China-ASEAN Monitor


Photo credit: Vietnamnet


Economy, Investment and Trade

Vietnam’s Investment Ministry expresses wariness over China’s ODA loans
(19 August 2018) Vietnam’s Ministry of Planning and Investment (MPI) has expressed concerns over Official Development Assistance (ODA) loans from China amongst Vietnam’s group of ODA participants. A report from the ministry indicated that the annual interest rate of China’s ODA loans is at 3 per cent, much higher than that of Japan (0.4-1.2 per cent), South Korea (0-2.0 per cent) and India (1.75 per cent). Moreover, Chinese loans are subject to a 0.5 per cent commitment fee, as well as a 0.5 per cent administration fee. The lending terms and grace period of the Chinese ODA loans are also shorter than those of other donors by about 15 years and 5 years respectively. In addition, the MPI also stated that several projects using funding and equipment executed by Chinese contractors have recorded slow progress, are of poor quality and suffer cost overruns.
Read more>>

China’s largest insurer launches in Indonesia
(15 August 2018) Chinese insurance giant, China Life Insurance (Overseas) Company Limited launched its first operations in Indonesia, becoming the first life Chinese insurer in the archipelago. The state-run company is a subsidiary of China Life Insurance (Group) Company, has chosen Indonesia due to the country’s strategic position in southeast Asia. According to the Organisation for Economic Co-operation and Development (OECD), the life insurance penetration rate for Indonesia in 2016 is only 1.3 per cent.
Read more>>

Singaporean agribusinesses reap profits from U.S.-China Trade War
(17 August 2018) The recent trade spat between China and U.S. has benefited Singaporean agribusiness companies as they took advantage of plummeting soybean prices. Soybean prices plunged as China retaliated with its own tariffs against U.S. agricultural products. Wilmar International, the leading business group in the region, announced its net profit in the period of April-June skyrocketed to US$316 million, more than fivefold year-to-year growth. Olam International, another Singapore based agri-commodity business, also demonstrated a 52 per cent increase in volume of soybean sales for the first half of the year. Both companies reaped the benefits of lower material costs. However, there are fears that these short term profits will be negated by the longer term effects of the conflict. Wilmar has stated that it intends to hedge against this by sourcing alternative oils, such as Canola, in the place of Soybean.
Read more>>

Proton, Geely ink JV agreement to penetrate Chinese market
(18 August 2018) Chinese automaker, Zhejiang Geely Holding Group Co Ltd (Geely) has signed a Heads of Agreement to form a Joint Venture (JV) with Proton Holdings Bhd, with both companies taking up equal equity in the new entity. The new JV will open doors for Proton to set up a production facility to assemble and market its cars into the lucrative Chinese market. Using the existing Geely’s platform technologies, the designs of the vehicles will be developed by Proton. Additionally, some vendors of Proton parts might come under consideration as suppliers to the JV. Both companies target to incorporate JV within the first half of 2019, subject to acquiring all approvals. The new joint venture follows Geely’s investment in Proton in 2017, which saw Geely obtaining a 49.9 per cent equity stake in Proton Holdings Bhd.
Read more>>

Singapore Airlines, Alibaba tie-up to penetrate lucrative Chinese travel market
(21 August 2018) The flag national carrier airline of Singapore, Singapore Airlines (SIA) will be leveraging on Alibaba’s vast digital and logistics networks to increase it’s penetration of the travel market in China, one of the largest in the world. SIA will be partnering up with Alibaba in areas such as ticket sales, loyalty programmes, marketing initiatives, cloud services and logistics. Alibaba’s e-commerce platform will offer SIA access to more than 600 million mobile users. Apart from that, SIA will cooperate with Alibaba Cloud, the cloud computing arm of Alibaba Group to conduct a study on how the its IT ecosystem from web hosting to apps and membership items can benefit from Alibaba’s Cloud global network.
Read more>>


Leave a Reply

Your email address will not be published. Required fields are marked *