Preview Newsletter
Project Dory Monitoring 11 August 2017
-
North Korea Sanctions Hit Global Cargo Shipping
Aug 10, 2017 | Port Technology International
Global shipping services providers and ports in the US, Russia, Iran, Syria, and China, for example Dandong and Dalian, have been caught up in the US’s latest offensive on North Korean trade, analysis has found. -
From a Chinese border town, measuring the impact of sanctions against North Korea
Aug 11, 2017 | Reuters
In April, when Reuters reporter Philip Wen last visited a Chinese border town across the Yalu river from North Korea, its Yicuomao port was bustling. -
Undaunted by tensions, Chinese tourists flock into North Korea
Aug 11, 2017 | Reuters
By Philip Wen
Undeterred by escalating tensions between Pyongyang and Washington rattling nerves globally, a steady stream of tourists from China each morning passes through the immigration checkpoint at the border trading hub of Dandong. -
Shanghai steel slips below 4-1/2-yr top, industry group warns about speculation
Aug 11, 2017 | Reuters
By Manolo Serapio Jr
Chinese steel futures dropped on Friday to pull away from 4-1/2-year highs reached this week, with an industry group warning that market speculators were driving up prices unnecessarily. -
War Threat in Korea Exposes Artery of Global Commodity Trade
Aug 11, 2017 | Bloomberg
Shipping rates in the region could increase by 20 percent to 30 percent if war breaks out and vessels are forced to change routes, increasing transport times, said Gary Chen, founder of Xinde Marine Services, a marine risk management company based in Dalian. -
Increasing number of inspections squeezing seafood imports in Tianjin
Aug 11, 2017 | SeafoodSource
By Gao Fu Mao
Leading Chinese tilapia producing region Hainan has reported exports of 69,800 tons in the first six months of the year, up 12.9 percent with a rise of 13.2 percent in value terms to USD 250 million (EUR 214 million). -
US-North Korea standoff could spark economic war with China
Aug 10, 2017 | CNBC
By John W. Schoen
The escalating saber rattling between the U.S. and North Korea has raised the prospects of an economic confrontation between America and China. -
As Trump Unnerves Asia, China Sees an Opening
Aug 10, 2017 | The New York Times
By Jane Perlez
With America’s Asian allies unnerved by President Trump’s threat to bring “fire and fury” to North Korea, China sees a chance to capitalize on the fear and confusion and emerge as the sober-minded power in the region, according to analysts who study the Chinese leadership. -
Inner competition to test new intra-Asia alliance
Aug 10, 2017 | Journal Of Commerce
By Greg Knowler
The cleaning up of South Korea’s container shipping industry since Hanjin Shipping went bankrupt a year ago and left Hyundai Merchant Marine as the new flag carrier took a surprising turn this week with the announcement that 14 of the country’s carriers were forming an intra-Asia alliance.
Port Mentions
City/Province Mentions
Competitor Mentions
US - China Relations
Industry News
-
North Korea Sanctions Hit Global Cargo Shipping
Aug 10, 2017 | Port Technology International
Global shipping services providers and ports in the US, Russia, Iran, Syria, and China, for example Dandong and Dalian, have been caught up in the US’s latest offensive on North Korean trade, analysis has found.Global shipping and ports industries must step up their monitoring of North Korean cargoes accordingly to avoid being hit by sanctions, leading law firm Holman Fenwick Willan (HFW) told PTI.
Congress aimed to punish three countries for doing things the US dislikes through the Countering America's Adversaries Through Sanctions Act, signed into law on August 2, 2017.
With the move it sought to counteract Russian meddling in US elections, Ukraine and Syria and build-up of weapons including missiles by Iran and North Korea.
US President Trump is now obliged to create and maintain a document listing global sea ports that don’t inspect North Korean ships as UN resolutions require or tranship larger amounts of cargo owned by ‘designated’ or sanctioned persons.
In the new report, Trump must analyse Pro-North-Korean activity at certain ports and airports in the US, China, Iran, Russia and Syria, including the ports of Dandong, Dalian, plus potentially any other ports in China.
This includes the Iranian ports of Abadan, Bandar-e-Abbas, Chabahar, Bandar-e-Khomeini, Bushehr Port, Asaluyeh Port, Kish, Kharg Island, Bandar-e-Lenge, Khorramshahr and the Russian ports of Nakhodka, Vanino, and Vladivostok.
Additionally, the Syrian ports of Latakia, Banias and Tartous will be scrutinized.
He will also assess how far foreign ship registers have gone to de-register any vessel owned, controlled or operated by or on behalf of the North Korean Government.
His report will pinpoint vessels owned or controlled by the North Korean political group, Reconnaissance General Bureau of the Workers' Party of Korea.
Trump is in some cases required to sanction anyone who buys from or sells to North Korea, for example buyers of minerals like coal, iron or iron ore. Also impacted are suppliers of crude oil, petroleum products or LNG.
The Act also forbids North Korean ships from operating in US waters or transferring cargo in any port under US jurisdiction.
Departmental officials in charge of the US Coast Guard, together with the Secretary of State, must maintain records of non-complying vessels in the Federal Register.
Restrictions on such ships transiting US waters do not affect the "right of innocent passage or the right of transit passage as recognized under international law".
HFW Partners Sarah Hunt, Daniel Martin, Anthony Woolich and Associate Felicity Burling in a statement said: “Ports and terminals around the world will need to monitor carefully whether vessels or cargo requesting their services have any connection with North Korea, have been designated under US or UN sanctions or are operated by persons who are so designated, and should avoid transactions or investment which involve North Korea.”
Commenting separately, British Insurer Steamship Insurance Management Service said: “There are wide ranging sanctions against North Korean cargo and shipping, targeting particularly provision of insurance and other services to vessels owned or controlled by the North Korean Government, purchase of coal, iron or iron ore, and certain metals and minerals from North Korea, supply of petroleum products including crude oil and natural gas to North Korea, significant transactions in North Korea’s transportation, mining, energy or financial services industries, goods produced by North Korean convict or forced labour, and foreign persons employing North Korean forced labourers.”
https://www.porttechnology.org/news/north_korea_sanctions_hit_global_cargo_shipping
-
From a Chinese border town, measuring the impact of sanctions against North Korea
Aug 11, 2017 | Reuters
In April, when Reuters reporter Philip Wen last visited a Chinese border town across the Yalu river from North Korea, its Yicuomao port was bustling.
Fishing vessel after fishing vessel returned to the docks of Dandong loaded with puffer fish and mackerel after making a 16-hour trip from China to North Korean waters and back.
Months later, on Aug. 5, the United Nations Security Council unanimously passed a resolution banning North Korean exports of coal, iron, lead and seafood in an effort to curb the country’s nuclear weapons and ballistic missile programs. Journalists and economists around the world rushed to quantify the impact the sanctions would have on North Korea amid heightened global tensions.
Wen knew from his experience as a reporter in China for the past five years that Dandong (population 866,000), through which about three-quarters of China's trade with North Korea flows, was an ideal place to assess the effect of the sanctions on North Korea’s seafood industry.
The rigorous, ground-level reporting that Wen practices is a crucial aspect of how Reuters supplies impartial and reliable news to its global audience.
“The Chinese border towns offer the closest view you can get of North Korea if you can’t get into the country itself,” Wen says. “This the perfect first point of reference to view the impact of sanctions.”
While North Korea’s seafood industry had been on track to earn an estimated $295 million in exports this year, Wen found a much more subdued scene as Chinese authorities began to enforce their ban on North Korean seafood. Dock workers sat on ramps along the river bank, checking their phones. Groups of men gathered inside a convenience store to shield themselves from the heat and sun, smoking cigarettes and playing cards. “They were waiting for boats that never turned up,” Wen says.
Unaffected by the sanctions is cross-border trade between China and North Korea from tourism and consumer goods. Wen observed long lines of Chinese trucks filled with clothes and food queuing on Dandong’s Friendship Bridge, which connects with the North Korean town of Sinuiju across the Yalu.
Consistent with the Thomson Reuters Trust Principles’ commitment to accuracy, Wen takes pictures of what he sees in Dandong — from stockpiles of North Korean lead ore at a storage facility awaiting Chinese buyers to an empty Chinese customs center along the riverbank. He plans to return to Dandong regularly — interviewing locals and building on his photographic record.
https://www.reuters.com/article/us-northkorea-missiles-idUSKBN1AQ179
-
Undaunted by tensions, Chinese tourists flock into North Korea
Aug 11, 2017 | Reuters
By Philip Wen
DANDONG, China (Reuters) - Undeterred by escalating tensions between Pyongyang and Washington rattling nerves globally, a steady stream of tourists from China each morning passes through the immigration checkpoint at the border trading hub of Dandong.
Greeting them on the North Korean side are dozens of tour buses, collecting them for itineraries ranging from a day in neighboring Sinijiu to a week visiting North Korea's main cities, including the capital Pyongyang.
"We're curious. We want to see how they live," Xu Juan said on Thursday before crossing the Yalu River, which marks the border between the two countries. Xu was traveling with friends and family from Hangzhou, in eastern China.
"I just want the sense of nostalgia, to see a country that is poor, like (China was) when I was young," said a man in his early 50s, from Jilin province, declining to give his name.
Few expressed concern over the North's persistent missile tests in recent months, which led the United Nations Security Council on Saturday to impose tough new sanctions against Pyongyang.
North Korea dismissed on Thursday warnings by U.S. President Donald Trump that it would face "fire and fury" if it threatened the United States as a "load of nonsense", and outlined plans for a missile strike near the Pacific territory of Guam.
But tour operators said their industry remains robust.
Traffic, especially on lower-end group tours, has grown steadily to one of the world's most isolated states over the past few years, despite North Korea's persistent nuclear and missile tests, which have drawn ever-tightening U.N. sanctions.
A flyer for the one-day tour to Sinijiu tout a trip to the city’s central plaza, where you can pay respects to a bronze statue of North Korea's founding president Kim il-Sung, as well as visits to a cosmetics factory, a revolutionary history museum, art history museum and a cultural park.
"You can feast on the North Korean speciality food by warm and hospitable North Koreans," it says.FERRIES AND SPEEDBOATS
China's tourism authority has not published a breakdown of the total number of Chinese visitors to North Korea since 2012, when it said 237,000 made the trip.
But the number traveling just from Dandong spiked to 580,000 in the second half of 2016 alone, according to the state-run China News Service. The report said 85 percent of Chinese tourist visits to North Korea originated from Dandong.
That's still only a fraction of the 8 million Chinese who visited South Korea in 2016.
Tourists can take ferries or charter speedboats down the Yalu for an up-close peek at North Korean villages and patrolling border guards.
One tour operator targeting wealthier, more adventurous travelers said it was receiving more inquiries in recent weeks over whether it was safe to travel.
"But those that inquire often already have their heart set on going," the operator, who declined to be named, told Reuters. "The idea of a bit of danger adds to the thrill and mystery of North Korea."
Another tour guide, Teng Yi, said that while some may be deterred by tensions on the Korean peninsula, it was prompting others to get to North Korea while they still can.
"There have been quite a few tourists in my groups who say they want to see North Korea in its reclusive state while they can," he said.
"It won't be the same if the regime collapses."
https://www.reuters.com/article/us-northkorea-missiles-tourism-idUSKBN1AR09G
-
Shanghai steel slips below 4-1/2-yr top, industry group warns about speculation
Aug 11, 2017 | Reuters
By Manolo Serapio Jr
Shanghai steel slips below 4-1/2-yr top, industry group warns about speculation
MANILA, Aug 11 (Reuters) - Chinese steel futures dropped on Friday to pull away from 4-1/2-year highs reached this week, with an industry group warning that market speculators were driving up prices unnecessarily.
Officials from the China Iron and Steel Association (CISA) met with steel producers, brokerages and research consultancies on Wednesday and agreed that the recent price spike was "not driven by market demand or reduced market supply".
Instead, some organisations were "over-interpreting, or even mis-reading" the effect China's environmental policies and clampdown on low-quality steel would have on production capacity in the second half of 2017, according to a statement from CISA posted on its official Wechat account.
The most-active rebar on the Shanghai Futures Exchange was down 0.7 percent at 3,942 yuan ($591) a tonne by 0224 GMT, after hitting an intraday peak of 4,016 yuan on Thursday, its strongest level since March 2013.
The construction steel product, which has risen more than 40 percent from April, has gained 6 percent so far this week.
"These warnings serve the purpose ... to cool down markets or to see some consolidation in commodity prices," Argonaut Securities analyst Helen Lau said in a note.
"We think the government wants to ensure stable development in markets and does not want to see quick boom and bust cycles fuelled by speculation."
Investors latched on to expectations of steep production cuts by Chinese mills in pushing up prices sharply this week. China has ordered mills to cut production by as much as 50 percent in major producing areas such as Hebei province during winter.
In Hebei, steelmakers are required to comply with state- and province-level emission restrictions by Sept. 1 or they will be shut down, the Hebei Province Environmental Protection Bureau said on Tuesday.
As steel prices retreated, so did iron ore. The most-traded iron ore for January delivery on the Dalian Commodity Exchange eased 0.4 percent to 560 yuan a tonne.
Iron ore for delivery to China's Qingdao port .IO62-CNO=MB rose 1.6 percent to $76.68 a tonne on Thursday, according to Metal Bulletin, tracking gains in futures that day.
It was the highest level since April 6 for the spot benchmark, which has risen 3.5 percent so far this week, on course for its fifth consecutive weekly increase.
https://in.reuters.com/article/global-precious-idINKBN1AQ045
-
War Threat in Korea Exposes Artery of Global Commodity Trade
Aug 11, 2017 | Bloomberg
China, Japan, S. Korea import 84% of seaborne iron ore:Citi
Rising vessel insurance, shipping route changes are concerns
Should U.S. President Donald Trump unleash “fire and fury” on North Korea, it will bring conflict to the core of the global commodity trade.
North Korea is an ant in the world of raw materials, as years of sanctions have more or less isolated it from international markets. But it’s an ant surrounded by elephants. China takes more than half the world’s soybean shipments. Japan is the world’s largest importer of liquefied natural gas. South Korea is among the biggest buyers of coal and sellers of steel. The three countries combined import about one-third of the world’s seaborne crude oil.
Commodity shippers are intently watching North Korea’s missile tests and Trump’s rhetoric to see if the tensions escalate into activity that could disrupt commodity flows into those countries. While it remains a war of words for now, an intensification could lead to higher insurance rates for vessels, exclusion zones or port disruptions, which may increase transport costs and force route changes, according to shipping analysts, academics and industry consultants.
“Rhetoric from and towards North Korea has ramped up materially in recent days, and although regional trade flow disruptions are likely a low probability event for now, it is important to note how crucial the Korean Peninsula and North Asia are to commodity markets and trade,” Christopher Main, a London-based analyst for Citigroup Inc., wrote in a report Thursday.
Trump stepped up his campaign of pressure on North Korea, warning the regime not to follow through on its threat to test missiles near Guam and promising a massive response to any strike against the U.S. or its allies. Trump stood by his threat Aug. 8 to bring down “fire and fury,” saying that the statement maybe “wasn’t tough enough.” He declined to rule out a preemptive strike on Pyongyang, North Korea’s capital.
For more on Kim Jong Un’s strategy, click here.
The impact on commodity trade routes would depend on whether the reach of the conflict is restricted to the Korean peninsula or spreads more broadly around the region. In the 10-week Falklands Islands war of 1982, the U.K. enforced a 200-nautical-mile maritime exclusion zone around the islands that made any ship entering the area a potential target. In the same decade, neutral commercial vessels were attacked in the Persian Gulf during the war between Iran and Iraq.
South Korea’s capital Seoul is about 25 miles (40 kilometers) from the North Korean border, one of the world’s most-guarded. But the impacted trade area could be wider in the event of conflict. Dalian in China is about 170 miles from the North’s shoreline. Japan’s main island is about 320 miles from North Korea at its closest.
Shipping rates in the region could increase by 20 percent to 30 percent if war breaks out and vessels are forced to change routes, increasing transport times, said Gary Chen, founder of Xinde Marine Services, a marine risk management company based in Dalian. While shipments can be redirected to other ports or conveyed over land by other means, that would represent an additional cost.
“It is to be expected that if the tension escalates that commercial shipping will respond by avoiding certain areas or ports possibly also regions,” David Attard, a professor at the IMO International Maritime Law Institute in Malta, said in an email. “Indeed this will affect also navigational routes, with the possibility of rising costs.”
Three of the world’s five biggest importers of crude oil share borders or seas with North Korea. Virtually all of Japan and South Korea’s crude imports, as well as the vast majority for China, come via seaborne shipments. Combined, the three countries receive about one-third of the 39.9 million barrels of oil that flows around the world daily in giant tankers, according to Clarkson Plc.
About 40 percent of the world’s finished and semi-finished steel exports originate from China, South Korea and Japan. The three countries also account for about 84 percent of the world’s iron ore seaborne trade, according to Citigroup, and 47 percent of the world’s seaborne imports of metallurgical coal, according to UBS Group AG.
Outright commodity prices and commodity volatility markets are scarcely pricing in any geopolitical risk, according to the Aug. 10 Citigroup note. The Bloomberg Commodity Index is down 4.8 percent this year.
China accounted for 64 percent of the world’s imports of soybeans in 2016-2017, according to the U.S. Department of Agriculture, and is the world’s biggest importer of rice, accounting for about 13 percent of trade. Japan is the largest buyer of overseas corn, and the three countries combined account for 20 percent of all imports of the grain.
Four of China’s northern customs districts near North Korea receive about 47 percent of the country’s oil imports and 63 percent of its anthracite coal, according to the General Administration of Customs. The country isn’t as dependent on waterborne imports as Japan and South Korea, as it has pipelines and land links to bring in some oil, natural gas and coal, and it can always re-route tankers to southern ports or move commodities by land.
“Energy imports to China may encounter some short-term inconveniences such as diversion to other ports, but overall it won’t be affected much as China’s energy supply is now quite diversified and the Korean peninsula is not a source of supply,” said Lin Boqiang, director of Xiamen University’s China Center for Energy Economics Research.
With assistance by Kyunghee Park, Jing Yang, Dan Murtaugh, Aaron Clark, Alaric Nightingale, Heesu Lee, Stephen Stapczynski, Ben Sharples, Phoebe Sedgman, Tsuyoshi Inajima, Martin Ritchie, Hannah Dormido, and Samuel Dodge
https://www.bloomberg.com/news/articles/2017-08-11/commodity-trade-s-asian-artery-exposed-by-north-korea-tensions
-
Increasing number of inspections squeezing seafood imports in Tianjin
Aug 11, 2017 | SeafoodSource
By Gao Fu Mao
Leading Chinese tilapia producing region Hainan has reported exports of 69,800 tons in the first six months of the year, up 12.9 percent with a rise of 13.2 percent in value terms to USD 250 million (EUR 214 million).
China’s General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) is crediting the region’s rise in seafood exports to a upping of production standards, in part through the establishment of the Chengmai Demonstration Zone, a government-designated processing zone where quality is policed vigorously.
Meanwhile, the port of Tianjin is reporting an unusual drop in seafood volume for the first half of 2017, which appears to stem from increased inspections by the AQSIQ. AQSIQ itself recently acknowledged “increased inspections” and “increased rigor” in its checks.
Tianjin – one of China’s leading ports and about an hour’s drive from Beijing – saw imports drop 12.2 percent in volume to 40,000 tons, while imports were down 28.8 percent in value terms to CNY 110 million (USD 16.3 million, EUR 13.9 million). This suggests that some of the volume may have been switched to other entry points.
https://www.seafoodsource.com/news/supply-trade/increasing-number-of-inspections-squeezing-seafood-imports-in-tianjin
-
US-North Korea standoff could spark economic war with China
Aug 10, 2017 | CNBC
By John W. Schoen
The escalating saber rattling between the U.S. and North Korea has raised the prospects of an economic confrontation between America and China.So far, economic sanctions against Pyongyang have done little to convince North Korean leader Kim Jong Un to curb his ambitions to develop a nuclear missile capable of striking the U.S. mainland.Now, critics of those measures are calling for stepped-up pressure on China, North Korea's largest trading partner.
The escalating saber rattling between the U.S. and North Korea has raised the prospects of an economic confrontation between America and China.
At issue are a series of sanctions against Pyongyang designed to convince North Korean leader Kim Jong Un to curb his ambitions to develop a nuclear missile capable of striking the U.S. mainland.
But those measures have had little impact on the increasingly bellicose stand-off, and on Thursday President Donald Trump repeated his complaint that Beijing needs to lean harder on Pyongyang to defuse rising tensions.
"I think they can do a lot more and I think they will do a lot more," the president told reporters. "We lost hundreds of billions of dollars a year on trade with China. They know how I feel. It's not going to continue like that."
On Tuesday, Trump threatened to inflict "fire and fury" on North Korea if it continues to pursue its nuclear weapons program. A recent series of successful North Korean test launches were matched Wednesday by Kim's threats to launch a missile at the U.S. territory of Guam.
The latest round of sanctions includes fresh restrictions, unanimously approved Saturday by the United Nation Security Council, that target North Korean exports of coal, iron, iron ore, lead, lead ore and seafood. The measures also ban countries from hiring more North Korean laborers, bar new joint ventures with North Korea and ban fresh investment in existing joint ventures.
Jim Watson | AFP | Getty ImagesPresident Donald Trump (L) and Chinese President Xi Jinping (R) walk together at the Mar-a-Lago estate in West Palm Beach, Florida, April 7, 2017.The escalating saber rattling between the U.S. and North Korea has raised the prospects of an economic confrontation between America and China.
At issue are a series of sanctions against Pyongyang designed to convince North Korean leader Kim Jong Un to curb his ambitions to develop a nuclear missile capable of striking the U.S. mainland.
But those measures have had little impact on the increasingly bellicose stand-off, and on Thursday President Donald Trump repeated his complaint that Beijing needs to lean harder on Pyongyang to defuse rising tensions.
"I think they can do a lot more and I think they will do a lot more," the president told reporters. "We lost hundreds of billions of dollars a year on trade with China. They know how I feel. It's not going to continue like that."
On Tuesday, Trump threatened to inflict "fire and fury" on North Korea if it continues to pursue its nuclear weapons program. A recent series of successful North Korean test launches were matched Wednesday by Kim's threats to launch a missile at the U.S. territory of Guam.
The latest round of sanctions includes fresh restrictions, unanimously approved Saturday by the United Nation Security Council, that target North Korean exports of coal, iron, iron ore, lead, lead ore and seafood. The measures also ban countries from hiring more North Korean laborers, bar new joint ventures with North Korea and ban fresh investment in existing joint ventures."We say to China, 'You have a choice whether you do business with North Korea or you do business with the U.S. but you can't do both.'"-Sen. Chris Van Hollen, D-Md.
Economic sanctions so far have proved ineffective largely because North Korea has found ways to get around them with "evasion techniques that are increasing in scale, scope and sophistication," according to a February U.N. report.
"Designated entities and banks have continued to operate in the sanctioned environment by using agents who are highly experienced and well trained in moving money, people and goods, including arms and related material, across borders," the U.N. report found.
The widest flow of goods and cash, by far, crosses North Korea's border with China. As North Korea's largest trading partner, China accounted for roughly 85 percent of overall volume in 2015, according to data from the United Nations Comtrade database.
Coal and other minerals accounted for more than 40 percent of North Korean exports in 2015, followed by textiles (29 percent), metals (7 percent) and machinery (6 percent). North Korea's biggest imports included textiles, machinery and raw materials including minerals, metals and plastics.
Though China has taken some steps to curb imports from North Korea, exports rose by nearly 30 percent in the first half of this year, according to Chinese customs data. During the six-month period, overall trade flows across the North Korean-China border rose 10 percent to $2.65 billion.
That's why critics of the existing North Korean sanctions say the measures don't go nearly far enough in cutting off the flow of cash and goods to the Pyongyang regime.
Some of those critics are calling for "secondary sanctions," which would cut off trade and financial flows to any country doing business with North Korea."We say to China, 'You have a choice whether you do business with North Korea or you do business with the U.S., but you can't do both,'" Sen. Chris Van Hollen, D.-Md., told MSNBC on Thursday. "That is what got people's attention with the Iran sanctions, and that's what we need to do now."
Last month, Van Hollen co-sponsored a bill with Sen. Pat Toomey, R.-Pa., that would impose secondary sanctions targeting third parties and countries that do business with North Korean companies and individuals.
Secondary sanctions offer a powerful financial weapon by allowing the U.S. government to bar foreign banks access to the U.S. financial system.
In late June, the White House imposed limited secondary sanctions on two Chinese citizens and a shipping company for helping North Korea develop nuclear weapons and also accused a regional Chinese bank, the Bank of Dandong, of laundering money for Pyongyang, Reuters reported.
Beyond cutting off cash and supplies to the North Korean regime, secondary sanctions squeeze the flow of cash to individuals, putting pressure on Kim's political allies, according to David Cohen, a senior CIA official in the Obama administration.
"Imposing secondary sanctions would send a strong message to North Korean leader Kim Jong Un that the financial noose is tightening in a way that could drive a wedge between Kim and the Pyongyang elite critical to his continued hold on power," Cohen wrote in a recent op-ed piece.
Imposing secondary sanctions that single out major Chinese banks and state enterprises comes with the risk of economic retaliation from Beijing.
To minimize that risk, the White House will need to build a much wider coalition of Asian countries, says Nicholas Burns, former U.S. ambassador to NATO during the George W. Bush administration.
But developing that coalition will be a tough task for an administration that has yet to fill dozens of key diplomatic positions. So far, the White House has filled fewer than half of the State Department positions that require Senate confirmation.
"It really is a time for diplomacy," Burns told CNBC on Thursday. "But there's no American ambassador to South Korea, there's no secretary of State for East Asia. So, you've also got to fill out the ranks."
https://www.cnbc.com/2017/08/10/us-north-korea-standoff-could-spark-economic-war-with-china.html
-
As Trump Unnerves Asia, China Sees an Opening
Aug 10, 2017 | The New York Times
By Jane Perlez
BEIJING — With America’s Asian allies unnerved by President Trump’s threat to bring “fire and fury” to North Korea, China sees a chance to capitalize on the fear and confusion and emerge as the sober-minded power in the region, according to analysts who study the Chinese leadership.
In dealing with new American presidents — there have been eight since Richard Nixon opened relations with the country — China’s leaders have looked for a few important qualities, mainly reliability and credibility.
Even if they had doubts about a president’s affinity for China, if he was deemed “kaopu,” or reliable, Chinese officials could expect some stability during even the prickliest disagreements.
Mr. Trump has increasingly been seen in China as unreliable, or “bu kaopu.” His statement this week that North Korea “will be met with fire and fury like the world has never seen” if it continues to threaten the United States with nuclear-tipped intercontinental ballistic missiles has only deepened that perception, analysts say.
But rather than make that judgment public, in the state-run news media or in official remarks, China’s leaders are sitting back, content to watch Mr. Trump’s credibility falter among American allies and adversaries alike, the analysts said.
“The Chinese don’t like North Korea’s nuclear program, but the current situation does serve their longer-term interests in eroding American leadership, because it provides a whole new set of circumstances in which America shows its weakness,” said Hugh White, a former senior defense strategist in the Australian government.
Mr. Trump’s threat has particularly unsettled America’s main Asian allies, Japan and South Korea, adversaries and neighbors of North Korea that have increasingly vocal lobbies for acquiring their own nuclear weapons to counter Pyongyang’s.
China and Japan are far from being close. But China is trying to improve its relations with South Korea, and it sees opportunity there as Mr. Trump threatens pre-emptive action against North Korea, which would be anathema to the liberal government of the South’s new president, Moon Jae-in.
Attempts by Secretary of State Rex W. Tillerson and Defense Secretary Jim Mattis to calibrate Mr. Trump’s comments did not alleviate the credibility problem that China hopes to exploit, analysts said.
Mr. Trump’s remark was the starkest example of a recent pattern in Washington, Mr. White said.
Too often, he said, the United States has declared it would use force to stop something from happening — such as China’s expansion in the South China Sea, and during President Barack Obama’s administration, Syria’s use of chemical weapons — and has failed to do so. “Trump’s antics amplify that message tenfold,” Mr. White said.
The official Chinese reaction to Mr. Trump’s comments was mild. The Foreign Ministry reiterated standard points about the North Korea dispute: that it should be resolved with diplomacy and that all parties should avoid escalating the situation.
In part, the modesty of that response was due to the fact that Chinese leaders are currently more focused on domestic politics than foreign policy, analysts said.
President Xi Jinping and other senior officials are attending an annual retreat at Beidaihe, a beach resort east of Beijing, where the political machinations are more intense this year than usual. Mr. Xi is assumed to be finalizing the new lineup of China’s top leaders for the next five years, expected to be announced at a national congress that could be convened as soon as next month.
There may also be a scheduling reason for the mildness of China’s response. Mr. Trump’s daughter Ivanka and her husband, the White House adviser Jared Kushner, are scheduled to visit China next month with their children. Mr. Kushner is a primary White House contact for China, and Beijing is putting considerable effort into ensuring that the visit goes smoothly. The visit is also seen as a planning operation for Mr. Trump’s own trip to China in November.
Images of Mr. Kushner, his wife and their children at a family dinner with Mr. Xi at his Beijing estate, Zhongnanhai, would fit well into Mr. Xi’s playbook of appearing to have “the world in its proper orbit, around him,” said Douglas Paal, vice president of the Carnegie Endowment for International Peace.
For China, North Korea is not the only vexing United States-China issue on which the Trump administration’s credibility has recently faltered. Last week, China appears to have narrowly escaped punishing American trade tariffs.
The White House was reported to be considering an investigation of alleged Chinese violations of American intellectual property, which could have led to steep tariffs on Chinese imports. But the plan appears to have been pulled because the administration needed China’s support last weekend for stiff new United Nations sanctions against North Korea.
“The Chinese figure the vaunted 301 measures are on hold until after the Trump family trips to Beijing,” Mr. Paal said, referring to the section of the 1974 Trade Act that the administration was planning to use to punish China.
Over all, the Chinese leadership — which is accustomed to belligerence from North Korea, its estranged ally — does not believe Mr. Trump would actually carry out his threat to strike North Korea, said Yun Sun, a senior associate at the East Asia program at the Stimson Center.
China has listened to three generations of bluster from the rulers of North Korea, including the current leader, Kim Jong-un, so grandiose and alarmist language is nothing new to them, she said. It is common for North Korea to talk about “turning Seoul into a sea of fire and a pile of ashes,” she noted, referring to the capital of South Korea.
And while North Korea and the United States are hardly equals, China is likely to similarly dismiss Mr. Trump’s “rhetorical war” against the North, Ms. Sun said.
“A striking impression is how little China sees the threats by either North Korea or Trump as credible,” she said, adding, “I don’t think the Chinese are losing sleep today.”
Outwardly, at least, Chinese leaders appear to be reacting calmly to Mr. Trump’s words because they understand that they need not be taken seriously, said Mr. White, the former defense strategist for Australia. That in itself is a major problem for the United States, especially as it competes with China for influence in Asia, he said.
“Trump is making empty threats to North Korea,” Mr. White said. “It is credible to say that America will attack North Korea if North Korea actually attacks the U.S. or allies — as Mattis has done. But it is not credible to threaten to attack if North Korea keeps issuing verbal threats towards America.”
Would China benefit if Mr. Trump actually started a war with North Korea? “If the U.S. gets a swift and decisive win, then that’s a big loss for China,” Mr. White said.
“But if, as is much more likely, it turns into a costly disaster for the United States, South Korea and Japan, in the end that might well mark the end of the United States’ leadership in Asia,” he said.
https://www.nytimes.com/2017/08/10/world/asia/north-korea-china-trump.html?_r=0
-
Inner competition to test new intra-Asia alliance
Aug 10, 2017 | Journal Of Commerce
By Greg Knowler
The cleaning up of South Korea’s container shipping industry since Hanjin Shipping went bankrupt a year ago and left Hyundai Merchant Marine as the new flag carrier took a surprising turn this week with the announcement that 14 of the country’s carriers were forming an intra-Asia alliance.
How so many container lines, all fiercely competitive with each other, will be able to cooperate in an oversupplied and cut-throat trade has analysts such as Alphaliner scratching their heads.
Nevertheless, the Korea Shipping Partnership was launched on Aug. 8 by the Korea Shipowners’ Association and is aimed at improving the Korean carriers’ operating cost competitiveness and at addressing the persistent supplydemand imbalance on intra-Asia routes.
The memorandum of understanding was signed in Seoul by HMM, KMTC, SM Line, Sinokor, Heung-A, Namsung Shipping, CK Line, Pan Continental Shipping, Dongjin Shipping, Pan Ocean, Dong Young Shipping, Doowoo Shipping, Taiyoung Shipping, and Hansung Line (an affiliate of Sinokor).
Alphaliner said the formation of the partnership was part of the Korean government’s plans to revive the country’s shipping industry after last year’s setback caused by Hanjin Shipping’s departure from the market.
Much of the work that needs to be done in Korea will involve consolidating and cleaning up the balance sheets of shipping companies, and an expert in that area is SC Lowy founder and Chief Investment Officer Soo Cheon Lee.
Lee was instrumental in resolving the critical financial woes of Korea Line and Pan Ocean, taking the Korean carriers from the brink of collapse to financially viable concerns. He said in general the shipping industry urgently needed cleaning up to address surplus capacity and better cope with demand that was unlikely to see the doubledigit growth of the past.
“But so far South Korea is the only country in Asia that is actively cleaning up its shipping sector,” he told JOC.com. “It started several years ago with Korea Line and Pan Ocean and has now moved into container shipping and shipbuilding. Korea is restructuring its huge shipping sector and it looks like that is set to continue under the new President Moon Jae-in government.
It will not be smooth sailing for the Korea Shipping Partnership. According to OOCL the intra-Asia market is continuing to show signs of weakness with “markedly negative volume growth” in trade between North China, Japan, and Korea, alhough Southeast Asia and Taiwan trade was improving.
On its intra-Asia/Australasia segment, the Hong Kong-listed carrier’s first half container volume showed a 5.2 percent decline compared with the first six months of 2016, with intra-Asia largely responsible for the falling volume. Revenue on the segment rose 2.3 percent in the first half year over year.
But arguably the main obstacle to the Korea Shipping Partnership is the fact that Korean carriers are fiercely competitive with each other. Alphaliner said this was illustrated by KMTC and SM Line, two Korean container lines that opted to stay out of the HMM + Sinokor and Heung-A partnership and pursue their own growth plans.
Drewry put the intra-Asia throughput in 2016 at 30 million TEU, a 4 percent year-over-year growth. For 2017, the International Monetary Fund forecast the global economy to grow by 3.5 percent, and Drewry believed container throughput in the world’s largest trade would reverse the trend of the last two years and surpass GDP growth.
The 14 Korean carriers operate a combined capacity of 308,000 TEU on intra-Asia routes, which Alphaliner said was a good distance short of the 1.28 million TEU operated by the main non-Korean carriers on the trade.
“The Korean carriers’ disadvantages from lack of scale and from excessive competition in their common markets can only be overcome by full fledged consolidation — similar to the recent and ongoing efforts of the major Chinese carriers, Cosco and CSCL, and Japan's NYK, MOL, and 'K' Line,” Alphaliner said. However, the analyst concluded that such a far-reaching move appeared to be remote in the Korean context.
http://www.joc.com/maritime-news/too-many-small-competitive-korean-carriers-new-intra-asia-alliance_20170810.html
Port Mentions
City/Province Mentions
Competitor Mentions
US - China Relations
Industry News
Add recipients
Suggested