Singapore-based fashion brand Aupen partners with LVMH Metiers d’Art, plans to shift production base to France

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Aupen described the circumstances surrounding the relationship in a speech to the media, stating that both businesses “discovered a shared vision and determination to creating value, classic products rather than following brief trends,” adding that LVMH was “particularly impressed by Aupen’s quick grip in the market.”

Aupen even clarified that&nbsp, LVMH did not keep any collateral in it, allowing Aupen to be independent. It hopes to have its earliest works of art published with LVMH Metiers d’Art in January 2025.

For today, just previously- launched designs, such as Nirvana bags, may be sold on Aupen’s site.

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Investments from GIC ‘not the solution’ to shake up Singapore’s stock market: Chee Hong Tat

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SINGAPORE: Directing Singapore sovereign wealth fund GIC to invest in locally-listed firms is “not the solution” to improve the attractiveness of the local equity market, said Transport Minister Chee Hong Tat on Tuesday (Jul 2).

“Doing so will compromise our objectives of setting up GIC, which is not beneficial for Singapore and Singaporeans,” he said, adding that the government would continue to seek more “sustainable” approaches.

Mr Chee, who is also Second Minister for Finance, was responding to a parliamentary question from Member of Parliament Liang Eng Hwa (PAP-Bukit Panjang) on whether the government would consider a suggestion from some industry players for GIC to allocate part of its investments to securities listed on the Singapore Exchange (SGX).

GIC – one of the three investment entities managing Singapore’s reserves – is the government’s fund manager. It does not own the assets it manages and as a rule, it does not invest in Singapore.

The suggestion that GIC should expand its portfolio to include the Singapore market gained traction after a recent report by the Financial Times.

The report on May 5 said the SGX and other government agencies are studying proposals from a venture and private capital association that include allowing pension and sovereign money to be invested in the stock market.

This is not the first time that this has been mooted. The Singapore Business Federation proposed having GIC use Central Provident Fund (CPF) monies to invest in the Singapore stock market as early as 2016. 

Earlier this year, the Society of Remisiers (Singapore) also made a similar recommendation as a way to shake up the struggling local stock market, which has seen subdued trading volumes and delistings frequently outnumbering listings.

Last year, for example, there were 25 delistings and just six initial public offerings (IPOs).

This contrasts with the SGX’s regional peers. In 2023, there were 79 IPOs in the Indonesia Stock Exchange, while bourses in Malaysia and Thailand welcomed 32 and 40 listings, respectively, according to a report by Deloitte.

Several Singapore companies have also opted to list overseas in recent years, such as property tech firm Ohmyhome, which made its debut on the Nasdaq last year. More recently, cancer diagnostics firm Mirxes refiled its draft prospectus in May for an IPO in Hong Kong.

“SHOULD NOT DIRECT OR INTERFERE” WITH GIC’S INVESTMENT DECISIONS: CHEE

In his reply, Mr Chee said GIC’s mandate is to preserve and enhance the international purchasing power of Singapore’s reserves, especially for crisis needs.

This means that GIC’s investment decisions must “aim to achieve good long-term returns for Singapore”.

“GIC must, therefore, continue to make professional investment decisions, and the government should not direct or interfere with GIC’s investment decisions,” said the minister.

He added that under current arrangements, the sovereign wealth fund can “invest in appropriate Singapore companies if these companies have a global footprint and generate good returns for GIC’s portfolio”.

A “more sustainable way” to develop the local equity market is to groom and develop a pipeline of good companies to list on the SGX, Mr Chee said.

One initiative is through establishing funds, such as the Anchor Fund @ 65 introduced in 2022, that support growth enterprises and prepare them for IPOs in Singapore. 

“These funds have invested in nine companies to date and they are working closely with the portfolio companies to prepare them for IPO on the SGX,” said Mr Chee.

The government also has various schemes in place to help more SGX-listed companies expand overseas and become more attractive to global investors.

“The government remains open to new ideas and measures to improve our equity market and support business growth. We will continue to work with industry stakeholders on this goal,” Mr Chee told the House.

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Sustainable transformation: making transition finance stick | FinanceAsia

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The Asia Pacific region is currently facing a significant gap in the race to fund decarbonisation – estimated at $US1.1 trillion by the International Monetary Fund (IMF).

However, this is not the only problem for a region whose coal-fired economies represent around half of global emissions, according to the International Energy Agency.

China alone accounts for 35% of global CO2 emissions, the agency says.

Speakers at the Sustainable Finance Asia Forum 2024 said that regulators will need to rebalance sustainable investment priorities – placing more emphasis on adaptation rather than mitigation – if the region’s most heavily polluting emerging economies are to meet their carbon zero targets.

Debanik Basu, the head of responsible investment and stewardship APAC at APG Asset Management, told a panel on harnessing transition finance for sustainable transformation that investment in mitigation (reducing greenhouse emissions at source) now represented the majority of transition funding.

He said the often more complicated task of climate adaptation – the need to change systems, behaviours and whole economies – was receiving scant attention.

“Currently the region is getting around $300 billion in transition finance so there’s a massive gap that needs to be addressed,” he told the conference. “Even within the small portion of finance that we are getting, more than 80 per cent of the funds are moving towards mitigation.

“Consensus estimates suggest that ideally it should be 50/50 between mitigation and adaptation.”

He said the other critical problem was that aspects of climate finance were not well understood and appreciated by the market overall, in particular within the agriculture and forestry segment.

“When you look at the NDCs (Nationally Determined Contribution) put out by a lot of countries, there are specific targets around climate change, but there aren’t explicit targets around forestry and agriculture,” he said.

“And even when there are targets, there is no clear roadmap. What all this means is that the institutional capacity is lacking. There are gaps in infrastructure and there are gaps in knowledge.

“As an investor, conversations with companies around biodiversity are at a very nascent stage.”

A question of taxonomies

Kristina Anguelova, senior advisor and consultant on green finance strategy APAC at the World Wildlife Fund, told the conference that regulation was moving in the right direction, guided by hubs such as Singapore and Hong Kong.

She added that the unofficial rivalry between Hong Kong and Singapore in terms of developing regulatory taxonomies was having a positive effect on the transition finance landscape in the region.

“I think the competition between Singapore and Hong Kong in this case is a good thing because it’s advancing regulation in the region quite a bit,” she said. “The Singapore Asia Taxonomy lays out transition taxonomy criteria across eight sectors.”

While the regulation is tailored to Singapore, she said she believed it would lay foundations for others to follow.

“It’s so important as a regulatory piece because it can serve as an incentive for investors to start to scale transition finance comfortably and confidently without the loopholes and the risks of potentially being accused of greenwashing,” she said.

In terms of biodiversity, she highlighted the nascent stage of biodiversity finance compared to climate finance, discussing the need for capacity building, regulatory clarity, and financial instruments to support nature-based solutions.

A case in point, she said, is the International Sustainability Standards Board (ISSB) which is developing standards aimed at developing a high-quality, comprehensive global baseline of sustainability disclosures focussed on the needs of investors and the financial markets.

“On biodiversity, I think we’re moving a bit slowly, but we’re getting there. Obviously coming from a science-based NGO, efforts can never be fast enough,” she said. “But the good news is that the ISSB will also be integrating the TNFD or the Task Force for Nature-related Financial Disclosures soon.

“Those jurisdictions that have adopted or committed to the ISSB will also be adopting those nature regulations.”

The challenge as always, she added, was that regulators had to strike a balance between mitigating financial risk and overregulating such that it slowed economic development.

Blended solutions

Building capacity, both speakers argued, would be critical to transition finance solutions to climate change and that new instruments, particularly in blended finance, were likely to be leading the charge.

“We are seeing beyond transition bonds to different types of instruments that are designed to go into blended finance structures such as transition credits which are based on the assumption that we can get carbon savings out of early retirement of coal-fired power plants,” Anguelova said.

One avenue that was currently being explored in a number of jurisdictions was concessionary capital: i.e. loans, grants, or equity investments provided on more favourable terms than those available in the market.

These terms could include lower interest rates, longer repayment periods, grace periods, or partial guarantees.

Of these instruments, Basu said, guarantees were evolving as one of the methods currently being pursued in several markets.

“What we are also seeing is that, apart from concessionary capital, a lot of public institutions are more comfortable with providing guarantees instead of direct capital because that then keeps the overall cost of capital down,” Basu said.

“It might be at a very nascent stage – and it is difficult to say if this is going to be the future – but it is developing,” he said.


¬ Haymarket Media Limited. All rights reserved.

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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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