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Q&A: Cooperation between ADB, AIIB a complex ballet
Jul 18, 2017 | Asia Times
By Doug Tsuruoka
Coooperate with China but don’t let anyone know seems to be the name of the game at the Asian Development Bank (ADB) these days. -
Apple names new managing director for greater China
Jul 19, 2017 | Financial Times
By Hudson Lockett
Apple has named Isabel Ge Mahe, from Liaoning province, vice president of its wireless technology division, as vice president and managing director for greater China – a new position that reflects the growing importance of Chinese users for the company. -
US-China trade rifts resurface even after friendly summit
Jul 18, 2017 | CNBC
By Carlos Barria
Could this week's U.S.-China Comprehensive Dialogue produce a meaningful breakthrough in economic relations? -
An EU Rubber-Boat Ban Won't Stop Migrants
Jul 18, 2017 | Bloomberg News
By Leonid Bershidsky
On Monday, the European Union's foreign ministers approved restrictions on the supply of inflatable boats and outboard motors to Libya. -
Asia-Russia spot rates expected to hold after doubling
Jul 18, 2017 | Journal of Commerce
By Eugene Gerden
Asia-Russia-Europe spot rates are up more than double year over year and shippers and industry watchers do not expect them to fall much for the rest of the year. -
HHI Presents Integrated Smart Ship Solution
Jul 19, 2017 | World Maritime News
South Korea’s shipbuilder Hyundai Heavy Industries (HHI) has developed Integrated Smart Ship Solution (ISSS), its ICT technology capable of realizing economical and reliable navigation and management of ships.
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Q&A: Cooperation between ADB, AIIB a complex ballet
Jul 18, 2017 | Asia Times
By Doug Tsuruoka
Coooperate with China but don’t let anyone know seems to be the name of the game at the Asian Development Bank (ADB) these days. In an era of presidential tweets heard around the world and on-again, off-again White House policy posturing, former ADB official Jeff Procak says it’s hard to tell what the bank’s and Washington’s true intentions are toward China’s Belt and Road Initiative (BRI) or its financing arm, the Asian Infrastructure Investment Bank (AIIB).
Until November last year, Procak was an ADB regional cooperation specialist for Central Asia. He has also served as the World Bank’s country officer for Russia and worked on the European Bank for Reconstruction and Development’s railway-sector surveys for seven Soviet successor states.
Procak spoke with Asia Times about the complex geopolitical ballet that underpins the ADB’s responses to Chinese development moves in the region.
Do you see the ADB getting involved in China’s Belt and Road projects?
Procak: Yes, but not overtly. We were cautioned not to state specifically in ADB documents that ADB projects support Belt and Road initiatives.
Some of the technical assistance I designed for Xinjiang and Liaoning took [BRI] into account. In fact, for the Liaoning initiative, I wanted to use it as a means for harmonizing the Japan-Mongolia Economic Partnership Agreement with the Belt and Road Initiative. But now that I’m not there, these small projects are languishing.
Is Japan’s hesitancy and wariness about China reflected in the ADB’s policy stance toward the AIIB and BRI?
Procak: Both Japan and the US have up to now refused to join the AIIB. So yes, certainly, there is a healthy dose of geopolitical positioning going on. Having the AIIB tag along as a co-financier seems acceptable for the moment. But [the real question is] will there come a time when the ADB co-finances an AIIB-designated project?
Is the Trump administration’s semi-cooperative stance toward China being reflected in current ADB policy toward the AIIB and BRI?
Procak: This is a big unknown. The US position on anything these days seems to change by the day, if not the hour – or, as a friend put it, by the tweet. The [US] silliness regarding Taiwan a few months back seems already forgotten. But I doubt that Beijing has forgotten.
If the US knew what it was doing – and this is much larger than a current-administration issue – it would quietly find ways to prompt Beijing to act on common concerns like North Korea, faith-based terror and the like. But that’s not something of which Washington appears capable.
http://www.atimes.com/article/qa-cooperation-between-adb-aiib-a-complex-ballet/
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Apple names new managing director for greater China
Jul 19, 2017 | Financial Times
By Hudson Lockett
Apple has named Isabel Ge Mahe, vice president of its wireless technology division, as vice president and managing director for greater China – a new position that reflects the growing importance of Chinese users for the company. Apple said Ms Mahe will provide leadership and coordination across Apple’s China-based team in the newly created role. Chief executive Tim Cook also took the opportunity of the announcement to underscore its commitment to the China market.
“Apple is strongly committed to invest and grow in China, and we are thrilled that Isabel will be bringing her experience and leadership to our China team,” Mr Cook said. “She has dedicated a great deal of her time in recent years to delivering innovation for the benefit of Apple customers in China, and we look forward to making even greater contributions under her leadership.”
Ms Mahe, who was born in Liaoning province, previously led Apple’s wireless technologies software engineering team for nine years. She said she was “looking forward to deepening our team’s connections with customers, government and businesses in China to advance innovation and sustainability.” Connections with government are likely to prove particularly important for Apple in the years ahead.
The company recently announced it will store personal user information for Chinese owners at its first online data centre at the tech group’s new facility in the province of Guizhou. That move followed Beijing’s introduction last month of tighter cyber security rules and reflected the concessions foreign multinationals must make to tap the world’s largest mobile market, which is increasingly important for iPhone sales.
https://www.ft.com/content/3f67f3fe-0f81-3258-a027-2627a67bf681
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US-China trade rifts resurface even after friendly summit
Jul 18, 2017 | CNBC
By Carlos Barria
Cake and conversation, it seems, can go only so far to mend longstanding economic rifts between the United States and China.
Three months after President Donald Trump and his Chinese counterpart, Xi Jinping, shared chocolate cake at an amiable summit in Florida, tensions between the world's two biggest economies are flaring again.
Just as officials of the two nations prepare to meet Wednesday in Washington, the Trump administration is considering slapping tariffs on steel imports, a step that risks igniting a trade war. For the United States, it's a perilous option to address a problem caused largely by China's overproduction of steel.
And Trump is criticizing China again for failing to use its economic leverage to rein in its neighbor and ally, the nuclear rogue state North Korea.
Could this week's U.S.-China Comprehensive Dialogue produce a meaningful breakthrough in economic relations?
Most China watchers are skeptical.
"I'm not looking for anything worthwhile," says Derek Scissors, a China specialist at the conservative American Enterprise Institute.
For one thing, the points of difference between the two countries run deep. For another, Xi faces political pressures at home and won't want to cause a stir in Beijing.
For all the tensions between the two nations, Trump's words about Xi himself have remained warm. He has suggested that the personal bond he formed with Xi when the two met April 6-7 at Trump's Mar-a-Lago resort can overcome fundamental differences on trade and national security. Last week, the president called his Chinese counterpart a "friend of mine," ''a terrific guy" and "a very special person."
At a White House event Monday, Trump suggested that the relationship is so strong that he asked during the Florida summit to start exporting U.S. beef to China and that the request was quickly granted. Trump said that the beef industry was so pleased to return to China after a 14-year ban that one executive from Nebraska "hugged me, he wanted to kiss me so badly."
"We welcome this opportunity," Kenny Graner, a North Dakota cattle farmer who is president of the U.S. Cattlemen's Association, says of the China market. "They have a middle class that's growing in income. It's big, a lot of people."
After the meeting, the president softened his accusations of abusive Chinese practices, dropped his threat to label China a currency manipulator and expressed optimism that China would pressure North Korea to scale back its nuclear program.
Still, the Trump-Xi relationship has yet to deliver the substantive changes that Trump the candidate had promised voters - a core piece of his mantra to put "America first." The economic irritants are likely to vex U.S. and Chinese officials this week.
Trump had campaigned on a promise to shrink America's trade deficits, which he blames for wiping out American factories and manufacturing jobs. The United States last year ran a trade deficit in goods with China of $347 billion, the amount by which imports exceeded exports. It's by far the widest gap that U.S. has with any country. Trump says China unfairly subsidizes exports.
Take steel. From 2000 to 2016, China accelerated steel production, raising its share of the world market from 15 percent to nearly 50 percent. As Chinese steel poured into the market, global prices fell, hurting American steelmakers. Scissors notes that China has long promised to stop subsidizing steel and to slow production but hasn't delivered.
The Trump administration responded by invoking a little-used weapon in American trade law that lets the president tax or restrict imports - if a U.S. Commerce Department investigation finds that they imperil national security. (The result of Commerce's investigation of steel imports is expected soon.) The rationale was that the American military relies on steel for airplanes, ships and other equipment. Steel also goes into roads, bridges and other infrastructure.
The problem is that the United States already blocks most Chinese steel imports. So any tariffs or limits on imports would instead hurt other countries, including such staunch allies as Canada and South Korea.
Scissors says the United States could try to coordinate sanctions against China by countries that do import Chinese steel.
David Dollar, a former World Bank and U.S. Treasury official who is now at the Brookings Institution, thinks Xi isn't likely to make a bold move to cut Chinese steelmaking capacity - or enact other economic reforms - in advance of the Chinese communist party's National Congress this fall. At the meeting, Xi will want to further tighten his grip on the party.
What's more, the European Union and others are likely to lash back if the U.S. imposes sanctions on foreign steel, thereby running the risk of a broader trade war.
Then there's North Korea. As a presidential candidate, Trump attacked China for refusing to pressure Pyongyang to back off from developing nuclear weapons. After the Mar-a-Lago summit, though, Trump praised Beijing for agreeing to help deal with North Korea. As a reward, he abandoned his vow to accuse China of manipulating its currency to benefit Chinese exporters.
This month, North Korea defiantly proceeded with its first launch of an intercontinental ballistic missile. Trump tweeted his complaint:
"Trade between China and North Korea grew almost 40% in the first quarter. So much for China working with us - but we had to give it a try!"
Brookings' Dollar says the administration will likely continue to be disappointed.
"China is not going to do anything dramatic" to pressure North Korea, he says. "They don't want that regime to collapse" and thereby destabilize the Korean peninsula and likely send North Korean refugees into China.
Overall, Dollar expects more turbulence between Washington and Beijing. The Obama administration, he notes, had kept the relationship stable despite economic differences by working with China on such issues as the Paris climate agreement and the Iran nuclear deal. But Trump has pulled out of the Paris deal and denounced the Iran pact.
"We're going to see more volatility in the U.S.-China relationship than we've seen in years," Dollar says.
http://www.cnbc.com/2017/07/18/us-china-trade-rifts-resurface-over-steel-even-after-friendly-summit.html
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An EU Rubber-Boat Ban Won't Stop Migrants
Jul 18, 2017 | Bloomberg News
By Leonid Bershidsky
If it looks as though Europe is clutching at straws to stop hundreds, sometimes thousands, of migrants from crossing the Mediterranean into Italy every day, that's exactly what's happening. On Monday, the European Union's foreign ministers approved restrictions on the supply of inflatable boats and outboard motors to Libya.
The boats that bring the migrants, mostly Africans these days, have long been a target of European efforts to dismantle the human-trafficking networks that control the Libya-Italy route. According to a U.K. parliamentary report, Operation Sophia, the joint European naval operation that began in 2015, had destroyed 452 boats by mid-June. These were larger, mainly wooden boats that could carry up to 500 people and offered the smugglers the greatest profit margins. Removing them from the Mediterranean has made the migrant crossings riskier. As a European Commission communicationpointed out in January, the smugglers' "business model" has changed:
They increasingly place irregular migrants and refugees on cheap and completely unseaworthy inflatable dinghies that have no prospect of ever reaching the Italian shores, assuming they will be picked up near or within Libyan territorial waters. The fact that such dinghies now account for 70 percent of all boats leaving the Libyan coast contributes to making journeys increasingly dangerous and to the rise in the number of deaths at sea.
What the focus on destroying boats hasn't changed are the migrant arrival numbers. On July 14, 5,122 people came, close to the record of 5,504 set on Aug. 31, 2016. But the EU stubbornly keeps after the boats, this time rubber ones.
A Sophia report from December 2015, published by WikiLeaks three months later, noted:
Reports of rubber boast (sic) being imported from China and transhipped in Malta and Turkey are supported by a recent interception by Maltese customs of 20 packaged rubber boats in a container destined for Misratah, Libya. As there are no legal grounds for holding such shipments, it was released for delivery to the destination.
That cargo would now be seized. But Europe has little control over the Chinese boat trade.
China has a lively inflatable boat industry with some 180 builders. Some two-thirds of rubber boats imported to Europe come from China. The manufacturers and sellers there know how their products are often used. On Alibaba, the biggest Chinese online market, the dinghies are marketed as "refugee boats."
It's easy to predict the consequences of the export restrictions. Dinghy shipments to Libya will no longer go through Malta, but rather through Turkey and North Africa. The EU sanctions have a loophole for fishermen, which will be exploited. If a shortage is created, smugglers will have to pay more for the vessels, so they'll cram even more migrants into them or to reuse the boats instead of dumping them at sea. This may result in more deaths; so far this year, 2,174 people drowned or went missing trying to make the crossing, compared with 2,951 by this point of the year in 2016.
In May, the EU asked China to help stop the shipments. But the producing country can't reasonably be expected to stop a large homegrown industry from shipping rubber boats to Turkey or Morocco.
The ugly reality of the current migrant crisis is that Europe can do little to stop the smuggling. The boat restrictions and EU participation in the training of the Libyan coast guard are the hopeless flailings of a bloc trapped by the consequences of the 2011 North Atlantic Treaty Organization military operation, which accelerated regime change in Libya but left it lawless and the coast practically unpoliced. In the same document that imposed the rubber boat restrictions, the EU reiterated "its firm support" for the internationally recognized government of Prime Minister Fayez Al-Sarraj, which controls little in Libya beyond the capital city of Tripoli.
This is a losing game. There's no point in repeating the bromide that the Libyan conflict cannot be resolved by force. Force is exactly what's likely to resolve it, when the strongest rebel group manages to consolidate the country or when it splits up the way Somalia did. Apart from pinpointing the strongest rebels and backing them militarily -- an unpalatable option to democracy-supporting Europeans -- the only solution to human trafficking out of Libya would be to land an expeditionary force to pursue the smugglers. Since the EU's joint military capability is modest, this should be an operation for NATO, which helped create the original mess and should help clean it up.
If that ever happens, Chinese rubber boat sales will drop a little -- but then the boat-building companies weren't started with African migrants in mind. They'll just have to go back to courting clients who want dinghies because they like to go fishing.
https://www.bloomberg.com/view/articles/2017-07-18/an-eu-rubber-boat-ban-won-t-stop-migrants
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Asia-Russia spot rates expected to hold after doubling
Jul 18, 2017 | Journal of Commerce
By Eugene Gerden
Asia-Russia-Europe spot rates are up more than double year over year and shippers and industry watchers do not expect them to fall much for the rest of the year. As of July 14, the Asia-North Europe spot rate sat at $1,015 per container while the rate to the Mediterranean came to $951, according to Russia’s Ministry of Transport.
Shippers say there is little variation in rates among container lines, suggesting capacity and rate discipline. Although shippers do not expect rates to fall much, they have likely peaked, according to the transport ministry.
The rate of growth in spot rates has slowed dramatically in recent weeks compared with January through March of this year, when rates rose by $100 to $110 each week. The steep increase in rates is owed to the heavy losses the container shipping industry suffered in 2016, and carriers have been working to recoup those losses, according to Vladimir Chisnakov, first vice president of Russian container line and logistics company FESCO.
He also expects that rate growth will subside in the short term. After the peak shipping season runs its course, transportation companies believe that Asia-North Europe spot rates will end the year at around $780 to $800, while rates from Asia to the Mediterranean will settle at around $830 to $850. However, some shippers doubt these predictions will come true.
Sergey Naydenov, head of Kitaysky Pily, a Russian-Chinese distributor of household goods said container lines will continue to raise rates for the rest of the year, citing the commercial necessity of higher profits for container lines such as Maersk, which lost $376 million last year and $66 million in the first quarter. The company has since said it expects to improve on last year’s result by $1 billion and evidence of a stronger global container shipping market continues to mount. Rising fuel costs, up almost 80 percent from one year ago, are another commercial incentive for carriers to continue raising rates, Naydenov said, adding that he expects average spot rates to increase 10 to 15 percent before the end of the year.
http://www.joc.com/maritime-news/trade-lanes/asia-europe/asia-europe-spot-rates-expected-hold-steady_20170718.html
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HHI Presents Integrated Smart Ship Solution
Jul 19, 2017 | World Maritime News
South Korea’s shipbuilder Hyundai Heavy Industries (HHI) has developed Integrated Smart Ship Solution (ISSS), its ICT technology capable of realizing economical and reliable navigation and management of ships.
ISSS standardizes ways of navigation varying depending on levels of skills and experiences of navigators, collects and analyzes real-time information on navigations, “and thus will play a role in enhancing efficiency and safety of ships.”
The solution, which is the first of its kind in the global shipbuilding industry, is expected to cut annual operating cost by 6%.
HHI developed the smart ship technology in 2011 for the first time in the world and has applied the system to about 300 ships it delivered so far.
Developed on the back of INTEGRICT which is Hyundai Electric’s intelligence energy management system, ISSS provides a wide range of ship information to operators including optimal navigation routes and navigation speed along with a slope status of the front and back hull of a ship that minimize resistances a ship takes on voyage.
The solution allows safer and more efficient management of ships by collecting and analyzing energy data and monitoring status of engines and propellers. The ICT solution already completed field tests by being mounted on a 6,500 PCTC and a 250,000 dwt VLOC.
According to data provided by Clarkson Research, “about 6,500 ships are to be ordered globally for the next five years. Considering the global shipbuilding market share HHI takes up now, ISSS is to be installed on approximately 700 ships for the comparable time period,” Lloyd’s Register’s Luis Benito, Innovation, Strategy and Research Director, Marine and Offshore, said.
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