Singaporean ‘Ah Long’ who ran illegal loan shark business from China and Malaysia gets jail and fine

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SINGAPORE: A gambler who was roped into an illegal moneylending syndicate as a runner rose through the ranks over more than a decade and became an “Ah Long” or loan shark operating from foreign countries, targeting Singaporean borrowers.

He operated from Kuala Lumpur, before shifting to China where he remained for 12 years, collecting a total of SS$756,000 (US$555,800) in salary before factoring in his cut of the profits.

Eventually, he suffered a stroke in China and returned to Singapore in 2022 to turn himself in because of his failing health.

Alan Sia Peng Xing, a 56-year-old Singaporean, was sentenced to six-and-a-half years’ jail and a fine of S$700,000 on Friday (Nov 10). 

If he cannot pay the fine, he will have to serve another 20 months’ jail.

He pleaded guilty to 20 charges under the Moneylenders Act, with another 39 charges taken into consideration.

SIA’S STORY

The court heard that Sia was in debt in mid-2006 due to gambling. He had taken loans of about S$5,000 from a loan shark known as Ah Heng or “Towkay”.

Ah Heng, whose real identity is Ang Wee Siong, is the sponsor and head of the moneylending syndicate that is based overseas.

In early 2007, Sia was unable to pay his loans and accepted a job to work as a runner for the syndicate for S$1,000 a month.

Sia first started working for the syndicate from early 2007 or 2008, harassing debtors at their flats, collecting payments and depositing cash.

He went by the name “Ah K” and was “promoted” to become a loan shark himself, operating from Kuala Lumpur in mid to late 2008.

Ah Heng arranged for Sia to take over the stall in Malaysia, with a pool of 50 debtors in Singapore. He was given a runner to assist him with errands in Singapore and he was paid S$3,000 a month, with a profit sharing of 30 per cent from the stall.

He was placed on a year’s probation, with 10 per cent of his profit sharing given to his mentor, a senior loan shark known as Johnny, who is Sia’s co-accused.

Sia operated his illegal moneylending stall from a condominium in Kuala Lumpur under Johnny’s watch, issuing loans ranging from S$500 to S$2,000 to his debtors in Singapore.

The loans came with interest rates of 20 per cent, repayable over daily, weekly or monthly instalments.

In mid-2009, Sia completed his probation and began operating his stall independently and reporting directly to Ah Heng. He received a 30 per cent profit sharing from Ah Heng after finishing his probation period.

In mid-2010, Ah Heng directed Sia to shift his base of operations from Malaysia to China.

Sia complied and stayed in China for about 12 years, regularly travelling to different regions and cities to operate his illegal moneylending business.

While in China, Sia communicated with his pool of Singapore debtors using Singapore and China mobile lines, maintaining his own records and informing Ah Heng if he faced difficulty in collecting repayments.

Investigations showed that Sia’s salaries and profit sharing increased several times during this period.

He was paid a monthly salary of S$6,000 in 2014, with a profit sharing of 30 per cent from his stall.

This percentage was increased to 40 per cent in mid-2016.

Based on the salary calculation alone, Sia collected a total of S$756,000, excluding the profit-sharing arrangements, while working for the syndicate, the prosecution said.

In mid-2016, Sia’s health deteriorated after he suffered a minor stroke in China. Because of his failing health, he decided to return to Singapore and surrender.

SURRENDER

He arrived at Changi Airport on Dec 1, 2022, and was placed under arrest after a police gazette was found to be put up against him.

Several of Sia’s co-accused, who were fellow unlicensed moneylenders from the same syndicate, have already been arrested and sentenced to jail terms, including caning.

The prosecution sought seven years’ jail and a fine of S$800,000 for Sia, to disgorge the sum of S$756,000 earned by Sia in his illegal line of work.

Sia had carried on his business for 12 years in China, first receiving training from a “senior” in Malaysia before operating a stall on his own in China, said the prosecutor.

Ah Heng is currently on the run.

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China’s AIIB faces hot Canadian fire

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Multilateralism – the willingness of sovereigns, despite different political systems and competing interests, to enter cooperative structured arrangements targeting shared challenges – is under threat. 

The geopolitics of an increasingly assertive and heavy-handed China and Russia’s brazen invasion of Ukraine risk eroding a key pillar of the post-WWII rules-based international order.

Created in 1944, the IMF and World Bank established a model for effective multilateralism – balancing on the one hand, a shared voice for all supported by high governance standards and a commitment to consensus, and on the other, acknowledging the realities of unequal economic and political standing in relative voting shares. But this model requires periodic re-calibration to remain aligned with changing realities.

On June 14, 2023, the Canadian Deputy Prime Minister and Finance Minister announced a halt to all government-led activities at the Asian Infrastructure Investment Bank (AIIB). 

They were conducting an urgent review of allegations by the bank’s resigning external affairs director, Canadian national Bob Pickard, of Chinese Communist Party (CCP) interference in the internal governance of the Beijing-based and Chinese-led multilateral development bank (MDB).

Political sensitivities around membership of the AIIB are not new. But over the last seven years, the bank has established its credentials as a responsible and accepted member of the MDB community by actively partnering with established MDBs, notably the World Bank Group, the Asian Development Bank and the European Bank for Reconstruction and Development.

Pickard’s allegations have found fertile ground in Canada, where a domestic context of heightened suspicion of the People’s Republic of China has been fuelled by developments such as the “two Michaels” saga. 

Membership of the AIIB was a contentious issue in both the 2019 and 2021 federal elections in Canada. Yet the findings of the urgent Canadian government review have yet to be made public.

Photo: Reuters/China Daily
China’s AIIB is under scrutiny. Photo: Asia TImes Files / China Daily

The AIIB welcomed the Canadian review and initiated its own internal inquiry. Led by its General Counsel Alberto Ninio – a Brazilian national with extensive World Bank and corporate experience – the inquiry had access to internal documents, communications and extensive interviews of its nationally diverse staff. 

The investigation highlighted shortcomings in the human resources management of both Pickard’s performance and multiple staff conflicts within his team. While acknowledging cultural challenges, it rejected the label of a “toxic” environment. It found no evidence of inappropriate interference by the CCP or any other national political body, highlighting the bank’s robust governance and internal processes.

These findings may not persuade external critics inclined to assume a covert CCP presence and agenda. The failure of non-Chinese staff, including all five vice presidents, to attest to inappropriate internal CCP influence may be rationalized as either complicity or naivety. 

Some will make much of the potential weaknesses of a non-resident Board. There will be some determined to find conspiracy.

The AIIB undoubtedly faces a number of challenges — including how to build the desired culture in a young institution with widely diverse expectations regarding management styles and staff empowerment. 

Other challenges include how to fully capture the potential benefits of a non-resident board, in terms of efficiency and strategic focus and how to avoid under-resourcing key functions, including human resources, while avoiding the high administrative costs of other MDBs.

But while there may be CCP members among the Chinese AIIB staff, China is unlikely to risk compromising the key benefit it gains from the AIIB, which is demonstrating that it can responsibly lead a respected MDB with high operational standards.

Effective multilateralism requires a judicious balance. It involves ensuring a shared voice for all supported by high governance standards and a commitment to consensus while recognizing the realities of unequal economic and political weight. 

The latter is reflected in the effective veto – at the AIIB, China’s 26% of the vote – given to key members over specific critical issues for the institution. Chinese efforts to surreptitiously corrupt internal decision-making would only disrupt this balance at the AIIB and erode its leadership legitimacy.

The broader impact of geopolitical tensions on multilateralism is increasingly evident. The US Congress is reportedly concerned about China’s growing influence at the Inter-American Development Bank. 

Of far more systemic consequence, challenges in finalizing the IMF’s 16th Quota review reflect difficulties in agreeing to raise China’s relative voting power consistent with its economic weight. 

At the World Bank and among other MDBs, the prevailing focus on stretching the lending capacity provided by existing capital bases, while highly desirable, also serves to kick the difficult issue of voting realignment down the road.

While this may provide time and leverage to press China for more constructive engagement on issues such as global debt, it risks missing the point that the International Monetary Fund and MDBs remain the best available option for harnessing China’s growing weight within the established rules-based system. 

China’s Belt and Road projects have reached far and wide. Photo: Asia Times Files / AFP / Greg Baker

At the same time, the progressive erosion of the principle that decision-making power should reflect economic weight will inevitably erode the legitimacy and effectiveness of these institutions, precisely when the challenges they are asked to tackle are becoming increasingly urgent and complex.

Pickard has opined that he sees no advantage in Canada’s continued membership in the AIIB. It is not clear what potential benefits he was dismissing. 

But it is arguable that the ability to keep open lines of communication with Chinese officials, even if relatively narrowly focused on the AIIB’s operations, offers practical value for middle powers such as Canada and Australia in these increasingly difficult times.

Chris Legg is Chair of the Board of Global Infrastructure Hub and former chief advisor at the Department of the Australian Treasury. He has sat on the Boards of the IMF and World Bank and was Australia’s Chief Negotiator in the establishment of the AIIB. 

He agreed to provide pro bono independent external advice on the design and conduct of the AIIB’s internal review of Mr Pickard’s allegations but did not view the material collected nor influence the findings. 

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Thai transgender owner of Miss Universe files for bankruptcy

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Anne Jakapong Jakrajutatip, chief executive of JKN Global Group.JKN
By Mariko Oi
Business reporter

The Thai owner of the Miss Universe pageant, which was once part of former US president Donald Trump’s business empire, has filed for bankruptcy a year after buying it for $20m (£16.4m).

JKN Global Group has said it would try to resolve a “liquidity problem”.

Its chief executive officer, Anne Jakapong Jakrajutatip, is a transgender woman whose purchase came as the pageant became more inclusive.

But the firm has loaded up on debt which it seeks to restructure.

“The company can continue its operation while being under the rehabilitation plan,” JKN said.

Funding for the deal was raised through bonds but the firm missed a repayment deadline of around $12m which was due on 1 September.

In the past year, JKN’s share price has fallen by more than 80%.

The Thai Bankruptcy Court has set the hearing date for the petition for business rehabilitation on 29 January, according to the firm.

Under the ownership of JKN, the pageant has allowed mothers and married women to participate in the contest from this year.

The revised format will also feature at least two trans women for the first time after Marina Machete became the first transgender woman to win Miss Portugal and Rikkie Valerie Kolle was crowned Miss Netherlands in July.

The annual Miss Universe pageant, with a history spanning seven decades, is broadcast in more than 165 countries.

The Miss Universe Organization was co-owned by Mr Trump from 1996 to 2015.

The former US president sold the company after two television partners said they would not broadcast the pageant, over comments Mr Trump made about illegal immigrants on his 2016 presidential campaign.

He was also criticised when former Miss Universe Alicia Machado claimed Mr Trump called her “Miss Piggy”.

The remarks were made when she put on weight after winning contest in 1996, the Venezuela-born model said.

“When I purchased the pageants many years ago, they were in serious trouble,” Mr Trump said in a statement following the company’s sale to US talent agency WME-IMG in 2015.

“It has been a great honour making them so successful. The pageants are now in the hands of a great company that will shepherd them to even greater levels of success.”

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China’s economic recovery faces deflationary risks

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China’s consumer prices declined again in October after the last contraction in July, adding to expectations the country needs to boost its economy with new monetary and fiscal measures.

The consumer price index (CPI) fell 0.2% last month from a year earlier and dropped 0.1% from September, the National Bureau of Statistics (NBS) said Thursday. The decline was caused mainly by falling food prices, it said.

In July, the figure decreased 0.3% year-on-year, the first decline since February 2021. It returned to a 0.1% growth in August but was flat in September. 

“The month-on-month growth of food prices was negative 0.8% in October, compared with a 0.3% growth in September. This caused the CPI to fall last month,” Dong Lijuan, chief statistician of the City Department of the NBS, said in a statement. “This is because most regions in the country had good weather in October, resulting in a sufficient supply of agricultural products.”

Dong said prices of fresh food including eggs, pork, vegetables and aquaculture products fell after the National Day holidays, known as Golden Week, in early October. She said the falling pork prices in recent months had significantly dragged down the CPI. 

Chen Guanghua, head of the animal husbandry and veterinary bureau at the Ministry of Agriculture and Rural Affairs, said the sufficient supply of pigs since late September has resulted in a 2% month-on-month decline in pork prices in October.

He said pork prices, which were down 30.1% last month from a year ago, will slightly rebound over the next couple of months but fall again in early 2024.

Meanwhile, China’s producer price index (PPI), which measures the costs for goods at the factory gate, decreased 2.6% year-on-year in October, compared with a 2.5% drop in September.

The NBS said the decline in China’s PPI was due to a high base in the same period of last year and price fluctuations of international crude oil and non-ferrous metals. 

Bruce Pang, chief economist at Jones Lang Lasalle, said the latest CPI figure showed that combating persistent disinflation amid weak demand remains a challenge for Chinese policymakers. 

“An appropriate policy mix and more supportive measures are needed to prevent the economy from a downward drift in inflation expectations that could threaten business confidence and household spending,” Pang said. 

Slow economic recovery

China’s gross domestic product (GDP) showed growth figures of 4.5%, 6.3% and 4.9% in the first three quarters of this year, respectively. Some economists said the 6.3% growth in the second quarter was disappointing, as the comparison was to a low base a year earlier during Covid lockdowns in China. 

Beijing has set an economic growth target of around 5% for 2023. 

Yu Yongding, an economist and an academician of the Chinese Academy of Social Sciences, said China is having an insufficient demand in general and needs to use expansionary fiscal and monetary measures to stimulate its consumption, investment and exports.

“It is true that the miracle double-digit growth seen in the first 30 years of China’s opening-up has ended,” Yu said in a speech at a forum organized by Caixin on Thursday. “But this does not mean that China will be unable to maintain a relatively high economic growth rate, such as a 5 to 6%.”

At this moment, Yu said, the Chinese government should increase its fiscal deficit and invest more in infrastructure projects. He said such a policy would lead to an increase in loan demand and interest rates, which can then be suppressed with a loose monetary policy. 

“The government should not be over-worried about having expansionary fiscal and monetary measures,” he said. “Many western developed countries are now facing a dilemma as they have to control inflation and avoid economic recession at the same time. We don’t have these problems. If we don’t take actions now, the windows for economic growth will be closed.”

Yu has long been a supporter of expansionary measures, which are similar to the quantitative easing in the US. He called on policymakers to gain experience from the four trillion yuan (US$549 billion) stimulus plan unveiled by then-Premier Wen Jiabao in 2008 and not be afraid of using such a measure again.

In 2008, after the US financial crisis broke out, China saw a significant drop in external demand. It then injected 4 trillion yuan of new money into the markets. However, a large part of the money entered the property markets and caused a huge asset bubble, which finally burst in 2021 and caused debt problems for many property developers, including Evergrande and Country Garden.

Due to the on-going property crisis, people tend to delay their home purchase plans. They also cut spending as they are making less money now than in the past.

In fact, the National People’s Congress on October 24 approved a motion that allows the central government to issue 1 trillion yuan of sovereign bonds and raise its budget deficit ratio from 3% to about 3.8% of GDP. 

However, some economists said the 1 trillion yuan is only enough for local governments to pay the interest on their outstanding debt. 

According to China’s Ministry of Finance, the outstanding amount of local government debt grew 15.1% to 35.06 trillion yuan at the end of last year from 30.47 trillion yuan a year earlier. 

Read: Evergrande seen likelier to fall as chairman probed

Follow Jeff Pao on Twitter at @jeffpao3

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What Xi should say over dinner with US CEOs

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The potential for a US-China olive branch moment will tantalize global markets over the next 10 days.

The setting is San Francisco where, first, US Treasury Secretary Janet Yellen will meet with Chinese Vice Premier He Lifeng. That rarified exchange today and tomorrow sets the stage for Xi Jinping’s arrival in the city for the November 14-17 Asia Pacific Economic Cooperation (APEC) summit.

There, the hope is that Xi and US President Joe Biden meet on November 15 to re-establish president-to-president level discussions. To be sure, no one expects big breakthroughs. That’s why Beijing and Washington are looking “to intentionally keep that bar low,” says economist Jude Blanchette at the Center for Strategic and International Studies think tank in Washington.

Yet the meeting itself would be a tonic for Asian economies caught in the middle as the two superpowers parry and thrust on a range of touchy issues. In fact, Xi’s scheduled dinner meeting with American corporate chieftains could prove to be more pivotal for bilateral relations.

The dinner meeting will be a rare opportunity for the Chinese Communist Party leader to reassure top US CEOs that Asia’s biggest economy is still open for business and that actions his lieutenants are taking now will morph economic headwinds into tailwinds in short order.

The speed with which capital has been fleeing China suggests that Xi’s efforts to communicate that Beijing is in control of its myriad challenges are not getting through. In recent months, Xi and Premier Li Qiang have rolled out a variety of policies to stabilize a cratering property market and weak demand.

Global investors, though, aren’t getting that memo as new threats emerge atop of old. In September, investment capital outflows from China saw their biggest net decline in nearly eight years; outflows hit nearly US$12 billion in the third quarter.

This is the first time on record that foreign investment into China went negative, according to the State Administration of Foreign Exchange. That speaks to the sharp deterioration in China’s perceived economic prospects and a continued collapse in confidence in its state-led model under Xi’s leadership.

There’s confusion in international circles, too, about Xi’s commitment to giving the private sector and market forces “decisive” roles in Beijing’s decision-making. That 2012 pledge was first called into question in 2015 when Xi’s government intervened aggressively to stabilize Shanghai stocks.

Questions only increased after Xi began cracking down hard on mainland tech platforms in late 2020, starting with Jack Ma’s Alibaba Group. The inquisition rapidly widened to Baidu, Didi Global, JD.com, Tencent and other top internet companies. The clampdown had some Wall Street banks debating whether China might be “uninvestable.”

Alibaba founder Jack Ma in a file photo. Image: Facebook

In the months since Li took charge of reforms in March, the government has repeatedly promised to treat private sector companies on par with state-owned enterprises and increase outreach efforts with tech firm founders.

Yet a perceived lack of follow-through is drawing complaints about “promise fatigue,” including from the head of the European Union Chamber of Commerce in China.

As President Jens Eskelund told Bloomberg: the chamber has “not yet seen signs of willingness to implement structural reforms needed to address the fundamental challenges facing China and allow foreign and private companies to deliver on their potential for supporting the Chinese economy.”

The ongoing decoupling, de-risking and de-globalization trends pitting Xi’s Beijing against Biden’s Washington hardly help at a moment when US bond yields are at 17-year highs.

“Capital outflow pressures may persist in light of the unfavorable interest rate differentials,” notes economist Maggie Wei at Goldman Sachs Group Inc.

Morgan Stanley strategist Laura Wang adds that foreign outflows from China’s A-share market is in “an unprecedented stage.” Between August 7 to October 19 alone, cumulative outflows topped $22 billion. That is the largest in the history of Stock Connect, which links mainland and Hong Kong bourses.

All this raises the stakes for Xi’s dinner with top CEOs. It’s an ideal opportunity to reboot Beijing’s faltering effort to win back the foreign investment crowd. And to slow the exodus of companies diversifying supply chains away from China to reduce risks.

Goal one is allaying concerns that China’s economy is heading into a dismal 2024. Many investors worry the International Monetary Fund is looking through rose-colored glasses when it projects China will grow 4.6% in 2023 amid property sector weakness and subdued external demand for Chinese exports.

China, for example, slipped back into deflation in October. The consumer price index fell 0.2% year on year after a flat reading in September.

What’s more, “there are signs that activity has started to slow entering the fourth quarter,” says economist Carlos Casanova at Union Bancaire Privée. “That means that policymakers need to remain on high alert and continue to support the economic recovery.”

To date, he added, the People’s Bank of China “has been reluctant to deploy stimulus measures in 2023, against the backdrop of higher US rates and a strong dollar. However, we believe that another 10 basis-point rate cut and an additional 25 basis-point reserve requirement ratio cut will be necessary in December.”

China stocks and the yuan currency are down as foreign investors flee the scene. Image: Twitter

Even more important, Xi must convince executives that big supply-side disruption is coming. Bold steps to repair the property sector, increase productivity, level playing fields for entrepreneurs, recalibrate growth engines from investment to domestic demand and create bigger social safety nets are needed to head off growing “Japanification” comparisons.

Beijing is quick to dismiss talk of a Japan-like funk. “China’s current situation is vastly different from what Japan used to be in,” says Liu Shijin, a member of the PBOC’s monetary policy committee. Claims that China is falling into a “balance-sheet recession” like Japan in the 1990s are off-base, Liu claims.

China, Liu argues, still has policy scope to pivot to an innovation and consumption-led growth model that enables the government to gain control of its debt trajectory.

Trouble is, the external sector might be less hospitable to Xi’s hopes to recalibrate growth engines — reducing the rapid economic growth rates needed to win party-wide support to push through sweeping and disruptive reforms.

As the IMF notes in its latest assessment: “Over the medium term, growth is projected to gradually decline to about 3.5% by 2028 amid headwinds from weak productivity and population aging.” The IMF’s economists also warn that financial stability risks are elevated and increasing “as financial institutions have lower capital buffers and growing asset quality risks.”

Geopolitical tensions loom large, too. A September survey by the American Chamber of Commerce in Shanghai cited Sino-US hostility as a major reason why foreign companies are looking for exit ramps from China to other Asian economies. In its own survey, UBS Group cited India, Japan and Vietnam as “top destinations” that are “gaining more attention.”

The good news is that Xi’s inner circle seems to be turning away from the “wolf warrior” antics of recent years.

Recent sit-downs, and those to come, “have sent out positive signals and raised the expectations of the international community on the improvement of China-US relations,” Vice President Han Zheng told Bloomberg.

“A stable and sound China-US relationship is the common expectation of all sectors in our two countries and the international community as a whole. We’re ready to strengthen communication and dialogue with the US at all levels,” Han said.

Team Biden, too, seems keen to lower the bilateral temperature. Of course, the White House’s actions must speak louder than words. Generally, those actions tend to be focused on Chinese containment.

Last month, Biden’s trade representatives again narrowed the types of semiconductors that US companies can sell to China. In doing so, it closed loopholes in existing policies with particular emphasis on limiting China’s ability to compete in supercomputing and artificial intelligence.

“The upshot is that China’s ability to reach the technological frontier in the development of large-scale AI models will be hampered by US export controls,” says Julian Evans-Pritchard, head of China economics at Capital Economics. This could have even bigger implications, he adds, since “we think AI has the potential to be a game-changer for productivity growth over the next couple decades.”

US and China are locked in a race for technological supremacy that will define the course of the 21st century. Image: Facebook

But the more important signal Xi must send to CEOs in San Francisco is that his team is getting under the Chinese economy’s hood. One law of economic gravity that Xi’s team has tried to beat these last 10 years is the idea that a developing nation must build credible and trusted markets before trillions of dollars of outside capital arrive.

In China’s case, this means increasing transparency, making local government officials more accountable, prodding companies to raise their governance games, crafting reliable surveillance mechanisms like credit rating companies and strengthening the financial architecture before the world shows up.

Too often, Xiconomics has China trying to flip the script, believing it can build a world-class financial system after waves of foreign capital arrive. And the Xi era’s efforts to communicate that a financial Big Bang is afoot continue to get lost in translation in boardrooms from New York to London to Tokyo.

The sense that Xi’s China tends to over-promise and under-deliver financial upgrade-wise was first seen in the summer of 2015, back when Shanghai shares plunged by one-third in three weeks. Beijing’s response was to treat the symptoms of the market rout, not the underlying causes.

Since then, Xi stepped up the pace of winning Chinese stocks places in top global indices, from MSCI for stocks to FTSE-Russell for bonds. Yet increases in access to yuan-denominated assets has often outpaced the reforms needed to prepare China Inc for global prime time.

Whether China can win back investors’ trust is an open question. As Chinese stocks are reminding us – as well as a yuan down 5.6% this year – there are certain laws of gravity that still apply to economies transitioning from state-driven and export-led growth to economies centered more on services, innovation and domestic consumption.

In San Francisco next week, Xi has an ideal opportunity to convince top Western decision-makers that they can indeed believe the hype about China’s prospects for 2023 and beyond. Investors of all stripes love to hear a great growth opportunity story. China has one, but Xi needs to prove he’s genuine about the narrative.

William Pesek is on X, formerly Twitter, at @WilliamPesek

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Malaysia’s net zero transition: expediting ESG | FinanceAsia

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The Joint Committee on Climate Change ( JC3 ) of Malaysia met last month to discuss working together to improve the financial sector’s ability to develop climate resilience. & nbsp,

According to a spokesperson for Bank Negara Malaysia( BNM ),” sustainable assets are gaining momentum in Malaysia with key investment styles built around the need for accelerating sectoral transition and climate resilience, such as energy transition, circular economy, food security, and freedom change.”

The JC3 board was established in September 2019 to ensure a cogent approach to ESG initiatives, with its founding serving as” great testimony” to how proponents of Malaysia’s capital markets intend to work closely to improve sustainability practices in Malaysia, according to Angelia Chin – Sharpe, CEO of BNP Paribas Asset Management, which operates in Southeast Asia.

Its members include representatives of the market’s central bank, BNM, capital markets regulator, Securities Commission Malaysia ( SC ), stock exchange, Bursa Malaysia, and 21 other financial industry players, including Chin-Shawni at BNP AM, insurance companies Allianz, Swiss Re and Zurich, as well as banks like RHB Islamic and CIMB.

The committee outlined five initiatives at the meeting that” emphasise the crucial part of the banking sector in enabling a lasting plan” with the goal of expediting the economy’s low-carbon practices. A pilot project to switch industrial parks and their operational infrastructure to low-carbon practices was one of these, along with three data-related initiatives and a RM1 billion($ 0.210 million ) guarantee to provide funding to smaller market players to support their ESG agendas. & nbsp,

The BNM spokesperson stated to FA that one of the goals of” Ekonomi Madani” is to encourage Malaysia’s green growth in the direction of climate resilience. This goal aims to put Malaysia on a strong development path by realizing and addressing key national issues.

There are numerous opportunities for industry players, including international investors, to achieve the National Energy Transition Roadmap ( NETR ) targets set for 2050, she said.

Energy efficiency( EE ), renewable energy( RE ), hydrogen, bioenergy, and green mobility and carbon capture, utilisation and storage( CCUS ) are the six energy transition levers that Malaysia’s NETR identifies as its ten flagship projects. These are anticipated to catalyze and quicken the market’s energy transition, reduce greenhouse gas ( GHG ) emissions by at least 10 metric tons of carbon dioxide equivalent ( MtCO2eq ) annually, create 23, 000 high-impact job opportunities, and improve corporate ecosystem growth opportunities with benefits to society.

According to the BNM touch, their powerful supply necessitates investments in infrastructure, engineering, and human capital totaling between RM1.2 trillion and Rs1.3 trillion up to 2050. In addition to & nbsp,

While Malaysia’s administrative society is capable of reviewing such an option and is aware of the significance of incorporating ESG into purchase technique,” there is still a need to teach” smaller scale investors on the opportunities and risks associated with sustainability strategies, according to Chin-Sharpe, BNP Paribas AM.

Having said that, she added,” Most banks in Malaysia are committed to playing a more active role to align and help their clients understand the[ relevant ] Malaysian taxonomies.”

Purchase and regulation

The five new initiatives have been included in the government’s budget for 2024 and” complement other policies such as the NETR, the New Industrial Master Plan ( NIMP ) 2030 and the Mid-Term Review of the 12th Malaysia Plan ( MTR – 12MP ,” according to YB Nik Nazmi Nk Ahmad, minister of Natural Resources, Environment, and Climate Change.

All governing events, including JC3 users, Malaysia’s Corporate Guarantee Corporation, and pertinent ministries, are committed to putting the tasks into action, the BNM representative confirmed with FA.

The regulatory environment in Malaysia keeps up with the country’s continued energy transition and the funding needed to make it happen. To obtain conservation and environment goals, the money market should be prepared to help finance raising and investments. Since 2011, when Sustainable and Responsible Investment ( SRI ) has been included as a crucial growth strategy in the Capital Market Masterplan CMP2, the SC has paved the way for sustainability, according to Dato ‘ Seri Dr. Awang Adek Hussin, its chairman.

A Climate Chance and Principle-based Taxonomy was published by BNM in 2021. In December 2022, SC unveiled a Principles-Based SRI Taxony for the Malaysian Capital Market. This year, in June of this year. SC also established the International Sustainability Standards Board’s ( ISSB ). & nbsp,

Meanwhile, the BNM spokesperson emphasized last month’s Energy Efficiency and Conservation legislation as having the potential to significantly lower energy use by 2050 — by 2, 017 million gigajoules, or RM97 billion in savings— and to” create new jobs in energy management and auditing ,” she said.

According to Adrian Wong, mind of jobs and director at the Singapore-based law firm Prolegis, which has a formal legal ally with Herbert Smith Freehills( HSF ),” investment has increased in Malaysia in part because the regulatory environment has done more to promote appetite in renewables.”

Large-scale solar auctions in Malaysia’s peninsular and projects along the Sarawak Corridor of Renewable Energy ( Score) are two of the renewable infrastructure projects his team is helping clients with.

The transport industry is anticipated to play a significant role in the demand for renewable energy, with electric vehicle ( EV ) usage expected to reach 80 % of the car market in 2050.

However, he informed FA that the greatest possibility is present in projects involving solar, water, and biofuel. In 2040, it is anticipated that all three sources will increase and account for roughly 17 % of Malaysia’s total energy mix.

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Data and the potential of emerging technologies to support Malaysia’s conservation plan are the three activities that were announced at the event.

The first builds on the accomplishments of JC3’s Greening Value Chain ( GVC ) pilot program, which began in 2022 and has so far assisted 80 small and medium enterprises( SMEs ) in tracking and reporting greenhouse gas ( GHG ) emissions across the length of their supply chains. In order to provide public listed companies( PLCs ) capacity-building support, reporting tools, and additional financing facilities, which the BNM spokesperson said could be accessed” at competitive rates via the Low Carbon Transition Facility( LCTF ), the updated plan connects Bursa Malaysia’s sustainability data platform with the GVC program.

Access to an” ESG jump-start portal,” through which Malay businesses can obtain useful information on ESG-related capacity-building programs, certification, as well as financial and opportunity methods, and the introduction of a Green AgriTech program to promote the adoption of green technology and sustainable agriculture techniques among local producers, are additional data related initiatives.

According to the BNM director,” Green AgriTech offers substantial potential for Malaysia’s agricultural field by opening up new possibilities and addressing vital difficulties.”

Wong concurred that emerging technology has the potential to modernize and alter Malaysia’s ESG strategy, particularly in the agricultural industry. From ensuring a sustainable supply of food sources to raising general health and environmental criteria, he mentioned the potential for positive effects.

To ensure that farmers may conduct their financial transactions online, he suggested the Malaysia Digital Economy Corporation’s project, which linked small farmers to online marketplaces offering bright warehouse facilities, supply, and farming solutions.

Through a thorough approach to alternative solutions, this catalytic pilot program encourages farmers to use technologies and follow greener and ecological practices. Participating farmers can obtain grants and LCTF to purchase natural systems, the BNM spokesperson added.

” Technology use may improve produce stability and quality while also assisting in the resolution of food safety issues.”

maintaining speed

The efforts to enlist input from all parts of Malaysia’s market, both the public sector and the private sector, is at the core of the country as it transitions. The BNM spokesperson informed FA that” efforts to level public-private partnerships are even continuing, with fresh initiatives.”

She stated that the GVC program is an excellent illustration of a cutting-edge blended financing initiative in Malaysia that supports the country’s move toward enlightenment.

BNM continues to support private institutions’ participation in the government’s loan offerings, the call emphasized,” BNM also supports such attempts by facilitating the release of Government of Malaysia Sustainable Sukuk for registration by both domestic and foreign investors.”

According to SC chairman Hussin at the conference, the SRI-linked Sukuk Framework was introduced last year, giving the Indonesian capital market access to a full range of frameworks to assist businesses in financing transitional projects as well as alternative, social, and sustainability initiatives.

Fitch recently released an ESG document that showed a steadfast global appetite for the sukuk. The data shows that by the end of 3Q23, ESG sukuk issuance had increased by 66 % year over year( YoY ) to reach$ 33.3 billion worldwide.

Due to built-in sharia filters, there is a cross between Islamic funding and ESG principles, according to the ratings agent’s research. & nbsp,

Over the moderate name,” Fitch Ratings anticipates more rise.” According to the review, the company’s growth is largely driven by governments’ sustainability initiatives and issuers’ funding diversification goals toward both sharia and ESG-sensitive investors.

” ESG sukuk could receive an awareness and issuance boost ,” said Bashar Al-Natoor, Fitch’s global head of Islamic Finance, with the United Arab Emirates( UAE) hosting the Conference of Parties( COP ) 28 this year.

It is motivating to see the Indonesian government adopting a” full of state” approach to addressing the impact of climate change on economic conservation, Hussin said at the conference’s conclusion. The nation’s interests and sustainable development methods are outlined in roadmaps and masterplans that have been made available by the relevant ministries.

I want to say it again:” Our planet is facing an unprecedented problem, one that necessitates immediate and coordinated effort from all countries, sectors, and individuals.”

 

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