China demands U.S. to drop Huawei exec's extradition as the latter don't have law on their side

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Huawei CFO has strong arguments in extradition case: Canadian diplomat
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 FM urges Canada to make right choice 

China urged Canada to "make the right choice" on Thursday, after Canada's ambassador to China John McCallum reportedly said the Huawei executive arrested in Vancouver at the request of the US has a strong case to fight extradition.

"Any one with normal judgment can see the nature of the incident, and we hope the Canadian side makes the right choice and not to 'pull someone's chestnuts out of the fire,'" Foreign Ministry spokesperson Hua Chunying said at a daily briefing on Thursday.

Hua's remark comes after McCallum told reporters earlier this week that Huawei's chief finance officer Meng Wanzhou has a "strong case" to fight an extradition request.

"I think she has quite good arguments on her side," said McCallum, CNN reported.

"One, political involvement by comments from US President Donald Trump in her case. Two, there's an extraterritorial aspect to her case; and three, there's the issue of Iran sanctions which are involved in her case, and Canada did not sign on to these sanctions."

Echoing McCallum, Huang Feng, director of Beijing Normal University's Institute for International Criminal Law, noted that the US extradition request has no merit as it does not follow the basic extradition principle of double criminality.

Double criminality states that a suspect could be extradited only if similar laws one breaks exist in the extraditing country. However, Canada has no such sanctions, said Huang.

Analysts stressed that even if the US files an extradition request at the last minute, it does not mean Meng would be extradited to the US, noting that every side has to weight their choice.

Such a request has to be reviewed and approved by Canada's judicial department and local court, and though Canada's judicial departments are unlikely to refuse the extradition, Huawei's legal teams could exhaust every means of judicial remedy in Canada to stop the extradition.

The US government alleges that Meng helped Huawei dodge US sanctions on Iran and has indicated it will file a formal extradition request by the January 30 deadline, CNN reported Thursday.

Wu Xinbo, director of Fudan University's Center for American Studies, told the Global Times that if Canada does agree to extradite Meng to the US in the worst scenario, bilateral ties will face unprecedented challenges.

The extradition will cause "downgraded diplomatic relations" between China and Canada, Wu said.

It will set a precedent of enterprises facing the harshest legal punishment for alleged misconduct they are charged of in a foreign country, said Wu.

US enterprises may face similar consequences in China, he said.

The current status of China-Canada relations does have a huge impact on bilateral exchanges and cooperation, but China is not responsible for that, Hua said.

The Canadian side has to take China's concerns seriously and correct its mistakes to change the situation, she said.

 US extradition mirrors Iran sanctions: just don't have law on their side' on Huawei case 

The US request to extradite Huaiwei Chief Financial Officer Meng Wanzhou goes against international law and mirrors its unilateral sanctions on Iran, which is opposed by the international community, Chinese Foreign Ministry said Wednesday.

The US extradition request mirrors US sanctions on Iran. However, as everyone knows, Huawei has repeatedly stated its compliance with all applicable laws and regulations of the countries in which it operates, said Hua Chunying, spokesperson of China's Ministry of Foreign Affairs.

Hua noted that China opposes unilateral US sanctions against Iran outside the UN Security Council framework. The sanctions are not in conformity with international law and have met with international opposition, including US ally Canada,she said.

Hua's comments came after the US Justice Department said on Tuesday it would continue to pursue the extradition of Meng and would meet all deadlines set by the US-Canada Extradition Treaty, Reuters reported, citing a statement released by US Justice Department spokesman Marc Raimondi.

Huang Feng, director of Beijing Normal University's Institute for International Criminal Law, told the Global Times this accusation is farfetched because she was allegedly accused of bank fraud at HSBC, a UK-based banking giant, not a US one, and Meng's activities were outside the US.

Canada's Department of Justice said an individual can be extradited if the alleged activity in question is recognized as a criminal in both countries.

Huang said that the extradition request cannot be passed by Canada unless the US offers solid evidence to prove that Meng violated the laws of Canada and the US.

The US action goes against international law and is unjustified, said Hua, noting that it is part of the country's political agenda to bully Chinese hi-tech firms and contain China's rightful development.

Huang also noted he found it strange that the Canadian ambassador announced the US request before the US formally send its extradition request. "Normally, none would publish relevant information unless it's formalized. So it seems like Canada is bluffing."

Ren Zhengfei, Meng's father and Huawei founder, said in an interview with foreign media on January 15, "I trust that the legal systems of Canada and the United States are open, just, and fair, and will reach a just conclusion," Ren said, according to a transcript Huawei released to media.

Meng case to further complicate China-Canada-US ties

Editor's Note:

The US has reportedly said to formally seek extradition of Huawei's Chief Financial Officer Meng Wanzhou. Since Meng was arrested on December 1 in Vancouver, the deadline for the US to file a formal extradition request is 30 January, 60 days after the arrest. What is the implication of Washington's move? How will it influence China-US-Canada relations? Global Times sought the opinion of two experts on the issue.

Li Haidong, professor with the Institute of International Relations at China Foreign Affairs University

US President Donald Trump has been deeply troubled by the government shutdown and the Russiagate investigation

As the deadline nears, Washington may be too busy coping with the shutdown chaos to consider Meng's case and make the formal extradition request. Ottawa is urging Washington to take the action.

Extradition is a strict cooperative law enforcement process between two jurisdictions. The US' filing a request does not mean that Canada must immediately send Meng to the US. Canada has to conduct a judicial review procedure to weigh the request, during which Meng's appeal will also be taken into account.

At least in the legal sense, if Meng's appeal is credible and convincing enough, there is a good chance that Ottawa would hesitate to transfer her to Washington.

Nonetheless, it should be noted that Meng's case is political in the garb of a legal procedure. If law is the only factor to be considered, I believe Meng will win the lawsuit; but when the political factors come into play, there would be increased uncertainty.

Meng's case is a long-running battle. As long as it is not resolved, it would be tough to iron out China-US-Canada relations.

Washington is unwilling to see any of its allies strengthening relations with Beijing, but China-Canada ties should not be affected by the Meng incident. Canada should abandon its role as a US puppet to sully China's image. The right thing for Ottawa to do is to immediately correct the mistake.

Chen Hongqiao, researcher at Guangdong University of Foreign Studies

Washington tends to make important decisions at the eleventh hour. It is used to taking a wait-and-see approach toward the two or more sides of the game, and then determine what measures to take.

In Meng's case, the US has its own strategic requirement. It needs to observe the interaction between China and Canada to make up its mind. If China takes a tough stance, the US would act prudently. If Canada requires support, the US will provide it.

Chinese Vice Premier Liu He will visit the US on January 30 and 31 for the next round of US-China trade negotiations. The US may proceed to file a formal extradition request for Meng just days before Liu's visit as a leverage to exert pressure on Beijing to pursue its interests in the trade talks. But the US side will not bring it up during the negotiations with Beijing.

According to Reuters, US President Donald Trump stated he would intervene in the Justice Department case against Meng if it is in US national security interest and US-China trade talks. His words signal that before Meng is extradited, he could apply the president's diplomatic prerogative to intervene. The US has a system of separation of powers and its judiciary branch is independent. If Meng is extradited to the US, it would be difficult for Trump to exercise his influence.

Canada claims to be a country with the rule of law, and will deal with the US request based on laws and will not hand over Meng without careful consideration. In fact, Ottawa has been disappointed with Washington, complaining that the US is competing with China at the expense of Canada. On the surface, Meng's incident is a legal issue, but politics and diplomacy play an important role.

Prepare for protracted game over Meng

The US Department of Justice confirmed on Tuesday that it will "meet all deadlines" to seek extradition of Huawei Chief Financial Officer Meng Wanzhou, signaling an extraordinarily high probability of the US filing a formal extradition request before January 30.

Washington's move will undoubtedly further intensify the dispute between the US and China over Meng's case. China must not bear any illusion and should prepare for more complicated games.

The Chinese government and media should continue to disclose and condemn that Washington and Ottawa have violated the basic legal spirit. Their sophistry must bear diplomatic and public pressure, and not to be left unimpeded in the international arena, as if Huawei did commit serious crimes.

Arresting Meng is obviously part of the US actions to crack down on Huawei. Anyone with a brain can clearly see Washington's intention to stop rising Chinese high-tech companies in the name of the law.

One thing should be made very clear: If Ottawa successfully assists Washington in the extradition of Meng, Beijing will retaliate against both of them without doubt.

The US' official request for extradition does not mean an immediate transfer of Meng. The Canadian court will then have a month to hear the US evidence and weigh the request before making judgment. Meng can also defend herself and appeal. This process may last a few months, or even years.

As a private company, Huawei is incapable of confronting the US and Canada's national system, but it can do its best to prolong the extradition process at most.

There has been a political purpose from the very beginning when news of Meng's case broke. Since Washington and Ottawa have vowed to declare that this is a 100 percent legal procedure, this political persecution must be strictly tested by their legal system.

Ottawa is stuck in the middle of Washington and Beijing, and involved in the whirlpool of geopolitical disputes. Being a US puppet is not easy. Canada may realize that it bears the blame for its ally. Its emphasis on acting by law is only a self-spiritual support in the current predicament.

Canadian public opinion is sensitive to any evidence of political persecution in this case, which can provide a potential favorable factor for Meng's defense and appeal.

Canada is a legal state under normal circumstances, and especially attaches importance to procedures and evidence. Although disguised as legal procedure, Meng's case, a case of injustice, is bound to have loopholes. Huawei has already shown its confidence in the upcoming litigation process.

China-US ties may also undergo certain subtle changes at any time which might dilute US political motives for persecuting Meng. We should never abandon such hope.

Meng's case has set an execrable precedent. Beijing's reaction will shape the world's understanding of China's national strength and will. Beijing must not be furious or cowardly.

We should take corresponding actions step by step in resolute and orderly manner, and show the world that Chinese are with reason and with restraint.

Any countries and forces that persecute Chinese citizens and infringe on China's interests will pay a heavy price. Global Times

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Ottawa is now as sensitive as a frightened bird. A few words by the ambassador should not have posed any impact on court decisions. Nonetheless, judging from the reactions of many politicians and journalists in Canada, McCallum's remarks are like a dreadful monster.

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Canadian Ambassador to China John McCallum admitted on Thursday that he misspoke on the case of Huawei CFO Meng Wanzhou by suggesting that she had a strong case to fight extradition to the US.

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It's hard to accurately understand the potential of 5G technology and its significance nowadays. More imagination should be encouraged. However, referring to 5G competition as an arms race and attaching so much importance to the dominance of the technology is typical American thinking.

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Malaysian Securities Commission to weed out virtual scams

SC innovation, digital and strategy executive director Chin Wei Min said those who have identified themselves to the commission can operate up to March 1. “Even if they don’t want to be in this business anymore, whatever they are holding, whether it’s money, crypto assets or digital assets, should be returned to their clients. Otherwise, we will take action.

KUALA LUMPUR: All companies engaging in digital assets will have to make themselves known to the Securities Commission (SC) by Friday, even if they have decided not to carry on once the regulatory framework comes into force.

This includes operators who are not registered with Bank Negara under the anti-money laundering and counter financing of terrorism – digital currencies (sector six) and those operating “underground”.

The SC will reserve the right to take action against those who fail to identify themselves by Friday on grounds of breaching the securities law.

SC innovation, digital and strategy executive director Chin Wei Min said those who have identified themselves to the commission can operate up to March 1.

“Even if they don’t want to be in this business anymore, whatever they are holding, whether it’s money, crypto assets or digital assets, should be returned to their clients. Otherwise, we will take action.

“The reason we also allow people to continue with their withdrawals and sell down is to ensure that there is an orderly market.

“The last thing we want is to cause confusion, and hopefully, there are no untoward fraudulent activities that people will capitalise on in this transition period and take advantage of investors,” he told a media briefing here yesterday.

While the regulation does not affect operators who are not incorporated in Malaysia, the SC can still take action against them under the Capital Markets and Services Act 2007 if the products are marketed, sold, or its operations exist in Malaysia.

Operators who identify themselves to the SC must state their intent, whether they want to resume their activities, of which certain obligations have to be met, or whether they want to wind down their business.

The SC will put up a list of operators and companies that have registered and received a letter from the commission for investors to check if their monies are with legitimate sources.

Chin also reiterated that operators are not allowed to accept new investors, list new products or conduct any sales and marketing activities during this period.

A statement by the SC last Thursday said platform operators would not be allowed to accept new investors and are only allowed to facilitate the withdrawal or transfer of client assets with the written instruction of investors.

They are also not allowed to conduct any initial coin offerings (ICOs) without prior authorisation.

Chin called on all ongoing ICOs to cease activities and the monies or digital assets to be returned to investors until the operators apply for authorisation and after they understand the SC requirements.

The guidelines are expected to be released by the end of the first quarter this year.

“If you are looking at the ones that are out there currently, the standards of the white paper are of low quality. It is important that this falls under regulated activity.

“We recognise that this is an alternative fundraising avenue. The idea here is to allow us to take out all the scams and fraudulent activities and at the same time, provide a platform for our early stage entrepreneurs to raise money,” said Chin, adding that the SC did not want people to take advantage of this as investors are pumping in money on the other end.

This is a high-risk investment and Chin also hinted that there could be a certain threshold for investors.

The Capital Markets and Services (prescription of securities) (digital currency and digital token) order 2019, which kicked in last Tuesday, will see those operating unauthorised ICOs or digital asset exchanges facing up to a 10-year jail term and up to a RM10mil fine.

The Finance Ministry said it viewed digital assets as well as its underlying blockchain technologies as having the potential to bring about innovation in both old and new industries.

 By royce tan The Star

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A whole new world - China luring talents from Malaysia & Singapore with lucrative salary

THE pull of the Chinese entertainment market is so great at the moment, actors from all over – including Malaysia and Singapore – are being drawn there.

There is a lot of money being spent in China, which broadly translates to more working opportunities as well as the potential for higher salaries.

According to London-based analyst IHS Markit, it is the world’s second biggest television market after the United States, as the country spent more than US$10.9bil (RM45bil) on TV programming in 2017.

China is also set to be the world’s largest film market by 2020, with its domestic theatrical revenue estimated to reach more than US$10bil (RM41bil) by then, according to reports.

Malaysia-born actress Tong Bingyu, 35, revealed that her pay for working on a single television drama series in China was the equivalent of a year’s salary in Singapore.

The former Mediacorp star, who used to go by the name Chris Tong and who had quit the Singapore company early last year, had previously claimed that was how much she was paid for her appearance on the upcoming Chinese TV period drama series One Boat One World.

She sounds hesitant when pressed, however. In a telephone interview recently, the 35-yearold says in Mandarin: “It’s true that it is possible to get a lot more money in China. The market there is huge and if you get picked for big projects, you can be well compensated.

“But I don’t want people to get the wrong idea that it’s easy money. Just because you pack up and move to China doesn’t mean you will be rich. It also depends a lot on luck and whom you know.”

Her stroke of luck came four years ago when she met a Chinese producer from popular TV channel Hunan Television through a good friend.

That producer eventually helped set her up for acting gigs in China.

Besides One Boat One World, Tong also snagged a role in the wuxia drama The Heaven Sword And Dragon Saber, which is based on Louis Cha’s novel of the same name.

Tong says of the producer: “She gave me so much solid advice. She pointed out very frankly that I’m not that young anymore and that I should diversify.”

Which is why Tong decided to try her hand at producing as well.

Currently, she is busy working as a producer on the Chinese action spy movie Zhi Sheng Si Yu Du Wai (Beyond Life And Death), which boasts a budget of 300mil yuan (RM182mil).

She was roped in after she met famed Hong Kong producer Manfred Wong, who is also behind the film.

Tong, who is managed by her Malaysian husband Kee Kai Loon, 40, says: “It’s stressful because I’m so new to this job, but it has also been very exciting. I’m suddenly asking questions like, ‘How much does this cost? What will it look like?’

“When I was at Mediacorp, I was such a passive person - I just went to work to act.”

The film, which she describes as an explosive actioner in the vein of China’s hit war films Operation Red Sea (2018) and Wolf Warrior (2015), is slated for release later this year.

Coming up, she will also produce a Chinese Web series, for which she declines to reveal the details.

When she was in Singapore, the actress played the lead in Mandarin TV series such as family drama Mightiest Mother-In-Law (2017) and nursing drama The Caregivers (2014).

“I will unlikely get the same star status as an actress in China and that’s OK. The reality is there are so many younger and more beautiful actresses who have been working in China for much longer than I have,” says Tong, who has been based out of Beijing for the past two years.

“I just take every day there as an opportunity to learn new things. Besides, now that I’m doing the producing thing, I realise that I’m loving it. If all goes well, I might be a producer full-time in the future.”

 – By Yip Wai Yee, The Straits Times/Asia News Network

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PM: Understand Malaysia’s fiscal woes

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TUN Dr Mahathir Mohamad has appealed to China for its understanding on Malaysia’s fiscal woes, as uncertainty hovers over the China-backed infrastructure projects back home.

The Prime Minister, who is on a five-day visit to China, also hoped Beijing could lend a helping hand to solve the problems plaguing Putrajaya.

“We hope to get China to understand the problem faced by Malaysia today and believe it would look sympathetically towards the problem we need to resolve.

“And perhaps help us resolve some of our internal fiscal problems,” he said.

Dr Mahathir was speaking at a joint press conference with his Chinese counterpart Li Keqiang at the Great Hall of the People here yesterday, following the official welcoming ceremony and a closed-door meeting.

While Dr Mahathir had stopped short of specifying the problem, the Pakatan Harapan government had said that the country’s debt is now above RM1 trillion.

The new administration was also critical of the “lopsided” deals with China and moved to suspend projects with Chinese investment, such as the East Coast Rail Link, the Multi-Product Pipeline and the Trans-Sabah Gas Pipeline.

During this visit, Dr Mahathir had stressed that Malaysia was not against any Chinese firms and that he welcomed Chinese businessmen to invest in Malaysia.

At the press conference, Dr Mahathir said Malaysia had much to gain from China and believes that Chinese investment could bring down the unemployment rate in the country.

“Malaysia has a policy of being friendly to every country in the world irrespective of its ideology. This is because we need to have a market for our produce,” he said while expressing hope that Malaysia would become a South-East Asian hub for new technology being developed in China.

“China has great entrepreneurs with innovative ideas in doing business that Malaysians can learn from.

“China has got a lot that will be beneficial to us. It is a big and rich market created by very dynamic people,” he said.

Asked about his views on the trade war between China and the United States, Dr Mahathir said Malaysia would support free and fair trade.

He said he did not want to see this trade war becoming a new form of colonialism.

Dr Mahathir’s trip, which ends today, is his first official visit to China since his return to helm the country.

Ministers joining him on the trip are Foreign Affairs Minister Datuk Saifuddin Abdullah, Primary Industries Minister Teresa Kok, International Trade and Industry Minister Ignatius Darell Leiking, Agriculture and Agro-based Industry Minister Datuk Salahuddin Ayub, Minister in the Prime Minister’s Department Datuk Liew Vui Keong and Entrepreneurial Development Minister Mohd Redzuan Md Yusof.

Meanwhile, Dr Mahathir also had a closed-door meeting with Chinese President Xi Jinping yesterday evening at the Diaoyutai State Guest House.

Accompanied by his wife Tun Dr Siti Hasmah Mohd Ali, he later attended a dinner hosted by Xi and his wife Peng Liyuan.

Bernama reported that Dr Mahathir gave the assurance to Xi that there would be no changes in policy towards under the new Malaysian government.

He told Xi that he was impressed with the level of development achieved by China.

“We see China as a model for development,” he said.

Credit: Beh Yuen Hui The Star

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Opportunities in e-commerce

Talk on trade: (from left) Interbase Resouces Sdn Bhd MD and Lelong.com.my co-founder Richard Tan, Chong and SME Association of Malaysia national deputy president Ong Chee Tat during a panel discussion on Global is the New Local: The Changing International Trade Patterns of Small Businesses in Asia Pacific, organised by FedEx.

More SME seen to be embracing technology

WHILE its been a constant lament that local small and medium-sized enterprises (SMEs) are not embracing digital technology, a new survey seems to suggest otherwise.

A recent FedEx-commissioned study on trends being adopted by SMEs in Asia Pacific (Apac) has revealed a high adoption of new technologies among local SMEs.

According to the study, Malaysia ranks fourth (among nine Apac countries surveyed) in digital platform implementation and third in adopting Industry 4.0 technologies.

Entitled “Global is the New Local: The Changing International Trade Patterns of Small Businesses in Asia Pacific”, the research revealed that an average of 88% of Malaysian SMEs are adopting digital economy platforms, such as e-commerce, mobile-commerce and social-commerce platforms.

FedEx Malaysia managing director S.C. Chong says it is critical for SMEs to take advantage of technological advancements as a catalyst to enter into new markets, improve customer service support and experience, and provide a more efficient end-to-end customer journey.

“SMEs are the engine of growth and form the backbone of Malaysia’s economy,” he says during a briefing on the survey, last week.

Chong adds that it is encouraging to see SMEs taking the initiative to grow their business through the adoption of new technologies, infrastructure-building, and expansion into international markets.

Citing the survey, he says that 61% of local SMEs are optimistic that the e-commerce platforms will help contribute to increased revenue growth in the next 12 months.

“The study also found that 69% of Malaysian SMEs have incorporated Industry 4.0 technologies into their operations such as mobile payments, automation software and big data / analytics in particular.”

Industrial Revolution 4.0 refers to the paradigm that machines are now able to autonomously adapt and coordinate their tasks to meet human needs.

The survey also shows a significantly high adoption rate of mobile payments among Malaysian SMEs at 90% (higher than the Apac SME average of 73%), with automation software and big data / analytics among the top Industry 4.0 technologies being used by SMEs at 84% and 77% respectively.

In addition, the survey also showed that 78% of respondents agreed that Industry 4.0 technologies have enhanced efficiencies in the supply chain and distribution channels, while helping reduce challenges brought by cross-border payments.

The results of the survey were based on interviews with 4,543 senior executives of SMEs in nine markets in Apac between March and April 2018. The markets included in the research were China, Hong Kong, Japan, Malaysia, Philippines, Singapore, South Korea, Taiwan, and Vietnam.

The interviews were split equally by market with a representative mix of company sizes: micro (one to nine full-time employees), small (10 to 49 full-time employees) and medium (50 to 249 full-time employees).

Each market had an average of 500 respondents.

SME Association of Malaysia national deputy president Ong Chee Tat says SMEs and Industry 4.0 are key components towards the growth of the nation, as Malaysia works towards achieving a high-income economy.

“While technology may have reduced the gap between SMEs and larger industry players, SMEs still face various challenges in the adoption of the latest trends or tools in technology. Most SMEs may find that they lack sufficient finances, knowledge or workforce talent to adopt these new technologies.

“As such, we (the SME Association) are cognisant of the barriers to technology-adoption and continue to guide, empower and support SMEs by providing strategic advice or counsel and initiating networking platforms to facilitate knowledge exchange.”

Ong says that the SME Association is currently looking to set up an SME Academy to help provide training for local start-ups.

“We hope to be able to launch this academy by this year,” he says.

The survey also revealed that 95% of Apac SMEs have made use of digital platforms such as e-commerce (82%), mobile-commerce (72%) or social-commerce (74%) in their business operations.

“In Malaysia, the top social media platforms are Facebook, WhatsApp and Instagram,” says Ong.

According to the survey, the top social media platform used in Apac markets is Facebook, with the exception of China (WeChat) and Taiwan (Line).

In comparison, Malaysia has an overall higher adoption rate of e-commerce (90%), mobile-commerce (87%) and social-commerce (86%) compared to other markets in Apac. Also, the survey says 61% of Malaysian SMEs expressed confidence that the digital economy will help reduce barriers to finding global customers beyond Apac.

Chong says the finding is strongly supported by Malaysia having 146% mobile penetration, 22 million internet users, 18 million active social media users, and seven million online shoppers, leading to Malaysia ranking 31st among the most tech-ready countries around the world.

Meanwhile, Interbase Resouces Sdn Bhd managing director and Lelong.com.my co-founder Richard Tan says that by educating SMEs and raising their awareness on the digital economy, there will be a rise in brick-and-mortar SMEs having an online presence to augment and complement their business.

“At Lelong.my, our integrated online platform which comes with services such as e-payment solutions and digital storefronts, has allowed us to extend our reach to capture the younger generation of increasingly digital savvy customers and merchants.

“As an online retail platform, we continuously evolve and transform ourselves to ensure that we fully understand the consumer journey and experiences to make it a seamless, pleasant one.”

He also says that the rise in digital platforms will not result in brick-and-mortar outlets becoming obsolete.

“I believe they will complement each other,” he says, adding that this is why it’s important for companies to have both a physical and online presence.

“I might see a product at a store somewhere, but may decide to purchase the item off of the company’s website. On the flipside, I might see something online that I might like, but would want to physically see it first, before deciding to buy.”

Tan emphasises that it is in a situation like this that SMEs need to have a presence online.

“You need to have your content displayed on the Internet. If people can’t find your product on the web, they may just decide not to buy it at all. That’s the behaviour of the new group of consumers today.

“You have to digitize your content.”

Chong admits that having products and services accessible via the web nowadays is a given.

“However, there are still products and services that you can’t get online. But it’s important to be able to have your product on the web, so that people can learn about it and either buy it or choose to view it physically at your store.”

Growth opportunities

In conjunction with the recent “Take E-Commerce to the Next Level” conference by DHL Express Malaysia, the logistics firm said in a statement last week that there is great potential for Malaysian SMEs to grow their business overseas through e-commerce.

“By 2020, it is expected that one out of five e-commerce dollars will be generated through cross-border trade. Business to consumer (B2C) e-commerce has grown at a faster pace than most other industry sectors in recent years, with premium cross-border shipments growing from 10% to more than 20% of the volumes of DHL Express.

“This is further boosted by various incentives the government has provided to ensure that the local e-commerce sector has the potential to lift Malaysia’s total trade to RM2 trillion this year.”

Over 100 local SMEs attended the conference.

Its speakers included those from Amazon Global Selling, Payoneer, Everpeaks, Malaysia Digital Economy Corp (MDEC) and Malaysia External Trade Development Corp (Matrade), who shared their insights on the importance of logistics, digital marketing, payment options and sales methodologies as part of the entire B2C ecosystem.

“These takeaways are meant to better equip local SMEs to meet the increasing demand of customers who seek faster fulfilment and more variety at cost-effective prices,” says DHL Express.


In the same statement, e-commerce conglomerate Amazon encouraged more Malaysian SMEs to expand their business by tapping Amazon’s global reach.

Amazon Singapore’s Amazon global selling head Gijae Seong says: “South-East Asia has quickly grown to be one of the most important regions for Amazon Global Selling.

“In the US alone, Amazon has over 150 million monthly unique visitors. We hope that more local SMEs will consider expanding their business globally on Amazon in the future.”

In addressing the challenges of SMEs to expand its presence on a global level, Matrade transformation and digital trade division director Noraslan Hadi Abdul Kadir points out that Matrade is Malaysia’s national trade promotion agency, and therefore has the mandate to promote local SMEs overseas.

“Our eTRADE Programme offers financial incentive valued at RM5,000 per company, which can be utilised to partially cover the on-boarding cost to be listed on world’s renowned e-Commerce platforms the likes of Amazon.com.

“We hope more SMEs can capitalise on the programme to kick-start their cross-border e-commerce business.”

Boost to property sector

The e-commerce boom is also set to be a boost to the local property market, with the industrial sub-sector being its biggest beneficiary.

According to the Valuation and Property Services Department’s (JPPH) Property Market Report 2017, the industrial sub-sector, though contributed the least to the overall property market last year , plays a significant role generating investments and employment opportunities.

“As Malaysia embraces Industrial Revolution 4.0 and the digital economy, a different ball game is expected of the industrial property sub-sector,” it says.

One initiative that is expected to support the sector’s performance, says JPPH, is the setting up of a Special Border Economic Zone in Bukit Kayu Hitam, which will be the new attraction for both domestic and foreign investors on the northern zone of Malaysia.

“Another is the establishment of a Digital Free Trade Zone (DFTZ), which will see KLIA as the regional gateway. The first phase of DFTZ is foreseen to have 1,500 small and medium enterprises participate in the digital economy and is expected to attract RM700mil worth of investment and create 2,500 job opportunities.

“On the same note, Cyberjaya will be transformed into a global technology hub and a smart city.”

In November, CIMB Research in a report said the industrial segment has a strong growth trajectory through acquisitions and organic growth, given the tight industrial space supply.

“Demand for new high-quality industrial assets will transform the segment, which has led to several new mega-distribution centres that carry high price tags as retailers start turning to logistics.

“Notably, UK-based retailer Marks & Spencer is building a 900,000-sq-ft distribution centre with one million products processing capability per day and will consolidate its 110 warehouses into just four.”

The sector is also expected to be bolstered by the growth of the e-commerce segment.

The growth in e-commerce, which in turn is spurring the online retailers sector, will lead to demand for larger warehouse spaces.

According to JPPH’s Property Market Report 2017, the industrial property sub-sector recorded 5,725 transactions worth RM11.64bil in 017.

“Compared with last year, the market volume increased by a marginal 2.1% but value declined by 3.1%. Most states recorded contractions in market activity but the commendable growth in Selangor and Johor at 19.5% and 9.5% respectively helped support the overall marginal growth.

“These two states accounted for 34.2% and 14% of the total market activity respectively. By type, vacant plots formed 31% of the total transactions, followed by terraced factory with 28.7% market share.”

JPPH says the industrial overhang remained minimal though the volume kept growing since 2016.

“There were 999 units worth RM1.51bil in 2017, showing an increase of 11.4% and 27.1% in volume and value respectively. Johor also took the lead in the industrial overhang with 40.7% (407 units) of the national total.”

JPPH adds that the industrial development front was less active as shown by the marginal increase of 0.4% in completion to record 1,851 units, whilst starts and new planned supply decreased by 20.7% and 34.3% respectively to 850 units and 710 units.

“As at year-end, there were 113,173 existing industrial units, with another 5,675 units in the incoming supply and 7,513 units in the planned supply.

“Prices of industrial property were stable across the board. One and a-half storey semi-detached factories in the Petaling District fetched between RM4.1mil to RM5.7mil. In Johor Bahru, similar factories in Taman Perindustrian Cemerlang ranged from RM2.3mil to RM2.7mil.”

As for the other property sub-sectors, the residential property market recorded 194,684 transactions worth RM68.47bil in 2017, which were 4.1% lower in volume compared with 2016, but they increased by a marginal 4.4% in value.

By price range, demand continued to be in the RM200,000 and below price points, accounting for nearly 45% of the residential market volume.

Last year saw 77,570 units of new launches, higher than those recorded in 2015 (58,411 units) and 2016 (52,713 units).

Kuala Lumpur recorded the highest number of launches in the country with more than 22,000 units. Its sales performance was at a low 19.5%, followed by Selangor with 13,522 units and Johor, 7,926 units.

The commercial property segment, meanwhile, continued to decline but at a modest rate, says JPPH. There were 22,162 transactions recorded worth RM25.44bil in 2017, down by 6.7% in volume and 29.2% in value compared with 2016.

The retail sub-segment’s performance was stable at 81.3% in 2017 compared with 81.4% in 2016, recording an annual take-up of more than 6.78 million sq ft.

Kuala Lumpur, Selangor, Johor and Penang saw a significant take-up rate as their newly completed shopping complexes secured commendable occupancy.

Johor was leading with nearly 2.82 million sq ft followed by Selangor (1.17 million sq ft), Kuala Lumpur (1.01 million sq ft) and Penang (778,833 sq ft).

Credit: Eugene Mahalingam Star SMEBIZ

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US-China trade war escalates, tariff list aims to hinder China’s high-tech development: expert

https://youtu.be/vK4ADxuvIgk https://youtu.be/HdADW3ZpFNs

China will impose 25 percent in tariffs on 659 US goods worth $50 billion, including soybeans, cars and seafood.

The move came as a tit-for-tat response to the tariffs announced by the Trump administration Friday morning. An expert said the US decision does not aim to tackle the trade deficit with China but to block the Chinese government's efforts in high-tech development.

Tariffs on 545 US goods worth $34 billion will take effect on July 6, involving agricultural products, car parts and seafood, according to a statement released by China's Ministry of Commerce (MOFCOM) on Saturday morning. Soybeans, which are China's biggest import from the US in value, are on the list.

Chemicals, medical equipment and energy products from the US will also be subject to 25 percent tariffs, which will be announced at a later date.

The revised list is longer and involves more categories of products than a preliminary list of 106 US goods published by the ministry in April, but the total value of the products remains at $50 billion.

A Chinese commerce expert found that aircraft were removed from China's new list, which is noteworthy.

"We need aircraft [from the US]. We have to consider the costs of the countermeasures we plan to take," Bai Ming, deputy director of the Ministry of Commerce's International Market Research Institute, said on Saturday soon after the Chinese tariffs were announced.

It's like acting as a soccer referee who will not call out the offenses and let the play continue when the game still benefits the attacking team even though an attacking player is fouled, Bai further explained.

China is one of the fastest-growing civil aviation markets in the world, and 15 to 20 percent of Boeing's aircraft deliveries are projected to end in the Chinese market over the next two decades, according to Morgan Stanley.

The US has kept changing their mind and ignited a trade war, which China does not want and will firmly oppose, a spokesperson of the MOFCOM said immediately after US took trade measures on China. "This move not only hurts bilateral interests, but also undermines the world trade order."

"China and the US still have hopes of negotiating and reaching an agreement, as both the tariffs announced by the two countries will not take into effect until next month," said Wang Jun, deputy director of the Department of Information at the China Center for International Economic Exchanges.

Wang told the Global Times that the removal of aircraft from the new list can be a signal that China still wants to talk, and also aircraft can be a valuable chip in the next round of trade negotiations.

Meanwhile, Wang said the Trump administration's newly published list is not so much a solution for the trade deficit problem with China as efforts to hinder China's technology development.

US President Donald Trump on Friday announced 25 percent tariffs on $50 billion in Chinese goods, containing industrially significant technologies related to China's "Made In China 2025" strategy.

According to a list published by the office of the US Trade Representative, the tariffs will be applied on more than 1,000 types of Chinese goods, including aircraft engine parts, bulldozers, nuclear reactors and industrial and agricultural machinery.

American industry also opposed Trump's decision.

"Imposing tariffs places the cost of China's unfair trade practices squarely on the shoulders of American consumers, manufacturers, farmers, and ranchers. This is not the right approach," US Chamber of Commerce President and CEO Thomas J. Donohue said in a statement posted on the chamber's website on Friday.

By Zhang Ye Source:Global Times


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American Ban on ZTE offers much food for thought & pain together with ZTE

This photo taken on April 19, 2018 shows the ZTE logo on a building in Nanjing in China's eastern Jiangsu province.AFP/Getty Images

 

Ban on ZTE offers much food for thought

The US ban on sales of chips and components to China's telecommunications company ZTE shocked Chinese society. Some Chinese people are furious at US behavior, others think ZTE deserves it, while some advocate Beijing take it as a warning and boost the country's domestic semiconductor industry. Some are more pessimistic and feel China cannot beat the US in a trade war.

The ZTE case can be argued as a show of high-tech hegemony by the US. It is absurd for Washington to pull this maneuver at the eleventh hour simply because ZTE failed to cut bonuses for its 35 employees as promised. The logic works for US society and the West is watching the case for fun. But certain Chinese people are also taking pleasure in it.  This is the reality.

It must be admitted that the US is powerful and it has started to punch China hard. The rise of China has reached a juncture where Beijing has prompted Washington to ponder its status as the world's No.1 and provided a somewhat disjointed West with a reason to strengthen its solidarity. The impulse to contain China's rise is emerging among Western elites. Radical and even risky policies toward China are gaining increasing support.

China needs a strong will, an open mind and the capacity to fight back. Through political solidarity and a robust economy, Beijing should be tough enough to withstand the slings and arrows. China needs to incubate and shape strategic technology research and development.

The reason why chip technology has experienced such limited progress despite years of advocacy is that the Chinese system has not yet formed a key driving force for it.

Beijing must develop its "nuclear weapons" in the field of economics to make the outside world fear strategic confrontation with China.

China should also make friends worldwide, including Western nations, so as to unite all the forces that can be united. It must not overly focus on gains and losses in friction with others. Beijing must protect its interests, but in the meantime it cannot isolate itself doing so.

China needs to accept diverse opinions on the internet, governing them but also adapting to them so as to prevent online opinions from impacting on society's overall judgment and confidence.

It is hoped that China will develop a greater core competitiveness which other countries cannot match. This is an expectation of all Chinese people.

American business to pain together in ZTE case

https://youtu.be/XgbspspyfLQ

The US government sales ban of American components to the ZTE Corporation will surely inflict significant damage to the company. However, the pattern of globalization shows that not only will the US not secure a victory, it will also suffer a harsh blowback. The US stock market came to a similar conclusion, and media from around the world calculated that the US' future losses will be significant.

Qualcomm is a major mobile chip supplier for ZTE mobile phones. According to Reuters, Qualcomm will be harmed during this strike because ZTE is an important client, and its competitors could benefit from ZTE choosing alternative manufacturers. Furthermore, Qualcomm might suffer more setbacks when China retaliates on the US for this ban.

According to studies by various media organizations, the full implementation of the seven-year sales ban on ZTE will amount to combined loss of $6.8 billion for Qualcomm, Acacia Communications, and Oclaro Inc. It will also affect more than 32,000 employees. Due to this estimation, Acacia Communications stocks dropped 35.95 percent this week. Additionally, Intel and Microsoft will be hit by shockwaves in the tech industry.

Over the years, China has grown to become the largest sales market for US electronic chips, providing US companies with substantial funds for research and development. Losing the Chinese market might cause these US companies to decline in quality, which could result in a bleak financial future.US semiconductor companies are facing real threats as they will likely be taken over by their opponents.

The US will also be hurt from increasing suspicions to its business environment. The US government ended ZTE's business dealings with American companies by force, due to "35 employees' bonuses issues" for the company with 80,000 employees. Is the American business environment still trustworthy? Does this not imply that the US government can bully whoever it wishes? Cooperation with American companies is already difficult and being reviewed by the US government for political correctness will not make matters easier.

Some Westerners criticize the risks of doing business with Chinese companies, but not one multinational company has experienced the same mistreatment ZTE has been subjected to. The proper name for ZTE's case could be called "35 people bonus crisis" and if this is what starts the cooperation breakdown between the US and China, or globalization in general, it will be one of the most bizarre jokes in history.

China will hit back in the best way it knows and inflict losses for American companies in China. Washington should not have any delusions of tolerance from China after causing such damage to its businesses.

With China and the US trading blows in this situation, the US economy and trade relations will delve into chaos. Investments of American companies in China far exceed Chinese companies in the US, meaning that the US has more to lose since these investments will not be spared during this fight.

Most importantly, Chinese society will lose faith in cooperation with American high-tech companies. The "35 people bonus crisis" will also serve as a push for China determination to develop its semiconductor industry to replace America's components.

China will endure a sting in the high-tech sector confrontation, but the US will suffer lasting pain. China has been slow to develop its semiconductor technology because it is cheaper to purchase American products in the past. Developing chips and operating systems will require massive market support and China's yearly import of $200 billion can definitely cover the funding for this research.

The consequences of punishing ZTE is now out of Washington's control. The intertwined economies of China and the US are like "conjoined twins" and separation will cause major pain for both sides. Washington's thinking that this is a unilateral punishment is naïve, and this short-sighted judgement will be paid at the expense of American companies and enterprises. - - Global Times


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China to open wider: How will US react?

If Washington thinks China's upgrade of its opening-up was triggered by US menaces, it is making a historic mistake in its relationship with Beijing. Whether the Sino-US trade war is aggravated depends on Washington. It is hoped US actions accord with Trump's pleasant tweets rather than more old carrot-and-stick

Opening-up China's future growth path

The community with shared future for mankind is a goal of China to lead the world forward into the future. The Belt and Road initiative is one of the paths toward it. The world has never seen a major power emerging with a peaceful and cooperative manner. Some people say that China is only pretending to rise peacefully. After Beijing's new measures were announced at Tuesday's forum, the world should have gained a better understanding of China.

Trump's car tariff tweet distorts truth

With the development of China's economic growth and strength of science and technology, further opening-up and lowering of tariffs will be the future trend. But how China will do this will be decided based on WTO rules and China's own interests. This is China's sovereignty. Beijing will never listen to the command of Washington.

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