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The Daily Brief for Tuesday, 7 November 2017

US-China trade relations: Donald Trump may have come east in peace, but it won’t last, William Pesek writes. The US president remains determined to turn the clock back to 1985 when currency tweaks and tariffs bent everyone to Washington’s whims. Airplane manifests say much about what presidents are thinking when visiting a nation. Lots of business titans on board means one set of priorities; loads of national-security or human-rights types portend others. In the case of Trump’s arrival in Beijing on Wednesday, the tell is who’s not on Air Force One: China-bashing advisor Peter Navarro. It’s long been disturbing that an economist famed for a documentary titled Death by China has Trump’s ear on America’s most important economic relationship. Navarro and his trade-war-drum schtick being left behind suggests a measure of realpolitik has seeped into the Trump policy bubble. It probably won’t last, though. Navarro’s policy prescriptions may be back in favor once the negotiator-in-chief returns to Washington largely empty-handed and bombarded anew by swirling scandals.
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Philippines summit security: While one terror battle has ended, the next one looms in the shadows on the southern island of Mindanao, Bong S Sarmiento writes. Five months after the Islamic State-aligned Maute Group laid destructive siege to the southern city of Marawi, Manila announced on October 23 the end of operations to liberate the city from the militants. At the same time, it acknowledged that the tactical triumph will not eliminate IS’s ideology in the Philippines, and called for stronger regional cooperation to fight the rising threat the terror group poses to Southeast Asia as fighters return home from the battlefields of Iraq and Syria. The call comes ahead of this week’s Association of Southeast Asian Nations summit in Manila, where global leaders will be in attendance. Security forces have amped up their vigilance against a possible IS-inspired retaliatory attack on the global meeting. Some 60,000 police, soldiers and other law enforcement operatives have been deployed to secure heads of states, including US President Donald Trump, along with some 3,000 delegates who will hold crucial meetings on politics, security and economics.
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Central Asia corruption: As the investigation into US President Donald Trump’s alleged ties with Russia gains momentum, separate inquiries are being conducted in Europe and the US into a US$2.9 billion Azerbaijani money laundering operation and slush fund that paid off European politicians and financially benefited the country’s ruling elite for two years, Alan Boyd writes. Another US inquiry will decide the fate of US$850 million that was seized from Gulnara Karimova, daughter of the late Uzbek President Islam Karimova. It is allegedly bribe money paid by telecommunications firms for contracts. Former Soviet republics have funneled billions of dollars into lobbying activities since the end of the Cold War in an effort to influence the policies of Western governments, including sanctions imposed against their own corrupt actions. The US Foreign Agent Registration Act records 54 “foreign principals” from Georgia that have recruited lobbyists, law firms and publicists to represent their American interests. There are 44 from Azerbaijan, 34 from Kazakhstan, and 19 from Uzbekistan; Turkey and Afghanistan also have principals listed.
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Global economic analysis: The Phillips Curve – the supposed trade-off between unemployment and inflation — has gone unobserved for a disturbingly long period of time, David P Goldman writes. The Federal Reserve, the European Central Bank and the Bank of Japan set a 2% inflation rate as the goal of quantitative easing. According to the Phillips Curve model, 4.1% unemployment in the US (the lowest since 1969), and 5.7% in Germany, the lowest on record, should produce inflation. If labor supplies are scarce, the cost of labor is supposed to rise, and prices are supposed to go up. Except they don’t. In fact, we rarely see much of a relationship between inflation and unemployment, except in periods of severe recession, where prices fall and unemployment rises. These are brief episodes, though; there are others during which inflation and unemployment fall together. The past sixty years of data show no relationship at all.
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Syria-China diplomatic relations: As the Syrian government regains control over vast swaths of territory from ISIS and with de-escalation zones now established in four areas across the country, China’s cautious economic approach towards Syria seems to be slowly, but decisively, changing, Fadi Esber writes. The reconstruction of Syria will cost hundreds of billions of dollars, and China wants its share of the pie. In July, Beijing announced a US$2 billion dollar plan to build an industrial park in Syria for 150 Chinese companies, although few details about the project were revealed. Then, in August, Chinese companies participated in the 59th Damascus International Fair. That was preceded by a Syria Day Expo organized by the Syrian embassy in Beijing, with hundreds of Chinese specialists in attendance. More revealing, however, about China’s understanding of the situation on the ground – and its intentions to carve out a significant Chinese role in post-conflict Syria – was a recent visit by the Chinese ambassador in Syria to Manin, a small town just north of Damascus.
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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 inChina

China Digest for Tuesday, 7 November 2017

LeEco’s problems lie with management, says Sun Hongbin

Investing in LeEco remains logical, but the biggest problem with the company lies in its management, said Sun Hongbin, chairman of Sunac China, which had earlier invested in the company.

Evergrande introduces US$9.04bln third round investment

The Evergrande Group, China’s second-largest property developer by sales, said in an announcement that its indirect subsidiary Evergrande Real Estate has signed a capital increase agreement with six strategic investors to introduce a 60-billion-yuan third round investment, Yicai.com reported.

Kweichow Moutai limits production increase of Maotai liquor

Kweichow Moutai, the Chinese producer and seller of Maotai liquor, announced its sales plan for the year ahead on Monday, Yicai.com reported.

Gelonghui completes US$30.15mln in Series A financing

The Chinese online overseas investment publication Gelonghui recently secured 200 million yuan (US$30.15 million) in Series A financing, Tencent Technology reported on Monday. The latest valuation of the company was two billion yuan after the financing.

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.