‘Trump trade’ wins, Asia loses as risk factors surge – Asia Times

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It’s obvious Donald Trump’s big gain is a game-changer of epic sizes, from the harsh effect in Asian economies to the frantic press speculation about what lies ahead.

The declines in Chinese securities and the yuan only demonstrate how investors are quickly rearranging their strategies for addressing global financial risks and opportunities. The money surged on the news Trump scored a&nbsp, next term. US companies jumped, as did crypto prices. Provides on US Treasury securities shot higher, also.

The” Trump trade” that Asia has in mind is to take cover. A Trump 2.0 White House may certainly be more inward-looking, putting Asia’s export-oriented economy in harm’s way.

A large fire radius is present. Though aimed at China, Trump’s designed 60 % tariffs will destroy Japan, South Korea, Thailand, Vietnam and another trade-driven markets. The aftermath on shipping flows could be unimaginable.

According to Dubravko Lakos-Bujas, a planner at JPMorgan,” a significant increase in tariffs would reflect the most significant departure in policy from the latest administration and possibly the largest source of volatility.” The current macro environment is significantly different from what it was eight years ago, when the business cycle was in its mid-cycle, when the Fed did n’t care about inflation, and when pro-growth 1.0 policies were simpler to implement and had a greater impact on the bottom line.

Trump’s win over Kamala Harris is more of a “black swans” occasion for Asia than a “gray one.” Unlike the past, the latter is a repetitive but doubtful results. A “gray swan”, though, does have its own&nbsp, serious consequences, too.

Unexpected effects might be a way to strengthen Xi Jinping’s influence in China. Trump may effectively strengthen it by attacking Beijing with such an aggressiveness that he essentially strengthens by compulsion to integrate with an Eastern economy with China at its core and not an America led by an uneven, mercantilist president who blames Asia for many of his country’s failings.

For Asia, the best-case situation is that Trump’s tax risks are more a negotiating strategy than a real accompli. In fact, Goldman Sachs economists predict that Trump may only establish 20 % tariffs on China and resist the urge to impose blanket charges on other countries.

Trump may turn the other means and impose taxes he has previously threatened to impose. Trump has already stated that there will be 100 % taxes on Mexican car exports.

How much is manufacturers in Japan and Korea hope to avoid such restrictions, especially given that Tesla’s CEO has Trump’s ear? At the very least, electronic vehicle charges will be stacked confidently against non-US manufacturers.

The&nbsp, financial challenges &nbsp, may be even greater. One is that a penny march that has already irritated Asia will take a turn. For years, the economy’s “wasteball” impulses have shook international markets. It has lured enormous waves of global capital west, disadvantaging emerging-market markets in specific.

The difficulty, explains Tom Dunleavy, a companion at MV Capital, is that emerging markets “rely strongly on assets and have debts in money”. The majority of business and debt is also based in dollars, along with fuel. And he says that” the ratio of everything is going up.”

Regardless of the dubious reasoning behind it, the more packed a continued-dollar-strength business becomes as the result of the global fallout when depressed punters flee for their exits. And Trump was serve up some such situations.

Though Trump’s tariffs get the headlines, Asia is extremely worried about what his next president may mean for the Federal Reserve, the keeper of the world’s top supply money.

Trump put the techniques on the Fed during his 2017-2021 stay in the White House. Jerome Powell sabotaged his hand-picked Fed chair, and he went after him frequently. In 2019, Powell bowed to unrelenting force from&nbsp, Trump, who also threatened to fire him.

That’s how the world’s most powerful economic authority added liquidity to a flourishing business that did n’t need new substances. Trump’s Fed meddling set the stage for the post-Covid-19 price surge to come. It also tarnished the Fed’s credibility in global markets.

For Asia, Trump’s Fed policies are especially worrisome. The region’s central banks are armed with the largest stocks of US Treasury securities. Japan alone holds$ 1.1 trillion of US debt, China$ 770 billion.

Together, Asia’s largest holders of dollars own about$ 3 trillion worth. Trump 2.0 would put at risk vast amounts of Asian state wealth if his fiscal policies push Washington’s debt far above today’s US$ 35 trillion.

Not to mention the ways China might retaliate, leading to cycle of tit-for-tat trade curbs. Or might Beijing make a move to dump sizable amounts of Treasuries to punish the Trump 2.0 gang?

Or what if Trump’s designs on altering the Fed’s mandate come to pass? A key plank of the” Project 2025″ strategy that the Heritage Foundation devised for a&nbsp, second Trump term&nbsp, is watering down Fed independence.

In a recent interview with Bloomberg, Trump took shots at Powell and his fellow policymakers. ” I think it’s the greatest job in government”, Trump said. Everybody talks about you like a god when you say,” Let’s say flip a coin,” and you show up to the office once a month.

Trump also contends that the White House has every right to compel the Fed to do its bidding.

Trump once remarked in August that the Federal Reserve had “kind of got it wrong” ( very interesting ). He went on to say that” I feel the president should have at least ]some ] say in there, yeah. I feel that strongly. I think that, in my case, I made a lot of money. I was very successful. And I believe I have a better instinct than those who, in many cases, would be chairman of the Federal Reserve.

This could put the Fed’s economic role closer to that of the People’s Bank of China.

To be sure, the concept of central bank independence has been muddied. Take the&nbsp, Bank of Japan, which has held interest rates at or near zero for 25 years. What truly self-governing central bank would do that?

Yet the Fed is a different story. The dollar serves as the foundation of global finance and trade. Trump frequently discussed using a weaker dollar to gain a competitive advantage during his first term. Any policy change that undermines confidence in the US government and the dollar makes the world system shakier.

A weaker dollar could fan inflation. That, on top of Trump’s tariffs, could put the Fed in a very tough spot as Trump looks over Powell’s shoulder. Economists are frantically debating how all of this might turn out.

” On the US dollar, Trump wants to revitalize US manufacturing and exports”, says Will Denyer, an analyst at Gavekal Research. He may try to manipulate the dollar lower because he recognizes that the strength of the US dollar is an obstacle to these goals.

However, Denyer says, “he has few good options. Given how dependent the US government and companies are on foreign capital today, it is difficult to use capital controls to deter foreign inflows. And if Fed chair Jay Powell persists until the end of his term in May 2026, leaning on the Federal Reserve to lower interest rates wo n’t be simple in the near future.

Trump might try to use the threat of tariffs as a negotiating tactic in an effort to revalue their currencies, Denyer adds. However, it is doubtful whether multilateral or even broader economic policy changes will significantly weaken the US dollar in the absence of broader economic policy shifts.

This, Denyer concludes,” will leave Trump to hope that continued disinflation allows the Fed to cut rates, weakening the US dollar. However, there is a sizable probability that loose fiscal policy and sticky inflation will keep&nbsp, monetary policy&nbsp, relatively tight, supporting the US dollar and confounding Trump’s aim of weakening the currency”.

Another irrational possibility: whether Trump will continue to flirt with defaulting on US debt. He declared to CNBC in 2016 that he would “know that you could make a deal” if the economy crashed. And if the economy was good, it was good. So, therefore, you ca n’t lose”.

Trump considered canceling Beijing’s debt while serving as president for the first time in light of trade tensions. With the US national debt twice the size of Chinese gross domestic product, it’s easy to see how that would make the 2008″ Lehman shock” seem quaint by comparison.

Asian assets are also weighed by the threat of geopolitical conflict. One example is what a Trump 2.0 foreign policy team might have for Taiwan.

Trump’s return is music to Vladimir Putin’s ears, giving the Russian leader greater scope to commandeer&nbsp, Ukraine&nbsp, once and for all. Compared with US President Joe Biden’s administration, Trump also seems less likely to come to Taipei’s defense if China moved against the island of&nbsp, 23 million people.

Asia investors will also keep their bets guessing about the direction US policies in the Middle East will take. Trump, for instance, might give Israeli Prime Minister Benjamin Netanyahu more freedom to fight the conflict in Gaza. He’s also likely to tighten sanctions on Iran, adding fresh uncertainty to oil supply dynamics and, by extension, energy prices.

” Conceptually, the impact of a potential second Trump term on oil prices is ambiguous”, says commodity researcher Yulia Zhestkova Grigsby at Goldman Sachs.

As Trump 2.0 assumes power, other issues will concern Asian governments. Japan and Korea are concerned that Trump’s “grand bargain” trade agreement with Xi leaves other top Asian nations staring in from the distance.

All that’s clear, though, is that there will be fewer guardrails or inhibitions as Trump seeks to “make America great again” at Asia’s expense.

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Indonesia-Russia naval exercises more surface than substance – Asia Times

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On Monday ( November 4), Indonesia held its first-ever diplomatic naval exercise with Russia. Three Russian ships and a support vessel were present, and the drills were scheduled to last from November 4 to November 8.

The activities, known as Orruda 2024, have been interpreted in some quarters as Indonesia’s new leader, Prabowo Subianto, tilting the Southeast Asian nation aside geopolitically from the US and its supporters and toward Russia and apparently China.

However, there is a general discussion in Jakarta regarding the exercise, with some claiming that it is simply a response to Russia’s growing security ties to the US and its supporters.

To be sure, there is no denying that President Prabowo, who assumed department on October 20, is strong on cultivating warm relations with Russia, a long-time company of Indonesian hands.

In July, when Prabowo was president-elect but also serving as defence minister, he traveled to Moscow and met with President Vladimir Putin. Prabowo praised Russia as a “great buddy” of Indonesia during the journey and expressed political optimism that ties between the two countries would continue to improve.

On October 25, Indonesian Foreign Minister Sugiono announced Indonesia’s desire to join BRICS while attending the expanding bloc’s summit in Kazan, Russia – a clear break from the past Joko Widodo administration’s non-committal position.

There was no denying that Sugiono received the best education because she is a close friend of Prabowo. So, Prabowo’s first big foreign policy walk as national head was Russia-friendly.

Importantly, Indonesia and China have begun debate about the possibility of conducting diplomatic joint military exercises, which could be groundbreaking since they have not been held for nearly a decade.

Indonesia suspended them in 2015 as a result of the two countries ‘ ongoing conflict over the North Natuna Sea, which are Indonesian territorial waters that fall under China’s nine-dash range state to almost all of the South China Sea. These preliminary actions may irritate Americans and allies, but in their wider context they are less serious.

For one, despite the standard branding, this year’s drills are not the first day Indonesia has held a naval exercise with Russia. The international Komodo Exercise, held four times since 2014 and most just in 2023, included Russia from the outset alongside the US, Japan and China, among others. Holding a smaller bilateral training with Russia may be a significant growth, but it’s rarely a step modify.

However, while serving protection minister, Prabowo oversaw the continuous expansion of Indonesia’s protection ties with the US and its allies. In August, Indonesia signed a new security pact with Australia, hailed by the latter as the most important safety contract in the two neighbors ‘ story, with Prabowo shepherding the agreement on Indonesia’s side.

Super Garuda Shield, an annual martial training involving Indonesia and the US plus aligned capabilities, grew in size and difficulty under Prabowo’s view. This time, the practice ran for a fortnight from August 26 to September 26 and involved some 5, 500 forces from Indonesia, the US, Japan, Singapore, the UK, Australia, Canada, France, Brazil, Brunei, India, South Korea, New Zealand and Thailand.

By contrast, the Orruda 2024 naval exercise being conducted with Russia right now is obviously smaller in size, lasting only four times and involving only a few hundred soldiers overall.

As one expert, who preferred to remain unnamed, frankly put it:” It’s kind of a pitiful practice if you compare it with Garuda Shield. This is similar to the shift you give a man after consuming a delicious meal at Garuda Shield.

Fauzan Malufti, a security analyst and part of JATOSINT, which provides open-source knowledge on Indonesia’s defense, was less contemptuous.

” Given the number of warships and the exercise materials, I do n’t think it’s merely symbolic”, he said. But, Malufti agreed that if compared to activities with American forces, Orruda was evidently much smaller and less complicated.

Zooming out, Prabowo’s willingness to amuse hot ties with Russia and possibly boost military assistance can be viewed as part of Indonesia’s classic choice for non-bloc positioning.

In terms of security, reaching out to Russia and China might serve as a signal that Indonesia’s close ties to the US do not indicate that it has abandoned its space for political maneuvering.

According to Fitriani Bintang Timur, a senior researcher at the Australian Strategic Policy Institute,” I privately think Prabowo would like to emulate India’s Prime Minister Narendra Modi, who positioned India as a member of the Quad while also meeting with Putin.”

She cited Prabowo’s unanticipated request for a peace deal with Ukraine at the Shangri-La summit in Singapore in 2023 as evidence of his desire to establish Indonesia as a dominant middle-class on the global stage.

However, Prabowo’s well-known preference for foreign plan, his desire to cut an important figure on the global stage, and his unpredictability may be what are driving a foreign policy that is attention-grabbing but does not actually signify a course change.

The Center for Strategic and International Studies think tank’s deputy executive producer, Shafiah Muhibat, acknowledged that some members of Indonesia’s foreign policy community were surprised by moves like joining the BRICS but unsure of their true significance.

Jokowi is known for his ability to attract attention, but he also enjoys being on the international stage, she said. Whether these may add up to a clear and specific proper perspective, though, is still uncertain, Shafiah said, suggesting the situation may be clearer over the next year.

For the time being, this year’s marine practice seems more important for Russia than Indonesia, according to Radityo Dharmaputra, a teacher and specialist in Indonesia-Russia connections at Airlangga University.

Russia can demonstrate that, despite American attempts to isolate it diplomatically, it still has strong diplomatic relations with an important middle power, he said.

The exercises have the potential to grow even further. Russia, I believe, also understands that Prabowo wants a global stage to showcase his abilities. If Russia gives that, and the West overly criticizes Prabowo, he will lean to Russia more”, Dharmaputra predicted.

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Who’s afraid of the big bad bond market? – Asia Times

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When interest levels were being cut in the US, a funny thing happened: they ended up being higher.

The US Federal Reserve lowered its benchmark interest rate by half a percentage point in September, &nbsp, raising expectations&nbsp, that another levels may soon start coming along. Otherwise, the US Treasury’s two-year and 10-year information and the common 30-year lease rate have all risen by half a percentage point or more.

What happened? The Fed has limited authority over interest rates, which is the quick reply. The bond market, when well, has a lot to say about rates—the longer-term charges in particular, although no entirely.

The relationship economy’s” say” is a simple representation of supply and demand. The key is to comprehend that bond yields and prices move in the opposite direction: one moves off and the other moves down.

The 30-year mortgage interest rate is one of several other bond market-based rates that was coming down before the Federal Reserve slashed its benchmark rate on Sept. 18 but went up after it. (Federal Reserve Bank of St. Louis chart)
The 30-year loan attention rate is one of several different bond market-based levels that were decreasing before the Federal Reserve cut its benchmark rate on September 18 but increased after it. Graph: Federal Reserve Bank of St. Louis

For example: If I buy for US$ 100 a bond that yields 5 %, I will receive$ 5 a year in interest. Let’s say I’m selling the bond to you and you only pay$ 90 because the demand is subdued and the supply is strong. You currently receive$ 5 in interest per year, but because you paid$ 90, your yield is 5.55 %. ( If, instead, you had to pay$ 105 for the bond, your yield would be 4.76 %. )

What’s happening, therefore, is that while the Fed is now trying to push prices down, ties are selling off and that’s driving costs higher. The question is: Why is the connection business negative?

There are at least two possible solutions.

Some experts blame what they’re calling the” Trump trade”. Although the surveys are a tossup, the industry think Trump is going to win the presidency. They also believe that a second Trump term will aggravate the trend toward higher inflation and worsen the already bad national debt.

Understand that the markets do n’t have a political agenda. Bond investors may be mistaken about the effects of a Trump success, as well as the success itself, but their predictions do n’t represent anti-Trump discrimination.

Their purchasing and selling of securities is based on what they think will happen in terms of prices. Lenders apprehension about being reimbursed in undervalued currency. Both candidates have pledged to provide tax breaks and freebies that will help with inflation, but academics believe Trump has already made those promises.

The business serves as the other justification for the ties selling off. The Fed’s September 18 price cut reflected an market that was scarcely creating 100, 000 new tasks a month. Some economists were predicting another half-point split at the Fed’s November meet.

But in early October the Bureau of Labor Statistics reported a 254, 000 increase in work in September, well above the 12-month regular, and Census revised some of the earlier times forward. Meanwhile, the inflation rate in September continued its downward march toward the Fed’s 2 % target but did n’t drop as much as analysts expected.

With those studies, a half-point November split by the Fed looked less good. One Fed official also expressed his willingness to avoid a split in November.

The November 1 report that only 12, 000 additional jobs were reported for October seems likely to be dismissed as being distorted by significant storms and the Boeing attack.

Financial businesses are forward-looking, they anticipate activities. In anticipation of the Fed’s September cut, owners had bought securities, which drove bond yields over. In light of the studies showing a stronger market and worse-than-expected prices in September, owners ‘ anticipation changed. If the Fed was n’t going to lower rates as much or as fast as expected, markets had to adjust.

It’s possible, of course, that the true answer is some mix of the Trump deal and expectations of future Fed price movements. The expectations solution is more normal. You’d have to wonder why then if shareholders were selling bonds out of concern for higher imbalances and prices. Bond traders have ignored decades of multi-trillion-dollar national budget deficits.

If those shortfalls are then causing bond traders to feel uneasy, it would represent a return of those who were known as the “bond vigilantes.” Bond investors ‘ concerns about federal spending three decades ago led to 10-year note yields falling from 5.2 % annually to 8 %.

Years later, the administration also managed to generate a budget surplus by working with Congress on plans to control spending. That it had to be pushed by the markets to do so caused a Clinton consultant, James Carville, to say – reportedly – that, if he could be reincarnated as anyone, it would be the relationship industry so he could scare everyone.

For farmers, ranchers and another business loans, the big question is where interest rates are going from below. The most probable course for them to take is, in my opinion, to fall, perhaps more quietly than analysts had predicted in September.

The US economy is robust, according to The Economist, and inflation is essentially under command. The present level of interest rates is much higher than current economic situations warrant, and if the economy continues to grow at this rate, which is very unlikely and if a rebound in inflation is possible but not specially unlikely.

If I’m correct about the economy, the Fed will continue to cut interest rates, perhaps just quarter-point cuts, and perhaps not at every meeting, but it will be closer to 3 % than 5 % over the long run.

The industry will eventually fall in line as the Fed moves in that direction, particularly if whoever wins the presidency is prevented from carrying out their most inflationary campaign promises by Congress, the relationship market, or a return to common sense.

Urban Lehner, a former Wall Street Journal Asia journalist and editor, is DTN/The Progressive Farmer’s editor emeritus. &nbsp, This&nbsp, content, &nbsp, actually published by DTN on November 1, and now&nbsp, republished by Asia Times with authority, is © Copyright 2024 DTN, LLC. All rights reserved. &nbsp, &nbsp, Follow&nbsp, Urban Lehner&nbsp, on X @urbanize

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How will the war in Lebanon end? – Asia Times

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How else will the war end, begging the question,” How long will it last if Hezbollah and Israel do n’t reach a ceasefire?”

Earlier in the week, the Israeli army had declared its mission accomplished and removed protective barriers it had set up against Hezbollah’s Anti-Tank Guided Missiles ( ATGM ) in Israel’s northernmost towns, near the Lebanese border.

The techniques signaled Israel’s assurance that its strategy to mitigate the Iran-backed army’s threat was going as planned. But Hezbollah’s high-trajectory fireplace continued. Israel, in consequence, has been fighting two wars against the Iran-backed Syrian army.

The first war, now seemingly over, was particular to Israeli communities that live within of 5, 500 meters ( 3.4 miles ) from the border, the range of Hezbollah’s hand-held ATGMs. Another threat was posed by the frontier itself.

Israelis lost trust in safety railings like the one that kept them from Lebanon after Hamas massacred 1,200 Israelis on October 7, 2023.

Hezbollah’s ATGMs and the uncertain border gate forced the movement of over 60, 000 Jewish settlers. Israel wanted to regenerate its north, but it did it the fastest because of the relatively small size of its military, which made it wait until it had defeated Hamas ‘ danger in the north.

Israel launched a ground operation on October 1 to clear Palestinian territory both underground and above ground from Hezbollah. Since then, the Jewish state has pushed up three meters inside Lebanon, neutralizing Hezbollah’s ATGM danger, and has lost close to 70 soldiers.

The Hebrew state will assuredly hold Palestinian territory until further notice in order to prevent this threat and given the absence of a trustworthy Lebanese government that you manage its side of the border.

If Beirut complains against activity, Jerusalem may provide the Syrian a business: Disband Hezbollah and input into a security arrangement, then consider your land again. Until finally, Israel will have to keep this country as a buffer zone — a no-man’s property.

Israel is fighting another battle with Hezbollah, one in which the Iran-backed military uses high-trajectory fire to beat somewhere in Israel. In reply, Israel has been hitting weapon hoard stores and eliminating Hezbollah’s chain of command.

Additionally, Iran’s proxy militias are prohibited from receiving supplies shipping via land and air to the Beirut airport under an arms sanctions.

To claim Israel success, Hezbollah and Hamas have frequently set two indicators: Israel’s ability to eliminate the militias ‘ leaders, and its failure to stop high-trajectory fireplace on Israel. A political arrangement on the terms of the militia was added by Hezbollah, which promised Israel that it would not be able to reunite its citizens with their north cities.

Hamas furthermore added a second measurement: Without concessions on hard-earned surveillance efforts, Israel may not be able to release the roughly 100 victims that the Palestinians kidnapped on October 7th. But since October 7, 2023, Israel has managed to essentially crush the “victory” indicators of both Hezbollah and Hamas. Both armies ‘ command has been destroyed by it.

In Gaza, Israel has even managed to reduce the high-trajectory fire hazard. Estimates suggest that, since October 7, Hamas has fired over 20, 000 missiles on Israel. By August 2024, but, Hamas had depleted its reserves. Its launch ceased to be frequent.

Hezbollah’s weapon stockpile was little bigger, estimated at 150, 000 before the war. By October 2024, Hezbollah’s property had apparently fallen to 27, 000. If Hezbollah maintains its normal regular launch of 100 projectiles, its missiles will last until early July, after which the army’s great missile fire withers away.

Hezbollah’s very existence may become useless if it is unable to launch missiles or shoot across the border at Israel.

Israel will either continue to monitor and restrict the supply of weapons to Hezbollah and Hamas while maintaining a buffer zone between Lebanon and Gaza, or it will need to establish concerned governments that remove the weapons from the hands of their armies.

Syrian and Palestinian citizens can rely heavily on international and Arab capitals to support and guide them from surviving on militias to demanding trustworthy governments. However, the Syrian and Palestinians must initially demand and demand for a result. After all, one can only lead a horse to the valley, but can never make it drink.

Hezbollah and Hamas seem to be unaware that the status quo has changed as a result of Israel’s defense victories and the deaths of their communities. The militants appear to believe they can turn the clock back to October 6, 2023, a classic example of “resistance” hopeful thinking that has hampered serenity and sparked war throughout the past decade.

Hussain Abdul-Hussain works for the Foundation for the Defense of Democracies ( FDD ) as a researcher.

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CelcomDigi considering viable options after losing out on Malaysia’s second 5G network

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  • Decision has no effect on its 5G customers, may remain delivering companies
  • Contends it would have been the best move to quickly and affordably give system

Idham Nawawi, CelcomDigi’s CEO, made the case that the telco was best equipped among the parties that bid for the second 5G network to quickly and at a more cost-efficient rate, roll out its 5G network for the benefit of the rakyat.

The Indonesian government announced on November 1 that it had selected U Mobile Sdn Bhd as the operator of Malaysia’s next 5G network, CelcomDigi, the largest telco in the nation with 20.2 million subscribers, and reiterated in a statement today that it had reaffirmed its position that it had submitted a powerful technical and commercial proposal to build the next 5G network based on its economic standing and track record of investing in and developing large-scale wireless networks and providing high-quality services to the

This includes the ability to begin a global implementation almost immediately following the award of the spectrum, and to create a 5G network that will suit our 4G and 4G network’s people in the shortest possible amount of time,” it said.

In a recent interview with business publication The Edge, before Friday’s selection by the government, Idham Nawawi, CelcomDigi’s CEO, made the case that the company was greatest equipped among the parties that charge for the next 5G network to quickly and at a more cost-efficient level, roll out its 5G network for the benefit of the rakyat.

Idham noted that the merged company had quickly made progress in reducing its combined network from 21, 000 to 18, 000 towers that could be converted to 5G-ready in two years with additional and software upgrades following the merger of Celcom and Digi in 2021. &nbsp,

Looking ahead, the telco reiterated that the top priority is still to ensure that its customers have access to a reliable and affordable 5G network. We will talk with various stakeholders to discuss the various options that might be available to us, in order to benefit both our customers and shareholders.

CelcomDigi will continue to concentrate on merger integration to achieve its savings and synergy goals while achieving network integration in the process. At 68 % complete, it said 65 % of customers have benefited from improved experience on the new intelligent network.

In order to support Malaysia’s transition into a 5G-AI-powered digital society, CelcomDigi vowed to continue providing the best choice and value in connectivity services and the best customer experience to Malaysian consumers and businesses.

Attention has turned to a world-class Single Wholesale Network ( SWN ) approach that would have allowed all telcos to compete on purely service delivery and marketing, instead of opting for a Dual Wholesale Network approach and allowing industry lobbying in addition to its SWN decision.

U Mobile will work with other telcos to create the second network in the capacity of owner and operator of the second 5G network. Those that partner with U Mobile and happen to be Digital Nasional Bhd ( DNB) shareholders, as U Mobile is, will have to exit ( DNB) selling their stakes back to it. U Mobile has named Telekom Malaysia Bhd and CelcomDigi ( a shareholder in DNB) as the companies it will be approaching as partners.

Maxis Bhd ( a shareholder in DNB), which was rumored to be interested in acquiring U Mobile if it were successful to win the bid for the second 5G network, was not mentioned.

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China’s Skydio curbs sound the alarm for US battery supply chain  – Asia Times

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Skydio, the largest drone manufacturer In the United States, has failed to obtain the batteries made by Japanese TDK’s unit in mainland China after it was sanctioned by the Chinese government three weeks ago. 

The California-based company last week sought help from the Biden administration as its Chief Executive Adam Bry met with US Deputy Secretary of State Kurt Campbell and senior officials at the White House, the Financial Times reported.

The Chinese government last month announced its sanctions against Skydio, Huntington Ingalls Industries and Edge Autonomy Operations LLC, as well as 10 senior executives of American defense contractors, and accused them of providing substantial military assistance to Taiwan. Observers couldn’t help noticing that the date of the announcement, October 10, marked the 113th anniversary of the Republic of China.

After the announcement, Chinese officials visited Skydio’s suppliers, including Dongguan Poweramp, a subsidiary of Japan’s TDK, and ordered them to cut ties with the American drone maker, a person familiar with the situation told the Financial Times on Thursday. 

“This is a clarifying moment for the drone industry,” Bry told Skydio’s customers in a note obtained by the Financial Times. “If there was ever any doubt, this action makes clear that the Chinese government will use supply chains as a weapon to advance their interests over ours.”

He said Beijing wants to eliminate the leading American drone company and deepen the world’s dependence on Chinese drone suppliers.

Bry told US media that Skydio has a substantial stock of batteries on hand but it does not expect new sources of battery supply until next spring, He said the company has invested in domestic production and sourcing outside of China but batteries are one of the few components it has not yet moved out of China. 

Skydio, which has sent more than 1,000 drones to Ukraine for intelligence gathering and reconnaissance purposes, is seeking alternative suppliers in Asia. It has been in touch with Taiwan’s Vice President Hsiao Bi-him about the issue. 

China’s moves to curb Skydio’s battery supply coincided with North Korea’s plan to deploy troops to support the Russian army in Ukraine. US State Secretary Antony Blinken said Thursday that about 8,000 North Korean soldiers are stationed on the Russian border and are preparing to join combat in Ukraine “in the coming days.” 

Chinese pundits’ reaction

Although Beijing’s curbs have not yet been able to disrupt Skydio’s drone production, many Chinese commentators are now celebrating.

“China’s sanctions against certain US companies and individuals have initially shown their effects,” A Henan-based columnist using the pseudonym “Spirit No.1” says in an article published on Friday. “The curbs are having a real impact on American firms, as Skydio now has a limited battery supply and needs to seek alternative suppliers.”

The commentator adds, “It is difficult for the US government to help companies overcome the challenge in the short term given the complexity and time required to reconstruct the supply chain.” 

He says, with its complete supply chain in the drone sector, China is able to limit the production and supply of the US military drone makers that rely on the Chinese manufacturing sector. 

He says that the incident is only reflecting the intensifying technology war between China and the US. He says the US should think twice whether it wants any escalations as it will hurt itself one day.

According to an article by a Hainan-based writer using the pseudonym “No.14 Observation Room,” “China has previously launched several rounds of countermeasures against US firms but people do not know whether these measures really work. Now people are satisfied after seeing Skydio’s failure in getting Poweramp’s batteries.”

He adds that “the US has made up excuses when sanctioning Chinese firms and individuals, and it thinks China can’t do anything to its arms sales to Taiwan. Now China’s counterattack is completely beyond the United States’ expectation. Skydio does not have an alternative supplier.”

That writer says the current Chinese sanctions, which target US defense contractors and drone makers, have displayed only a small part of Beijing’s retaliation capabilities. He says the US defense contractors’ suppliers in China can be targeted.

John Moolenaar, chairman of the House Select Committee on the Strategic Competition Between the US and Chinese Communist Party, said the administration and Congress need to work together with industry to set guardrails that protect US companies from CCP economic coercion. 

He said China’s control of supply chains for drones, pharmaceuticals and other sectors was a “loaded gun” aimed at the US economy. He said Beijing is weaponizing these supply chain dependencies against US people. 

China Plus One strategy 

While Skydio is working on sourcing batteries elsewhere, TDK is also implementing its China Plus One strategy by adding new production facilities in India.

TDK Chief Executive Noboru Saito told Nikkei in 2022 that it is diversifying its manufacturing network by expanding in countries such as India. He said at that time that TDK no longer saw China as the world’s manufacturing hub although it would continue to treat the country as its main battery production base. 

TDK and a long-term partner, Contemporary Amperex Technology Co Ltd (CATL), in 2021 set up two joint ventures in Xiamen, Fujian province, for the making of electric vehicle batteries. 

Saito said in a speech on Investor Day on May 22 this year that TDK has started production of back-end processes for battery packs in India in 2017 to implement its China Plus One strategy. He said the company also started cell production in India in 2022 and will commence production in a new factory in Sohna of the same country in 2025.

“We will continue to expand gradually in line with growth in local demand,” he said. “In our materials procurement efforts, we will maximize business value by strengthening our value chain, including pursuing strategic initiatives such as investing in material suppliers.”

Meanwhile, several US academics co-write in an article published by The Conversation on Friday that, among the 23 battery plant projects announced or expanded since the Inflation Reduction Act became law in the US, construction for 72% of expected production is on track. 

They say these 23 companies’ new US factories are expected to create about 30,000 new jobs, with projects mostly in the US Southeast, Midwest and Southwest. 

Read: Latest Taiwan drills show off PLA deterrence

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How China can revive its bruised and dwindling billionaire class – Asia Times

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Is the “smart” money still fleeing China? Whether it’s wise to leave Asia’s biggest economy is debatable. What’s not is that the mainland billionaire emigration trend continues and that their ranks have thinned by more than a third in just the last three years.

The latter dynamic, tracked by research group Hurun, spotlights how the fallout from the last few years of government crackdowns, slowing economic growth, volatile equities and property collapse is catching up with Xi Jinping’s policymakers and complicating their efforts to counter Wall Street worries that China has become “uninvestable.”

To be sure, the “avoid-China” vibe isn’t what it was, say, six months ago. As Nicholas Colas, co-founder of research firm DataTrek, notes, the recent “surprise announcement of aggressive fiscal and monetary policy action is spurring a reappraisal of the view” that Chinese equities are uninvestable.

“China’s leadership has finally acknowledged that the country’s economy needs much more monetary and fiscal stimulus if it is to achieve its growth potential over time,” Colas says.

Billionaire David Tepper has been making his own headlines by declaring it time to buy “everything” in China. And after “running around the world” in recent weeks, Kinger Lau, chief China equity strategist at Goldman Sachs, says that “for some investors who haven’t really looked at China over the past one to two years, certainly, the interest level has picked up a lot”

As Lau tells the South China Morning Post, “I’m not saying everyone is buying. But the level of interest has picked up a lot, very much consistent with the flows and positioning.” He’s among many who now see “upside” for Chinese equities.

Where this leaves China’s remaining billionaires in US dollar terms – Hurun says there are now 753 versus a peak of 1,185 in 2021 – is debatable. What’s clear, though, is that the stakes surrounding next week’s gathering of the standing committee of National People’s Congress are rising.

Rarely has there been a better opportunity for Xi’s inner circle to reassure the billionaire set at home and global funds abroad.

“The announcement of the NPC Standing Committee meeting for November 4-8 reflects Beijing’s strategic approach to the major economic policy U-turn underway,” says economist Diana Choyleva at Enodo Economics.

Choyleva noted that “by scheduling the meeting immediately after the US presidential election on November 5, the Chinese leadership has positioned itself to announce fiscal measures with full knowledge of the electoral outcome, enhancing its ability to manage market expectations and responses effectively.”

Next week’s confab will “allow Chinese policymakers to fine-tune their announcements and potentially adjust the scale or presentation of stimulus measures based on the new geopolitical context,” she says.

Choyleva notes that “a better-coordinated approach to policy announcements could actually enhance market stability. Investors should view the timing as a sign of careful planning rather than delay, particularly given the potential for more comprehensive and strategically calibrated announcements.”

Billionaires and global funds alike are craving a “well-thought-out approach” that “sets the stage for more impactful and sustainable market responses,” Choyleva says. “For investors, this timing and a more coordinated policymaking reduces uncertainty by ensuring that China’s fiscal response will be announced with full knowledge of the US political landscape, potentially leading to more stable and sustained market reactions rather than volatile short-term responses.”

The potential wildcard of a Donald Trump 2.0 presidency would be a game-changer for Asia, starting with a 60% tax on all Chinese goods that would upend Asian growth and supply chains.

Derek Holt, Bank of Nova Scotia’s head of capital markets economics, speaks for many when he warns that “Trump’s plans risk being highly destabilizing to world markets in a much more fractured world.”

Investors everywhere are bracing for a supersized US trade war in the event of a second Trump White House, including Europe. Germany’s recession is already casting a pall over European markets.

“In a worst-case scenario of a full-blown tariff war with retaliation, we estimate potential for a mid to high single-digit drag on European earnings-per-share growth,” says Barclays Plc strategist Emmanuel Cau. A “big chunk” of analysts’ worry more than 10% growth in earnings next year could disappear as trade tensions spike, he notes.

One worry is Trump’s desire to add fiscal stimulus via giant tax cuts into an economy that doesn’t need it. “The US economy doesn’t need pump-priming, it’s in excess demand and will remain there next year,” Holt notes. And while “the US needs to assert control over its borders, Trump’s extreme immigration policies would severely damage the US economy.”

Trump’s desire to weaken the US dollar also would increase inflation risks, complicating hopes the Federal Reserve might cut interest rates. Not that Vice President Kamala Harris has a great track record in global market circles, Holt notes. As a US senator in 2020, Harris was one of only a few lawmakers who voted against a revised US-Mexico-Canada trade agreement.

In Holt’s view, “it’s a matter of picking the one you think will be less damaging. As a professional economist, I have no doubt that this means voting against Donald Trump and the weak self-serving men behind him.”

Yet risks abound as the US national debt tops the US$35 trillion mark. “America’s fiscal position is living on borrowed time and the more damage that’s done now, the higher taxes will go in the future in a potentially more divided and more dangerous world,” Holt explains.

Reassuring China’s billionaires and overseas funds requires bold and transparent action by Xi’s inner circle. 

Earlier this month, Beijing cut borrowing costs, slashed banks’ reserve requirement ratios, reduced mortgage rates and unveiled market-support tools to put a floor under share prices. Beijing is telegraphing bolder fiscal stimulus steps.

Team Xi also raised the loan quota for unfinished housing projects to 4 trillion yuan (US$562 billion), nearly double the previous amount. The bump was less than markets wanted, but pledges of more come has limited big negative market reactions.

The bigger issue, though, is repairing the balance sheets of giant property developers. Success in devising a mechanism to dispose of toxic assets could go a long way toward reassuring investors.

Xi’s inner circle has surely demonstrated it knows what’s needed to turn things around and reassure its capitalist class: a clear strategy to strengthen the finances of good-quality developers; incentivizing mergers and acquisitions; improving capital markets so that consumers stop seeing property as their only investment option; creating social safety nets so that households spend more and save less.

Beijing also must allay concerns that the tech crackdowns that began in late 2020 are over and done with.

Xi has left it to Premier Li Qiang to make the case for a more dynamic, competitive and predictable China. In January, Li said that “choosing investment in the Chinese market is not a risk, but an opportunity.”

He stressed that “investing in China will bring huge returns and a better future” and described CEOs on hand as “participants, witnesses, and beneficiaries of China’s reform and opening up.”

China, Li added, “stands ready to seriously look into and solve the difficulties and problems encountered by foreign enterprises” operating in the country. “We will take active steps to address reasonable concerns of the global business community,” Li said.

The bottom line, says Fred Hu, CEO of Primavera Capital Group, is that if China “really commits to rule of law and market reforms, I do think the confidence will slowly but surely come back, then the animal spirit will be rekindled.”

One reason the clock is ticking in Xi’s reform plans is that the 10-year mark of his “Made in China 2025” scheme is fast approaching.

When he took the reins of power in 2012, Xi promised to let market forces play a “decisive” role in Beijing’s decision-making. In May 2015, Xi unveiled his ambitious plan to morph China into a high-tech Mecca for semiconductors, renewable energy, electric vehicles, biotechnology, aerospace, artificial intelligence, robotics and green infrastructure.

A decade on, progress has been more sporadic than hoped. Team Xi has often proved better at treating the symptoms of China’s economic funk, not the underlying ailment. 

It’s a lesson Japan taught the world: throwing money at an economy traumatized by plunging property values and deflationary pressures won’t work without supply-side moves to repair cracks in the economy.

Late last year, Xi introduced the buzz-phrase “new quality productive forces.” Though somewhat cryptic, Xi’s inner circle has been selling it as the answer to China’s economic future.

China wants to get its consumers to spend more and save less to keep growth near 5% year after year. That means continuing to raise incomes and building more robust social safety nets to encourage spending. It means creating deeper, trusted capital markets so the average Chinese can invest in stocks and bonds — not just real estate.

Beijing’s extreme focus on boosting consumption over the years has proved counterproductive, economists say. It leaves China susceptible to boom-and-bust cycles that require urgent attention at the expense of moving the economy upmarket. China’s heavy reliance on exports leaves the economy vulnerable to Trump-like antics.

There’s no better alternative to accelerating and broadening China’s evolution into a high-tech powerhouse, development experts say. And indications are, this is precisely the pivot Xi and Li are making as 2025 approaches.

At the NPC in March, Xi’s Communist Party said “it’s imperative to boost the endeavors to modernize the industrial system, and accelerate the development of new productive forces.” Billionaires skittish about China’s prospects couldn’t agree more. The days and weeks ahead offer Xi a ready opportunity to do just that.

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On foreign policy, it’s Trump disruption vs Harris engagement – Asia Times

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According to conventional wisdom, US voters are largely motivated by domestic concerns and especially the economy.

But the upcoming presidential election may be somewhat of an outlier. In a September 2024 poll, foreign policy actually ranks quite high in voters’ concerns – with more Democrats and Republicans combined saying it was “very important” to their vote than, say, immigration and abortion.

As such, understanding where Republican presidential nominee Donald Trump and Democratic rival Kamala Harris stand on the significant international issues of the day is important. And we can do so by looking at the records of their respective administrations in the three regions they prioritized: the Indo-Pacific, Europe and the Middle East.

Donald Trump: disrupter-in-chief

In his 2017 inaugural address, Trump painted a dark picture of the US In his telling, his country was being taken advantage of by other nations, especially in trade and security, while neglecting domestic challenges.

To disrupt this, Trump promised an “America First” approach to guide his administration.

And in practice, his foreign policy certainly proved disruptive. He showed a clear willingness to buck traditions and undid some of former President Barack Obama’s signature policies, such as the Iran nuclear deal, which exchanged sanctions relief for restrictions on Tehran’s domestic nuclear program, and the Trans-Pacific Partnership trade agreement.

In so doing, he ruffled the feathers of allies and foes alike.

Trans-Atlantic relations were tense under Trump, especially because of his hostility toward NATO. After deriding the Atlantic alliance on the campaign trail, Trump stuck to the same tune while in office. He routinely insulted allies at high-level summits and allegedly came close to withdrawing from the alliance altogether in 2018.

Donald Trump meets Russian President Vladimir Putin in June 2019. Image: Kremlin Press Office / Handout / Anadolu Agency / Getty Images via The Conversation

While NATO did make inroads in bolstering its Eastern flank in that period, the alliance was primarily defined by internal turmoil and limited cohesion during Trump’s time in office. US relations with the European Union hardly fared better. In 2018, the US imposed steel and aluminum tariffs on the European Union, citing national security concerns.

Trump also broke with previous US presidents in his administration’s Asia policy. One of his first moves in 2017 was to abandon the Trans-Pacific Partnership, a trade deal negotiated by Obama. Trump’s late 2017 national security strategy also announced a major shift toward China, labeling it as a “strategic competitor” – implying a greater emphasis on containing China as opposed to cooperating with it.

This hawkish turn played out especially in the field of trade. Trump’s administration imposed four rounds of tariffs in 2018-19, affecting US$360 billion of Chinese goods. Beijing, of course, responded with tariffs of its own.

The two countries did sign a so-called phase-one deal in January 2020 that sought to lower the stakes of this trade war. But the Covid-19 pandemic nullified any chance of success, and relations soured further with each Trump utterance of the pandemic being a “Chinese virus.”

Trump showcased somewhat contradictory impulses toward the Middle East and other issues. He pushed for disengagement and to undo Obama’s major policies.

Besides withdrawing from the Paris Climate Accords in 2017, Trump abandoned the Iran nuclear deal in 2018. His administration also signed a deal to end the US presence in Afghanistan, and it withdrew forces from northern Syria.

But at the same time, Trump continued the bombing campaign against the Islamic State group in Syria and Iraq and authorized the killing of Iranian General Qasem Soleimani in 2020. The latter was consistent with a policy that aimed to pressure and isolate Iran economically and diplomatically.

The key example of diplomatic pressure came especially through the Abraham Accords, through which Trump helped facilitate the establishment of normal diplomatic ties between Israel, the UAE, Bahrain and Morocco.

Kamala Harris: alliance and engagement

Although not taking a driving role in foreign policy, Harris has been part of an administration that has committed the US to repairing alliances and engaging with the world.

This came across by undoing some major actions from the Trump administration. For example, the US quickly rejoined the Paris Climate Accords and overturned a decision to leave the World Health Organization.

But in other areas, the Biden administration has shown more continuity with Trump than many expected.

For instance, the US under Biden has not fundamentally deviated from strategic competition with China, even though the tactics have differed a little. The administration maintained Trump’s tariff approach, even adding its own targeted rounds against Beijing on electric vehicles.

Moreover, it cultivated different diplomatic platforms in the Indo-Pacific to act as a counterweight to China. This included the cultivation of the Quad dialogue with Australia, India and Japan, and the AUKUS deal with Australia and the UK, both of which attempted to further the Biden administration’s strategy of containing China’s influence by enlisting regional allies.

Finally, the Biden administration did maintain some channels of communication with China at the highest level as well, with Biden meeting Xi Jinping twice during his presidency.

A man and a woman walk along a balcony.
Ukraine President Volodymyr Zelenskyy walks alongside Vice President Kamala Harris at the White House compound on September 26, 2024. Photo: Tom Brenner / Getty Images / The Conversation

The Biden administration’s Middle Eastern policy displayed significant continuity with Trump’s approach – at first.

While it turned out to be chaotic, the US completed the withdrawal of its troops from Afghanistan in summer 2021, as had been agreed under Trump. The Biden administration also embraced the format and goals of the Abraham Accords. It even tried to build on them, with the goal of fostering Israeli-Saudi diplomatic ties.

Of course, the attacks of October 7, 2023, in Israel completely changed the equation in the Middle East. Preventing the spiral of violence in the region has become an all-consuming task. Since then, Biden and Harris have tried, largely unsuccessfully, to balance support for Israel with mediation efforts to liberate the hostages and to ensure a cease-fire.

Trans-Atlantic relations, however, are an area where there were marked differences in the past four years. The tone of the Biden-Harris administration has been in sharp contrast with that of Trump, reaffirming frequently its clear commitment to NATO. And once Russia launched its illegal invasion in February 2022, the US placed itself at the forefront of supporting Ukraine.

Harris has suggested that she would continue Biden’s policy of providing Kyiv with extensive and continuous military support. In conjunction with allies, the White House of Biden and Harris also implemented a broad range of sanctions against Russia. But the US under Biden has not yet been willing to support Ukraine’s immediate entry into NATO.

What next?

Based on their records, what could we expect of a Trump or Harris presidency?

It’s unlikely either candidate will abandon strategic competition with China. But Trump is more likely to seriously escalate the trade war, promising extensive tariffs against Beijing. Trump’s commitment to defending Taiwan is also more ambiguous in comparison with Harris’ pledges.

US policy toward Europe will largely depend on the results of the election. Harris has frequently underlined her steadfast support for NATO, as well as for Ukraine. Trump, on the other hand, is showing signs that he is unwilling to further aid the regime in Kyiv.

And for the Middle East, it remains to be seen whether either Trump or Harris would be able to better shape events in the region.

Garret Martin is senior professorial lecturer, co-director Transatlantic Policy Center, American University School of International Service

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

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Commentary: A possible Trump win muddies an already-chaotic economic debate in China

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WILL BEIJING’S PRIORITIES CHANGE?

Until recently, Xi’s stimulus was entirely a domestic affair.

Ministry-level officials have promised the largest one-time debt swap in recent years to improve municipal finances. The state will also buy unsold housing to stabilise property prices, as well as boost banks’ capital buffer to increase their willingness to lend in a weak economy.

All these are sensible blueprints to lift China out of deflation. 

But a Trump win can change Beijing’s priorities again. His hawkish rhetoric on Chinese imports, as well as the wide latitude that the US president enjoys in setting and imposing tariffs, directly threatens Xi’s ultimate passion of transforming China into a high-end manufacturing powerhouse.

China has certainly reacted to Trump’s moves before. After Huawei was placed on the US trade blacklist in 2019, state resources were poured into industrial upgrades. Huawei alone received over US$1 billion in government grants last year, more than quadruple the amount in 2019, in part a reflection that President Joe Biden has furthered Trump’s tough trade policies. 

Bank lending to industrial firms has also soared in that time; meanwhile, real estate developers are struggling to refinance. In July, the government said it would spend 300 billion yuan (US$42 billion) to expand an existing trade-in and equipment upgrade programme as a way to boost consumption but also to absorb industrial production.

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