China-ASEAN Monitor
Photo credit: New Straits Times
Economy, Investment and Trade
Malaysia bets on durian as demand from China rises
(26 November 2018) Malaysia foresees a rise in large-scale durian farming as it expects a 50% jump in exports by 2030. This comes as the country sees unprecedented demand from China as its consumers discover a newfound love for all things durian-flavoured including pizza, butter, salad dressing, milk and even durian-flavoured chicken broth. The prices of durian in China have nearly quadrupled in the last five years. According to the United Nations’ trade database, China’s durian imports rose 15% in 2017 to nearly 350,000 tonnes worth US$510 million, of which 40% was from Thailand. While Malaysia accounted for less than 1% of China’s durian imports in 2017, it expects sales to jump to 22,061 tonnes by 2030 from 2018 volumes which is likely to hit 14,600 tonnes. According to Malaysia’s agricultural ministry, one hectare of Musang King durian can yield nearly nine times more revenue than a hectare of palm plantation.
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Thai rubber farms stretched as US-China trade war saps demand
(25 November 2018) Thai farmers are feeling the bite with rubber prices now five times below the levels in 2011. Since June 2018, prices had dipped 20%. Thailand produces around 4.6 million tonnes of rubber every year but the government aims to reduce production as it foresees a longer term global oversupply crisis due to lower demand from factories in China. Chinese demand for rubber imports—which makes up more than half of Thailand’s latex exports—has decreased. This is due to the rise in rubber prices caused by US tariffs and the depreciation of the Chinese yuan against the US dollar. According to tyre giant Michelin’s regional head, the changing rubber prices will impact farmers, processors, manufacturers and consumers.
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Chinese firm is close to finalizing New Yangon City proposal
(23 November 2018) Hong-Kong listed China Communications Construction Co. Ltd (CCCC) is close to finalizing its proposal for the development of the “New Yangon City” project. New Yangon Development Company (NYDC) announced that it is in the final stages of negotiations with CCCC to define the scope of the first phase of the infrastructure project. The project will cover 20,000 acres of land across the Yangon River from Myanmar’s commercial capital and is expected to generate 2 million jobs. The first phase will cost over US$1.5 billion and include two bridges, 26 kilometres of roads, power distribution and transmission facilities, a water treatment plant, a water intake facility as well as basic infrastructure for village towns and an industrial estate.
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Chinese company to invest $3.5 billion for steel mill in Mindanao
(22 November 2018) China-based Panhua Group Co. Ltd. has pledged to invest US$3.5 billion to build an integrated steel manufacturing plant at the Phividec Industrial Estate in Mindanao. The project which is expected to commence operation in six to seven years, will be completed in three phases and cover 305 hectares. The project will consist of a port, production facility with a capacity of 10 million tonnes, an industrial and other downstream industries. According to the Philippine Trade and Industry Secretary Ramon Lopez, the project will create more than 50,000 jobs and strengthen the country’s integrated iron and steel industry.
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Philippine trade secretary on PH-China trade ties
(22 November 2018) Philippine Trade and Industry Secretary Ramon Lopez expounded on the many opportunities for trade between the Philippines and China during a recent interview after Chinese President Xi Jinping’s state visit, saying that China’s Belt and Road Initiative (BRI) is “a program that is definitely benefiting the Philippines.” Trade volume between the two countries topped US$50 billion in 2017 according to data from the Chinese government, making China the Philippines’ top trading partner and fourth largest export market. Philippine exports to China grew by 10.5% to US$19.2 billion dollars in 2017.
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