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The Daily Brief for Thursday, 27 July 2017

Japan’s inflation hunt: For nearly two decades, Japan has tried to generate inflation because rising consumer prices, Tokyo officialdom says, will restore the country’s pre-1990s greatness and position it to take on China. William Pesek examines this strategy by asking if the government has properly considered the most important question: What happens when Japan actually gets some inflation?

Indian’s political chaos: India’s opposition looks to be in disarray after possible prime ministerial candidate, Nitish Kumar, stepped down as chief minister of Bihar on Wednesday, dumped his scandal-tainted coalition partner and formed a new government with the support of a rival. E Jaya Kumar writes that Nitish, who took his oath as chief minister for the sixth time, now must prove he can command a majority and it is not going to be easy.

Spied become spies: For years China has complained about America’s close-in surveillance of its coastline, which has led to confrontations such as the one last week when Chinese planes intercepted a US Navy surveillance aircraft over the East China Sea. Ironically, writes Todd Crowell, at the same time Beijing was complaining about American spying, its rapidly growing fleet of intelligence-gathering spy ships have also been up and close eavesdropping on US missile tests and allied maneuvers.

Temple Mount riots: This week Palestinians protested at the Haram-al-Sharif, or the Temple Mount to Christians and Jews, about the presence of metal detectors at the entrance to the al-Aqsa mosque. David Goldman argues that the dispute is because much of the Arab world clings to the fantasy that if the Jews do not control the Temple Mount they really have not returned to Zion, and their presence in the surrounding city of Jerusalem and country of Israel must be a temporary aberration.

Beijing-Hanoi energy wars? A reported threat of force from Beijing against Hanoi’s energy exploration in the South China Sea threatens to douse recently warming relations, reports Helen Clark. China has previously intimidated all other multinational and state-run oil and gas companies to leave the disputed maritime area — save the US’s Exxon-Mobil, until recently run by US Secretary of State Rex Tillerson — but has never before, in recent years, explicitly threatened force over energy prospecting.

Asia Times app: The Asia Times has launched an app for both iOS- and Android-based devices that will deliver the publication’s regular daily news, commentary, blogs and live coverage while also bringing readers added functionality. Asia Times Staff report that the app, launched on July 25, includes content notification, share and save functions and is free to download from both the Apple Store and Google Play.

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China Digest for Thursday, 27 July 2017

US$416 million deal for Global Eagle scuppered

HNA Group Co’s US$416 million deal for Global Eagle Entertainment, the world’s largest in-flight services provider, has been called off after failing to pass a US national security panel, Caixin reported. Global Eagle Entertainment said in a regulatory filing that the Hainan-based conglomerate’s deal had failed to obtain clearance from the Committee on Foreign Investment in the US, the report added.

CSRC to attract long-term capital into the market

A recently concluded work conference by the China Securities and Regulatory Commission has called for a greater infusion of long-term capital in the market, Yicai reported. The move is seen as welcome news for mainland-listed A shares where incremental funding has been lacking in the capital markets, the report said. As for CSRC, long-term capital offers the possibility of deleveraging without adding to the risk of financial bubbles, the report added.

Per capita online lending amounts shrink

Ppdai.com, one of the largest online lending platforms, said that 98.6% of loans issued in Q2 were below 10,000 yuan, while 78% were below 3,000 yuan, Yicai reported. Per capita loan amounts shrank to 65,721.9 yuan in June, compared to May, as the turnover slid due to business rectification.

Central SOE reform on track for 2017

State-owned enterprises (SOEs) under central government supervision will complete mixed ownership reform by the end of 2017, the Shanghai Securities Daily reported. The reforms will involve 3,200 subsidiaries of 69 central SOEs for a total 8 trillion yuan (US$1.18 trillion) in assets. More than 92% of subsidiaries under 101 central SOEs were transformed into limited companies in 2016 by the State-owned Assets Supervision and Administration Commission.

CSRC clarifies focus on direct financing

The China Securities and Regulatory Commission said on Wednesday that the focus on developing direct financing as a priority for the securities watchdog should not be mistaken as putting IPOs at the forefront, the Paper reported. Direct financing involves share and bond financing more than ten times the scale of IPOs, whereas IPOs are just a subset of share financing, the report added.

Shenzhen, Shanghai and Dongguan top competitive list

The General Administration of Customs said that Shenzhen, Shanghai and the southeast coastal city of Dongguan ranked as the top three cities respectively on the 2016 foreign trade competitiveness list, the National Business Daily reported. All eight cities on the top ten list excluding Beijing and Tianjin were coastal cities, four of which are located in southeast Guangdong Province.

China surpasses the US in Mideast investment

With the development of the Belt and Road initiative, China has become the top investor in the Middle East region, according to a new report by the Arab Investment and Export Credit Guarantee Corp, Caixin reported. China’s investment in the Middle East to date has reached US$29.5 billion, accounting for 31.9% of all foreign investment in the region. Comparatively, the US is third with 7.6% of all foreign investment (US$7 billion), coming after the UAE at 16.4% (US$15.2 billion).

CIER index indicates improved employment

China continued to see improvement in employment conditions in the second quarter of 2017, the Economic Information Daily reported, citing the China Institute for Employment Research (CIER) index. The average CIER index increased year on year in June to 2.26, with large enterprises recording 2.46 and around 1.0 for small and micro enterprises. An index of above 1.0 means job supply overweighs demand, while below 1.0 indicates the opposite.

Online gaming hits US$14.78 billion in revenue

The number of online gaming users continues to grow, topping 507 million in the first half of this year, a 3.6% year on year increase, the Shanghai Securities Daily reported, citing figures from the China Digital Entertainment Congress. Total sales revenue amounted to 99.79 billion yuan, a staggering 26.7% year on year increase. Meanwhile, sales revenue for online gaming based on the Chinese intellectual property market was 69.37 billion yuan, a 21.6% yearly increase.

Ride-share CEO to leave by September

Peng Gang, CEO of Yidao Yongche, a premium ride-sharing platform, is set to leave by the start of September, according to the Paper, citing anonymous sources. The company was a former LeEco affiliate and has been besieged with financial issues like LeEco.