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The Daily Brief for Thursday, 24 August 2017

Korean Peninsula exercises: Australian Prime Minister Malcolm Turnbull has assured his American ally that the two sides are “attached at the hip,” Helen Clark writes. In that spirit, Australia has joined for the first time the Ulchi Freedom Guardian joint military exercises underway now between the US and South Korea to defend the latter from a North Korea attack. The exercises, scheduled to run from August 21-31, are the world’s biggest computerized command-and-control drill, with over 50,000 South Korean and 17,000 American soldiers participating. Australia is sending a couple dozen officers but no troops to the decades-old war games. It’s not clear, however, that the public would support Australia’s involvement in a US-led conflict with North Korea. The Iraq conflict, in which Australia provided air, maritime and Special Forces operations, was very unpopular.

Singapore succession risk: More than half of the leading 200 companies in Southeast Asia are controlled by a single family, but few have succession plans in place, Alan Boyd writes. Consequently, family feuds, while nothing new in the heady world of Southeast Asian business, are becoming an operational risk as the pioneering generation of 1950s entrepreneurs fades into history. A study by the Singapore Business School and DBS Bank reported that only about 40% of families in the island republic have appropriate succession plans. The concern is that family conglomerates control more than 60% of stock market listings, which is too much business clout to be riding on the outcome of potential court challenges.

‘Political pressure’ talks: Executives from more than a dozen top European companies in China met in Beijing last month to discuss concerns about Communist Party interference in their local operations, according to sources. One senior executive whose company was represented at the meeting said some companies were under “political pressure” to revise the terms of their joint ventures with state-owned partners to allow the party final say over business operations and investment decisions, Michael Martina writes. Companies in China, including foreign firms, are required by law to establish a party organization, a rule long regarded by many executives as symbolic rather than anything to worry about.

United Nations survey: The world body has released its Global Innovation Index 2017, Liu Hsiu Wen writes. Singapore is ranked seventh in the annual survey, making it the top place in Asia for innovation. South Korea follows closely as Asia’s runner-up, in 11th place overall. The index provides detailed metrics on the innovation performance of 127 countries and economies worldwide. The survey looks at a total of 81 indicators, including political environment, education, infrastructure and business sophistication.

India rights milestone: The Supreme Court’s 3-2 verdict this week abolishing instant “triple talaq” – the practice of nullifying a marriage by uttering “talaq” (divorce) three times – is a huge victory for millions of Muslim women, and for India’s judiciary and constitution, E Jaya Kumar writes. The five judges found the practice of instant triple talaq unconstitutional, arbitrary, and un-Islamic. The federal government was directed to legislate against triple talaq in six months and is already in the process of sending an advisory to states to ensure compliance. The court ruling saw a rare convergence of views, with voices across party lines welcoming it as historic.

Asia Times app: Asia Times has launched an app for both iOS- and Android-based devices that delivers the publication’s regular daily news, commentary, blogs and live coverage while also bringing readers added functionality. As we report here, 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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Posted inBeijingChengduChinaHong KongShanghaiWorld

China Digest for Thursday, 24 August 2017

Alibaba plans major expansion in Hong Kong

Hong Kong Chief Executive Carrie Lam Cheng Yuet-ngor visited the headquarters of Alibaba Group in Hangzhou and expressed a need to see more support from the company to promote Hong Kong’s technological sector, the Paper reported. Jack Ma, the founder of the e-commerce giant, said that the Group will help Hong Kong build up commercial infrastructure in trade, payment, finance, logistics and the investment sector to attract more young workers.

Deleveraging a high priority in central SOEs

China will further reduce leverage at central state-owned enterprises (SOEs) by providing more channels to reduce corporate debts and improve business performance, Sina Finance reported. In a State council meeting, Premier Li Keqiang said bringing down debt levels will be a top priority in ongoing national supply-side reform to help cut outdated capacity and control debt risks. Total net profits of central SOEs increased 16.4% year on year in the first seven months this year, compared to a 3.7% slump in 2016.

Third batch of pilot SOE reform kicks off

The National Development and Reform Commission has selected the third batch of state-owned enterprises for pilot mixed ownership reform, said Zhou Lisha, a deputy researcher at the State-owned Assets Supervision and Administration Commission, the Securities Daily reported. Chief economist at Founder Securities, Ren Zeping, thinks SOEs in the industry of oil and natural gas will be the focus of the new batch of SOE reform. SOEs in civil aviation, communication and military industry also have a great chance to be included.

Shanghai-Chengdu high-speed railway in works

Insiders from the railway sector said the Chinese government has launched new research on the viability of a Shanghai-Chengdu high-speed rail line, The Paper reported. The plan calls for the railway to be built along the Yangtze River and run at a speed of 350 km per hour. The trip from Chengdu to Shanghai is expected to be shortened by about 6 hours to 7 hours and 48 minutes.

China’s FDI in overseas real estate breaks US$15.8 billion

China’s outward investment in overseas real estate hit a record US$15.8 billion for the first half of the year, the second highest total ever, China News Service reported. As for investment destinations, Hong Kong ranked in first place with a total amount of US$5.4 billion, followed by the US and the UK, which have attracted US$4.2 billion and US$4 billion in Chinese capital respectively.

Anbang Life Insurance downgraded to AA+

The credit rating for Anbang Life Insurance Co Ltd has been downgraded by Dagong Global Credit Rating Co to AA+ from AAA, Sina finance reported. Dagong said in a statement that Anbang Life Insurance is facing growing debt repayment pressure and reduced wealth productivity as a result of liquidity strains and falling investment yields.

LeEco repaying debt by transferring venture shares

LeEco Mobile, the developer arm of LeEco’s mobile devices commissioned Lucky Clover Limited to transfer 6.1275% of its shares to one of of its suppliers, Xingke Electronic Technology, to help offset a 322.9-miilion-yuan debt. Dongfang Cheyun Information Technology Limited, which owns Yidao, LeEco’s ride-hailing app, will also transfer another 6.1275% of its shares to Xingke, offsetting 1.85 million yuan of the debt, Caixin reported.

Robotics industry gets a boost in Beijing

Beijing has set a goal to build a robot innovation center at a global level with a projected revenue of 60-billion-yuan by 2025, Caixin reported. The development plan released at the World Robot Conference said that the first stage will see 12 to 15 billion in revenue by cultivating dozens of leading companies and headquarters by 2020. China has already been one of the world’s largest robotics producers as the number of robots built for industrial use amounted to 720 thousand in 2016, one fourth of the global market.

Environment protection industry poised for rapid growth

The Ministry of Industry and Information Technology said that temporary management methods for the environmental protection equipment manufacturing industry have been published for public review, the Shanghai Securities Journal reported. The industry is expected to see ten leading companies grow to the ten-billion yuan level in market value, with a total output value projected to hit one trillion yuan (US$127.8 billion) by 2020, the report added.

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