$6.
87 billion, marking 77 straight months in which the
News Summary
It is the start of new quarter, new month and yes, do beware
of April Fool’s jokes aka Fake News.
Not a lot of news due to Easter weekend. We start of the
report on Asia. Growth in China’s manufacturing sector
picked up more than expected in March as authorities lifted
winter industrial pollution restrictions and steel mills
cranked up production as construction activity swings back
into high gear. Published on Saturday, Manufacturing PMI
rose to 51.5 in March from 50.3. This exceeded estimates of
50.5. March survey showed manufacturers shifted into higher
gear as seasonal demand picked up. The sub-index for
output jumped to 53.1 from 50.3 and total new orders rose
to 53.3 from 51.0 and export orders climbed to 51.3 from
49.0. Services PMI came out at 54.6 from 54.4, while
composite PMI gained 54.0 in March, from February’s 52.9.
Overall, China’s economic data so far this year suggest the
economy has carried more growth momentum into the first
quarter from last year than expected, with a government
think tank forecasting the economy will grow 6.9 percent in
the first half (page 9).
China’s cabinet has approved policies designed to draw big
tech companies such as Alibaba and Tencent to list on
domestic stock markets. The State Council’s latest
guidelines apply to companies in sectors that China is trying
to promote through state industrial policy, including cloud
computing, big data, artificial intelligence, semi-
conductors, bio-tech and high-end manufacturing (page 8).
Interesting article found in South China Morning Post that
this year marks the 40th anniversary of China’s economic
reform and opening. In December 1978, China’s “open door”
policy signposted a turning point in its economic
management and trajectory. Over the period, the character
of China’s economic management has evolved from being
strictly centrally planned, export oriented and state led to
one that is more market led and oriented towards domestic
consumption. Today, China is the world’s largest economy
on a purchasing power parity basis. It is the world’s largest
manufacturer, exporter and holder of foreign exchange
reserves. And China is actively aiming for a leadership role in
globalisation and in combating climate change. China is at
the centre of Asia’s economic growth by increasing regional
connectivity through its “Belt and Road Initiative”. This will
help turn Asia into the dominant global economic force,
providing an estimated 52 per cent of global GDP by 2050. As
a result, China is on course to overtake the United States as
the world’s largest consumer market and economy (page 9).
Finally, Chinese state cabinet has given its preliminary
approval to merge China State Shipbuilding Corp with China
Shipbuilding Industry Corp. These two companies have
combined revenue of at least 508 billion yuan (S$106 billion)
making products ranging from aircraft carriers for China's
navy to vessels for carrying containers, oil and gas for
commercial companies. The merger will have more than
twice the combined annual revenue of South Korea's Hyundai
Heavy Industries, Daewoo Shipbuilding & Marine Engineering
and Samsung Heavy Industries (page 11).
South Korea released its trade data on Sunday, exports rose
6.1 percent last month from a year earlier to mark the
largest monthly tally for March. Imports gained 5 percent on-
year to $44.72 billion. South Korea's trade surplus came to
These information have been obtained or derived from sources believed to be reliable, but I make no representation or warranty as to their accuracy or completeness.
Copyright © 2013 The Poon Report by Vincent Poon. All rights reserved.
country's exports have exceeded imports (page 10).
In The Sunday Times, Irwin Stelzer said for President Trump,
the problem is less November 2018 than November 2020,
when he stands for re-election. Should the economy soften
before then, policy makers will face an impending recession
with few tools at their disposal. If the economy slows, and it
will, the authorities ordinarily unsheathe two weapons. The
federal government borrows and spends — loosens fiscal
policy, in the jargon of the trade. And the Fed cuts interest
rates and buys bonds to drive their prices up and therefore
interest rates down. Neither policy is likely to be available.
In short, American policymakers go naked into their battle
with the next recession. The blame game will begin (page
5).
US President Donald Trump and his administration has
proposed almost everyone applying for a US visa will be
asked to list their social media accounts before being
granted entry. Applicants will be required to submit details
of any accounts held in the preceding five years on sites such
as Twitter, Facebook, YouTube and LinkedIn. Hina Shamsi of
the American Civil Liberties Union said: "People will now
have to wonder if what they say online will be misconstrued
or misunderstood by a government official (page 6).
A good piece by Associated Press, Trump and his officials
departed from reality on a variety of subjects in recent
days: the census, Amazon’s practices and the makeup of the
Supreme Court among them (long piece though – page 6).
The Sunday Observer warned more than a fifth of UK
manufacturing firms are planning to lay off workers to cope
with the costs of Brexit. The survey by Chartered Institute of
Procurement and Supply said more than 20% of
manufacturers plan cuts while more than 58% plan price
increases to offset costs of leaving EU. John Glen, a CIPS
economist said, “It’s becoming clear that manufacturers can
no longer absorb the costs of Brexit, and so the burden of
higher prices is spreading to consumers, to suppliers, to
clients and reshaping supply chains,” (page 3).
Russia has warned its citizens that they face the "insertion of
foreign objects" into their luggage when they travel to the
UK. Russian embassy posted the claim of new "provocations"
on its website as the row continues over the poisoning of
former spy Sergei Skripal and his daughter Yulia in Salisbury.
Russian Ministry of Foreign Affairs has also issued a list of 14
new questions about the Salisbury poisoning that it says have
not been answered, on top of the 27 made public on Friday.
Meanwhile, Australian travellers to Russia have been warned
to brace for possible anti-western sentiment as the fallout
continues. Department of Foreign Affairs and Trade posted
on Sunday, “Due to heightened political tensions, you should
be aware of the possibility of anti-western sentiment or
harassment” (page 4-5).
Have a great week ahead.
News Britain
Shire faces calls to find ‘credible’ saviour from
possible Takeda bid
Taken from The Sunday Times 1 April 2018
Drugmaker on bid alert after Japanese suitor shows hand
Shire is facing pressure from shareholders to find a deep-
pocketed suitor as a Japanese rival weighs a potential £35bn
bid for the vulnerable drug maker.
Investors said the Shire board should seek alternative buyers
after Takeda revealed last week it was considering an
approach for the FTSE 100 rare disease specialist. One said
the Tokyo-based raider was not a “credible buyer”.
Shire shares leapt 19% after Takeda’s interest came to light
last week, on hopes that a bidding war would break out.
Shire, which is domiciled in Ireland but has the bulk of its
operations in the US, has a market value of £32bn. At $39bn
(£28bn), Takeda is smaller than its target.
“This process of Takeda going in should spur the board into
action. We wouldn’t be surprised if there was a counter
bid,” said one top investor.
AbbVie, Novartis and Pfizer have been mooted as possible
buyers of Shire.
London-listed Shire, led by Danish chief executive Flemming
Ornskov, specialises in rare diseases and neuroscience, a
division that includes top-selling drugs such as ADHD
treatments Adderall and Vyvanse.
The company has grown into one of Britain’s largest listed
companies through a series of acquisitions. It is chaired by
Susan Kilsby, a former City dealmaker.
Last year revenues rose by a third to $15.2bn, after they
benefited from the first full year of sales from America’s
Baxalta, the haemophilia business that Shire bought for
$32bn in 2016.
However, concerns over this acquisition have led shares to
languish over the past year. It is also under pressure from
copycat versions of its best-selling drugs. Before Takeda’s
intervention, its shares had slumped by a quarter, leaving it
vulnerable to an opportunistic bid. Shire came close to being
bought by American drugmaker AbbVie in 2014 until a reform
of the US tax rules scuppered the deal.
Takeda was forced by the Takeover Panel to make an
announcement following a spike in Shire’s shares on
Tuesday. The company said it believed a deal with Shire
would create a “truly global, value-based Japanese
biopharmaceutical leader”, boosting its research and
development and strengthening its core therapeutic areas of
oncology, neuroscience and gastroenterology.
Any offer from the company is likely to include a large slug
of shares. Jack Scannell, an analyst at UBS, said in a note to
clients that it would be “hard to predict” how Shire’s board
and shareholders would react to a stock-based offer.
“We need to see more detail; so far we have not even had a
clear bid,” said Marcus Morris-Eyton, European portfolio
manager at Allianz Global Investors, a top 20 investor in
Shire. He added that Shire was “significantly undervalued”
by the market.
Takeda’s shares fell 7.5% after it admitted that it was
considering pouncing on Shire. The backlash from investors
has led some to suggest it may not make a formal approach.
Shire and Takeda last night declined to comment.
(Full article click - Times)
---
These information have been obtained or derived from sources believed to be reliable, but I make no representation or warranty as to their accuracy or completeness.
Copyright © 2013 The Poon Report by Vincent Poon. All rights reserved.
Telegraph Revealed: Election watchdog officials
face calls to resign over Brexit 'bias'
Taken from The Sunday Telegraph 1 April 2018
Confidence in the elections watchdog was evaporating last
night as it emerged that almost half of its board have made
public statements criticising the pro-Brexit campaign or
backing calls for the result to be overturned, despite strict
impartiality rules.
An investigation by The Sunday Telegraph found that four of
the Electoral Commission’s 10 commissioners, including the
chairman, had made pronouncements on Brexit since the
referendum – all of them backing Remain.
The body’s code of conduct states that commissioners must
“act at all times” to “uphold its impartiality”.
Last night there were calls for the commissioners to resign,
as MPs suggested their personal views could have been
behind the Commission’s refusal to investigate alleged illicit
collusion by pro-Remain campaign groups, while conducting
several inquiries into the official Leave campaign.
In three cases, the comments about Brexit were made while
the commissioners were in post.
In the fourth, speaking months after being nominated as the
body’s next chairman, Sir John Holmes said in a speech that
he “regret[ted] the result of the referendum”, and
complained about “the panoply of Eurosceptic nonsense
about the EU” heard during the campaign.
Brexiteers have previously accused the organisation of bias
and claimed that the past roles of several commissioners
suggest they are Europhiles.
Priti Patel, the pro-Leave former Cabinet minister, whose
formal complaint about alleged rules breached by Remain
campaign groups was rejected by the commission earlier this
year, said: “There is clear evidence that the chairman and
commissioners have publicly given views that undermine the
standards and impartiality required in these roles. They
should relinquish their positions and independent people
should be brought in.”
Jacob Rees-Mogg, chairman of the European Research Group
of pro-Brexit Conservative backbenchers, said: “This is very
serious as the regulator of elections must be impartial.
"Anyone who has called for a second referendum or made
political statements on Brexit ought to recuse him or herself
from any decision with regard to the referendum.”
Gisela Stuart, the former Labour MP who chaired the official
Vote Leave campaign, added: “Senior figures on the
Electoral Commission need to act without bias – and to be
seen to be unbiased – by the public. This is hugely important
so that their rulings are respected as fair and even handed.”
In a speech less than a fortnight after the referendum, Sir
John spoke of an alternative scenario in which Remain had
prevailed. “The campaign for another referendum would not
have taken long to start again, and all the panoply of
Eurosceptic nonsense about the EU would have been rolled
out again,” he said.
Sir John was interviewed for the Electoral Commission
chairmanship three months earlier, with his name put
forward by a panel chaired by John Bercow, the Commons
Speaker.
In an online article also published after the referendum,
David Howarth, a commissioner since 2014, asked how it
could be allowed to “bind the young”, given that “Leave’s
majority will have been reversed merely by the process of
Leave voters dying and new Remain voters reaching the age
of 18”.
Prof Howarth wrote that Leave voters “are already shifting
to Remain” having been “shocked and surprised by the
reactions of the markets” and by “Leave campaigners
admitting their promises on immigration and health spending
were mere ‘possibilities’”.
He went on to question whether it was “morally acceptable”
to “press on with invoking Article 50”.
Six months later, following a speech in which Tony Blair
declared that Brexit was not “inevitable” and could be
overturned, Bridget Prentice, a former Labour MP who has
served as a commissioner since 2014, tweeted: “Blair spot
on re Brexit.” The code of conduct warns that use of social
media should not “call into question the impartiality of the
commission”.
Lord Horam, another commissioner, has made a number of
remarks in the House of Lords since the referendum
signalling his backing for Remain.
In July 2017, following a speech by another peer who said a
second referendum was needed to allow people to make a
decision once they had seen that “it will make sense not to
leave the EU”, he said: “There is great logic in what the
noble Lord has just said about the possibility of a second
referendum. I agree that there is a logical case for that.”
The code of conduct states: “Commissioners are expected to
act at all times to further the commission’s aims and
objectives, and uphold its impartiality … The highest
standards of integrity, honesty, impartiality and objectivity
… are integral to your role.”
A commission spokesman confirmed that it “has a number of
investigations open in relation to campaigners at the EU
referendum” but added: “Commissioners do not have a role
in investigatory procedures and decisions.” It told Ms Patel it
did not have “reasonable grounds” to suspect wrongdoing.
(Full article click - Telegraph)
---
Industry planning jobs cull to offset Brexit
Taken from The Sunday Observer 1 April 2018
More than 20% of manufacturers plan cuts while more than
58% plan price increases to offset costs of leaving EU
More than a fifth of manufacturing firms are planning to lay
off workers to cope with the costs of Brexit, according to a
survey that suggests the sector is already losing business.
More than one in 10 (11%) of manufacturers say that they
have already lost contracts, according to Chartered Institute
of Procurement and Supply data shared with the Observer.
Unions warned companies not to use Brexit as “an excuse to
lay people off”. The figures have emerged as a group of
cross-party MPs and peers hope to persuade the government
to reconsider its determination to leave the European
Union’s customs union – a move causing serious concern
among manufacturing groups.
More than half of manufacturing companies (58%) said they
planned to increase prices to offset Brexit, according to the
survey of about 200 supply chain managers; 46% said they
had already increased costs to customers in the wake of the
Brexit vote. Some manufacturers are said to be trying to find
suppliers in Britain to replace lost contracts overseas, known
as “inshoring”. However, John Glen, a CIPS economist, said
that it may not be a simple task and companies slow to act
may not survive.
“It’s becoming clear that manufacturers can no longer
absorb the costs of Brexit, and so the burden of higher prices
is spreading to consumers, to suppliers, to clients and
reshaping supply chains,” he said. “Though the sector has
moved further towards inshoring, they’re likely to have
difficulty finding suitable alternatives in the UK. Businesses
that fail to plan ahead and use this opportunity to reduce
their costs in supply chains may not survive.”
Stephen Phipson, chief executive of the manufacturers’
association EEF, said he was concerned that smaller
These information have been obtained or derived from sources believed to be reliable, but I make no representation or warranty as to their accuracy or completeness.
Copyright © 2013 The Poon Report by Vincent Poon. All rights reserved.
companies were not preparing for a bad outcome from the
Brexit talks.
“The more I speak to companies, the more I am concerned
that there is a body of smaller and medium-sized companies
that have no contingencies, or even though being put into
what happens in the event of the Brexit negotiations not
going to plan,” he said. “Our overarching asks to government
are to keep the conditions for trading as close to today as
possible.”
Experts are warning that more EU businesses could start
splitting away from their UK partners as Brexit approaches.
“The government’s problem is that, as it becomes clear that
the most we can hope for is a free trade agreement with the
EU, more and more businesses reliant on pan-European
supply chains will be forced into considering the viability of
their UK operations,” said Sam Lowe, from the Centre for
European Reform.
“The transition agreement serves the dual purpose of both
buying time for the EU and UK to finalise an agreement, and
time for businesses to repatriate their supply chains to the
EU 27, if necessary. And the costs of doing so will in some
cases be front-loaded on to the consumer.”
Frances O’Grady, the TUC general secretary, said:
“Companies need to be honest with their workforces about
the impact of Brexit. And not use it as an excuse to lay
people off. But it’s clear that the government’s shambolic
approach to Brexit is sending shudders through the UK
manufacturing sector.
“It’s vital ministers work with unions and employers to
protect jobs and key industries. The uncertainty is delaying
investment decisions and leaving workers in limbo.”
Meanwhile, smaller EU nations have been trying to convince
UK-based international companies to move operations to
their countries. Jerzy Kwieciński, Poland’s minister of
investment and economic development, was recently on a
trip to the UK to win over businesses.
“It will not be the same situation for the financial sector
after Brexit,” he said. “We do not expect that the big
players will move their headquarters from London to
Warsaw. But in order to be more efficient in the European
Union, we think many financial institutions will want to have
antennas somewhere in Europe,” he said.
“My conviction is that [Brexit] was a mistake. I think that
you will see the effects. You have already got a slowdown in
your economy at a time when the other economies in the EU
are growing relatively well. Europe and Poland would have
no problem if you changed your mind.”
(Full article click - Observer)
---
Barclays plots buyback after US sub-prime deal
Taken from The Sunday Times 1 April 2018
Barclays is planning a multimillion-pound share buyback
after last week’s settlement of claims that it mis-sold sub-
prime loans in the run-up to the financial crisis.
The $2bn (£1.4bn) settlement with the US Department of
Justice was much smaller than expected, leaving Barclays
with extra cash to give back to investors.
A source close to the bank said that chief executive Jes
Staley wants “to reward long-suffering shareholders . . . he
wants to show it’s jam today, not always jam tomorrow”.
It would be the bank’s first shares repurchase since 1997.
Staley is under pressure after Edward Bramson, the
American activist investor, became Barclays’ fourth-biggest
shareholder last month with a 5.2% stake.
Barclays had to pay the $2bn penalty for the sub-prime
mortgage bonds it sold between 2005 and 2007. Analysts had
feared it could be as high as $6bn.
The US lawsuit had been the main obstacle to a return of
capital to investors. Staley wants to maintain capital buffers
of at least 13% of its loan book, and at its full-year results in
February, the bank reported a buffer of 13.3%. The
settlement reduced that to 12.85%.
Barclays is believed to want to clear the Bank of England’s
stress tests in November before trying to get a green light
from the regulator for the share buyback.
“The settlement has finally created certainty around the
litigation cost, and clears the way for capital returns,” said
Joseph Dickerson, a banking analyst at Jefferies. “A share
buyback would most likely transpire late in the year, or
possibly early next year.”
In his statement about the settlement, Staley reiterated a
commitment to paying a 6.5p dividend for 2018. However,
Barclays faces a string of other problems that are weighing
on its share price.
UK regulators have been investigating Staley for more than a
year over his attempts to unmask a whistleblower. The
Financial Conduct Authority has repeatedly extended the
timeline for the probe to conclude.
In February, the Serious Fraud Office accused Barclays of
providing “unlawful financial assistance” related to the
fundraising from the Qataris in 2008 that enabled it to avoid
a taxpayer bailout. Barclays denies the charges.
Once that concludes, Barclays faces a civil lawsuit from PCP
Capital Partners, the investment firm founded by Amanda
Staveley, over whether Barclays offered Qatar and Abu
Dhabi investors the same deal terms for the fundraising.
In February, Lloyds Banking Group announced plans for a
£1bn share buyback.
(Full article click - Times)
These information have been obtained or derived from sources believed to be reliable, but I make no representation or warranty as to their accuracy or completeness.
Copyright © 2013 The Poon Report by Vincent Poon. All rights reserved.
News Europe
Russia warns travellers to UK face
'provocations' including having 'objects placed
in their luggage'
Taken from Independent on Sunday 1 April 2018
Spy row continues as Kremlin's foreign ministry issues list of
14 new questions over Salisbury nerve agent attack
Russia has warned its citizens that they face the "insertion of
foreign objects" into their luggage when they travel to the
UK.
The Russian embassy posted the claim of new "provocations"
on its website as the row continues over the poisoning of
former spy Sergei Skripal and his daughter Yulia in Salisbury.
It said the warning was necessary because of "the anti-
Russian policy, the growing threatening rhetoric of the
British, the British government's selective actions against
Russian individuals and legal entities".
The Russian Ministry of Foreign Affairs has also issued a list
of 14 new questions about the Salisbury poisoning that it
says have not been answered, on top of the 27 made public
on Friday.
They want to know what antidotes were administered to the
Skripals, how it was determined that the nerve agent used in
the attack "originated from Russia" and whether it has been
produced in the UK.
Several questions focus on the involvement of French
experts in the investigation.
The British government is still considering a request to allow
Russian officials to visit Yulia Skripal after it was reported
her condition was rapidly improving.
Her father, a former MI6 spy, remains in a critical but stable
condition in hospital after being exposed to the nerve agent
novichok on 4 March.
Britain expelled 23 Russian diplomats earlier this month
after accusing Russia of responsibility for the attack.
Russia responded by sending the same number home from
Moscow and has retaliated against similar moves by the US
and many EU nations.
Additional UK diplomats were told to leave on Saturday as
the Kremlin ordered Britain to cut just over 50 more of its
Russia-based staff.
Russia has also accused Britain of "blatant provocation" after
border force officers searched an Aeroflot plane at
Heathrow.
Securities minister Ben Wallace described the search as
“routine”.
(Full article click - IOS)
---
Australians in Russia warned to brace for
possible 'anti-western sentiment'
Taken from The Sunday Observer 1 April 2018
Updated travel advice follows fallout from poisoning of a
former spy in the UK and expulsion of two Russian spies from
Australia
Australian travellers to Russia have been warned to brace for
possible anti-western sentiment as the fallout continues
from the poisoning of a former spy in the United Kingdom.
Last week, the foreign affairs minister Julie Bishop
announced two Russian spies had been asked to leave
Australia, in a show of solidarity with the UK over the nerve
agent attack on former double agent Sergei Skripal and his
daughter Yulia in Salisbury.
London blames Moscow for the attack but Russia denies
involvement. The Kremlin has since retaliated, announcing
that two Australian diplomats have a week to leave Russia.
The Department of Foreign Affairs and Trade has now
updated its travel advice for Russia.
“Due to heightened political tensions, you should be aware
of the possibility of anti-western sentiment or harassment,”
the travel advice said on Sunday.
“While the Australian government is not aware of any
increased difficulties for Australians travelling in Russia at
this time, you should follow the security and political
situation closely and keep up to date with this travel advice.
“Remain vigilant, avoid any protests or demonstrations and
avoid commenting publicly on political developments,” the
travel advice said.
On Friday, Australia’s ambassador to Russia, Peter Tesch,
was among the diplomats summoned to the Russian foreign
ministry to be told of the expulsion of two Australian
diplomats from Moscow. The diplomatic mission in Moscow
has 10 staff.
In a joint statement on Saturday morning, Malcolm Turnbull
and Bishop said there was no justification for Russia’s
expulsions.
“This is a disappointing, although not unexpected, reaction
by the Russian government to the decision of the Australian
government to expel two Russian diplomats working as
undeclared intelligence officers,” they said.
“Australia’s action was in concert with 28 other nations
expelling a total of 153 Russian diplomats in an
unprecedented demonstration of global solidarity with the
United Kingdom.”
In total, Russia will expel 59 diplomats from 23 countries. It
had already expelled 23 British and 60 American diplomats
earlier in the week.
(Full article click - Observer)
These information have been obtained or derived from sources believed to be reliable, but I make no representation or warranty as to their accuracy or completeness.
Copyright © 2013 The Poon Report by Vincent Poon. All rights reserved.
News Americas
Irwin Stelzer: When tweeting won’t be enough
Taken from The Sunday Times 1 April 2018
Not much is heard from Donald Trump about the stock
market these days. Odd, that. There was a time when he
took credit for its spectacular rise after his election. “The
reason our stock market is so successful is because of me.
I’ve always been great with money.”
Perhaps he has been absorbed with other matters. The
Russia investigation, signing P45s after cabinet meetings,
designing a new putter. Or it just might be that he now
believes “It’s the stock market, stupid” is not a winning
campaign slogan. Or that he does not deem it sufficient to
point out that after an 8% decline from its January 26 peak,
the S&P 500 remains 22% above its level when the voters
surprised him — not to mention Hillary Clinton and the
media — with the news that he would have to give up the
comforts of his Trump Tower penthouse in New York to
rough it in the White House, with time off at Mar-a-Lago for
good, or even bad, behaviour.
Actually, if he had to go before the voters tomorrow, he
could claim that the economy is in reasonably good shape,
despite a Federal Reserve Board that is intent on raising
interest rates, despite the threat of a trade war, despite a
hole in the federal budget larger, relatively, than the ones
that drove several of his enterprises into bankruptcy. They
say that once past 70, men cannot change: debt never
frightened Trump when he was in business, it certainly is not
frightening him now.
If he does decide that the focus on share prices is no longer
in his interest, but that the economy is, he can point to
several things.
● The economy is growing at about the 3% rate most
consider quite satisfactory.
● Unemployment, at 4.1%, is low, and there are a record
6.2m job openings, even though Americans are returning to
the labour force in droves — 806,000 last month alone.
● Wages have moved from stagnation to modest growth, in
the order of 2%-2.6%, depending on the measure used.
● The value of all the assets (houses, shares) owned by
households, minus what they owe, rose by $2 trillion last
year, and household net worth, as it is called, was a tick
below a record $100 trillion at year end.
● House prices are now above their pre-crisis peak.
Looking ahead, the results of the tax cut — a bit more
consumer spending, more business investment, some
repatriation of the $2.2 trillion in corporate funds stashed
overseas — are likely to be felt this year and next.
Little wonder that the chief executives of America’s largest
companies say they expect sales and their investments over
the next three months to be at the highest level in the past
15 years. That should carry the economy through to the
November elections, which augurs well for those Republicans
who can succeed in a delicate task: distancing themselves
from an unpopular president, without at the same time
alienating the Trump core.
For Trump, the problem is less November 2018 than
November 2020, when he stands for re-election. Should the
economy soften before then, policy makers will face an
impending recession with few tools at their disposal. If the
economy slows, and it will, the authorities ordinarily
unsheathe two weapons. The federal government borrows
and spends — loosens fiscal policy, in the jargon of the
trade. And the Fed cuts interest rates and buys bonds to
drive their prices up and therefore interest rates down.
Neither policy is likely to be available.
The tax cuts and the profligate budget just agreed by both
parties have already hugely increased the deficits the
federal government is likely to incur over the next decade.
Two developments allowed this to happen.
The first is Trump’s takeover of the Republican Party and its
abandonment of any willingness, at least at times, to fight
for its core beliefs — balanced budgets, minimal spending,
sound money, small government.
The second is the agreement of both parties that bipartisan
deadlock can be broken only when they agree to each
other’s demands — Republicans for more money for the
military, Democrats more cash for social programmes. In a
recession, the government would be able to increase
spending and deficits, as Keynes would recommend, only if it
had taken his advice and run surpluses in good times, which
it hasn’t.
Nor will the Fed be of much help. Even after a few quarter-
point rate rises it will be operating from a base of interest
rates so low that there would be little room to lower them
further.
In short, American policymakers go naked into their battle
with the next recession.
The blame game will begin. The downturn was caused by
trade wars and the threat of trade wars. The inability of the
heavily indebted American government to mount a stimulus
is due to the improvident tax cuts of 2018. The dumping of
US Treasury bonds by foreigners is by way of payback for the
infidelity of its American ally during the Trump years. The
reduced purchasing power of take-home pay packets shows
that Trump might have “been great with money”. but with
his, not ours.
It will do Trump no good to tweet until his thumbs are
calloused. He got to the White House because enough
Americans thought they needed a businessman-president,
the first since Herbert Hoover. A recession would persuade
them to look for a person with a different calling.
Of course, there might not be a recession by 2020. In which
case, the Trump campaign theme will be: “It’s the economy
stupid.”
(Full article click - Times)
---
Trump administration wants visa applicants to
hand over social media account details
Taken from The Sunday Telegraph 1 April 2018
Almost everyone applying for a US visa will be asked to list
their social media accounts before being granted entry,
under proposals put forward by Donald Trump’s
administration.
Applicants will be required to submit details of any accounts
held in the preceding five years on sites such as Twitter,
Facebook, YouTube and LinkedIn.
An estimated 14.7 million people a year would be affected
by the move, which includes submissions for both immigrant
and non-immigrant visas.
Those countries with visa-free travel to America, such as
Britain, would not be affected but non-exempt countries
such as China, India and Mexico would be hit.
The proposal was made by the US state department and
submitted to the Office of Management and Budget, which
has 60 days to decide whether to approve.
It comes after Mr Trump talked up the need for “extreme
vetting” at America’s borders during his successful 2016
election campaign.
The Trump administration had already announced including
it would roll out the request on applications for immigrant
visas - meaning those for foreigners who wish to live in the
US.
These information have been obtained or derived from sources believed to be reliable, but I make no representation or warranty as to their accuracy or completeness.
Copyright © 2013 The Poon Report by Vincent Poon. All rights reserved.
This change would expand the checks to non-immigrant
visas, those issued to people visiting the US temporarily
whose countries do not have a visa-free agreement.
Applicants would also be asked for their email addresses,
telephone numbers and travel history over the last five years
as well as whether they have ever been deported.
Hina Shamsi of the American Civil Liberties Union said:
"People will now have to wonder if what they say online will
be misconstrued or misunderstood by a government official.
"We're also concerned about how the Trump administration
defines the vague and over-broad term 'terrorist activities'
because it is inherently political and can be used to
discriminate against immigrants who have done nothing
wrong.”
The state department said in a statement: “Maintaining
robust screening standards for visa applicants is a dynamic
practice that must adapt to emerging threats.
"We already request limited contact information, travel
history, family member information, and previous addresses
from all visa applicants.
"Collecting this additional information from visa applicants
will strengthen our process for vetting these applicants and
confirming their identity.”
(Full article click - Telegraph)
---
AP FACT CHECK: Trump departs from reality on
wall, Amazon
Taken from Associated Press Sunday, 1 April 2018
President Donald Trump hailed the start of his long-sought
U.S.-Mexico border wall this past week, proudly tweeting
photos of the “WALL!” Actually, no new work got underway.
The photos showed the continuation of an old project to
replace 2 miles of existing barrier.
And on Saturday, he ripped Amazon with a shaky claim that
its contract with the post office is a “scam.”
Trump and his officials departed from reality on a variety of
subjects in recent days: the census, Amazon’s practices and
the makeup of the Supreme Court among them. Here’s a
look at some statements and their veracity:
TRUMP: “Great briefing this afternoon on the start of our
Southern Border WALL!” — tweet Wednesday, showing
photos of workers building a fence.
TRUMP: “We’re going to be starting work, literally, on
Monday, on not only some new wall -- not enough, but we’re
working that very quickly -- but also fixing existing walls and
existing acceptable fences.” — Trump, speaking the previous
week after signing a bill financing the government.
THE FACTS: Trump’s wrong. No new work began on Monday
or any other time this past week. And the photos Trump
tweeted were misleading. They showed work that’s been
going on for more than a month on a small border wall
replacement project in Calexico, California, that has nothing
to do with the federal budget he signed into law last week.
The Calexico project that began Feb. 21 to replace a little
more than 2 miles (3.2 kilometers) of border wall was
financed during the 2017 budget year. A barrier built in the
1990s mainly from recycled metal scraps is being torn down
and replaced with bollard-style barriers that are 30 feet (9.1
meters) high.
Ronald D. Vitiello, acting deputy commissioner of U.S.
Customs and Border Protection, defended the president’s
statements, saying Friday “there’s construction” underway.
___
TRUMP: “If the P.O. ‘increased its parcel rates, Amazon’s
shipping costs would rise by $2.6 Billion.’ This Post Office
scam must stop. Amazon must pay real costs (and taxes)
now!” — tweet Saturday.
TRUMP: “I have stated my concerns with Amazon long before
the Election. Unlike others, they pay little or no taxes to
state & local governments, use our Postal System as their
Delivery Boy (causing tremendous loss to the U.S.), and are
putting many thousands of retailers out of business!” —
tweet Thursday.
THE FACTS: Trump is misrepresenting Amazon’s record on
taxes, the U.S. Postal Service’s financial situation and the
contract that has the post office deliver some Amazon
orders. Federal regulators have found that contract to be
profitable for the Postal Service.
People who buy products sold by Amazon pay sales tax in all
states that have a sales tax. Not all third-party vendors using
Amazon collect it, however.
As for the post office, package delivery has been a bright
spot for a service that’s lost money for 11 straight years.
The losses are mostly due to pension and health care costs —
not the business deal for the Postal Service to deliver
packages for Amazon. Boosted by e-commerce, the Postal
Service has enjoyed double-digit increases in revenue from
delivering packages, but that hasn’t been enough to offset
declines in first-class letters and marketing mail, which
together make up more than two-thirds of postal revenue.
While the Postal Service’s losses can’t be attributed to its
package business, Trump’s claim that it could get more bang
for its buck may not be entirely far-fetched. A 2017 analysis
by Citigroup concluded that the Postal Service was charging
below-market rates as a whole for parcels. The post office
does not use taxpayer money for its operations.
Trump is upset about Amazon because its owner, Jeff Bezos,
owns The Washington Post, one of the targets of his “fake
news” tweets.
___
TRUMP: “Because of the $700 & $716 Billion Dollars gotten
to rebuild our Military, many jobs are created, and our
Military is again rich. Building a great Border Wall, with
drugs (poison) and enemy combatants pouring into our
Country, is all about National Defense. Build WALL through
M!” — tweets Sunday and Monday.
THE FACTS: Trump is floating the idea of using “M″ — the
Pentagon’s military budget — to pay for his wall with
Mexico. Such a move would almost certainly require
approval from Congress and there’s plenty of reason to be
skeptical about the notion of diverting military money for
this purpose.
Only Congress has the power under the Constitution to
determine federal appropriations, leaving the Trump
administration little authority to shift money without
lawmakers’ approval.
Pentagon spokesman Chris Sherwood referred all questions
on the wall to the White House. Spokeswoman Sarah
Huckabee Sanders declined to reveal specifics but said
Trump would work with the White House counsel to make
sure any action taken was within his executive authority.
___
DAVID SHULKIN, citing reasons Trump fired him as Veterans
Affairs secretary: “I have been falsely accused of things by
people who wanted me out of the way. But despite these
politically based attacks on me and my family’s character, I
am proud of my record and know that I acted with the
utmost integrity.” — op-ed Thursday in The New York Times.
THE FACTS: His statement that he and his family were
subjected to politically based attacks is disingenuous,
though politics contributed to his dismissal.
White House support for Shulkin eroded after a blistering
report in February by VA’s internal watchdog, a non-partisan
office. The inspector general’s office concluded that he had
violated ethics rules by accepting free Wimbledon tennis
These information have been obtained or derived from sources believed to be reliable, but I make no representation or warranty as to their accuracy or completeness.
Copyright © 2013 The Poon Report by Vincent Poon. All rights reserved.
tickets. The inspector general also said Shulkin’s chief of
staff had doctored emails to justify bringing the secretary’s
wife to Europe with him at taxpayer expense.
It is true, though, that Shulkin had encountered resistance
from about a half-dozen political appointees at the VA and
White House who rebelled against him. In an extraordinary
telephone call, John Ullyot, a top communications aide, and
VA spokesman Curt Cashour asked the Republican staff
director of the House Veterans Affairs Committee to push for
Shulkin’s removal after the release of the inspector
general’s report. The staff director declined to do so. Those
political appointees were not involved in drafting the
inspector general’s report.
Shulkin expressed regret for the “distractions” caused by the
report and agreed to pay more than $4,000 to cover the
costs of his wife’s coach airfare and the Wimbledon tickets.
He continues to insist he did nothing wrong and point to
what his staff did in doctoring his emails as a “mistake.”
___
TRUMP: “THE SECOND AMENDMENT WILL NEVER BE
REPEALED! As much as Democrats would like to see this
happen, and despite the words yesterday of former Supreme
Court Justice Stevens, NO WAY. We need more Republicans
in 2018 and must ALWAYS hold the Supreme Court!” — tweet
Wednesday.
THE FACTS: As a basics civics lesson, Trump’s tweet falls
short. The Supreme Court is the unelected branch of
government and no party can “hold” it. That said, both
parties try to win confirmation of justices who are
considered likely to vote the way they want.
Republican-nominated justices have formed a majority of
the Supreme Court for nearly 50 years. The five more
conservative justices were appointed by Republicans while
the four more liberal justices were Democratic nominees.
Republicans would have the opportunity to cement
ideological balance in their favor if Justice Anthony Kennedy
— the most moderate of the conservatives — or one of the
older and more liberal justices were to retire with Trump in
office and Republicans in control of the Senate.
Trump was citing retired Justice John Paul Stevens, who
called in a New York Times article for repeal of the Second
Amendment to allow for gun control legislation. Democratic
leaders are not proposing repeal of the amendment, as
Trump implies. Also noteworthy: Stevens was nominated by
a Republican president, Gerald Ford.
___
WHITE HOUSE SPOKESWOMAN SARAH SANDERS, on the Trump
administration’s decision to ask people about their
citizenship in the 2020 census: “This is a question that’s
been included in every census since 1965 with the exception
of 2010, when it was removed. ... And again, this is
something that has been part of the census for decades and
something that the Department of Commerce felt strongly
needed to be included again.” — press briefing Tuesday.
COMMERCE DEPARTMENT: “Between 1820 and 1950, almost
every decennial census asked a question on citizenship in
some form.” — statement on Monday.
THE FACTS: Sanders is incorrect. The Commerce Department
statement is also problematic. Both are trying to play down
the risk of a severe undercount of the population if many
immigrants, intimidated by the citizenship question, refuse
to participate.
The Census Bureau hasn’t included a citizenship question in
its once-a-decade survey sent to all U.S. households since
1950, before the Civil Rights era and passage of a 1965 law
designed to help ensure minority groups in the count are
fully represented.
The nation’s count is based on the total resident population
— both citizens and noncitizens — and used to determine
how many U.S. representatives each state gets in the U.S.
House.
The citizenship question was not in the 1960 census,
according to a copy of the form posted on the Census Bureau
website, and no census was held in 1965.
From 1970 to 2000, the question was included only in the
long-form section of the census survey, sent to a portion of
U.S. households. After 2000, the question has been asked on
the Census Bureau’s American Community Survey, a separate
poll designed to replace the census long form and sent only
to a sample of U.S. households.
The Commerce Department’s assertion that the citizenship
question was asked on “almost” every decennial census
between 1820 and 1950 also pushes the limits of reality.
According to the Census Bureau, the question wasn’t asked
in four of those censuses —1840, 1850, 1860 or 1880.
Between 1820 and 1950, a total of 14 censuses were held.
That means more than 1 in 4 surveys during that time period
lacked the citizenship question.
Not exactly “almost.”
(Full article click - AP)
These information have been obtained or derived from sources believed to be reliable, but I make no representation or warranty as to their accuracy or completeness.
Copyright © 2013 The Poon Report by Vincent Poon. All rights reserved.
News Asia
China clears path for foreign-listed tech
unicorns to return home
Taken from FT Sunday, 1 April 2018
Cabinet issues plan that skirts thorny legal issues to pull
national champions closer
China’s cabinet has approved policies designed to draw big
tech companies such as Alibaba and Tencent to list on
domestic stock markets, a response to discomfort after
national champion unicorns sought listings abroad.
The State Council’s latest guidelines apply to companies in
sectors that China is trying to promote through state
industrial policy, including cloud computing, big data,
artificial intelligence, semi- conductors, bio-tech and high-
end manufacturing.
The plan for “China Depository Receipts” is modelled after
similar instruments that let US investors buy into foreign
companies.
Search engine Baidu, gaming company NetEase, and travel
agency Ctrip — all of which trade in the US through American
Depository Receipts — have already publicly declared an
interest in listing domestically.
(Full article click - FT)
---
Japan's Kono hints at North Korea nuclear
activity amid easing tensions
Taken from Nikkei Sunday, 1 April 2018
Foreign Minister Taro Kono suggested Saturday there are
signs North Korea is preparing to again test a nuclear
weapon, even as tensions on the Korean Peninsula are easing
ahead of summit talks between the leaders of the two
Koreas.
North Korea appears to be "working hard to get ready for the
next nuclear test," Kono said in a lecture in Kochi city,
referring to soil removal from the tunnel at the nuclear test
site where past tests were conducted.
His remarks may be based on satellite imagery provided by
the United States.
As for the possibility of summit talks between Prime Minister
Shinzo Abe and North Korean leader Kim Jong Un, Kono
expressed caution over acting hastily to Pyongyang's recent
charm offensive.
"There's absolutely no need to rush things," the Japanese
foreign minister said, adding that North Korea may take
advantage of countries heeding invitations to send their
leaders to Pyongyang for talks.
There are signs of a thaw on the peninsula, with global
attention fixed on two closely related events -- an inter-
Korean leaders' summit scheduled for April 27, and a first-
ever U.S.-North Korea summit expected to be held by the
end of May.
North Korea last conducted a nuclear test, its sixth and most
powerful, in September 2017.
(Full article click - Nikkei)
---
China March factory growth stronger than
expected - official PMI
Taken from Reuters Sunday, 1 April 2018
* Growth picks up in China’s manufacturing and services
sectors
* Official factory PMI 51.1 vs poll 50.5, Feb 50.3
* Services PMI rises to 54.6 vs Feb 54.4
* Steelmakers crank up output but inventories building up
Growth in China’s manufacturing sector picked up more than
expected in March as authorities lifted winter industrial
pollution restrictions and steel mills cranked up production
as construction activity swings back into high gear.
The official Purchasing Managers’ Index (PMI) released on
Saturday rose to 51.5 in March, from 50.3 in February, and
was well above the 50-point mark that separates growth
from contraction on a monthly basis.
Analysts surveyed by Reuters had forecast the reading would
pick up slightly to 50.5. February’s print had been the lowest
in 1-1/2 years, but many analysts suspected it was due to
disruptions related to the long Lunar New Year holidays.
The March survey showed manufacturers shifted into higher
gear as seasonal demand picked up. The sub-index for
output jumped to 53.1 from 50.3 in February, while total
new orders rose to 53.3 from 51.0 and export orders climbed
to 51.3 from 49.0.
Driving the positive sentiment are better-than-expected
exports in the first two months of the year, particularly in
tech shipments, the fastest-growing segment of China’s
industrial sector.
A sub PMI for the hi-tech manufacturing sector stood at 53.2
in March, down from 54.0 in February.
However, a sharp escalation in trade tensions with the
United States is clouding the outlook for both China’s “old
economy” heavy industries and “new economy” tech firms.
The Trump administration slapped hefty tariffs on steel and
aluminium imports last week and then targeted China
specifically by announcing plans for additional tariffs of up
to $60 billion of Chinese goods, which are expected to focus
largely on its tech and telecommunications products.
A resurgent yuan has also weighed on exporters’ confidence.
The Chinese currency has gained more than 3 percent
against the U.S. dollar this year, on top of a 6.7 percent rise
in 2017.
SPRING FORWARD OR FALL BACK?
This spring could see a major test of Chinese manufacturers’
surprising 1-1/2-year run.
In the first quarter, China’s steel companies defied
expectations for a winter lull and continued to ramp up
output in response to strong sales, while boosting borrowing,
capital expenditure and hiring, a survey from the China
Beige Book showed on Wednesday.
Production increased further after winter smog controls
expired on March 15 in many areas.
A separate PMI on the steel sector rose to 50.6 in March from
49.5 in February, the China Logistics Information Centre
(CLIC) said.
But the burst in output has pushed steel inventories to multi-
year highs, sending prices sharply lower and reducing mills’
profit margins.
At the same time, growth in property sales and new
construction starts appears to be slowing, and Beijing has hit
the brakes on some local governments’ infrastructure
spending due to concerns over high debt levels.
Overall, China’s economic data so far this year suggest the
economy has carried more growth momentum into the first
quarter from last year than expected, with a government
think tank forecasting the economy will grow 6.9 percent in
the first half.
These information have been obtained or derived from sources believed to be reliable, but I make no representation or warranty as to their accuracy or completeness.
Copyright © 2013 The Poon Report by Vincent Poon. All rights reserved.
That would keep synchronised global growth on track for a
while longer. But economists are sticking to forecasts that
China’s pace will slow to around 6.5 percent by the end of
the year, weighed down by the cooling property market and
rising borrowing costs, even if there are no global trade
shocks.
Boosted by government infrastructure spending, a resilient
housing market and unexpected strength in exports, China’s
manufacturing and industrial firms helped the economy
produce better-than-expected growth of 6.9 percent in
2017.
SERVICES GROWTH ALSO ACCELERATES
A sister survey showed activity in China’s service sector rose
in March. The official non-manufacturing Purchasing
Managers’ Index (PMI) rose to 54.6 from 54.4 in February.
A sub-reading for construction activity stood at 60.7 in
March, up from 57.5 in February.
The services sector accounts for over half of China’s
economy, with rising wages giving Chinese consumers more
spending clout.
Chinese policymakers are counting on growth in services and
consumption to rebalance their economic growth model from
its heavy reliance on investment and exports.
China is aiming for an around 6.5 percent growth for the
economy this year, the same as in 2017, while pressing
ahead with its campaign to reduce risks in the financial
system, Premier Li Keqiang said in the annual parliament
meeting earlier this month.
A composite PMI covering both the manufacturing and
services activity rose to 54.0 in March, from February’s 52.9.
(Full article click - Reuters))
---
China’s four-decade route to the world’s No 1
economy
Taken from SCMP 1 April 2018
Its impressive achievements are thanks to perseverance and
the far-reaching economic and societal changes that have
been introduced since 1978.
Within our lifetimes, China has transformed from an agrarian
economy to a world-beating digital and consumption-led
powerhouse, driven by smartphone-wallet shoppers.
This year marks the 40th anniversary of China’s economic
reform and opening. In December 1978, China’s “open door”
policy signposted a turning point in its economic
management and trajectory.
Over the period, the character of China’s economic
management has evolved from being strictly centrally
planned, export oriented and state led to one that is more
market led and oriented towards domestic consumption.
China’s gross domestic product has achieved an average
annual growth rate of 10 per cent in the past 40 years –
three times the rate in the United States over the same
period.
Its GDP per capita increased from US$156 in 1978 to
US$8,123 in 2016, lifting more than 800 million people out of
poverty. By comparison, the US GDP per capita was
US$57,638 in 2016, indicating there is still growth in the
China story.
Today, China is the world’s largest economy on a purchasing
power parity basis. It is the world’s largest manufacturer,
exporter and holder of foreign exchange reserves. And China
is actively aiming for a leadership role in globalisation and in
combating climate change.
All of these impressive achievements are thanks to the
perseverance and far-reaching changes in China’s economy
and society, from the decollectivisation of agriculture to the
expansion of international trade and the welcoming of
foreign direct investment.
The Chinese government has also committed to reforms in
banking, securities and insurance. These included
diversifying banks’ equity structures and transforming state-
owned banks into joint-stock banks. Key securities
companies were restructured, while reforms in the insurance
sector also progressed.
Another key phase of reform is allowing more foreign
participation in China’s capital markets. The country’s
capital account is becoming increasingly open in de facto
terms. China now has the second-largest equity market in
the world. From a total market capitalisation of
US$513 billion in 2003, it has grown 17 times to US$8.7
trillion last year. The country’s domestic bond market is now
the third largest in the world.
Significant progress has already been made to
internationalise the yuan. Just over a decade ago, yuan
usage was largely confined to the mainland. Today, more
than 10 per cent of China’s trade is settled in the currency.
After primarily being a recipient of FDI for four decades,
China has now emerged as a major FDI-originating country as
well, with non-financial outbound direct investment
rocketing from less than US$1 billion in 2000 to US$170
billion in 2016.
China’s “reform and opening” efforts have also allowed it to
enter an era of new economic growth, with consumption,
innovation and green energy leading the way.
Changes are already taking place. Domestic demand has
steadily expanded, with final consumption contributing 58.8
per cent of economic growth last year, nearly four
percentage points higher than five years prior.
The country has also become the global leading force in
digital technology and innovation, driven by its rising middle
class and a young, free-spending, digitally connected new
generation of consumers.
China has more e-commerce activity than any country in the
world. It accounts for 42 per cent of global e-commerce, a
third of the world’s most successful tech start-ups and
conducts 11 times more mobile payments than the United
States.
There are challenges ahead, including health care for its
ageing population, as well as making its economy sustainable
and green.
Still, China is at the centre of Asia’s economic growth by
increasing regional connectivity through its “Belt and Road
Initiative”.
This will help turn Asia into the dominant global economic
force, providing an estimated 52 per cent of global GDP by
2050. As a result, China is on course to overtake the United
States as the world’s largest consumer market and economy.
(Full article click - SCMP)
---
These information have been obtained or derived from sources believed to be reliable, but I make no representation or warranty as to their accuracy or completeness.
Copyright © 2013 The Poon Report by Vincent Poon. All rights reserved.
S. Korea's exports rise 6.1 pct on-year in March
Taken from Yonhap News Sunday, 1 April 2018
South Korea's exports rose 6.1 percent last month from a
year earlier to mark the largest monthly tally for March,
government data showed Sunday.
Outbound shipments reached US$51.58 billion in the one-
month period, up from $48.64 billion a year ago, according
to the data compiled by the Ministry of Trade, Industry and
Energy.
They increased for the 17th consecutive month, with the
total being the highest for all March figures.
Imports gained 5 percent on-year to $44.72 billion.
South Korea's trade surplus came to $6.87 billion, marking 77
straight months in which the country's exports have
exceeded imports, the ministry said.
Daily exports also rose for 16 months in a row to $2.19
billion, up 8.3 percent from a year earlier.
"The upbeat pace in monthly exports is driven by recovering
global trade and a boom in the information technology
market," the ministry said in a release, adding that steady
demand for South Korean semiconductors lent strong support
to the exports of Asia's fourth-largest economy.
Shipments of chips surged 44.2 percent on-year to $10.8
billion, setting a fresh monthly record, on brisk sales of high-
value memory chips and storage devices.
Overseas sales of personal computers soared 62.5 percent
on-year to a record $1.06 billion, while petroleum products
edged up 0.3 percent as a rally in oil prices boosted their
sales prices.
Exports of machinery and steel products also rose 6.1
percent and 6.3 percent last month, respectively, thanks to
rebounding global demand.
In contrast, sales of automobiles dropped 8.6 percent on
sluggish performance in North America, and those of auto
parts also decreased 11.1 percent.
Exports of flat displays contracted 16.5 percent last month
due to weak demand in China.
For the first three months of 2018, South Korea saw its
exports expand 10.3 percent to $145.7 billion from a year
earlier and imports increase 13.4 percent to $132 billion. Its
trade surplus reached $13.7 billion in the first quarter, down
slightly from the previous year's $15.6 billion.
(Full article click - Yonhap News)
---
Postponed US-South Korea joint military drills
get under way
Taken from Nikkei Sunday, 1 April 2018
The United States and South Korea on Sunday began their
annual joint military exercises which had been postponed
until after the Winter Olympics and Paralympics, South
Korean Defense Ministry sources said.
The exercises, which both countries stress are defense in
nature, come as Seoul and Washington prepare for separate
summits with North Korean leader Kim Jong Un amid a
diplomatic thaw on the Korean peninsula.
Both the South Korean Defense Ministry and the U.S.
Department of Defense said last month that the exercises
would be roughly the size of those in previous years.
However, local media have reported that the joint drills this
year will be shorter than originally planned, and that a
nuclear-powered aircraft carrier will not take part.
The main "Foal Eagle" field exercise that began Sunday is
scheduled to run through April. The computer-simulated
command-post "Key Resolve" exercise will get under way
later in the month and last two weeks.
North Korea has long opposed both exercises as preparations
for invasion.
But the country's leader Kim told South Korean officials China Shipbuilding Industry, a subsidiary of CSIC that owns
during their meeting last month in Pyongyang that he shipyards and other firms involved in the sector, climbed as
understands Seoul's stance that it is hard to postpone the much as 5.4 per cent in Shanghai trading on Friday.
military drills again or suspend them. In Korea, shares of Hyundai Heavy, Samsung Heavy and
Kim is scheduled to hold a summit with South Korean Daewoo Shipbuilding all fell more than 2.5 per cent.
President Moon Jae In on April 27 and is expected to meet Hudong Zhonghua Shipbuilding (Group), part of CSSC, was
with U.S. President Donald Trump possibly by the end of the first shipyard in China to build liquefied natural gas
May. carriers. CSIC was the first shipbuilder to build a very large
The start of the drills comes around a week after Kim made crude carrier, or VLCC.
a surprise visit to Beijing where he held his first summit with (Full article click - BT)
Chinese President Xi Jinping.
Washington and Seoul had agreed to suspend their joint
drills until the March 18 end of the Pyeongchang Winter
Paralympics in South Korea, to which the North sent its
athletes.
(Full article click - Nikkei)
---
Beijing 'planning merger to create shipbuilding
giant'
Taken from Business Times Sunday, 1 April 2018
Result would dwarf combined annual revenue of Hyundai,
Daewoo and Samsung's shipbuilding units - already the
world's top 3 by market value
CHINA'S government is working on a plan to combine its two
biggest shipbuilders to create an industrial giant that would
dwarf its South Korean rivals, according to people with
knowledge of the matter.
The state council, China's cabinet, has given its preliminary
approval to merge China State Shipbuilding Corp with China
Shipbuilding Industry Corp, the people said, asking not to be
identified as the information isn't public.
The two companies have combined revenue of at least 508
billion yuan (S$106 billion) making products ranging from
aircraft carriers for China's navy to vessels for carrying
containers, oil and gas for commercial companies.
The move could be subject to change as many details need
to be ironed out by ministries and regulators, the people
said. Both companies have subsidiaries that trade on the
stock exchanges in Shanghai and Hong Kong.
Representatives at the State-owned Assets Supervision and
Administration Commission of the State Council, CSSC and
CSIC didn't respond to faxed or emailed requests for
comments.
The giant resulting from the merger will have more than
twice the combined annual revenue of South Korea's Hyundai
Heavy Industries, Daewoo Shipbuilding & Marine Engineering
and Samsung Heavy Industries, the world's three biggest
shipbuilders by market value.
CSSC and CSIC were formed in July 1999 under a plan to
increase competition and efficiency among the country's
defence companies.
The two Chinese groups, including their units, had 10.4
million compensated gross tons in order backlog as of
February, equivalent to about 13 per cent of the market.
That compares with 7.72 million tons at South Korea's
Hyundai Heavy, according to the latest report by shipping
services provider Clarkson.
While the two are engaged in designing and building the
Chinese navy's fleet of aircraft carriers, CSSC also has plans
to design and build a cruise ship.
Shares of CSSC Offshore & Marine Engineering Group, a unit
of CSSC, were halted from trading in Shanghai from Sept 27
through March 20.
Controlling shareholder China State Shipbuilding was
contemplating a significant transaction involving the
company, the listed company said in a Hong Kong stock
exchange statement in September.

These information have been obtained or derived from sources believed to be reliable, but I make no representation or warranty as to their accuracy or completeness.
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