Economy, Investment and Trade
Apple explores moving 15-30% of production capacity from China to Southeast Asia
(19 June 2019) Apple Inc has asked its major suppliers to explore shifting 15-30% of their production capacity from China to other countries in order to lower its dependency on manufacturing in China, according to a Nikkei Asian Review report. The report, which cited anonymous sources, said that the countries being considered include Indonesia, Malaysia, Vietnam, India and Mexico. Apple product manufacturers and assemblers that have been asked to explore options outside of China are iPhone assemblers Foxconn, Pegatron, Wistron, as well as manufacturers Quanta Computer, Compal Electronics, Inventec, Luxshare-ICT and Goertek. Nevertheless, some analysts remain sceptical over whether Apple will ultimately shift production outside of China since it will likely take 12 to 18 months to shift 5-7% of its iPhone production to India, and at least two to three years to move 15% of the production of the same to other regions.
Cambodia, China to jointly build rice warehouses and silos
(20 June 2019) The Cambodian government and Chinese state-owned CITIC Construction signed an agreement for the development of 12 warehouses and 10 silos in 11 provinces to boost Cambodia’s rice exports to China. Speaking at the signing ceremony held at the Cambodian Ministry of Economy and Finance, Cambodian commerce minister Pan Sorasak said that the infrastructure will help both paddy rice farmers and milled rice exporters store their stock for a longer period, therefore allowing them to export more and at a better price. The 12 warehouses can store 827,000 tonnes of rice while the 10 silos can dry around 13,000 tonnes per day. This will, in turn, help the government reach its export target of one million tonnes of milled rice per year. According to the Ministry of Agriculture, Cambodia saw a 59% year-on-year increase in milled rice exports to China in the first quarter of 2019 totalling 75,214 metric tonnes. The country is also expected to export 400,000 tonnes of jasmine, fragrant and white rice to China from August 2019 to December 2020.
Cambodia to probe Chinese exports sent to the US via Sihanoukville SEZ
(21 June 2019) The Cambodian government “will not ignore” allegations made by the US that several Chinese companies are using Chinese-owned special economic zones (SEZ) in Cambodia to circumvent tariffs imposed by the US on Chinese exports, said commerce ministry spokesman Seang Thay. The ministry’s comments follow US embassy spokesman Arend Zwartjes’s recent announcement that the US Department of Homeland Security has penalised several companies for exporting Chinese goods to the US through Cambodia’s Sihanoukville SEZ. According to Seang Thay, the Cambodian government takes the matter seriously as they may lose access to the US’ Generalised System of Preferences (GSP) if no action is taken. The Sihanoukville SEZ incident follows an announcement by the Vietnamese customs earlier in June that it is investigating Chinese exporters who slapped “Made in Vietnam” labels on their goods in order to avoid US tariffs.
Vietnam, China localities to create “two nations, six destinations” travel tour
(22 June 2019) Vietnam’s Lao Cai province and Chinese Yunnan province’s Honghe prefecture signed an agreement for the development of a “two nations – six destinations” travel tour in a bid to boost tourism cooperation between the provinces. The six destinations are Vietnam’s Lao Cai, Hanoi, Hai Phong and Quang Ninh, plus China’s Kunming and Honghe. Under the agreement, both sides will cooperate in ensuring that tour companies from both countries will enjoy “optimal conditions” whether in terms of transportation arrangements, promotional activities, or other resources. Furthermore, the Honghe administration has asked Lao Cai to identify places in Honghe that the late President Ho Chi Minh stayed in 1940-1941 in order to develop a tour related to the Vietnamese leader.
Chinese conglomerate Dalian Wanda mulls Singapore REIT listing
(24 June 2019) Chinese real estate company Dalian Wanda is planning to list one of its real estate businesses as a real-estate investment trust (REIT) in Singapore, according to a Wall Street Journal report citing anonymous sources. The REIT, whose IPO will reportedly be worth over US$1 billion, will comprise a collection of properties owned by Dalian Wanda. According to the report, the listing comes on the back of the company’s recent sale of all 37 of its department stores as part of its effort to reduce corporate debt, which has so far seen the company unload over US$9 billion in assets. The company has also announced that it intends to focus on local investments and developing leisure and commercial facilities this year, such as through its US$11.6 billion project in Shenyang city.