Category: China

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‘US can be secure only if Asia is’: US defence chief seeks to deepen strategic alliances in region

By Clement Tan | June 2, 2024 | The Straits Times

SINGAPORE – The United States wants to meld its strategic alliances and partnerships in Asia into a “new convergence” based on the rule of law – a commitment that its defence chief said will continue regardless of the outcome of the presidential election in November.

Mr Lloyd Austin evoked “a future of fresh and growing partnerships” in a speech at the Shangri-La Dialogue on June 1, which immediately elicited a question from a Chinese military delegate on whether the US was planning to build “a Nato-like system in the Asia-Pacific region”.

In response, the US Secretary of Defence described it as a strengthening of relationships with allies and partners based on a common vision and common values.

He also emphatically rejected the Chinese delegate’s suggestion that Nato’s eastern expansion was responsible for the war in Ukraine, eliciting applause from many in the audience.

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Taiwan’s political disrupter could be kingmaker in a split parliament. Here’s why it matters

By Clement Tan | January 26, 2024 | CNBC.com

TAIPEI — “One day, we’ll get our victory,” Ko Wen-je, the vanquished presidential candidate for the Taiwan People’s Party, said at his concession speech two weeks ago.

He urged his disappointed young supporters, some of them crying, not to give up, and framed himself as a one-man social movement crusading for political change.

“For me, over the last 10 years, whether I was in office or standing for election, I have always regarded it as a social movement aimed at changing political culture. Since this social movement has not fully materialized, let’s keep working hard,” the former Taipei City Mayor told supporters in Mandarin.

While he may have finished last in the first competitive three-way race for the Taiwan presidency since 2000, Ko garnered more than a quarter of the popular vote — disrupting the usual stranglehold of the dominant political parties, the ruling Democratic Progressive Party and Kuomintang.

The 63-year-old clearly resonated with the young and educated as he spoke plainly into their everyday bread-and-butter issues, including soaring housing costs and stagnant wages at a time of high inflation.

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‘A real big deal’: Biden backs economic corridor as shifting geopolitical alliances fragment the global economy

By Clement Tan | September 18, 2023 | CNBC.com

NEW DELHI — Even for those accustomed to the ebbs and flows of the U.S.-Saudi Arabia relationship, the sight of President Joe Biden extending a handshake to Saudi Crown Prince Mohammad bin Salman at the recent G20 leaders’ summit in New Delhi was quite the turnaround.

After all, Biden had warned last October of “consequences” after the Saudi-led oil cartel OPEC decided to cut crude production and boost prices amid Russia’s war in Ukraine.

Roughly a year on, Saudi Arabia is not only one of six new invitees to the China-dominated BRICS coalition, but also a signatory to the Biden-led pact for a ship-to-rail economic corridor linking India with Middle Eastern and European Union countries unveiled on the sidelines of the G20 summit — framed as a counter to China’s decade-old Belt and Road Initiative.

Saudi Arabia’s double dipping underscores the range of economic and strategic opportunities that abound for the various economies caught between the dueling U.S. and China as they build their own alliances and spheres of influence. U.S. and other major Western nations have been keen to “de-risk” their economic — and not decouple — from China on grounds of national security.

This is also consequently leading to a fragmentation of the world’s economy as protectionism and nationalism impede global trade, while giving rise to a complex matrix of relationships in a multipolar world that are not always straightforward as nations pursue their self interests.

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China vows to ‘adjust and optimize’ property policy in ‘tortuous’ economic recovery

By Clement Tan | July 24, 2023 | CNBC.com

China’s top leaders pledged to “adjust and optimize policies in a timely manner” for its beleaguered property sector, while elevating stable employment to a strategic goal, along with other pledges to boost domestic consumption demand and resolve local debt risks.

Chaired by President Xi Jinping, the Communist Party’s top decision-making body said it would implement a “counter cyclical” policy and stick largely to a prudent monetary policy and pro-active fiscal policy, according to a readout published late Monday of a quarterly meeting of the Politburo.

The July Politburo meeting typically sets the tone for China’s economic policies for the second half of the year, with market watchers eagerly awaiting firmer guidance on policy support for faltering growth in the world’s second-largest economy.

“Currently, the economy is facing new difficulties and challenges, mainly due to insufficient domestic demand, difficulties in the operation of some enterprises, many risks and hidden dangers in key areas, and a grim and complex external environment,” Xinhua quoted the Politburo as saying.

The post-pandemic economic recovery will proceed in a “wave-like” fashion in a “tortuous” process, it added. The Chinese phrase for risk appeared at least seven times in the readout, underscoring the government’s focus on its containment.

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U.S. and China trade barbs at top security summit as Taiwan Strait tensions simmer

By Clement Tan | June 5, 2023 | CNBC.com

SINGAPORE — A handshake and a ministerial lunch were all that the U.S. defense chief and his Chinese counterpart shared on the sidelines of a regional security summit in Singapore.

Ahead of the annual Shangri-La Dialogue which kicked off Friday, Beijing rejected a U.S. request for a bilateral meeting between its defense minister, Gen. Li Shangfu, and his American counterpart Lloyd Austin.

On Saturday, when Austin took to the stage at the summit where global defense leaders gathered, he called out China for refusing to engage in military dialogue.

“Dialogue is not a reward. It is a necessity. A cordial handshake over dinner is no substitute for substantive engagement,” Austin said in prepared remarks. “The more that we talk, the more we can avoid the misunderstandings and miscalculations that could lead to crisis or conflict.”

China’s Li responded a day later by accusing the U.S. of lacking sincerity and behaving in a manner not befitting of a superpower.

“It is undeniable that a severe conflict or confrontation between China and the U.S. will be an unbearable disaster for the world. China believes that a major country should behave like one,” Li said Sunday in a translation provided by summit organizers. It was his first address to an international audience in his current role as China’s defense chief.

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China’s record high youth unemployment is deepening economic scars

By Clement Tan | May 30, 2023 | CNBC.com

As youth unemployment in China rises to a record high, college graduates are caught in a perfect storm — with some forced to take on low-paying jobs or settle for jobs below their skill levels.

Official data shows urban unemployment among the 16- to 24-year-olds in China hit a record 20.4% in April – about four times the broader unemployment rate even as millions more college students are expected to graduate this year.

“This college bubble is finally bursting,” said Yao Lu, a professor of sociology at Columbia University in New York. “The expansion of college education in the late 1990s created this huge influx of college graduates, but there is a misalignment between demand and supply of high skilled workers. The economy hasn’t caught up.”

The scourge of underemployment is another issue that Chinese youths and policymakers have to grapple with.

In a paper Lu co-authored with Xiaogang Li, a professor at Xi’an Jiaotong University, the professors estimated at least another quarter of college graduates in China are underemployed, on top of the rising youth unemployment rate.

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Without Baggage of Legacy, China Budget Airlines Gain on “Big Three”

By Clement Tan

March 31 (Bloomberg) — Cheap fares and no legacy are helping China’s budget airlines beat state-owned carriers in the stock market.

With combined fleets exceeding 1,000 planes, $31 billion in market values, and up to 20 times more workers, state-controlled China Southern Airlines Co., China Eastern Airlines Corp. and Air China Ltd. on average provide just one-third the returns of Spring Airlines Co. and Juneyao Airlines Co., according to data compiled by Bloomberg. Even the Chinese regulator has lauded Spring as a model of efficiency.

Investors have driven up shares of Juneyao fourfold since the stocks listed last year, while Air China, the leader by market value, has fallen 46 percent in the same period. The data also suggest the three carriers need to step up the pace of reforms to better exploit growth in the Chinese air-travel market, poised to become the world’s largest within two decades.

“Spring and Juneyao don’t have the baggage of legacy like the state-owned airlines,” said Cao Xuefeng, an analyst at Huaxi Securities Co. in Chengdu. “They were started as profit-driven businesses and cost-efficiency for them extends to all aspects of their operations, not just their smaller work forces and cheaper tickets.”

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Airbus, Boeing See Politics Make Good Business Sense in China

By Clement Tan

March 1 (Bloomberg) — China’s political leaders identified aerospace as one of 10 key industries in the country’s quest to become an advanced industrialized nation. Ahead of this weekend’s annual legislative session, Western planemakers — their future competitors — are helping them toward that goal.

Airbus Group SE will break ground Wednesday on a finishing center for its wide-body A330 jets in Tianjin, near Beijing, a decade after it opened an assembly plant there for single-aisle planes. Chicago-based Boeing Co. also is seeking a location in China for a plane-completion facility.

Opening plants in China, poised to become the world’s largest aerospace and air-travel market in two decades, is as much a political as an economic decision. One factor is proximity to customers: Chinese airlines order billions of dollars of planes from Airbus and Boeing every year, and doing some assembly locally eases the strain on the planemakers’ existing facilities. Equally important is the goodwill such investments earn.

 “It’s absolutely undeniable there’s been a communication of Chinese expectations for companies to build in China, to provide jobs in China, that they will be treated less equitably otherwise,” said Scott Harold, the Washington-based associate director of Rand Corp.’s Center for Asia Pacific Policy. “If you build in China, you’re a ‘friend’ of China.”

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Chinese New Year: When Buying A Train Ticket Feels Like Winning The Lottery

By Clement Tan

Jan. 31 (Bloomberg) — In China, getting a ticket home for the Lunar New Year can feel a bit like winning the lottery. First, there’s competition for plane, train and other passenger seats for almost 3 billion voyages. Then there’s the quiz to prove you’re not a Web robot.

Beijing hairstylist Yang Mingyue learned how high the odds are in November, when she stayed up past midnight to buy train tickets online as soon as they became available. After finding the best fares for the 20-hour trip home to Heilongjiang province, Yang hit a snag: cryptic questions she had to answer correctly before her booking would be accepted.

The puzzles are part of new cybersecurity measures designed to thwart scalpers from snapping up seats to resell at inflated prices. But in attempting to block scammers, the perplexing process is catching innocent web users such as Yang.

“Those questions were so ridiculously difficult, and even when I managed to get them right after a few tries, the seats I wanted were no longer available,” the 21-year-old said. “It’s too late now. Even standing tickets on the dates I wanted are all sold out, economy class air tickets, too. Business class is too expensive.”

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Deal-Making Hits China Plane Leasing as Billionaire Li Jumps In

By Clement Tan

China is making the aircraft-leasing business a popular destination for mergers and acquisitions.

Plane-leasing companies in China have been involved in more than $16 billion worth of acquisitions since last year, according to figures compiled by Bloomberg. In addition, billionaire tycoons such as Li Ka-shing, Hong Kong’s richest man, have entered the industry during that period.

Behind the recent flurry of activity is the Chinese government’s call in mid-2014 for local leasing companies to expand overseas and benefit from rising travel demand. Renting out planes to airlines has shown to be a stable business and is often more profitable than the carriers themselves.

“They want to grow big — and fast,” said Dewey Yee, head of aerospace finance and leasing advisory at Bridge Partners Capital in Hong Kong. “Aviation is really the only very, very long-term investment that you can make that gives you these really solid, steady returns.”

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