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Project Dory Monitoring 7 August 2017
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Former Liaoning party chief sentenced to life in prison
Aug 7, 2017 | Financial Times
By Emily Feng
The former Chinese Communist party chief of Liaoning province has been sentenced to life in prison for corruption. -
North Korean Consulate Workers in China Called Home For Review
Aug 4, 2017 | Radio Free Asia
By Jieun Kim
North Korean staff assigned to consulates in China are being called back to Pyongyang for questioning on their political views, with some officials ordered home not returning to their posts, sources say. -
Will North Korea take China and US ‘right to the brink’?
Aug 5, 2017 | South China Morning Post
By Sarah Zheng
Tensions over North Korea’s nuclear missile programme will take Sino-US relations “right to the brink” and could prove a “make or break” issue for the two countries, analysts warn. -
COSCO Ports enters into merger agreement with Dalian Container Terminal
Aug 4, 2017 | American Shipper
By Elizabeth Landrun
The port terminal operator arm of Chinese conglomerate COSCO Shipping will merge three terminal operators into one business entity at the Port of Dalian, according to an official statement from COSCO Ports. -
Kazakhstan gets sea access using Chinese logistics centres
Aug 5, 2017 | The Astana Times
hinese logistics centres become more accessible to Kazakhstan within the One Belt, One Road project. -
Tillerson Hails U.N. Sanctions, as Chinese Minister Rebukes North Korea at Asean Meeting
Aug 6, 2017 | The New York Times
By Gardiner Harris
A day after the United Nations Security Council passed its toughest sanctions against North Korea, Secretary of State Rex W. Tillerson met with his South Korean and Chinese counterparts here in hopes of ratcheting up pressure on Pyongyang. -
Xi's Move to Slap North Korea Buys Time With Trump on Trade
Aug 6, 2017 | Bloomberg
Xi Jinping appears to again be back in Donald Trump’s good graces -- at least for now. -
Trump's attack on Chinese trade gets sidelined over North Korea
Aug 4, 2017 | Politcio
By Andrew Restuccia, Eliana Johnson, Josh Dawsey And Nahal Toosi
An opportunity to hit North Korea with new United Nations sanctions has sidelined President Donald Trump’s bid to punish China for its alleged unfair trade practice. -
China wastepaper import ban less severe than feared
Aug 4, 2017 | Journal Of Commerce
By Bill Mongelluzzo
Although about 16 percent of US wastepaper exports to China could be lost due to the government’s latest ban on importation of scrap commodities, the estimated 160,000 TEU represented by mixed scrap paper will be far less damaging than if China had targeted the more voluminous cardboard and newspaper sectors. -
Asia-Europe spot rates up from last year amid muted increases
Aug 7, 2017 | Journal Of Commerce
By Greg Knowler
The Asia-Europe rate increases levied on Aug. 1 only managed to lift the spot price for a week before declining once again, but the spot rate remains around 8 percent higher than at the same point a year ago. Spot rates from China to North Europe declined by $28 to $935 per TEU, and on the China-Mediterranean trade fell $24 to $859 per TEU, according to the Shanghai Shipping Exchange’s SCFI. The weekly rate movements are tracked on JOC.com’s Market Data Hub
Port Mentions - There are no relevant clips to report at this time.
City/Province Mentions
Competitor Mentions
US - China Relations
Industry News
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Former Liaoning party chief sentenced to life in prison
Aug 7, 2017 | Financial Times
By Emily Feng
The former Chinese Communist party chief of Liaoning province has been sentenced to life in prison for corruption.
Wang Min, 67, was found guilty of bribery, embezzlement and dereliction of duty in the central province of Henan and sentenced Friday, according to the People’s Daily, the party’s official newspaper.Mr Wang had been under investigation since last August by China’s top anti-corruption watchdog and was expelled from the Communist party.
Appointed party chief of Liaoning in 2009, he was partially felled by his role in a massive scandal that caused 45 lawmakers to be expelled for bribery and vote-buying. The province’s legislature had to be temporarily suspended because so many of its members were purged for their connection to the scandal. Chinese state media accused Mr Wang of being directly responsible for election fraud.He pleaded guilty to embezzling Rmb1m in public funds for personal use during his time as governor of nearby Jilin province.
Liaoning was also found to have falsified its 2015 fiscal revenues by as much as 20 per cent under Mr Wang’s watch. The northeast province has been particularly hard hit by a clampdown on overcapacity in industries like steel and in 2016 was the first Chinese province to post negative growth in seven years.https://www.ft.com/content/5f90f1d3-9c8f-31d4-83ca-d9ba4b58c1db
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North Korean Consulate Workers in China Called Home For Review
Aug 4, 2017 | Radio Free Asia
By Jieun Kim
North Korean staff assigned to consulates in China are being called back to Pyongyang for questioning on their political views, with some officials ordered home not returning to their posts, sources say.
The recall order, which began in April, is the largest in recent memory, a Korean-Chinese source in Shenyang city in China’s Liaoning province told RFA’s Korean Service.
“The summoning of consulate staff back to Pyongyang began all at once in many cities in China, including Beijing, Shenyang, Dandong, and Shanghai,” RFA’s source said, speaking on condition of anonymity.
“The reason for the mass recall seems to be to a review of the staffers’ ideology, though some say this may just be part of a North Korean plan to replace them all.”
Some of those called back have not been seen again, the source said.
“One North Korean staffer that I know was summoned to Pyongyang, but I haven’t heard from him for months. His wife and daughter, who had been studying at Liaoning University, went back with him.”
“A number of people from the Shenyang consulate have been called home, and they are reportedly being subjected to an intensive ideological review,” the source said, adding that some younger staffers have been sent out to replace them, though not all posts have been filled.
Many of the consulate staff called back with their families have already had long tours in their posts, a second source told RFA, adding that “this continuous summoning of staffers since April is causing extreme anxiety.”
“One worker in the Shenyang consulate who was put in charge of [China’s] Dandong district was called back to Pyongyang and punished for his failure to manage conditions for North Korean workers in China to secure party funding,” he said.
North Korea has exported workers to China, Russia, and countries farther afield for years, but requires them to remit most of their earnings to the North Korean government, which is believed to use the cash to fund its illicit weapons programs.http://www.rfa.org/english/news/korea/review-08042017120436.html
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Will North Korea take China and US ‘right to the brink’?
Aug 5, 2017 | South China Morning Post
By Sarah Zheng
Pyongyang regime’s nuclear missile programme could be a ‘make or break’ issue, analysts warn
Tensions over North Korea’s nuclear missile programme will take Sino-US relations “right to the brink” and could prove a “make or break” issue for the two countries, analysts warn.
“There have been signs that the promise of cooperation between the US and China seems to be breaking down,” Australian National University defence studies expert Dr Brendan Taylor said. “Unfortunately, it’s going to take going right to the brink for the US and China to start working together in a genuine and concerted way.”
After a fleeting honeymoon between US President Donald Trump and Chinese counterpart Xi Jinping following their meeting in Florida in April, the two countries have taken to blaming each other for Pyongyang’s march towards nuclearisation.
Taylor said Washington’s “inconsistent and erratic” approach had exhibited a level of uncertainty, as well as a lack of success.
North Korea had become an almost “make or break” issue in the Sino-US relationship, alongside the trade deficit, Dr Carla Freeman, an expert in Chinese foreign policy at Johns Hopkins University in Washington, said.
“Pyongyang has been an expert in playing countries off each other to get what it needs,” she said. “They are particularly good at creating strains in the US-China relationship to push their own agenda.”
She said there had been a “cacophony of statements” from different voices in Washington, with Trump posting comments on Twitter about China’s efforts or lack thereof to put pressure on North Korea, which counts China as its most important ally and trading partner.
In his latest tweet on the subject, fired off last Saturday, he said: “I am very disappointed in China ... They do nothing for us with North Korea, just talk. We will no longer allow this to continue.”
Washington has tiptoed towards levying “secondary sanctions” against North Korea – ones clamping down on Chinese firms doing business across the border – and Joshua Pollack, a nuclear and missile proliferation expert at the Middlebury Institute of International Studies at Monterey, in California, said there were indications Trump could use trade as a bargaining chip.
Secondary sanctions were the only feasible non-military option for the US, said Dr Sung-yoon Lee, a Korean studies professor at Tufts University in Boston, since the idea that America would outsource its North Korean policy to China was a “fool’s errand”.
“The Chinese will be indignant, so the US has been quite restrained in not doing this,” he said. “But [more action from China] is not going to happen unless the costs become unbearable on China.”
However, Lee said he did not expect further sanctions would derail the Sino-US relationship, because it was “too big to fail”.
China would be outwardly upset but would tolerate secondary sanctions, said Robert Manning, an Asia analyst at the Washington-based Atlantic Council think tank, because they would have little impact on its economy.
He said Beijing and Washington had been engaged in an unproductive “blame game”, but deterrence had proven to be an effective policy for dealing with North Korea since 1953.
“The one redeeming feature of the North Koreans is that they’re not suicidal, everything they’ve ever done is so the Kim dynasty, the regime, can survive,” he said.
Citing an increase in Chinese trade with North Korea in recent months, the Trump administration has imposed sanctions on two Chinese individuals, the China-based Bank of Dandong, and a shipping company to stem the flow of money to North Korea.
Data from China’s Ministry of Commerce shows trade between China and North Korea grew 13.7 per cent between January and May, while China Customs figures said it increased by 37.4 per cent increase in the first three months of the year.
Chinese officials have urged a return to the negotiating table, and for the US to accept its “dual suspension” approach, which calls for the US and South Korea to end joint military exercises – one is scheduled for this month – and for North Korea to suspend its nuclear programme.
“The common goal for China and the US is the denuclearisation of the Korean peninsula; this goal has been consistent,” said Dr Ren Xiao, an international studies professor at Fudan University in Shanghai. “The difference is how to achieve this goal.”
US officials at the Asean summit in Manila are expected to press China this weekend on harsher sanctions against North Korea, but Ren said the “pressure from the Americans will be in vain”.
Pollack said Pyongyang’s ongoing nuclear tests and missile launches – it launched its second intercontinental ballistic missile in a month on July 28 – appeared to have soured Trump’s hopes that Xi would have a deterrent effect.
The two countries were likely to “continue to limp along and half cooperate”, he said, despite Trump having made North Korea a centrepiece of his foreign policy.
“It’s Washington’s choice whether or not to make this the defining issue in US-China relations,” he said. “We’ll see who blinks first.”
While China had cooperated with UN Security Council resolutions on North Korea’s weapons programme, it would not cave in to US pressure, said Dr Chang Ching, a research fellow at the Society for Strategic Studies, a conservative think tank in Taipei.
“Beijing will never give up its own positions under pressure from the US,” he said. “North Korea is [a] headache for Beijing, but not a threat ... yet.”
Chang also cited the “mutual aid and cooperation friendship treaty” signed between North Korea and China in 1961, which is up for renewal in 2021, but added that North Korea did not have to be a diplomatic wedge between the US and China.
“Pyongyang is important to both sides, but could never be vital in the relations between Beijing and Washington,” he said
Analysts say China has multiple fears about the future of the Korean Peninsula: the threat of an unpredictable North Korea as a credible nuclear power, the potential downfall of Kim Jung-un’s regime and an ensuing refugee influx, greater military cooperation between South Korea and the US, and the possibility of a reunified Korea on its border that is friendly to the US.
Lee said North Korea was “very calculating and rational” and Kim was “sitting pretty right now”.
In the long-term, stopping North Korean nuclearisation would prove “virtually impossible”, he said, because the regime would not give up its nuclear weapons unless there was a change in leadership.
“Military power, nuclear power is really a non-negotiable ace card for the Kim regime, unless the regime is presented with the spectre of regime threat,” Lee said. “Things will have to get worse before they get better.”
http://www.scmp.com/news/china/diplomacy-defence/article/2105426/will-north-korea-take-china-and-us-right-brink
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COSCO Ports enters into merger agreement with Dalian Container Terminal
Aug 4, 2017 | American Shipper
By Elizabeth Landrun
The port terminal operator arm of Chinese conglomerate COSCO Shipping will merge three terminal operators into one business entity at the Port of Dalian, according to an official statement from COSCO Ports.
COSCO Shipping Ports Ltd. has announced an agreement with Dalian Container Terminal that will merge the three terminal operators at the Port of Dalian into one business entity.
Upon completion of the merger, Dalian Container Terminal Co., (DCT), as the surviving entity, will assume all assets, businesses, credits and debts of Dalian Port Container Terminal Co. (DPCT) and Dalian International Container Terminal Co., (DICT). DPCT and DICT will be deregistered as legal entities and the current shareholders of DPCT and DICT will hold equity interests in DCT as the surviving entity, said COSCO Ports.
DCT currently operates seven berths at the Port of Dalian, while DPCT operates five berths and DICT operates two.
According to COSCO Ports, Dalian Port Container Development Co. (DPCD) will own a 48 percent share in the terminal business. The remaining shareholders include Singapore Dalian Port, China Shipping Terminal Development Co. (CSTD), Nippon Yusen, PSA China, COSCO Ports Dalian and China Shipping Ports Development Co. (CSPD), who own the remaining 20 percent, 10 percent, 6.8 percent, 5 percent, 4 percent and 3.6 percent, respectively.
“The company believes that the merger will allow each party to exert its strength, further optimize the allocation of resources, and facilitate integrated management of the relevant terminals, thereby lowering operational costs, increasing overall competitiveness of DCT and enhancing its efficiency,” COSCO Ports said in announcing the agreement.
The completion of the merger is subject to approval by government authorities, including the Anti-monopoly Bureau of The Ministry of Commerce of the People’s Republic of China.http://www.americanshipper.com/main/news/68329.aspx#hide
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Kazakhstan gets sea access using Chinese logistics centres
Aug 5, 2017 | The Astana Times
ASTANA – Chinese logistics centres become more accessible to Kazakhstan within the One Belt, One Road project.
An initiative announced by Chinese President Xi Jinping in 2013, One Belt, One Road is aimed at reviving and boosting cooperation between countries that once laid along the Silk Way route linking Asia and Europe.
Part of the programme, since then renamed as simply Belt and Road Initiative, includes establishing a transcontinental Eurasian transport corridor. Leading Chinese transport hubs and seaports such as Lianyungang port, located in the northeastern Jiangsu province on the corridor’s eastern edge, are taking part in the project. It has three large logistics centres – railroad, sea and cargo processing areas.
The railroad sector receives rail freight trains going from Kazakhstan to China, whereas the seaport, with a cargo volume reaching 200 million tonnes per year, serves as a departure point for cargo ships travelling to 60 destinations.
The 220,000-square metre cargo processing area also hosts the Kazakh-Chinese joint terminal. The facility sends ten cargo trains every week to Astana, Almaty, Tashkent, Central Asia and Turkey and the export volume has exceeded eight million tonnes since it was unveiled in 2014.
The port’s strategic location gives landlocked Kazakhstan access to the Pacific Ocean, as the port connects to large Chinese cities as well as Busan seaport in South Korea and Osaka in Japan.
Kazakh logistics companies are particularly interested in the electronic cargo processing system that allows Internet tracking of each container ship. The technology was developed by China specifically for the terminal at Lianyungang port.
The port operating company will soon send its experts to Kazakhstan to install a similar system at the large logistics terminal on the new Silk Way route. The specialists will later work to integrate all the mechanisms to enable tracking services throughout the Eurasian transcontinental corridor.
The new Silk Way route has two key destinations – Zhejiang province and Qingdao port in Shandong Province on the Chinese eastern coast.
Yiwu dry port in Zhejiang province is among China’s 17 international dry ports. Only the first stage is presently operating, processing nearly 400,000 containers annually.
Ningbo-Zhoushan port in the same province is the world’s busiest port in terms of cargo processing volume. It houses Asia’s largest crude oil terminal and iron ore load berth with a handling capacity of 250,000 tonnes and 200,000 tonnes, respectively. Nearly 300 container ships arrive in the port monthly from different parts of the world.
The international Qingdao port, the world’s seventh largest seaport, will also provide water access. It has trade links with 700 ports in 180 countries around the world and is now establishing cooperation with Central Asian countries. In the first six months, international cargo transit surpassed 9,000 containers.
The port is taking the industry to a new level by offering a unique automated mechanism which eliminates the need for human involvement in all processes. Chinese experts are also planning to share this technology with Kazakhstan.
http://astanatimes.com/2017/08/kazakhstan-gets-sea-access-using-chinese-logistics-centres/
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Tillerson Hails U.N. Sanctions, as Chinese Minister Rebukes North Korea at Asean Meeting
Aug 6, 2017 | The New York Times
By Gardiner Harris
MANILA — A day after the United Nations Security Council passed its toughest sanctions against North Korea, Secretary of State Rex W. Tillerson met with his South Korean and Chinese counterparts here in hopes of ratcheting up pressure on Pyongyang.
In a midday conclave on Sunday with Foreign Minister Kang Kyung-wha of South Korea, Mr. Tillerson hailed in his typically understated fashion the United Nations vote, which could cost North Korea nearly $1 billion a year, or about one-third of its foreign earnings.
“It was a good outcome,” Mr. Tillerson said with a smile.
Ms. Kang, sitting across the table from him, could not resist chiming in: “It was a very, very good outcome.”
Despite Mr. Tillerson’s obvious glee, though, the man of the moment here at the annual ministerial meeting of the Association of Southeast Asian Nations, or Asean, was the Chinese foreign minister, Wang Yi, a dashing diplomat who unlike Mr. Tillerson held a news conference and direct talks with Foreign Minister Ri Su-yong of North Korea.
Mr. Wang said the two had “an intensive conversation,” and in unusually strong terms, he later urged North Korea to show restraint.Continue reading the main storyRELATED COVERAGEDiplomats Question Tactics of Tillerson, the Executive Turned Secretary of StateAUG. 6, 2017U.N. Security Council Imposes Punishing New Sanctions on North Korea AUG. 5, 2017All Eyes Are on Tillerson and North Korean Counterpart at Asean Meeting AUG. 5, 2017North Korea Could Lose $1 Billion in Exports Under U.N. Measure AUG. 4, 2017
“Do not violate the U.N.’s decision or provoke the international society’s good will by conducting missile launching or nuclear tests,” Mr. Wang said.
He also said, “Of course, we would like to urge other parties like the United States and South Korea to stop increasing tensions.”
A year ago, the Chinese were on their heels in this region. An international tribunal in The Hague last July delivered a sweeping rebuke of China’s behavior in the South China Sea, including its construction of artificial islands, finding that its expansive claim to sovereignty over the waters had no legal basis.
The case, brought against China by the Philippines, seemed like a turning point in China’s disputes with a host of regional players, including Brunei, Indonesia, Malaysia, Taiwan and Vietnam.
A few months before that ruling, 12 nations in the Pacific region concluded more than seven years of negotiations by signing the Trans-Pacific Partnership, or TPP, a trade agreement that bound much of Southeast Asia together with the United States and Japan in an economic partnership intended to fight China’s growing economic hegemony in the region.
While China had its own regional trade accord, the United States-led pact had become the preferred agreement, with several nations that had missed out on the initial round of negotiations expressing interest in joining in a second round.
How things have changed.
President Rodrigo Duterte of the Philippines, elected last year, has backed down from his country’s insistence that China abandon the shoals at the heart of the tribunal’s decision, preferring instead to accept significant Chinese economic assistance.
In a news conference on Friday, the Philippine foreign affairs secretary, Alan Peter Cayetano, said the fight with China was not worth the cost.
“If we go harsh with everyone, our people will suffer — trade, direct foreign investments, tourism,” Mr. Cayetano said.
With the Philippines serving as host to Asean, the country’s about-face lifted a significant cloud over China, with only Vietnam reportedly continuing to insist that the group condemn Beijing’s actions.
Instead, Asean and China adopted a fairly weak negotiating framework for a code of conduct in the South China Sea — several steps removed from anything that could force China to abandon its territorial claims or give up the seven islands it has built in the disputed waters, three of which are equipped with runways and military hardware.
Mr. Wang said the adoption of the framework created a solid foundation for negotiations that could start this year, if “the situation in the South China Sea is generally stable and on the premise that there is no major interference from outside parties,” Reuters reported.
Few believe the framework will lead China to conclude a binding agreement anytime soon.
Perhaps even more important, in his first days in office, President Trump renounced TPP. That action, along with his years of denunciations of the trading policies of Japan and China and a promised “America First” pivot, seemed to many in the region to represent a significant retreat by the United States from its military and economic engagement here, and an important victory for China.
President Barack Obama had lavished attention on the region, where he spent part of his childhood and which has a population of more than 620 million and a collective economy of around $2.4 trillion, the third-largest in Asia behind those of China and Japan.
Geographically astride the world’s busiest and most strategic shipping lanes, the region was the fulcrum of the administration’s rebalancing toward Asia.
Mr. Trump has yet to demonstrate a similar interest or commitment to the region.
In his opening remarks to the conference, Mr. Tillerson sought to put to rest fears that the United States would abandon the region, saying that his multiple meetings with ambassadors were “indicative of the importance that the United States pays and places on this relationship with Asean.”
And while Mr. Tillerson chose not to meet with journalists on Sunday, his top diplomat for the region, Susan A. Thornton, the acting assistant secretary for East Asian and Pacific affairs, said that multiple visits by top administration officials had demonstrated its continued importance to the United States.
“The engagement is not a question,” she said.
Still, Ms. Thornton gave credit to the Chinese for supporting Saturday’s vote in the United Nations against North Korea.
“The fact that the Chinese were helpful and instrumental really in setting up this set of sanctions, this really sweeping set of international sanctions, shows that they realize it’s a huge problem that they need to take on and is a threat to them,” she said.
But Ms. Thornton cautioned that Beijing has often failed to follow through on its promised tough measures against Pyongyang. China accounts for more than 90 percent of North Korea’s external trade, and it has long avoided tough economic sanctions against the North for fear that a collapse of the government would lead to a flood of refugees, as well as the North’s reunification with the South, putting a close American ally directly on China’s border.
“I think we still are going to be watchful as to their implementation of the sanctions,” Ms. Thornton said. “But this is definitely an important step.”
Also on Sunday, Mr. Tillerson met with Foreign Minister Sergey V. Lavrov of Russia. Mr. Lavrov has often spoken expansively and sometimes humorously in the moments before or after meeting top American diplomats. But though he and Mr. Tillerson both smiled and appeared relaxed as they made small talk in the moments before their official meeting, neither said anything to a contingent of journalists briefly ushered into their presence.
Mr. Trump signed legislation on Wednesday imposing sanctions on Russiaand limiting his authority to lift them days after President Vladimir V. Putin of Russia decided to reduce the American diplomatic mission in Russia by 755 employees, actions that have plunged relations between the two countries to their lowest point in decades.
In comments that were broadcast on Sunday on Russian television, Mr. Lavrov said that Mr. Tillerson had asked about the details of the reductions in American diplomatic staff members in Russia and that Mr. Lavrov had explained how it would work, according to a translation provided by The Associated Press.
Mr. Lavrov also said Mr. Tillerson had promised to send the United States special envoy for Ukraine, Kurt Volker, to Moscow for discussions.
https://www.nytimes.com/2017/08/06/world/asia/asean-rex-tillerson-north-korea-sanctions.html?_r=0
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Xi's Move to Slap North Korea Buys Time With Trump on Trade
Aug 6, 2017 | Bloomberg
China backing for sanctions likely to deter U.S. investigation
Sanctions unlikely to stop Kim Jong Un’s nuclear program
Xi Jinping appears to again be back in Donald Trump’s good graces -- at least for now.
Last week, it looked as if the leaders of the world’s biggest economies were on a collision course. North Korea’s second intercontinental ballistic missile test in a matter of weeks prompted Trump to lash out at China on Twitter, and a few days later came reports that his administration was getting ready to take steps that could lead to a trade war.
That all changed with a breakthrough at the United Nations on Saturday. After a month of talks, the U.S. and China agreed on sanctions that would cut North Korea’s exports by a third, punish some of its biggest companies and cap the number of its citizens working in other countries at current levels.
“It’s enough to give the administration some new hope that it can work with China on North Korea and trade,” said Dennis Wilder, former senior director for Asia at the National Security Council during the George W. Bush administration. The move would “almost certainly” stop the U.S. from imposing secondary sanctions on China, and may delay a planned investigation into intellectual property theft, he said.
Still, while Chinese Foreign Minister Wang Yi expressed confidence on Sunday that the sanctions would bring Kim Jong Un back to the negotiating table, many North Korea watchers are skeptical that he’ll give up his quest for an ICBM that can hit the U.S. with a nuclear weapon. China will still be providing Kim’s regime with food and fuel, and North Korea’s nuclear weapons program is already in an advanced stage.
“If the past decade has told us anything, it is that sanctions and condemnation alone won’t do it,” said Hans Kristensen, director of the Nuclear Information Project at the Federation of American Scientists. “They must be paired with incentives that make it attractive for North Korea to change.”
China -- North Korea’s main ally and trading partner -- has been regularly accused of failing to fully implement previous UN resolutions. After North Korea’s second ICBM test on July 27, the U.S. called China and Russia “economic enablers” of Kim’s regime.
China has sought to cool tensions on the Korean Peninsula, particularly as Trump administration officials warn that war is possible to stop Kim from acquiring the ability to hit the U.S. mainland with a nuclear weapon. China sees the collapse of Kim’s regime as a greater strategic threat that could lead to a refugee crisis and U.S. troops on its border.
The measures agreed to unanimously on Saturday are aimed at cutting North Korean exports by about $1 billion a year through blocking sales of coal, iron, lead and seafood -- a move that could hit laborers and fishermen. Existing joint ventures would be prevented from expanding their operations.
While it’s significant, the numbers are also minuscule compared with Iran, which had oil exports curbed and tens of billions of dollars frozen in overseas bank accounts. North Korea’s economy -- roughly 280 times smaller than China’s gross domestic product -- grew last year at the fastest pace in 17 years, which may help offset some of the blow.
“The problem with North Korea is it’s all too small,” said John Delury, an associate professor of Chinese studies at Yonsei University in Seoul, referring to the economic stakes. “It’s trying to use a method that would work after we brought the North Korean economy into the region, into the world. But it’s not effective at this stage.”
At a meeting on Sunday in Manila, where top diplomats from more than 20 countries are gathering, China’s Wang made clear that the goal of the sanctions was to push North Korea toward dialogue. He met separately with both North Korean Foreign Minister Ri Yong-ho and U.S. Secretary of State Rex Tillerson, urging both to reduce tensions.Reluctant to Fight
Wang said he also spoke with Tillerson about the need to work together to make Trump’s upcoming visit to China maintain “the momentum of healthy development” and help shape Sino-U.S. relations over the next 50 years.
“Both China and the United States are reluctant to fight a trade war,” Wang told reporters on Monday. “The interests of China and the United States are fully integrated.”
China has repeatedly proposed that North Korea halt further nuclear and missile tests in return for the U.S. and its allies suspending military exercises in the region -- a so-called freeze-for-freeze. The U.S. rejects this, saying that Kim must be prepared to give up his nuclear weapons entirely -- a prospect that many analysts view as unlikely since Kim sees them as essential to his survival.
“The situation is now in a deadlock because of the U.S. mindset,” said Shi Yuanhua, a professor who researches Korea at Fudan University in Shanghai. The sanctions are more “a gesture of condemnation rather than an effective tool to solve the real problem.”Volatile Relationship
For Xi and Trump, it’s just the latest twist in a relationship that lurches from good to bad seemingly in the time it takes to write a 140-character tweet.
On the campaign trail, Trump regularly bashed China for stealing American manufacturing jobs. After his first meeting with Xi in April, Trump said they had “great chemistry.” In June, he said Xi had failed to rein in Kim’s regime. Weeks later he said they had an “excellent” meeting in Germany. And then on July 30 -- in a tweet -- he accused China of doing “NOTHING” on North Korea.
“The Trump administration has made it explicit that there is a constant trade-off between trade issues and North Korea,” Delury said. “It would appear President Trump is happy with Xi Jinping now, but it wouldn’t be surprising in a matter of weeks for a tweet to say now he’s disappointed again.”
— With assistance by Peter Martin, Ting Shi, Hooyeon Kim, and Keith Zhai
https://www.bloomberg.com/news/articles/2017-08-06/xi-s-move-to-punish-north-korea-buys-time-with-trump-on-trade
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Trump's attack on Chinese trade gets sidelined over North Korea
Aug 4, 2017 | Politcio
By Andrew Restuccia, Eliana Johnson, Josh Dawsey And Nahal Toosi
An opportunity to hit North Korea with new United Nations sanctions has sidelined President Donald Trump’s bid to punish China for its alleged unfair trade practice.
The White House had been preparing for a Friday announcement in which Trump planned to urge his administration to open a trade investigation into China’s alleged violations of U.S. intellectual property rights and forced technology transfers, three administration officials said.
But on Thursday afternoon, senior administration aides postponed the announcement at the urging of United Nations and State Department officials, who are in the sensitive final stages of convincing China to sign on to a U.N. resolution that would impose new sanctions on North Korea. U.N. and State Department officials warned that the trade announcement could kill their chances of winning Beijing’s buy-in, according to the officials.
"There are broader talks about diplomatic considerations,” an administration official said. The official added that the threat of U.S. action on trade has led to a round of separate conversations between the U.S. and China on the issue at “high levels,” though the president has not directly been involved.
A different U.S. official told POLITICO Friday talks have advanced with the Chinese and Russians on a North Korea resolution, with the potential to hold a vote at the Security Council on Saturday.
"The U.S. has circulated a draft of a resolution among Security Council members," the U.S. official said. That indicates China — and Russia — are close to agreement with the U.S. and its allies on the wording.
When asked Friday if the Russians and Chinese are amenable, a Security Council diplomat said, "We have high confidence that they will be on board with this resolution."
Two of the administration officials said they were still hopeful Trump will announce the trade action against China, but they said the exact timing is unclear.
Trump is slated to urge U.S. Trade Representative Robert Lighthizer to open an investigation against China under Section 301 of the Trade Act of 1974. The investigation could eventually result in tariffs or other punitive measures.
Lighthizer is expected to be out of the U.S. next week, but aides said that wouldn’t necessarily stop Trump from making the trade announcement.
The president has railed against China in recent days, arguing the country isn’t doing enough to stop North Korea from developing a nuclear weapon capable of striking the United States. A decision by China to sign on to the U.N. resolution sanctioning North Korea would be one step in easing U.S. tensions with Beijing.
A State Department spokesperson declined to comment. A White House spokeswoman countered that the administration had never officially announced plans to make the trade announcement on Friday. “We'll let you know when we have something to announce,” the spokeswoman said.
http://www.politico.com/story/2017/08/04/trump-china-trade-north-korea-sanctions-241348
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China wastepaper import ban less severe than feared
Aug 4, 2017 | Journal Of Commerce
By Bill Mongelluzzo
Although about 16 percent of US wastepaper exports to China could be lost due to the government’s latest ban on importation of scrap commodities, the estimated 160,000 TEU represented by mixed scrap paper will be far less damaging than if China had targeted the more voluminous cardboard and newspaper sectors.
This latest environmental initiative by China that was published on July 18 and is scheduled to take effect at the end of the year is nevertheless chilling for scrap paper exporters, ports and especially carriers in the westbound Pacific because wastepaper is the top US containerized export. According to PIERS, the JOC.com sister company within IHS Markit, total scrap paper exports to China in 2016 were 1.03 million TEU.
The Chinese government’s “Reform and Implementation Plan to Enhance Solid Waste Import Management System by Prohibiting the Entry of Foreign Waste” could carry more threatening, longer-term consequences for exports of recyclables if it leads to an assault on other scrap products. The General Office of the State Council said the goal by the end of 2019 is to “gradually halt the importation of solid waste that can be replaced with domestic resources.” China appears to be moving toward domestically-procured recyclables that it can better control.
This is the latest Chinese government effort to crack down on the environmental impact of scrap imports. It follows the 2013 “Green Fence” and this year’s “National Sword” initiatives. China’s goal, as stated in the latest report, is to “ensure the safety of the natural environment by continuously strengthening the supervision and management of solid wastes at the importation, transport, utilization and other steps.”
China is targeting mixed scrap paper. Wastepaper falls under three classifications— old corrugated containers, which represent about 60 percent of the volume of scrap paper exports, old newspapers, 35 percent and mixed papers, about 15 percent. Ed Zaninelli, president of Griffin Creek Consulting, who formerly managed export cargoes at Orient Overseas Container Lines, said the new emphasis on mixed papers is due to a shift among wastepaper exporters in the US to automated sorting of paper types and grades. The sorting work used to be performed with more precision by hand.
That observation was confirmed by an executive at a paper exporter. “There’s a trade off between efficiency and quality,” he said.
Although mixed paper accounts for only 15 to 16 percent of total US wastepaper exports, given the huge volume of scrap paper exports, the potential loss amounts to 160,000 TEUs, or 80,000 FEU a year. Most scrap paper is shipped in 40-foot containers.
The ban will also have an immediate economic impact on wastepaper exporters. “It will drive down the price of mixed paper through the floor,” said Nick Halper, director of export at the Paper Tigers.
On the other hand, it does not appear that China will expand the ban to other types of scrap paper because wastepaper is a critical component in manufacturing. “Chinese manufacturing has been and will continue to need paper,” said Adina Renee Adler, senior director, international relations, at the Institute of Scrap Recycling Industries. The US is the largest and most dependable source of scrap paper for China’s manufacturing sector, she said.
Also, even though China dominates US scrap paper exports, accounting for almost 84 percent of total containerized wastepaper exports, volume to Vietnam and the Indian Subcontintinent grew by double digits last year.
Wastepaper is one of those exports that shipping lines love to hate. It is one of the lowest-rated cargoes, usually commanding a freight rate of about $250 per FEU or lower from the West Coast. When overall US exports are doing well, carriers will quickly bump wastepaper containers from their ships if better-paying cargo shows up. Nevertheless, for much of the year, carriers look to scrap paper to produce revenue for westbound containers they would otherwise have to reposition to China empty.
With the large vessels that are being deployed in the major east-west trade lanes, freight rates for wastepaper and other commodities are expected to remain low in the foreseeable future.
Zaninelli said this will especially be the case on all-water services from the East Coast to Asia. Last summer’s completion of the Panama Canal expansion project, and this summer’s completion of the project to raise the Bayonne Bridge in New York-New Jersey, both of which are resulting in more mega-ship deployments to the East Coast, will drive already low westbound rates even lower, he said.
http://www.joc.com/maritime-news/container-lines/china-wastepaper-import-ban-less-severe-feared_20170804.html
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Asia-Europe spot rates up from last year amid muted increases
Aug 7, 2017 | Journal Of Commerce
By Greg Knowler
The Asia-Europe rate increases levied on Aug. 1 only managed to lift the spot price for a week before declining once again, but the spot rate remains around 8 percent higher than at the same point a year ago. Spot rates from China to North Europe declined by $28 to $935 per TEU, and on the China-Mediterranean trade fell $24 to $859 per TEU, according to the Shanghai Shipping Exchange’s SCFI. The weekly rate movements are tracked on JOC.com’s Market Data Hub
With greater demand from Europe and the spot market remaining above the $800 per TEU mark since November last year, carriers on the Asia-Europe trade have been reporting significant improvements in revenue.
The interim results of Hong Kong-based Orient Overseas Container Line revealed a huge increase in volume and revenue on Asia-Europe for the first six months of 2017 compared with the very poor first half of 2016. OOCL reported Asia-Europe volume up 22.2 percent in the first half to 546,505 TEU, while revenue for the trade was up 48.5 percent year-over-year to $525 million. The carrier result came as the European economy, driven by strong retail sales and domestic demand, expanded 0.6 percent in the second quarter from the first, according to IHS Markit, which has revised upward its 2017 forecast for Eurozone GDP growth 0.1 percentage point to 2 percent.
The three Japanese carriers — MOL, NYK Line, and “K” Line — also reported a strong improvement in their financial results as the container shipping business environment strengthened. NYK Line and “K” Line swung back into the black in the first quarter of fiscal 2017 after incurring net losses a year earlier, while MOL saw its net profit nearly quadruple.
This led to SeaIntel predicting rate levels will be $1.2-$1.7 billion higher for carriers on Asia-Europe for the full year 2017 versus 2015, a more realistic benchmark than comparing this year with the rate war-plagued 2016
Drewry is predicting carriers will end the year with $5 billion in profit after six years of straight industry losses. Growing volume, particularly on the Asia-Mediterranean trade, has helped carriers mitigate overcapacity, with traffic on the Asia-Europe trade rising 6.9 percent to 2.3 million TEU, according to the maritime analyst.
According to the Drewry World Container Index, the Aug. 1 rate increases lifted the head-haul rates on the AsiaEurope and trans-Pacific trades this week. Rates on the Shanghai-Rotterdam route are up by $116 to $1,801 per FEU, and the Asia-Europe spot market is expected to be less volatile, the analyst said.
Even as carriers start to tally their profits, something else shaping up as good news for container shipping is the International Monetary Fund’s July update to its World Economic Outlook. The outlook found that the global economy is showing signs of solid and steady growth, with China, India, Japan, and major economies from Europe to lead this development.
“These figures speak quite well for the container shipping industry, and support the notion that 2017 could be a turning point for the carriers and their stressed financial situations,” SeaIntel said in its newsletter.
http://www.joc.com/maritime-news/trade-lanes/asia-europe/asia-europe-spot-rates-last-year-amid-muted-increases_20170804.html
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