Is Trump insane? Escalating trade tension woos equity bears to Asia

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Stocks fall amid fresh tensions in US-China trade war

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KUALA LUMPUR: Asian markets started the week on a weak note amid escalating trade war concerns after the US and China announced plans for additional tariffs against each other.

Locally, the FBM KLCI stayed in negative territory for the whole of yesterday, before paring losses to close 8.8 points or 0.55% lower at 1,600.53 points. Before the closing, the index hovered below 1,595, falling 1.17% to an intraday low of 1,590.51.

Despite the fall, the local index was among the least affected by the regional selldown, compared with other Asian indices. The biggest loser among the regional indices was Japan’s Nikkei 225, falling 2.17% to 20,261.04. This was followed by Hong Kong’s Hang Seng Index and the Taiwan Stock Exchange, down 1.91% and 1.74% respectively. India’s Sensex notably closed 2.16% higher.

In Southeast Asia, Singapore’s Straits Times Index was the biggest decliner, down 1.45% at 3,065.33, and the Jakarta Composite index closed 0.66% lower at 6,214.51.

Last Friday, US President Donald Trump announced an additional duty on some US$550 billion worth of targeted Chinese goods, following China’s move to hike trade levies on US$75 billion worth of US goods.

Trump said US tariffs on US$250 billion of Chinese imports will increase from 25% to 30% on Oct 1, while an additional 5% tax on US$300 billion worth of Chinese goods — raising the tariff to 15% from 10% — starts on Sept 1.

The president made it clear that the US was responding to China’s threat of additional tariffs on US$75 billion of goods including soybeans, automobiles and oil.

“This looks like a tit-for-tat [response] and I don’t see an easy resolution to the trade war, as there seems to be no middle ground between the US and China. It is very unsettling for the market because there is no direction from day to day,” said Inter-Pacific Securities Sdn Bhd research head Pong Teng Siew.

However, the tensions eased a bit towards the later part of yesterday, as Chinese Vice Premier Liu He said China was willing to resolve the trade dispute through calm negotiations, stating the nation was against the escalation of the conflict.

Trump responded positively to China’s suggestion and, on the sidelines of a summit in France, had hailed Chinese President Xi Jinping as a great leader and welcomed the latter’s desire for calm negotiations.

It remains to be seen how the trade dispute will be resolved, given the constant retaliatory tariffs between the two economic behemoths since early last year.

Several trade talks between the two nations have not brought any solutions to the trade war, still affecting investor sentiments towards global markets. For the KLCI, the trade war remains a major factor affecting analysts’ forecasts.

Kenanga Research said the index’s underlying trend remains bearish but does not discount the possibility of a technical rebound as the KLCI has been in oversold territory for about a month. “Look out for overhead resistance levels at 1,630 and 1,650. If selling pressure continues, the key support levels to keep an eye on are 1,570 and 1,550,” Kenanga Research wrote in a note yesterday. - Source link


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Clout eroded as US shirks intl duties

I think it's necessary to include something Liu once said that also applies here, “The world needs a new America. It needs an America that is free of prejudice and intolerance. It needs an America that understands respect, that matches words with deeds, that understands the principles of benevolence, righteousness, propriety, wisdom, and faithfulness. The world would be lucky if the new America could become such a country.”

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The past few months have been sad and depressing for those who live in Hong Kong. The safety guaranteed on the streets of Beijing and Xi'an should be available to the people of Hong Kong. China should not be asked to compromise its sovereignty. If Americans want to boycott anyone, they should do so with their politicians who support the Hong Kong unrest.

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Many Hongkongers are confusing right from wrong while Western public opinion constantly delivers the ideological energy that the radical protesters need. The West has shed no tears for Iraq, Syria and Ukraine, which had gone through similar hardships. Now, it is turning Hong Kong into the forefront of the struggle with China, and, as usual, they will shed no tears for the city's misery.

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Resolve race, religion and education to aspire for a better, the real new Malaysia

https://youtu.be/ZGDwQk_7DXA

The Edge Special Report: The Real New Malaysia

A short year since the first change in government gave the people hope for a resetting of the national direction, grave doubts about the pace of scope of reforms are clouding the mood for Merdeka Day.

The risk of political instability, economic pain for modest income-earners and worsening communal relations have left many wondering what has gone wrong with the dream of a New Malaysia.

In our Special Report this issue in conjunction with Merdeka, find out what the country’s young people are wishing for the nation amid the cacophony of noises. Contributors include co-founder of #Undi18 Qyira Yusri, Zahirah Zulkifly from Teach For Malaysia and lawyer Melissa Sasidaran, among others.

On the economic front, the country is better off today than decades ago, but the income gap between the B40, M40 and T20 has actually grown. This underscores the fact that economic growth has not been equally distributed to all levels of society.

Of concern is whether there will be sustained income and unemployment growth for all segments of society, especially the lower and middle-income groups.

Then there is the issue of navigating the country’s economy to the right path towards new growth engines that is sustainable and inclusive.

This would mean addressing the various challenges facing the country such as low productivity growth and capital efficiency, continued non-optimal investment in capital-intensive and value-added industries and automation, skills gap for the future workforce, among others.

My aspirations for our 62nd Merdeka

SIXTY-TWO years ago in 1957, Malaya gained independence. The new nation was blessed with a multiracial and multi-religious society and abundant natural resources and natural beauty.

There were serious challenges facing the new nation then, but we were blessed with honest, strong, competent and dedicated founding fathers and able leaders who provided good governance, set up credible national institutions like parliament, the judiciary, security and civil services.

Most importantly, poverty, which was widespread at independence, was considerably reduced as we moved forward, thanks to assertive rural development policies.

The country was also blessed with high economic growth and dubbed a tiger economy. There was little corruption and cronyism for many years after Merdeka.

The economy has since grown faster and developed more strongly in the last 61 years, and the country has progressed in peace and harmony except for the aberration of the 1969 riots.

We were more united then and shared a strong national family spirit. We emphasised and enjoyed our commonality and universality as Malayan and then as Malaysians.

After 60 years of being governed by one political party, we realised that we had been going off the track with rising corruption, cronyism and fracturing national unity, religious intolerance, racism and widening income inequality.

That was when we as a nation said “enough is enough” and elected a new government in our uniquely democratic Malaysian way. Thank God for the fundamental change and transition towards greater socioeconomic, political and institutional reforms and revitalisation of our country under the Pakatan Harapan government.

But we have to work harder to stick to the straight and narrow path and not go off the rails again.

So, on this auspicious 62nd Merdeka Day anniversary, can we all resolve to develop a new national consensus and mould a New Malaysia Policy (NMP)?

To do this, we need to:

1. Apply the NEP to all Malaysians regardless of race or religion. Make the NEP a needs-based socioeconomic policy and end the race-based policy as practised now. This change in policy will remove the sense of alienation that most non-Malays and even many neglected bumiputra now feel;

2. Show greater priority in increasing the opportunities for the B40 groups of all races to earn higher incomes through better and more skills-based education and training programmes;

3. Reject compulsory training in some non-academic studies that are not directly related to improving the present generally low quality of education at almost all levels. Provide more technical and vocational training and use English to teach science subjects. This is essential to make our graduates more employable and get a more rounded education;

4. There should be equal business and employment opportunities in both the government and private sectors. The civil service and business sectors have to be more multiracial in their employment make-up. One way to encourage more multiracial ownership and balanced employment in the private sector in the context of the new policy of “Shared Prosperity” would be to provide new tax incentives in Budget 2020;

5. National schools could teach our mother tongues to encourage higher multiracial attendance. The current perception of national schools being Islamic schools needs to be corrected. They could then become schools of choice;

6. The present campaign against corruption, cronyism and money politics must be stepped up. Continuation of any elements of these very bad practices will undermine national interest and the public’s well-being and welfare;

7. The government must take a harder stand against hate speech and those who promote racial and religious conflict. Foreign speakers and external financing that promote social unrest should be dealt with more sternly and quickly. The government should not protect these undesirable troublemakers, both foreign and local, who can cause major disunity and instability;

8. Public institutions should be further strengthened and made more independent of any political interference. This is essential to safeguard the integrity and sustainability and, indeed, the very sovereignty of our nation;

9. With climate change and global warming becoming more critical, we must not look at short-term profits and neglect the longer-term devastation of Mother Earth; and

10. As far as possible, we should preach and practise universal human rights in a more sincere and serious way. We can always protect our religious and cultural values and adopt human rights at the same time.

On our 62nd Merdeka Day anniversary, let us all pledge to protect our precious Constitution, live by the principles of the Rukun Negara and resolve to aspire for a better Malaysia.

May God continue to bless our beloved country and people. Selamat Hari Merdeka 2019.

TAN SRI RAMON NAVARATNAM, Chairman Asli Centre of Public Policy Studies - Source link

 
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US divides China by playing risky Taiwan card with arms sales that will lead to serious consequences and puts Taiwan at risk

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White House playing wrong card in its risky game with China

Following its $2.2 billion arms deal with Taiwan that was announced on July 9, the United States Department of State has reportedly "informally" notified corresponding House and Senate committees that it supports the sale of F-16 fighter jets to the island.

Not surprisingly, the Chinese government has lodged "solemn representations" against the $8 billion deal, as it has each time arms sales to the island have been proposed or carried out.

That is because they seriously violate the one-China principle and the three China-US joint communiqués, especially the Aug 17, 1982, communiqué, and interfere in China's internal affairs and undermine China's sovereignty and security interests, as the Chinese Foreign Ministry pointed out on Monday.

Of course, should the deal get the green light and be inked by both Washington and Taipei, the actual delivery will not take place for several years.

Even if they were to be delivered immediately, 66 F-16s will do very little to change the military imbalance between the two sides of the Taiwan Straits.

Given the mainland's asymmetrical and constantly enlarging military advantage against Taiwan, rather than constituting a severe security challenge to the mainland, the surplus F-16s to be sold to Taiwan represent a matter of principle in Beijing's eyes. It holds sovereignty over Taiwan to be a "core interest" as well as a diplomatic redline in its relations with foreign countries.

Not to mention there is the legitimate concern that the Washington may be employing the arms sales to Taiwan, along with the ongoing protests in the Hong Kong Special Administrative Region, as bargaining chips in its trade talks with Beijing.

However, playing the Taiwan card will more likely than not ruin the prospect of a deal rather than facilitate it. As Beijing has repeatedly stated, a deal will not be made at the expense of such a key national interest.

The only thing the proposed arms sale can do is to send what Washington has time and again been warned are the "wrong messages" to Taipei, encouraging it to edge further toward a military showdown with the mainland, the outcome of which is easily predictable. Such a scenario would be detrimental to Taiwan, the mainland and the US.

Given it announced it would impose sanctions on the companies involved in the July deal, Beijing's response to the latest arms sales has actually been disproportionally restrained so far considering the severity of the matter.

But Washington should stop its grave interference in China's internal affairs, cease selling arms to the island and end all military contacts with it, otherwise China will have to take measures to safeguard its interests depending on how the situation develops. Source link

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US arms sales to Taiwan will lead to serious consequences 

 

Gun and Freedom

US President Donald Trump confirmed Sunday that he has approved the sale of $8 billion worth of F-16V fighter jets to Taiwan. According to reports, the arms sales involved 66 fighters of this type, and it was believed that the deal will pass smoothly in US Congress.

It would be the largest single US arms sale to Taiwan in recent years. In 1992, the Bush administration decided to sell 150 F-16A/B fighter jets worth $6 billion to Taiwan. That deal wreaked havoc on Sino-US relations.

Objectively, with the PLA's combat capability constantly increasing, even if Taiwan spends all defense budgets to buy US weapons, it will have no real impact on the military situation across the Taiwan Straits. Taiwan is no longer a military rival of the Chinese mainland. The PLA has the ability to disarm the Taiwan military in a very short time. US arms sales to Taiwan cannot change this basic reality.

However, US arms sales to Taiwan have become the biggest link in strengthening political relations between the US and the island of Taiwan.

Beijing has been consistently opposing US arms sales to Taiwan. This time the Trump administration is doing what the Bush administration did 27 years ago, and it comes at a time of tensions between China and the US. It is expected that China will take strong countermeasures.

The Chinese mainland can take steps in two directions. First, it can crank up military pressure on Taiwan, so that it will become a political liability for Tsai ing-wen and her administration. Second, the more weapons Taiwan buys, the greater the risk. Whoever pushes for arms purchases will suffer politically. The Chinese mainland must act firm to establish a new political understanding of Taiwan's military purchases.

There are many measures that the Chinese mainland can take in this regard. To date, promoting peaceful reunification has been the basic purpose of the mainland’s cross-Strait policies. China's policy toward Taiwan can be changed, given the worsening cross-Strait relations by Taiwan authorities. Ratcheting up military pressure is another option for China. It is very dangerous to use force to resist reunification and serve as a strategic pawn of the US, especially at a time of serious tensions between China and the US.

Beijing should insist that the money for the F-16V sold by the US be deducted from its trade with China. The twists and turns of China-US economic and trade negotiations tell us that the US has no bottom-line, and the longer the battle against it lasts, the more likely it will increase our losses.

We suggest that China directly link US arms sales to Taiwan with China's purchase of US agricultural products in the future. China will buy less US agricultural products for every weapon the US sells to Taiwan. If we make that decision, and stick with it for a few years, it will be American farmers versus arms dealers. It won't be long before there is a domestic backlash in the US against arms sales to Taiwan.

It is a long process from the signing of the arms sales contract between the US and island of Taiwan to its implementation. We must not allow this contract to be implemented comfortably between both parties. We must make both the island of Taiwan and Washington suffer because of it. Source link

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Arms purchase puts Taiwan at risk 

The US State Department formally announced on Tuesday that the US government had decided to sell $8 billion in military equipment, including 66 new F-16V fighter jets, to the island of Taiwan. The plan still needs congressional approval but it is unlikely to be turned down.

This is the largest-ever US arms sale to the island, which will definitely impact the China-US relations and the situation across the Taiwan Straits.

Taiwan regional leader Tsai Ing-wen's authorities consider the arms purchase a big political score and will try to use it to convince Taiwan people that the US is reliable in protecting the island and that the radical policy of the Democratic Progressive Party (DPP) is secure, hoping the arms sale could help get Tsai reelected as the regional leader in 2020.

Taiwan's military buildup is meaningless when compared with the People's Liberation Army (PLA), which is getting increasingly stronger. Most analysts believe that it will only take the PLA hours to take down the island if the mainland resorts to force. It doesn't matter what weapons the island has purchased.

What Taiwan needs most to keep itself safe is to hold the political bottom line rather than picking a wrong path that leads to the extreme condition, in which the PLA has no alternative but to take decisive action. The major arms purchase could probably bring the island greater risks instead of security.

Taiwan must never try to promote de jure independence. If the island goes toward the direction with the salami-slicing strategy, it will only accumulate risks for itself. Taiwan must not act as a puppet of the US to contain the Chinese mainland. Otherwise, it will only find a dead end. The US won't be able to protect it and the Chinese mainland will definitely not let it have its way.

Taiwan considers Chinese mainland-US tensions an opportunity to develop its ties with the US. The island has been trying to get involved in the US Indo-Pacific Strategy, proactively enhancing its role as a leverage of the US to strategically contain the Chinese mainland. It is a very risky move.

The higher cost and the risk of resorting to force is an important reason the Chinese mainland upholds peaceful reunification. Once the island's authorities, by cooperating with the US, sharply increase the mainland's cost of maintaining peace across the Taiwan Straits, the mainland will certainly reconsider its peaceful reunification policy and deliberate on other options.

If the Taiwan authorities insist on going their own way, the PLA will likely take action against the island to either liberate the island or deter and alert Taiwan secessionist forces. If the island's authorities are bent on their wrong way, the mainland will increase military pressure on the island. Simultaneously, the probability of cross-Straits military frictions will grow, which will boost the likelihood that the PLA will take forceful military measures to punish the island. The DPP will pay for its ventures. Source link

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Pence's threat on HK affairs outrageous

The US wants to revive its domestic economy, but choosing a conflict in such an important direction is bound to lead to a serious distraction of resources and attention. China will stand firm, not fail, and history will conclude: America has chosen the wrong adversary at the wrong time.

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