Achieving climate equity for the Commonwealth

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The Commonwealth of Nations has demonstrated a long-standing dedication to tackling climate change and assisting member countries in mitigating its adverse effects.

The unified political determination to safeguard the planet for succeeding generations has been precise and robust, dating back to the Langkawi Declaration on the Environment in 1989. During this pivotal moment, Commonwealth leaders pledged to take concerted action, both independently and collectively, through a program focused on environmental initiatives and addressing the challenges of climate change. 

Climate action plays a vital role in the resilience and prosperity of small island developing states (SIDS), particularly within the Commonwealth. SIDS, despite their diversity, face significant vulnerability to the impacts of climate change, posing existential threats to their economies and ecosystems.

The Commonwealth actively supports SIDS in advocating for increased climate action, recognizing the unique challenges they confront in the face of climate change. The commitment of the Commonwealth heads of government to various goals, including climate action, underscores the interconnectedness of health, education, gender equality, and climate resilience for SIDS. 

Access to electricity is essential for economic progress and poverty reduction. However, many less developed nations in the Commonwealth face limited power availability, which hampers such social services as health and education. Additionally, it is crucial to decarbonize the energy sector and ensure climate equity to promote sustainable development objectives. 

Energy access disparities are prominent in the Global South, where both power access and the proportion of renewable energy lag behind the global average. African Commonwealth nations, in particular, require significant electricity availability development despite being leading renewable energy producers.

Bridging these disparities is essential to fulfill the objectives of Sustainable Development Goal 7 (SDG 7), which aims to achieve universal access to affordable and reliable energy services.

The Commonwealth Sustainable Energy Transition (CSET) Agenda is a collaborative platform for concerted efforts among member countries to expedite the shift toward low-carbon energy systems and attain SDG 7. This initiative is grounded in three fundamental pillars: inclusive transitions, technology and innovation, and enabling frameworks.

It champions actions led by members to accelerate inclusive and equitable energy transitions, ultimately realizing the objectives of SDG 7. The CSET Agenda has introduced three new member-led action groups focusing on energy literacy, geothermal energy, and a crosscutting youth action group. 

Transitioning to a low-carbon economy is vital for achieving decarbonization targets and addressing climate change. However, this transformation poses challenges due to the historical reliance on hydrocarbon energy sources.

Moreover, the shift toward decarbonization may lead to stranded hydrocarbon assets, affecting not only their owners, but suppliers, staff, entire communities and regions. A comprehensive and inclusive policy framework is necessary to guide member nations in aligning their efforts with the UN Sustainable Development Goals and the COP21 Paris Agreement.

While policy frameworks and climate targets are essential, they must be accompanied by binding rules and regulations. Legislation can enforce energy-efficiency standards, promote the adoption of renewable energy, and phase out carbon-intensive practices. As already done in the UK and Canada, prohibiting internal-combustion engines or coal-fired electricity generation can expedite the energy transition and propel positive climate action.

Climate injustice is a significant concern within the Global South, where poorer nations often contribute more to combating climate change than wealthier countries. Evaluating national emissions capabilities and historical emissions reveals stark disparities, emphasising the need for fair burden-sharing.

Wealthier nations have an opportunity to address climate injustice by supporting renewable energy projects in Commonwealth countries, thereby reducing energy poverty.

To this end, the Commonwealth Climate Finance Access Hub (CCFAH) facilitates unlocking climate finance for small and vulnerable member states. This initiative assists countries in bidding for and gaining increased access to climate finance by supporting the development of grant proposals and project pipelines.

The process also involves building human and institutional capacity, providing technical advisory services, and fostering cross-Commonwealth cooperation. Commonwealth national climate finance advisers, deployed and embedded in relevant government ministry departments, play a key role in facilitating sharing of experiences and expertise among member states. 

Africa Caribbean Pacific
Mauritius Antigua & Barbuda Fiji
Eswatini Belize Solomon Islands
Namibia Grenada* Tonga
Seychelles* St Lucia Vanuatu
Zambia Barbados, Jamaica & Guyana*  
Regional Technical Assistance – Commonwealth Regional Climate Finance Adviser, Indo Pacific Incoming – Regional Technical Assistance Regional Technical Assistance – Commonwealth Regional Climate Finance Adviser, Africa
* Countries that have previously been supported by a Commonwealth national climate finance adviser.
CCFAH Beneficiary Countries | Source: The Commonwealth and Climate Change Report

Examining how energy is generated, delivered, and utilized is essential to achieving decarbonization goals and fostering socioeconomic growth. Accelerating the energy transition requires strong political will, technological advancements, and cost reductions. Finally, ensuring inclusive processes during this transition is crucial for achieving sustainable and people-centered social development.

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Global markets eye BOJ response as inflation quickens

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Japan’s economic landscape is undergoing a subtle shift as core consumer price growth picked up slightly in October, following a brief easing the previous month. 

The countrywide core Consumer Price Index (CPI), which excludes volatile fresh food costs, rose 2.9% year on year in October, government reveals, compared with the 3% expected by economists in a Reuters poll.

Core inflation had slowed to 2.8% in September from 3.1% in August, the first time it was below 3% since August 2022.

This fresh data published on Friday have sparked debate among domestic and international investors about the potential for the Bank of Japan (BOJ) to reconsider its monetary stimulus measures. 

A potential rollback of such policies could send ripples through global markets, impacting various asset classes and reshaping investor sentiment.

The most immediate impact of a BOJ monetary stimulus pullback would likely be felt in currency markets. 

Historically, changes in the BOJ’s policy stance have influenced the value of the Japanese yen. 

A reduction in monetary stimulus might result in a stronger yen, affecting Japan’s export competitiveness. Also, other major currencies, such as the US dollar, would likely experience fluctuations as global investors reassess their currency allocations in response to a strengthening yen.

Equity markets, both in Japan and globally, would react too to the prospect of a BOJ stimulus policy shift. 

Sectors sensitive to interest rates, such as financials and utilities, could experience volatility as investors reassess the impact of changing monetary conditions on corporate earnings. Conversely, export-oriented sectors in Japan may face headwinds due to a potentially stronger yen affecting international competitiveness.

Changes in monetary policy in Japan would also influence commodities and real assets. As investors seek inflation hedges, commodities like precious metals could be expected to experience heightened demand. 

In addition, real assets such as real estate and infrastructure could see increased attention as investors pivot toward tangible assets in response to evolving economic conditions.

In broader terms, the prospect of the BOJ rolling back monetary stimulus introduces an element of uncertainty into global markets, which could potentially impact risk sentiment. 

Investors may reassess their risk exposure, leading to shifts in allocations between risk-on and risk-off assets. Market volatility could increase as participants adjust their investment mix due to changing expectations for Japan’s economic trajectory.

One thing is for sure: The consequences of a BOJ stimulus shift extend well beyond Japan’s borders, making it a focal point for investors worldwide.

Nigel Green is founder and CEO of deVere Group. Follow him on Twitter @nigeljgreen.

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Can three standing ovations change history?

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SUBSCRIBE TO THE GLOBAL POLARITY MONITOR Quantitative and qualitative polarization trends David Woo and David Goldman take stock of polarization trends across economic, market, and political arenas, including the impacts of the Biden-Xi summit, currency and equity risk in Europe, and potential consequences for global polarization accruing from the Gaza conflict. Military conflict risks: Low and receding David […]

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Shared prosperity for Commonwealth LDCs

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The Commonwealth, encompassing a diverse group of nations, faces numerous challenges in achieving financial prosperity and addressing the needs of its member states, especially the least developed countries (LDCs) such as Rwanda, Kiribati, Solomon Islands and Tuvalu, among others.

These issues, ranging from trade difficulties and structural vulnerabilities to limited access to finance, technology, and education hinder economic growth and development.

To build a resilient tomorrow for the Commonwealth, it is essential to prioritize a robust private sector, foster innovation, bridge the digital divide, promote structural reforms, support climate justice, enhance trade competitiveness, and invest in quality education.

Some domains in the Commonwealth that need attention to move toward a more equitable and prosperous future for the LDCs are the following.

1. Private-sector development and access to finance.

A robust private sector is vital in fostering fiscal growth, investment, employment, and technical capabilities. However, many LDC economies have historically struggled with weak private sectors.

To address this, private-sector development plans should focus on improving market accessibility, competitiveness, and business-friendly regulations. Additionally, increasing domestic credit levels provided to the private sector can stimulate economic activity, as seen in the case of Bangladesh.

By facilitating access to internal financial means, such as lines of credit, trade credits, and non-equity securities, LDCs can support investments in productive capacity and strengthen their economies.

2. Fostering innovation for productivity and structural transformation.

Innovation, when combined with the adoption of new technologies, can drive productivity growth, diversification, and structural transformation. Unfortunately, few Commonwealth LDCs have made significant advancements in this area.

Increasing inventive activity, as measured by trademark and patent applications, remains a challenge. Most Commonwealth LDCs have recorded minimal trademark and patent applications. Promoting innovation through research and development, technology transfer, and intellectual-property protection is crucial for the Commonwealth to harness its potential for economic growth.

3. Bridging the digital divide and enhancing communications.

While there have been notable increases in Internet usage across Commonwealth LDCs, the digital divide persists within and beyond the Commonwealth of Nations. Access to the Internet remains limited in many LDCs, hindering progress toward universal connectivity.

Addressing this gap requires focused efforts on improving infrastructure quality, energy supply accessibility, digital skills, and entrepreneurship. The Commonwealth can play a significant role in facilitating digital inclusion by supporting the adoption of cutting-edge communication technologies, investing in remote learning, and providing technical skills and vocational training opportunities.

4. Structural reforms for economic diversification and productivity.

LDCs face many challenges, such as limited economic diversification, low productivity, and capacity constraints in manufacturing and other productive sectors. Structural reforms are crucial to shift labor and resources from lower to higher productivity activities.

LDCs can boost productivity growth and create sustainable economic progress by promoting the transition from low-value-added to higher-value-added sectors. Overcoming obstacles to structural reforms, including limited economic diversification and low investment rates, requires comprehensive policy measures, improved governance, and enhanced capacity-building.

5. Climate justice and resilience building.

Small island developing states (SIDS), low-income countries (LICs), and Commonwealth LDCs face heightened vulnerability to external shocks and climate-related disasters. Access to substantial and predictable climate funding, separate from existing assistance, is critical for these nations to address climate change impacts and prepare for a changing climate.

The Commonwealth should support climate justice by advocating for increased climate financing and facilitating cooperation among member states to address loss and damage. By forging partnerships and innovative financing mechanisms, the Commonwealth can help its most vulnerable members build resilience and ensure a just transition toward a greener future.

6. Enhancing trade competitiveness and financial stability.

Many Commonwealth nations still need help increasing export competitiveness, diversifying their exports, and engaging in global trade. To overcome these hurdles, the Commonwealth should provide technical assistance, facilitate trade negotiations, and promote financial stability through capacity-building and knowledge-sharing.

By supporting trade agreements with developed and developing nations, Commonwealth LDCs can expand their market access, diversify their exports and enhance participation in the global economy.

7. Investing in quality education for empowering youth.

Quality education is essential for achieving sustainable development and empowering youth. The Commonwealth must prioritize investment in education, particularly in LDCs, to ensure access to inclusive and quality learning opportunities.

By leveraging technology and distance learning methods, the Commonwealth can overcome barriers to education, such as limited infrastructure and teacher shortages. Additionally, valuing the contributions of young people, involving them in decision-making processes, and addressing their unique challenges will foster their active participation in national progress and drive future prosperity.

The Commonwealth stands at a crucial juncture in fostering a prosperous and resilient future for all its member states. Collaboration among governments, non-governmental organizations, the corporate sector, and civil society is pivotal in ensuring the success of these efforts in fostering effective developmental governance, especially for the LDCs.

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US pension fund’s exit may shake Hong Kong markets

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Hong Kong’s status as an international financial hub faces a new challenge as the United States’ federal pension fund has decided to exclude Hong Kong-listed shares from the benchmark indexes for its international funds.

The decision was announced by the US Federal Retirement Thrift Investment Board (FRTIB) on Tuesday before Chinese President Xi Jinping and US President Joe Biden met in San Francisco on Wednesday. In a dinner on Wednesday evening, Xi called on the US business community to boost investment in China. 

The FRTIB said it had conducted a routine review of the four benchmark indexes followed by its Thrift Savings Plan (TSP) and decided to adjust its International Stock Index Investment Fund, or I Fund, which has an asset size of US$68 billion as of the end of last month. It said it had reviewed the recommendations of its staff and Aon, its investment consultant. 

“Overall, operational complexity has increased when investing in emerging markets in recent years given a range of events such as investment restrictions on sensitive Chinese technology sectors, delisting of Chinese companies and sanctions on Russian securities due to the Russia-Ukraine conflict,” Aon said. 

“These types of unforeseen events can incur transaction costs and may cause performance and volatility swings,” it said.

It said any announcement of investment restrictions can cause the value of a stock to decline at a time where the investor is forced to sell. It said, given the asset size of the I Fund, the forced selling or restricted investments could incur higher than average market impact costs due to liquidity challenges.

It said it will work with its fund managers to implement the transition from the current index (MSCI Europe, Australasia and Far East (EAFE) Index) to the next index (MSCI All Country World (ACWI) ex USA ex China ex Hong Kong Investable Market Index (IMI)) in 2024. It said the next index is expected to outperform the current one on a risk-adjusted basis over the long term.

Assets in Hong Kong

The MSCI ACWI IMI ex USA ex China ex Hong Kong, launched in June this year, provides exposure to 5,621 large-, mid-, and small-cap stocks in 21 developed markets and 23 emerging markets. 

The MSCI EAFE Index currently provides exposure to 798 large- and mid-cap stocks in 21 developed markets. Hong Kong stocks represent about 3.3% of the index’s assets, according to the geographical breakdown of a similar MSCI index. 

If the I fund is closely tracking the MSCI EAFE Index, it should have allocated US$2.2 billion of its assets into Hong Kong markets.

Simon Lee, a US-based Hong Kong commentator, noted that the asset size of the I Fund’s assets in Hong Kong is not enormous, comparatively speaking. But he predicted the fund’s departure will still hurt the city’s stock markets. 

“In general, the US now sees China as a risk, not an opportunity, and it does not treat Hong Kong as an independent economy from mainland China,” Lee said. “As the TSP is representative, its departure from Hong Kong may make some state-level pension funds follow suit.” 

He said the TSP’s departure will fuel capital outflows in Hong Kong and hurt the city’s status as an international financial hub. 

A Shanghai-based columnist says in an article that shares of 29 Hong Kong-listed firms, including AIA Group Ltd, Hong Kong Exchanges and Clearing Ltd, CK Hutchison Holdings and Sun Hung Kai Properties Ltd, will face downward pressure when the TSP’s fund managers dispose of them next year. 

The Hang Seng Index, a benchmark of the Hong Kong stock markets, has fallen 13.4% so far this year. The Shanghai Composite Index, which tracks the A-share markets, has dropped by only 2%.

Trump’s decision

In November 2017, the FRTIB decided to let its I Fund follow the MSCI ACWI IMI ex USA, instead of MSCI EAFE Index, as a way to enter the A-share markets. 

As of July 31, 2019, China received the third-most investment on a per-nation basis within the MSCI ACWI IMI ex USA at 7.56% of the index’s assets. 

In August 2019, US Senators Marco Rubio and Jeanne Shaheen told FRTIB Chairman Michael Kennedy in a letter that some of the US federal government employees’ money mightd have been invested in Chinese firms that pose national security, human rights and financial disclosure risks. 

The FRTIB was ordered to stop investing in A-shares by the Trump administration in May 2020.

As of the end of March in 2020, the TSP had US$557 billion of assets while its I Fund had US$41 billion.

The Economic Daily, a state-owned newspaper, said in a commentary in 2020 that the negative impact on the A-share markets of the TSP’s exit was negligible. 

Citing an estimation of the Bocom Schroders Asset Management Co Ltd, it said all US pension funds totaled US$30 trillion but the US federal government only controlled US$1.9 trillion of that while the remaining was owned by state governments and the private sector. 

It added that no more than US$15 billion of US pension funds had been allocated to the Greater China region and most of it was in Hong Kong.

The Chinese Foreign Ministry in May 2020 criticized the US government for blocking American investors from entering China’s markets and politicizing the matter in the name of national security. It said such a move would hurt US investors’ interest.

‘Butterfly effect’

In the first 10 months of this year, the average daily turnover of Hong Kong’s stock market was HK$106.6 billion (US$13.7 billion). Market capitalization amounted to HK$30.8 trillion (US$3.95 trillion) at the end of last month.

Some analysts said the I Fund’s US$2.2 billion investments in Hong Kong is negligible as it is only about 16% of the market’s daily turnover and 0.06% of its market capitalization. 

However, they are worried that if more institutional investors are leaving Hong Kong, it will create a “butterfly effect” that may lead to a market crash. 

In October 2022, the Teacher Retirement System of Texas, managing a US$184 billion public pension fund, cut its China target allocation to 1.5% from 3% of its assets. 

In April this year, Ontario Teachers’ Pension Plan (OTPP), Canada’s third largest pension fund, reportedly closed down its China equity investment team based in Hong Kong.

On Wednesday, lawmakers passed a bill to lower the stamp duty for stock trading to 0.1% from 0.13%, hoping to make the bourse more competitive.

Read: BlackRock, MSCI probed for investments in China

Follow Jeff Pao on Twitter at @jeffpao3

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Impact investing on the rise: BNP Paribas survey | FinanceAsia

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Impact investing is gaining in popularity across the globe, but a lack of harmonised environmental, social and governance (ESG) data, regulations and standards pose barriers to its development in Asia, a BNP Paribas survey suggested.

“Asia Pacific (Apac) is behind Europe, which has already integrated broader ESG topics such as inequalities and biodiversity. But it is ahead of North America which is highly fragmented over this topic,” Jules Bottlaender, Apac head of sustainable finance at BNP Paribas (securities services), told FinanceAsia.

So far 41% of global investors recognise a net zero commitment as their priority, while in Apac, 43% have set a due date to achieve net zero targets, according to the survey.

The global survey, titled Institutional investors’ progress on the path to sustainability, looked into how institutional investors across the globe are integrating their ESG commitments into implementation.

It gathered data from 420 global hedge funds, private capital firms, asset owners and asset managers between April and July 2023. Among them, 120 (28.6%) are from Asia Pacific (Apac) markets including China, Hong Kong, Singapore and Australia.

Impact investing

Impact investing, a strategy investing in companies, organisations and funds generating social and environmental benefits, in addition to financial returns, is a global trend that in the next few years, is set to overtake ESG integration as the most popular ESG strategy, the report revealed.

Globally, ESG integration dominates 70% of investors’ ESG investment strategies, but the proportion is expected to drop by 18% to 52% over the next two years. In contrast, 54% of respondents reported a plan to incorporate impact investing as their primary strategy by that time.

European investors have the greatest momentum in adopting impact investing at present, with 52% employing impact investing. While in the four markets in Apac, the proportion stood at 38%.

Negative screening took a lead as a major strategy of 62% investors surveyed in Apac. In the next two years, the figure is set to shrink to 47%, overtaken by 58% estimating to commit to impact investing.

“Impact investing is a rather new concept for most people [in Asia]. It is driven by the need to have a clear and tangible positive impact,” Bottlaender said.

An analysis from Invesco in March 2023 pointed out that while impact assessment is key to a measurable outcome of such investments, clear and consistent frameworks are required to avoid greenwashing acts.

“There is no singular standard for impact assessment,” the article noted. On the regulatory side, specific labelling or disclosure requirements dedicated to impact investing have yet to come in Asia.

Private markets, including private debt, private equity and real assets, will take up a more sizeable share of impact investing assets under management (AUM), it added.

Bottlaender echoed this view, saying that current regulatory pressure in Asia “is almost all about climate”. As a result, Asian investors’ ESG commitments are mostly around climate issues such as including net zero pledges and coal divestment. These are coming before stronger taxonomies and broader ESG regulations which are set to be finalised over the next few years.

Data shortage

A lack of ESG data is one of the greatest barriers to investors’ commitments, as respondents to the survey reported challenges from inconsistent and incomplete data. The concern is shared by 73% of respondents across Apac, slightly higher than a global average of 71%.

Bottlaender explained that although mandatory reporting of climate data is adopted in certain regulations, a majority of ESG data is submitted voluntarily.

This leads to a fragmentation and inconsistency of sources based on the various reporting standards they adhere to. Moreover, the absence of third-party verification results weighs on the accuracy and reliability of the data provided, he continued.

He shared that investors are either engaging directly with companies to encourage standardised reporting practices, or relying on data providers, or leveraging technology to carry out quality control to address the lack of ESG data.

But “significant gaps persist, especially concerning private companies and aspects like scope 3 emissions.”

“As a result, investors must be extremely cautious when advancing any ESG claim or commitment,” he warned.

¬ Haymarket Media Limited. All rights reserved.

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Impact investing on the rise: BNP survey | FinanceAsia

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In: Asia, Finance, South-East Asia

Impact investing is gaining in popularity across the globe, but a lack of harmonised environmental, social and governance (ESG) data, regulations and standards pose barriers to its development in Asia, a BNP Paribas survey suggested.

“Asia Pacific (Apac) is behind Europe, which has already integrated broader ESG topics such as inequalities and biodiversity. But it is ahead of North America which is highly fragmented over this topic,” Jules Bottlaender, Apac head of sustainable finance at BNP Paribas, told FinanceAsia.

So far 41% of global investors recognise a net zero commitment as their priority, while in Apac, 43% have set a due date to achieve net zero targets, according to the survey.

The global survey, titled Institutional investors’ progress on the path to sustainability, looked into how institutional investors across the globe are integrating their ESG commitments into implementation.

It gathered data from 420 global hedge funds, private capital firms, asset owners and asset managers between April and July 2023. Among them, 120 (28.6%) are from Asia Pacific (Apac) markets including China, Hong Kong, Singapore and Australia.

Impact investing

Impact investing, a strategy investing in companies, organisations and funds generating social and environmental benefits, in addition to financial returns, is a global trend that in the next few years, is set to overtake ESG integration as the most popular ESG strategy, the report revealed.

Globally, ESG integration dominates 70% of investors’ ESG investment strategies, but the proportion is expected to drop by 18% to 52% over the next two years. In contrast, 54% of respondents reported a plan to incorporate impact investing as their primary strategy by that time.

European investors have the greatest momentum in adopting impact investing at present, with 52% employing impact investing. While in the four markets in Apac, the proportion stood at 38%.

Negative screening took a lead as a major strategy of 62% investors surveyed in Apac. In the next two years, the figure is set to shrink to 47%, overtaken by 58% estimating to commit to impact investing.

“Impact investing is a rather new concept for most people [in Asia]. It is driven by the need to have a clear and tangible positive impact,” Bottlaender said.

An analysis from Invesco in March 2023 pointed out that while impact assessment is key to a measurable outcome of such investments, clear and consistent frameworks are required to avoid greenwashing acts.

“There is no singular standard for impact assessment,” the article noted. On the regulatory side, specific labelling or disclosure requirements dedicated to impact investing have yet to come in Asia.

Private markets, including private debt, private equity and real assets, will take up more sizeable share of impact investing asset under management (AUM), it added.

Bottlaender echoed this view, saying that current regulatory pressure in Asia “is almost all about climate”. As a result, Asian investors’ ESG commitments are mostly around climate issues such as including net zero pledges and coal divestment, before stronger taxonomies and broader ESG regulations which are set to be finalised over the next few years.

Data shortage

A lack of ESG data is one of the greatest barriers to investors’ commitments, as respondents to the survey reported challenges from inconsistent and incomplete data. The concern is shared by 73% of respondents across Apac, slightly higher than a global average of 71%.

Bottlaender explained that although mandatory reporting of climate data is adopted in certain regulations, a majority of ESG data is submitted voluntarily.

This leads to a fragmentation and inconsistency of sources based on the various reporting standards they adhere to. Moreover, the absence of third-party verification results weighs on the accuracy and reliability of the data provided, he continued.

He shared that investors are either engaging directly with companies to encourage standardised reporting practices, or relying on data providers, or leveraging technology to carry out quality control to address the lack of ESG data.

But “significant gaps persist, especially concerning private companies and aspects like scope 3 emissions.”

“As a result, investors must be extremely cautious when advancing any ESG claim or commitment,” he warned.

¬ Haymarket Media Limited. All rights reserved.

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Japan's Kioxia reports Q2 loss, says prices have bottomed out

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TOKYO (Reuters) – Japan’s Kioxia on Tuesday reported a 100.8 billion yen ($664.5 million) operating loss in the second quarter as earnings were hit by a slump in demand for memory chips used in smartphones and personal computers (PCs).

The result at Bain Capital-backed Kioxia, formerly Toshiba Memory, compares with a loss of 130.8 billion yen three months earlier.

Makers of memory chips have been struggling with slumping demand since the COVID pandemic, with the market awash with supply and growing pressure for the industry to consolidate.

Merger talks between Kioxia and Western Digital have stalled, Reuters reported previously, after Kioxia investor SK Hynix said it did not back the deal.

A combined company would control one-third of the global NAND flash memory market, on par with Samsung Electronics and threatening the position of SK Hynix.

Since then, Western Digital has said it will spin off its memory business but remains open to alternatives that would deliver “superior value” to the planned separation.

While investment in artificial intelligence is expected to boost the chip industry, a rebound in demand for NAND flash memory used for data storage is less clear.

Selling prices have bottomed out, Kioxia said, pointing to expected higher shipments of smartphones and PCs next year.

Revenue fell quarter-on-quarter with Kioxia saying the smaller loss was because of higher average selling prices with a boost from the weaker yen.

Separately, Toshiba, which holds a stake in Kioxia after selling its chip unit to the Bain-led consortium in 2018, posted a 26.7 billion yen net loss in the second quarter.

The industrial conglomerate is due to go private after a successful $13.4 billion tender offer from private equity firm Japan Industrial Partners.

($1 = 151.7000 yen)

(Reporting by Sam Nussey; Editing by Tom Hogue and Christian Schmollinger)

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The great AI regulation race is on

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A wide range of tasks involving machines carrying out tasks with or without human intervention are referred to as artificial intelligence ( AI ). From visual identification devices and bots to photo editing software and self-driving cars, our knowledge of AI technology is largely shaped by where we encounter them.

If you think of AI, you may imagine technology firms, from established behemoths like Google, Meta, Alibaba, and Baidu to up-and-coming competitors like OpenAI and Anthropic. Governments around the world, which are determining the rules under which AI systems will work, are less obvious.

Tech-savvy regions and countries in Europe, Asia-Pacific, and North America have been enacting laws aimed at AI technology since 2016. ( Australia is falling behind and is still looking into the viability of such rules. )

Worldwide, there are now more than 1, 600 Artificial policies and strategies. The creation and management of AI in the world have been significantly influenced by the European Union, China, the US, and the UK.

In April 2021, when the EU proposed an original framework for restrictions known as the AI Act, efforts to regulate AI started to pick up speed. These guidelines seek to impose duty on companies and customers based on various risks connected to various AI technologies.

China advanced by putting forth its own AI requirements while the EU AI Act was still pending. Politicians have talked about wanting to lead the way and provide global leadership in AI management and development in Chinese press.

China has been regulating certain aspects of Artificial one after another, whereas the EU has taken a complete view. These have included conceptual AI, deep production, or “deepfake” technology, and algorithmic recommendations.

These policies and others will be included in China’s comprehensive framework for AI management. The incremental process gives regulators the flexibility to implement new policy in the face of new risks while allowing them to develop their bureaucratic know-how and governmental capacity.

A “wake-up phone”

China’s rules of AI may have served as a warning to the US. Influential senator Chuck Schumer stated in April that his nation if” never allow China to lead on technology or read the rules of the road” for AI.

The White House issued an executive order on secure, safe, and reliable AI on October 30, 2023. The purchase focuses on particular technological applications while attempting to address broader problems of capital and civil rights.

In addition to the major players, developing IT nations like Japan, Taiwan, Brazil, Italy, Sri Lanka, and India have even tried to put defensive measures in place to reduce any challenges that the widespread adoption of AI might present.

Global AI laws show a struggle against outside influences. On a political level, the US competes diplomatically and economically with China. The EU places a strong emphasis on achieving US independence and establishing its own modern sovereignty.

These regulations are perceived as favoring major former tech companies over up-and-coming competitors on a regional level. This is due to the fact that following the law is frequently costly and may require sources from smaller businesses.

Calling for AI legislation have received support from Tesla, Meta, and Alphabet. In addition, Tesla CEO Elon Musk’s xAI has merely introduced its first product, a robot called Grok, and Alphabet-owned Google has joined Amazon in investing billions in OpenAI rival Anthropic.

shared perception

Shared passions between the parties are evident in the AI Act of the EU, China’s AI requirements, and the executive order from the White House. Together, they prepared the ground for past year’s” Turing declaration,” in which 28 nations—including the US, UK, China, Australia, and a number of Union members—promised assistance on AI protection.

AI is seen as a benefit to nations or regions ‘ economic growth, regional stability, and global leadership. All areas are attempting to help AI development and innovation despite the acknowledged risks.

By one estimate, global spending on AI-centric techniques could surpass US$ 300 billion by 2026. The conceptual AI industry alone could be fair$ 1.3 trillion by 2032, according to a Bloomberg statement.

The pleasant page for the ChatGPT software from OpenAI. Photo: Leon Neal, Getty Images, and Asia Times Files

These statistics, along with discussions of alleged advantages from software companies, regional governments, and consulting firms, frequently dominate media coverage of AI. Tones of criticism are frequently ignored.

Countries use AI techniques for defense, security, and defense applications in addition to economic ones.

International conflicts were evident at the UK’s AI security conference. China endorsed the Enigma declaration made on the first day of the summit, but it was not included in the next day’s public events.

China’s cultural payment system, which has little transparency, is one area of contention. According to the EU’s AI Act, cultural scoring systems of this kind pose an intolerable risk.

China’s opportunities in AI pose a threat to US regional and economic security, particularly in the form of attacks and disinformation campaigns, according to the US.

International cooperation on conditional AI regulations is likely to be hampered by these tensions.

the restrictions of laws

Existing AI restrictions have major restrictions as well. For example, current regulations across jurisdictions do not include a clear, typical set of definitions of various types of Artificial technology.

There is concern about how useful the latest legal definitions of AI are because they are frequently very large. Rules cover a wide range of systems that pose various risks and may require various treatments because of their large range.

It is difficult to ensure exact legal compliance because many regulations lack exact definitions for danger, safety, transparency, fairness, and non-discrimination.

Additionally, local states are starting to implement their own rules within the national structures. These might solve particular issues and aid in balancing the growth and regulation of AI.

Two bills have been introduced in California to control AI job. A technique for rating, managing, and monitoring the provincial level of AI development has been put forth by Shanghai.

Yet, limiting the definition of AI technology, as China has done, raises the possibility that businesses will figure out a way to circumvent the regulations.

Nearby, national, and international organizations are developing sets of “best practices” for AI leadership, with oversight from organizations like the UN’s AI advisory panel and the US National Institute of Standards and Technology.

The current AI leadership structures from the UK, US, EU, and, to some extent, China are likely to be used as examples. Both social consensus and, more importantly, nationwide and geopolitical interests will serve as the foundation for international cooperation.

Fan Yang, doctoral research brother at the American Graduate School of Policing and Security, Charles Sturt University, and the ARC Centre of Excellence for Automated Decision-Making and Society, The University of Melbourne and Ausma Bernot

Under a Creative Commons license, this post has been republished from The Conversation. Read the original publication.

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The AI regulation battle is only just beginning

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In: Asia

It’s amazing that the United States has just recently released distinct rules regarding the technology given the rate of development in artificial intelligence in recent years.

President Joe Biden andnbsp issued an executive order at the end of October to guarantee” healthy, secure, and reliable artificial intelligence.” The order establishes new guidelines for AI health in general, including fresh privacy measures intended to safeguard consumers.

The executive order is a crucial step toward reasonable rules of this fast developing technology, even though Congress has not yet passed complete regulations dictating the use and development of AI.

The fact that the US did n’t already have any such AI protections on the books may surprise casual observers. The rest of the world is even further on, according to a meeting of 28 institutions for the AI Safety Summit&nbsp last week in the UK.

Attendees at the storied former spy bottom Bletchley Park were able to come to an understanding to collaborate on security research to prevent the” severe harm” that AI might cause.

The US, China, the European Union, Saudi Arabia, and the United Arab Emirates are among the members to the &nbsp declaration, which was a rare political revolution for the UK but was brief on specifics. The US promoted its own fresh guardrails&nbsp as something that the rest of the world should emulate through the celebration.

To comprehend that AI is a crucial component of one of the most significant technological shifts humanity has ever experienced, you do n’t need to be an expert in computing.

AI has the ability to alter how we think and teach ourselves. It may alter our working practices and render some work unnecessary. To produce these results, AI systems typically gather enormous amounts of data over the empty Online. There’s a good chance that some of your data is being used to power AI platforms like ChatGPT by huge language versions. &nbsp,

AI engages in battle

This is merely the beginning of the ice. AI is now being used in Israel’s businesses in Gaza to aid in the decision-making process. According to Israel’s Military Intelligence Directorate&nbsp, the military “produces trusted target quickly and accurately” using AI and another “automated” tools.

The new AI-powered resources are being used for the” first occasion to immediately give ground forces in the Gaza Strip with updated information on target to attack,” according to an unnamed senior official.

This represents a significant increase in Artificial use across the board, not just among Palestinians. As a part of Israel’s sizable and potent weapons-technology industry, the technologies being tested in Gaza will almost certainly been exported.

Simply put, various issues, from Africa to South America, could immediately use the AI techniques used to assault Israeli targets. &nbsp,

Issues with Artificial security, consumer security, and privacy are specifically addressed in Biden’s executive order. New safety assessments of new and existing AI platforms, capital and civil rights direction, and analysis on AI’s effect on the labour market are all required by the order&nbsp.

The US government will now be required to receive health exam results from some AI businesses. The Commerce Department has been asked to develop guidelines for AI hashing and a security system that you develop AI tools to help find bugs in important software.

There has been some activity in recent years, despite the fact that the US and other European nations have been slow to draft complete AI rules.

A thorough&nbsp, AI risk management framework was outlined by the US National Institute of Standards and Technology ( NIST ) this year. The professional order of the Biden administration was based on the report. Importantly, the administration has given the Commerce Department—which houses the NIST—the authority to assist with get implementation. &nbsp,

Need for conformity

Finding buy-in from top American tech companies will now be the problem. Biden’s order wo n’t accomplish much without their cooperation and a framework for punishing businesses that break the law.

There is still a ton of work to be done. Over the past 20 years, technology firms have mostly been able to grow without much supervision. The connected world of technology, where businesses have developed new goods or services outside of the US, contributes to this.

For instance, the ground-breaking AWS sky hosting systems from Amazon was created and developed significantly from American regulators at the University of Cape Town in South Africa. &nbsp,

The Biden presidency could look for more detailed laws and regulations with sincere buy-in from top businesses. Strong government involvement in tech generally carries a chance of stifling technology. However, smaller nations with understanding markets have a clear chance to intervene.

Artificial protection can be used by nations like Estonia and the UAE that have invested in their understanding markets, have little groups ( and regulatory situations ). In cities like Dubai, where foreign tech companies have established regional offices, this would have a significant impact.

These smaller nations have less red tape, so AI regulations can be rapidly passed and, perhaps more importantly, changed if they overly restrict development.

The global community cannot wait for larger nations or coalitions like the United States and the European Union to push through regulations first given the hyper-connected world of technology enhancement. Instead, regulations that meet their needs should be implemented in new markets with it economies to take into account. &nbsp,

The speed at which AI technology is developing is astounding. We do n’t have the luxury of waiting for world leaders to take action first because it is so crucial to the overall technology sector. It’s time to set an example for others, and AI laws are a great place to start.

The copyright-holding Syndication Bureau, &nbsp, provided this content.

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