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Trump Puts Squeeze on Beijing over North Korea
Jul 17, 2017 | World Affairs
By Gordon G. Chang
US-China relations are about to spiral downward. -
Chinese ports grow by double digits
Jul 17, 2017 | Journal of Commerce
By Turloch Mooney
China’s main container ports in the month of May continued their strong performance since the start of the year with a double-digit expansion in throughput compared with May 2016. -
EU raises prospect of new sanctions against North Korea
Jul 17, 2017 | Daily Mail
European Union member countries agreed Monday to consider imposing new sanctions on North Korea after it tested its first intercontinental ballistic missile. -
Chinese Steel, Aluminum Loom Over Made in America Week
Jul 17, 2017 | U.S. News & World Report
By Andrew Soergel
U.S. President Donald Trump's and Chinese President Xi Jinping's 100-day trade discussion window has come to a close, but Chinese steel and aluminum producers appear to be flooding the market with more products than ever – an action that could end up making it difficult for Trump to stick by his "America first" mantra. -
Deal paves way for direct Bangladesh-China services
Jul 17, 2017 | Journal of Commerce
By Syful Islam
Bangladesh and China are laying the groundwork for direct container services between Kunming and Pangaon Inland Container Terminal (PICT), a move that would give shippers of both countries cheaper and faster transits than moving goods through Colombo and Singapore -
Oceanbulk Books Capesize Quartet at Shanghai Waigaoqiao
Jul 18, 2017 | World Maritime News
Greek Oceanbulk Group has been linked to an order for four Capesize bulkers at China’s Shanghai Waigaoqiao Shipbuilding, a wholly owned subsidiary of China CSSC Holding. -
China Merchants Port Holdings Forecasts 50 Pct Profit Rise
Jul 17, 2017 | World Maritime News
Hong Kong-listed China Merchants Port Holdings expects to record an over 50 percent jump in profit for the six months ended 30 June 2017 when compared with the same period last year.
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Trump Puts Squeeze on Beijing over North Korea
Jul 17, 2017 | World Affairs
By Gordon G. Chang
“Recently, certain people, talking about the Korean peninsula nuclear issue, have been exaggerating and giving prominence to the so-called ‘China responsibility theory,’” said Foreign Ministry spokesman Geng Shuang on Tuesday, referring indirectly to Trump administration officials. “I think this either shows lack of a full, correct knowledge of the issue, or there are ulterior motives for it, trying to shift responsibility.”
Beijing expressed more than just irritation with Washington. “Asking others to do work, but doing nothing themselves is not OK,” Geng said. “Being stabbed in the back is really not OK.”
Language this intemperate is rarely heard from government officials in public, especially diplomats, and it tells us that US-China relations are about to spiral downward.
And, frankly, that would be a good thing. For a generation, American diplomats have equated good relations with cordial relations. Yet, in China’s view good relations exist only when Beijing gets what it wants. And, indeed in the name of good relations, American diplomats have allowed their Chinese counterparts to outmaneuver them to make profound gains in an array of areas—currency, trade, and security, to name a few—all the while tolerating China’s increasingly irresponsible, hostile, and dangerous behavior, which has frequently violated both international norms and law.
Since the beginning of his term, President Trump’s approach, on full display at his April meeting in Mar-a-Lago with Chinese ruler Xi Jinping, has been generous. And the early signs were positive. A couple of weeks after the meeting, the president suggested the two were cooperating, tweeting, “Why would I call China a currency manipulator when they are working with us on the North Korean problem?” Adding coyly, “We will see what happens.”
It appears now that in Trump’s view, insufficient progress has “happened,” as it were, because the administration’s approach has changed. In late June, the president began to impose costs by designating the Bank of Dandong a “primary money laundering concern,” a long overdue move that essentially sawed off the shady institution’s links to the global banking system.
Beijing was certainly displeased, but Geng’s denial of his country’s responsibility for North Korea’s arms build-up and missile tests suggest Chinese officials hope to head off additional American sanctions.
Beijing’s problem, however, is that as North Korea’s primary benefactor and life-line, much of its ongoing and multi-faceted commercial, security, and trade relationship with the Kim regime directly violates US law, the Patriot Act in particular.
Some of China’s larger banks appear to have washed cash for the Kim regime, a primary suspect being the Bank of China, one of China’s so-called Big Four banks. The bank was listed in a 2016 UN report for designing and operating a money-laundering scheme for Pyongyang.
In the last few weeks, a number of analysts have proposed schemes to disarm or defang the Kim regime. Yet, Kim would come under considerable pressure if the US would simply enforce existing law, designed to prevent foreign banks from laundering currency. That law puts Chinese financial institutions, working on behalf of Kim Jong Un’s destitute and dangerous state, in the crosshairs.
China can expect more banks to suffer the fate of the Bank of Dandong. The Trump administration is targeting other financial institutions laundering cash for the Kim regime—some of them believed to be Chinese—and it is also seizing the funds of parties dealing with North Korea, like Dandong Zhicheng Metallic Material Co. and four related front companies.
The Chinese will complain about America’s “long-arm” jurisdiction, but for the moment this White House seems determined to reconsider its criteria for “good relations” with China by preventing Chinese and other banks from aiding Pyongyang. Beijing will not be pleased and that’s why a downward—and healthy—spiral in relations can be expected.
http://www.worldaffairsjournal.org/blog/gordon-g-chang/trump-puts-squeeze-beijing-over-north-korea
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Chinese ports grow by double digits
Jul 17, 2017 | Journal of Commerce
By Turloch Mooney
China’s main container ports in the month of May continued their strong performance since the start of the year with a double-digit expansion in throughput compared with May 2016. The top 10 container ports — including Shanghai and Ningbo-Zhoushan in the Yangtze River Delta; Shenzhen and Guangzhou in the Pearl River Delta, and Qingdao and Dalian in the northern Bohai Rim — handled a combined 15.3 million TEU in May, 10.6 percent more than the 13.9 million TEU handled in May last year, the latest figures from the Shanghai Shipping Exchange show.
The strong throughput data comes amid renewed warnings of weakening business sentiment and manufacturing activity, and expectations of slowing GDP growth for the remainder of 2017 and into 2018. With the exception of the northeastern port of Dalian, which handled fewer containers in May than it did in the same month last year, all of the ports in the top 10 list managed to grow volumes. Shanghai, Ningbo-Zhoushan, and Guangzhou performed particularly well, with throughput up by 14.7 percent, 27.2 percent, and 14.2 percent respectively.
On a year-to-date basis, throughput at the top 10 ports reached 70.4 million TEU, 7 percent higher than volumes handled during the first five months of 2016.
Shanghai handled 1.5 million TEU more containers over the first five months of the year than it did last year, while Ningbo-Zhoushan handled an additional 1.2 million containers, taking it ahead of Shenzhen to become China’s second-busiest port in terms of volumes handled on a year-to-date basis.
The strong container throughput growth over the first part of the year reflects good GDP performance by the overall economy, which grew 6.9 percent year over year in the first quarter. In its World Economic Outlook, IHS Markit attributed the better-than-expected growth in part to policy stimulus to ensure stability ahead of the 19th Party Congress, but warned that excess industrial capacity and a correction in the housing market would trim growth back to around 6.6 percent over the full year.
IHS Markit’s tri-annual China business outlook survey of 12,000 manufacturers and service providers, which was released Monday, signals a weakening of business sentiment toward the year ahead. Companies surveyed forecast increases in output and new orders, but the level of optimism was down from February to near record lows in both cases. Survey respondents said tough competition, raw material shortages, and unstable market conditions were among key threats to outlook.
Changes to state policies, particularly environmental protection laws for manufacturers, were also linked to subdued growth expectations “The latest IHS Markit Business Outlook survey revealed a renewed drop in confidence among Chinese firms during June. Furthermore, optimism towards future activity, new business and profits all fell to near-record lows,” said IHS Markit economist Annabel Fiddes.
“Lower levels of confidence were recorded across both the manufacturing and service sectors to suggest a broadbased growth slowdown in the next year,” Fiddes added.
The Caixin/IHS Markit Manufacturing Purchasing Managers' index (PMI) contracted for the first time in 11 months in May, with a reading of 49.6. A reading above 50 indicates expansion in manufacturing and a reading below that level points to a contraction in activity.
"Softer growth in output reflected a relatively muted increase in total new orders during May," Caixin and IHS Markit said in a joint press release. An official PMI that focuses on larger state-owned enterprises continued to show expansion in manufacturing, with a reading of 51.2 for May.
http://www.joc.com/port-news/asian-ports/port-qingdao/chinese-ports-grow-double-digits-economic-outlook-weakens_20170717.html
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EU raises prospect of new sanctions against North Korea
Jul 17, 2017 | Daily Mail
European Union member countries agreed Monday to consider imposing new sanctions on North Korea after it tested its first intercontinental ballistic missile.
Last month, the EU expanded its sanctions blacklist after North Korea launched a volley of surface-to-ship cruise missiles off its east coast.
EU foreign ministers met on Monday to condemn the July 4 intercontinental ballistic missile test launch as an "outright violation" of UN Security Council resolutions.
North Korea "is the country against which we (Europeans) have the most restrictive measures and we decided we will consider adopting further measures in full coordination with our international partners," EU foreign policy chief Federica Mogherini told a press conference after the meeting.
EU sanctions against North Korea date back to 2006 and are part of international efforts to halt a nuclear and ballistic missile programme that experts say is intended to give Pyongyang the capability to hit the US mainland.
The foreign ministers also stressed the need for a diplomatic rather than a military solution and kept the door open to dialogue.
"Denuclearisation of the Korean pensinula must be achieved through peaceful means. This excludes military action," Mogherini said.
The ministers agreed to follow the diplomatic lead of South Korea which has just offered to hold rare military talks with North Korea on Friday at the border truce village of Panmunjom.
Mogherini said Beijing, North Korea's neighbour and main trade partner, is increasing its diplomatic efforts when asked to comment on criticism it was not putting enough pressure on Pyongyang.
"What I have seen in recent months in my dialogue with the Chinese authorities from the highest level down has been a sincere commitment to find a solution to tensions on the Korean peninsula," she said.
She said China's role will form a "consistent part" of the talks she will attend at the Asia regional forum in Manilla in August.
British Foreign Secretary Boris Johnson said the foreign ministers had opposed any effort to engage in a dialogue with North Korea before it takes a concrete step.
"They have got to make serious moves toward denuclearising their country before it is right for us to begin a proper dialogue," he said, summing up what he saw as the EU position.
http://www.dailymail.co.uk/wires/afp/article-4703626/EU-raises-prospect-new-sanctions-against-NKorea.html
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Chinese Steel, Aluminum Loom Over Made in America Week
Jul 17, 2017 | U.S. News & World Report
By Andrew Soergel
U.S. President Donald Trump's and Chinese President Xi Jinping's 100-day trade discussion window has come to a close, but Chinese steel and aluminum producers appear to be flooding the market with more products than ever – an action that could end up making it difficult for Trump to stick by his "America first" mantra.
China's latest gross domestic product print exceeded expectations during the second quarter of the year, with growth clocking in at 6.9 percent. But that performance was supported by a metals production increase that international officials have been desperately trying to avoid as a global oversupply dilemma wreaks havoc on prices and makes it difficult for non-Chinese companies to compete.
Steel and aluminum production in China – the world's largest supplier of both items – in June jumped 5.7 percent and 7.4 percent on the year, respectively, to all-time highs. The spike was perceived as an effort by Chinese industry to generate as much product as possible before an expected government crackdown effectively limits the country's factory output.
The timing of the news, though, wasn't ideal. A 100-day period of trade discussions between the U.S. and China expired Sunday – the day Beijing's industrial performance numbers were released. A delegation of Chinese officials is scheduled to attend a series of economy-themed meetings in the District of Columbia this week, and the Trump administration on Monday was poised to kick off what it's referring to as "Made in America Week" to celebrate American producers.
Chinese metal production has been a bugaboo for Trump in the past, and he and his allies in the White House are reportedly weighing the revitalization of a 1960s Cold War-era law that would allow the president to restrict imports of certain items into the U.S. on the basis of national security.
"At this point, it looks like the president will use his authority and claim that all this steel that's coming in from China and from other countries is hurting the U.S. or is putting at risk the national security of the country," former Commerce Sec. Carlos Gutierrez, told CNBC's "Power Lunch" in a recent interview. "Whether that is the way to solve the steel capacity issue is another thing. Because this national security concept is somewhat ambiguous, you can expect China to do some kind of retaliation. So I think it's a slippery slope, and I think we have to be careful."
Still, the 100-day trade window Trump and Xi ironed out during an April meeting at the president's Mar-a-Lago resort in Florida didn't appear to do much to curb Chinese industrial exports. And although American exporters are now believed to have wider access to the Chinese consumer market following the discussion period – particularly for beef and electronic payment services – at least some of that expansion had already been agreed upon while former President Barack Obama was still in the White House.
Trump has indicated a willingness to wed economic and diplomatic priorities, using trade and economic issues between China and the U.S. to persuade Beijing to help rein in North Korean missile testing. Since his first meeting with Xi, Trump has repeatedly voiced public skepticism of China's willingness to play ball.
The administration did recently unveil a series of isolated sanctions and blacklisting that involved Chinese individuals and companies doing business with North Korea. But broader trade and economic sanctions have yet to come into the fold – though they very well could if Trump begins to close off the U.S. market to Chinese steel and aluminum.
But the integrity of Trump's "America first" pledge and the point of "Made in America Week" has been undermined by his and his family's business dealings. A considerable share of Trump-made merchandise is and has been manufactured overseas – many Trump-brand ties, for example, bear a "Made in China" tag.
And Ivanka Trump, the president's daughter and White House adviser, was the subject of a recent expose in The Washington Post that alleges her clothing line's production relies on low-wage workers from countries like Indonesia and China.
Trump has vowed to bring manufacturing and industrial production jobs back to the U.S. from overseas, but that espoused goal could be put to the test this week as a potential trade showdown with China looms.
https://www.usnews.com/news/economy/articles/2017-07-17/chinese-steel-aluminum-loom-over-made-in-america-week
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Deal paves way for direct Bangladesh-China services
Jul 17, 2017 | Journal of Commerce
By Syful Islam
Bangladesh and China are laying the groundwork for direct container services between Kunming and Pangaon Inland Container Terminal (PICT), a move that would give shippers of both countries cheaper and faster transits than moving goods through Colombo and Singapore. Bangladesh’s exports to and imports from China at present arrive via feeder vessels from Singapore or Colombo to the ports of Chittagong or Mongla.
The deal will enable priority berthing of vessels and cut ship turnaround time, reducing lead time for exporters, according to a source in the Department of Shipping.
“The coastal shipping deal will reduce cost as well as time. To us, time is also money,” said Mahmudur Rahman, director for Bangladesh China Chamber of Commerce and Industry.
“We welcome the deal,” said Rahman, who is also managing director of Zaheen Spinning Mills, an importer of machinery and equipment. He plans to begin importing hand bags, school bags, and other products from China, an effort he said would benefit from the coastal shipping deal.
The PICT is in Keraniganj, a Dhaka suburb, and was inaugurated in November 2013 with the aim of transporting containers to and from the port of Chittagong via river rather than congested roadways. PICT has storage capacity of 3,500 TEU in its 55,000-square-meter container yard, and handles 116,000 TEU annually. There are plans to gradually raise annual capacity to 160,000 TEU.
PICT is on a 180-meter-long (about 590.5 feet), 26-meter-wide jetty that can handle two ships of 70 to 75 meters at berth simultaneously. The terminal has one mobile harbor crane, two straddle carriers, four forklifts, two tractor trailers, and two cargo-lifting cranes. Bangladesh’s exports to China increased by 17.5 percent year over year to $949.4 million from $808.1 million in fiscal year 2016 to 2017 a year back, according to the Export Promotion Bureau.
China exports nearly $9 billion in goods to Bangladesh. Bangladesh mainly exports woven garments, knitwear, home textiles, agri-products, frozen food, leather and leather products, footwear, raw jute, jute goods, and bicycles. IHS Markit expects that total merchandise exports from Bangladesh will rise 9.5 percent year over year this year, with growth driven by ready-made garments, which make up 80 percent of all exports from the country.
Major imports from China include: cotton, cotton yarn/thread and cotton fabrics, nuclear reactors, boilers, machinery and mechanical appliances, electrical machinery and equipment, sound recorders and reproducers, man-made staple fibers, iron and steel, plastics and articles thereof, vehicles other than railway or tramway, paper and paper board, and arms and ammunition.
Trade between the two countries will continue to grow, as China in 2010 granted duty-free market access to some 4,721 Bangladeshi products under the Asia Pacific Trade Agreement (APTA) and the two countries are negotiating terms for duty-free access for some Bengali goods to the Chinese market, according to a ministry of commerce official. The official also said Bangladesh is negotiating a 100 percent duty free market access to China under the World Trade Organization.
http://www.joc.com/maritime-news/short-sea-shipping/bangladesh-china-hammering-out-coastal-shipping-deal_20170717.html
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Oceanbulk Books Capesize Quartet at Shanghai Waigaoqiao
Jul 18, 2017 | World Maritime News
Greek Oceanbulk Group has been linked to an order for four Capesize bulkers at China’s Shanghai Waigaoqiao Shipbuilding, a wholly owned subsidiary of China CSSC Holding.
The 180,000 DWT quartet is valued at USD 172 million, with Oceanbulk paying USD 43 million a piece, data from VesselsValue shows.
The newbuilds are slated for delivery in 2019.
Shanghai Waigaoqiao has already delivered two Capesize bulkers to the company earlier this year and is building three more 11,000 TEU containerships for the group.
The boxships are expected to be delivered later this year.
Petros Pappas-chaired group has nine bulkers in its fleet, with an average age of 6 years, and eleven newbuilds valued at USD 496.4 million.
In addition, Oceanbulk’s fleet includes four containerships and 18 tankers.
http://worldmaritimenews.com/archives/225394/oceanbulk-books-capesize-quartet-at-shanghai-waigaoqiao/
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China Merchants Port Holdings Forecasts 50 Pct Profit Rise
Jul 17, 2017 | World Maritime News
Hong Kong-listed China Merchants Port Holdings expects to record an over 50 percent jump in profit for the six months ended 30 June 2017 when compared with the same period last year.
The increase in net results for the first half of the year has been ascribed primarily to the expected net gain of approximately HKD 775 million (USD 99.2 million) that will be recorded from the disposal of its entire interest in China International Marine Containers (CIMC).
As informed, CIMC is expecting to return to profit in the first half of the year, as compared with a loss of RMB 378 million in the same period last year.
Detailed financial information of the group for the six months ended 30 June 2017 will be published in August 2017, the company said.
CMPort is China’s largest port developer, with a comprehensive ports network along coastal China as well as South Asia, Africa, Europe, and Mediterranean. These locations include Shanghai, Shenzen, Hong Kong, Qingdao along with Colombo in Sri Lanka, and Djibouti, Africa.
For 2017, the company set out three strategic goals, those being consolidation and unification of the West Shenzhen Port Zone and stepping up of efforts in improving both the software and hardware of the homebase port; seeking to capture opportunities for expansion of the port network layout within China, and expansion of overseas ports network.
http://worldmaritimenews.com/archives/225331/china-merchants-port-holdings-forecasts-50-pct-profit-rise/
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