Visits and Vehicles
China-Taiwan one nation: Ma Ying-jeou, Malaysia & Singapore leaders in China, Cambodia tourism boost, EVs in Vietnam & Thailand, Legacy car makers have serious trouble, US-EU Banks in trouble too
UPDATE: Former KMT leader Ma Ying-jeou said Tuesday that people from both sides of the Taiwan Strait belong to the same China. Ma, the first Taiwanese former KMT leader to visit China, made the statement during a visit to the mausoleum of Sun Yat-sen – one of the major figures of the Xinhai Revolution (1911) – in Nanjing (east).
Malaysia’s Prime Minister Datuk Seri Anwar Ibrahim and Singapore PM Lee Hsien Loong arrive for Boao Forum for Asia Annual Conference 2023 (BFA 2023) with large delegations.
Cambodia is preparing to host the 51st Meeting of the Greater Mekong Subregion (GMS) Tourism Working Group (TWG-51) and the Mekong Tourism Forum 2023 in Preah Sihanouk province in late April.
Vietnam’s EV maker is gearing up to expand into the United States, where it hopes its two electric SUV models will compete with legacy American brands. Thailand has reported EV registration for the month of January 2023 were recorded at 317,502 units, an increase of 39.48% yoy, and continues to rise.
Legacy car companies, Toyota, Volkswagen and Ford are ranked 1-3-6 in the world’s most indebted companies. The top ten is dominated by the US, Japan and Germany and in the petrol car, finance and media-communications sectors.
There are five main causes of the SVB collapse and the subsequent knock-on problems facing the US and global financial system. Some of the huge profits the financiers make from this system are funnelled back to buy support from US politicians to prevent adequate regulation, and to secure bail-outs when the system crashes.
China Taiwan people from the same nation
Taiwan’s former Kuomintang (KMT) leader Ma Ying-jeou said Tuesday that people from both sides of the Taiwan Strait belong to the same China. Ma, the first Taiwanese former president to visit China, made the statement during a visit to the mausoleum of Sun Yat-sen – one of the major figures of the Xinhai Revolution (1911) – in Nanjing (east).
The revolution ended centuries of dynastic rule in China and led to the creation of the Republic of China. Ma, former chairman of the Kuomintang (KMT) party, founded by Sun Yat-sen, while paying respects at his tomb, spoke about his hope for a shared future, where Taiwan and China work together for peace and avoid war.
Moreover, he underlined that “unification” was what all the Chinese people desired, and that 1992 Consensus – where both sides recognized that they were a part of the same China but with differing interpretations of what it meant – should be the base for peace.
Ma highlighted the good hospitality he received since his arrival in China on Monday and that he would pass on this goodwill to the Taiwanese people upon his return to the island. This was the first visit by a former Taiwanese president to China since KMT nationalists retreated to the island in 1949 after losing China’s civil war against the communists.
China and Taiwan experienced significant rapprochement during the presidency of Ma Ying-jeou between 2008 and 2016, to the point that he held a historic meeting in Singapore with his Chinese counterpart, Xi Jinping, in 2015.
It was the first such meeting during the more than 60 years of unilateral separation of the island from the Chinese mainland. In 2016, the Democratic Progressive Party won the Taiwanese elections, and since then tensions between Beijing and Taipei have increased.
The situation intensified last year with the visit to the island of the then-US House of Representatives Speaker Nancy Pelosi, to which the Chinese authorities had lodged strong protests. Taiwan has been a self-governing territory enjoying de facto independence since 1949, while Beijing continues to consider it a rebel province and has not ruled out exercising force for reunification.
Read full article here.
PM Anwar in China attends Boao Forum
Prime Minister Datuk Seri Anwar Ibrahim arrives today to attend the Boao Forum for Asia Annual Conference 2023 (BFA 2023) and kickstart his four-day official visit to China. Anwar is expected to arrive at the Boao International Airport tonight accompanied by Minister of Transport Anthony Loke and Minister of Local Government Development Nga Kor Ming.
The Prime Minister is scheduled to attend a joint meeting with the top leadership of China Communications Construction Company (CCCC), the contractor of Malaysia's mega rail project - East Coast Rail Link (ECRL).
On Thursday, Anwar is scheduled to deliver his speech at the BFA 2023, which is also attended by Chinese Premier of the State Council Li Qiang. Other world leaders attending the annual conference are Prime Minister of Singapore Lee Hsien Loong, Prime Minister of Spain Pedro Sanchez, Prime Minister of Ivory Coast Patrick Achi and Prime Minister of Kazakhstan Alikhan Smailov.
Also attending is Managing Director of the International Monetary Fund (IMF) Kristalina Georgieva.
Anwar will depart Hainan for Bejing on Thursday to continue his visit to the great wall country. The prime minister's official visit to China is his ninth international visit after being sworn in as the 10th Prime Minister last November. Last year, the total trade between both countries increased 15.6 per cent year-on-year to RM876 billion.
Themed "An Uncertain World: Solidarity and Cooperation for Development amid Challenges", the four day annual conference, beginning today, will include discussions and conferences on development and inclusiveness, efficiency and security, regional and global cooperation as well as discussions on the present and future with a view to promoting international cooperation and consolidating consensus.
Formed in 2001 to promote economic integration in the region, this year's BFA agenda will include four modules, namely Development and Inclusiveness; Efficiency and Security; Regional and Global; and Present and Future with the aim to encourage a sensible discussion of the relations between self and mutual, short-term and long-term interests, promoting international cooperation and consolidating consensus. -- Bernama
Read more here.
Singapore PM Lee starts week-long China visit
Prime Minister Lee Hsien Loong arrived in Guangzhou on Monday on his first trip to China in four years. The Singapore leader, accompanied by his wife and a delegation of about 50 Singapore officials, was greeted on the tarmac at Guangzhou Baiyun International Airport at around noon by Chinese officials bearing umbrellas under a persistent drizzle.
Among them were Guangdong vice-governor Zhang Xin, China’s Ambassador to Singapore Sun Haiyan, Guangdong Foreign Affairs Office director-general Liu Chenzi and Guangzhou vice-mayor Tan Ping.
The southern city of Guangzhou in Guangdong province is PM Lee’s first stop on his week-long visit to China, which will also take him to Hainan where he will speak at the Boao Forum for Asia Annual Conference, as well as Beijing.
He is scheduled to meet President Xi Jinping and newly minted Premier Li Qiang, who will host a welcome ceremony and a lunch banquet for the Singapore delegation in the Chinese capital city.
In Guangzhou on Monday, PM Lee first visited WeRide, one of China’s leading autonomous driving companies.
Founded in 2017 and now valued at US$5.1 billion (S$6.8 billion), the start-up has investments from Singapore’s SMRT urban mobility services subsidiary Strides, and K3 Ventures, a tech venture capital firm run by Mr Kuok Meng Xiong, the grandson of business tycoon Robert Kuok.
The company’s founder and chief executive Tony Han briefed PM Lee on WeRide’s operations and took him on a tour in a “robo-bus”, which is part of WeRide’s fleet that has been deployed on the roads of Guangzhou to test its autonomous public transport capabilities.
Read more here.
Phnom Penh hosts Mekong tourism forum
Cambodia is preparing to host the 51st Meeting of the Greater Mekong Subregion (GMS) Tourism Working Group (TWG-51) and the Mekong Tourism Forum 2023 in Preah Sihanouk province in late April. The minister of tourism expects that the event will be an opportunity to help promote and attract more international tourists.
At a March 27 inter-ministerial committee meeting to prepare for the events, Minister of Tourism Thong Khon said he considered the event a ‘golden opportunity’ to attract more international visitors by sharing the Kingdom’s tourism potential to the regional delegates who will attend.
Khon said it was of the utmost importance that the attendees gained an understanding of the key points of this year’s “Visit Cambodia 2023” campaign, and learned about the Kingdom’s preparations to host the SEA Games and ASEAN Para Games.
Thong Rathasak, head of the ministry’s General Department of Tourism Development and International Cooperation, said the TWG-51 meeting would take place on April 25, with about 80 participants from Cambodia’s GMS partners – China, Laos, Myanmar, Thailand and Vietnam – expected to attend. He added that the Mekong Tourism Forum would be held the following day, with up to 180 guests expected.
“They will include delegates from the six GMS member states, representatives from the private sector, and around 30 domestic and international journalists,” he explained.
“There will also be presentations by tourism specialists from many countries,” he said. “An island visit is scheduled to take place on April 27 in order to showcase some of the most popular tourist destinations in Preah Sihanouk province.”
“Aside from this forum, I also expect the visit Cambodia 2023 campaign and the upcoming SEA Games and ASEAN Para Games to boost the number of foreign tourists we will greet this coming year,” he added.
Read more here.
VinFast Rolls Out VF9 Electric SUV
The country’s sole EV maker is gearing up to expand into the United States, where it hopes its two electric SUV models will compete with legacy American brands. Vietnamese carmaker VinFast said on Thursday it will begin delivering its new electric sport utility vehicles (SUVs) to local customers this week and will target overseas deliveries in the coming months.
VinFast, which began operations in 2019, is gearing up to expand in the United States, where it hopes its two electric SUV models can compete with legacy automakers.
“After Vietnam, VinFast expects to export the first batch of VF9 to international markets in the coming months,” VinFast said in a statement, without providing a specific timeline for deliveries of the new model.
The VF9 model was initially scheduled to debut at the beginning of this year.
The company currently sells the VF8 model of SUV. These started to ship last year and deliveries to customers began this month. The company has said it would ship the second batch to the US in the second quarter of 2023.
VinFast, backed by Vietnam’s biggest of conglomerate Vingroup JSC, is the country’s sole EV maker.
As of December last year, VinFast said it secured 55,000 orders globally, of which 12,000 were from the US market.
Read more here.
Thailand EV registrations surge in January 2023
Thailand has reported EV registration for the month of January 2023 were recorded at 317,502 units, an increase of 39.48% yoy, and continues to rise. This is a stepping stone to Thailand’s becoming a low-carbon society.
In February 2023, the number continued to rise to 331,885. Hybrid electric vehicles (HEV) recorded the most sales, which totaled 257,726 and 265,475 in January and February respectively, followed by plug-in hybrid electric vehicle (PHEV), totaled 43,297 and 44,535 in January and February respectively. Registration of battery electric vehicle (BEV) in January is recorded at 16,479 units, a leap increase of 286.83% from the same period of last year (4,260 units), while in February 2023, BEV sales totaled 21,875 units.
According to the Government Spokesperson, the Prime Minister commits to drive forward economic development in parallel with national development and environment protection in a sustainable manner. The Government has a policy to promote domestic manufacturing and use of EVs to channel Thailand toward a low-carbon society and the region’s EV manufacturing hub.
Read more here.
The World's Most Indebted Companies 2023
How much is too much? Loans and bonds can be used sensibly to invest but too much debt can be catastrophic for a company, especially if the economy goes south. Expansion, diversification, growth: these things cost money. After the 2007-2009 global financial crisis, there was a universal imperative: get out of debt. The opposite happened. Central banks around the globe pushed interest rates to historically low levels to boost the economy, and businesses that borrowed money for years to either stay afloat, refinance their debt or buy back their shares did it again.
Toyota Motor Corporation (Japan, debt US$217 Billion)
Evergrande Group (China, debt US$174 Billion)
Volkswagen AG (Germany, debt US$166 Billion)
Verizon Communications (USA, debt US$151 Billion)
Deutsche Bank (Germany, debt US$150 Billion)
Ford Motor Company (USA, debt US$139 Billion)
Softbank (Japan, debt US$138 Billion)
AT&T (USA, debt US$136 Billion)
Deutsche Telekom AG (Germany, debt US$115 Billion)
Électricité de France (France, debt US$108 Billion)
How much did they borrow? According to data by the Institute of International Finance (IIF) and S&P Global, the debt of non-financial corporations has increased from 75% of total global gross domestic product (GDP) in 2007 to 98% last year (which along with the debt of governments, households and financial corporation brings the total aggregate worldwide debt to a record $300 trillion, a 349% leverage on the gross domestic product).
Not only has corporate debt grown, the quality of that debt has gotten dramatically worse. From the recovery period beginning in 2010 until today, S&P estimates that the share of investment-grade bonds fell to about 76% from over 90% during the previous two post-financial crises. Junk bonds offer a higher return, but have a higher risk of default. The issuer might not be able to pay interest and principal in a timely manner, or ever. By some estimates, at the current pace, speculative-grade non-financial global debt could soon surpass investment grade—the implication being that as we try to fix the current crises we might be creating conditions for crises down the road. Furthermore, as risky credit market segments such as high-yield bonds and leveraged loans have expanded, borrowers’ credit quality, underwriting standards and investor protections have weakened.
As all this was taking place, economists were sounding the alarm louder and louder: the debt buildup and the resulting higher interest charges can become an overwhelming burden for companies (as well as governments and households), making them vulnerable to tighter monetary policies and pushing them—and everyone with them—closer to economic collapse.
A new machine-learning model developed by the IMF—based on 50 indicators going back to 1995—estimates that out of 55 advanced and emerging economies that 38 are currently at medium risk and seven are at high risk of corporate distress spilling over into systemic economic risk. Not only are more countries at high risk of a debt crisis than before the pandemic, but the number of large economies in this category has also grown: it now accounts for 21% of world GDP in the third quarter of 2022, up from just 1% at the end of 2019.
Read More here.
The Financial Crisis of 2023: Protecting Big Finance, Coming and Going
There needs to be a safe place for businesses to place their reserves and working capital. There are five main causes of the SVB collapse and the subsequent knock-on problems facing the US and global financial system: the Federal Reserve’s anti-inflation obsession causing it to raise interest rates too high and too fast; the inherent fragility of banking which for centuries has periodically erupted in crises; inadequate regulation of this fragile system which often leads to high profits that accrue to bankers’ and their wealthy owners; the corruption and self-dealing that often result from banks’ insufficient supervision; and the lack of public alternatives for financial institutions and services that could perform many of the key functions of banking and finance with less risk and without the private financiers taking their cut. Some of the huge profits the financiers make from this system are funneled back to buy support from the politicians to prevent adequate regulation, and to secure bail-outs when the system crashes.
The rapid increase in central bank interest rates to fight inflation is a major precipitating factor driving the financial problems facing the banks today. The more than 4 percentage point increase in the Fed’s rates in the last year rapidly led the prices of Treasury bonds and mortgage-backed securities to plummet, wiping billions off the balance sheets of SVP’s books. When SVB sold these to cover deposit losses from big venture capital firms and their start-ups, SVB had to sell bonds and realize these losses, cutting deeply into SVB’s already insufficient capital levels.
Importantly, though, the problem of low-interest rate government bonds and mortgage securities threatened by the Fed’s excessive tightening is not confined to SVB. The potential losses on banks’ balance sheets from the interest rate hikes have been estimated to be as much as $1 trillion if these had to be marked down. This interest rate overshooting by the Fed is, as my colleague Bob Pollin and his co-author Hannae Bouazza have shown, due to their wrong-headed commitment to driving inflation down to its arbitrary 2% target.
Many critics have pointed to the Trump era partial deregulation of medium-sized banks (less than $250 billion in assets) which contributed to SVB’s failure: SVB’s capital and liquidity requirements were reduced, mandatory stress tests were eliminated, the rules against proprietary trading (the Volcker Rule) was suspended, and the need to prepare plans in case the bank became insolvent (so-called ‘living wills”) was eliminated. These stricter rules would have made it much more likely that the problems with SVB would have been dealt with by the Federal Reserve and FDIC sooner and in a much less disruptive way. Others have pointed to the lack of supervision from the San Francisco Regional Federal Reserve Bank which was supposed to be supervising SVB. The fact that SVB’s CEO Greg Becker was on the board of the San Francisco Federal Reserve points to possible serious conflicts of interest between banker influence on the Fed and the ability of the Fed to serve the public interest.
The recent crisis highlights a structural problem in our current financial system: there needs to be a safe place for businesses to place their reserves and working capital without providing funds to speculative financiers, and without fear that their deposits will be wiped out in a bank failure. That, among other reasons, is why we need publicly provided accounts where households and businesses can hold their money, risk-free. A healthy economy needs a set of basic institutions that provide financial services to families and businesses that facilitate their productive and necessary activities. The problem with private, more speculative, banks like the ones that dominate our economy is that they provide poor and costly services to most families and smaller businesses, and when they do, such as offer deposit accounts, they often put these at risk by engaging in highly leveraged and overly risky activities that often have little social value.
Read full article here.