EJ Insight http://www.ijdpls.com On the pulse Fri, 03 Jan 2020 10:27:36 +0000 en-US hourly 1 HA must address long-standing issues with new mindset http://www.ijdpls.com/20200103-ha-must-address-long-standing-issues-with-new-mindset/ http://www.ijdpls.com/20200103-ha-must-address-long-standing-issues-with-new-mindset/#comments Fri, 03 Jan 2020 10:20:00 +0000 http://www.ijdpls.com/20200103-ha-must-address-long-standing-issues-with-new-mindset/ Recently, I and some representatives of the Association of Hong Kong Nursing Staff met up with Henry Fan Hung-ling, the new chairman of the Hospital Authority (HA).?

Among the topics we discussed was manpower planning for nurses in our public hospitals, precautionary measures for the winter influenza season, and the implications for the health sector from the ongoing social movement.

During the meeting, we urged the HA to adopt effective measures to address the three issues in order to ease the stress on the frontline healthcare staff.

As far as the human resource planning for nurses is concerned, we offered suggestions including setting the nurse-to-patient ratio in our public hospitals at 1:6 according to international standards, hiring more frontline nurses, raising the manpower percentage in hospital wards, re-introducing the “jumping” salary point, and enhancing the promotion opportunities for nursing staff to help retain talent and improve their morale.

The authorities agreed that nursing staff retention can facilitate stability in the healthcare service. In order to achieve that, the HA has established a Task Group on Sustainability to follow up on a series of staff-related measures.

The measures in the pipeline include improving the career prospects of the nursing profession, following up on the proposal of bringing back the “jumping” salary point, reviewing the existing employment model to reduce staff turnover, and providing specialty nurses with an additional incremental salary point as soon as possible.

I hope that under the leadership of its new chairman, the HA can resolve the issues of healthcare staff shortage and insufficient healthcare services that have been plaguing the healthcare sector for years, with new thinking.

Hong Kong experienced waves of social turmoil of unprecedented proportions in 2019. Even so, the people will still be able to stand together when it comes to our priorities?and?protecting our institutions.

As we have entered a new year, I hope citizens will stand united to allow the city to move on.

This article appeared in the Hong Kong Economic Journal on Jan 2

Translation by Alan Lee

[Chinese version 中文版]

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Will Public Order Ordinance be a tool to thwart protest events? http://www.ijdpls.com/20200103-will-public-order-ordinance-be-a-tool-to-thwart-protest-events/ http://www.ijdpls.com/20200103-will-public-order-ordinance-be-a-tool-to-thwart-protest-events/#comments Fri, 03 Jan 2020 09:26:00 +0000 http://www.ijdpls.com/20200103-will-public-order-ordinance-be-a-tool-to-thwart-protest-events/ During a press conference held prior to the New Year’s Day rally, Jimmy Sham Tsz-kit, convener of the Civil Human Rights Front (CHRF), called upon the police to exercise restraint in handling the event.

At the same time, the organizer appealed to marchers to refrain from vandalizing any building or shop during the demonstration, to avoid giving the law enforcement an excuse to intervene.

Unfortunately, Sham’s advance warning and fears turned out to be a self-fulfilling prophecy, as during the march on Wednesday, a HSBC branch in Wan Chai was vandalized by some radical protesters.

And the police, citing public safety, told the CHRF to terminate the march early, at 5:30 pm, and ordered the crowd to disperse within 30 minutes after the cessation of the event.

Sham told a radio program on Thursday morning that the CHRF received the police request to end the march at 5:30 pm, but the group felt it would be impossible to disperse the huge crowd at such short notice.?

After some exchanges, the police finally extended the deadline for dispersing the crowd?to 6:15 pm, Sham said.

Following Wednesday’s developments, a CHRF figure has expressed worry, saying that if such a hard-line approach to handling mass protests becomes a routine practice of the police, the freedom of procession to which the people of Hong Kong are entitled could get eroded gradually.

Over the years, the CHRF has organized countless mass demonstrations, and it wasn’t uncommon for scuffles, or even clashes, to break out between protesters and the police during the marches.

However, under most circumstances, the police would in the past only arrest the individuals that were stirring up troubles, and it was extremely rare for the law enforcement to demand that the organizer halt the entire event immediately.

Another CHRF figure has told us bluntly that even though they had deployed over 200 marshals to maintain order during Wednesday’s march, the police shouldn’t have passed the entire onus of controlling the crowds to the organizer, given the sheer number of the demonstrators.

He is concerned that if the precedent set by the police on Wednesday becomes a routine policy, it would mean that the law enforcement will have a free rein to forcibly halt lawful demonstrations even if there are minor incidents or acts of violence by a handful of marchers.

A person who has helped the CHRF organize marches in the past revealed to us that the police on Wednesday said the organizer had liaised with them beforehand and agreed to conclude the march prematurely if the route was deemed no longer safe.

However, there was not much room for the CHRF to say “no” to the early termination of the event, the person said.

It is because, the person explained, under section 17 (2) of the current Public Order Ordinance, any police officer of the rank of inspector or above may “prevent the holding of, stop, disperse or vary the place or route of any public gathering……if he reasonably believes that the same is likely to cause or lead to a breach of the peace.”

In the Thursday morning radio program, Sham said the CHRF could not disobey the police’s request to end the march, as the group feared that non-compliance could prompt authorities to send in riot police to disperse the “peaceful, rational and non-violent” citizens at the scene.

On Thursday evening, in response to the police’s remarks that the CHRF assisted the police in terminating the march and that it agreed with the order, the event organizer refuted the claims as false.

Whatever the truth, there is one thing we need to bear in mind: despite possessing the handy weapon in its toolbox, the police, over the years, have rarely invoked the provision to terminate demonstrations.

But things appear to be changing now, and the police may be tempted to invoke the Public Order Ordinance to make rally organizers such as the CHRF end the events early,?despite objections from the other side, if the organizers decline to add terms, when seeking permission for marches, for termination of the event when vandalism acts happen.

One of the key reasons why the anti-extradition bill movement was able to keep its momentum over the past seven months was unspoken cooperation between the “peaceful, rational and non-violent” demonstrators and the radical elements, under which the latter would stage their actions only after the end of peaceful marches.

By doing so, the “valiant protesters” will avoid putting the peaceful protesters in harm’s way.

However, judging from the march on the New Year’s Day during which quite a number of radical protesters were vandalizing bank branches even when the citizens’ rally was still underway, it appears as if the delicate unspoken understanding between the two blocs has vanished.

In light of Wednesday’s events, a pan-dem says the “valiant protesters” may need to be told to fine-tune their strategies to help sustain the chemistry with peaceful demonstrators.

This is an updated version of an article that appeared in the Hong Kong Economic Journal on Jan 2

Translation by Alan Lee with additional reporting

[Chinese version 中文版]

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Liquor king Kweichow Moutai says goodbye to era of easy money http://www.ijdpls.com/20200103-liquor-king-kweichow-moutai-says-goodbye-to-era-of-easy-money/ http://www.ijdpls.com/20200103-liquor-king-kweichow-moutai-says-goodbye-to-era-of-easy-money/#comments Fri, 03 Jan 2020 09:08:00 +0000 http://www.ijdpls.com/20200103-liquor-king-kweichow-moutai-says-goodbye-to-era-of-easy-money/ Kweichow Moutai (600519.CN), China’s top liquor brand, saw its share price tumble 4.5 percent on the first trading day of the new year, despite a strong overall market, after the company said its revenue and earnings were expected to be up about 15 percent for 2019.

While 15 percent may not seem bad at all, Moutai investors were disappointed as they have been used to seeing much higher growth rates.

Between 2015 and 2018, Moutai’s revenue soared over 130 percent while its net profit expanded 127 percent.

In the first half of 2019, revenue and net profit continued to grow at a pace of 17 percent and 27 percent respectively. The 15 percent full-year profit gain implies a much lower growth clip in the second half.

As Moutai currently has a market value of 1.4 trillion yuan (US$200.8 billion), investors are paying 40 times earnings for its shares. If its growth prospects dim, such a high valuation could be called into question.

In the past, Moutai has been making a lot of easy money. Riding on strong demand from official receptions and rising consumption power, Moutai, which has a limited annual production volume, has always sold out.

The favorable demand allows the company to keep raising its prices, sometimes a number of times a year, thereby fattening margins.

In addition to the actual demand, plenty of speculators are buying Moutai and reselling their supplies for a quick buck – or holding them as “long-term investment”.

But since last year, things have been changing.

On top of barring officials from throwing lavish banquets, where Moutai is a must-have, the government also started cracking down on Moutai speculating activities.

The most popular Moutai 53, officially priced at 1,499 yuan per bottle, changed hands at over 3,000 yuan each at one point on one e-commerce site.

After the introduction of the real-name registration system, one is allowed to buy a maximum of two bottles with their ID card. Reselling of Moutai at a stiff markup on online platforms like Taobao is also prohibited.

Since then, Moutai’s secondary price has dropped back to around 1,800 yuan per bottle.

Amid China’s slowing economic growth and the clampdown on speculative demand, the liquor maker is forecasting a 10 percent sales growth for 2020.

Meanwhile, Moutai share prices have surged over six times in the past five years and almost doubled last year alone. It’s now the fourth most valuable listed company in China, behind ICBC (01398.HK, 360011.CN), China Construction Bank (00939.HK, 601939.CN) and Ping An Insurance (02318.HK, 601318.CN).

If Moutai’s high growth era is over, investors may have to take a fresh look at the company and determine for themselves whether the high valuation premium is still justified.

This article appeared in the Hong Kong Economic Journal on Jan 3

Translation by Julie Zhu

[Chinese version 中文版]

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Govt on alert after outbreak of mysterious pneumonia cases http://www.ijdpls.com/20200103-govt-on-alert-after-outbreak-of-mysterious-pneumonia-cases/ http://www.ijdpls.com/20200103-govt-on-alert-after-outbreak-of-mysterious-pneumonia-cases/#comments Fri, 03 Jan 2020 06:48:00 +0000 http://www.ijdpls.com/20200103-govt-on-alert-after-outbreak-of-mysterious-pneumonia-cases/ Hong Kong authorities are stepping up efforts to prevent an outbreak of mysterious pneumonia cases in central China from spreading in the city.

Secretary for Food and Health Sophia Chan Siu-chee presided over an inter-departmental meeting on Thursday after several clinics and hospitals in Wuhan, the capital of Hubei province, reported cases of pneumonia whose cause remained unknown.

Chan told media after the meeting that?although no serious pneumonia cases related to those in Wuhan have been detected in Hong Kong so far,?all relevant policy bureaus and departments have been reminded to heighten their vigilance and preparedness, the Hong Kong Economic Journal reports.

According to mainland media, 27 people have been infected, and seven of them were seriously ill.

The situation in Wuhan has raised concerns in Hong Kong, where an?outbreak of SARS (severe acute respiratory syndrome) killed almost 300 people in the city in 2003.

Dr. Tony Ko Pat-sing, chief executive of the Hospital Authority, told media that as of Thursday noon, it had notified the government of three cases in which it treated patients for pneumonia symptoms after they returned from Wuhan recently.

The three patients – two men and one woman – had sought medical treatment in Princess Margaret Hospital in Kwai Chung, Tuen Mun Hospital and Alice Ho Miu Ling Nethersole Hospital in Tai Po.

Their condition has since improved, with their fever having receded, Ko said, adding that two of the patients have been discharged while a man remained confined at?Princess Margaret Hospital as of Thursday night.

Chan told the media on Thursday night that the three cases are not linked to the mysterious Sars-like disease in Wuhan, because the patients did not visit the seafood market that is believed to have been the source of the virus, RTHK reported.

Dr. Raymond Lai wai-man, chief infection control officer at the HA, told a radio program on Friday morning that all of the three had been in stable condition with two discharged.

He also said gene sequencing is being conducted for the virus found in the Tuen Mun Hospital case.

In the interdepartmental meeting, authorities decided to launch multiple measures to prevent any similar outbreak in the city.

These measures include?closely monitoring the cluster of pneumonia cases in Wuhan and updating the surveillance criteria and testing strategies accordingly, as well as giving a daily update on the number of relevant cases to address public concerns and increase transparency.

Additional thermal imaging systems have been put in place at the Chek Lap Kok airport to check the body temperature of incoming travelers from Wuhan.

At all boundary control points including the West Kowloon Station of the Guangzhou-Shenzhen-Hong Kong Express Rail Link, those with fever or?acute respiratory symptoms who had visited wet markets or seafood markets in Wuhan within 14 days prior to the onset of the illness will be immediately referred to public hospitals for isolation treatment and follow-up.

The HA? has also advised MTR Corp., the Airport Authority, and relevant airlines to enhance cleaning and disinfection measures of the incoming express trains and planes from Wuhan.

Roy Tam Hoi-pong, a member of the Tsuen Wan District Council, urged the government to order?high-speed trains bound for Hong Kong not to stop at Wuhan to prevent contagion.

He said passengers from Wuhan would be sharing the same compartments with those on the train during the?four-hour journey to Hong Kong.

MTR sought to assure passengers that it has regular communication mechanisms with relevant government departments and mainland railway units.

Any service adjustment requires cooperation from relevant departments, the MTR said, adding it would stay alert and continue to monitor the situation.

– Contact us at english@hkej.com


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What to expect from the tech sector in 2020 http://www.ijdpls.com/20200103-what-to-expect-from-the-tech-sector-in-2020/ http://www.ijdpls.com/20200103-what-to-expect-from-the-tech-sector-in-2020/#comments Fri, 03 Jan 2020 05:10:00 +0000 http://www.ijdpls.com/20200103-what-to-expect-from-the-tech-sector-in-2020/ Ushering in 2020, it’s time to make some predictions as to what lies in store for us from the all-important technology sector in the year ahead.

One big underlying theme, most analysts agree, will be 5G, as the advanced high-speed networks get rolled out in many parts of the world. Also, artificial intelligence will come into play even more, becoming a part of people’s daily lives as global tech giants step up focus on machine learning.

The smartphone wars will enter a new phase as players tweak their marketing strategies amid the Sino-US trade and tariffs battle. Apple will need to keep an eye on the political and diplomatic games between Washington and Beijing, while Chinese phone makers may find it more rewarding to focus on markets in the developing world.

Keeping our discussion limited to the smartphone segment for the moment, we can say that among all the contenders the stakes are the biggest for Huawei, as the Chinese firm seeks to overcome the impact of US trade curbs and push a goal of beating Samsung and capturing the global No. 1 spot.

Realizing the ambition in the coming one or two years, something that Huawei executives have outlined as a task, is not impossible, but the journey won’t be easy by any means.??

The Chinese telecoms equipment giant has admitted that 2020 will be a tough year as there is no sign that the US government will ease the trade ban on the company. Huawei’s rotating chairman Eric Xu said early this week that “survival” is the firm’s first priority, as sales had been affected after the firm was shut out from some Western markets.

Huawei expects its 2019 sales revenue to come in at 850 billion yuan (US$121.7 billion), up roughly 18 percent from the previous year, but significantly lower than what the company had anticipated earlier.? In January last year, Huawei flagged annual sales revenue of US$125 billion.

Huawei will face a much tougher business environment this year as it will suffer a full-year impact of the US trade ban. All the new products launched this year will have no Google Mobile Service support. The lack of Google support will dampen product prospects overseas as most users outside China rely on Google for their digital life, from Gmail to Google Maps to Google Photos.

The Chinese firm launched its own mobile service applications in a bid to fill the gap, but they won’t really be a wholesome substitute for Google’s well-established offerings. Hence, Huawei’s smartphone and tablet business will face headwinds this year outside China.

Confronted with a challenging environment, Huawei will have to devote more resources, in terms of time and money, to boost product sales so that it can narrow the gap with Samsung — the current leader in the global smartphone industry in terms of unit shipments.

That being said, the overall outlook for Huawei should not be too negative, given the brand’s growing strength in its home market. Many Chinese consumers opted for Huawei devices last year due to nationalistic sentiments amid the US clampdown on the firm. That helped Huawei boost its market share in China, taking the figure past the 40 percent level, squeezing out other local rivals.

In the coming year, Huawei is expected to launch P40 series smartphone and other 5G compatible devices. It will be interesting to see how Xu and his team manage the business outside China, especially as many overseas operators have started to distance themselves from Huawei to comply with local regulations that aim to keep perceived state-linked Chinese entities at bay.?

Despite the obstacles, Huawei will have to strive for breakthroughs in overseas markets, as increased dependence on the domestic Chinese market won’t be healthy in the long run.

Apple has lost out to Huawei for the industry No. 2 spot for two consecutive years, but the US trade ban could give the iPhone maker a chance to reclaim the position, especially as a 5G iPhone could be in the offing this year.

All said and done, the iPhone is still a unique product in the highly crowded global smartphone market, and contributes more than 60 percent to Apple’s profit. There is speculation that Apple could launch as many as six iPhone models this year, including an entry-level small screen SE successor.

Meanwhile, the company is expected to launch a 5G handset in the second half of the year, with a Qualcomm chip inside. That should trigger a new round of replacement cycle within the iPhone user base, particularly as many iPhone users are still holding iPhone 6 or 6s series gadgets.?

Another interesting thing to watch will be how Apple makes use of the 5G technology to potentially develop whole new products. In the previous decade, Apple launched iPad, Apple Watch and AirPod. Entering a new decade, Apple could focus on augmented reality to bring immersive entertainment and gaming experience to its users.

However, smartphone may not be the best device for such experience. Some?experts believe?Apple could launch an eye glass with augmented reality and wireless connectivity to enable users to?enjoy the games or movies directly through the glass with AirPod to bring a total new experience for users. The timeframe would be anyone’s guess, but we can say it could be too early for Apple to bring such new product to the market during this year.

Elsewhere, Android smartphone makers like Samsung and Xiaomi will devote resources to building a new smartphone font factor in the new decade. They are betting that foldable screen smart devices could become mainstream product in this decade. Samsung’s Galaxy Fold and Huawei Mate X proved the feasibility of such concept.

In the future, foldable screen devices could enable smartphone makers to go beyond the screen-size limitation to bring better mobile experience. But this could also blur the line between smartphone and tablet computer, as an analyst has noted.

As 5G and other emerging technologies get into our daily life, privacy activists caution that the new tech raises the risk of users’ personal data being tapped by authorities and technology firms. Amid growing concerns over data privacy, some governments have already started work on new laws and rules to monitor the use of new tech that could collect personal data through different ways.

For example, the G20 has set up a consortium to set out guidelines for members to follow when using new technology for data collection and city development. In Hong Kong, a government smart lamppost project will remove cameras and use other technology to collect necessary data without individual recognition.

The year 2020 would be an exciting period in relation to emerging technologies, but people would need stronger protections as more personal information would be collected behind the scenes, rendering the citizen a much larger part of the big data game.

– Contact us at english@hkej.com


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Tesla cuts price for China-made Model 3 vehicles before delivery http://www.ijdpls.com/20200103-tesla-cuts-price-for-china-made-model-3-vehicles-before-delivery/ http://www.ijdpls.com/20200103-tesla-cuts-price-for-china-made-model-3-vehicles-before-delivery/#comments Fri, 03 Jan 2020 04:49:00 +0000 http://www.ijdpls.com/20200103-tesla-cuts-price-for-china-made-model-3-vehicles-before-delivery/ US electric vehicle maker Tesla Inc. cut the starting price for its China-made Model 3 sedans by 16 percent to 299,050 yuan (US$42,919) after receiving Chinese subsidies for electric vehicles, Reuters reports, citing information on the company’s China website.

The reduction, partly thanks to 24,750 yuan of subsidies, from an earlier 355,800 yuan is among a slew of adjustments Tesla has made to its sales policy in China, including tweaking prices for car accessories and home charging facilities.

Tesla has said it plans to start delivering cars, made at its US$2 billion factory in Shanghai, to the public on Jan. 7.

Fifteen Tesla employees who had purchased the car were the first to take delivery on Monday after the first China-made vehicles rolled off the plant’s production line in October.

The deliveries come a year after construction of Tesla’s only plant outside the United States began.

Earlier this week, Tesla said that 30 percent of its China supply chain was localized, which means some car parts are shipped in to build its cars. The automaker wants to completely localize its China supply chain by end-2020, it said at the time.

Tesla plans to ramp up Model 3 deliveries in January and will double the number of service centers and fast-charging stations in China in 2020, its executives have said.

The plant has achieved a production target of 1,000 units per week, or around 280 cars a day, and that sales for the China-made sedan had so far been “very good”, according to the executives.

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Police defend moves on Jan 1 march, deny arbitrary arrests http://www.ijdpls.com/20200103-police-defend-moves-on-jan-1-march-deny-arbitrary-arrests/ http://www.ijdpls.com/20200103-police-defend-moves-on-jan-1-march-deny-arbitrary-arrests/#comments Fri, 03 Jan 2020 04:27:00 +0000 http://www.ijdpls.com/20200103-police-defend-moves-on-jan-1-march-deny-arbitrary-arrests/ Police defended their decision to cut short a massive pro-democracy march staged on New Year’s Day, saying some of the participants were turning violent.

In a police press briefing on Thursday afternoon, Senior Superintendent (Operations) Ng Lok-chun of Hong Kong Island Region said a small number of rioters had been seen vandalizing a coffee shop and a bank branch on Hennessy Road in an attempt to hijack what was supposed to be a peaceful public event organized by the Civil Human Rights Front (CHRF), less than two hours after it began, the Hong Kong Economic Journal reports.

As the police force did not think the organizers had the ability to stop the radical protesters and ensure the safety of the other participants, it had no choice but to terminate the march, Ng said.

If the march had not been stopped, peaceful demonstrators could have faced higher risks, he said, adding that police fired?tear gas only after rioters starting hurling petrol bombs at them.

As for the allegation that the police made arbitrary arrests after the march was terminated, Ng explained that those who remained at the scene were?deliberately staying to block the roads as most of the participants had already left after officers?unfurled a blue flag and a black flag.

Those who were intercepted and checked by officers were later allowed to go after they were found to have no involvement in unlawful assembly, he said.

Ng also said police had to widen the cordon of interception because they needed enough space to conduct their investigation.

They had to make sure those intercepted would not pose a risk to officers, citizens and journalists, before letting them go, he added.

Chief Superintendent Kwok Ka-chuen of the Police Public Relations Branch in the press briefing slammed some people for inciting young members of the assembly to break the law.

A total of 420 people were arrested on Tuesday and Wednesday, with the youngest being a 12-year-old primary school pupil, police data showed.

Police fired 30 canisters of tear gas, 24 rubber bullets and two bean-bag rounds during the period.

On Wednesday night, police intercepted 464 people. Of this number, 287 were arrested for unlawful assembly and the rest were released several hours later.

It was understood that among those arrested were two personnel from the Fire Services Department and one from the Customs and Excise Department.?Both departments did not reply to inquiries from HKEJ as of press time.

In a statement, the Hong Kong Journalists Association (HKJA) strongly condemned the police for cordoning multiple streets during their clearance operation on Wednesday night and?dispersing journalists who ended up failing to record and monitor how officers treated those detained at the scene as a result.

The police action infringed on press freedom, the HKJA said.

In response, Kwok said the Force Media Liaison Cadre, after communicating with the frontline commander, arranged spots for reporters to do their work and allowed live broadcasts at the scene as well.

Meanwhile, Democratic Party lawmaker Ted Hui Chi-fung accused the police of mistreating him and vowed to file cases against them.

He was referring to an incident that took place at around 8 p.m. on Wednesday, when officers were containing protesters on Hennessy Road outside the Sogo department store in Causeway Bay.

Hui insisted on staying on the road to observe police enforcement and ensure that those arrested were safe.

When he refused to leave, an officer grabbed his goggles and pulled them off his face. He said he picked up the eyewear from the ground and put it back on, but the officer pulled it off again and pepper-sprayed him in the face.

Explaining what happened, Senior Superintendent Kong Wing-cheung of the PPRB said Hui refused to leave the area and return to the pavement as the officer had asked, forcing the latter to use pepper spray on him after warning him.

The officer removed Hui’s goggles so that the use of pepper spray would be effective, he said.

But Hui said in a statement that from where he was standing, he was not preventing police from carrying out their work. As such, the officer had no reason to pepper-spray him other than to give vent to his anger and prevent him from doing his job as a lawmaker.

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US kills top Iranian commander Soleimani in air strike http://www.ijdpls.com/20200103-us-kills-top-iranian-commander-soleimani-in-air-strike/ http://www.ijdpls.com/20200103-us-kills-top-iranian-commander-soleimani-in-air-strike/#comments Fri, 03 Jan 2020 04:25:00 +0000 http://www.ijdpls.com/20200103-us-kills-top-iranian-commander-soleimani-in-air-strike/ The United States killed Iranian Major-General Qassem Soleimani, head of the elite Quds Force and spearhead of Iran’s spreading military influence in the Middle East, on Friday in an air strike at Baghdad airport, the Pentagon and Iran said.

Top Iraqi militia commander Abu Mahdi al-Muhandis, an adviser to Soleimani, was also killed in the attack, a militia spokesman said.

The high-profile assassinations are likely to be a massive blow to Iran, which has been locked in a long conflict with the US that escalated sharply last week with the storming of the US embassy in Iraq by pro-Iranian militiamen following a US air raid on the Kataib Hezbollah militia, founded by Muhandis.

“At the direction of the President, the US military has taken decisive defensive action to protect US personnel abroad by killing Qassem Soleimani,” the Pentagon said in a statement.

“This strike was aimed at deterring future Iranian attack plans,” it added.

US officials, speaking on the condition of anonymity, said that Soleimani had been killed in a drone strike.

Iran’s Revolutionary Guards confirmed in a statement that Soleimani was killed. “Honored supreme commander of Islam, Haj Qassim Soleimani, was martyred this morning after a life of struggle in an attack by American helicopters,” the Revolutionary Guards said in a statement read on state TV.

Ahmed al-Assadi, a spokesman for Iraq’s Popular Mobilization Forces (PMF), the umbrella grouping of Iran-backed militias, blamed the US and Israel.

“The American and Israeli enemy is responsible for killing the mujahideen Abu Mahdi al-Muhandis and Qassem Soleimani,” he said.

Iraqi paramilitary groups said on Friday that three rockets hit Baghdad International Airport, killing five members of Iraqi paramilitary groups and two “guests”.

The rockets landed near the air cargo terminal, burning two vehicles, killing and injuring several people.

Local militia commander Abu Muntathar al-Hussaini told Reuters:?“Haj Soleimani and Abu Mahdi al-Muhandis were riding in one vehicle when it was struck by two successive guided missiles launched from an American helicopter while they were on their way from the arrivals hall on the road that leads out of Baghdad Airport.”

He said the second vehicle was carrying bodyguards from the PMF and was hit by one rocket.

“The American criminals had detailed information on the convoy’s movements.”

Oil prices were up US$3 on the news.

Dramatic escalation

Soleimani’s killing marks a dramatic escalation in the regional “shadow war” between Iran and the US and its allies, principally Israel and Saudi Arabia, which could quickly ratchet up tit-for-tat attacks – all the way to the brink of all-out war.

The slain commander’s Quds Force, along with its stable of paramilitary proxies from Lebanon’s Hezbollah to the PMF in Iraq – battle-hardened militias armed with missiles – has ample means to launch a multi-barrelled response against its enemies.

In September, US officials blamed Iran for a devastating missiles and drones attack on oil installations of Saudi Aramco, the Saudi state energy giant and world’s largest oil exporter. The Trump administration did not respond, beyond heated rhetoric and threats.

Iran, for its part, has absorbed scores of air strikes and missile attacks, mainly carried out by Israel against its fighters and proxies in Syria and Iraq.

But analysts say Iran is likely to respond forcefully to the targeting of Soleimani, who it has built into a legend as its influence has spread across the region in the wake of the US-led invasion of Iraq in 2003 and subsequent occupation.

Soleimani, who has led the foreign arm of the Revolutionary Guards and has had a key role in fighting in Syria and Iraq, acquired celebrity status at home and abroad.

The US and Iran’s regional foes Saudi Arabia and Israel have struggled to keep Iran’s influence in check.

Soleimani survived several assassination attempts against him by Western, Israeli and Arab agencies over the past two decades.

His Quds Force, tasked with carrying out operations beyond Iran’s borders, shored up support for Syrian President Bashar al-Assad when he looked close to defeat in the civil war raging since 2011 and also helped militiamen defeat Islamic State in Iraq.

He became head of the Quds Force in 1998, a position in which he kept a low profile for years while he strengthened Iran’s ties with Hezbollah in Lebanon, Syria’s government and Shi’ite militia groups in Iraq.

Muhandis, who was killed with Soleimani, oversaw Iraq’s PMF, an umbrella grouping of paramilitary groups mostly consisting of Iran-backed Shi’ite militias that was formally integrated into Iraqi armed forces.

Kataib, which received battlefield training from Lebanon’s Hezbollah, has long targeted US forces and was one of the earliest groups to dispatch fighters to Syria to support Assad.

In 2009, Washington declared Kataib Hezbollah a foreign terrorist organization, saying it threatened stability in Iraq and declared Muhandis a terrorist.

In 2007, a Kuwaiti court sentenced him to death in absentia for his involvement in the 1983 US and French embassy bombings in Kuwait. Reuters

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China RRR still relatively high, says PBoC official http://www.ijdpls.com/20200103-china-rrr-still-relatively-high-says-pboc-official/ http://www.ijdpls.com/20200103-china-rrr-still-relatively-high-says-pboc-official/#comments Fri, 03 Jan 2020 03:03:00 +0000 http://www.ijdpls.com/20200103-china-rrr-still-relatively-high-says-pboc-official/ The proportion of money that Chinese banks must set aside as reserves is still relatively high by global standards, and can be adjusted in future to help provide long-term, stable liquidity to the economy, a senior central banker said.

China on Wednesday announced it will cut the reserve requirement ratio (RRR) from Jan. 6 to spur more lending and lower financing costs. It has cut the ratio eight times since early 2018 as it looks to avert a sharper economic slowdown, but growth has still cooled to a near 30-year low.

“From an international perspective, China’s current required reserve ratio (RRR) is still relatively high and has relatively big room to adjust,” Ruan Jianhong, head of the Statistics and Analysis Department at the People’s Bank of China (PBoC), said in an article.

The article was first published in the December edition of China Bond, and released via the magazine’s official WeChat account late on Thursday.

Along with other monetary policy tools, RRR adjustments “can provide long-term, stable liquidity to the real economy”, she said.

The 50 basis point cut announced on New Year’s Day released around 800 billion yuan (US$114.91 billion) in funds. It brought the ratio for big banks down to 12.5 percent, compared with 17 percent at the start of 2018.

RRRs for China’s commercial banks range between 7.5 percent and 13 percent. Most deposits in the United States are subject to RRR of zero to 3 percent, while the European Central Bank imposes RRRs of zero to 1 percent, according to the article.

While rolling out a series of growth-boosting measures in the last two years, China’s policymakers have pledged they will not embark on massive stimulus schemes like those launched in past downturns, which left a mountain of debt that is still weighing on the financial system.

Echoing that cautious tone, Ruan said that the RRR adjustments don’t represent changes in China’s monetary policy stance, and are aimed at reducing the cost of funding and improving overall liquidity, as the size of China’s monetary base shrank in 2019.

“In recent years, PBoC has been reducing RRRs successively. But this doesn’t mean PBoC is shifting toward a looser monetary policy. Rather, the moves are aimed at supplementing liquidity to the overall economy in an efficient, low-cost manner,” according to the article.

To improve liquidity, RRR adjustments are a more appropriate option than expanding PBoC’s balance sheet, because PBoC, with about US$5.42 trillion of assets at the end of 2018, is already the world’s biggest central bank by assets, she said.

Further expanding its balance sheet would hurt credibility of China’s monetary policies, the article said. Reuters

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Would Superman bail out Hong Kong people? http://www.ijdpls.com/20200103-would-superman-bail-out-hong-kong-people/ http://www.ijdpls.com/20200103-would-superman-bail-out-hong-kong-people/#comments Fri, 03 Jan 2020 02:34:00 +0000 http://www.ijdpls.com/20200103-would-superman-bail-out-hong-kong-people/ April Fools’ Day came three months early this year.?

Rumors that Hong Kong billionaire Li Ka-shing was unveiling another relief fund??this time covering not just small retailers but?all adult residents of the city – went viral on social media on the first day of the year.

Li, who had earlier granted HK$1 billion to some 28,000 small businesses and entrepreneurs affected by the months-long social unrest, was allegedly planning to dish out?HK$5,000 to each adult resident in Hong Kong.

Many people took the rumor?hook, line and sinker. It’s not beyond the realm of possibility, they must have thought,?considering that the Liberal Party, following the crushing defeat of the pro-establishment camp in the recent District Council elections, proposed that the government hand HK$10,000 in cash or voucher to each adult permanent resident in the city as a way of stimulating local consumption and business activity in these troubled times.

Unfortunately, the HK$5,000 giveaway turned out to be fake news.

It was quickly traced to an article in Apple Daily, titled “Ten bold predictions for 2020″, meaning it was more of wishful thinking on the part of the author than solid fact.

Interestingly, the Li Ka Shing Foundation, the tycoon’s charity, chose not to comment on the matter, merely stating that they had received inquiries about the article.

There’s no doubt about the generosity of Mr. Li, who turns 92 this year, and that he has shown time and again that the welfare of Hong Kong people is close to his heart.

But suffice it to say that it is unlikely that he plans to take away from the beleaguered administration of Chief Executive Carrie Lam Cheng Yuet-ngor the opportunity to make Hongkongers happy.

Besides, the HK$5,000 handouts, assuming that 5 million people would be qualified, would easily amount to HK$25 billion, or about 11 percent of his net worth of US$29.4 billion (HK$229 billion) based on Forbes estimates.

Even so, it is less than the value of the Cheung Kong Centre, where he still occasionally holds office after his retirement in 2018.

Li won praises for his quick action to help small businesses, thanks to the smart use of?artificial intelligence, which enabled his charity to distribute huge amounts of money to the intended beneficiaries within just three months.

His lightning rescue efforts may have made some people red in the face in the government, which bared its inefficiency in the distribution of HK$4,000 handouts to the underprivileged last year.

Over the past six months, several other tycoons offered to do their bit in easing the burden brought about by the political crisis some donating land, others lowering rentals – but so far it’s only Mr. Li who had distributed cash for the benefit of affected Hongkongers.

Perhaps there’s a lesson somewhere in this little joke that went viral on the internet, which is that many people are desperate for some good news in the midst of all the anger and despair.

However, we can’t expect Superman to do all the work.

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Sweden ends its experiment of negative rates http://www.ijdpls.com/20200103-sweden-ends-its-experiment-of-negative-rates/ http://www.ijdpls.com/20200103-sweden-ends-its-experiment-of-negative-rates/#comments Fri, 03 Jan 2020 02:18:00 +0000 http://www.ijdpls.com/20200103-sweden-ends-its-experiment-of-negative-rates/ Negative rates are the destruction of money, an economic aberration based on the mistakes of many central banks and some of their economists who start from a wrong diagnosis: the idea that economic agents do not take more credit or invest more because they choose to save too much and therefore saving must be penalized to stimulate the economy. Excuse the bluntness, but it is a ludicrous idea.

Inflation and growth are not low due to excess savings, but because of excess debt, perpetuating overcapacity with low rates and high liquidity and zombifying the economy by subsidizing the low productivity and highly indebted sectors and penalizing high productivity with rising and confiscatory taxation.

Historical evidence of negative rates shows that they do not help reduce debt, they incentivize it, they do not strengthen the credit capacity of families, because the prices of non-replicable assets (real estate, etc.) skyrocket because of monetary excess, and the lower cost of debt does not compensate for the greater risk.

Investment and credit growth are not subdued because economic agents are ignorant or saving too much, but because they don’t have amnesia. Families and businesses are more cautious in their investment and spending decisions because they perceive, correctly, that the reality of the economy they see each day does not correspond to the cost and the quantity of money.

It is completely incorrect to think that families and businesses are not investing or spending. They are only spending less than what central planners would want. However, that is not a mistake from the private sector side, but a typical case of central planners’ misguided estimates, that come from using 2001-2007 as “base case” of investment and credit demand instead of what those years really were: a bubble.

The argument of the central planners is based on an inconsistency: That rates are negative because markets demand them, not because they are imposed by the central bank. If that were the case, why don’t they let rates float freely if the result was going to be the same? Because it is false.

Think for a moment what type of investment, company or financial decision is one that is profitable with rates at -0.5 percent but unviable with rates at 1 percent. A time bomb. It is no surprise that investments in bubble-prone sectors are rising with negative rates and non-replicable and financial assets skyrocket.

Public debt trades at artificially low yields and, instead of strengthening economies, negative rates make governments more dependent on cheap debt. Politicians abandon any reformist impulse and prefer to accumulate more debt.

The financial repression of central banks begins with a misdiagnosis, assuming that low growth and below-target inflation is a problem of demand, not of the previous excess, and ends up perpetuating the bubbles that they sought to solve.

The policy of negative types can only be defended by people who have never invested or created a job because no one that has worked in the real economy can believe that financial repression will lead economic agents to take much more credit and strengthen the economy.

Negative rates are a huge transfer of wealth from savers and real wages to the government and the indebted. A tax on caution. The destruction of the perception of risk that always benefits the most reckless. The bailout of the inefficient.

Central banks ignore the effects of demography, technology and competition on inflation and growth of consumption, credit, and investment, and with the wrong policies generate new bubbles that become more dangerous than the previous ones. The next bubble is to increase again the fiscal imbalances of the countries. Even worse. When central banks present themselves as the agent that will reverse the effect of technology and demographics, they create a greater risk and bubble.

Sweden launched its failed negative rate plan almost six years ago and now reverses it due to the financial risks that are created. The most interesting thing is that it reverses the policy of negative rates precisely because of the risk of an economic slowdown because the evidence shows that investment and consumption decisions do not increase with financial repression.

In Sweden, with negative rates, the real estate price index has increased 50 percent (from 160 points to 240), the average residential index has risen 27 percent, non-replicable assets have risen between 30 percent and 70 percent (infrastructure, etc.), the stock market has risen more than 20 percent. In that period, household consumption and investment (gross capital formation) have increased very little and real wages have remained stagnant.

Monetary policy has gone from being a support for structural reforms to an excuse to avoid them. Now, governments are delighted to read that “fiscal measures” must be implemented. And when a government hears “fiscal measures” it translates into “spending.” And when the eurozone governments start spending, the result is always the same: more debt and higher taxes.

In the eurozone, the economic aberration of negative rates continues despite the evidence of the collateral risks they generate. Meanwhile, you and I are blamed for not spending and borrowing more. What can go wrong?

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Why a ‘cool war’ may be worse than a cold one http://www.ijdpls.com/20100103-why-a-cool-war-may-be-worse-than-a-cold-one/ http://www.ijdpls.com/20100103-why-a-cool-war-may-be-worse-than-a-cold-one/#comments Fri, 03 Jan 2020 01:51:00 +0000 http://www.ijdpls.com/20100103-why-a-cool-war-may-be-worse-than-a-cold-one/ In recent years, fears of a new cold war between the United States and China have been proliferating. But the tensions between the two powers would be better described as a “cool war,” characterized not by old-fashioned spheres of interest, proxy wars, and the threat of “mutually assured destruction,” but by an unprecedented combination of wide-ranging competition and deep interconnection.

Even without the threat of nuclear annihilation that marked the Cold War, a “lose-lose” outcome is likely in this cool war – not least because, in a scenario where either the US or China begins to gain an advantage over the other, the loser could well act rashly to bring their opponent down with them. But a win-lose or even win-win outcome is also possible. Whatever happens, the effects will reverberate globally.

The ongoing trade war, which US President Donald Trump initiated in the summer of 2018, offers a straightforward example of cool-war dynamics. Whereas the Soviet Union was a closed economy, China has, over four decades of “reform and opening up,” established itself as one of the world’s top three global supply-chain hubs, along with the US and Germany.

Given how deeply interconnected the American and Chinese economies are – both with each other and the rest of the world – everybody wins if the trade war is resolved. That is why the recent “phase one” trade agreement is good news.

But the next step remains far from certain. If the agreement falters and the conflict continues to escalate, the US and China could move to sever direct ties. Given the difficulty of untangling global supply chains, however, the US and China would remain indirectly linked. So, while the world economy would be reshaped, and everyone would suffer from the added expense of increased trade frictions, the formation of entirely separate, competing trading systems is unlikely.

Unfortunately, trade may be the only area where all-out strategic competition is not in the cards. The US and China increasingly seem to be embracing a Cold War-style zero-sum approach to national security, which threatens to bring about a wide-ranging and extremely wasteful bilateral contest over everything from defense and innovation to finance and ideology.

Like the Cold War arms race, such competition would lead to what Garrett Hardin called the “tragedy of the commons”: people overuse the resources that are available to them, without accounting for the negative effects for society (including themselves). The resources the US and China would channel toward their all-encompassing competition – and those that other countries would also have to spend to adjust to this new strategic environment – would dwarf the value created through international trade and investment.

For example, in technology, the Sino-American competition would lead to two separate innovation ecosystems, each with different standards and core technologies. This would drastically increase the costs of research and development and deepen the risks of damaging systemic disruptions – a costly step backward after decades of globalization.

Such fragmentation would also gut global governance. Already strained multilateral institutions – the United Nations, the International Monetary Fund, and the World Trade Organization, to name three of the more vulnerable – would cease to function in any meaningful way, undermining peace and stability worldwide. Other bulwarks of the global economy, such as payments systems, would similarly break down.

To avoid this outcome, the US and China must take steps to build trust, strengthen cooperation, and improve policy discipline. This does not mean they have to agree on everything. Rather, in line with the Chinese proverb “no friendship can be built without fights,” they must express their disagreements clearly and respectfully, and assert their respective red lines honestly.

For example, the US would need to agree not to challenge China on its basic growth model, its political system, or the underlying ideology. This would mean limiting the “whole-of-government” approach to relations that US Vice President Mike Pence advocated – and accused China of employing – in 2018. Strategic competition is inevitable, but not just any tool or topic is fair game. Fortunately, there are signs that US trade negotiators, at least, recognize China’s ideological red lines.

This is not to say that China has no concessions to make – or that it is not willing to make them. In line with US demands, and its own long-term structural-reform objectives, the country is committed to continuing to open up its economy and financial system. The government’s aggressive development of dynamic urban clusters, such as the Greater Bay Area, supports this effort, as do its measures to improve sustainability, reduce corruption, streamline bureaucracy, and address inequality.

China has also demonstrated a willingness to cooperate on supplying global public goods by participating in multilateral frameworks and agreements such as the 2015 Paris climate agreement (from which the US is withdrawing). And it has used its wealth to invest in innovation and support development far beyond its borders.

The cool war threatens to undermine these efforts, because facing the US at the negotiating table requires China to strengthen its own position above all. This means ensuring that disruptions caused by US short-termism do not present a long-term systemic threat to China, even as they hurt the global economy as a whole.

The unfolding Sino-American cool war is far less cut and dried than the Cold War was. Minimizing the fallout will require both sides to recognize that, in an interconnected world, efforts to strengthen their own position become self-defeating when they undermine global stability and dynamism. The trade war threw this lesson into sharp relief. Unfortunately, there is little reason to believe that it has been learned.

Copyright: Project Syndicate

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The decline of global value chains http://www.ijdpls.com/20200103-the-decline-of-global-value-chains/ http://www.ijdpls.com/20200103-the-decline-of-global-value-chains/#comments Fri, 03 Jan 2020 01:39:00 +0000 http://www.ijdpls.com/20200103-the-decline-of-global-value-chains/ For more than a decade, China has been haunted by the prospect of getting stuck at an income level below that of the developed world (the “middle-income trap”). But the country’s economy is well on its way to eliminating this fear: growth has been faster, and driven by more innovation, than in most other middle-income countries. And yet, a key aspect of China’s growth model, the economy’s integration into global value chains, is now being undermined from several directions. How China responds to this challenge will shape the speed and nature of its own growth and that of the global economy.

In the period leading up to the 2008 financial crisis, global value chains (GVCs) expanded rapidly, eventually accounting for around 70 percent of international trade. But in the years since, GVCs have stagnated and declined slightly in importance. Most of this change has actually been driven by China, which has radically reduced its use of foreign inputs, by producing more of these domestically, and exported more intermediate goods.

As a result, Asia, previously an important supplier of intermediate goods to China, now accounts for a smaller share of GVCs than it once did. At the same time, European dependence on China has increased at the expense of value chains within Europe. And the United States has absorbed some of the increase in Chinese intermediate exports, reducing its share of GVCs. The net effect of all this, notes Bruegel’s Alicia García-Herrero, is that China has become less dependent on the world, and the world more dependent on China.

The fate of today’s elaborate and increasingly efficient cross-border production systems is now in the balance. These systems are tied to specific technologies and deeply embedded in growth models. But they are also political and social arrangements, which makes them vulnerable to geopolitical and geo-economic conflict. Owing to these vulnerabilities, Chinese players will increasingly have to build their own supply chains, deciding where to produce which goods and services. This will cause value chains to become less global.

Moreover, China is changing its own growth model, from one led by investment to one driven by innovation. Achieving that shift will increasingly require supporting innovation through the entry and exit of firms, rather than within existing ones. The Chinese financial system still faces challenges in extending credit to small firms, but its main problem is phasing out support for low-productivity incumbents. Enforcing fair competition is thus becoming increasingly important. China needs to shift from promoting national and local champions to pursuing an industrial policy that loosens sector constraints and improves the investment climate across the entire economy.

More broadly, rapid technological change is continuously challenging existing value chains. A shift in emphasis from the transfer of goods and services to information – itself tightly controlled through multinational corporate structures – reinforces the fragmentation that has already resulted from increasing specialization. Nowadays, rather than producing an entire car, a country can focus on making some small part – say, gearboxes – to be part of a value chain. But robotization and artificial intelligence are driving a shift in where production occurs. And China, for its part, is investing massively in these technologies so that it can shape future value chains.

The acceleration of technological change will lead to more rapid turnover in employers, careers, and occupations, implying increased uncertainty for individuals. Worse, inequality is deepening within countries, and current growth patterns are reinforcing urban/regional disparities around the world, including in China. Labor markets in both advanced and emerging economies are becoming more polarized as medium-skill jobs disappear. And the resulting social tensions are fueling populism, which must be met with policies that emphasize equality of opportunity and improved social-safety nets.

Nonetheless, the most immediate threat to GVCs and China’s role in them comes from US President Donald Trump’s administration. By locking out Chinese suppliers from critical parts of value chains, the US is forcing China to pursue further “decoupling,” which, given how closely interconnected the US and Chinese economies are, is likely to be extremely costly for both sides. The long-run risks in such a world cannot be overstated. The most constructive approach for Chinese producers would be to build their own value chains within an open architecture that allows the most efficient firms to join and create redundancies to reduce their own vulnerabilities.

At the same time, America’s unilateral challenge to Chinese participation in GVCs could encourage China to play a more active role in shaping a new multilateralism for the twenty-first century. The ongoing trade and technology war could also represent an opportunity for China to extend its production networks in Asia, where they are currently underdeveloped, and to reduce its exposure in Europe and other parts of the West. Such a push would meet with understandable resistance from Asian countries that are already wary of Chinese influence; but economic interests may yet prevail. The question, ultimately, is whether it will be China that shapes technology standards in Asia, and what implications that outcome would have for the rest of the world.

What is certain is that, as with other countries that have avoided the middle-income trap, China’s transformation into an innovation-led economy is facing technological disruption. And as the process of domestic creative destruction accelerates, social and political tensions will rise. China will remain vulnerable to the current breakdown of multilateralism ushered in by the US; but so, too, will the rest of the world.

Ultimately, the Chinese government must recognize that Sino-American tension is rooted in the differences in their political systems. Without some willingness on China’s part to liberalize its authoritarian model, the transformation of the world economy is unlikely to be smooth.

Copyright: Project Syndicate

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Australian navy helps rescue thousands as new fire threat looms http://www.ijdpls.com/20200103-australian-navy-helps-rescue-thousands-as-new-fire-threat-looms/ http://www.ijdpls.com/20200103-australian-navy-helps-rescue-thousands-as-new-fire-threat-looms/#comments Fri, 03 Jan 2020 01:26:00 +0000 http://www.ijdpls.com/20200103-australian-navy-helps-rescue-thousands-as-new-fire-threat-looms/ The Australian navy on Friday began the evacuations of some of the thousands of people stranded on the east coast of the fire-ravaged country as a searing weather front was set to whip up more blazes across the states of Victoria and New South Wales (NSW).

At the peak of the summer holiday period, tens of thousands of holidaymakers were urged to leave national parks and tourist areas on the NSW south coast and eastern areas of Victoria before a return of temperatures above 40C and strong winds on Saturday.

Victoria declared a state of disaster for the first time, giving authorities broad powers to compel people to leave their properties and take control of services, similar to the state of emergency that has been declared in NSW.

Andrew Crisp, emergency management commissioner for Victoria, urged people in at-risk areas to leave their homes immediately and not count on luck to avoid disaster.

“This is your opportunity to get out. It is not just the fires we know. It is the new fires that might start today,” he told ABC News.

So far this week the fires have killed seven people in NSW and two in Victoria, where 28 other people are unaccounted for.

The navy’s HMAS Choules and Sycamore started the evacuations of nearly 1,000 of the 4,000 people stranded on a beach in the isolated town of Malla-coota in far-east Victoria, federal member of parliament Darren Chester tweeted on Friday morning.

With all roads blocked, sea transport is the only way out of the stricken town and each round trip could take a day or more.

Prime Minister Scott Morrison had called for calm on Thursday, before visiting the fire-devastated NSW town of Cobargo where he was not entirely welcome.

Video showed Morrison confronted by a group of angry locals, one of whom shouted he should be “ashamed of himself” and said he had “left the country to burn”.

Speaking to the ABC, Morrison said he understood there were strong feelings. “They have lost everything and there are still some very dangerous days ahead,” he said.

Morrison’s conservative government has long drawn criticism for not doing enough to address climate change as a cause of Australia’s savage drought and fires.

Bushfires so far this season have scorched more than 4 million hectares of bushland and destroyed over 1,000 homes, including 381 homes destroyed on the south coast just this week. Reuters

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Pentagon sees signs Iran or proxies may be planning more attacks http://www.ijdpls.com/20200103-pentagon-sees-signs-iran-or-proxies-may-be-planning-more-attacks/ http://www.ijdpls.com/20200103-pentagon-sees-signs-iran-or-proxies-may-be-planning-more-attacks/#comments Fri, 03 Jan 2020 00:48:00 +0000 http://www.ijdpls.com/20200103-pentagon-sees-signs-iran-or-proxies-may-be-planning-more-attacks/ US Defense Secretary Mark Esper said there are indications Iran or forces it backs may be planning additional attacks, Reuters reports.

He also warned that the “game has changed” and it is possible the United States might have to take preemptive action to protect American lives, the news agency said.

“There are some indications out there that they may be planning additional attacks, that is nothing new … we’ve seen this for two or three months now,” Esper told reporters, without providing evidence or details about the US assessment.

“If that happens then we will act and by the way, if we get word of attacks or some type indication, we will take preemptive action as well to protect American forces to protect American lives.”

Iranian-backed demonstrators hurled rocks at the US embassy in Baghdad during two days of protests, then withdrew on Wednesday after Washington dispatched extra troops.

US President Donald Trump, who faces a re-election campaign in 2020, accused Iran of orchestrating the violence. He threatened on Tuesday to retaliate against Iran but said later he did not want war.

Iran has rejected the accusation. Iranian Foreign Ministry spokesman Abbas Mousavi criticized American officials in a statement, saying they have “the astounding audacity” to blame Iran for protests sparked by US air strikes.

The unrest outside the US embassy followed American strikes on Sunday against bases of the Tehran-backed Kataib Hezbollah group. Washington said the air strikes, which killed 25 people, were in retaliation for missile attacks that killed a US contractor in northern Iraq last week.

On Wednesday, Supreme Leader Ayatollah Ali Khamenei condemned US attacks on Iranian-allied militias in Iraq, blaming the United States for violence in Iran’s neighbor.

The protests marked a new turn in the shadow war between Washington and Tehran playing out across the Middle East.

“The game has changed and we are prepared to do what is necessary to defend our personnel and our interests and our partners in the region,” Esper said.

During the same press briefing, Chairman of the Joint Chiefs of Staff Mark Milley said there had been a sustained campaign by Kataib Hezbollah against US personnel since at least October and the missile attack in northern Iraq was designed to kill.

“Thirty-one rockets aren’t designed as a warning shot, that is designed to inflict damage and kill,” Milley said.

He said it was highly unlikely anyone could overrun the US embassy in Baghdad and if they did, they would run into a “buzzsaw”.

US troops ready

The US sent 750 troops to Kuwait this week and US officials have told Reuters that about 3,000 additional troops could be sent to the region in the coming days.

Milley said additional troops had been alerted but a decision had not yet been made on deploying them. Since May, the US has dispatched about 14,000 additional troops to the Middle East.

In his 2016 campaign, Trump promised to extract the US from “endless wars”.

In a statement, Esper said the demonstrations outside the US embassy in Baghdad were carried out by Iranian-backed Shi’ite militia, saying leaders were seen in the crowd and some members showed up wearing uniforms.

He said the series of rocket attacks on bases hosting US forces in Iraq were being directed by the “Iranian regime” and specifically Iran’s Islamic Revolutionary Guard Corps leadership.

Earlier on Thursday, Revolutionary Guards Commander Brigadier General Hossein Salami said: “We are not leading the country to war, but we are not afraid of any war.”

The Iraqi government has attempted to integrate paramilitary organizations into its armed forces.

Esper said he had not seen the Iraqi government take sufficient action on stopping Iran-backed groups from carrying out attacks on US forces and Baghdad needs to double down on efforts to control the groups.

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US passes legislation on overseas sales of cyber tools http://www.ijdpls.com/20200103-us-passes-legislation-on-overseas-sales-of-cyber-tools/ http://www.ijdpls.com/20200103-us-passes-legislation-on-overseas-sales-of-cyber-tools/#comments Fri, 03 Jan 2020 00:11:00 +0000 http://www.ijdpls.com/20200103-us-passes-legislation-on-overseas-sales-of-cyber-tools/ Newly passed legislation will push the US State Department to disclose how it polices the sale of cyber tools and services abroad.

The move followed a Reuters investigation which revealed that American intelligence contractors clandestinely assisted a foreign spying operation in the United Arab Emirates, helping the monarchy to crack down on internal dissent.

The legislation directs the State Department to report to Congress within 90 days on how it controls the spread of cyber tools and to disclose any action it has taken to punish companies for violating its policies.

Under US law, companies selling hacking products or services to foreign governments must first obtain permission from the State Department.

US lawmakers and human rights advocates have grown increasingly concerned that hacking skills developed for US spy services are being sold abroad with scant oversight.

“Just as we regulate the export of missiles and guns to foreign countries, we need to properly supervise the sale of cyber capabilities,” said Congressman Dutch Ruppersberger of Maryland, who drafted the legislation.

The provision was a result of a Reuters investigation, congressional staffers said, which showed US defense contractors ran a hacking unit in the UAE called Project Raven and that the State Department granted permission to three companies to assist the Emirati government in surveillance.

A State Department spokesman declined to comment. The agency previously said human rights concerns are carefully weighed before such licenses are issued but declined to comment on the authorizations granted for Project Raven.

The UAE Embassy in Washington did not respond to a request for comment. In response to Reuters reporting, a senior Emirati official last year said the country possessed a “cyber capability” that it needed to protect itself.

The new reporting guideline was part of the State Department’s 2020 budget bill signed into law by President Donald Trump on Dec. 20.

The UAE program used former US National Security Agency (NSA) operatives to target foreign rivals, human rights activists, and journalists, the Reuters reporting found.

While the secret Emirati hacking unit was initially created to help the country fight terrorism, the Reuters investigation revealed that it quickly became a tool for the monarchy to crack down on internal dissent.

Reuters found the clandestine program helped local security forces track activists, who were sometimes later tortured.?

Reuters reporting also showed how the State Department granted permission to three companies US consulting firm Good Harbor, cybersecurity company CyberPoint International, and defense contractor SRA International to assist the Emirati government in surveillance operations.

CyberPoint and Good Harbor did not immediately respond to requests for comment. General Dynamics, which now owns SRA, declined to comment.

Good Harbor and CyberPoint have previously told Reuters that their companies obtained proper permissions from the State Department and followed all US laws.

“This report will help Congress ensure these sales are advancing our foreign policy goals, especially in light of recent reports alleging human rights abuses,” said Ruppersberger, whose district is home to the NSA. Reuters

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Ant Financial applies for Singapore digital banking license http://www.ijdpls.com/20200103-ant-financial-applies-for-singapore-digital-banking-license/ http://www.ijdpls.com/20200103-ant-financial-applies-for-singapore-digital-banking-license/#comments Fri, 03 Jan 2020 00:06:00 +0000 http://www.ijdpls.com/20200103-ant-financial-applies-for-singapore-digital-banking-license/ China’s Ant Financial, an affiliate of e-commerce giant Alibaba Group Holdings, has joined the race for a digital banking licence in Singapore, Reuters reports, citing a company statement.

The Monetary Authority of Singapore (MAS) has said it will issue five such licenses as it embarks on the biggest liberalization of its banking sector in two decades.

“In line with our commitment to promoting financial inclusion globally, we have submitted an application to the Monetary Authority of Singapore for a digital wholesale banking license,” a spokesperson for the company said in an emailed statement.

“We look forward to contributing to the development of the digital banking landscape in Singapore.”

Gaming firm Razer Inc. also on Thursday said it was leading a consortium that has applied for a license, while earlier this week Singapore Telecommunications Ltd. and Southeast Asian ride-hailing firm Grab said they were teaming up for a bid of their own.

MAS, Singapore’s central bank, is set to issue up to two “digital full bank” licenses and three wholesale bank licenses.

The city-state is set to announce the winners in mid-2020 and the digital banks are expected to start operations in a phased manner from mid-2021.

A spokeswoman for MAS said it could not comment on individual license applications.

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Lebanon receives Interpol arrest warrant for Ghosn http://www.ijdpls.com/20200103-lebanon-receives-interpol-arrest-warrant-for-ghosn/ http://www.ijdpls.com/20200103-lebanon-receives-interpol-arrest-warrant-for-ghosn/#comments Thu, 02 Jan 2020 23:46:00 +0000 http://www.ijdpls.com/20200103-lebanon-receives-interpol-arrest-warrant-for-ghosn/ Lebanon received an Interpol arrest warrant on Thursday for former Nissan chairman Carlos Ghosn, while Turkey launched an investigation into his daring escape from Japan via Istanbul, Reuters reports.

Ghosn has become an international fugitive after he revealed on Tuesday he had fled to Lebanon to escape what he called a “rigged” justice system in Japan, where he faces charges relating to alleged financial crimes.

Sources close to Ghosn said a delay to a trial and a strict ban on communicating with his wife motivated him to go ahead with a plan to use a private security company to smuggle him out of Japan via private jet.

The Interpol red notice, which calls on authorities to arrest a wanted person, was received by Lebanon’s internal security forces and has yet to be referred to the judiciary, a Lebanese judicial source told Reuters.

A senior Lebanese security official said it was not yet clear if Ghosn would be summoned for questioning over the warrant but said Lebanon does not extradite its citizens to foreign states.

In past cases in which Lebanon has received red notices for Lebanese citizens resident in the country, the suspects have not been detained but their passports have been confiscated and bail has been set, the judicial source said.

Ghosn holds French, Lebanese and Brazilian citizenship. He has deep ties to Lebanon, the country of his childhood, where his investments include a stake in a bank, real estate and a vineyard.

Sources close to Ghosn said he met with Lebanese President Michel Aoun shortly after arriving in Beirut and was greeted warmly, though the presidency denied such a meeting took place.

Speaking to broadcaster MTV, caretaker defense minister Elias Bou Saab said Lebanon played no official role in Ghosn’s exit from Japan.

Turkish police on Thursday detained seven people, including four pilots, as part of an investigation into Ghosn’s passage through the country, a police spokeswoman said.

The spokeswoman said the other detainees were two airport ground staff and one cargo worker, and all seven were expected to give statements in court on Thursday.

Flight tracking data suggests Ghosn used two different planes to fly to Istanbul and then to Lebanon.

Trial delayed

The sources close to Ghosn said he was prompted to flee after a recent court session in which he learned that the second of two trials would be delayed until April 2021.

“They said they needed another whole year to prepare for it. … He was distressed about not being able to see or speak to his wife,” one of the sources close to Ghosn said.

A request to see or speak to his wife over Christmas was also denied, the sources added, part of strict conditions set on his bail.

The sources said Ghosn had grown distressed that authorities were pressuring his family to draw a confession from him after his daughter and son were questioned by Japanese prosecutors in the United States in early December.

In just his second public comment since landing in Beirut, Ghosn said in a statement his family played no role whatsoever in his exit from Japan.

“I alone arranged for my departure,” he said.

Ghosn was first arrested in Tokyo in November 2018 and faces four charges for alleged financial crimes including hiding income and enriching himself through payments to car dealerships in the Middle East. He denies the charges.

Japanese public broadcaster NHK said on Thursday Japanese authorities allowed Ghosn to carry a spare French passport in a locked case while out on bail, potentially shedding some light on how he managed to escape despite having passports held by Japanese lawyers.

No one was immediately available for comment at the office of Ghosn’s lawyer, Junichiro Hironaka, at the French embassy in Tokyo, or at the Tokyo District Public Prosecutors Office.

Nissan ousted him as chairman, saying internal investigations revealed misconduct including understating his salary while he was its chief executive, and transferring US$5 million of Nissan funds to an account in which he had an interest.

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Wall Street starts 2020 with record highs http://www.ijdpls.com/20200103-wall-street-starts-2020-with-record-highs/ http://www.ijdpls.com/20200103-wall-street-starts-2020-with-record-highs/#comments Thu, 02 Jan 2020 23:31:00 +0000 http://www.ijdpls.com/20200103-wall-street-starts-2020-with-record-highs/ Wall Street’s major indexes notched record highs to open the new year on Thursday as fresh economic stimulus from China added to optimism fueled by easing trade tensions and an improving global outlook.

China’s central bank said on Wednesday it would cut the amount of cash that all banks must hold as reserves, the eighth such cut since early 2018. The move to inject fresh stimulus into the Chinese economy boosted equity markets around the globe.

The benchmark S&P 500 hit its 11th record high in 14 sessions and posted its largest daily percentage gain in three weeks. The Dow registered its biggest such gain in almost four weeks, and the Nasdaq its greatest in nearly three months.

Economic stimulus in China, along with the easing of trade tensions between Washington and Beijing, has bolstered optimism that the global economy will accelerate in 2020.

“The market’s been up all day because of the news that China is out there with monetary easing,” said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York. “With the trade deal as a backdrop, it’s a positive factor.”

Among the S&P 500’s sectors, technology and industrials, both of which have high exposure to the Chinese economy, rose more than 1 percent and led in percentage gains. Shares of Apple Inc., which have been a bellwether of trade sentiment, ended 2.3 percent higher and surpassed US$300.

The lengthy rally on Wall Street has prompted some concerns that US stocks are vulnerable to a pullback, especially if economic growth does not pick up as much as expected or if US-China trade tensions reignite.

“Large-cap equities are priced for perfection,” said Peter Cecchini, global chief market strategist at Cantor Fitzgerald in New York. “It feels like we’re wildly overbought given the risks that we see.”

The Dow Jones Industrial Average rose 330.36 points, or 1.16 percent, to 28,868.8, the S&P 500 gained 27.07 points, or 0.84 percent, at 3,257.85, and the Nasdaq Composite added 119.59 points, or 1.33 percent, to close at 9,092.19.

Adding to positive economic sentiment, data from the US Labor Department showed the number of Americans filing claims for jobless benefits edged lower last week.

Other data from Greater China showing that gross gaming revenue in Macau fell less than expected in December boosted shares of US casino operators. Shares of Wynn Resorts Ltd., Las Vegas Sands Corp. and Melco Resorts & Entertainment Ltd. rose between 2 percent and 4 percent.

Advancing issues outnumbered declining ones on the NYSE by a 1.74-to-1 ratio; on Nasdaq, a 1.41-to-1 ratio favored advancers.

The S&P 500 posted 59 new 52-week highs and one new low; the Nasdaq Composite recorded 115 new highs and 15 new lows.

Volume on US exchanges was 7.61 billion shares, compared to the average of 6.85 billion shares for the full session over the last 20 trading days. Reuters

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Why anti-infiltration law will help Taiwan’s pan-green coalition http://www.ijdpls.com/20200102-why-anti-infiltration-law-will-help-taiwans-pan-green-coalition/ http://www.ijdpls.com/20200102-why-anti-infiltration-law-will-help-taiwans-pan-green-coalition/#comments Thu, 02 Jan 2020 09:38:00 +0000 http://www.ijdpls.com/20200102-why-anti-infiltration-law-will-help-taiwans-pan-green-coalition/ On the final day of 2019, an anti-infiltration bill proposed by the ruling Democratic Progressive Party (DPP) passed the third reading in Taiwan’s legislature despite a sit-in protest staged by lawmakers of the opposition Kuomintang (KMT).

For the so-called pan-green coalition, the passage of the bill was like a big gift for the New Year.

In an address delivered on New Year’s Day, President Tsai Ing-wen said the passage of the law “won’t have any effect on freedom or violate human rights and won’t influence normal commercial exchanges. It will simply provide greater guarantees from Taiwan’s freedom and democracy.”?

Given China’s moves abroad, a Taiwan failure to prevent interference could give the impression it is untroubled by Beijing’s actions, the Associated Press quoted Tsai as saying.

“Under Chinese pressure and with the constant Chinese infiltration and interference, we really needed this law to make Taiwan a safer place and to prevent social divisions arising from infiltration and interference,” Tsai said, according to the news agency.

Yet as far as the pan-blue coalition is concerned, as some of its members have put it, the new law could mark a regression to the martial law period.

The rationale behind the DPP’s swift and take-no-prisoners approach to pressing ahead with the bill is not difficult to understand: as the presidential election is less than two weeks away, Tsai was attempting to boost her odds of getting re-elected by delivering the new law.

Here’s the logic: the anti-infiltration law is directed at Beijing and aimed to prevent any form of interference by the mainland in Taiwan’s elections.

And since both Tsai and the DPP have successfully portrayed themselves as the “guardian” of Taiwan’s democratic values, it was only natural that they embark on this legislative initiative.

While it remains to be seen whether the newly passed anti-infiltration law can truly combat Beijing’s infiltration and interference as the DPP has claimed, the result of its passage is instant and clear: the new law has proven a shot in the arm for the entire pan-green coalition, thereby substantially enhancing Tsai’s capacity to draw more votes on the election day on Jan. 11.

As a matter of fact, according to poll findings released by the Green Party Taiwan on Tuesday, 48.6 percent of the Taiwanese people were in favor of passing the anti-infiltration law, while only 19.7 percent were against it.

In other words, nearly half of the Taiwanese people believe that passing the new law was necessary, and hence the popular mandate for the DPP to do it.

Apparently, what has given rise to such prevailing sentiment is the widespread distrust of Beijing among the Taiwanese public.

And the stronger the fear of the mainland among Taiwan people, the more the shot in the arm for the electioneering of Tsai and the DPP.

This article appeared in the Hong Kong Economic Journal on Jan 1

Translation by Alan Lee with additional reporting

[Chinese version 中文版]

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