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Project Dory Monitoring 16 August 2017
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To make North Korean sanctions stick, the 'gloves are off' for U.S. in fight against Chinese smugglers
Aug 16, 2017 | Los Angeles Times
By Jonathan Kaiman and Barbara Demick
Cai didn’t know what he was bringing into North Korea, and he didn’t dare ask. Whenever the 49-year-old truck driver crossed the bridge into North Korea, the cargo was carefully wrapped so he couldn’t see what was inside. -
Irons Off the Fire: China's Import Ban Seen Hindering North Korea
Aug 15, 2017 | Fox News
By Chuin-Wei Yap and Eva Dou
As China throws its weight behind new global economic sanctions against North Korea, a lively trade in coal--legal and through rampant smuggling--is likely to recede further. Shipments of seafood and iron ore will be curtailed for the first time. -
China, Russia keep North Korea’s nuclear program funded
Aug 15, 2017 | THe Sacramento Bee
By Kevin G. Hall
Lost in all the attention paid to President Donald Trump’s threat of unleashing “fire and fury” on North Korea is his promise to bring the country to heel with tough sanctions. It hasn’t worked so far, because of Russia, China and shadowy middlemen tied to both nations. -
China steel, iron ore struggle to recover after curbs
Aug 16, 2017 | Reuters
By Manolo Serapio Jr
Chinese steel and iron ore futures slipped for a fourth session running on Wednesday as recent moves by the Shanghai exchange to increase trading charges kept the two commodities under pressure. -
New Chinese storage terminal launched
Aug 15, 2017 | Tank Storage Magazine
A new oil and chemical bulk liquid storage terminal has been opened in China. -
The ‘Fire and Fury’ Crisis: Trump Risks a Backfire Over China and North Korea
Aug 15, 2017 | The Wall Street Journal
By Andrew Browne
By ordering his first trade action against Beijing, while amping up pressure on Chinese leaders to rein in Pyongyang’s nuclear menace, U.S. President Donald Trump is bringing to a head two of the most intractable problems that bedevil U.S.-China relations. -
Trump asked China to rein in its unreasonable trade practices. It should.
Aug 16, 2017 | The Washington Post
FOR ALL his talk during the 2016 campaign about taking on China for “stealing” American jobs, President Trump has hardly launched the trade war against Beijing that many feared. -
US and China must set ground rules for freedom of navigation patrols
Aug 16, 2017 | South China Morning Post
By Mark J. Valencia
On August 10, the top-of-the-line USS destroyer John S. McCain made a “non-innocent” passage within 12 nautical miles of China-claimed and occupied Mischief Reef in the South China Sea. This “freedom of navigation operation” indirectly challenged China’s sovereignty claim to the low-tide feature. -
Could "Big Data" Predict Freight Rates?
Aug 15, 2017 | Maritime Executive
By Paul Benecki
What if you had a good idea of what container freight rates for your cargo might be next week? If you knew they would go up, you could book your shipment now; if you knew they would go down, you might be able to wait for a lower price. Christian Ove Sørensen, global head of marketing and sales at software company Portix Logistic Software (PLS), believes that there may be a digital means to make this possible.
Port Mentions - There are no relevant clips to report at this time.
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US - China Relations
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Aug 16, 2017 | Los Angeles Times
By Jonathan Kaiman and Barbara Demick
Cai didn’t know what he was bringing into North Korea, and he didn’t dare ask.
Whenever the 49-year-old truck driver crossed the bridge into North Korea, the cargo was carefully wrapped so he couldn’t see what was inside.
For all he knew, the packages contained agricultural tools, baby clothes, umbrellas, food, rice cookers or toaster ovens. Or they might have contained materials for making nuclear bombs.
His boss was a well-dressed, well-spoken woman, Ma Xiaohong, who he said “had a special connection with the Chinese government.”
“I started to suspect she was doing illegal trading,” said Cai, who asked to be quoted only by his surname because of the sensitivity of the situation. After six months driving in 2015, he quit.
His suspicions were confirmed when Ma and three associates were indicted in September in U.S. District Court in Newark, N.J., on charges of conspiracy to evade sanctions against North Korea.
Her company, Dandong Hongxiang (the latter part of the name translates to “Flying High”), at one point handled an estimated 20% of North Korea’s trade with China, according to company documents filed with the court.
Ma since has disappeared and is unlikely to stand trial, given the lack of an extradition treaty with China, but the charges have effectively closed her operation.
Borrowing a technique used against suppliers to the Iranian nuclear program, the U.S. government filed an unusual petition seeking forfeiture of at least $1.9 million from an affiliated company, Mingzheng International, through Chinese banks that do business in the United States.
“It is a novel approach that underscores the U.S. commitment to target the illicit North Korean trade,” said Aaron Arnold, a former advisor to the FBI on nonproliferation, who refers to the tactic as “weaponizing the courts.” While the U.S. government previously has been reluctant to go after Chinese companies and banks for fear of retaliation against U.S. companies working with China, he said, that has changed. “Now, from what I understand, the gloves are off.”
The case is likely to be a template for future government action against North Korea with the hope that lawsuits and sanctions — a safer course than military action — can slow the North Koreans’ completion of a weapon that can reach the United States. The Trump administration has been scrambling to respond to North Korea, which since June has conducted two tests of intercontinental ballistic missiles capable of reaching the United States.
A tough new sanctions resolution unanimously approved Aug. 5 by the U.N. Security Council bars North Korea from exporting $1 billion of its most profitable commodities, including coal. On Monday, China announced that it would ban imports of North Korean coal, iron and lead ores, and seafood, beginning Sept. 5. Yet, as with past sanctions, their bite will depend on how thoroughly the Chinese enforce them.
In the past, sanctions have been largely ineffective because they targeted only North Koreans, not Chinese and others — such as Malaysians and Singaporeans — who have helped North Korea buy what it needs.
“The Chinese economy is a globalized marketplace. Anything the North Koreans want, they can procure within the Chinese market,” said John Park, an expert in Chinese-North Korean trade at Harvard University.
China accounts for 90% of North Korea’s trade volume. Dandong looms large in this equation. The city of 2.4 million is the largest on the 850-mile border between China and North Korea and was the crossing point when Chinese communist troops came across the Yalu River during the Korean War.
Like other Chinese cities today, it has been transformed by a pell-mell of glitzy high-rises and shopping malls. It draws Chinese tourists who stroll on a riverfront promenade, gawking at a country across the way that looks frozen in an earlier era — with dingy mid-rises, a few rusty cargo ships, a Ferris wheel that never revolves. Visitors buy nostalgic souvenirs, North Korean currency, traditional North Korean dresses and North Korean liquor, beer, pickled eggs.
Meanwhile, elite North Koreans come to Dandong’s upscale Mirador International Mall to buy 18-karat gold jewelry, Bose stereo speakers and Gucci fashions.
“North Korea is just like any country. There are haves and have-nots,” said a Gucci agent, who asked not to be identified. “Many of them speak Chinese.”
Most of the trade runs across the Sino-Korean Friendship Bridge, but some takes place on the river. “People smuggle iron, copper, even flour” across the border, said a longtime Dandong trader.
“Sometimes, we’ll see small boats from North Korea. If they’re running out of petrol, they’ll ask this side to give them more petrol.”
But that’s only for the small players. The serious trading is carried out by large government-owned North Korean trading companies that operate with greater sophistication.
North Korea “is flouting sanctions through trade in prohibited goods, with evasion techniques that are increasing in scale, scope and sophistication,” reported the U.N. Panel of Experts, which oversees the enforcement of sanctions against North Korea. The panel said that North Korea is “using agents who are highly experienced and well-trained in moving money, people and goods, including arms and related materials, across borders.”
Of the various networks spread through Asia and Europe that have helped the North Koreans, none did as much business as the enterprise operated by Ma Xiaohong.
Ma got her start in the 1990s when the North Korean economy was imploding and the country was plagued with famine. Like other Chinese business people, she bought scrap metal from North Koreans who were dismantling factories in order to buy food, according to a report in the Chinese-language Southern Weekly newspaper. She eventually forged ties with senior North Korean officials, among them Jang Song Taek, the uncle of Kim Jong Un who was purged and executed in 2013.
Ma was hardly a shadowy player in Dandong. She was a well-known businesswoman who had served on the Liaoning provincial legislature and was active in the Communist Party. She had a taste for publicity, as is evident from glossy corporate brochures and a self-published magazine in which she struck glamorous poses. In a rough-and-tumble part of China (the northeast is famous for its gruff manner of speaking), Ma stood out.
“My first impression of her was that she was really well-mannered, really well-educated, really polite, but really authoritative as well,” said Cai, the truck driver.
By 2010, the company boasted in a PowerPoint presentation that it accounted for a stunning 20% of the trade between China and North Korea, a claim that could not be independently verified. It had five ships registered in Hong Kong that transited regularly between northern China and the North Korean port of Nampo. The company advertised itself on its website as “a bridge between DPRK [North Korea] and the world.”
Dandong Hongxiang would buy commodities from North Korea — coal being the largest — and then use the proceeds to buy whatever the North Koreans needed. But trading with North Korea became increasingly perilous with tightening international and U.S. sanctions. “Business risks come with sensitive North Korean situation,” the PowerPoint presentation acknowledged.
The indictment alleges that Ma set up a series of front companies scattered from the British Virgin Islands to the Seychelles and Hong Kong — Success Target Group, Best Famous Ltd., Flying Horse and Beauty Chance are just a few — to disguise illegal trade with the North Koreans.
Chinese authorities closed down Dandong Hongxiang’s operations last year after the company was flagged by U.S. intelligence.
“They did act against this network, but only after the United States issued sanctions,” said Anthony Ruggiero, a former Treasury Department official now at the Foundation for Defense of Democracies. “There is really no evidence that China has cracked down on the trade relationship with North Korea.”
Others are more optimistic.
“There are only a limited number of players bringing money into the financial system. If you are able to shut them down, you can have a disproportionate impact on their business,” said David Thompson, an analyst with the Center for Advanced Defense Studies.
Although Hongxiang’s headquarters — a sprawling office on the 16th floor of the Sun Fortune Center office building, just across from the river promenade in Dandong — was shuttered, at least three of the company’s subsidiaries are still operating. These include a travel agency bringing Chinese tourists to North Korea, a restaurant and a cargo firm where half a dozen people still work.
“We’re doing foreign trade; we’re an agency,” said one female employee, before she stormed off into another room and refused to say more.
http://www.latimes.com/nation/la-fg-north-korea-sanctions-2017-story.html
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Irons Off the Fire: China's Import Ban Seen Hindering North Korea
Aug 15, 2017 | Fox News
By Chuin-Wei Yap and Eva Dou
As China throws its weight behind new global economic sanctions against North Korea, a lively trade in coal--legal and through rampant smuggling--is likely to recede further. Shipments of seafood and iron ore will be curtailed for the first time.
Beijing's latest "total ban" on coal imports from North Korea cuts off a loophole that had survived an earlier round of sanctions in February, which had allowed for "livelihood" shipments, or exemptions for humanitarian purposes.
China is also targeting iron ore, of which imports from North Korea soared as coal fell, as well as seafood for which it was the primary customer.
The moves will make it harder for North Korea to acquire resources to build up its military capacity, said Zhao Tong, a fellow at the Carnegie-Tsinghua Center for Global Policy in Beijing.
"This is going to have significant impact on the functioning on North Korean industry, especially the defense industry," he said.
The limited coal ban imposed earlier this year surprised some foreign observers by its effectiveness. A famously porous border for smugglers between the two countries had stymied previous attempts to get China to effectively sanction Pyongyang's ambitions for nuclear power.
Since March, however, imports of anthracite--the coal used to power Chinese electric plants--have dropped to zero, China customs data show.
China's latest move comes as U.S. President Donald Trump signed an order Monday to probe China on alleged intellectual property theft, and amid accusations that Beijing isn't taking a strong enough stand against North Korea.
China's Foreign Ministry said it tightened the screws in response to new U.N. directives aimed at cutting off $1 billion in Pyongyang's foreign earnings, and not pressure from Mr. Trump.
Revenue from anthracite at one time provided nearly half of Pyongyang's foreign exchange. Two years ago some 80% of China's anthracite came from North Korea. Imports in 2016 totaled 22.4 million metric tons, giving North Korea $1.2 billion.
This year, China has imported just 2.67 million tons valued at $220 million.
North Korea exported $196 million worth of seafood and prepared fish in 2016, with 97% of that going to China, according to U.N. statistics.
The coal trade in particular shows how active China used to be in North Korea. Commerce was dominated by some 5,000 Chinese companies, some state-owned, trading with North Koreans legally or otherwise, analysts say.
The Chinese city of Dandong was a favored overland entrepôt; the Chinese ports of Rizhao and Dongjiang were established counterparts of Nampo and Songrim in North Korea. Chinese cellphone towers along the countries' 870-mile border extended into North Korea territory, helping to facilitate a lively market for contraband.
"It's difficult for [smuggled] iron ore or coal to go through normal customs checkpoints, so sometimes they do it by river boats," said Justin Hastings, an international-relations scholar at the University of Sydney who has researched the China-North Korea illicit trade. "Trucks can also go over the frozen river" along the border.
As Beijing turned up the heat, some North Korean smugglers took to meeting Chinese counterparts on the Yellow Sea to shift cargo, a method favored by trading firms based in the northeastern Chinese port of Dalian, Mr. Hastings said.
As coal shipments to China declined, imports of iron ore ticked up, rising 60.3% in the first half from a year earlier to 1.3 million tons, China data show.
Beijing's decision to include the steelmaking ingredient indicates a close monitoring of trading patterns, and a willingness to find new pressure points on Pyongyang.
"There have been reports of iron ore traders encouraged to import less from North Korea, even before the sanctions took place," said Tomas Gutierrez, analyst for Shanghai-based Kallanish Commodities. "As I understand, some companies were refused new permits to import from North Korea earlier in the year."
For North Koreans, the pain is likely to hit coal workers who were among its more highly paid laborers, analysts say. North Korean colliers earned about 500 yuan ($75) a month, compared with average salaries at other factories of about 280 yuan.
For the Chinese, the impact is mostly limited to corporate bottom lines. Russian coal carried by rail substitutes costs 50% more than the North Korean commodity; seaborne Australian coal costs 70% more.
"This won't have a lot of impact on the Chinese side, as there already hasn't been a lot of trade going on either way," said Chi Jingdong, deputy secretary-general of the China Iron and Steel Association.
Some analysts doubt if any of the global sanctions would achieve their desired result: to slow North Korea's missile development.
"The nuclear missile programs are the top priority, so when resources become fewer, they will just concentrate them on the nuclear missile programs," Mr. Zhao said.
Neither is it clear how long Beijing's freeze will last.
"Whenever China has wanted to make a point, China seems to hold up trade just enough for North Korea to feel the pain," Mr. Hastings said. "That doesn't mean it will last forever."
http://www.foxbusiness.com/features/2017/08/15/irons-off-fire-chinas-import-ban-seen-hindering-north-korea.html
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China, Russia keep North Korea’s nuclear program funded
Aug 15, 2017 | THe Sacramento Bee
By Kevin G. Hall
Lost in all the attention paid to President Donald Trump’s threat of unleashing “fire and fury” on North Korea is his promise to bring the country to heel with tough sanctions. It hasn’t worked so far, because of Russia, China and shadowy middlemen tied to both nations.
North Korea has successfully skirted sanctions for two decades and developed a nuclear arsenal thanks to a network of Chinese middlemen, rogue Russian partners and no shortage of people willing to help, even at a steadily escalating price.
Trump’s threat makes him the fourth consecutive U.S. president to promise that he’d change North Korea’s behavior by blocking its access to the global financial system. But China and Russia have both long eased any pain to North Korea caused by the economic clampdown through a series of investments that have allowed Pyongyang to direct its cash into weapons programs.
Russia, for instance, enjoys a long-term lease at a terminal in North Korea’s relatively new port of Rajin on the Sea of Japan, and there is a new ferry service connecting the two countries. China has boosted railroad infrastructure near Dandong, its border chokepoint for trade with North Korea. Plus, both Russia and China give North Korea a trading lifeline.
China’s General Administration of Customs said in April that trade with North Korea had expanded more than 37 percent in the first three months of 2017, despite tighter global sanctions. Over the weekend, China pledged to halt imports of iron, lead and coal from North Korea. Russia appears to be backfilling what China pulls back, especially North Korean coal, according to reports citing the Russian state-owned news site Sputnik.
Indeed, despite years of sanctions, Pyongyang shows no sign of a financial squeeze.
North Korea manages to skirt financial sanctions mostly through the use of Chinese nationals who lend their name and businesses for transactions in exchange for a handsome payoff, according to spies and defectors.
The illicit money washes through banks in Hong Kong, Singapore, Malaysia and sometimes even the United States, and eventually back to China, where North Korean officials can access it.
“It’s like whack-a-mole. Every time there is a set of (sanction) designations that come out, a new company or front person emerges as a primary interlocutor,” said Scott Snyder, director of the U.S.-Korea policy program at the Council on Foreign Relations. “If you had 100 percent Chinese (sanctions) enforcement, won’t there always be a Chinese partner willing to be paid for the growing risk as a supplier for what North Korea needs?”
The latest round of UN sanctions, passed unanimously by the Security Council, is unlikely to have any greater effect. While China said over the weekend it would ban imports of North Korean coal, lead and iron, tougher sanctions are only likely to raise the premium demanded by middlemen, but they are unlikely to tie North Korea’s hands.
A recent report by the policy-analysis group C4ADS said sanctions have failed in part because “the system of North Korean financing and procurement is practically invisible, making it nearly impossible to expose.”
The group suggested a solution has been hiding in plain sight — a more targeted effort, focused on identifying middlemen of Chinese and other nationalities who are key cogs in a limited pipeline.
It’s a view shared by Marcus Noland, who advises presidents and policymakers on North Korea. He thinks the grip has been slowly tightening on North Korea in recent years but not because of sanctions per se.
“Because of North Korea’s size and culture — and isolation — it appears that North Korea has a relatively thin bench of people who are capable of operating an international sanctions-evasion network,” said Noland, executive vice president of the Peterson Institute for International Economics.
One example: a North Korean-born man, Kim Il Song had Chinese residency was nabbed in a sting operation, traveling to Hawaii to buy military-grade night-vision goggles for Pyongyang. He was sentenced in February 2016 to three years in U.S. prison. A UN report earlier this year documented how a small number of front companies in Singapore allegedly helped North Korea conduct arms sales.
In both cases, there were a relatively small number of people involved in the transactions.
“The number of those Chinese intermediaries is not that big,” Noland said.
Still, it is next to impossible to plug all the holes in the dike.
Take North Korea’s $100 million arms deal with a company in the United Arab Emirates. UAE emails leaked in 2015 and reported then by The New York Times show that the Persian Gulf nation’s ambassador was called into the State Department for a dressing down and was warned that the arms purchases were funding North Korea’s nuclear program.
UAE’s neighborhood rival Qatar was found to have about 1,000 North Korean nationals working there in 2015, down from an earlier 3,000 or so, the Washington Post reported in July. Their wages help fund the North Korean regime.
The real way to pressure North Korea is to attack the banks, particularly in China and to a lesser extent Russia. The banks do business with the middlemen who serve as proxies for Pyongyang’s trade and finance activities outside its borders.
“Somehow they have to go after the banks,” said Anthony Ruggiero, who worked in both the State and Treasury departments combating the illicit finance that helps rogue nations seeking nuclear materials. He pointed to similar — and effective — U.S. efforts to isolate Iran that resulted in $15 billion in fines levied on European banks that helped it skirt sanctions from 2012 to 2015.
But that could deal a direct blow to the U.S. economy. China would likely respond in kind.
“That is obviously fraught with possibilities of harming the U.S.-China trade relations, and having an impact on both economies,” said Ruggiero, now a senior fellow at the Foundation for Defense of Democracies.
The Trump administration took steps in that direction on June 29 when Treasury’s Financial Crimes Enforcement Network announced a proposed rule that would, for practical purposes, shut out China’s Bank of Dandong from the global financial system. The Chinese bank and government have until the end of this month to comment.
Treasury invoked a controversial portion of the USA Patriot Act called Section 311, which allows the accused to know very little about what information the government has on them and gives them very little room to challenge the findings.
Section 311 is a blunt tool, lifted only through compliance. The George W. Bush administration used it against 13 financial institutions, most famously a Macau bank — Banco Delta Asia — accused of helping the North Korean regime. The Obama administration used the provision seven times.
By blocking any U.S. bank or its partners from having any banking relationship with the cited financial institution, Treasury effectively turns them into in a pariah lender. European and Asian banks steer clear, not wanting the penalties and reputational hit.
In many respects, going after Bank of Dandong makes sense: It is located in a border city where about two-thirds of China’s trade with North Korea occurs.
But Bank of Dandong is a small lender without broad global ties. Going after a bigger Chinese bank that is globally integrated would send a much more serious message.
Hitting larger Chinese banks may have unintended consequences, Noland warned. It might isolate small-time local politicians or Chinese criminal groups, or it could touch higher.
“If somehow we hit somebody like (President) Xi Jinping’s nephew … things could get a lot more messy,” he said. “How far are we willing to push the Chinese on secondary sanctions to elicit cooperation?”
On June 1, the Treasury Department went after some of these secondary targets, hitting alongside North Korean front companies a Russian oil company run by Eduard Khudainatov, who ran Russia’s oil giant Rosneft until President Vladimir Putin replaced him in 2012 with a close associate.
For two decades, the isolated family-run dictatorship in North Korea has survived through illicit activities, including weapon sales, trafficking in ivory, cigarette smuggling and evenallegedly making perfect counterfeits of U.S. and Chinese currency.
North Korea relies on offshore companies to help hide its financial transactions. That was clear from the Panama Papers published last year by McClatchy and its partners at the International Consortium of Investigative Journalists.
Among the findings was that a British banker, Nigel Cowie, established an offshore financial vehicle called DCB Finance to allow North Korea to sell arms to fund its nuclear program. North Korean-linked offshore front companies often also used the names of poor people in Asia to populate their boards of directors.
A new McClatchy review of the offshore documents finds that the Panamanian law firm Mossack Fonseca actively sought clients in Chinese border city of Dandong — even as pressure on North Korea mounted and it was labeled by President Bush as a member of the “axis of evil.”
Internal documents from the law firm show that representatives from its Hong Kong office courted the head of a company called Huashang Overseas Investment Co. Ltd. in late September 2007.
“We will keep in touch with them,” read one message from Austin Zhang, a Hong Kong employee of Mossack Fonseca, back to headquarters about the Dandong-based firm.
Huashang Overseas openly boasts on the internet of being an access point for North Korea.
“Our company plays an important role in the area of North Korea investment,” it said in a Jan. 5, 2015, posting on a business-promotion website. “We are specialized in North Korea Business and we can help anyone or any company who has the ability and idea to do business in North Korea.”
http://www.sacbee.com/news/nation-world/world/article167337082.html
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China steel, iron ore struggle to recover after curbs
Aug 16, 2017 | Reuters
By Manolo Serapio Jr
* Rebar, iron ore futures drop for fourth straight session
* Shanghai bourse hiked fees, imposed limits to fight speculation
* China's construction sector faces cyclical headwinds -analyst
MANILA, Aug 16 (Reuters) - Chinese steel and iron ore futures slipped for a fourth session running on Wednesday as recent moves by the Shanghai exchange to increase trading charges kept the two commodities under pressure.
The China Iron and Steel Association last week put a surge in rebar steel futures down to speculative trading, prompting the Shanghai Futures Exchange to lift transaction fees and impose limits on intraday positions on some rebar futures contracts from this Tuesday.
That fueled a retreat in steel and iron ore prices from last Friday when the measures were announced.
The most-active rebar on the Shanghai Futures Exchange was off 0.5 percent at 3,727 yuan ($558) a tonne by 0218 GMT.
Iron ore on the Dalian Commodity Exchange was down 0.4 percent at 523.50 yuan a tonne.
Expectations that Chinese steel mills in key producing areas such as Hebei province would cut output by up to 50 percent during winter, upon Beijing's orders to fight smog, spurred a rally in rebar futures last week, lifting prices to their strongest since 2013.
But data this week showing a slowdown in China's fixed-asset investment growth, particularly in property investment, suggested steel demand from the construction sector could soften, said Carsten Menke, analyst at Julius Baer.
"While the weakness of the July data should not be over-emphasized, it still fits our view of a moderate slowdown in China towards the end of this year," Menke said in a note.
"The construction sector should face further cyclical and seasonal headwinds, which should weigh on demand over the coming months," he said.
Iron ore for delivery to China's Qingdao port .IO62-CNO=MB dropped 1.4 percent to $73.68 a tonne on Tuesday, the lowest since Aug. 3, according to Metal Bulletin, slipping for a third straight day.
https://in.reuters.com/article/asia-ironore-idINL4N1L21GC
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New Chinese storage terminal launched
Aug 15, 2017 | Tank Storage Magazine
A new oil and chemical bulk liquid storage terminal has been opened in China.
The Weifang Sime Darby liquid terminal expands Weifang Sime Darby Port's range of services offered for storage and other terminal facilities.
The first phase of the facility was opened earlier this month, with a storage capacity of 406,000 m3. The second phase, which involves the construction of 91,000 m3 of capacity is expected to become operational in October. Building work on the final phase, with a capacity of 164,000 m3 is expected to be complete by the first half of 2019.
The terminal will be build, managed and operated by Weifang Sime Darby Liquid Terminals, a JV company owned equally by Sime Darby Overseas and Dragon Crown Group Holdings.
The port sits within the network of Longkou Port, Yantai Port, Weihai Port, Qingdao Port and Rizhao Port and it receives cargos from central, northern and western Shandong and Weifang city.
Timothy Lee Chi Tim, vice chairman of Weifang Sime Darby Liquid Terminal, says: 'The terminal is part of our RMB 2.8 billion master expansion plan, which will put Weifang Sime Darby Port on the roadmap to achieving our aim of becoming a significant multi-purpose port in the northeast Asian region.
'The launch of our liquid terminals is timely to capture the growing market for crude and refined oil, as well as chemicals in China. These commodities have benefitted from the gradual liberalisation of import and export policies in China.'http://www.tankstoragemag.com/display_news/9954/New_Chinese_storage_terminal_launched/
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The ‘Fire and Fury’ Crisis: Trump Risks a Backfire Over China and North Korea
Aug 15, 2017 | The Wall Street Journal
By Andrew Browne
SHANGHAI—By ordering his first trade action against Beijing, while amping up pressure on Chinese leaders to rein in Pyongyang’s nuclear menace, U.S. President Donald Trump is bringing to a head two of the most intractable problems that bedevil U.S.-China relations.
There are hints that Mr. Trump’s hard-nosed strategy could be having an impact—at least in the near-term. After repeated North Korean threats to launch missiles toward the U.S. Pacific territory of Guam, Pyongyang suddenly backed away from that threat Tuesday. And China has signed on to U.N. sanctions that will slash North Korea’s already meager foreign revenues by another $1 billion.
But Mr. Trump’s strategy comes with risks; each issue—trade and North Korea—is volatile enough to upend the relationship.
Mismanaged, one could ignite a trade war, the other trigger scenarios that could lead to military conflict.
To avoid these dangers, the two sides would have to reconcile clashing views on Asian security, which shape their divergent approaches to North Korea, and incompatible economic systems, which drive trade frictions.
Successive U.S. administrations have delayed the reckoning that Mr. Trump now seeks, precisely because the chances of pulling off such a diplomatic outcome are so improbable.
Indeed, Washington may have missed the opportunity long ago when it had more leverage. The Chinese economy is now powerful enough to withstand any trade sanctions; it is less dependent on exports, whereas U.S. corporations are more reliant than ever on access to China’s consumer markets. A tit-for-tat trade war would hurt both sides, and damage U.S. friends and allies in global supply chains that run through China.
Meanwhile, Chinese President Xi Jinping, riding a wave of assertive nationalism he’s helped to whip up, aims to diminish the U.S. presence in Asia and weaken its alliance system. He has no interest in any kind of arrangement for the Korean Peninsula that would strengthen America’s position there, and allow Washington to turn its attention to other flashpoints like Taiwan and the South China Sea.
Beijing’s bottom line: The status quo in North Korea is preferable to the upheaval required to take out its nuclear weapons, most likely including regime change.
White House officials insist there is no linkage between the North Korean issue and Monday’s presidential order to examine whether an investigation is warranted into Chinese requirements that U.S. companies give up technology in return for market access, as well as outright intellectual property theft. China, too, insists that trade disputes and North Korean tensions are separate issues.
Yet Mr. Trump has explicitly made the connection. This was the grand bargain he dangled to Mr. Xi: Help me on North Korea, and I’ll go easy on trade. He’s rapidly losing patience, though. “Our foolish past leaders have allowed them to make hundreds of billions of dollars a year in trade,” Mr. Trump tweeted, “yet they do NOTHING for us with North Korea, just talk.”
That’s been the U.S. complaint for years. Now, North Korea is on the point of perfecting intercontinental ballistic missiles able to strike the U.S. mainland.
And mercantilist policies, like forced technology transfers, have become an integral part of China’s state-led industrial model, imperiling America’s long-term economic prospects.
We’re moving toward a climax on two fronts in a crisis atmosphere.
To be sure, Mr. Trump is acting cautiously and deliberately, despite heated rhetoric. An investigation into alleged Chinese trade abuses could take up to a year, leaving ample room for compromise.
On North Korea, he has stressed the need for cooperation, although his threat to unleash “fire and fury” against North Korean Leader Kim Jong Un was as much intended to scare Beijing into action as to rattle the Korean dictator.
Some think Mr. Trump is deploying Nixonian “Madman Theory” to make Chinese leaders believe he is crazy enough to unleash chaos on their doorstep. In a phone call last week, Mr. Xi urged Mr. Trump to “avoid words and deeds that increase tensions.”
A nightmare for Beijing is a North Korean collapse that brings U.S. troops pouring across the 38th parallel, running into Chinese forces headed in the opposite direction to impose order, prevent a refugee wave and secure “loose nukes.”
Avoiding worst-case scenarios is a challenge as great as any the U.S. and China have facedsince diplomatic normalization in 1979.
Henry Kissinger, an architect of that breakthrough, writes in The Wall Street Journal that instead of subcontracting to Beijing the task of achieving American objectives on North Korea, the only feasible approach is “to merge the two efforts and develop a common position.”
But the gap between Beijing and Washington remains immense.
Hours ahead of Mr. Trump’s announcement on trade, Beijing said it would start implementing bans on coal, iron ore, seafood and other products from North Korea. But it won’t go so far as to cut off fuel and food supplies.
When it comes to trade, Beijing brought so little to the table during the first round of formal talks with the Trump administration they broke up with no joint statements, action plans or even a news conference. The implication is that China feels no sense of urgency, nor does it fear a showdown.
https://www.wsj.com/articles/the-fire-and-fury-crisis-trump-risks-a-backfire-over-china-and-north-korea-1502789822
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Trump asked China to rein in its unreasonable trade practices. It should.
Aug 16, 2017 | The Washington Post
FOR ALL his talk during the 2016 campaign about taking on China for “stealing” American jobs, President Trump has hardly launched the trade war against Beijing that many feared. He has not slapped across-the-board tariffs on Chinese goods; he has delayed what once seemed an imminent crackdown on aluminum and steel imports; he has declined to brand Beijing a “currency manipulator.” Rather than trade, Mr. Trump’s approach to China has emphasized enlisting President Xi Jinping’s help in defusing the crisis over North Korea’s nuclear weapons.
Given that, Mr. Trump’s announcement Monday — that he is ordering his special trade representative to determine “whether to investigate any of the acts, policies, or practices of China that may be unreasonable or discriminatory and that may be harming American intellectual property, innovation, and technology” — strikes us as a variation on a theme, not necessarily a portent of dangerous new trade tensions. China’s state-run English-language newspaper suggested that the move could “poison” bilateral relations, and that it was “impossible” not to see Mr. Trump’s announcement as some kind of payback for Beijing’s failure, thus far, to rein in Pyongyang. But if Mr. Trump is trying to signal China that it can’t use the North Korea issue to get its way on trade, this is a relatively low-risk way of making that point. He did not order an investigation, but rather an investigation of whether an investigation is needed, which could take months, and its actual policy result under the relevant statute, Section 301 of the Trade Act of 1974, might not be evident until well after that.
In fact, Mr. Trump’s order Monday targeted legitimate issues that have troubled presidents before him: Beijing’s habit of tolerating massive theft of American software, and its requirement that U.S. and other foreign businesses transfer technology in return for permission to invest directly in China. Fast-growing Chinese direct investment in the United States faces no reciprocal obstacles (though it does face reviews when national security is potentially involved). There is bipartisan agreement that China has turned these areas of its relationship with this country into a one-way economic street, contrary to the spirit of the World Trade Organization (WTO) to which it acceded with U.S. support more than a decade and a half ago. Yet Beijing plays U.S. companies off one another — a collective-action problem that can be solved, if at all, only if companies get support from Washington.
Controversially, Mr. Trump’s decision could ultimately lead to retaliatory tariffs or other measures under Section 301, which broadly authorizes such steps against countries found to be persistently and unfairly harming U.S. interests — but which previous administrations have generally eschewed in favor of seeking remedies at the WTO. This is indeed strong medicine and would invite WTO litigation, if not a stronger response from China, and so it would be better not to use if at all avoidable. Mr. Trump’s order gives China plenty of time to head off Section 301 penalties by meeting the United States’ reasonable concerns in negotiations. It would be in China’s best interest to do so.
https://www.washingtonpost.com/opinions/trump-asked-china-to-rein-in-its-unreasonable-trade-practices-it-should/2017/08/15/6f2c0824-8128-11e7-902a-2a9f2d808496_story.html?utm_term=.22fb013f0a62
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US and China must set ground rules for freedom of navigation patrols
Aug 16, 2017 | South China Morning Post
By Mark J. Valencia
Mark Valencia says after three such patrols under the Trump administration, the two sides appear to have settled into a predictable pattern of provocation and condemnation. Why not take the opportunity to agree on a modus vivendi?
On August 10, the top-of-the-line USS destroyer John S. McCain made a “non-innocent” passage within 12 nautical miles of China-claimed and occupied Mischief Reef in the South China Sea. This “freedom of navigation operation” indirectly challenged China’s sovereignty claim to the low-tide feature.
This was the third such operation under US President Donald Trump. The controversial use of warships to press a legal point – and China’s reaction thereto – have now become somewhat “routine” and may indicate a new modus vivendi between the two rivals, at least in the South China Sea.
The US defence department describes the premise of its freedom patrols thus: “Since the founding of the nation, the United States has asserted a vital national interest in preserving the freedom of the seas and necessarily called upon its military forces to preserve that interest.”
Based on this premise – and perhaps realising it may not become a party to the UN Convention on the Law of the Sea, which enshrined freedom of navigation in international law – the US initiated in 1979 the “freedom of navigation operation” programme to contest “unilateral acts of other states designed to restrict the rights and freedom of the international community”.
China considers these US operations a violation of its national laws requiring prior permission for warships to enter its 12-nautical-mile territorial sea and views them as a threat to its security.
So the two have a legal dispute in which – according to the US – China is in the wrong.
Despite US protestations to the contrary, these operations also have a political significance for both friends and foes. To the region and beyond, they are an indication of the status of the Sino-US relationship and the US resolve to contest China’s claims and actions in the South China Sea.
During Barack Obama’s presidency, there were six somewhat legally confused and confusing freedom operations. The last of those occurred last October. When some seven months went by without any such operations, there was hope that an understanding had been reached between the two to avoid accidents and misunderstandings. However, that hope was dashed on May 24 when the USS Dewey made a “non-innocent” passage within 12 nautical miles of Mischief Reef. China objected strenuously; the foreign ministry said the warship had “trespassed” near islands over which China has “indisputable sovereignty”
Then, on July 2, another destroyer, the USS Stethem, sailed within 12 nautical milesof China’s long claimed and occupied Triton Island in the Paracels. China reacted strongly – in part because it was a repeat of a similar patrol in January 2016 and therefore unusually provocative, and because China has long considered the Paracels unquestionably its own, despite revanchist claims by Vietnam.
Indeed, China’s defence ministry used harsh language in condemning the Stethem’s actions, saying they “seriously damaged the strategic mutual trust between the two sides” and undermined the “political atmosphere” in the development of Sino-US military ties. It warned that the Chinese military would bolster its efforts in the waters, including “an increase in the intensity of air and sea patrols”.
his strong reaction was considered significant, especially since the US was at the time requesting China’s help in restraining North Korea’s nuclear weapons and missile development programmes. Not surprisingly, President Xi Jinping (習近平) told Trump in a phone call that “negative factors” were affecting US-China relations. It seemed that the more the US pursued these operations, the more they would damage US-China trust and confidence at a critical time.
But, despite these strong words from China and the increasingly pressing US need for China’s help with North Korea, the US persisted with the freedom patrols. In the most recent operation, two Chinese frigates shadowed the USS John S. McCain and sent multiple radio warnings. China’s foreign ministry spokesperson condemned the destroyer’s actions, and the US responded.
It would appear that there is an agreement between the two to disagree. This “clash of principles” may have settled into a modus vivendi – a pattern in which each side does more or less what the other expects and will tolerate.
However, this situation is unstable and there are various triggers that could lead to conflict. For example, clashes could break out if China were to physically interfere with the US patrols or the activities of US ally the Philippines in its legitimate maritime areas, or if the US were to attempt to blockade or otherwise force China’s troops off the features it occupies.
Another scenario would be if Japanese warships joined those of the US in a freedom of navigation operation, or undertook one on their own.
The US Navy – and the world – should also be aware that China considers the Paracels to be very different politically and legally from the Spratlys. The former have long been under China’s control and some features and military facilities are substantial and strategic.
Moreover, to China, the freedom operations against its claims are very different from US intelligence, surveillance and reconnaissance probes in its “near seas”. While the US considers these probes to be protected by the principle of freedom of navigation, China – with good reason – considers them violations of its law and the Law of the Sea, as well as direct threats to its security. Thus it is likely to continue to protest and even interfere with them, and more incidents and accidents are likely.
That is why China and the US should take this opportunity to build on any modus vivendi regarding freedom of navigation operations and negotiate guidelines for intelligence, surveillance and reconnaissance operations off each others’ coasts.
http://www.scmp.com/comment/insight-opinion/article/2106914/us-and-china-must-set-ground-rules-freedom-navigation
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Could "Big Data" Predict Freight Rates?
Aug 15, 2017 | Maritime Executive
By Paul Benecki
What if you had a good idea of what container freight rates for your cargo might be next week? If you knew they would go up, you could book your shipment now; if you knew they would go down, you might be able to wait for a lower price. Christian Ove Sørensen, global head of marketing and sales at software company Portix Logistic Software (PLS), believes that there may be a digital means to make this possible.
At present, PLS offers shippers and freight forwarders a software suite that organizes all their transportation rates – sea freight, airfreight, LTL, tariffs, rebates, allocation management and quotations. This gives the firm considerable insight into the world of freight, and Sørensen thinks that some of this data could be used for sophisticated forecasting.
"Can you predict with some kind of accuracy what freight rates will be one to two weeks out?" he asks. "Some customers tell me that this will never fly, that it's not a rational market. But some are interested to start exploring this."
Sørensen wants to approach this problem using predictive analytics and machine learning – an advanced computing technique in which a program "studies" a giant data set to find patterns and create forecasts. In the energy industry, this technique is already in use for predictive maintenance – the practice of analyzing sensor data to forecast equipment failure and optimize interventions. Predictive analytics is also widely in use in the retail business for determining pricing strategies, forecasting demand and figuring out the best way to advertise.
Sørensen thinks that the freight forwarding sector could benefit too. For forwarders, the value wouldn't only be in the forecast itself – it would also be in its ability to confirm human intuitions about where rates will go. "If a forwarder could tell a shipper that they have a statistically-driven prediction for what they believe rates will do in two weeks, and that the prediction supports their own independent analysis, they could use this to make an additional argument for a sale," Sørensen says.
To build this predictive model, PLS needs a large amount of past and present pricing data. While the firm already handles plenty of this information every day, it doesn't aggregate its clients' data or use it without permission. "We would need a customer who would let us work with their data, and we would partner with an analytics firm to see if we can make a predictive model based on that information. We already see interest from our existing customer base for this and we hope that this joint approach will enable us to determine if this is a nut that can be cracked," he says. If successful, the project could bring the kind of data-driven forecasting used by tech giants and oil majors to the much more traditional business of booking cargo.
https://maritime-executive.com/article/could-big-data-predict-freight-rates
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