Friday, November 6, 2015

Xi Jinping in Singapore: A look at his itinerary

Welcome to our live coverage of China President Xi Jinping's visit to Singapore
Mr Xi will arrive in Singapore for a state visit, as the two countries are set to adopt a new strategic framework. http://str.sg/ZEMd   
Get live updates and analyses from our team of senior reporters covering the visit. http://str.sg/ZEMA   
Xi Jinping in Singapore: A look at his itinerary 
It will be the first state visit to Singapore by Mr Xi, who last visited the Republic in 2010 as the vice-president. His visit caps a year-long series of celebrations to mark 25 years of diplomatic ties between China and Singapore. Here's a look at his itinerary for Nov 6-7. http://str.sg/ZEMD
Xi Jinping in Singapore: A look at his itinerary 
Mr Xi, accompanied by his wife Peng Liyuan and his delegation of officials, will arrive this evening, There will be a welcome ceremony at the Istana, followed by a state banquet. http://str.sg/ZEMd PHOTO: ST FILE
Mr Xi with PM Lee Hsien Loong at a meeting at the Shangri-La Hotel on Nov 15, 2010.
Xi-Ma meeting on Sat (Nov 7)
After Mr Xi wraps up the programme for his state visit on Saturday (Nov 7) afternoon, he will meet Taiwan President Ma Ying-jeou in Singapore, the first meeting between top leaders from both sides of the Taiwan Strait since 1949. A day before the historic meeting, media from Taiwan, China and Hong Kong have already started to stake out at Shangri-la Hotel, the venue for the meeting. ST PHOTO: KUA CHEE SIONG
Media staking out at Shangri-la Hotel
ST journalist Chew Hui Min, who is reporting from Shangri-la Hotel where the Xi-Ma meeting will take place on Sat (Nov 7), says the lobby has been turned into an impromptu media centre. ST PHOTO: CHEW HUI MIN
Preparation at Shangri-la for Xi-Ma meeting on Sat (Nov 7)
ST journalist Chew Hui Min checks out preparation at Shangri-la Hotel. ST PHOTO: CHEW HUI MIN
Taiwan's Mainland Affairs Council chief Andrew Hsia at Shangri-la Hotel
Mr Hsia, who is one of the officials accompanying President Ma Ying-jeou for Saturday's meeting with Chinese President Xi Jinping, speaks to the media at Shangri-La Hotel earlier. ST VIDEO: CHEW HUI MIN

Xi Jinping in Singapore: Bringing out the red carpet
An airport staff puts the finishing touches to the red carpet at the VIP Complex at Changi Airport. Finance Minister Heng Swee Keat has arrived at the airport to welcome Mr Xi, who is expected to touch down within the next hour. PHOTO: REBECCA LYNNE TAN
All ready at Changi Airport for Chinese President Xi Jinping's arrival
ST correspondent and TV producer Rebecca Lynne Tan reports from the VIP Complex at Changi Airport. ST PHOTO: REBECCA LYNNE TAN
Live video: Chinese President Xi Jinping is expected to arrive shortly
China President Xi Jinping arrives in Singapore
ST PHOTO: REBECCA LYNNE TAN 
China President Xi Jinping and wife Peng Liyuan arrive in Singapore
They will next attend a welcome ceremony at the Istana followed by a state banquet. ST PHOTO: ONG WEE JIN
China President Xi Jinping and wife Peng Liyuan arrive in Singapore
Mrs Xi wears an elegant lilac dress and cream-coloured jacket and grey pumps. She carries a light grey leather tote bag. Mr Xi's pink-purple tie complements his wife's high-collared dress. ST VIDEO: REBECCA LYNNE TAN


Members of the public gather outside the Istana hoping to catch a glimpse of Chinese President Xi Jinping. There will be a welcome ceremony at the Istana, followed by a state banquet. PHOTO: NG KAILING
The Guard of Honour contingent forms up as they await the arrival of Chinese President Xi Jinping at the Istana. PHOTO: KOR KIAN BENG
The Chinese entourage arrives at the Istana for a welcome ceremony
VIDEO: KOR KIAN BENG
Chinese President Xi Jinping arrives at Istana for a welcome ceremony
President Xi is accompanied by Singapore's President Tony Tan. ST PHOTO: KOR KIAN BENG
Singapore's national anthem being played

Welcome ceremony at the Istana

Getting ready for the state banquet 
Preparations are underway at the Istana ballroom where a state banquet will be held in honour of Mr Xi, Madam Peng and their delegation, which includes policy research head Wang Huning, general office head Li Zhanshu and State Councillor Yang Jiechi. ST PHOTO: KOR KIAN BENG
President Xi Jinping calls on President Tony Tan
Chinese President Xi Jinping and wife Peng Liyuan meets Singapore's President Tony Tan and wife Mary Tan at the Istana. ST PHOTO: SEAH KWAN PENG
#ICYMI IN PICTURES: Xi arrives in Singapore
Chinese President Xi Jinping and wife Peng Liyuan arrived at Changi airport at around 5.30pm this evening. They were received by Singapore's Finance Minister Heng Swee Keat. ST PHOTOS: ONG WEE JIN
Chongqing mayor among President Xi's delegation
Chongqing mayor Huang Qifan is spotted entering the banquet room at the Istana. Chongqing has been tipped as a possible location for the third government-led project between Singapore and China. 
State banquet to welcome President Xi: What's on the menu
The six-course menu came with a touch of Singapore flavour. 
  • Baked foie gras with truffle and minced chicken in filo pastry, sliced smoked duck with mango topped with spicy lime sauce, steamed white tofu topped with leg of snow crab
  • Double-boiled chicken soup with sea whelk and "bak kut teh" spices
  • Pan-fried beef with black pepper sauce served with mesclun salad
  • Baked cod in vanilla and olive sauce served with white asparagus
  • Crab claw served with deep-fried bun and steamed glutinous rice
  • Chilled cheng tng served in young coconut, baked bird's nest egg white tart
Politicians and guests at the state banquet
ST PHOTO: KOR KIAN BENG
Singapore-China ties a unique relationship that evolves with the times: President Tony Tan
"Today, Your Excellency is leading the Chinese people into a new era of progress and prosperity," President Tony Tan said at a state banquet with visiting Chinese President Xi Jinping on Friday (Nov 6) evening. "This is a remarkable endeavour and I am confident that China will continue to succeed under your leadership." http://str.sg/ZEQD
President Xi now takes the podium to address guests at the state banquet
President Xi congratulates Singapore on its 50th birthday and its remarkable achievements along the way. 
He said that during his visit here, both sides will officially launch the third joint-project based in Chongqing.
He added that China wants to build a partnership with Singapore and establish “All Round Cooperative Partnership Progressing with the Times” as bilateral ties reach a new historical point. "We will write more new and exciting chapters in Sino-Singapore relations."
Third Singapore-China joint project to be based in Chongqing: President Xi Jinping
The third Singapore-China government-led project will be based in Chongqing, Chinese President Xi Jinping said at a state banquet at the Istana. "During my visit, the two sides will officially launch the third project based in Chongqing," Mr Xi said in a Mandarin speech. http://str.sg/ZEQV 
Communications and Information Minister Yaacob Ibrahim posts photos from state banquet
An exchange of gifts
A drawing of the Singapore Botanic Gardens by Pathlight student Glenn Phua was presented to Chinese President Xi Jinping. http://str.sg/ZEAQ 
 A bone china tea and coffee set with the Great Wall and Merlion images was presented to President Tony Tan. The set was made in celebration of the 25th anniversary of diplomatic ties between China and Singapore. The gift "carries our best wishes for mutual support and joint progress of the two countries," read the note that came with it. ST PHOTOS: SEAH KWANG PENG
What Chinese media say about President Xi's visit
China Daily, which quoted Chinese Ambassador to Singapore Chen Xiaodong, said "China-Singapore cooperation has always been forward-looking and pace-setting". PHOTO: SCREENGRAB FROM CHINA DAILY WEBSITE
What Chinese media say about President Xi's visit
CCTV, reporting on Mr Xi's arrival, quoted the Chinese leader on how bilateral ties has brought benefits to the people of both countries. PHOTO: SCREENGRAB FROM CCTV WEBSITE
What Chinese media say about President Xi's visit
Xinhua news agency reported that Mr Xi hailed the traditional high-level exchanges between China and Singapore, as well as the ever-deepening and expanding cooperation between the two sides.PHOTO: SCREENGRAB FROM XINHUA WEBSITE
Heng Swee Keat: May Singapore's friendship and cooperation with China grow stronger
"Hope President Xi and his delegation will have a most fruitful visit and that our friendship and cooperation will grow stronger, improving the lives of the people of both countries," Finance Minister Heng Swee Keat wrote in a Facebook post. 
Vivian Balakrishnan: It's going to be a busy time
In a Facebook post, Singapore's foreign minister Vivian Balakrishnan said it is "amazing that tiny Singapore has been China's largest foreign investor for the last two years. China has been Singapore's largest trading partner since 2013."
He also touched briefly on how Chongqing will be the third China-Singapore government-to-government project.
"We will also begin negotiations to upgrade the China-Singapore Free Trade Agreement," he added. "Going to be a busy time for all involved!"
RECAP: Here are some stories from our coverage this evening of the start of Chinese President Xi Jinping's two-day state visit to Singapore. Join us tomorrow morning for continuing coverage of his visit. 




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China And The Pull Of The SDR - By Marc Chandler of Marc to Market

China And The Pull Of The SDR

By Marc Chandler of Marc to Market
Monday, November 2, 2015 12:44 PM EST
(I write a monthly column for a Chinese paper. Here is a draft of this month's column) 
Sometimes the mountain peak is clearer from the valley than from the summit.  It may be easier to understand the changes in China’s currency regime if we take a step away and try to look at the big picture. To find our path we need to clear away some undergrowth that is distracting us from rigorous analysis.
With China’s economy slowing and exports weak, a devaluation could be a way to restore economic vigor. Many accounts in the western financial press tried placing the depreciation of the yuan in this context, but it is mistaken. 
Consider Japan’s experience. The dollar has appreciated by more than 50% against the yen over the last three years.  What has happened to the volume of Japanese exports? Very little. The same can be said for Canadian and Australian exports, for example, who have experienced significant currency declines without a corresponding rise in exports.
China is gradually climbing the value-added chain in manufacturing, but yuan-incurred costs remain modest compared with other large economies. That means that China’s exports will likely be considerably less sensitive the yuan’s fluctuations than Japan. The 3%-4% depreciation of the yuan is unlikely to have a tangible impact on China’s exports. 
Owing to China’s previous export-oriented development strategy, the frequent reliance on state action, and a heavily managed currency, many observers conclude mercantilism is the driver. This is exactly backwards. China’s currency machinations are designed to increase the internationalization of the yuan. Specifically, China’s actions are understandable only within the context of its push to join the IMF’s Special Drawing Rights (SDR). 
There are two formal requirements for joining the SDR:  being a larger exporter and having a currency that is freely accessible. The former has not been an issue for years. China is the world’s largest exporter.  It is the accessibility of the yuan that has been the stumbling block. However, over the past few years, China has improved the accessibility of the yuan. 
There have been numerous measures, including more than two dozen swap lines with foreign central banks, the development of offshore yuan trading centers, the Hong Kong-Shanghai link, and the abolition of quotas for foreign central banks and sovereign wealth funds investing in mainland bonds.   This is not meant to be an exhaustive list, but simply cited to give a sense of the sustained campaign that China has undertaken. 
In addition to these formal objectives, there are some operational requirements. The SDR is fixed every day. The participating central banks give the fix of their currency to the IMF. The fix needs to be a market price. Before August 11, the fix was not a market price and had a seemingly little relationship with the spot market. The PBOC’s measures were aimed at closing the gap between spot and the fix. 
However, closing the gap between the fix and the spot market created another operational challenge.  The offshore yuan diverged with the onshore yuan. This is a barrier to SDR entry because the gap between the two meant that the offshore yuan was not an effective hedging tool.  It is important that if central banks are to hold yuan-denominated bonds, they need a deep hedging market.
With official indications suggesting a high probability of the yuan joining the SDR, two questions arise. The first is operational.  The currencies in the SDR are assigned a weight based on its trade and reserve status.  Given China’s export prowess, it suggests the yuan should be a major currency in the SDR. However, as a reserve asset, it is very small. The IMF estimates the yuan’s share of reserves at a minuscule 1.1%. Entry into the SDR is a sufficient victory for China that if it is assigned a low weight now, that would be acceptable. The SDR currency weightings are reviewed every five years, and continued evolution of the yuan may see it get increased weight in the future. 
The second question that arises if we assume the yuan’s entry into the SDR is so what?  What does it mean?  The direct and indirect economic consequences are minor at best.  On the margins, it may encourage some central banks to have yuan in reserves but officials move at glacial speeds. With low interest rates, a currency that is not simply appreciating as it did for several years, and liquidity issues, maybe this is the not the best time for foreign central banks to shift reserves into yuan, even if it is easier. 
Being a member of the SDR has not fostered strong use of the yen or sterling as a reserve currency. The Australian and Canadian dollars have achieved reserve currency status without being part of the SDR. The US dollar has the largest weight in the SDR, and yet the US pays a premium over nearly every eurozone country and Japan. The “exorbitant privilege” that is often attributed to reserve currency may be exaggerated. 
If that is true, it begs another question: Why should joining the SDR be such an important goal for China?  It seems an issue of status and prestige mostly. This is not a judgement.  It is a description.  It seems clear that there may be a tendency in China to feel mistreated at the hands of the US (and other high income countries) and has not gotten the respect it believes it deserves.  It has been blocked, for example, of getting a higher voting share at the IMF because the US Congress has failed to authorize funding.  The TPP agreement appears to be written in such a way that it may preclude China for many years. 
Joining the SDR is a sign of recognition of the incredible progress China achieved in opening up its markets, and internationalizing the use of the yuan. The international goal as helped focus China’s financial reform efforts, in a similar way that joining the World Trade Organization in 2001 facilitated earlier reforms.  It is an unequivocal acknowledgement that China is among the great financial powers.   
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