Emerging Markets Daily - May 27
US Official Says 'Era of Engagement' with China Is Over, Indonesia's Digital Market, Singapore Carbon Exchange, Iran Bans Crypto Mining, Women's Employment Rising in Saudi Arabia
The Top 5 Emerging Markets Stories from Global Media - May 27
Top Biden Asia Advisor Says Era of Engagement With China is Over
Bloomberg
“The U.S. is entering a period of intense competition with China as the government running the world’s second-biggest economy becomes ever more tightly controlled by President Xi Jinping, the White House’s top official for Asia said.”
“‘The period that was broadly described as engagement has come to an end,’ Kurt Campbell, the U.S. coordinator for Indo-Pacific affairs on the National Security Council, said Wednesday at an event hosted by Stanford University. U.S. policy toward China will now operate under a ‘new set of strategic parameters,’ Campbell said, adding that ‘the dominant paradigm is going to be competition.’”
“Chinese policies under Xi are in large part responsible for the shift in U.S. policy, Campbell said, citing military clashes on China’s border with India, an ‘economic campaign’ against Australia and the rise of ‘wolf warrior’ diplomacy. Beijing’s behavior was emblematic of a shift toward ‘harsh power, or hard power,’ which ‘signals that China is determined to play a more assertive role,’ he said.”
“The blunt comments were among several signs of fresh tensions between the two countries, even as U.S. Trade Representative Katherine Tai and Chinese Vice Premier Liu He held their first phone call. Before the talks, Tai told Reuters that the two sides faced ‘very large challenges’ and President Joe Biden announced that he had ordered the U.S. intelligence community to ‘redouble’ its efforts to determine whether the Covid-19 virus had escaped from a Chinese lab.” Peter Martin reports.
Indonesia’s Digital Market Could Grow to $300 Billion in the Next 3 Years
CNBC
“Indonesia’s technology market is at an inflection point and could grow to between $200 billion and $300 billion in size the coming years, said John Riady, director of Lippo Group and CEO of Lippo Karawaci.”
“Riady said the market has grown to around $40 billion today [up from only $100 million in 2012].”
“He said that the group has made more than 30 investments in Indonesia’s tech space, which include digital payments platform OVO. ‘Indonesia is the most exciting digital and technology market in Asia and arguably the world,’ Riady told CNBC’s ‘Street Signs Asia’ on Thursday.”
“‘When our group first invested in technology in 2012, the size of the entire technology market in Indonesia was approximately $100 million. That same asset class today is about $40 billion,’ he added.” Yen Nee Lee reports
Singapore to Launch Global Carbon Exchange
Finews.Asia
"Climate Impact X, a new global exchange and marketplace for carbon credits, is set to launch in Singapore by the end of the year, according to an announcement on Friday.”
“CIX aims to provide ‘high-quality carbon credits to address hard-to-abate emissions’ to multinational corporations (MNCs) and institutional investors, the partners said in a joint statement. There will also be a project marketplace that caters to a broader spectrum of corporates seeking to participate in the voluntary carbon market, offering them a selection of NCS projects that can help meet their sustainability objectives.”
“In the announcement, CIX noted the growing global demand for high-quality carbon credits in the voluntary carbon market, which is estimated to increase at least fifteenfold by 2030, up to 1.5 to 2 gigatons of carbon dioxide (GtCO2) annually.” Finews.Asia reports
Iran Bans Crypto Mining Amid Electricity Shortages
Financial Times
“Iran has banned cryptocurrency mining for four months as the energy intensive industry has triggered electricity blackouts across the country.”
“In recent weeks, businesses and households across Iran have experienced blackouts for as much as six hours a day. Rolling blackouts cost Iranian chess players their match in an online Asian championship.”
“‘Everyone is finding a corner to mine bitcoins and cryptocurrencies,’ President Hassan Rouhani said on Wednesday. ‘Whoever does this from today is doing an illegal job even those who were allowed [to mine bitcoins] are no longer allowed until we leave behind this problem [of power cuts...’
“Rouhani on Wednesday ordered the ministries of industries, telecommunication, energy and interior affairs to clamp down on cryptocurrencies. He said electricity consumption had increased by 20 per cent over the past year, though he did not clarify how much of this was caused by cryptocurrencies…”
“…overseas investors, including China, have invested in cryptocurrency mining in Iran. A Chinese-run operation in Rafsanjan, southern Iran, is estimated to be the biggest in the country. Polish, Indian and Turkish companies have also received permission to mine bitcoin in Iran, Majid-Reza Hariri, head of Iran-China Chamber of Commerce, told local news agencies on Tuesday…”
“It is also not clear how easy it will be to enforce the restrictions. Last week, the energy ministry tried to shut down one operation but was met with gunfire.” Najmeh Bozorgmehr reports.
Women Are Getting More Jobs Than Ever in Changing Saudi Arabia
Bloomberg
“It looks like a woman’s world on the 29th floor of Tamkeen Tower, where a call center for Saudi Arabia’s General Authority for Statistics overlooks the beige sprawl of Riyadh. Past frosted glass doors, the few men to one side of the room are vastly outnumbered by female colleagues sitting at desks spread across the office.”
“The scene is the opposite of what most workplaces in the conservative Islamic kingdom looked like a few years ago, reflecting the growing influx of women into the job market. ‘Look where we were and where we are now,’ says Reem Almuhanna, 31, who oversees the call center’s 74 employees as they gather data on households and businesses.”
“Keeping women at home is a luxury the world’s largest exporter of crude can no longer afford. Crown Prince Mohammed bin Salman, 35, is overhauling the economy to prepare for a post-oil future and striving to create jobs amid sputtering economic growth. With the cost of living on the rise as the government cuts gasoline and electricity subsidies and introduces new fees and taxes, including a 15% value-added tax, Saudi households increasingly depend on women working.” Vivian Nereim reports
What We’re Also Reading..
China’s GPS Rival BeiDou To Be Worth $156 Billion by 2025
South China Morning Post
“The value of China’s BeiDou satellite navigation industry is estimated to be worth 1 trillion yuan (US$156 billion) by 2025, according to state news agency Xinhua, as the country continues to seek alternatives to US technology.”
“China’s satellite navigation industry was worth more than 400 billion yuan by 2020, growing at an average annual rate of 20 per cent, according to a Xinhua report on Wednesday, citing Yang Jun, deputy director of China Satellite Navigation Office, at an industry conference hosted in the southeastern Jiangxi province.”
“…Launched in 1994, China’s BeiDou project was a response to the realisation that the country’s military needed its own satellite navigation system to replace GPS, developed by the US Department of Defence.”
“In a 1996 incident, which a senior Chinese military official characterised as ‘an unforgettable humiliation’, the People’s Liberation Army lost track of two missiles fired into the East China Sea as a warning to Taiwan.Analysis later suggested that the failures might have been caused by a sudden disruption of GPS.” Tracy Qu reports
Seoul Threatens Boycott of Tokyo Summer Olympics
Korea Times
“Calls are growing for Seoul to boycott the upcoming Tokyo Summer Olympics ― not out of concerns over COVID-19 infections but in protest against Japan's persistent claim over Korea's easternmost islets of Dokdo in a map for the Olympics showing Japan's territory.”
”Former Prime Minister and former ruling Democratic Party of Korea (DPK) Chairman Lee Nak-yon on Thursday wrote on Facebook that ‘Japan's Olympic organizing committee is marking Dokdo as Japanese territory, and dismissing Korea's demands to correct it.’ He said Dokdo is Korea's territory historically, geographically and by international law.”
"‘I strongly urge the Japanese government to correct this as soon as possible. The Olympic Charter states it pursues political neutrality, and Japan's act is against the Olympic spirit that pursues harmony. I also urge the International Olympic Committee (IOC) to take prompt and stern action against Japan's move,’ said Lee, who is anticipated to run for next year's presidential election.”"If Japan continues to refuse (to correct), the Korean government should take all possible measures, including a boycott of the Games." Nam Hyun woo reports.
Why a Grand Plan to Vaccinate the World Against Covid Unraveled
The Wall Street Journal
“This spring, American epidemiologist Seth Berkley had to break some bad news to the world’s poorest countries: millions of Covid-19 vaccine doses promised to them weren’t coming.”
“The nations were counting on getting shots from Covax—a multibillion-dollar program to immunize the world, led by Dr. Berkley and championed by the World Health Organization. But shipments from Covax’s main supplier in India, where Covid-19 cases were surging, suddenly weren’t coming through.”
“Tens of millions of hospital workers who had received one dose were unexpectedly no longer scheduled for a second. The prospects for quickly inoculating other front-line workers and vulnerable people were fading fast.”
“The Covax program, conceived in early 2020 as a kind of Operation Warp Speed for the globe, was supposed to be a model for how to vaccinate humanity, starting with those who needed it the most. The plan was scheduled to have the developing world’s entire healthcare workforce immunized by now.”
“Instead, the idealistic undertaking to inoculate nearly a billion people collided with reality, foiled by a basic instinct for nations to put their own populations first, and a shortage of manufacturing capacity around the world.” Gabriele Steinhauser, Drew Hinshaw and Betsy McKay report