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The Daily Brief for Monday, 13 March 2017

Federal Reserve raise: Whether the Federal Reserve raises the overnight rate to 1% from 0.75% tomorrow rather than at its May meeting, as expected earlier, is a matter of compelling interest in the financial world but it shouldn’t be, writes David P. Goldman. Economic data suggests that the transmission mechanism between monetary policy and the real economy is extremely loose, if not completely broken and the Fed might want to consider why its models have stopped working and think about devising better ones.

China’s space war: China’s military is developing powerful lasers, electromagnetic railguns and high-power microwave weapons for use in a future “light war” involving space-based attacks on satellites, writes Bill Gertz. Beijing’s push to produce so-called directed-energy weapons aims to neutralize America’s key strategic advantage: the web of intelligence, communication and navigation satellites enabling military strikes of unparalleled precision expeditionary warfare far from US shores.

Indonesian corruption scandal: A graft watchdog’s claim that politicians embezzled US$173 million from a state scheme may if proven represent Parliament’s largest ever skimming scam, reports John McBeth. The House Speaker, Justice Minister and 37 parliamentarians appear in a list of figures suspected of embezzling Rp2.3 trillion from an electronic identity card project in what the head of one corruption watchdog group called “a massive robbery of the national budget.”

SexyCyborg woos China: Naomi Wu, a 23-year-old from southern Chinese city of Shenzhen, who has been called the world’s sexiest hacker, is also known as SexyCyborg and her do-it-yourself videos have made her an online phenomenon. Johan Nylander writes that, despite the leather boots, stay-up stockings and miniskirts, her video clips are largely meant to inspire young women to go into technology, to code and to promote China as a hub for creative technology.

Abenomics and Japan: Japan Prime Minister Shinzo Abe’s leadership has earned him public support ratings near 60% but he hasn’t managed to pull the economy out of its multi-decade slump. Yet, argues Grant Newsham, although critics attack the prime minister about the apparent failure of Abenomics, it should be noted that none of his predecessors were any more successful on the economic front over the last 25 years.

Posted inBeijingChinaMiddle East

China Digest for Monday, 13 March 2017

Integrate civilian and military tech, says President Xi

President Xi Jinping called for the People’s Liberation Army (PLA) to speed up the adoption of new technologies at a speech during the NPC on Sunday, China News said. Xi was speaking to members of the PLA and he also called for a new partnership between military and civilian technologies, and urged the speeding up of integration between them.

Unified local GDP auditing methods to start by year’s end

Local government GDP auditing methods will be unified by 2020, with two balance sheets introduced across the country in stages, China Securities Journal reported on Sunday, citing Ning Jizhe, deputy director of the National Development and Reform Commission and the National Bureau of Statistics. The national assets and liabilities balance sheets will also be ready for use in 2017, while seven provinces in a pilot scheme are using the same natural resources balance sheet.

Capital liability ratio in 12 core SOEs over 80%

The 102 centrally administered State-owned Enterprises have an average liability ratio of 66.6% in 2016, a 0.1% drop compared to the previous year, China Securities Journal reported on Sunday, citing the chairman of the State Administration of State-owned Assets Xiao Yaqing. Four companies saw a debt level over 85%, while 12 of them had over 80%, it said. SOEs are barred from using such financing for expansion.

PBOC will not merge with three watchdogs: former deputy

The People’s Bank of China will not merge with the watchdogs for banking, securities and insurance to integrate regulation, Beijing Daily News reported on Saturday, citing a former central bank vice-chairwoman and the vice-chairwoman of the national legislature’s financial and economic committee Wu Xiaoling. Regulators cannot confine their scope by the license institutions hold, but by the nature of their actions and functions.

‘Irrational and abnormal’ ODI investments still an issue: SAFE chief

Pan Gongsheng, the chairman of State Administration of Foreign Exchange, said on Sunday that Chinese firms’ overseas direct investments (ODI) are on a whole “reasonable,” but some “irrational and abnormal” investments occur, reported Caixin on Sunday. Pan cited “irregularities” such as insufficient understanding of large-scale projects, pouring huge sums of money into non-core businesses and limited partnerships where the subsidiaries are larger than the parent company, reported Caixin. Pan also said China’s ODI had slowed down since the last quarter.

More prosecutions in Xu Xiang insider trader case

Accomplices associated with Xu Xiang, the hedge fund trader jailed last month for insider trading, will soon go on trial, the Supreme People’s Court said in Caixin on Sunday. The announcement from the country’s highest court meant that provincial courts can prosecute other suspects in the case. Xu, nicknamed the Carl Icahn of China, had collaborated with 13 listed companies to profit from stock price manipulation.