Asian Insider June 17: The China syndrome

Asian Insider brings you insights into a fast-changing region from our network of correspondents.


Singapore, the world's most trade dependent economy, has reported that non-oil domestic exports (Nodx) slipped 15.9 per cent year on year in May, the biggest drop in more than three years as electronic exports plunged. The decline beat analysts' forecasts of a 18.7 per cent contraction, as polled by Bloomberg. But it was larger than the 11.8 per cent drop in March and 10 per cent fall in April.

Trade is roughly 300 percent of Singapore’s gross domestic product, underscoring its importance to the local economy. The largest contributors to the Nodx decline were China (-23.3 per cent), Taiwan (-34.7 per cent) and Hong Kong (-24.8 per cent). Correspondent Joanna Seow says that on a month-on-month seasonally adjusted basis, Nodx rose by 6.2 per cent in May, following the decline of 0.7 per cent in the previous month.

Meanwhile, as the US-China trade war proceeds factories in Singapore are seeing reduced activity amid slowing orders and some firms have stopped hiring, says Senior Correspondent Tan Ee Lynn. This time of year, normally factories are buzzing with end-of-year orders for the holiday season. Factories that make components for Chinese companies for eventual shipment to the US are particularly hit hard.

Beijing is yet to show its own hand. Military equipment firms in the United States will likely have their supply of Chinese rare earths restricted, the Global Times said on Monday, after China's state economic planner confirmed industry experts have proposed export controls.


China worries may be cooling regional economies, but the political heat is only rising - especially for Beijing.

The latest in the week-long protests against Hong Kong’s extradition Bill is a climbdown by the territory’s government and an apology by its Beijing-blessed administrator, Ms Carrie Lam. It may not be the last of the story. Activist Joshua Wong, who walked free from detention this morning, is back in the streets and addressing protesters. Regional Correspondent Elizabeth Law and Hong Kong Correspondent Claire Huang have this report.

The Hong Kong protests were the last thing the Chinese government would have wanted, says China Correspondent Danson Cheong. It is noteworthy that the protests in the territory took place just days after the 30th anniversary of the Tiananmen crackdown, one of the most politically sensitive periods for modern China.

Meanwhile, a slew of bills bound to be deemed hostile by Beijing are being introduced in US Congress, including one backed by China hawk Marco Rubio called Hong Kong Democracy and Human Rights Act, says US Bureau Chief Nirmal Ghosh. Analysts believe the Bill, and another one condemning China for human rights violations against Uighur Muslims in Xinjiang, are likely to pass.


Some countries are gaining as investments leave China. Vietnam's patchwork of free trade agreements, liberalisation and already close trading relationship with both China and the United States ensures that, for now at least, the country of 96 million people probably wins, whether relations between Beijing and Washington thaw or remain in deep freeze.

Regional Correspondent Jeffrey Hutton, who was recently in the country, says the inflow of capital has touched off a scramble for resources such as industrial property.

Vietnam Singapore Industrial Park, a joint venture between Singapore's Sembcorp Development and Vietnam state-owned company Becamex IDC, attracted US$14.2 billion in investment by 822 companies across the eight properties it manages throughout the country, up from US$12.9 billion at the end of last year.


China is not the only big Asian economy to feel the wrath of the Trump administration over trade. Earlier this month, the US withdrew India from a list of developing countries it gave preferential trade access, citing its protectionist trade policies.

US-India trade has ballooned seven-fold since 2001 to more than US$140 billion but President Donald Trump’s administration has continued to pile pressure on New Delhi to open its markets faster.

Over the weekend, India retaliated by slapping tariffs on several US exports, including almonds - of which India is the No. 1 importer. US Bureau Chief Nirmal Ghosh says US Secretary of State Mike Pompeo will soon be in New Delhi to discuss this, and other issues ahead of the G-20 meeting in Japan where Mr Trump and Indian leader Narendra Modi will soon meet.

Despite the trade rumble, though, the strategic relationship between the two is gaining pace..


Australian tycoon James Packer's most prized projects - the development of a massive A$2.2 billion waterfront hotel and apartment tower and casino at one of Sydney's most prime locations - could be in trouble, says Australia Correspondent Jonathan Pearlman.

This is because of his decision to sell almost half his stake in his Crown Resorts gaming empire to  Lawrence Ho's Hong Kong-based firm Melco Resorts and Entertainment. Mr Ho is the son of gaming tycoon Stanley Ho, known as the "casino king" of Macau.

The 275m-high Crown Sydney project, at the Barangaroo site adjoining the Central Business District, will include 349 hotel rooms, plus luxury apartments, some of which have reportedly sold for A$40 million each. It is due to be completed by 2021.

In late 2013, the New South Wales state government controversially revealed that it had granted permission to Crown Resorts to open a gaming venue at the complex. It will be for high rollers only. But the licence for the site's casino specifically states that Mr Stanley Ho or his associates should not be involved. This was because of concerns over his alleged links to organised crime triads - allegations made by the United States authorities, which he has denied.


Singapore’s central bank, Monetary Authority of Singapore (MAS), has issued three-year prohibition orders (POs) against Paris Michele - a former representative of UBS in Singapore - for dishonest conduct, having forged documents and falsified company emails during his employment with UBS. Mr Michele's responsibilities in UBS included conducting due diligence on UBS's customers.

Huawei founder Ren Zhengfei has said the Chinese telecoms giant would slash production by US$30 billion over the next two years as it grapples with a United States push to isolate the company internationally. Speaking in Shenzhen, he said he expected sales to drop to around US$100 billion this year and the next.

Tens of thousands of Indian doctors went on strike on Monday calling for more protection against violence by patients and their families, as Parliament met for the first time since national elections. The nationwide strike, which will last until Tuesday morning, is in solidarity with doctors in the eastern state of West Bengal after three were viciously attacked by the relatives of a man who died.

Have a good week ahead, and check in frequently at to catch the latest on Asia.

Meanwhile, seize the day!

Ravi Velloor