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The Japanese government has opted to build up a huge domestic fusion industry to secure a leading role in the future commercial utilization of fusion power.

This policy is clearly set forth in a document published on April 14 by the Japanese Cabinet, entitled “Fusion Energy Innovation Strategy.” The new policy goes far beyond merely stepping up the participation of Japanese industry and scientific institutes in international projects.

The explicit intention is to create the industrial and manpower base for Japan to build – and no doubt export – its own commercial fusion plants, if possible in advance of other industrial nations.

One cannot help but recall the way the Ministry of International Trade and Industry (MITI) famously built up Japan’s industry, systematically, sector by sector, starting in 1949. The new “Fusion Innovation Strategy” is solidly rooted in Japan’s industrial policy tradition.

At first glance, the new policy still seems oriented to the “ultra-conservative” scenario, according to which the International Thermonuclear Experimental Reactor (ITER), a giant tokamak reactor now under construction, will provide the essential scientific and engineering basis, by around 2035, for designing and constructing a first prototype fusion power plant, the DEMO, likewise as an international project.

The first commercial fusion power plants might then be built starting around 2050. As I stressed in an earlier Asia Times article, this scenario is intolerably long.

Significantly, Japan’s “Fusion Innovation Strategy”  departs from it in several decisive ways. First, Japan intends to build its own prototype fusion power plant at least five years ahead of the standard scenario.

Second, this “JA-DEMO” will be a national project, based as much as possible on Japanese technology and Japanese industry. Third, the cited document hints at the possibility that scientific and technological breakthroughs might accelerate the process even more.

The document notes that the US and UK are already restricting access to some of the technologies they intend to use in future fusion power plants. It stresses the urgency of beginning immediately, to build up the fusion industrial sector. Otherwise, Japan might come in too late.

Japan’s takeoff point

Japan already occupies one of the leading positions internationally in fusion research and fusion engineering. This provides a favorable takeoff point for the government’s new strategy.

The JT-60SA tokamak. Image: Facebook

The presently largest tokamak fusion reactor in the world, the JT-60SA, is located at Japan Atomic Energy Agency’s Naka Fusion Institute. A cooperative project with the EU, JT-60SA is the follow-on to Japan’s flagship tokamak reactor, the JT-60U, which holds the world record for the hottest ion temperature ever achieved (522 million °C) as well as the highest value among magnetic confinement devices of the so-called “fusion triple product.” 

The fusion triple product is defined as the product of the temperature, the density and the duration of confinement of the plasma.

Together with the plasma temperature, the triple product is regarded as a measure of progress toward a net power-producing fusion reactor. Since the late 1960s, the value of the triple product achieved by tokamak reactors doubled on average every 1.8 years.

Interestingly, this doubling rate exceeds that of the famous “Moore’s Law”, which states the number of transistors on a chip double approximately every two years.

A simplified plot of the progress of various tokamak reactor experiments toward the “breakeven” point Q = 1. (1 keV corresponds to a temperature of roughly 11 million degrees Celsius.) Note the logarithmic scales. The red area is the projected range of the ITER reactor. Image: Wikipedia

Had JT-60U been operating with deuterium-tritium fuel – the most likely fuel for first-generation fusion reactors – it would have achieved so-called breakeven, in which the energy liberated by fusion reactions exceeds that energy input used to heat the plasma.

However, as in most tokamak experiments, the JT-60U was not designed to produce large numbers of fusion reactions. Instead, it operated with pure deuterium, avoiding the need for special handling of tritium, which is moderately radioactive, as well as the strong neutron radiation that would have been generated by DT reactions.

I should stress, with reference to my earlier Asia Times articles on China’s EAST tokamak, that the recent breakthroughs on EAST concern the increase in the confinement time – the time during which the high-temperate plasma is maintained in a stable state in the reactor.

While the fusion triple product realized by EAST in the relevant experiments is much lower than that of JT-60U, the latter’s plasma lasted only seconds while EAST maintained stable confinement at comparable temperatures for 17 minutes.

In addition to magnetic confinement fusion, Japan has one of the world’s advanced laser fusion facilities, the Gekko-XII, based in Osaka. Curiously,  while referring vaguely to “various reactor types”, the strategy does not explicitly mention laser (or “inertial confinement”) fusion.  

The Gekko XII laser room. Image: Institute of Laser Engineering, Osaka University

I shall not speculate about why but merely report an interesting piece of news: In 2021 Japan had its first laser nuclear fusion startup, EX-Fusion Inc, with the ultimate goal of building a commercial laser fusion reactor.

EX-Fusion was co-founded by Shinsuke Fujioka from Osaka University’s Institute of Laser Engineering, which built and operates the Gekko XII system.

EX-Fusion has already raised seed money from venture-capital firms in Osaka and Tokyo to begin work on two of the most essential systems in a laser fusion power plant: a system for continuously feeding fusion fuel particles in rapid succession into the combustion chamber; and a laser target beam tracking system which ensures that the laser pulse hits the moving target particle at exactly the right moment.

Some key quotes

To round out the picture, it is worth quoting some passages from the Japanese Cabinet’s “Fusion Energy Innovation Strategy.”, which is available in provisional translation here.

For the present purposes, I have rearranged some of the passages. The stress marks are mine.

The strategy paper highlights international developments which have fed into the government’s decision to launch a large-scale fusion industry in Japan:

“Government-led scientific and technological breakthroughs are being made, and private-sector investment in this area is also increasing in many countries. Spurred by this booming private-sector investment, fusion start-ups in the US, the UK, and elsewhere are accelerating fusion R&D competition with setting ambitious targets for fusion power generation ahead of the schedules of government plans up to now. Moreover, China is also making strong progress in its plans for the government-led construction of experimental equipment and a prototype reactor, which could make China a very strong competitor in fusion research and development…

“Other countries and private companies are developing advanced technologies and various reactor types, and these original and emerging technologies could have a game-changing impact…

“The US and the UK governments formulated their national strategies (US: March 2022; UK: October 2021) targeting the commercialization of fusion energy, and have started confining relevant technologies to their own countries. The race to commercialization has already begun without waiting for the actual realization of fusion power generation…”

What does this mean for Japan? The paper notes:

“Fusion technologies, which produce ripple effects to other industries, are important for ensuring economic security based on technological security….

“Those areas that could hinder the realization of fusion energy in Japan if dominated by other countries should be approached from the perspective of supply chain access regardless of whether Japan has strengths or weaknesses in them…

“Japan regards fusion energy as a new industry and needs to adopt a multifaceted approach, including entering without delay the global supply chains that are being created…

“The government labeled its fusion strategy for the coming ten years as: ‘Towards the practical realization of fusion energy, the world’s next-generation energy source — The commercialization of fusion energy: Seizing the winning market edge by leveraging Japan’s technological advantage.’…

“It will be essential to build the foundation for the [Japanese] DEMO with the aim of establishing a future fusion energy ecosystem and promoting the acquisition of necessary technology in anticipation of the participation of private companies in the development of Japan’s DEMO….

“The Cabinet Office and MEXT will support the R&D by private companies that will play a major role in developing the fusion industry. In particular, support to start-ups will be enhanced staring fiscal 2023.”

(MEXT stands for the Japanese government’s mammoth Ministry of Education, Culture, Sports, Science and Technology.)

A particularly important passage raises the possibility of greatly accelerating the process toward commercial fusion power:

“MEXT’s “Roadmap toward Fusion DEMO Reactor (first report)” sets the period for the achieving of power generation around 2050, and the results of study by MEXT’s Task Force on a Comprehensive Strategy for DEMO Development has shown that it is possible technically to move that timeline forward…”

The study referred to here is an October 28, 2022 report entitled “Action Plan for development of DEMO based on study for moving forward the timeline for fusion energy power generation.”

Finally, the Japanese government’s strategy sees fusion as necessary for achieving a new stage of social development, referred to as “Society 5.0.”

“The government will … promote activities for deepening citizens’ understanding of fusion energy … Fusion energy will not only solve the energy problems of Japan…  [but also] become the foundation for supporting Society 5.0, which is hailed as the model for the future society Japan should aim for.”

Comment

The Japanese government has clearly chosen to make fusion energy a pillar of its national industrial policy, starting immediately. I consider this a wise decision, and one with far-reaching positive consequences.  

It stands in sharp contrast to Germany, which has no national fusion program and where one can witness the pathetic spectacle of a former leader in nuclear technology shutting down its last fission plants, at the same time Japan is turning its own plants back on.

Decisive for the success of the Japanese government’s fusion strategy, however, will be to fully exploit the potential for innovation inherent in fusion and fusion-related technology.

Two 440-ton vacuum vessel sectors for the ITER nuclear fusion project in southern France. Japan will use a giant device for nuclear fusion experiments in Ibaraki Prefecture to provide data necessary for the multinational endeavor. Image: ITER Organization

Over the 70 years since the first awesome demonstration of fusion energy – the explosion of the first hydrogen bomb – the struggle to realize fusion energy in controlled forms has generated an enormous store of creative ideas and experimental discoveries.

These are embodied only partially, or not at all, in the present, slow-moving ITER project. There is every reason to expect, that the economic applications of fusion energy will take a great variety of forms, including reactor types based on different principles.

The unprecedented flow of private investment into fusion now underway is essential for realizing this broader perspective, as well as shortening the timeline to commercialization.

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Police look at resale of cyanide

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Deputy national police chief Pol Gen Surachate Hakparn arrives at the Royal Thai Police Sports Club in Bangkok on May 10 to question a witness in the cyanide poisoning case. (Photo: Pattarapong Chatpattarasil)
Deputy national police chief Pol Gen Surachate Hakparn arrives at the Royal Thai Police Sports Club in Bangkok on May 10 to question a witness in the cyanide poisoning case. (Photo: Pattarapong Chatpattarasil)

Police will press charges against a company that imported cyanide compounds and sold them to other retailers, after an investigation determined that alleged serial killer, Sararat “Aem Cyanide” Rangsiwuthaporn, had purchased the cyanide she used to kill at least 13 people from a reseller.

Deputy national police chief, Pol Gen Surachate Hakparn, met the deputy director of the Department of Industrial Works (DIW), Pornyod Klankrong, on Thursday to discuss the country’s regulations on cyanide imports as public pressure mounts for the police to prevent such an incident from happening again.

The meeting, he said, was meant to find ways to plug loopholes in Thailand’s Hazardous Substances Act, and to see if there were any companies which were illegally reselling cyanide they had lawfully imported, to other parties.

He said authorities have enough evidence to press charges against one company, which police believe resold the cyanide it acquired to other parties.

The company had brought in 1,600 bottles of cyanide, 100 of which ended up with six other retailers.

“It is against the law because the sale of cyanide is restricted to research purposes or factory operations,” he said.

According to Pol Gen Surachate, a police investigation has found that at least nine other people had bought cyanide in a similar manner to Ms Sararat in order to commit suicide.

He said the police would continue their investigation and submit their report to the DIW as soon as the probe wraps up.

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Cops look at resale of cyanide

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Police will press charges against a company that imported cyanide compounds and sold them to other retailers, after an investigation determined that alleged serial killer, Sararat “Aem Cyanide” Rangsiwuthaporn, had purchased the cyanide she used to kill at least 13 people from a reseller.

Deputy national police chief, Pol Gen Surachate Hakparn, met the deputy director of the Department of Industrial Works (DIW), Pornyod Klankrong, yesterday to discuss the country’s regulations on cyanide imports as public pressure mounts for the police to prevent such an incident from happening again.

The meeting, he said, was meant to find ways to plug loopholes in Thailand’s Hazardous Substances Act, and to see if there were any companies which were illegally reselling cyanide they had lawfully imported, to other parties.

He said authorities have enough evidence to press charges against one company, which police believe resold the cyanide it acquired to other parties.

The company had brought in 1,600 bottles of cyanide, 100 of which ended up with six other retailers.

“It is against the law because the sale of cyanide is restricted to research purposes or factory operations,” he said.

According to Pol Gen Surachate, a police investigation has found that at least nine other people had bought cyanide in a similar manner to Ms Sararat in order to commit suicide.

He said the police would continue their investigation and submit their report to the DIW as soon as the probe wraps up.

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No long queues, no panicking customers: India’s banks start exchanging discontinued 2,000-rupee notes

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Resident Sanjeev Sen Gupta said he would check with a store to see if he could get rid of his notes by buying some jewellery. 

“It totally depends on the understanding between the businessman and the customer. I am sure the jewellery shop owner will think about whether he should accept them,” he added. 

Meanwhile, some businesses are hoping to cash in on the situation by encouraging shoppers to use up their notes by purchasing goods or services.

Another resident, Ms Sangeeta Sehgal, said: “The businesses are giving us options. They are telling us to go to their gyms and to go to their shops. 

“I am also getting these messages on WhatsApp telling me that I can buy all kinds of clothes using 2,000-rupee notes. So, they have now used this to boost their sales, be it jewellers or any other businesses. So a lot of us are spending our 2,000-rupees notes in the market this way.”

As people shop to avoid the hassle of going to a bank, this has reportedly led to an increase in sales for many businesses, said analysts. 

This could benefit gold merchants and real estate companies, they added. 

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US-China trade war as mutually assured destruction

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Analysts at Fitch Ratings aren’t looking out for China as they tiptoe up to downgrading Washington’s AAA credit rating. But written between the lines in bold font is how a US default would give Beijing the big trade war win Xi Jinping has been seeking.

To be sure, China won’t love the paper losses on its stockpile of US$870 billion of US Treasury securities. Nor will Chinese leader Xi or Premier Li Qiang welcome the ways in which surging US debt yields make China’s 5% growth target less attainable.

But the immediate devastating blow to US leadership and credibility from a default would play right into Xi’s goal of increasing the yuan’s role in finance and trade — and thus giving China a bigger say in global economic affairs.

And yet, it’s not quite that simple. Just as US Congress members play games with the debt ceiling and teeter towards default, Chinese stocks are cratering.

The CSI index has erased all its gains for the year so far as China’s post-Covid recovery disappoints. It’s hard not to wonder if the common link here isn’t the trade war that neither side seems ready to end.

Call it mutually assured economic destruction. In the 855 days of the Joe Biden presidency, his White House continued predecessor Donald Trump’s punitive tariffs against China.

In many ways, Biden has gone after China with even greater verve. Biden is not doing it with blunt taxes and angry tweets, but surgical and steady efforts to deprive China of access to vital technology.

China, of course, has retaliated in kind. But as the two biggest economies face intensifying headwinds, it’s high time US and Chinese officials lowered the temperature and found a way to stop the insanity, many analysts believe.

A widely watched meeting in Vienna earlier this month between US National Security Adviser Jake Sullivan and China’s top diplomat Wang Yi generated some muted optimism. Both sides described the discussions as “candid, substantive and constructive.”

Another chance to return to normalcy will come at a dinner planned for May 25 in Washington, where US Commerce Secretary Gina Raimondo will dine with her Chinese counterpart Wang Wentao, marking the first cabinet-level meeting in Washington between the two sides during the Biden administration.

Yet where Biden or Xi stands on the it’s-time-to-talk continuum is anyone’s guess.

Chinese leader Xi Jinping and US President Joe Biden are locked in a contest for economic supremacy. Photo: Pool / Twitter / Screengrab

It’s time to admit the ongoing “decoupling” drama between the US and China is having an “adverse effect” on the companies of both nations, saysErgys Islamaj, senior economist at the World Bank.

What’s more, Islamaj notes, “the fragmentation of standards, especially between the world’s two largest markets, can not only constitute additional barriers to trade and investment between the two countries.”

The “fragmentation,” he says, “creates additional burdens and diseconomies on exporters and multinational corporations from third countries, as companies need to adjust their products and processes to comply with different regulations.”

All this is creating “additional costs and complexity in sourcing decisions” and it’s not a formula for innovation or economic confidence, Islamaj concludes.

Wang Qi, CEO of MegaTrust Investment, thinks ending what he calls an all-out “investment war” will be hard. As he puts it: “Trump started the trade war. Biden initiated the tech war. Yet they both wanted an investment war with China.”

Worries about heightened US-China tensions have weighed on Chinese stocks since late April. This is just months after the US Public Company Accounting Oversight Board completed its first round of audit inspections on Chinese ADRs, or American depositary receipts, “which reduced the delisting risk,” Wang says.

For now, at least. Many, though, “seriously underestimated the gravity of the so-called investment war, which is still on today,” Wang says. “Trying to limit Chinese companies’ growth by trade or tech sanctions is one thing. Putting an explicit cap on the US investments in Chinese stocks is another. The latter is arguably more direct and detrimental to the share price.”

US officers can, and do, make reciprocal claims about Beijing. Yet neither economy is thriving in this environment. US growth cooled in the first quarter. Gross domestic product (GDP) rose at an annual rate of 1.1% in the January to March period, down from 2.6% in the previous quarter last year.

“Compared to the fourth quarter, the deceleration in real GDP in the first quarter primarily reflected a downturn in private inventory investment and a slowdown in nonresidential fixed investment,” the US Commerce Department said earlier this month.

To Fitch economist Olu Sonola, the downshift is not a fluke. Despite unemployment sitting at a 54-year low, Sonola notes, US labor markets will weaken as aggregate demand stagnates in response to higher interest rates and tightening credit conditions, exacerbated by stress in the banking sector.

Silicon Valley Bank’s collapse could yet be the tip of the iceberg for US banks. Image: Screengrab / Twitter / TechCrunch

“Labor demand still exceeds supply, but this imbalance is declining, now at approximately 2.3% of the labor force in first quarter 2023 compared with 3.2% last quarter,” Sonola says. “Job openings have also declined by 1.6 million from peak levels. Wage growth year-over-year has decelerated significantly since last quarter in a number of states.”

Clearly, trade headwinds aren’t doing China any favors either. Retail sales, industrial output and fixed investment expanded much less than hoped in April. The youth unemployment rate hit a record high of 20.4%, raising concerns for social stability.

Economist Jeffrey Currie at Goldman Sachs says deep concerns over the health of the global financial sector, US debt ceiling risks, fears of an impending demand slowdown in the West and a disappointing recovery in China in April have all contributed to “fears of an upcoming US or global recession.”

Those fears will be turned up to 11 or higher as the US flirts with default. Enter Fitch, with a perilously timed downgrade warning as US politicians play with fire. It moved the US to “rating watch negative” the “X-date” when Washington runs out of cash.

In its statement, Fitch said “we believe risks have risen that the debt limit will not be raised or suspended before the X-date and consequently that the government could begin to miss payments on some of its obligations. Prioritization of debt securities over other due payments after the X-date would avoid a default.”

Adding to the uncertainty is where Biden and Xi might take their economic clash next.

Some think Team Biden should be careful what it wishes for. Economist Michael Beckley at the Washington-based Wilson Center says that “most debates on US-China policy focus on the dangers of a rising, confident China. But the United States actually faces a more volatile threat: an insecure China mired in a protracted economic slowdown.”

Chinese growth, he adds, has fallen by half over the past decade and is “likely to plunge in the years ahead as massive debt, foreign protectionism, resource depletion and rapid aging take their toll. Past rising powers that suffered such slowdowns became more repressive at home and aggressive abroad as they struggled to revive their economies and maintain domestic stability and international influence. China already seems to be headed down this ugly path.”

Performers dance during a show as part of the celebration of the 100th anniversary of the founding of the Communist Party of China, at the Bird’s Nest stadium in Beijing on June 28, 2021. Photo: AFP / Noel Celis

The bottom line, Beckley concludes, is that “slowing growth makes China a less competitive long-term rival to the United States, but a more explosive near-term threat. As US policymakers determine how to counter China’s repression and aggression, they should recognize that economic insecurity has spurred great power expansion in the past and is driving China’s belligerence today.”

Clearly, China could make a similar argument about the specter of Trump getting a second shot at power after the November 2024 election. Trump, after all, recently reiterated he favors a US default.

But if the definition of insanity, as Albert Einstein said, is trying the same play over and over expecting a different result, then there’s still too much crazy in US-China relations.

Follow William Pesek on Twitter at @WilliamPesek

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ANGKASA-X Announces The Launch Of A-SEANSAT-PG1 Satellite In June

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Precusor to a satellite-as-a-service plan targted at ASEAN countries
The satellite is set to launch from the Vostochny Cosmodrome in Russia

 
ANGKASA-X has officially announced the upcoming launch of the A-SEANSAT-PG1 (PG1) satellite next month, marking the first step in the formation of a Low-Earth-Orbit (LEO) satellite constellation designed and assembled in Malaysia over the…Continue Reading