US friend-shoring hurts China’s industrial profits

By:
On:
In: Asia

Chinese industrial firms made lower profits in the first quarter than a year ago as the United States’ “near-shoring” and “friend-shoring” strategy has started showing a negative impact on the Chinese manufacturing sector.

China’s industrial firms’ profits fell 21.4% year-on-year to 1.52 trillion yuan ($220 billion) in the first three months from 1.93 trillion yuan a year ago, the National Bureau of Statistics said Thursday. The year-on-year decline was 22.9% in the first two months of this year.

Of the 413 billion yuan drop in industrial profits in the first quarter, the computers, telecommunication and other electronic equipment sector contributed 20%. The rest was attributable to the chemical, metal and oil refinery industries, which are more sensitive to changes in commodity prices.

Manufacturers of computers, telecommunication and other electronic equipment saw their revenue down 6.4% to 3.24 trillion yuan in the first quarter from a year earlier while their profits contracted 57.5% to 60.73 billion yuan.

Chinese officials concluded that the shrinking profits were a result of weak external demand but some analysts suggested that the problem is more of a structural one.

Zhang Zhongjie, an economist at Huajin Securities, writes in a research report that the export of electronic products has regained its growth momentum in the first quarter of 2023 from the fourth quarter of last year after China ended its zero-Covid policy last December. He says, however, the recovery was slowed by the protectionist US policy. 

Zhang Yansheng, chief researcher at the China Center for International Economic Exchanges, has recently said on two occasions that the decline in China’s industrial profits was caused by not only a slowing external demand but also the restructuring of the US supply chains.  

“At present, the biggest challenge for China’s foreign trade is the decoupling of the Sino-US supply chain,” Zhang says. “In 2018, the US used trade disputes to push forward ‘re-shoring’ and ’near-shoring,’ and now it is promoting ‘friend-shoring’ to achieve its decoupling goal.”

He notes that the US has recently forced its companies to reduce their purchases in China while some traditional foreign customers have also encouraged Chinese manufacturers to relocate to some Southeast Asian and South Asian countries.

“Geopolitics can cause huge and far-reaching damage to the stability of the global supply chain, and this will have a major impact on China’s future foreign trade situation,” he says. “China is now selling more and more intermediate products to South and Southeast Asia, Eastern European and Mexico, which will do the processing and assembly and then ship the end products to the US and Europe.”

Zhang says China can boost industrial profits by strengthening its research and development to fight for high-value manufacturing orders, and also partnering with overseas scientists, engineers and entrepreneurs to sell professional services. 

Since the Sino-US trade war began in 2018, US officials have pushed forward a “re-shoring” and “near-shoring” strategy, encouraging companies to produce their goods in Mexico and the US.

In June last year, the Biden administration said it would waive tariffs on solar panels imported to the US from Cambodia, Malaysia, Thailand and Vietnam for 24 months. The move provided incentives for Chinese solar panel suppliers to move to these four countries.

Last November, Treasury Secretary Janet Yellen visited India to promote the US “friend-shoring” drive, which will also benefit Vietnam and Indonesia.

Auto, metal and energy sectors

Meanwhile, other industries performed differently in terms of their profitability during the first quarter. 

Automakers recorded a 1.3% growth in revenue to 2.14 trillion yuan but their profits contracted 24.2% to 81.9 billion yuan due to a price war in the sector. In March, their profits climbed 9.1%, in sharp contrast to a decrease of 41.7% in the January-February period.

Many metal suppliers and oil refiners recorded shrinking profits as the selling prices of their products fell faster than their raw materials. The electricity and thermal supplying sector recorded a 49% growth in profit while the electrical machinery and equipment manufacturing sector saw a 27.1% profit growth.

“Overall, the profit drop of Chinese industrial firms remains significant while the scope of profit losses for some companies is large,” NBS statistician Sun Xiao said in a media briefing on Thursday. “Hopefully, the easing of raw material prices will help improve the profitability of Chinese firms.”

Sun added that China has seen some signs of recovery in March when industrial profits dropped only 19.2% year-on-year, compared with a slump of 22.9% in the first two months.

To accelerate the recovery of industrial profits, Sun urged efforts to expand market demand, perk up confidence and give enterprises reason to feel positive about the future.

On Wednesday, the General Office of the State Council issued a circular laying out measures to improve the scale and structure of foreign trade to ensure its stable and high-quality growth.

Governments at all levels should promote the full resumption of important domestic offline expos for better supply and purchase matchmaking, and facilitate cross-border business personnel exchanges, according to the circular.

Efforts will be made to enhance market development services to stabilize exports to developed economies and guide enterprises to further develop markets in developing countries, ASEAN and other regional markets.

The circular came after some Chinese manufacturers said they met fewer buyers from Europe and the US at the Canton Fair, the largest trade show in China, which is being held in Guangzhou between April 15 and May 5.

They said they saw more buyers from Latin America, Africa, Southeast Asia and Russia but these customers may provide lower margins. 

Read: US sanctions turn away Canton Fair’s Western buyers

Follow Jeff Pao on Twitter at @jeffpao3

Continue Reading

BOJ chief Ueda won’t shock markets yet

By:
On:
In: Asia

TOKYO – Judging by the dearth of volatility in yen trading, investors aren’t expecting fireworks from the Bank of Japan tomorrow (April 28).

Surprises do happen at BOJ headquarters, of course. But this being Kazuo Ueda’s first policy meeting as governor, the odds are low that Tokyo is about to shock global markets with an about-face in its 20-plus-year experiment with quantitative easing.

That would be wise considering the worrisome mix of troubles bubbling up under the surface of the world’s third-biggest economy. Those include worries about a Silicon Valley Bank-like blowup among Japan’s 100-plus regional lenders.

Another: the high likelihood of political blowback in Tokyo if Ueda made radical monetary policy moves right out of the gate.

This latter point is often underappreciated in analyses of the BOJ’s latitude to take risky steps. Though “independent,” the BOJ in reality is on a shorter leash than many observers like to admit. Case in point: Haruhiko Kuroda leaving the BOJ governorship earlier this month with zero effort to wind down QE.

Granted, the BOJ had already been deep in the QE matrix for 13 years by the time Kuroda arrived in 2013. But he turned Japan’s QE era up to 11 and then some. And with limited success, clearly, as wages flatlined amid record corporate profits compliments of a plunging yen.

Still, the big gains in Nikkei stocks and relative macroeconomic stability earned Kuroda considerable political capital at home. Capital he could’ve spent on his way out the door plotting ways to reduce the BOJ’s US$5 trillion balance sheet.

Kuroda didn’t, leaving Ueda with what’s arguably the worst job in global economics. As Ueda presides over his first policy deliberation as governor, memories of December 20, 2022 loom large.

Outgoing Bank of Japan Governor Haruhiko Kuroda. Photo: AFP / Jiji Press

On that day, all hell broke loose in markets after Team Kuroda announced the slightest of tweaks to its “yield curve control” policy. The move to let 10-year bond yields rise as high as 0.5% was meant to limit the gap between US and Japanese interest rates. That, Kuroda figured, would reduce pressure on the BOJ to intervene in markets day after day.

The Kuroda BOJ spent the next two weeks cleaning up the move’s mess by making countless unscheduled asset purchases to reassure global investors that QE is here to stay.

Then came the Silicon Valley Bank crisis in the US. Next, UBS having to save Credit Suisse, which served to spike global paranoia levels to the next level.

Now, comes news this week that San Francisco-based First Republic Bank’s troubles are far from over. And, it follows, concerns about new US bank failures are intensifying by the day.

This is the limited option environment into which Ueda steps. Reports from Bloomberg that US regulators may downgrade First Republic’s prospects are making headlines just as Ueda sits down to mull BOJ policy. It’s worth noting, too, that Japan’s economic performance thus far in 2023 has not been stellar.

“Although the recent decline in government bond yields might seem to open the door for tweaks to yield-curve control, such a step could backfire,” says economist Stefan Angrick at Moody’s Analytics. “Economic data of late haven’t been good. Disappointing GDP growth means the economy is still smaller than before the pandemic. Employment conditions are showing signs of softening, and wage growth is trailing inflation.”

Complicating matters, recent “shunto” wage negotiations yielded the biggest wage gains since 1993 – an average 3.8%. Trouble is, coming amidst the highest inflation in 40 years, the timing of the pay bump could fan overheating risks. Here, China’s rebound adds to the risk of global inflation getting a second wind.

As Angrick notes, “notwithstanding a strong shunto spring wage round, it is unclear that this year’s gains will be repeated next year. Recent financial market disruptions abroad have only added risk. Given the BoJ’s history of premature policy tightening, the bungled yield curve control tweak in December, and the cold water poured on the idea of a change at the first press conference with the BOJ’s new leadership, it is unlikely the BOJ will move soon.”

The reference here to wage uncertainties for next year deepens the plot for Ueda. On the one hand, the new governor doesn’t want to let inflation become even hotter. On the other, Tokyo’s political establishment would pounce if BOJ “tapering” spooked CEOs into closing their wallets anew.

As Naoko Tochibayashi, a World Economic Forum analyst in Tokyo, notes, even now “it remains to be seen if similar wage rises can be seen in small and medium-size enterprises, which make up 70% of employers and are key to Japan’s economic revival.”

Japanese workers are negotiating for higher wages. Photo: AFP / Charly Triballeau

This dramatizes the precarious balancing act Ueda faces. So does the fragile state of Japan’s regional bank network. Many of these lenders service rapidly aging communities in already sparsely populated areas of the country. That squeezed profits well before the banking shocks of the last 15 years, including fallout from the 2008 “Lehman shock.”

That episode, graying customer bases and an accelerating exodus of companies to Tokyo had regional banks hoarding government and corporate bonds instead of lending BOJ liquidity. It was a similar practice that blew up SVB and New York-based Signature Bank.

As of the end of December, SMBC Nikko Securities estimated that regional lenders were sitting on about $10.5 billion of unrealized losses on foreign bonds and other securities. Such figures raise a difficult question Ueda now has to answer: how big might losses get on domestic debt if Japanese government bond yields rose above, say, 1% or more?

The good news is that many Japanese banks tend to prioritize bonds that can be sold rather than holding to maturity SVB-style. As such, SMBC Nikko analyst Masahiko Sato reckons the threat to capital ratios, on average, is only about 2%. Therefore, Sato does “not think potential losses are on a scale with systemic implications.”

BOJ tapering or even a rate hike or two could change this calculus, and fast. If regional banks face profit pressures with rates at zero – and the BOJ is still in 24/7 ATM mode – just imagine the valuation losses if Ueda were to hit the monetary brakes.

Yet Ueda’s pedigree suggests he could be more of an out-of-the-box thinker than currency strategists grasp.

During his time as a BOJ board member in 2000, Ueda dissented on a move to end the zero-rate strategy. His background as a Massachusetts Institute of Technology-trained economist, meanwhile, could be its own wildcard.

At MIT, Ueda was a pupil of Stanley Fischer, a former senior official at the Fed, the Bank of Israel and the International Monetary Fund. Fisher also taught former Fed chief Ben Bernanke, former European Central Bank head Mario Draghi and former Treasury Secretary Lawrence Summers.

Other members of the MIT monetary club: Reserve Bank of Australia Governor Philip Lowe and former Bank of England governor Mervyn King.

In February, Summers called Ueda “Japan’s Ben Bernanke.” Ueda and Bernanke, it’s worth noting, made their economic reputations exploring the lessons from the Great Depression, including Japan’s late-1920s to mid-1930s policies.

For Ueda, that entailed a keen focus on the 1930s policies of Korekiyo Takahashi, who’s often called the John Maynard Keynes of Japan.

Kazuo Ueda has arguably the most difficult job in finance as the Bank of Japan’s next governor. Image: Facebook / Asahi / Screengrab

Takahashi served as finance minister, BOJ governor and even prime minister in the 1920s and 1930s. His super-aggressive monetary easing, fiscal expansion and “debt monetization” efforts were as pioneering as economic policy gets.

There’s also reason to think Ueda could be a rather conventional central banker. He’s said so far, for example, that there’s no urgency to alter the BOJ-government framework that mandates the central bank target 2% inflation.

“If needed, Ueda likely will request the government to revise the joint statement so that the BOJ can respond flexibly, without sticking with the continuation of monetary easing,” says JPMorgan Chase & Co economist Benjamin Shatil. “We continue to see an exit from yield-curve control in coming months.”

Yet odds are decidedly low that Ueda would choose tomorrow (April 27) to toss financial explosives into jittery markets. And that seems wise for now.

Follow William Pesek on Twitter at @WilliamPesek

Continue Reading

More charges await serial-killing suspect

By:
On:
In: South-East Asia
Forensic officers examine a car belonging to Sararat Rangsiwuthaporn, who is accused of killing a woman with cyanide in Ratchaburi, for possible evidence. (Photo supplied/Wassayos Ngamkham)
Forensic officers examine a car belonging to Sararat Rangsiwuthaporn, who is accused of killing a woman with cyanide in Ratchaburi, for possible evidence. (Photo supplied/Wassayos Ngamkham)

Police are preparing more charges against Sararat “Am” Rangsiwuthaporn, who is suspected of involvement in the deaths of a dozen people.

Crime Suppression Division (CSD) investigators are looking to obtain statements from two key people in connection with the case, CSD deputy commander Pol Col Anek Taosupap said on Thursday. They are Kantima “Pla” Phaesa-ard, 36, who survived a poisoning attempt allegedly made by the suspect, and Raphee Chamnarnrue, who took the family of a dead woman to file a police complaint.

Pol Col Anek said he had assigned another team to meet with doctors who specialise in poisons and chemicals. Officers want to learn more about the dangers of cyanide, and the amount that would result in harm to the body and cause death. This information will be included in a police report, together with evidence of test results that showed toxic substances in the body of one of victims linked to the suspect.

“We are confident that we have firm evidence to prosecute … the suspect in the case,” said Pol Col Anek. “Now, police investigators are preparing to press additional charges aside from a premeditated murder charge.”

The additional charges are premeditated murder with intent to steal property, poisoning, and theft. “Some offences carry the death penalty,” he said.

Other leads the police are expected to follow relate to the suspect’s reported involvement in money lending and a pyramid scheme.

Ms Sararat, 36, the ex-wife of a senior police officer in Ratchaburi province, was apprehended on Tuesday at the government office complex on Chaeng Wattana Road in in Bangkok by CSD police with an arrest warrant issued by the Criminal Court. She had a bottle of cyanide in her possession and she refused to give police a statement.

Sararat “Am” Rangsiwuthaporn, 36, who is accused of killing a woman with cyanide in Ratchaburi and suspected in as many as 12 killings in all, is taken to the Criminal Court on Wednesday. (Photo supplied/Wassayos Ngamkham)

Her arrest followed a complaint filed by the mother and elder sister of the late Siriporn “Koy” Khanwong, 32, from Kanchanaburi. Siriporn collapsed and died on the bank of the Mae Klong river in Ban Pong district of Ratchaburi where she had gone with Ms Sararat to release fish for merit-making on April 14. Cyanide was found in her body.

Investigators came to believe that Ms Sararat might have mixed cyanide in Siriporn’s food, causing her death. She allegedly also stole the victim’s valuables.

Deputy national police chief Pol Gen Surachate Hakparn said on Wednesday that two more dead victims has been linked to Ms Sararat, bringing the total to 12.

On Wednesday, the Criminal Court approved a police request to further detain Ms Sararat without bail on a charge of killing Siriporn.

Pol Col Anek said investigators had called Nipawan Khanwong, 35, the elder sister of Siriporn, who was with her sister before her death, to give a statement on Thursday. Ms Nipawan had reportedly asked the suspect about the death.

Investigators are also seeking to question a Mukdahan man whose wife had been given capsules by the suspect, who said they were a tonic. The woman consumed the capsules before she died.

As well, officers are looking into whether Ms Sararat’s elder sister, a pharmacist, was involved in the provision or use of cyanide. The initial investigation, however, showed that the suspect had purchased cyanide from another channel, said Pol Col Anek.

At this stage, investigators have not yet found any other people involved and they believe Ms Sararat had acted alone, he added.

Initial questioning of the suspect did not indicate any mental problems that might have led to the crimes. She spoke like a normal person, he said.

Cyanide is a controlled substance used in industries and cannot be purchased at drug stores.

A source close to the investigation said Ms Sararat had reportedly purchased cyanide online. Five teenagers called in for questioning told police that she brought them five parcels containing bottles of drugs with her name as the recipient and asked them to bury them. They claimed she had paid them 500 baht to do the job.

One of them reportedly suspected what was inside the parcels, so he opened one and sniffed one of the bottles. He developed symptoms including dizziness and confusion for about three days.

As it turned out, the teenagers never got around to burying the bottles because they were busy celebrating Songkran. Ms Sararat phoned them to ask whether they had done what she asked, but by then it was too late as police already found the bottles, according to the source.

Investigators are also checking the records of two logistics companies for evidence of deliveries that could implicate the suspect.

Ms Sararat, meanwhile, was said to have suffered from high stress and rising blood pressure after being sent to the Central Women’s Correctional Institute on Wednesday night. She was admitted to the institute’s hospital at around 10pm. After being treated, she was sent back to her cell, Corrections Department chief Aryut Sinthopphan said on Thursday.

The suspect is four months pregnant. A doctor checked her infant’s pulse and found it was normal, said Mr Aryut.

Meanwhile, Raphee Chamnarnrue, coordinator of the case against the suspect, said there were five groups of victims involved. They were  those who took part in a pyramid scheme with the suspect, those who loaned money to her, those who gave her money to provide money lending services, those who took their cars or assets to her to mortgage, and those who authorised her to borrow from savings cooperatives.

He called on relatives of dead victims who were in those five groups to contact him or police handling the case.

Crime Suppression Division (CSD) deputy commander Pol Col Anek Taosupap has assigned investigators to consult with doctors who have specialised knowledge of poisons in order to learn more about how cyanide works. (Photo supplied/Wassayos Ngamkham)

Continue Reading

Exploring the investible opportunity in life sciences & healthcare in the Asia Pacific region

By:
On:
In: Asia, Finance, South-East Asia

It has been a tumultuous time for the life sciences and healthcare space in the Asia Pacific region over the last three years. A post-pandemic boom saw a rapid surge in private equity buyouts in the sector through 2020 and 2021, followed by a sharp correction through last year.

However, 2023 promises to be a year in which life sciences and healthcare regains its spot among the top priorities of investors, with several macroeconomic, demographic, and digital adoption trends buoying interest.

To gain deeper insights into what the future holds for this critical sector, FinanceAsia in partnership with DFIN created the Life Sciences & Healthcare Report 2023. Our report is based on a study of the most significant recent trends in the sector so far; as well as a glimpse into what the future holds via bespoke research involving key stakeholders.

We surveyed nearly 70 investors, legal and financial advisors who are actively engaged in the space, as well as professionals operating in life sciences and healthcare companies across the APAC region, to obtain informed insights on the opportunities and challenges that come with investments in the sector.

Here are some of the key takeaways:

  • The life sciences and healthcare sector is expected to bounce back in 2023: After a challenging 2022 in which factors like rising interest rates and a post pandemic rationalisation saw a decline in interest in the space, respondents across categories demonstrate optimism about the sector’s prospects.
  • An overwhelming 80% of investors expect to be involved in a transaction (funding, M&A, public listing): Over the next two years, a vast majority of investors surveyed believe they will engage with the life sciences and healthcare space. This is particularly significant since only 40% have engaged in transactions in the sectors over the last two years. Among investors who have not associated with the sector so far, 100% are ready to invest, given the right opportunity.
  • APAC will receive increased investor focus: The regions aging population, rising pressure on the public healthcare systems in some markets, as well as a sharp increase in health consumerism and digital innovations are among the major factors driving investor interest. While the life sciences and healthcare space has underperformed in the region compared to North America and Europe, innovative solutions in this space will be embraced by the region’s digital savvy middle class population which is growing in affluence.
  • Investors expect heightened M&A activity and more foreign investment: This is particularly true of mature markets. Most investors (56.3%) expect to see a growth in both volume and value of M&As over the next two years.

Read the report for a comprehensive overview of the life sciences and healthcare space including:

  1. The verticals most likely to attract investor interest and M&A.
  2. The impact of a recessive climate on investment.
  3. The biggest opportunities within the life sciences and healthcare according to investors, advisors, and professionals.
  4. The most critical challenges that the sector is dealing with.
  5. A forward-looking view on the scope and potential of life sciences and healthcare in the APAC region.

The report is essential reading for investors engaged in or thinking of engaging with the life sciences and healthcare, companies operating in the sector looking for growth opportunities, as well as advisors serving the space.
 

Download the full report now

 

¬ Haymarket Media Limited. All rights reserved.

Continue Reading

US lifts import ban on Malaysia’s Smart Glove

By:
On:
In: Asia

KUALA LUMPUR: The United States lifted a 17-month import ban on products from Malaysian rubber glove maker Smart Glove, saying the company has addressed exploitative labour practices. US Customs and Border Protection (CBP) in November 2021 sanctioned imports from Smart Glove and its group of companies over the alleged useContinue Reading

China police question staff at US consultancy giant Bain

By:
On:
In: Asia
Shanghai skyline.Getty Images
By Mariko Oi
Business reporter

US consultancy giant Bain & Company has confirmed that Chinese police have visited its office in Shanghai and questioned some staff.

“We are cooperating as appropriate with the Chinese authorities,” a spokesperson for the firm told the BBC.

It comes as relations between Washington and Beijing have deteriorated in recent months.

Last month, another US firm Mintz was raided in Beijing and five local employees were detained.

“We can confirm that the Chinese authorities have questioned staff in our Shanghai office,” Bain said.

“At this time, we have no further comment,” it added.

The company’s statement came after a media report that police made an unannounced visit to Bain’s office in the Chinese financial hub two week ago.

Officers took away computers and phones, according to the Financial Times, which cited people briefed on the matter.

According to the company’s website, Bain’s Shanghai office was opened in the city’s central business district in 2004. It also has offices in Beijing and Hong Kong.

The global firm, which has its headquarters in Boston, provides advice to public, private, and non-profit organisations.

As tensions have grown in recent months between the world’s two largest economies, US businesses have become increasingly pessimistic about their prospects in China.

This month, a survey by the American Chamber of Commerce in China of companies operating in the country found that 87% of them felt “US-China relations remain the most challenging issue”.

Tensions have been heightened since former President Donald Trump triggered a trade war between the US and China in 2018.

In February, relations between the two countries were further frayed after the US shot down an alleged Chinese spy balloon, which Beijing insisted was a weather monitoring device.

Last month, TikTok chief executive Shou Zi Chew was grilled by US lawmakers for almost five hours about the app’s data security and privacy practices, and its alleged ties to Beijing.

Earlier this month, Taiwan’s president Tsai Ing-wen’s meeting with US House Speaker Kevin McCarthy also angered the Chinese government which staged military drills around Taiwan.

Related Topics

More on this story

Continue Reading

Mitr Phol achieves global recognition for sustainability

By:
On:
In: South-East Asia

Company ranks No.2 in S&P Global for the food industry

Buntoeng Vongkusolkit, Chairman of Mitr Phol Group, sits amid a crop of canes. The company prioritises the development of bio-based raw materials by ensuring the quality of its cane and sugar.
Buntoeng Vongkusolkit, Chairman of Mitr Phol Group, sits amid a crop of canes. The company prioritises the development of bio-based raw materials by ensuring the quality of its cane and sugar.

Mitr Phol Group, world’s second biggest sugar producer and a leader in sustainable development in the agro-industrial sector in Thailand, has been recently ranked second in the world for sustainable development in the food product industry in the latest Corporate Sustainability Assessment (CSA) by S&P Global.

The inclusion in the rankings for the fifth consecutive year testifies to the Group’s excellent work as it climbed from 17th in the first assessment year to second among 353 participating organisations this time around. This represents a push for Mitr Phol Group to achieve international sustainability standards, transparency, and to abide by the same standards as leading companies listed on the Stock Exchange of Thailand (SET) as well as global companies.

The latest world’s ranking testifies to Mitr Phol Group’s success over the past 66 years in creating an organisation with a focus on sustainable development that meets international standards and its gaining of international recognition — economically, socially and environmentally — while helping all its operations achieve a sustainable future.

“In doing business today, we must focus on developing sustainability for society, the environment and all related parties. To create organisational sustainability we must not only focus on increasing our business growth but we must also prioritise the benefits to all stakeholders,” according to Buntoeng Vongkusolkit, Chairman of Mitr Phol Group, referring to company’s stakeholders including sugarcane farmers, business partners, customers, communities, society and employees.

“Operating a sustainable business helps us build the competitiveness we need to deal with sudden changes, including helping society and environment,” noted the Chairman.

Mitr Phol Group has adhered to sustainable business principles for a long time.

The group has consistently embraced the emergence of digital technology and innovations, capitalising on both to help manage and create sustainable development throughout the business value chain, from upstream to downstream.

Agricultural sector … A new opportunity for a greener world

As the group is in the agro-industrial sector which involves a number of people and partners as well as communities and the environment, the company’s sustainable development drives truly aim to benefit all stakeholders.

The agricultural sector is the source of food security and can be extended to provide green energy and bio-based products that respond to industrial and consumer demands.

The manufacturing industry is taking a hard look at utilising bio-based raw materials over those derived from petroleum for its production processes to reduce the environmental effects.

“We see a chance of agricultural sector for playing a key role to build sustainability. Consequently, we prioritise the development of raw materials throughout the value chain and strive to ensure the quality of cane and sugar that can be used as bio-based raw materials,” said Mr Buntoeng.

“Recently, the company became the first in Thailand to be certified by Bonsucro EU-RED, demonstrating that its ethanol is produced in accordance with the sustainability requirements of the European Union,” he said.

Mitr Phol Group remains committed to creating sustainable development in accordance with the United Nations Sustainable Development Goals (SDGs) covering all three economic, social and environmental dimensions.

To achieve this, the group adopts global sustainability assessment criteria to the same standard as the Dow Jones Sustainability Indices (DJSI).

Under the latest assessment, Mitr Phol Group received higher scores across the board, including in economic aspects including supply chain management and ensuring transparency in business operations, the social aspects that focus on developing and taking care of the quality of life of stakeholders, and the environmental aspect whereby Mitr Phol Group aims to become a carbon neutral organisation by 2030 and to achieve net zero greenhouse gas emissions by 2050.

To achieve the net zero goal, the group has implemented six procedures — produce and use clean energy, expand to the bio-based products business, encourage cane farmers to harvest by cutting fresh canes instead of burning their crops, ensure wastewater and waste management, increase afforestation and to offset carbon credits.

Continue Reading

More US firms looking elsewhere: AmCham China

By:
On:
In: Asia, Technology

More than a quarter of American firms are reprioritizing other countries over China as sentiment regarding Sino-US relations grows more pessimistic, says the American Chamber of Commerce in China (AmCham China).

About 27% of surveyed AmCham China members are considering countries other than China when making their investment decisions, mainly due to concerns about an uncertain policy environment in China, according to a survey conducted between April 18 and 20 and published in the 2023 American Business in China White Paper on Wednesday.

The figure was only 6% in a previous survey, which was conducted last November and published in the 2023 China Business Climate Survey Report (BCS) last month.

In the latest survey, about 87% of US firms expressed pessimism regarding the outlook for the relationship between the world’s two largest economies. The figure was 73% in the 2023 BCS report.

The proportion of respondents who are optimistic about Sino-US relations fell from 8% to 2% for the same period. The remaining 11% are neutral on the matter.

Colm Rafferty, Chairman of AmCham China, said the latest survey was conducted against a backdrop of a tense US-China bilateral relationship that continues to stoke uncertainty in business decision-making while China is no longer the primary investment destination it once was.

Rafferty said members reported a slightly more pessimistic financial outlook for 2023 compared with previous years.

In the White Paper, AmCham China says the refusal of China to speak out against Russia’s 2022 invasion of Ukraine has further exacerbated tensions with the US and other Western nations as well as several of its neighbors.

“The Chinese government has repeated Russian propaganda and disinformation about the war, opposed economic sanctions against Russia and abstained or sided with Russia in United Nations votes on the war in Ukraine,” it says. “These decisions have continually put China at odds with many the US and many Western nations, who have threatened sanctions should China offer military or financial aid to Russia.”

It says that without peaceful resolution, Beijing’s stance in the Ukrainian war will continue to raise concern among foreign companies invested in China.

US imports from Mexico, Vietnam, India and other “friend-shoring” venues depend on imports of Chinese components, according to an Asia Times study of international trade data.

James Crabtree, executive director of the Asia branch of the International Institute for Strategic Studies, says in a tweet that, because the West’s supply chains around the world will still need Chinese components, their fundamental vulnerability will remain.

Crabtree also says an economic decoupling between the West and China will leave Southeast Asian countries more economically dependent upon China.

Top business challenge

Sino-US political tensions increased after a Chinese “spy balloon” was seen in North American airspace in late January. The situation was worsened by the cancellation of US State Secretary Antony Blinken’s China trip, new sanctions against Chinese firms and a historic meeting between Taiwanese President Tsai Ing-wen and US House Speaker Kevin McCarthy in California on April 5.

AmCham China says rising tensions between the two powers remain a top business challenge cited by its members. It says three-quarters of companies are being directly impacted by the changing US-China relationship while 46% of members expect the relationship to deteriorate in 2023, up from 24% in 2022.

Besides, it says, 38% of member companies felt that foreign companies were treated unfairly as compared with domestic companies in China last year, compared with 33% that felt that way in 2021. These companies said regulatory enforcement topped the list of unfair treatment areas, with licensing and market access and government financial support/subsidies sharing second place.

Made in China. Cardboard boxes with text made in China and Chinese flag on a roller conveyor. Photo: 3d illustration

“Almost half of our members felt ‘less welcome’ in China, with greater than one-third of survey participants expressing unfair treatment towards foreign companies by government policies and subsequent enforcement actions,” it says. “Unfortunately, this has also led to the second year of an increase in uncertainty among our members regarding the Chinese government’s intentions to open up China’s market to foreign investment.”

According to the 2023 BCS report, 24% of respondents said last November that they were considering or already relocating or already relocating their manufacturing or sourcing outside of China while 74% said they were not considering it. After the Chinese government ended its zero-Covid policy in December, there were still 23% of respondents acknowledging in mid-April that they planned to leave China.

The 2022 BCS report said in March last year that only 14% of members wanted to leave China while 83% said they would stay. The Chinese Foreign Ministry’s spokesperson at the time, Zhao Lijian, said foreign investors had cast a vote of confidence in China’s development.

When the 2023 BCS report was released last month, the foreign ministry did not comment on it but waited to comment on the separate survey conducted by AmCham South China. The survey said more than 90% of the participating companies selected China as one of the most important investment destinations and 75% of the companies planned to reinvest in China in 2023

“China remains a popular destination for foreign investment because it has a huge market and full-fledged industrial and supply chain networks,” Mao Ning, a foreign ministry spokesperson, said on March 1. “No matter how the international landscape may change, we will not waver in our resolve to further open up at a high standard and our determination to share development opportunities with the rest of the world.”

China’s foreign direct investment (FDI) rose 4.9% to 408.45 billion yuan (US$59.2 billion) in the first quarter from a year ago, the Ministry of Commerce said on April 20. If denominated in US dollars, the year-on-year growth of the country’s FDI was only 0.5% in the first quarter, significantly down from 32% in the same period of last year.

US investment curbs

Next week, United States President Joe Biden will sign an executive order that will restrict US companies and funds from investing in China’s microchips, artificial intelligence, quantum computing, biotechnology and clean energy projects and firms.

The investment curbs will require US companies to notify the government of new investments in China’s high-technology sectors and prohibit some of these deals. Biden will try to announce them before the G7 Summit on May 19-21 and ask US allies for support.

AmCham China says several US export control rules are not effective as many items that require US dual-use export licenses may be exported readily from non-US countries without licenses.

“The US government should work with other governments to impose multilateral controls, instead of imposing unilateral US controls that are ineffective in achieving national security and foreign policy goals,” the chamber says. “Where controls remain unilateral, it should reconsider the effectiveness of such controls, and remove those controls that do not meet US policy goals.”

AmCham suggests that government and industry representatives from both countries can establish a vehicle to openly collaborate to address export control concerns and determine baselines that would enhance the ability of Chinese companies to procure US-controlled commodities and allow US and Chinese companies to develop technology together for the benefit of both countries.

Read: US investment curbs on tech firms infuriate China

Follow Jeff Pao on Twitter at @jeffpao3

Continue Reading

Pentagon suggests China seeks to seize US satellites

By:
On:
In: Asia

The recent leak of Pentagon documents included the suggestion that China is developing sophisticated cyber attacks for the purpose of disrupting military communication satellites. While this is unconfirmed, it is certainly possible, as many sovereign nations and private companies have considered how to protect from signal interference.

Nearly every aspect of our lives is enabled by satellite communication, from financial transactions, navigation, weather prediction, and internet services to more remote locations. Yet given how many satellites are in orbit, while the effect might be felt on some of the population, if a satellite or two were lost there would not be any major problems.

But when we consider the military benefits of satellites, immediate communication is vital for early warning systems and tracking. So how easy would it be to disrupt these services?

The Chinese space program has been advancing at a faster rate than that of any other country. China’s first successful launch was in 1970, but in 1999 its space program leapt forward with the Shenzhou-1 launch which was the first in a series of unmanned, then manned, space missions of increasing sophistication.

China conducted just over 200 launches between 2010 and 2019. In 2022, it set a record with 53 rocket launches in a year – with an incredible 100% success rate.

As such, the Chinese National Space Administration (CNSA) has become a major player in global space activity and has a lot of experience with satellite communications.

Satellites would be a target in any US-China conflict. Image: Twitter

The leaked document suggests that the Chinese are looking for the capability to “seize control of a satellite, rendering it ineffective to support communications, weapons, or intelligence, surveillance, and reconnaissance systems.”

It’s also quite possible that the US and other nations might also be developing such capabilities.

Satellites orbit our planet at a range of altitudes. The lowest stable orbits are around 300 kilometers, the International Space Station and the Hubble Space Telescope sit at 500 kilometers altitude, and geostationary satellites are around 36,000 kilometers up (about six times the radius of the Earth).

The idea of physically capturing or taking over a satellite has been considered a largely impossible task, although it has featured, famously, in the film such as “You Only Live Twice” where a large orbiting cylinder swallowed manned spacecraft.

Smaller craft designed to remove space debris from orbit have been launched in the past few years. But the practical challenges of capturing a fully working and operating satellite are far greater (particularly due to the recoil of firing harpoons).

However, there are methods of disrupting and even taking over satellite communication?

Three ways to disrupt satellite communications

1. Saturation

This is the easiest method. Satellites communicate by broadcasting on a specific set of radio or microwave frequencies. By bombarding the receiving station or the satellite itself you can effectively drown out the signal. It is particularly effective with positioning information.

2. Jamming

This is a method of diverting the communication signal from reaching the satellite or the ground control station. This requires high-power signals to fool one or the other that the jamming signal is the main transmitting station as a communication will lock onto the strongest source.

This method of interference works best when the jamming signal contains no information, so the receiver assumes there is no data transmission (a human would hear silence or just a tone).

3. Command sending

This is an infinitely more tricky procedure. The original signal needs to be silenced or overpowered and the replacement signal must be able to accurately communicate and fool a satellite.

This usually requires knowing an encryption key that would be used as well as the correct commands and syntax. This sort of information cannot be easily guessed, meaning knowledge of the launch systems and companies is required.

To make these three techniques easier to understand, imagine you are at a restaurant and your partner is sitting opposite you. You are talking to them normally and then the background music gets turned up really loud. You may be able to make out some words but not everything – this would be saturation.

Now the waiter comes past and starts talking loudly at you taking your attention away – this would be jamming.

Now your partner goes to the toilet and you receive a call that appears to be from them but is actually from somebody who has taken their phone and is impersonating them – this would be command sending.

This final example is infinitely more difficult to achieve but has the most potential for disruption. If you can trick a satellite into thinking you are the true command source, then not only are communications blocked but false information and images can be sent to the ground stations.

Zombie satellites

When a satellite does go out of communication, we refer to it as a zombie satellite. Essentially it cannot do any of its intended tasks and just orbits with little chance of recovery.

This can happen naturally during coronal mass ejections, when the Sun releases large amounts of energetic charged particles that can interact with satellites causing electrical surges. In some cases, this results in untrustworthy data, but can also result in communication loss.

Destructive anti-satellite missile tests generate huge amounts of space debris that can endanger other satellites and manned spacecraft. Photo: Atalayar

The most famous of these cases was the Galaxy 15 telecommunications satellite, which lost ground station communication in 2010 but continued to broadcast communications to customers.

While the military cannot replicate coronal mass ejections, the hijacking of signals is possible. The leaked document does not provide any proof of China’s capabilities, or indeed the United States’ current advancement in this field.

All we can say is that our understanding of atmospheric physics and wave propagation in the upper atmosphere is likely to increase rapidly as this becomes more and more important.

Ian Whittaker is Senior Lecturer in Physics, Nottingham Trent University

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

Continue Reading

High costs, lack of available technology among challenges facing maritime sector in decarbonisation pursuit

By:
On:
In: South-East Asia

Ms Christensen also highlighted the importance for private companies, industry experts and policy makers to work together to discuss the specific challenges such as the technologies, financing structures and necessary regulation needed to take the sector forward.

FUTURE SOLUTIONS

Moving forward, the sector is also working on using ammonia as a potential new fuel, but there are many technical and operational gaps, she said.

“The supply chain doesn’t exist (and) the infrastructure doesn’t exist. It’s a new fuel, in fact, engines that burn ammonia don’t exist today. Ships that use ammonia don’t exist today,” explained Ms Loo.

“That said, I think the ecosystem is quickly coming together as well. We’ve moved from an era of declaring ambition to taking action.”

Ms Loo added that GCMD will later this week unveil its ammonia safety study for conducting a bunkering pilot in Singapore, to show that ammonia can be bunkered or transferred between vessels while mitigating the risks in the process.

It complements other similar studies done by organisations such as the Global Maritime Forum, the Getting to Zero Coalition and the Nordic Green Ammonia-Powered Ship (NoGAPS) project.

“So it’s by piecing these different kinds of pilots and studies together that again we can move the ecosystem along towards being able to use ammonia as a fuel,” said Ms Loo.

Continue Reading