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The Daily Brief for Wednesday, 2 August 2017

Identity card scam: A spiraling US$172 million parliamentary scandal has tainted Indonesian President Joko Widodo while boosting the electoral prospects of comparatively clean opposition leader Prabowo Subianto, who has his eye on another bid for the presidency in 2019, John McBeth writes. Heeding widespread public condemnation, Prabowo’s opposition party has pulled out of Parliament’s critical inquiry into the Anti-Corruption Commission (KPK), saying it was the “wrong step” and would only weaken the fight against corruption.

Abuse of power: China’s anti-graft watchdog said one of its former senior inspectors, Zhang Huawei, had been expelled from the Communist Party after an investigation found he had taken bribes, Philp Wen writes. The Central Commission for Discipline Inspection said in a statement on its website that the vice-ministerial level inspector from the Central Inspection Team had “lost his ideals and convictions,” and damaged the reputation of the commission.

New Russia sanctions: The “free trade” wing of the Republican Party has taken the United States into a trade war that it cannot win, David P Goldman contends. The new sanctions passed by the House and Senate last week force Europe into a de facto alliance with Russia against the United States, and by extension with China as well. It is the dumbest and most self-destructive act of economic self-harm since the United States de-linked the dollar from gold on August 15, 1971, and it will have devastating consequences.

Aiming to please: Apple Inc is binding itself more closely to China as its share of the world’s biggest smartphone market slips and it becomes more reliant on selling services that require government approval, Adam Jourdan and Pei Li write. A flurry of recent action by Apple underlines its push to get on the right side of China’s notoriously tough tech regulators, as it looks to revive sales there.

China deleveraging trend: Highly leveraged large-caps are massively outperforming the market composite index, David P Goldman writes. As investors show confidence in China’s approach to gradual deleveraging, debt-burdened state-owned enterprises have turned in torrid returns on the Chinese stock market during the past several weeks.

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.

Asia Times Financial is now live. Linking accurate news, insightful analysis and local knowledge with the ATF China Bond 50 Index, the world's first benchmark cross sector Chinese Bond Indices. Read ATF now. 

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China Digest for Wednesday, 2 August 2017

Xi touts combat readiness in PLA training

President Xi Jinping said on Tuesday that the People’s Liberation Army (PLA) will focus on real combat capability and promote civil-military integration, the Shanghai Securities News reported. Xi, who is also chairman of the Central Military Commission, delivered the keynote speech in celebration of the 90th anniversary of the PLA in Beijing. Military business is projected to see a major boost in the latter half of this year, the report added.

BRICS meeting kicks off in Shanghai

Trade ministers from BRICS countries were to discuss trade facilitation, economic and technological cooperation, capacity building and the multilateral trade system at their seventh annual meeting in Shanghai, Sina Finance reported. Zhong Shan, chairman of the two-day meeting, said that Brazil, Russia, India, China and South Africa should support the multilateral trade system to safeguard emerging markets and the mutual benefits of developing countries.

Court orders further asset freeze for Jia Yueting

A Beijing court has approved the China Construction Bank’s application to freeze 250 million yuan (US$37.2 million) in assets of former LeEco chairman Jia Yueting, Caixin reported. In early July a Shanghai court also approved China Merchants Bank’s application to freeze 1.237 billion yuan in assets belonging to Jia, Jia’s wife and three LeEco affiliates.

Tencent’s market value hits all-time high

Tencent shares broke yet another historical record on Tuesday, hitting the three trillion Hong Kong dollars threshold, Caixin reported. The tech giant’s shares already increased by 11.6% in July, and have broke historical records nine straight times, the report added.

Cities cite plans to boost rental housing

Guangzhou, Foshan, Wuhan and several other pilot cities will introduce plans to increase their housing rental market supply, Yicai reported. Plans included speeding up the construction of rental housing, protecting both leasing and renting parities, and creating a system that guarantees the same rights when renting and purchasing a property, it added.

Taiyuan city to cut all coal use by October

Taiyuan, the largest city in Shanxi province, has announced it will replace all use of coal with clean energy by October this year, the Paper reported. The rapid upgrade will also remove coal usage in agricultural production and commercial activities, the report added.

Sichuan issues US$4.47 billion in local bonds

Approved by the Ministry of Finance, Sichuan Province issued local government bonds on the Shenzhen Stock Exchange on Tuesday, totaling 30 billion yuan (US$4.47 billion), Sina Finance reported. Twelve securities firms, including CITIC Securities and Bank of China International Securities, are underwriters for the pilot project. Individuals can also buy local government bonds, a move which aims to decrease financing costs and improve liquidity.

China’s ‘Silicon Valley’ hits 9% GDP growth

Chengdu Hi-tech Industrial Development Zone, hailed as the “Silicon Valley” of western China, saw a gross domestic production of 70.11 billion yuan in the first half of 2017, a 9% year on year increase, Yicai reported. The three pillar industries — economic, electronic information and bio-pharmaceutical — are driving growth in the pilot zone.

Tourism trade surplus projected to increase

Inbound tourists made 69.5 million trips, while 62 million overseas trips were recorded by Chinese tourists in the first half of 2017, Xinhua Finance reported, citing data from the China National Tourism Administration (CNTA). Insiders said that the tourism trade surplus is expected to increase as China’s inbound tourism market has been climbing following the global financial crisis, while outbound tourism has slowed after rapid expansion.

Asia Times Financial is now live. Linking accurate news, insightful analysis and local knowledge with the ATF China Bond 50 Index, the world's first benchmark cross sector Chinese Bond Indices. Read ATF now.