Unknown future: As Singapore further cut its
growth forecast, New Zealand, India and Thailand also cut their interest
rates signalling concerns on growth outlook. — AFP
SINGAPORE: Singapore slashed its full-year economic growth forecast as global conditions were seen worsening and data confirmed the slowest growth rate in a decade amid mounting fears of recession in the city-state.
The government cut its forecast range for gross domestic product in Singapore – often seen as a bellwether for global growth because international trade dwarfs its domestic economy – to zero to 1% from its previous 1.5%-2.5% projection.
Singapore’s downgrade adds to concerns globally about the effect of increasing protectionism on exports and production.
The deterioration in the global outlook has pushed central banks to cut interest rates and consider unconventional stimulus to shield their economies.
“GDP growth in many of Singapore’s key final demand markets in the second half of 2019 is expected to slow from, or remain similar to, that recorded in the first half, ” the trade ministry said in a statement to the media yesterday.
The ministry flagged a host of growing economic risks including Hong Kong’s political situation, the Japan-Korea trade dispute, the Sino-US tariff war, slowing growth in China and Brexit.
Final second quarter GDP data yesterday showed a 3.3% on-quarter contraction on a seasonally-adjusted annualised basis. That was slightly smaller than the 3.4% decline seen in the government’s advance estimate but deeper than a 2.9% fall predicted in a Reuters poll and a sharp contrast to the robust 3.8% first quarter expansion, which was driven by brisk construction activity.
Yesterday’s data also confirmed annual GDP expanded 0.1% in April-June from a year earlier, its slowest rate in a decade, and lower than poll expectations of 0.2% and the first quarter’s 1.1%.
Singapore’s benchmark stock index fell 1.2% to a two-month low in early trade, underperforming other bourses in the region.
Singapore has been hit hard by the Sino-US trade war, which has disrupted world supply chains in a blow to business investment and corporate profits.
Also yesterday, Singapore cut its full-year forecast for non-oil domestic exports to a 9% contraction from an 8% fall previously.
That comes after a 26.9% drop in electronics exports in the second quarter year-on-year.
“With trade tensions between the US-China unlikely to abate anytime soon, we expect exports and trade-related services to push the economy into technical recession in Q3, ” said Sian Fenner, lead Asia economist at Oxford Economics.
New Zealand, India and Thailand all cut interest rates last week, signalling major concerns about the outlook for economic growth. Last month, the US Federal Reserve cut interest rates for the first time since 2008.
Singapore Prime Minister Lee Hsien Loong said in an annual speech last week that the government stood ready to stimulate the economy.
“It feels like the storm is coming if you look at the whole macro economic fundamentals softening, ” said Selena Ling, head of treasury and strategy at OCBC Bank.
“All the downside risks are piling up on one side, ” Ling added, pointing to the myriad of global risks flagged in the trade ministry statement. — Reuters
The Tanjong Pagar container terminal in Singapore.
Shock contraction in quarterly GDP raises risk of job losses
Officials already grappling with aging, productivity threats
Singapore’s economic data have gone from bad to worse this month.
Exports slumped to their second-worst rate since the global financial
crisis, the purchasing managers index slipped into contraction for the
first time since 2016, and the economy shrank the most in almost seven
years in the second quarter.
After spending much of early 2019 enjoying relative resilience, a recession
is now looming. That’s a warning shot for regional and global
economies, since Singapore’s heavy reliance on trade makes it somewhat
of a bellwether for the rest of Asia.
The severity of the slump may be down to trade tensions and a
global slowdown, but Singapore has been grappling with longstanding
economic threats that have been slowly eroding the city state’s growth
potential: rapid aging, labor market shrinkage, and sluggish productivity among them. Those risks will become more acute for policy makers now.
“Any
undue turbulence or prolonged stresses from the trade war are only
going to compound the challenges of all the other issues --
productivity, demographics, anything else,” said Vishnu Varathan, head
of economics & strategy at Mizuho Bank Ltd. in Singapore. “External
demand concerns will be at the top of the list for now, because if you
don’t get that one right it’s that much more difficult to solve
everything else.”
Singapore remains one of the most export-reliant
economies in the world, with trade equivalent to 326% of gross domestic
product, according to World Bank data. That puts the city state at the
center of the storm stirred up by its top two trading partners sparring
over tariffs.
The shock GDP figures earlier this month prompted some analysts to downgrade
their Singapore forecasts for the year to below 1%. The government is
set to revisit its own 1.5%-2.5% range next month, but for now, it’s remaining calm, seeing no recession for the full year.
What Bloomberg’s Economists Say...
“Barring
a swift rapprochement in U.S.-China trade relations, our forecast for a
0.2% year-on-year contraction in Singapore in 2019 remains on course.
The government has ample firepower to cushion the blow, but it may not be enough to avoid a recession.”
-Tamara Henderson, Asean economist
The slump is largely contained so far to manufacturing, which makes up about a fifth
of the economy, but could soon spread to other sectors such as retail
and financial services. That increases the risk of job losses at a time
when businesses like International Business Machines Corp. are already laying off workers and banks such as Nomura Holdings Inc. cut staff.
The number of retrenched
workers in Singapore rose to the highest in more than a year in the
first quarter, though the unemployment rate has remained fairly steady
at 2.2% amid a recovery in construction.
“The labor market looks
to be on two tracks at the moment -- there’s a weak market in the
manufacturing sector but a steady one in the services sector,” said
Shaun Roache, chief Asia-Pacific economist at S&P Global Ratings in
Singapore. “High-frequency indicators including industrial production
and trade suggest that the environment will remain challenging in
manufacturing for the year.”
While those cyclical headwinds buffer the outlook, policy makers are also grappling with structural impediments to growth.
An employee clears tables at a food center in Singapore.
Faced
with a rapidly aging population, the government has been on an
aggressive campaign to re-skill its labor force and prepare workers for a
postponed retirement.
The median age is set to rise to 46.8 years in 2030 from 39.7 in 2015,
faster than the other top economies in Southeast Asia as well as the
world as a whole, according to United Nations projections.
Tied to its rapid aging is Singapore’s productivity conundrum.
As
the labor pool shrinks and gets older, the city state’s answer to the
productivity challenge has been to automate and digitize. With an
ambition to become a “Smart Nation,”
the government has poured money and energy into digitization projects
of all kinds, from helping seniors fine-tune smartphone skills at
digital clinics to attracting financial technology giants to set up shop and test their ideas.
It’s
that technological advancement, along with its world-beating
infrastructure and efficiency, that continues to make Singapore attractive to
businesses like Dyson Ltd., the U.K. manufacturer that picked the city
state for its location to build its first electric cars. It’s also a
reason why officials are confident Singapore can meet its foreign investment targets for this year.
“They’re saying the right thing, doing the right thing,” said
Edward Lee, chief economist for South and Southeast Asia at Standard
Chartered Plc in Singapore, who has penciled in 1% growth for 2019.
“Retraining, ongoing structural reforms on the labor side -- those are
the right things.”
Malaysia may, to a certain extent, be less
vulnerable with the revival of major construction projects which in view
of the country’s strained finances, have been shrunk to cut costs. The
Singapore economy may undergo a “shallow, technical recession” in the
third quarter.
TALK of recession has hit the region, and near home, Maybank Kim Eng Research is flagging that possibility for Singapore in the next quarter.
Export-reliant economies are hard hit by slowing growth and supply chain disruptions caused by the prolonged US-China trade and tech war.
There may be a ceasefire now in the fight between the US and China following talks between President Donald Trump and President Xi Jinping at the Group of 20 Summit in Osaka last Saturday.
Existing US tariffs on Chinese imports still remain; additional tariffs on the remaining US$300 bil worth of Chinese imports, as threatened, will not be imposed for now
However, the new timeline for truce remains elusive; the suspicion is that of a “creeping” imposition of tariffs, as “each truce is followed by new tariffs and then, another truce.”
In December last year, Trump and Xi had struck a truce following which talks broke down in May this year, and tariffs on US$200bil of Chinese imports leaped from 10% to 25%.
Will there be light out of this tunnel, with harder issues involving tech and supremacy not tackled? Smaller economies with the fiscal and monetary space may be able to cushion their economies somewhat from the downdraft on growth.
Malaysia may, to a certain extent, be less vulnerable with the revival of major construction projects which in view of the country’s strained finances, have been shrunk to cut costs.
The Bandar Malaysia and East Coast Rail Link projects to be revived, are now downsized to RM144bil and RM44bil respectively.
Works for the Light Rail Transit (LRT) 3, from Bandar Utama in Petaling Jaya to Johan Setia in Klang, will resume in the second half of the year, at a reduced cost of RM16.63bil.
Talks are said to be ongoing to revive the Mass Rapid Transit Line (MRT) 3, or MRT Circle Line round the city centre, at possibly RM22.5bil which is half the original cost.
“The timing (of the revival of these projects) has been very good for Malaysia,’’ said Pong Teng Siew, the head of research at Inter-Pacific Securities. “These projects will go on for several years and positively impact the economy over that period.’’
Domestic spending and activities will provide ‘some comfort’ to the local economy but we should ensure that any further monetary easing actually goes into the real economy to support these activities, according to Anthony Dass, head of AmBank Research.
Malaysia’s private consumption was at a record 59.5% of its nominal (calculated at current market prices) Gross Domestic Product, which hit US$88.5 bil in March, 2019, according to CEIC Data.
Benefits from trade diversion from China, the current US tariff hotspot, are offset by downward pressure on global trade where volume was flat in the first quarter, the weakest since the financial crisis.
Global semiconductor sales also declined in February and March, the first back-to-back double digit contraction since the financial crisis.
In view of this decline, the volatile global trade environment and rising geopolitical tensions, open economies “should be prepared for the unexpected,’’ said Nor Zahidi Alias, the associate director of economic research of Malaysian Rating Corp.
The Singapore economy may undergo a “shallow, technical recession” in the third quarter, said Maybank Kim Eng, pointing to possible intensification of supply chain disruptions and US export controls on more Chinese tech firms.
Following the Trump-Xi talks, the US has reversed its equipment sales ban on Huawei but will that ease fears of other similar bans down the road? Defined as two consecutive quarters of negative quarter-on-quarter growth, a recession will prompt further easing of monetary policy in Singapore.
Manufacturing in Singapore, which accounts for a fifth of the economy, fell 2.4%, with electronics dropping 10.8% in May from a year ago; output is expected to decline again in June.
Hong Kong has also been issued warnings of recession, as its economy experienced the largest contraction since 2011, declining by 0.4% in the first quarter against the previous quarter.
Thailand’s economy grew at its slowest pace in four years, in the first quarter, hitting 2.8% from 3.6% in the same period last year; exports remain weak.
Taiwan’s economy avoided contraction in the first quarter but private consumption and gross capital formation slowed significantly while government consumption declined.
In the US, a mis-calibration in interest rate policy by the Federal Reserve can cause a sharper slowdown than expected or bring on a recession.“Monetary policy affects the economy with unpredictable lags, it could be hard for the Fed to time its policy (rate cut) that can prevent a downturn this and next year,’’ said Lee Heng Guie, the executive director of Socio Economic Research Center.
Columnist Yap Leng Kuen notes the reminder to ‘expect the unexpected.’
Even though there are signs of China-US trade frictions
turning around, as the US political system will not fundamentally change
in the short term, China must remain vigilant and prepare for a
long-term trade war, in case the hawks gain the upper hand.
Impractical move: China is generally aware
that the Hong Kong people cannot sustain any form of protest because
rent and bills need to be paid and protests don’t gain a voice, neither
by yellow shirts nor umbrellas. — AFP
The future of the Hong Kong people lies with China but the challenge for Beijing is to make Hong Kongers feel that they are a fundamental part of the Middle Kingdom. -If there is a history lesson that the Chinese can learn from British Malaya in handling the Hong Kong protests, it's that the British administered their colonies well and without the need for any heavy-handed approaches, even they robbed these colonies of their rich minerals.
YOU’VE got to hand it to the British because they are really the masters at the game. Anyone who has studied basic Malayan history would know that officials during colonial times merely identified themselves as advisers.
They were British civil servants, but they called the shots.
Adding insult to injury, the Malay Rulers – as the Sultans were called then – were “led” to believe they still ran the states.
Under British Malaya – a set of states on the Malay peninsula and Singapore under British rule between the 18th and 20th centuries – British colonial officials had the last say on almost everything except religion and customary matters, which they cleverly left to the palaces.
So, in theory, the Rulers held their positions, kept their perks and all royal protocols befitting royalty, but their wings were clipped.
These were the federated states, but in the case of Straits Settlement states, British governors were appointed.
So, the famous Malacca Sultanate, with its rich lineage of Sultans, found itself having a governor, a Caucasian, as did Penang and Singapore.
Tun Dr Mahathir Mohamad put it aptly when he said last week in his speech in Britain that “Malaysia is a member of the Commonwealth, but there is nothing much in common with the wealth dominated by certain countries”.
“The British acknowledged the Malay Sultans as Rulers, but the Sultans never ruled. Therefore, when they criticised us as dictators, I don’t think they really meant it,” he said.
There was more. Under British rule in the 20th century, the British introduced repressive laws such as the Internal Security Act (ISA), used against communist insurgents.
Under the ISA, a person could be held for 60 days in solitary confinement and up to two years’ extension without trial.
Despite this, the British told the world, with a straight face, that they taught us, the natives, principles of justice, democracy and fairness, and that we all cried when they abandoned us when the Japanese invaded Malaya in 1941, and when we gained independence in 1957.
Our first prime minister, Tunku Abdul Rahman, kept the law when the Union Jack was lowered in 1957, which marked our independence.
Not many Malaysians are aware that the British imposed the ISA. Of course, during that era, only the radical left-wingers, with communist tendencies, were detained.
One ISA detainee, who was imprisoned under the British and then under the Malaysian government, said: “With the British guards, they would cheerily come every morning and wished the detainees a good day.” That was the difference.
Fast forward to 2019 and the massive turnout in Hong Kong against the controversial extradition Bill, with proposed amendments allowing for criminal suspects to be sent to China, has made international news.
It has prompted concern in Hong Kong and elsewhere that anyone from the city’s residents to foreign and Chinese nationals living or travelling through the international financial hub could be at risk if they were wanted by Beijing.
Basically, Hong Kong residents would rather face HK courts than be deported to mainland China.
Many have no faith in China’s judicial system compared to the British-style HK courts, which inherited the British legal system, and where most of the judges and lawyers are also British-trained.
The HK people can’t be blamed for their anger and suspicion since the international community has read of Chinese nationals being short-changed, or even neglected by the courts in the pursuit of justice.
And we can even read of income tax defaulters, under investigation, being hauled off to undisclosed locations, while dissidents have been taken away, and disappeared without a trace.
This bad press, verified or otherwise, would have scared many people, even though one wonders how many of these HK protesters believe, in their hearts of hearts, that they would ever get arrested and sent to China.
But the irony is that under British rule in HK, like many governments, the British widely used the law as a tool to consolidate control of Hong Kong in the hands of a privileged minority.
Legal expert Richard Daniel Klien wrote that “the British enacted legislation which in some respects instituted two sets of laws – one for the Europeans and another for the Chinese. Laws were passed to ensure no Chinese would live in the most desirable parts of Hong Kong, which the British wished to preserve as their exclusive enclaves.
“In a land in which ninety-eight per cent of the population were Chinese, English was the official language.
“The Chinese language was not permitted to be used in government offices.
“Laws regulating conduct were written exclusively in English, a language which the vast majority of the population could not understand.
“The astonishing truth of the failure of the Hong Kong Chinese to develop a significant pro-democracy or pro-independence movement, while other British colonies obtained independence long ago, testifies to the success of the British laws in accomplishing the goal of continued colonial rule over this land of six million inhabitants.”
MK Chan wrote in a law review report that “to most people in Hong Kong, the preservation of the existing legal system is of crucial importance to the high degree of autonomy the post-colonial Hong Kong Special Administrative Region is supposed to enjoy under Chinese sovereignty according to the “One Country, Two Systems” formula.
“However, this widely shared perception is flawed for one simple reason: the legal system in Hong Kong today has its own serious defects. It is not only alien in origin,” and “markedly different from the legal system in the People’s Republic of China but also defective and inadequate”.
No protest has gained voice, neither through yellow shirts nor umbrellas. And no protests were staged because the British didn’t allow elections during the colonial rule from over a century and a half.
The 1995 Hong Kong Legislative Council election for members of the Legislative Council of Hong Kong was only finally held that year – it was the first and last fully elected legislative election in the colonial period before the nation was returned to China two years later. So much for democracy and freedom.
No HK resident protested that only the white men could hold top posts in government bodies, places where there were many qualified HK civil servants who could speak and write in English better than their superiors.
To put it bluntly, there was not even a squeak – and we know how corrupt the HK police were in the 1970s – about the force being headed by Britons.
To be fair, the British transformed HK from a barren island to an international hub, with a working administration system that has won the confidence of the international community.
However, the responsibility of the British ended in 1997 when HK was handed over to the Chinese. It has lost its right to tell the Chinese what to do.
But what has brought this resentment towards China, from HK Chinese people, and perhaps, even a yearning, for British rule?
Not long ago, it was reported that some localists had taken to thumbing their nose at “China’s heavy-handed meddling” by waving the British flag at football matches, booing the Chinese anthem and chanting “We are Hong Kong! Hong Kong is not China!” in English.
Reports have also surfaced about a small Hong Kong-United Kingdom Reunification Campaign, which angled for a return to British rule but ultimately dismissed as quirky.
Then there are HK people who talk about the “good times” under British rule.
If there is a history lesson which the Chinese can learn from British Malaya, it’s that the Brits administered their colonies well and without the need for any heavy-handed approaches, even as they robbed these colonies of their rich minerals.
Reports of Beijing’s transgressions in the territory, such as the kidnapping by mainland agents of local booksellers, or the National People’s Congress purportedly stepping into local judicial cases, won’t win the hearts of the HK people.
Beijing must put on a softer face and display plenty of patience in dealing with HK. There is really no rush for China, especially with risking an international black eye at a time when it can ill afford to do so.
Yes, China is concerned about how its billion people will react if they see these hot-headed HK protesters abusing policemen.
The lessons from the breakup of the Soviet Union – and the wounded pride and dignity that follows – are always etched in the minds of Chinese leaders.
When CNN and BBC reporters talk about individual rights, they have no idea what Beijing or even the Chinese diaspora think.
But the people of HK must also accept the harsh reality – HK is now China’s sovereignty, and more and more of its independence, or even importance, will slowly fade away.
China doesn’t need HK as much as it used to as a strategic financial hub, because Chinese cities, including Beijing and Shanghai, have even eclipsed the former island nation. No matter how big or how long these protests run for, China knows the HK people don’t have the stamina, because rent and bills need to be paid, and protest sittings on streets don’t last anyway.
And the other blow is the British government’s refusal to grant citizenship to the 3.5 million Hongkongers born there under the British flag.
China needs to work harder on winning hearts and minds, and to make the HK people feel they are a fundamental part of China, and Chinese culture and pride.
HK people have always been independent because they were brought up differently and under different sets of political and legal systems, and that must be understood. There is no need to ramp through any laws, indicating that the HK people are unhappy.
The destiny of the HK people lies with China, and not Britain, but the challenge for Beijing is to make the people of HK feel those sentiments and be proud of it.
And speaking of extradition, let’s not forget that the US is also seeking to get WikiLeaks founder Julian Assange extradited from the UK for alleged crimes under the Espionage Act 1917, of which remains unclear.
He is the first journalist to have the book thrown at him for whistleblowing.
That’s not all. The US wants Huawei chief financial office Sabrina Meng Wanzhou to be extradited from Canada over charges which smell suspiciously like trumped up accusations. - by wong chun wai
It gives me great pleasure to attend the 18th Shangri-la Dialogue. I would like to thank Dr. John Chipman for inviting me here and thank the Singapore government, the Ministry of Defense in particular, for the warm hospitality. I would also like to congratulate His Excellency Prime Minister Lee Hsien Loong on his excellent keynote address the other day. This is my first attendance at the Shangri-la Dialogue as China's defense minister. I am here for mutual confidence, cooperation and peace. I am glad to speak on China and International Security Cooperation.
I. Humanity is at a crossroad. Building a community with a shared future for mankind is the right path forward and the trend of the times.
The world today is undergoing profound changes unseen in a century. Destabilizing, uncertain factors and challenges continue to rise. President Xi Jinping's great vision of building a community with a shared future for mankind is the answer to harmonious coexistence of people across the world, the effective solution to global problems and the right path towards world peace and human progress. We take note that the US expounded on its perspective on regional affairs yesterday. We believe that any such perspective should take into account the common security and interests of regional countries. No approaches to regional issues should resort to military blocs, nor should they undermine the interests of others. We hold different views with the US side on several issues, and firmly oppose its wrong words and actions concerning Taiwan and the South China Sea. Now let's think about the following questions:
First, which should we choose, peace and development or conflict and confrontation? Peace and development remain the call of our times and the trend of history. However, global and regional hotspots flare up one after another and the risk of conflict and war persists. What is the cause for regional wars and conflicts, the spread of terrorism, the chaos in the Middle East and the refugee crisis in Europe? Who are behind all these and what is the root cause? These are the questions to be reflected on. Some deliberately create division and hostility, provoke confrontation, meddle with regional affairs, interfere in internal affairs of others, and frequently resort to arms. Whose interests on earth do they serve and whose do they harm?
Second, which should we choose, openness and inclusiveness or isolation and exclusiveness? See the world with an open and inclusive mind, and there will be friends and partners everywhere. See the world with a narrow and exclusive mind, and there are only enemies and adversaries. This is a self-fulfilling prophecy. However, lately we see a growing backlash against globalization and a surge of protectionism. A certain country champions unilateralism, puts its own interests before others, withdraws from international treaties and organizations. Aren't there many countries suffering from the willful infringement and sanctions?
Third, which should we choose, win-win cooperation or zero-sum game? Win-win cooperation makes the pie bigger and brings more benefits to all. However, zero-sum game makes no winner and harms the interests of both sides. Currently, over 150 countries and international organizations have proactively joined China's Belt and Road Initiative (BRI). Not long ago, over 6,000 delegates from 150 countries and 92 international organizations gathered in Beijing for the second Belt and Road Forum for International Cooperation. People can tell what is right.
Fourth, which should we choose, mutual learning among civilizations or arrogance and prejudice? A few days ago, China successfully hosted the Conference on Dialogue of Asian Civilizations. We believe that human civilizations are and should be colorful, equal, inclusive and willing to learn from each other. Not a single civilization should be worshiped or belittled. There are scars and tragedies in the history of human civilization which do not go away, to name only a few, the enslavement of Africans, the expulsion of native American Indians, the colonization in Asia, Africa and Latin America, and the killing of Jewish people. Unfortunately, some people recently pick up the decadent idea of "clash of civilizations". As racist and narrow-minded as it is, this is not right. How can we tolerate such a regress of history?
II. Facing complex and volatile international security situation, the Chinese government and armed forces stay committed to regional and world prosperity and stability.
Those who are familiar with China's modern history must know that the country was once poor and weak and went through enormous misery. The Chinese people know only too well the value of peace and the cruelty and destructiveness of war. Over the years, some have been recklessly hyping up, exaggerating and dramatizing the "China threat theory", partly due to the lack of understanding of China's history, culture and policies, but more likely due to misunderstanding, prejudice, or even a hidden agenda.
China sticks to the path of peaceful development. Such a commitment is underpinned by China's socialist system, the independent foreign policy of peace, and the cultural tradition that values peace and harmony. China shall follow the path of peaceful development, which is a solemn commitment to the people of China and the world. This has been written into the Constitution of the Communist Party of China and the Constitution of the People's Republic of China, thus reaffirmed as the will of the CPC and the state. If this is not even convincing enough for some people, then we don't know what they would believe? Over the past 70 years since the founding of the P.R.C., China has never provoked a war or conflict, nor has it ever invaded another country or taken an inch of land from others. In the future, no matter how strong it becomes, China shall never threaten anyone, seek hegemony or establish spheres of influence. History has proven and will continue to prove that China will not follow the beaten path of big powers seeking hegemony when it grows strong. Hegemony does not conform to China's values and national interests.
China adopts a military strategy of active defense. China's military strategy adheres to the principles of defense, self-defense and post-strike response. It stresses that "we will not attack unless we are attacked, but we will surely counterattack if attacked". China develops its military entirely for self-defense. The purpose is to defend the country and provide the people with a peaceful working environment, and ensure that our people are free from the disasters of war and enjoy a better life. We have never bullied or preyed on others, and we shall not let others bully or prey on us either. China develops its military to cope with security threats. Similar scenario can be found in the past when China had to develop nuclear capabilities of its own under nuclear threat. China's defense expenditure is reasonable and appropriate. China enhances national defense in order to meet the legitimate needs to defend its own security as well as contribute to the world force for peace.
The Chinese military is dedicated to safeguarding national sovereignty, security and development interests. The PLA is the people's force under the leadership of the CPC. The PLA has fought many battles and is not afraid of sacrifice. In face of aggression, coercion or hardships, it has stridden forward from victory to victory. The more severe the pressure and difficulties are, the stronger and braver the Chinese people become. Adversity only brings our nation greater solidarity and strength. As the lyrics of the Chinese national anthem go, "Arise, all those who do not want be enslaved. Let's build the new Great Wall with our flesh and blood." Faced with daunting and complex security challenges, the PLA vows not to yield a single inch of the country's sacred land, but it shall not seize anything from others either. The PLA has no intention to cause anybody trouble, but it is not afraid to face up to troubles. Should anyone risk crossing the bottom line, the PLA will resolutely take action and defeat all enemies.
The Chinese military stays committed to safeguarding regional and world security and stability. China is an active supporter of UN Peacekeeping Operations. It is the largest troop contributor among the permanent members of the UN Security Council and a major contributor of funds. We have established a peacekeeping standby force of 8,000 troops that is ready to be deployed. For years, China has been active in promoting bilateral and multilateral security cooperation. The China-Russia Comprehensive Strategic Partnership of Coordination has been running at a high level. The state-to-state and military-to-military relations between China and the US remain generally stable, despite twists and difficulties. We have strengthened the sense of shared destiny with ASEAN countries, deepened traditional friendship with India, Pakistan and other South Asian countries, maintained peaceful coexistence and good-neighborliness with surrounding countries, and built good relationship with the countries and militaries of Africa and Latin America. In October this year, China will host the 9th Beijing Xiangshan Forum. We welcome defense and military leaders and scholars from all over the world to attend the Forum.
III. While striving for common prosperity in the Asia-Pacific, we must respect the core interests and accommodate the security concerns of all.
China advocates that all countries, big or small, strong or weak, rich or poor, are equal members of the international community. We should respect and accommodate the legitimate security concerns of one another. China understands and respects the sovereignty, independence and territorial integrity of all countries, and supports the social systems and development paths they independently choose. China is not able to progress in isolation from the rest of the world; the world also needs China to prosper. We in China do not covet the interests, nor envy the development, of others. However, we shall never give up our legitimate rights and interests. No country should ever expect China to allow its sovereignty, security and development interests to be infringed upon. As for the recent trade friction started by the US, if the US wants to talk, we will keep the door open. If they want a fight, we will fight till the end. As what the general public of China says these days, "A talk? Welcome. A fight? Ready. Bully us? No way." I would like to further illustrate China's position on a few issues you may be interested in.
First, on Taiwan. The Taiwan question bears on China's sovereignty and territorial integrity. Not a single country in the world would tolerate secession. I visited the US last year. American friends told me that Abraham Lincoln was the greatest American president because he led the country to victory in the Civil War and prevented the secession of the US. The US is indivisible, so is China. China must be and will be reunified. We find no excuse not to do so. If anyone dares to split Taiwan from China, the Chinese military has no choice but to fight at all costs for national unity. Hereby, I have a message for the DPP authorities and the external forces. First, no attempts to split China shall succeed. Second, foreign intervention in the Taiwan question is doomed to failure. We took note that the US side mentioned the Taiwan Relations Acts in yesterday's speech. Is it of Taiwan or the US? Is it a Chinese law or an international law? We can find no justifiable reasons for the US to interfere in the Taiwan question by its domestic law. Third, any underestimation of the PLA's resolve and will is extremely dangerous. We will strive for the prospects of peaceful reunification with utmost sincerity and greatest efforts, but we make no promise to renounce the use of force. Safeguarding national unity is a sacred duty of the PLA. If the PLA cannot even safeguard the unity of our motherland, what do we need it for?
Second, on the South China Sea. The current situation in the South China Sea is improving towards greater stability. It is attributed to the common efforts of the countries in the region. However, there are always people trying to rake in profits by stirring up troubles in the region. Before the Dialogue, I paid a visit to Vietnam and Singapore and reached broad consensus with Gen. Ngo Xuan Lich and Dr. Ng Eng Hen on maintaining the stability in the South China Sea. I have a few questions concerning the issue to discuss with you.
First, who on earth is threatening security and stability in the South China Sea? Over 100,000 ships sail through the South China Sea each year. None has been threatened. The problem, however, is that in recent years some countries outside the region come to the South China Sea to flex muscles, in the name of freedom of navigation. The large-scale force projection and offensive operations in the region are the most serious destabilizing and uncertain factors in the South China Sea.
Second, who would benefit and who would suffer from the chaos in the South China Sea? In case of chaos in the South China Sea, we, the regional countries, are the ones to take the blunt. What are the purposes for certain countries to send military vessels and aircraft all the way from afar to the region? Aren't there enough examples that some big countries intervene in regional affairs, make troubles, walk away and leave a mess behind?
Third, should the stability in the South China Sea be maintained by countries in the region or outside the region? China and ASEAN countries have made positive progress in negotiating the COC. We hope that relevant parties will not underestimate the wisdom and ability of regional countries to properly handle differences and maintain peace. However, we welcome constructive suggestions from all countries.
Fourth, is China's construction on its South China Sea islands and reefs militarization? It is the legitimate rights of a sovereign state to carry out construction on its own territory. China built limited defense facilities on the islands and reefs for self-defense. Where there are threats, there are defenses. In face of heavily armed warships and military aircraft, how can we stay impervious and not build some defense facilities?
Third, on the DPRK nuclear issue. China is committed to denuclearization, peace and stability of the Peninsula and to a negotiated solution through dialogue and consultation. In recent years, the Chinese side has made active efforts in promoting peace talks and played an irreplaceable and constructive role. We hope that the US and the DPRK will accommodate each other's concerns with cool heads and patience, work towards the same goal and resume the dialogue for peace at an early date. The US and the DPRK should follow the dual-track approach and combine denuclearization with the establishment of a peace mechanism. We hope that the international community will positively respond to the legitimate concerns of the DPRK, trigger the reversible clause of the UN Security Council resolutions in due course, push for a declaration on the end of the war, and actively build trust among all parties.
Fourth, on China-US relations. This year marks the 40th anniversary of the establishment of diplomatic ties between China and the US. Despite all the ups and downs, China-US relationship has been steadily growing in the past 40 years. The most valuable lesson we have learned from the 4-decade-long relationship is that cooperation benefits the two sides while confrontation hurts both. Looking forward, the two countries should follow the consensus by the two heads of state and promote a China-US relationship featuring coordination, cooperation and stability. Through continued communication, the militaries of the two countries have agreed on many important issues. First, in terms of implementing the consensus of the heads of state, the two militaries agreed on building their relationship a stabilizer for the overall relations. Second, we agree on maintaining regular communication on the strategic level. The day before yesterday, I had a candid and practical discussion with Acting Secretary of Defense Patrick Shanahan. We reaffirmed the importance of maintaining communication and to develop a constructive military-to-military relationship. Third, in terms of managing risks and preventing conflicts, the two sides recognize that military conflicts or even a war between them would bring disasters to both countries and the world. It takes two to cooperate, but only one to start a fight. We hope that the US side will work with us towards the same goal, follow the principles of non-conflict, non-confrontation, mutual respect and win-win cooperation, and steer the China-US relations in the right direction.
The achievement China has made in the past 70 years since the country was founded is not a windfall or a handout from others. Neither was it made by engaging in military expansion or colonial exploitation. Instead, the country has developed through its people's hard work, wisdom and bravery as well as the win-win cooperation with the world since reform and opening-up. At present, under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, China enjoys political stability, social cohesion and steady economic growth. Blessed with peace, harmony, prosperity and good governance, the country is making progress on all fronts. The Chinese people are committed to realizing the Chinese Dream of great national rejuvenation. The Chinese military is ready to work with the armed forces of other Asia-Pacific countries to jointly respond to challenges, promote the building of an Asia-Pacific community with a shared future and safeguard peace and stability in the region.
June 4 marks the 30th anniversary of the Tiananmen Square incident. The Communist Party of China and the Chinese government have determined the nature of the incident. Chinese society has also made a comprehensive summary of it. Dropping the incident thereafter has been aimed at helping the country leave the shadow behind, avoid disputes, and help all Chinese people face the future.
We consider such practice a political success, although some people have criticized it from the perspective of news governance. Merely afflicting China once, the incident has not become a long-term nightmare for the country. Neither has the incident's anniversary ever been placed in the teeth of the storm. It has become a faded historical event, rather than an actual entanglement.
The Chinese government's control of the incident in 1989 has been a watershed marking the differences between China and former Eastern European socialist countries, including the Soviet Union and Yugoslavia. Since the incident, China has successfully become the world's second largest economy, with rapid improvement of people's living standards. The policy of avoiding arguing has served as a contributor to the country's economic take-off.
Today's China obviously has no political conditions to suddenly reproduce the riot of 30 years ago. Chinese society, including its intellectual elite, is now far more mature than it was in 1989. In those years, China's reform was carried out prior to those of the Soviet Union and Eastern European countries. China was completely inexperienced, with an intellectual circle filled with idealism. Chinese society today has seen enough of the political tragedies that occurred in the Soviet Union, Yugoslavia and some Arab countries.
Having become politically mature, we now understand the significance of the country's continuous development through evolutions instead of revolutions. We are also aware of the difficulties and complexity at the practical level.
As a vaccination for the Chinese society, the Tiananmen incident will greatly increase China's immunity against any major political turmoil in the future.
We have noticed that every year around June 4, certain forces outside the Chinese mainland stir up public opinion and attack China. Such forces consist of two groups of people: student leaders and dissidents who fled abroad after 1989, and Western politicians and media outlets.
The first group's understanding of the incident remains fixed in 1989. They refuse to correct their understanding of China's development and the changes that the world has been through. Their interests have been decoupled from the Chinese people and have merged with anti-China forces outside China. Their attitude toward the incident cannot represent those of today's Chinese public.
Western politicians' discussions of the incident are mainly influenced by their countries' relations with China. Due to the deterioration of China-US ties, US officials have launched fierce attacks against China that have focused on the incident since last year. But Chinese people are clear that those officials are not genuinely concerned about Chinese human rights, but are making use of the incident as a diplomatic tool to challenge China.
However, all these noises will have no real impact on Chinese society. The actions of the external forces are completely in vain.
The US offers its commiserations for so-called human
rights violations in China, yet in actions, it has been trampling on
China's human rights for years. It is time for Mr Pompeo and his
colleagues to stop the self-contradictory moves.
HOW other cities worldwide tackle their Airbnb problems are being studied to see if the home-sharing business could be legalised or regulated in Penang.
The office of the Penang State Exco for Tourism Development, Arts, Culture and Heritage (Petach) is studying their policies to tackle the issue of residential home owners who rent out their units as if they were running a hotel or serviced apartment.
Its exco member Yeoh Soon Hin (pic) said the global home-sharing business was quite established in Penang now that when people buy a house or condominium unit, someone might approach them and offer to guide them to sign up with Airbnb and make money from their new property.
He told the assembly that Penang Global Tourism had met with Airbnb’s management team to discuss how to regulate the business.
“Airbnb told us that they are ready to cooperate and register Airbnb units in Penang with the local authority, but we have no laws or policies for this yet,” he said.
Yeoh said in San Francisco, Airbnb operators are limited to renting their homes to a maximum of 90 days a year.
“In Catalonia, Spain, Airbnb operators can be fined up to 30,000 Euros (RM140,000) and the unit owners fined up to 90,000 Euros (RM420,000) if there are complaints.
“In Singapore, the Urban Redevelopment Authority is proposing to limit Airbnb units to only allow up to six people each time to rent them and for only up to 90 days a year.
“For strata units, Singapore plans to allow it only if at least 80% of all unit owners in the building give consent.
“Japan enacted a law to allow home-sharing of units for only up to 180 days a year,” he said when replying a question from Daniel Gooi Zi Sen (PH-Pengkalan Kota).
Gooi said he was concerned because despite strong enforcement from Penang Island City Council since 2017 to stop residential property owners from using their units commercially, the Airbnb portal lists thousands of units in Penang.
“We cannot deny property owners from benefitting from their assets, but we also cannot let them continue to operate without paying their dues such as commercial assessment rates or the hotel fee,” he said.
Yeoh said Petach was studying how Airbnb operators are regulated while waiting for the federal government to draft laws on home-sharing.
“We raised the issue and were told that the Housing and Local Government Ministry and the Tourism, Arts and Culture Ministry are studying possible laws on this.”
Yeoh said the business was unfair to neighbours, the hotel industry and local authorities.
“They are paying assessments and utility rates for residential units but are using those units commercially while legal hotels that comply with all laws such as safety and traffic provisions pay much more.
“The peace and privacy of their neighbours are being intruded upon,” Yeoh said.
He said his team in Petach was also considering the possibility of recommending that Airbnb operators be charged double or triple the current residential assessment rates that they are paying now after they are legalised.
By arnold loh and r. sekaran at the penang state assembly
Should Airbnb be regulated?
MUCH has been said about Airbnb in the news of late. The Malaysian Association of Hotels (MAH) Penang branch has claimed that the emergence of Airbnb and illegal accommodation are among the main causes for Penang hotel occupancy rate to decline.
Another news report indicated that Airbnb operators are required to register with Kuala Lumpur City Hall. At this point in time, it is vital to see the concept of Airbnb. The platform was started to connect people who were looking to rent their homes to those who wanted hotel-free stay accommodation for short periods. The reason for the registration must be for the purpose of regulation by the authorities.
The claim by MAH that the emergence of Airbnb has caused hotel occupancy rates to drop must also be examined.
In terms of cleanliness and hospitality, although hotels do fit the bill, not all hotels are in that category. All hotels must be refurbished and kept clean at all times. It may be a bit too much to ask for luxury bedding or first class service, but cleanliness and pleasant service is not too difficult.
Airbnb hosts are conscious about their guests and the reviews that are given on the website. They go the extra mile, and it is not always accurate to say that Airbnb is cheaper and therefore people choose them over hotels. It is the space, the home away from home concept, and being looked after, the occasional bottle of wine left for guests, the fruit basket, the bottles of fruit juice and mineral water in the fridge — all of these go a long way in wooing guests.
In terms of protection for the hosts and the guests, Airbnb has enough protection in place. It is up to the renter to choose who they want to rent out to. Those who want to rent and those who are renting out their properties have their profiles. Reviews as to the safety of the place and its convenience — all can be seen from the website. It is a very transparent website and no one can complain that they were not aware that there was a danger or that they did not get their money’s worth. There are times that unfortunate Airbnb hosts unwittingly allow roguish guests and their premises are wrecked. The Airbnb hosts too, have a risk to take.
From the reports, it is unclear of the need for Airbnb to be registered or regulated. Hotel operators are required to register as it is a business. Airbnb is a service platform and not a business. For hosts, it is an additional income — especially for the elder population whose children have left, or even for those with university fees to pay, this additional income will be a good supplement. Unlike hotels and motels, Airbnb operators are there on a temporary basis. Sometimes, the owner may get a long-term tenant, and may not want to continue with the Airbnb concept.
Maybe we can take a leaf from countries where Airbnb has been regulated. In Los Angeles, United States, a regulation was passed for short-term rentals (vacation) with an initial cap on rentals for up to 120 days with flexibility to increase that number of days.
In New York, it is illegal to rent out an entire residence for less than 30 days. Short-term rentals are permitted if the homeowner is also staying there throughout the rental period and there are no more than two renters. This would be ideal for an elderly couple who would enjoy the company of young tourists who would in turn enjoy being in a home environment.
In Japan, anyone wanting to list their property on Airbnb will need to register with the local government, who will conduct fire and safety checks on the premises. The new regulations also limit rentals to 180 days per year.
Singapore has prohibited public housing rentals that are under six months, or three months in the case of private housing without the approval of the Urban Redevelopment Authority. In London and Paris, new laws have limited short-term rentals up to 90 days per year, and Liverpool City Council has pushed for national regulations to ensure that landlords register short-term rental properties.
Regulation is of critical importance in shaping the welfare of economies and society. Any form of regulation must work effectively and serve the public interest. Government agencies, in this case, the local councils are responsible for implementing regulatory policies and must be aimed towards protecting the consumer. When imposing such regulations on individuals, such as Airbnb hosts, there must be a goal that will help the government to achieve its purpose. The objective of a government or regulatory body is to ensure better and cheaper services and goods, and to provide a fair competition to any particular industry without encouraging a monopoly. Airbnb may be regulated and the town and city councils may want to draw up guidelines following from the examples cited above.
By GRACE XAVIER
Grace Xavier is research fellow at the Faculty of Law, Universiti Malaya and she can be reached at gracem@um.edu.my
Using Airbnb to settle mortgages
Survey: Hosting helps to repay loans, provide extra income
PETALING JAYA: More Malaysians are relying on Airbnb to settle their mortgages given the property overhang that is engulfing the sector.
According to an Airbnb survey of more than 2,000 Malaysian hosts and guests, half of the Airbnb hosts said it had helped them pay for their homes while 40% said Airbnb provided a supplementary income for them to make ends meet.Malaysia is Airbnb’s fastest growing country in South-East Asia for the second consecutive year.
It saw more than 3.25 million guests in Malaysia over the past 12 months ended July 1, which translated to a 73% increase from the previous period.There are more than 53,000 Airbnb listings in the country.
Axis REIT Managers Bhd investment head and former Malaysian Institute of Estate Agents president Siva Shanker said many of the Airbnb hosts were investors and speculators who purchased the properties during the upturn, with the intention of selling them at a higher price.
“However, when the property market started to make a turn for the worse, many of these speculators found it difficult to sell or rent out their units but at the same time they needed income to service their loans,” he told StarBiz.
Siva said many of the buyers and investors had bought the units on the advice of some people with questionable skills and credentials.
“Many of the people, who claimed to be experts, gave false assurances that the properties could be sold at a premium of up to 40% within a couple of years, or that they would be able to get high rental yields.
“This is essentially a get rich quick scheme and many people believed in them. But then the market crashed and many of the buyers are saddled with a property that they can’t sell or rent out.”
Siva said many of the so-called “advisers” had rebranded themselves as Airbnb consultants when the property market slumped.
Airbnb is an online booking platform that allows people to rent out their properties or spare rooms to guests.
PPC International managing director Datuk Siders Sittampalam said the concept of Airbnb needs to be regulated.
“It’s never been regulated in the past, especially in terms of taxes. How do you determine things such as cost and security?”
Siva concurred that proper regulation need to be put in place to for Airbnb operators.
“You don’t know who’s going into your apartment. Every other day, your occupants are changing.
“They could be illegal immigrants, running criminal activities, being a nuisance and disturbing the neighbours.
“How is the unit considered ‘gated and guarded’ when the owner is the one that opens the door to these strangers?”
With no proper regulation in place, Siva said the value of the apartment will deteriorate.
“The owner is running it like a hotel, except he doesn’t have the upkeep skills of a hotelier. Within a year, the apartment will look run down. By then, new properties will be up in the market and new owners will be looking to rent them out.
“The owner of the run down apartment is going to have difficulties finding tenants, but he still needs to fulfil his monthly mortgage. Eventually, it becomes a vicious cycle. To stop this, we need to educate the public and get rid of the self-proclaimed property gurus.”
Another concern is the Airbnb having a huge impact on the local hotel industry.
According to Impiana Hotels Bhd executive director Azrin Kamaluddin, hotels that havemore than four stars will face limited to no impact from the rising popularity of Airbnb.
“The hotels offer distinct product differentiation as they provide experience and service to guests.
“What Airbnb does is offer accommodation as a commodity.
“I believe that owners of four and five star serviced residences that do not lease back their units to operators as well as hotels that are three stars and below would be disrupted by Airbnb.
“It is imperative for hotels that have three stars and below to reinvent themselves to stand out from the competition posed by Airbnb,” he said.
On the potential launch of Airbnb Luxe, Azrin said it would not have an impact on four to five-star hotels, given the relatively small volume and higher price tag of US$1,000 per night.
Siders concurred that Airbnb would only have an adverse impact on budget hotels.
“The four-star and five-star hotels offer different types of services and amenities.”
