Tuesday, October 13, 2015

Pacts inked to deepen partnership in Sino-Singapore Tianjin Eco-City

Pacts inked to deepen partnership in Sino-Singapore Tianjin Eco-City

SEVERAL agreements were inked on Tuesday to broaden and deepen partnership between Singapore and China in the Sino-Singapore Tianjin Eco-City.
After the bilateral project's Joint Steering Council Meeting held at Shangri-La Hotel, Singapore's Ministry of National Development (MND) and China's Ministry of Housing and Urban-Rural Development signed a memorandum of understanding on four joint collaborative projects in the eco-city.
These projects include a demonstration city for water resources management, smart city development, a green building demonstration base, and a garden project. These are part of the three-year work plan.
Singapore's National Library Board's subsidiary company, Cybrarian Ventures Pte Ltd, and the eco-city's Administrative Committee signed a letter of intent to incorporate Singapore's expertise in developing the eco-city's main library.
A letter of intent was also inked between the Bank of China Singapore Branch and the Tianjin Eco-City Investment & Development Co Ltd on financial services in support of developing the eco-city.
Since the eco-city project broke ground in 2008, the initial focus was on rehabilitating the salt land and building the infrastructure. It welcomed the first residents in 2012. The number of people living or working in the city has since doubled from 20,000 in 2014 to 40,000 in 2015.
Prior to the signing ceremony on Monday, Chinese Vice-Premier Zhang Gaoli also met Singapore's Deputy Prime Minister Teo Chee Hean. The duo co-chaired the 17th Suzhou Industrial Park Joint Steering Council Meeting, the 8th Sino-Singapore Tianjin Eco-City Joint Steering Council Meeting and the 12th Joint Council for Bilateral Cooperation Meeting, the two countries' highest-level bilateral meeting.

China to put growth before reform ambitions amid slowdown fear

China to put growth before reform ambitions amid slowdown fear

[BEIJING] Chinese leaders will signal that growth is their priority over reform for the world's second-biggest economy by setting a growth target of around 7 per cent in their next long-term plan even as the economy loses momentum, policy insiders say.
The Communist Party's central committee will meet from Oct. 26-29 to set out their 13th Five-Year plan, a blueprint for economic and social development between 2016 and 2020.
While the government has flagged a "new normal" of slower growth as it tries to shift the economy to sustainable, consumption-led growth, official data shows it has consistently at least met, and mostly exceeded, the growth targets it sets. "We will have to rely on policy stimulus to safeguard the 7 per cent growth target," said an economist from a government think-tank. "We should not put financial liberalisation at the forefront of economic reforms." Beijing needs average growth of close to 7 per cent over the next five years to hit a previously declared goal of doubling gross domestic product and per capita income by 2020 from 2010.
But a plunging stock market and the unexpected fallout from a modest devaluation of the yuan have raised fears among policymakers that an abrupt slowdown in growth could spark systemic risks and destabilise the economy. "It appears that growth has outweighed the reform agenda, which could stabilise the market for the short term while adding destabilisation factors in the medium term," said Zhou Hao, senior economist at Commerzbank in Singapore.
The government is likely to boost infrastructure spending in the new Five-Year plan, a favoured means of stimulus in China, under Beijing's push for regional integration and the "New Silk Road" scheme, to try to meet an earlier growth target set for the current decade.
While the specifics remain vague beyond the intention to build out road, rail and building infrastructure projects across Central Asia, analysts also expect the plenum to contain a raft of environmental measures.
Power generation from renewable fuels is expected to be a central pillar of any such initiatives, which would likely boost demand for copper and aluminum in particular as power grids are upgraded and connected to solar, wind and hydro power projects.
The National Development and Reform Commission (NDRC), China's top economic planner, did not respond to a request for comment.
In the first two quarters of the year, annual growth came in at 7.0 per cent, in line with the target for 2015, with the government rejecting suggestions that the figures were being inflated to meet official forecasts.
Reuters reported in June that China could aim for "around 7 per cent" growth for the next five years, but since then market and economic conditions have deteriorated.
The expected emphasis at the upcoming plenum on achieving the growth forecast will raise questions about the leadership's resolve for "decisive results" in wide-ranging economic reforms by 2020 that were made at a party meeting in 2013.
President Xi Jinping has reaffirmed a commitment to market-based reforms, seen by some as a bid to repair damage to the government's reformist image caused by its recent heavy-handed intervention in the stock and currency markets.
But potentially disruptive changes, such as lifting capital controls, may fall behind growth-friendly reforms such as changes to spur private investment in state firms and public projects, the insiders said. "China should not loosen capital controls quickly and yuan internationalisation must be based on market demand and economic development," said a former policy adviser to the central bank.
Cai Fang, vice head of the Chinese Academy of Social Sciences, a top government think-tank, told a recent forum that he expected annual potential growth to dip to 6.2 per cent in 2016-2020 if China failed to unleash new growth drivers.
The government will exceed the 7 per cent target for the current 2011-15 Five-Year plan with growth averaging around 7.8 per cent. But growth has slowed markedly in that time, from 9.5 per cent in 2011 to being on track for a quarter-century low of around 7 per cent this year. "The worst has yet to come. The economic slowdown may still deepen," Guan Qingyou, chief economist at Minsheng Securities, told a recent seminar.
The International Monetary Fund expects China's economic growth to slow to 6.8 per cent this year and 6.3 per cent in 2016. "The mainstream view on the growth target is still around 7 per cent," said an economist at a well-connected think-tank. "But the pressure will be bigger given the complex global and domestic environment."
REUTERS

Ahead of Xi's Britain trip, China says hopes for unified EU

Ahead of Xi's Britain trip, China says hopes for unified EU

[BEIJING] China hopes the European Union remains united and continues to play an important role in the world, a top Chinese diplomat said on Tuesday ahead of President Xi Jinping's trip to Britain, a country which will vote by 2017 on whether to leave the EU.
Prime Minister David Cameron is seeking to renegotiate Britain's relationship with the bloc it joined in 1973 as the'in' and 'out' campaigns prepare for battle in a referendum on membership.
China typically does not comment on votes in other countries, viewing it as an interference in an internal affair.
But Beijing has been worried about the implications of free trade-supporting Britain leaving the EU, and of any weakening of the bloc which it views as a vital counterbalance to the United States, diplomats say.
Asked whether China was concerned Britain could withdraw from the EU and whether Mr Xi would bring this up in talks in London next week, Vice Foreign Minister Wang Chao would not answer directly.
"This is a very big issue. China has good bilateral relations with Britain and also with the EU," Wang told a news conference. "China has resolutely and consistently supported the European integration process. So we would like to see Europe as one bloc and continue to play an even more important role in international affairs."
Assistant Commerce Minister Zhang Ji said China was particularly happy to see Britain support efforts to push an eventual China-EU free trade deal.
"Britain is an important member of the EU and consistently upholds a free trade position," Mr Zhang said. "We hope Britain continues to play a positive role in internal EU matters and pushes for high-tech exports to China and restrains the use of trade remedy measures against China."
MrXi will be on his first state visit to Britain, 10 years after the last such trip by a Chinese president.
British finance minister George Osborne visited China last month, and agreed to a series of initiatives ranging from an expanded currency swap agreement, Chinese investment in British nuclear power and a feasibility study for a scheme to connect the London and Shanghai stock markets.
Mr Zhang said deals worth an "enormous" sum would be signed on areas including energy, cars and finance, though he would not give details.
The British government has moved forcefully to strengthen financial ties with Beijing. Earlier this year, it broke ranks with the United States by signing up as a founding member of China's new infrastructure investment bank.
REUTERS

Singapore's total household wealth down 5.8% to US$1 trillion: report

Singapore's total household wealth down 5.8% to US$1 trillion: report

TOTAL household wealth in current US dollar terms fell by 5.8 per cent to US$1 trillion from mid-2014 to mid-2015, although in domestic currency terms, it rose by 1.8 per cent, according to Credit Suisse Research Institute's sixth annual Global Wealth Report.
The report, which focuses on how the middle class has developed since 2000, also found that average wealth in Singapore has grown by 140 per cent since 2000, from US$112,800 to US$269,400 in mid-2015. Globally, Singapore is now ranked eighth with much of the rise due to high savings and asset price increases, combined with favourable exchange rate movements from 2005 to 2012. Meanwhile, Singapore's median wealth at US$98,900 ranks seventh highest globally.
As with many developed economies, Singapore has a high proportion of adults in the middle class at 62 per cent, owning US$334 billion of wealth, 31 per cent of the country's total. At the top of the wealth pyramid, the number of US dollar millionaires in Singapore is projected to rise by 50 per cent in the next five years to reach 212,000 in 2020, from the current 142,000, added the report.
There are an estimated 752 ultra-high-net-worth individuals in Singapore with more than US$50 million net wealth.

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Monday, October 12, 2015

North Korea pleasure parks show nascent middle class at play

North Korea pleasure parks show nascent middle class at play

[PYONGYANG] North Korea's use of its showcase capital city to promote an image of national success and prosperity has cemented Pyongyang's reputation as a Potemkin Village boasting leisure facilities that amount to little more than "playgrounds for cadres."
Pyongyang has always been an exclusive city, and the 10 per cent of the 25 million population allowed to live there generally enjoy a lifestyle the vast majority of North Koreans can only dream of.
But there are increasing signs that the capital's political elite are not the only ones able to indulge a taste for consumer goods and a spot of rest and recreation.
A closely monitored but tolerated grassroots capitalism, born out of a spirit of survivalist self-sufficiency that got many through the catastrophic failure of the state distribution system in the famine years of the mid-to-late 1990s, has given rise to a growing entrepreneurial class with disposable income and free time.
It emerged during the leadership of Kim Jong Il, but has only begun to prosper under his son Kim Jong Un who took power after his father died in 2011.
Its rise can be seen in Pyongyang in the number of mobile phone users, the growing fleets of taxis that ply the capital's wide avenues and the splashes of street fashion among young women.
If the sort of genuine wealth that creates car owners is still limited to a tiny minority, it seems there is larger, aspirant middle class gaining a foothold in the capital and presumably other cities.
'AUTHORITARIAN CAPITALISM'
Some observers such as veteran North Korea watcher Andrei Lankov believe Kim Jong Un wants to promote a style of "authoritarian capitalism" that allows room for private enterprise while maintaining absolute political control over its development.
The rewards for those who benefit from such a system include the ability to afford a meal at one of Pyongyang's new restaurants or a family outing to watch a dolphin show.
Since taking over from his father, Kim has pushed through a number of costly "leisure" projects that range in scale and ambition from theme parks to a swanky equestrian centre and ski resort.
This in a country where, according to the United Nations, 70 per cent of the population remains "food insecure" and cash-starved infrastructure leaves millions vulnerable to floods and drought.
For the North Korean leadership, the projects serve the dual purpose of projecting prosperity, while also catering to the elite and satisfying the aspirations of those with new-found disposable income.
And it clearly hopes the really high-end facilities, like the Masik Ski resort, will help bring in much-needed hard currency from increased tourism.
A lower-end example is a Folk Park built just outside Pyongyang and opened three years ago.
With its full-size replica of a 5th century pagoda and scaled down representations of Pyongyang's landmark monuments, it is similar to the sort of theme parks that proliferated in and around Chinese cities in the 1990s.
PARKS AND RECREATION
The entrance fee is low and the complex claims an average daily turnover of 5,000 visitors though nothing like that number was visible during a tour of the park last Sunday.
But a fair number of families and couples strolled round the attractions, some taking smartphone pictures of each other posing before the exhibits.
More than two million North Koreans have signed up for the 3G network service operated by Egypt's Orascom in partnership with North Korea's Koryolink.
"Our respected Marshal Kim Jong Un said we must make this park a great education site for the nation, and to raise people's spirits," intoned the official tour guide.
More up-market is the dolphinarium completed in Pyongyang in 2012 and fed by a specially constructed seawater pipeline from the port of Nampo.
While the Folk Park partly aims to educate, the dolphin show is wholly aimed at entertainment And apart from a brief nod to Kim Jong Un and a message of congratulation regarding the previous day's 70th birthday for the ruling Workers' Party, it is also largely devoid of the political trappings that cling to so many aspects of North Korean public life.
But it is an entirely political project, originally devised by Kim Jong Il and eventually realised by his son, with trainers selected from top universities and sent to China to learn how to handle the dolphins.
And the obviously high construction and running expenses again raise the issue of skewed priorities in a country where poverty runs so high.
The head of customer service at the dolphinarium, Jon Suk-Yong declines to reveal its daily operational cost.
"But the seawater is brought in through a 70km pipeline and we have 10 dolphins that each eat 10kg of fish every day, so you can imagine," Mr Jon said.
AFP

Information sharing with Chinese authorities crucial for Hong Kong: SFC chief

Information sharing with Chinese authorities crucial for Hong Kong: SFC chief

[HONG KONG] Hong Kong's securities regulator said on Tuesday that information sharing with mainland authorities is crucial for the future of the global financial centre.
Hong Kong Securities and Futures Commission (SFC) Chief Executive Ashley Alder, speaking at a regulation summit, added that the city was in talks with mainland regulators over enhanced supervision of Hong Kong units of Chinese companies.
Hong Kong's securities regulator in July extended a near two-month suspension of trade in shares of Hanergy Think Film Power Group amid a probe into a sudden plunge of its stock price in May.
REUTERS

Citi appoints first global head for its IPB business

Citi appoints first global head for its IPB business

CITI has appointed C R 'Shyam' Sambamurthy as the first global head for its international personal bank (IPB) business.
Based in Singapore, Mr Sambamurthy will be responsible for the global strategy of the IPB franchise, which represents an international wealth management business providing specialised wealth management advisory and solutions to a select group of global clients.
The IPB franchise has 260,000 clients with total assets under management of more than US$60 billion. It has five booking centres across the world - Hong Kong, Jersey, London, Singapore and the US.
Mr Sambamurthy has extensive experience in the industry having managed complex and multi-jurisdictional businesses across Asia and Europe. Prior to his latest appointment, Mr Sambamurthy was the business manager of IPB Singapore, a role which he held since 2009.
Michael Zink, head of Asean and Citi country officer, Singapore, said: "We first launched IPB in Singapore in 1983 and I am delighted that we are continuing to build on our success. Shyam's appointment affirms the importance of Singapore to Citi and is very much in line with the country's development as a leading international financial centre."

Small banks face challenges from higher fixed costs: Sibos panel

Small banks face challenges from higher fixed costs: Sibos panel

SMALL banks have had basic services trimmed by global banks, as a result of heightened regulations, said panel participants at Sibos 2015 on Tuesday. And this, according to larger banks, is a result of higher fixed costs that must be incurred regardless of the size of the corresponding bank.
Ferry Robbani, Bank Mandiri's head of international banking and financial institutions group, said the bank has had basic services such as cheque clearing retracted by global banks, as a result of higher regulations.
And smaller payments from the salaries of Indonesian migrant workers living in the Middle East and South-east Asia are also commonly flagged by corresponding banks, leading to higher costs as well, he said.
By leaning towards the big guys, the "small guys" get kicked, said Andrew Yiangou, managing director of global transaction banking solutions at National Australia Bank.
DBS's group head of compliance Lam Chee Kin said the fixed cost of compliance remains, regardless of the size of the bank. And that cost looks unlikely to be trimmed further from here on.
Citi's head of business compliance and risk Jack Jared made a similar point, noting that smaller banks cannot produce large enough revenues to cover the cost.
This also comes as regulations have created a perception of "zero tolerance" towards errors, he added, despite the calls for banks to determine business relationships on a risk-adjusted basis.

Chinese investor stabs asset management CEO after default

Chinese investor stabs asset management CEO after default  

[BEIJING] A Chinese investor stabbed the chief executive of a struggling Beijing-based asset management company after losing his investment, a company source said, highlighting growing public anger over loosely regulated financial products.
Wang Jie, the CEO and general manager of Global Wealth Investment (Beijing), was stabbed in the shoulder on Sunday during a meeting with investors, the company representative said. He was rushed to hospital where he remained in a coma.
The assailant, aged in his 20s, was sitting next to Mr Wang during the meeting, the source said, requesting anonymity because she was not authorised to speak to the media.
After the stabbing, he calmly waited for police to arrive, she added. "He was very young and didn't control his emotions well,"the source said, adding that the assailant had invested 300,000 yuan (S$66,444) in Global Wealth's products.
The incident was first reported by Chinese financial magazine Caixin. Police declined to comment on the case.
The crime exposes the escalating tensions in China's financial system, with many investors feeling duped after losing their investments in wealth management products that had been marketed as risk-free with double-digit returns.
Global Wealth, which used to have nearly 200 employees, managed more than 700 million yuan in assets.
The company's clients took comfort from the fact that their investment was backed by Hebei Financing Investment Guarantee Group, one of China's biggest state-backed credit guarantors.
But Hebei Financing decided not to honour its commitment earlier this year. "Hebei Financing defaulted on us, and we defaulted on our clients," said the representative of Global Wealth. "We could not see any hope that Hebei Financing would compensate us ... and feel desperate."
The company has cut its employees to around 15 after Hebei Financing halted operations.
Last month, hundreds of investors hit the streets of Beijing and Shanghai to protest against the Fanya Metal Exchange in southwest China, after they were unable to withdraw their money. The exchange itself said it was suffering liquidity problems.
REUTERS

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