China to invest $900b in Belt and Road Initiative

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China announces plans to boost the Belt and Road trade by creating economic corridors and investing nearly $900 billion in countries along the route.

Vice-Premier Zhang Gaoli said the country is mulling six economic corridors with countries along the Belt and Road trade route to better connect Asia and Europe with funding from the Asian Infrastructure Investment Bank and the Silk Road Fund.

Corridors are set to run through China-Mongolia-Russia, New Eurasian Land Bridge, China-Central and West Asia, China-Indo-China Peninsula, China-Pakistan, and Bangladesh-China-India-Myanmar, said Zhang.

Addressing the opening ceremony of the Asia-Europe Meeting (ASEM) Industry Dialogue on Connectivity Chongqing municipality on Wednesday, Zhang said such strong relationships were “a trend of the times and a global concern”.

The China-proposed Belt and Road Initiative on trade and infrastructure networks have been welcomed across Asia and Europe, according to Zhang. Its success is in the interests of all the sides involved, he said.

Meanwhile, China Development Bank, one of the country’s policy banks, said it will invest more than $890 billion into more than 900 projects involving 60 countries, as part of its efforts to bolster the initiative, the 21st Century Business Herald reported on Thursday.

The newspaper cited the bank’s vice-president Li Jiping that over $10 billion has been poured into projects covering coal and gas, mining, electricity, telecommunications, infrastructure, agriculture, and so on.

Zhang underlined that “connectivity” concerns not only physical infrastructure like roads, but also people-to-people exchanges, policy coordination, trade and capital flow, a significant boost to Asia-Europe cooperation.

While highlighting transportation, communication and energy as important areas for connectivity, the vice-premier said the countries should “consolidate the social foundation for connectivity” by ensuring openness in their education, employment and tourism markets.

The two-day event held in Chongqing municipality has gathered government officials and company representatives from the 53 members and international organizations grouped under the ASEM.

 

 

 

 

Source : China Daily | May 28, 2015

Thomas D’Innocenzi

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China-EU co-op to help China’s fast growing digital economy

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The director general of BusinessEurope said in a recent interview with Xinhua that China-EU cooperation can help realize growth potential in China’s digital economy.

Markus J Beyrer, director general of BusinessEurope, an association of enterprises in 33 European countries, said the digital industry is a game changer for the global economy and will have a huge impact on EU competitiveness.

Intelligent, interconnected systems now seamlessly support industrial activities along the entire value chain, he added.

Europe will have to reap the benefits of this huge potential, putting in place a real strategy to digitize all sectors of the economy.

He noted that by 2025, Europe’s manufacturing industry would gain a gross value worth 1.25 trillion euros ($1.36 trillion). However, he warned if Europe fail to turn the digital transformation to their advantage, the potential losses can be up to 600 billion euros by 2025 or over 10 percent of Europe’s industrial base.

Talking about China’s digital economy, Beyrer said China’s Internet industry is growing fast, but until now it has largely been consumer-driven rather than enterprise-driven.

Large e-commerce firms have driven sales and transformed retailing, but small and medium sized enterprises still lag behind in using the Internet for procurement, sales and marketing purposes, he said.

“It is clear that there is a lot of potential for growth in China’s digital economy too, China needs to liberalize its market to encourage new innovations and robust competition would accelerate China’s productivity,” said Beyrer.

Beyrer underlined that European companies have the required expertise and can help China realize its potential by engaging the Chinese market on commercial terms.

 

Source : China Daily | May 27, 2015

Thomas D’Innocenzi

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Dubai eyes key role in trade initiatives

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Emirate wants to be China’s partner as ‘Belt & Road Initiative’ takes shape

Dubai is set to play an important role as the trade, transportation and financial hub for China in the Middle East and Africa as well as be a key partner for the “Belt and Road Initiative”.

A high-level delegation of government and business leaders from Dubai is currently in Beijing for the Dubai Week in China from May 9 to 15 and will use the event to showcase the emirate’s ties with China and opportunities for future growth.

Ibrahim Al Janahi, deputy chief executive officer of the Jebel Ali Free Zone Authority and chief commercial officer of Economic Zones World, told China Daily: “Dubai, with its transportation, financial and legal infrastructure, can act as the gateway for Chinese businesses in the Middle East and the African continent.”

JAFZA, which hosts 248 registered Chinese companies, is continuing to have discussions with several others to join the zone and many are in the pipeline for this year, said Al Janahi.

“In particular, we will adopt strategies to help more small and medium-sized Chinese enterprises, which are limited in capacity, to enter the region going forward,” he said.

In 2014, China overtook India as Dubai’s biggest trading partner with traffic between the two surging 29 percent to $47.6 billion. Much of the Chinese trade into Dubai enters via Middle East’s largest port, Jebel Ali, and is destined for re-export elsewhere in the region and beyond. The Silk Road Economic Belt and the 21st Century Maritime Silk Road initiatives proposed by President Xi Jinping have emphasized an important role for trade facilitation and connectivity.

Dubai already plays such a vital role for the region, and is well positioned to further its role in line with the “Belt and Road Initiative”, said Cong Hongbin, managing director of Invest Dubai, a subsidiary of the Dubai-based advisory firm Falcon and Associates.

Aside from its maritime infrastructure, Dubai International Airport surpassed Heathrow last year as the world’s busiest airport for international passenger business.

Emirates Group, one of the main carriers in the Middle East, which is well-known for its luxury first-class cabins and services, also witnessed stronger relationships and personnel exchanges between the two sides.

Since the carrier started to operate in China in 2004, travel and trade exchanges between the two have increased 10 fold, said Barry Brown, Emirates Group divisional senior vice-president of commercial operations.

As many as 1.3 million Chinese passengers traveled by Emirates in the last financial year, Brown said. The carrier operates 35 weekly flights to three destinations in the Chinese mainland and enjoyed an average load factor of 84 percent in 2014.

On the financial front, the Dubai International Finance Center, a federal financial free zone, is already home to the regional headquarters of China’s big four financial institutions: the Industrial and Commercial Bank of China Ltd, China Construction Bank Corp, Agricultural Bank of China Ltd and Bank of China Ltd.

Chirag Shah, chief strategy and business development officer at Dubai International Finance Center, said: “We already have a significant Chinese presence in the DIFC but as China is seeing more financial institutions going international, we can provide the right platform for them to do business in the region.” The DIFC enjoys several cooperative agreements with Chinese counterparts, such as a memorandum of understanding its regulatory authority shares with the China Banking Regulatory Commission and the China Securities Regulatory Commission.

Last month, the court system in the DIFC announced that it is seeking an agreement with the Chinese courts for mutual enforcement of decisions.

 

 

Source : China Daily | May 22, 2015

Thomas D’Innocenzi

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Indonesia can use its strength without closing borders

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US Ambassador to Indonesia Robert Blake said on Tuesday that Indonesia could maintain its economic strength without closing its borders to foreign imports, as had been practiced by the President Joko “Jokowi” Widodo administration.

“Trade can help Indonesia achieve its economic goals. It can help increase Indonesia’s economic growth and reduce poverty, which is the President’s goal. […] Indonesia can play to its strength and prosper without closing its borders,” he said in a speech at Al Azhar University, South Jakarta, on Tuesday.

He further said that open trade would create opportunities for businesses for innovation and expansion, while providing lower prices and a wider choice of goods and services for consumers.

“For an economy like Indonesia where consumer spending is important for economic growth, it is necessary to ensure that consumers have access to a wide range of products and services at the lowest prices as a good way to ensure that growth continues,” he said

The US previously turned to the World Trade Organization to settle a complaint, along with New Zealand, on Indonesia’s wide ranging import restrictions on farm products like fruit, vegetables, beef and poultry.

A survey in 2013 by the International Trade Center (ITC) involing 1,000 Indonesian businesses found that 37 percent of businesses in Indonesia were affected by non-barriers to trade.

Blake went on to say that the decision on trade would be a vital strategic choice for Indonesia.

“Indonesia is faced with a strategic choice. It can turn inward and pursue policies designed to protect its companies and industries, while accepting its inefficiencies, higher prices and less choice for consumers, as well as lack of innovation,” he said.

 

Source : The Jakarta Post | May 26, 2015

Thomas D’Innocenzi

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Peugeot’s Chinese JV to start production in Vietnam

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French automaker PSA Peugeot Citroen and its Chinese joint venture partner Dongfeng Motor Group will open an assembly plant in Vietnam and have already begun production in Malaysia, according to a Dongfeng Peugeot Citroen Automobile spokesperson.
Dongfeng Peugeot is producing compact cars in cooperation with local firm Naza Group in Malaysia and plans to begin assembling in Vietnam later this year in partnership with THACO Group, the official Xinhua news agency reported on Wednesday.
The venture aims to sell 8,700 cars in the ASEAN region this year with plans to raise sales of imported and locally produced cars to 70,000 units by 2020, the spokesperson said in an emailed response to Reuters’ request for comments.
Last year, Peugeot and Dongfeng agreed on a 3 billion euro ($3.34 billion) capital tie-up, giving the French carmaker much needed funding to turn its business around.
The two firms also agreed that their China JV would aim to sell 1.5 million vehicles a year starting in 2020, as well as consider setting up a new company responsible for sales in the Asia-Pacific region, especially in Southeast Asia.
Source : Thanh Nien Daily | May 21, 2015
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Ticon enters rental factory JV in Indonesia

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Ticon Industrial Connection has formed a joint venture in Indonesia with local partner SSIA and Japan’s Mitsui to build international-quality warehouses and factories for lease to the automobile, electronics, consumer products, logistics and other industries.

“This is our first expansion into Indonesia together with high-potential partners like SSIA, which is a leading property developer listed on the Indonesian Stock Exchange, and Mitsui, one of the world’s most diversified and comprehensive trading, investment and service companies,” managing director Virapan Pulges said yesterday.

SLP Surya Ticon Interusa was set up with registered capital of US$46.4 million (Bt1.6 billion). SSIA holds 50 per cent and Ticon and Mitsui 25 per cent each.

The initial development covers 16 warehouses with rental space of 2,160 square metres each. Rental space of 34,560sqm in the first phase is now completed and 81 per cent occupied. 

The next phase will follow next quarter. When the Technopark project is completed, SLP will have a total of 146,195sqm of warehouse and factories for lease.

This collaboration reflects the partners’ confidence in Ticon’s more than 25 years of professional experience as a developer of rental warehouses and factories with high standards in Thailand. 

The company is confident that with a strong connection with customers – mostly global and multinational companies from the manufacturing and logistics industries – Ticon can leverage its long-term expertise to ensure the success of this JV.

Ticon comes especially with the ability to understand customer needs and to provide engineering and design support to the construction and development of the facilities to meet international standards, Virapan said.

Johannes Suriadjaja, president director of Surya Semesta Internusa (SSIA), said Indonesia was a prime investment destination, as its government is seeking to add to the $22 billion worth of large infrastructure projects already planned for this year. 

The government plans to spend annually to maintain and upgrade its logistical network and utilities, and it is quite clear that demand for warehouses and factories for lease will increase significantly, he said.

Eiichi Tanabe, general manager of the second overseas business development department in the Urban Development Division at Mitsui & Co, said Indonesia had become an increasingly important investment hub for foreign companies, especially from Japan, which accounted for 9.5 per cent of the market last year. 

Indonesia will become a valuable manufacturing base to serve the fast-growing demand of the domestic market and help fulfil potential growth in the export sector, especially after integration into the Asean Economic Community by the end of this year. 

“We are confident that Mitsui, along with our professional partners SSIA and Ticon, will drive SLP to become Indonesia’s leading and largest industrial property [developer] for rental warehouses and factories in the future.”

Source : The Nation | May 20, 2015
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Thailand : Board of Trade predicts economic resurgence, maintains 3.5% GDP growth forecast

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The economy has already bottomed out and should head up steadily in the remaining months, driven mainly by rising private investment, increasing tourism arrivals and incomes, and the “digital economy” policy, which will help promote business, according to the Board of Trade of Thailand and Thai Chamber of Commerce.

The Board of Trade yesterday left its GDP growth prediction at 3.5 per cent for this year after seeing that the economy had already reached its low point. “After hearing comments from every provincial chamber of commerce, businesspeople shared the view that the economy is on a roll, particularly in tourism, retailing and investment,” Isara Vongkusolkit, chairman of the two associations, said yesterday.In April, the Board of Trade’s figures showed retail sales up by 1.5-2 per cent, compared with growth of just 0.5 per cent in the first quarter of the year. Collections of value-added tax were up 10 per cent in the first four months of the year.

Sales of life insurance policies grew 13-14 per cent year on year in the first quarter, while sales of non-life insurance were up 7-8 per cent, reflecting more investment by companies to build factories.

Despite the slowdown in exports, shipments from Bangkok Port expanded by 6.07 per cent and from Laem Chabang Port by 7.5e per cent in the first quarter, showing more trade with many markets, especially the United States and CLMV (Cambodia, Laos, Myanmar and Vietnam).

Isara said that with the brighter business outlook, the economy should show strength throughout next year.

Under the government’s digital economy policy, more companies would be promoted to expand in both the domestic and international markets, he said.

Vichai Bencharongkul, chairman of the Board of Trade’s Creative Digital Economy Committee, said that after more investment in telecommunications businesses, more sales in the industry and more services, the information and communications technology sector is expected to grow by 10 per cent a year and could reach Bt1.5 trillion this year.

The ICT sector was worth Bt1.2 trillion in 2013, accounting for 10 per cent of gross domestic product.

The Board of Trade has supported the government’s plan to invest more in expanding Internet broadband access to every household, to adopt technology for distance learning and to promote the growth of e-commerce.

For every 10-per-cent expansion in Internet broadband, GDP will grow by 1.3 per cent, the organisation believes. For every 10-per-cent growth of mobile phones, GDP will grow by 0.7 per cent.

Source : The Nation | May 20, 2015
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