America’s priority should be chip design leadership – Asia Times

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Chips&nbsp, are the&nbsp, important economic and military drivers of the technological planet. Yoon Suk Yeol, president of South Korea, recently stated that command in the field of microprocessor technology is crucial to a nation’s economic life ( Wall Street Journal, June 5, 2024 ). The effect on defense things is enormous. As David Goldman and I wrote in the the&nbsp, Wall Street Journal&nbsp, on December 23, 2018:” Silicon, never Steel, will get the Next War”.

In accordance with that philosophy, hundreds of billions of dollars are being used from federal money to grow the sector in nations like China, Taiwan, Japan, South Korea, and the US. In the US, the CHIPS Act allocated$ 50 billion to help manufacturing opportunities. These substantial commitments must be taken into account when considering the cost of a state-of-the-art, full-scale factory, which costs between$ 20 billion and$ 30 billion. And these flowers end up being outdated in a few years. A significant national endeavor requires keeping up with the cutting-edge of device manufacturing technology.

As the&nbsp, original&nbsp, creator of the market, the US is facing significant new competition. The first goal in the US should be to retain management in innovative product style because that authority impacts economic&nbsp, growth&nbsp, and the US&nbsp, still&nbsp, leads the world in this regard.

While the US-based economy expanded, much of the production and packaging of cards has moved elsewhere. But, the key to the value creation process, or complex high-end product development, is still largely in the US. Over 50 % of the top-tier bits are developed in the US and supported by US-based companies for marketing. This is possible because of the big design technology center in the US, which includes numerous design-focused companies, a sizable educational group of designers, continued DARPA and other federal agencies support, and the availability of venture capital funding for new modern design companies.

Fresh businesses with encouraging products are acquired by larger businesses with effective acquisition programs, giving them the resources to grow quickly. Thus, US- designed large- performance chips continue to lead the world industry the Americans ‘&nbsp, diversity and ability to quickly proceed concepts into big business products.

On the basis of its special AI-enabling systems, Nvidia’s recent history as a fresh US chip design business is a prime example of how revolutionary chip design helped it become one of the three most important companies in the world ( at about three trillion dollars ). The use of “neural networks” ( massive parallel data processing ) computing chips, which mimic the way the human brain manages data, is the new technological concept behind AI. The concept was also known for many years in medical circles, but because it required a lot of chip processing power, applying it to genuine problems was unprofitable.

Researchers in image research demonstrated the value of the technology by applying Moore’s law as financial chip concentrations increased over time. Quick programs were found in video game equipment used in computer games. But the discovery to large applications in AI came when the CEO of Nvidia, Jensen Huang, &nbsp, saw the AI programs of the Nvidia items and decided the company’s coming by concentrating all of its efforts on AI applications&nbsp, while exiting different applications. With annual sales that surpass$ 100 billion, the company currently holds the position of effective monopoly in processing chips for AI.

A key underlying factor drove this success. Not the US government’s recommendations, but the work of thousands of talented technologists who work together to develop innovative ideas into valuable products. To continue maintaining essential leadership in the chip technology sector, this underlying success factor needs to be supported and encouraged.

Henry Kressel Ph. D is a technology expert with numerous ground-breaking achievements in electronic devices, an author, a trial executive, and a long-term investor in private equity.

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Beijing: new Treasury rules amount to ‘decoupling’ – Asia Times

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Following Washington’s suggestion to establish a set of specific regulations that would hinder and track American investments in China for semiconductors, artificial intelligence, and classical computing, Beijing has expressed major problems. &nbsp,

The Chinese Commerce Ministry stated on Monday that, despite the US’s repeated efforts to say it has no intention of dissociating from China or preventing the country’s economic growth, Washington has insisted on preventing American firms from investing in China and preventing the government’s normal growth. &nbsp, &nbsp,

A spokesperson for the government referred to the meeting between Chinese President Xi Jinping and US President Joe Biden in the US in November as” a typical broad approach to national security,” saying that this method goes against the two faces of state’s discussion at the conference in San Francisco.

He predicted that the restrictions may have a negative impact on Chinese and US businesses ‘ regular economic and trade cooperation, undermine the world’s economic and trade balance, and deteriorate global commercial and supply chains ‘ security and stability.

He added that China is entitled to take the same actions as the United States is against. He demanded that the US government prevent politicizing and stifling business.

Researchers at the Ministry of Commerce, Zhou Mi, predicted that Washington’s purchase regulations will make high-tech cooperation between the US and China more difficult. He claimed that it will also stifle global technical innovation and scientific advancement. &nbsp,

Beijing made the comments after the US Treasury Department released a notice of proposed rule-making ( NPRM ) on June 21 to implement Biden’s executive order, which was first announced in August and had the title” Addressing US investments in specific national security technologies and products in countries of concern.”

According to the Treasury, the NPRM establishes a procedure for creating a new federal security software to combat threats from foreign direct investments in China, Hong Kong, and Macau.

The proposed NPRM developments our national security by preventing, according to Paul Rosen, assistant secretary of the Treasury for Investment Security, the numerous benefits that some US opportunities offer besides only capital from supporting the development of delicate systems in nations that might use them to harm our national security.

The Treasury requests comments on the proposal through August 4 and anticipates that the regulation will be in effect by the end of this year. &nbsp,

The secretary of the Treasury must enact laws that prohibit US citizens from operating AI, chip, and quantum computing businesses in China, according to Biden’s executive order. &nbsp,

Additionally, the regulations should mandate that US citizens notify the Treasury of specific other transactions that might involve these products and technologies that could compromise US national security.

The NPRM said a” covered transaction” may be a prohibited transaction, or only a notifiable one. &nbsp,

Covered transactions include the provision of debt financing, the conversion of convertible debt, greenfield investments ( a type of foreign direct investment where a company establishes operations abroad ), joint ventures, and limited partner ( LP ) or equivalent investments.

China’s FDI

The Chinese Commerce Ministry reported on June 21 that its total foreign direct investment decreased by 31 % to US$ 57.9 billion in the first five months of this year from US$ 84.3 billion during the same time period in 2023. &nbsp,

FDI in China’s high technology manufacturing sector rose 2.7 % to US$ 6.9 billion. FDI coming from Germany and Singapore to China rose 24 % and 16 % year- on- year, respectively. However, the commerce ministry did not make the detailed FDI figures available for each country. &nbsp,

China’s high technology development certainly needs the participation of foreign funds, but it mainly relies on domestic funds and policy environment, said Xiang Ligang, director- general of the Zhongguancun Information Consumption Alliance, a Beijing- based telecom industry association.

China must now send a clear message that it needs to develop its own AI technology, according to Xiang, who stated that the proposed US investment restrictions were a result of this. He made mention of Beijing’s recent national policy to support Chinese technology startups.

On June 15, China’s State Council published a document to encourage local governments, state- owned- enterprises, banks, private equity and asset management firms and long- term fund management companies to provide loans, subsidies and funds to technology startups.

According to the statement, financial authorities should foster a favorable lending climate for technology companies to grow and raise money. China will tweak its laws in order to promote FDI, according to the statement. &nbsp,

In an article published on June 23, Guan Quan, a professor at the Renmin University of China, writes that the US has recently sent an official to Japan and the Netherlands and urged them to tighten their export controls for chip-making equipment. &nbsp,

Besides, he says, Washington also plans to add 11 Chinese chip foundries to its Entity List. He says all these moves have shown clearly&nbsp, that the Biden administration will not stop suppressing China’s chip sector.

He claims that until one day China can self-supply all the necessary chip-making tools, the only way to put an end to all these restrictions is to use technological advancements. However, Guan did not provide a roadmap or schedule for how China would go about accomplishing its objectives.

Chinese students repatriated

China can still use this opportunity to attract American investments into its high technology sectors, according to some commentators, because it may take up to six more months before the proposed US investment restrictions go into effect. &nbsp,

Meanwhile, the immediate effect of imposing a ban on Chinese students from studying or obtaining AI technology in the US is. &nbsp,

On June 22, China Daily, a state- owned publication, reported that four Chinese students who traveled to the US for academic conferences had recently suffered from the US border officers ‘ “unwarranted harassment, interrogation and repatriation” .&nbsp,

Border agents questioned the four science students, two of whom have research interests in AI, about their personal and family histories and whether they were affiliated with the Chinese Communist Party, according to the report. &nbsp, &nbsp,

It said the US has repatriated more than 30 Chinese students, mostly master’s or doctoral degree candidates in computer- related fields, in recent years.

Read: China hawk: Fix symbolic, ineffective US sanctions

Follow Jeff Pao on X: &nbsp, @jeffpao3

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Malaysia headquartered Paywatch secures USmil funding in largest raise for Earned Wage Access startup in SEA

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  • Money to expand employee wellness programs and initiatives throughout the Ocean
  • Third Prime, the head investor, invests in financial and industrial technology companies.

The Paywatch team with founders, Richard Kim (seated, 2nd from right) and his brother, Alex Kim (3rd from right).

In what is believed to be the largest funding round closed by an earned- wage access ( EWA ) startup in Southeast Asia, Malaysian headquartered startup, Paywatch, has raised US$ 30 million ( RM141 million ) in funding from a mix of equity and credit facilities to supercharge growth.

With the help of new investors Octagon Venture Partners and Wooshin Venture Investment Corp., Paywatch received over US$ 14 million ( RM65 million ) in Series A equity funding led by Third Prime and a consortium of US investors, including Vanderbilt University and the University of Illinois Foundation. Additionally, it secured payment services worth US$ 16 million from big banks, including Citi and other big banks, at global locations.

]RM1 = US$ 0.212]

” We take great pride in the assurance these reputable investors and banks have in our vision in the midst of this money and tech winter. We were firmly convinced from the beginning that ensuring accessibility to major financial institutions and offering Received Wage Access at the lowest, minimum payment was the best course of action. Our rapid expansion and collection of high-caliber business customers validate our approach, even though it was a more difficult way to market, according to Alex Kim, president and co-founder of Paywatch, who co-founded the business in South Korea in 2020 with his nephew Richard Kim.

An ESG individual gain

Employees can access a portion of their accumulated earnings in real-time as it is earned, as well as before the conclusion of their pay cycle, thanks to Paywatch’s debt-free EWA solution, also known as on-demand pay, an impressive employee benefit.

Paywatch’s remedy has clearly decreased employees ‘ dependency on loans, alleviated home debt and enhanced fiscal management. Together, Paywatch’s smooth, fully automated program has greatly boosted businesses ‘ employee retention and efficiency, resulting in significant cost savings associated with hiring and training.

Paywatch has partnered and collaborated with a few Malaysian brands and institutions such as Lotus, Jaya Grocer, QSR Brands ( including KFC and Pizza Hut ), FFM Bhd, PayNet, Shopper360, Guardian ( part of DFI Group ), Corus Hotel ( under MUI Group ), Llao Llao ( by Woodpeckers ), Coway, Media Prima, University of Nottingham Malaysia, UNITAR and Durioo.

It claims that these partnerships show how committed it is to offering a revolutionary financial service that meets the demands of Malaysia’s labor.

Most foreign EWA in Asia, biggest level with US$ 58mil processed

The firm, which serves the largest foundation of employees in Asia, has processed more than US$ 58 million in salaries through its method to time, and its monthly disbursements have increased by as much as US$ 8 million, or 15 %, month over month.

According to Paywatch, this results in the largest EWA service in Asia by volume of transactions. By the end of the year, the company anticipates receiving more than US$ 120 million in salary, more than double its lifetime value.

Since its establishment in 2020 in South Korea, Paywatch has expanded quickly to three other markets- Malaysia, Philippines, Indonesia. With the most recent funding, the company is “ready to expand into new markets and develop even more financially inclusive tools for our users,” Kim said.

Along with the company’s other innovation efforts, a significant portion of the Series A funding will be used to enhance the company’s embedded finance offerings.

Third Prime, a U.S.-based early-stage venture capital firm that invests in global leaders in financial and industrial technology, is Paywatch’s leading investor for this funding round.

Malaysia headquartered Paywatch secures US$30mil funding in largest raise for Earned Wage Access startup in SEAIn the US and Latin America, EWA has become a common employee benefit. And with such great momentum, Paywatch is emerging as the market’s leading change agent in Asia. As markets with different regulations and cultures are increasingly popular, the rapid adoption of earned wage access is a gratifying time, said Michael Kim, General Partner of Third Prime ( pic ).

Aligning with Malaysia’s financial inclusion vision

With a strong base of clients in Malaysia, Paywatch’s innovative EWA solution is set to enhance the financial well- being of Malaysian workers, one of the outcomes stated in the country’s National Financial Inclusion Strategy.

Paywatch argued that its instant access to earned wages supports the Malaysian government’s efforts to combat income disparity and foster financial stability among its citizens.

First time for US university endowments

The direct investment by the Vanderbilt University and the University of Illinois Foundation in Paywatch is regarded as a milestone in the market because it marks the first time these endowment funds from US universities have made an investment in an Asian tech startup.

We have long supported financial inclusion, and we think Paywatch’s earned wage access technology can help the movement advance significantly. Beyond the technology, we also believe in the company’s dedication and commitment to delivering true impact in Southeast Asia”, shares Travis Shore, Chief Investment Officer of the University of Illinois Foundation.

The Paywatch management team with founders, Alex Kim (4th from right) and Richard Kim (5th from right).

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DNB hits key milestone in agreements with Malaysian mobile network operators

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  • Terms law established by Share Subscription Agreements were properly complied with.
  • TM given until 21 Aug to find owners ‘ smile, following its leadership

Malaysian mobile network operators, CelcomDigi and U Mobile took a big step towards owning a 14% stake respectively in DNB with their announcements that they have met the terms of the Share Subscription Agreement with DNB.

The Share Subscription Agreements ( SSA ) between Digital Nasional Bhd ( DNB) and four mobile network operators ( MNO ) in Malaysia, namely CelcomDigi Bhd through Infranation Sdn Bhd, Maxis Broadband Sdn Bhd, U Mobile Sdn Bhd, and YTL Communications Sdn Bhd through YTL Power International Bhd, have marked an important milestone.

On 1 Dec 2023, DNB and the Minister of Finance ( Incorporated ) ( MoF Inc ) entered SSAs with five MNOs, thereby enabling the MNOs ‘ participation in DNB through equity ownership. DNB confirmed that all SSAs law requirements were met on June 20 with a statement released monday. With this crucial step being completed, the SSAs are scheduled to be completed by the end of June 2024 for all MNOs, aside from Telekom Malaysia Bhd ( TM), to increase their equity stake in DNB, according to DNB. The long prevent time for TM is 21 Aug 2024, for it to get its owners ‘ endorsement, in accordance with its management requirements.

According to the SSAs, it is anticipated that the MNOs will collectively acquire a 70 % equity stake in DNB, with each holding a 14 % stake. The Malaysian Government, represented by MoF Inc, may keep a 30 % interest and a Unique Promote in DNB for a designated time.

As the factions work toward the SSAs, DNB stated that it is still committed to spurring technological advancement and expanding online services across the nation, creating a more connected and online empowered Malaysia.

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China’s GDP troubles point to need for bolder reform – Asia Times

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Due to Asia’s largest economy’s unsteady state, China’s home crisis is once more in the news for all the wrong reasons.

One of the catalysts that helped China become a global superpower was the country’s estate boom. Xi Jinping is currently facing the most difficult problem of his ten years as Chinese president due to the cover slump.

According to data from May, Xi’s inner circle had hoped that the government’s stimulus efforts to date were n’t gaining the support they had hoped. After falling 3 % in April, new home sales decreased by roughly 4 % last month. It’s the worst work for the business in roughly 10 years. &nbsp, Property investment&nbsp, is over 10 % since the start of the time compared to the January- Does period a year ago.

This data additionally supports the property industry’s continued dominance of growth this year, according to Lynn Song, ING Bank’s chief greater China economist, adding that Beijing if “ring some alarm bells.”

The Third Plenum conference scheduled for this month is set to be illuminated by all of this in a better than ever light. This meeting takes place every five times to examine big-picture reform ideas.

The event was actually scheduled for October 2023, but it was postponed due to uncertainty in the physical economy. However, the meet is a fantastic opportunity for Xi to rekindle his reformist momentum and discuss how steps can be taken to stop the property crisis.

At the moment, says Fitch Ratings analyst Brian Coulton, “domestic desire has weakened in China as the&nbsp, property&nbsp, industry decline worsens and personal intake growth remains sluggish. However, exports have rebounded, which has helped true GDP, and governmental policy is being relaxed. Negative pressures are, nonetheless, widespread”.

An apostrophe is required for all the engines currently propelling China.

The ultra-long special sovereign bonds Beijing began selling in May have the potential to support the country’s gross domestic product of 1 trillion yuan ($ 138 billion ). The goal is to achieve China’s 5 % yearly growth target by reducing public debt and funding for equipment.

According to scholar Louise Loo at Oxford Economics, “unconvincing onshore action speed outside of the “new” companies in May suggests that the current increase in house and fiscal stimulus has not yet improved buyer and investor sentiment.”

The physical sector, however, is even more questionable, yet if mainland exports are on a break. In spite of the escalating US-China trade tensions, overseas shipments increased by 7.6 % year over year at their fastest rate in more than a year.

According to Tatiana Orlova, an economist at Oxford Economics,” We anticipate that the Chinese trade value recession will provide a valuable tailwind in the battle to bring emerging market inflation back to destination.”

Problem is, the international scene is awash in winds. In the US, the Federal Reserve’s reticence to relieve means the “higher for more” time for provides may persist indefinitely. At the same time as the Bank of Japan is considering a rate increase, Tokyo is avoiding recession once more. Europe is muddling along as Germany stagnates.

What’s urgent is a renewed effort to rebalance growth engines and incentives. Short- term stimulus is plenty needed, as evidenced by the marked downshift in mainland&nbsp, demand.

Many people anticipate Beijing to increase its efforts since April to encourage businesses and households to upgrade outdated machinery with government subsidies, with an emphasis on automobiles.

” The upcoming implementation of the trade- in replacement scheme will positively impact household and business demand, hopefully inducing demand- led inflation somewhat” ,&nbsp, says Kelvin Lam, an economist at Pantheon Macroeconomics.

The main point will be however, how Xi and Premier Li Qiang’s plans to speed up structural upgrades are to be discussed.

” The Third Plenum may conclude with a pledge of comprehensive reform in areas spanning the private sector, manufacturing, innovation, social security, economic management and more”, says Mark Williams, chief Asia economist at Capital Economics. That may give rise to significant change, but the Party believes that it has engaged in comprehensive reform for the past ten years.

Carlos Casanova, economist at Union Bancaire Privée, adds that “while nobody can know the scope of reforms ahead of time, we expect to see changes to&nbsp, housing&nbsp, sector policies. More cities are announcing a complete end to macroprudential restrictions on investment properties. The central government has so far remained silent, suggesting a more formal pivot during the summer. Stay tuned for more”.

That “more” could include Beijing going further than it has to date to help highly indebted property developers, regardless of “moral hazard” risks.

In order to maintain growth at 5 %, Xi’s top priority in 2024 is encouraging consumers to spend more and save less. That entails boosting incomes and creating stronger social safety nets to encourage spending. It implies developing more reliable capital markets so that the typical Chinese can invest in both stocks and bonds, not just real estate.

Until now, Beijing’s extreme focus on juicing consumption time and time again is counterproductive, many economists say. It makes China vulnerable to boom-and-bust cycles that necessitate urgent attention at the expense of reinvigorating the economy. And China’s heavy reliance on exports leaves the economy vulnerable to Washington ‘s&nbsp, trade- sanction antics.

Part of the strategy is accelerating and broadening China’s evolution as a high- tech powerhouse, development experts agree. And indications are, this is precisely the pivot Xi and Premier Li Qiang are making as 2025 approaches.

Xi’s” Made in&nbsp, China 2025″ vision has Beijing investing aggressively in making China the dominant power in 5G, electric vehicles, semiconductors, artificial intelligence, renewable energy and other dominant “future” industries. &nbsp,

Yet unless China tends to cracks in its economic foundations, boom- bust cycles will remain a challenge for Xi’s inner circle. Lau notes that a robust increase in domestic demand will require bold actions to address” the current economic malaise” in the real estate sector and rising local government debt levels.

” The&nbsp, property&nbsp, sector is a major problem”, says&nbsp, Wei He, &nbsp, economist at Gavekal Dragonomics. Policymakers announced new support measures in the middle of May, but the lack of improvement in daily sales figures suggests that they will almost certainly need to do more to restore consumer confidence.

Odds are, He says, “policymakers may opt to wait, at least for now. They are not complacent about economic growth, as the Politburo’s call in April for more support demonstrated. However, they may not feel any urgency either because real GDP growth is likely running above the full-year target of around 5 %.

To be sure,” that prospect is unwelcome to market participants”, He adds. Equity and commodity markets have slowed since late May, according to the statement from the Politburo meeting, which started in late April.

There are no obvious catalysts for a change in market sentiment until further policy support is found, he asserts, or the upcoming Third Plenum results in an unexpectedly market-friendly outcome. ” Unless the economic data worsen, policymakers may keep markets waiting”.

Follow William Pesek on X at @WilliamPesek

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Analysis: Adverse optics cloud Malaysia’s joint venture with BlackRock entity in airport privatisation deal

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GIP fits the bill and, like most private capital funds, they will ultimately leave after creating price, only as they have been doing with their other airports, according to a spokeswoman from Khazanah.” We were looking for a spouse that has a strong track record of value creation and one that goes beyond what current airport managers are doing and can achieve,” said the spokesperson from Khazanah.

GIP does come with serious credentials.

GIP, one of the top infrastructure managers in the world, has a 17-year history and currently manages assets worth US$ 112 billion. GIP makes significant investments in renewable energy and oil and gas projects across the globe in addition to managing ports and airports.

However, opponents of the privatization plan pointed out that the airports run by GIP’s management do not consistently place high in international rankings like Skytrax. &nbsp,

The London Gatwick Airport, in which the fund has a 49.99 per cent interest, is ranked 48th in Skytrax’s 2024 ranking, while the Sydney Airport, of which GIP owns 37 per cent, was in 55th&nbsp, place. By contrast, Singapore’s Changi was ranked second, after the Doha Airport, and South Korea’s Incheon was ranked third.

With the exception of the Sabiha Gokcen Airport in Istanbul, MAHB currently manages 39 airports, all of which are located in Malaysia.

FINANCIAL MUSCLE NEEDED FOR UPGRADES

Malaysia’s airports need renovations. &nbsp,

The Kuala Lumpur International Airport (KLIA ), widely seen MAHB’s prized asset, was 71st in the Skytrax 2024 airport rankings. In 2019 after experiencing an embarrassing technical issue that caused travelers to be stranded, the airport management was forced to suspend its aging aerotrain network, which is currently being replaced.

The privatization plan’s backers argued that GIP would provide much-needed financial support and technical expertise to put MAHB back on course to face off against other international rivals. &nbsp,

According to government officials, the Anwar administration’s decision to replace the 25-year concession’s operating and land lease agreement with a new 45-year term that will only expire in 2069 will also help with better financial planning and airport expansion programs.

But there is concern that BlackRock’s participation could create other complications, particularly over the future prospects of the Sabiha Gokcen Airport in Istanbul. &nbsp,

Turkey canceled all bilateral relations with Israel last month over what President Recep Tayyip Erdogan described as a “worsening humanitarian tragedy” caused by the Israeli offensive in Gaza. &nbsp,

Some businesspeople believe that unless ties between the two nations resume, MAHB could find itself in a difficult position if the Sabiha Gokcen Airport concession expires in 2023.

In a client report from CGS International in late February, MAHB could choose to partner with Sabiha Gokcen, where it currently holds a 100 % interest, to increase its chances of receiving an extension. &nbsp,

Khazanah declined to comment on the Istanbul airport’s prospects.

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IPEF making economic gains above the naysaying critics – Asia Times

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SINGAPORE – The results of the last week’s Indo-Pacific Economic Framework ( IPEF ) meetings in Singapore heightened the potential and need for even greater private sector support.

Many people questioned the IPEF’s worth from the beginning because its ambition falls short of the Trans-Pacific Partnership ( TPP )’s previous US foray into Asia-Pacific trade leadership.

But the project’s rely on supply chain resilience, green market investments and tackling obstacles to doing business in the region is proving the Biden administration’s brilliance while reaffirming US leadership in local financial, investment and integration issues.

That was seen in next week’s filing of the Clean Economy and Fair Economy Agreements, which demonstrated the project’s partners continue to take the necessary steps for approval, acceptance and endorsement of IPEF agreements.

During the Singapore meeting, the US Department of Commerce’s Office of the Secretary announced six press releases, including notable new achievements in the areas of the IPEF Agreement Relating to Supply Chain Resilience ( Pillar II ), the IPEF Agreement Relating to a Clean Economy ( Pillar III ), and the IPEF Agreement Relating to a Fair Economy ( Pillar IV ), as well as the overarching Agreement on IPEF.

( The IPEF brings together Australia, Brunei, Fiji, India, Indonesia, Japan, South Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand, Vietnam and US. )

However, critics point out that IPEF fails to address the US’s obvious inability to handle local trade barriers and to create opportunities that conventional free trade agreements do not. They note IPEF does not identical TPP when it comes to business reform. However, the past year demonstrated how serious IPEF is about finding new ways to take the result.

Two weeks prior to the meetings, Dr. Deborah Elms, the renowned head of trade policy at the Hinrich Foundation, testified before the US Congress that” IPEF is a bad supplement” for what the different 13 members of the platform really desire: a US return to traditional free trade agreements.

She cited in particular the region’s desire for the US to sign up for the CPTPP, the Indo-Pacific’s successor to the TPP, which has provisions for market access, stronger labor and environmental provisions, and consistency of regulations in a range of sectors.

Others shared a similar assessment. A Politico article stated that” Doubts follow Raimondo on a trip to sign more IPEF deals” prior to US Secretary of Commerce Gina Raimondo’s visit to Singapore, where she signed the two agreements and led a delegation of investors to the IPEF Clean Economy Investor Forum.

” ]W] ithin the business community, a big question hangs over the deals: will they make any difference”?, the article asks. Many in the private sector believed they would not, according to the report.

Realistically, a return to TPP is unlikely and wo n’t occur as a result of Donald Trump’s potential White House entry and the Democratic Party’s hard line on free trade. Trump, who resigned from TPP after his third day in office, has pledged to do the same for IPEF.

” Under the next administration … the Biden plan for’ TPP Two’ will be dead on day one”, Trump said at a recent campaign event in Iowa. It’s worse than the first one, threatening to pulverize farmers and manufacturers with yet another massive globalist monstrosity designed to boost outsourcing to Asia.

IPEF, of course, does no such thing, especially with the initiative’s relevant trade provisions now seemingly on indefinite hold. The division of IPEF into four pillars, with only one focusing on trade, turns out to be a useful feature rather than a bug.

The IPEF’s Investor Forum on Clean Economy, which is unique, demonstrates how engagement can occur when tangible outcomes are possible. &nbsp,

The Singapore forum identified US$ 23 billion in terms of potential investment in accelerating the transition to green energy by establishing mechanisms for cooperation and enabling governments, developers, and investors to meet and address priorities in ways that are not otherwise known. Private equity firms KKR and GIP co- chaired the initiative, with global investors BlackRock, GIC, Rockefeller Foundation and Singapore’s Temasek all part of the coalition.

To catalyze investment to advance the energy transition, regulatory frameworks must be established. The IPEF partners continued their progress on a range of climate solutions through the cooperative work program ( CWP ) mechanism, which focuses on hydrogen, carbon markets, clean electricity, emissions intensity accounting, e- waste and small modular nuclear reactors.

Momentum is also building around the Indo- Pacific Partnership for Progress ( IP3 ), a collaboration of public, private, and non- profit leaders dedicated to mobilizing capital and expertise to advance economic growth, sustainability, and inclusivity. &nbsp,

A US return to traditional free trade agreements would, as the Hinrich Foundation’s Elms noted, “bind the US to partners in the Indo- Pacific”. And as Bilahari Kausikan and I noted in our post about the US-Singapore FTA’s 20th anniversary, creating the most powerful geopolitical latticework for the US requires more than just a crisscross of strips representing diplomacy, defense, and development, but also trade.

FTAs that are properly executed will enhance that effort. The US must continue to be a regional leader that collaborates with numerous partners in whatever political contexts are acceptable. And for now, the IPEF remains the only game in town, as I wrote for Asia Times in November.

Singapore demonstrated the IPEF’s commitment to advance US interests in the area. The next step in advancing that success is to increase business and investor engagement, which are by design essential to IPEF.

Steven R. Okun serves as the senior adviser to Singapore-based geostrategic consulting firm McLarty Associates. He is the CEO of APAC Advisors.

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European debt now a better bet than US Treasuries – Asia Times

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As relationship expert Bill Gross sparkles a bright spotlight on a rapidly evolving threat to US Treasury securities, the November election, Janet Yellen the n’t become happy.

The former Pacific Investment Management Co ( PIMCO ) chief investment officer has mentioned European debt as a ready substitute for securities that were sold by US Treasury Secretary Yellen’s team in recent interviews.

” As we move to November, and everything becomes more clear as to who may or who might not win, the doubt plus the potential legislation implications may affect Treasuries significantly”, Gross told Bloomberg.

Gross’s apparent move to Europe comes even after the electoral debacles in Berlin and Paris. Emmanuel Macron and Olaf Scholz faced opposition in the European Parliament elections on June 9.

As President Macron called a snap election in a bid to consolidate power, French bond yields reached their highest level since November. German and Italian bond prices plunged, too, as traders assessed the fiscal policy implications of the elections.

Gross notes, political surprises coming from the continent, and other significant events in India, Mexico, and South Africa that put many bond investors at risk due to market reactions. Could the US election pitting Democrats for Republicans against President Joe Biden be the next market snob?

” What we’ve seen the last few weeks is a reaction to uncertainty, in terms of not only the party that’s dominating, but uncertainty as to what their policies will be”, Gross explains.

As such, Gross adds,” there’s coming a point where European bonds are more attractive than Treasury bonds, in my opinion. In terms of attraction, the spreads for German and French 10-year bonds have decreased significantly over the past month or two in relation to Treasuries and today as well.

This is how US electioneering may cast a serious shadow over the attractiveness of the dollar, the linchpin of global finance and trade, written between the lines in bold font. And the difficult task Team Yellen must complete in order to stop the US government’s debt from rising worldwide.

Adding to Yellen’s challenges, a US national debt approaching US$ 35 trillion just as Washington politics become increasingly toxic.

A US debt run might be in the offing. Photo: Wikimedia Commons

Extreme polarization is already imperiling Washington’s credit rating. Last August, when Fitch Ratings yanked away America’s AAA&nbsp, credit score, it cited the polarization behind the January 6, 2021 insurrection among the reasons.

Additionally, Fitch cited political conflict involving raising the statutory debt ceiling and funding the US government as risk factors for the credit rating of Washington. Such clashes might worry Asia less if not for the fact Washington’s debt is&nbsp, twice the size&nbsp, of China’s annual GDP and more than eight times Japan’s.

Combined, Tokyo and Beijing hold about$ 2 trillion of US government debt. That vast pool of savings could be at risk if Moody’s Investors Service revokes Washington’s last remaining AAA rating. Surging US yields would affect global markets in unanticipated ways.

America’s sharp mercantilist pivot since 2017 is another worry for Asia’s export- reliant economies. Then, President Trump imposed severe tariffs on global steel and aluminum as well as Chinese goods.

When Biden arrived, he left Trump’s trade war in place— and added new layers of China- targeted curbs, most targeting China’s access to semiconductors, chip- making equipment and other vital, cutting- edge technologies.

Now, Trump’s plan to slap 60 % taxes on all Chinese goods is catalyzing something of a tariff arms race, one that’s drawing retaliation threats from Xi Jinping’s government. The EU followed this week with 38 % of its own tariffs after Beijing just imposed a 100 % tax on China-made electric vehicles.

Never mind that “policies are more likely to hurt than help the lower- and middle-income Americans they purport to benefit,” asserts economist Kimberly Clausing of the Peterson Institute for International Economics, a think tank based in Washington.

Stock markets everywhere could be in harm’s way as trade war risks increase and uncertainty surrounds growth prospects. According to Gross, the US’s “equity market is valued at historically high levels if looking at current 21-times ‘ price to earnings ratios” are considered. If GDP slows, he notes, there could be” a problem in terms of valuation at the moment for many stocks”.

That goes, too, for Europe’s economic prospects as the region’s biggest economy, Germany, fends off recession risks. With a narrower electoral mandate, Chancellor Scholz ‘ Social Democrats and its progressive coalition partners are now free to stimulate growth.

Macron is smarting in France now that he lost to Marine Le Pen’s nationalist far-right party in parliamentary elections. The surprise snap election he announced overlaps with Macron’s hosting of the Paris Summer Olympics. Macron’s instinct to fight contrasts with Belgium’s Alexander De Croo, who resigned instead.

Macron urges French citizens to cast ballots the same way they did this weekend for the European Parliament, which has long been seen as a protest vote, according to Mujtaba Rahman, an analyst at Eurasia Group.

Macron “believes he can defy the polls by having to choose between the pro-EU, pro-Ukrainian, and centrist status quo” and the existential risk of a far-right government,” he said.

It’s quite a gamble on France’s future. Polls, Rahman says, suggest Macron’s centrist coalition will fail to win a majority, and if Le Pen’s National Rally picks up the most seats.”

That means” France will be in uncharted waters,” Rahman explains”. Le Pen has stated that she will partially withhold EU funding, impose stricter immigration laws, violate the EU single market by putting French business before French aid, and impose restrictions on aid to Ukraine.

Italy’s Giorgia Meloni had a much better week, continuing her pivot from far- right to mainstream. Along with a solid election showing, Meloni’s government will host the Group of Seven ( G7 ) in the days ahead.

Centrist European Commission President Ursula von der Leyen also appears to have reclaimed the far-right trend and been given another five-year term. She will likely be forced to make concessions to immigration and environmental policies to advance the agenda.

Ursula von der Leyen, the EC president, has been hawkish about China trade issues. Photo: Asia Times Files / AFP / Dursun Aydemir / Anadolu Agency

What all of this means for EU fiscal dynamics is a ripe subject. Another wildcard is the outlook for US rates. The core consumer price index dropped to its lowest level in more than three years in May.

Despite May’s lower CPI, the US Federal Reserve’s guidance seems” roughly unchanged,” says economist Dominique Dwor- Frecaut at advisory Macro Hive”. Cuts continue to be the best case scenario until the Fed has increased its confidence in the disinflationary outlook.

Will Denyer, economist at Gavekal Dragonomics, adds that” even though they had this softer inflation data in hand, Fed policymakers still pared back their rate cut expectations for the year.”

The global implications are uncertain. The belief that the Fed is” committed to its 2 % inflation target” in the foreign exchange market implies that any increase in US inflation has a tendency to cause the dollar to rise while slower inflation causes the US currency to contract, according to Denyer.

As a result, May’s softer CPI release saw the dollar ease against most currencies. However, it’s still unclear whether this focus will continue to be the main force behind the world’s exchange markets in the coming days and weeks.

Denyer contends that worries about the outcome of the French parliamentary election could devalue the euro. A potential drop in the Bank of Japan’s asset purchases could increase the yen. The main story is, however, May’s moderate US inflation and what it implies for US policy and global markets.

Not the whole story, though, as election- year shenanigans heat up in the US. Global markets will continue to be tense as Biden and Trump battle it out in the polls. &nbsp,

According to Kelvin Wong, an analyst at OANDA, the 10-year yield spread premium between US Treasury notes and Japanese government bonds has reduced Japanese insurance companies ‘ ability to invest in fixed-income securities, which may result in higher odds that the long-term JGB yields will likely trend higher.

According to Wang,” These potential upcoming fixed income portfolio adjustments from Japanese insurance companies may provide some support to halt the major yen’s weakness against the US dollar.”

However, as Gross points out, European debt will soon be popular with global investors as Yellen’s team struggles to maintain demand for a US Treasury debt market that appears to be in decline.

” Relative to the US, we see support for European bonds due to smaller fiscal deficits,” says Ann- Katrin Petersen, investment strategist at the BlackRock Investment Institute.

Follow William Pesek on X at @WilliamPesek

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SC releases inaugural guide on VC and PE in Malaysia

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  • In- detail knowledge to understand policy scenery governing VC/ PE operations
  • Foster a more active secret industry sector in accordance with Capital Market Masterplan 3

SC releases inaugural guide on VC and PE in Malaysia

The first edition of the” Practical Guide on Venture Capital and Private Equity in Malaysia” ( Guide ) was released by the Securities Commission Malaysia (SC ) today and is now available for download.

This guide will help prospective venture capital (VC ) and private equity ( PE ) fund managers, service providers, and investors navigate Malaysia’s restrictive VC and PE operations ‘ policy landscape.

SC releases inaugural guide on VC and PE in MalaysiaThe Practical Guide on VC and PE in Malaysia, according to Dr. Awang Adek Hussin, the president of the SC, is “our commitment to creating a conducive environment for funding and innovation. We want to create a more vibrant group of professional traders to assist entrepreneurs in Malaysia by providing quality on the business landscape for VC and PE firms.

The Indonesian capital market’s alternative financing ecosystem includes both VC and PE. In order to foster promising startups and higher growth enterprises, VC and PE firms are crucial in fostering opportunities for local talent, innovation, and contribute to the expansion of the Indonesian economy.

The Guide’s main topics include information on local money market rules affecting the VC and PE industries, foreign trade policy, tax issues, fund organizing considerations, and other areas crucial to fund operations.

The SC’s efforts to promote a more powerful private business sector are reflected in the publication of the Guide in accordance with the Capital Market Masterplan 3. It will strengthen the capacity of professional fund managers and foster a more active investor base that can support investments into startups and micro, small, and medium-sized ( MSMEs ) with high growth.

This initiative is in line with the SC’s wider efforts to expand market-based financing options for MSMEs and mid-tier companies ( MTCs ).

The Guide also supports the regional KL20 plan, which seeks to establish Malaysia as a leading company ecosystem on a global scale.

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