Sunday, April 8th, 2018
WASHINGTON, April 8 — US President Donald Trump today said he sees an end to the escalating trade dispute with China, after tit-for-tat retaliatory tariffs and threats that rattled markets. “China will take down its trade barriers because it…
FRANKFURT, April 8 — Deutsche Bank AG’s supervisory board is leaning toward naming Christian Sewing to succeed Chief Executive Officer John Cryan, according to people with knowledge of the discussions. No final decision has been made as the…
PARIS, April 8 — Air France grounded just under a third of flights yesterday as staff staged a walkout over pay, and travellers also braced for a fresh wave of train strikes starting later in the day, crippling much of France’s transport…
WASHINGTON: As US-China trade tensions ratchet up, the technology sector is fretting over the potential for collateral damage to one of America’s most important export industries.
The tech industry is not directly affected by the new tariffs unveiled by the Trump administration which aim to target Beijing for unfair trade practices failure to protect intellectual property.
But some industry leaders fear tech will be dragged into the dispute, with the potential to impact the estimated US$3 trillion (RM11.6 trillion) industry in which the US and China are key players.
“As trade wars escalate, they are not controllable, they are not predictable,” said Ed Black, president and chief executive of the Computer & Communications Industry Association, which represents major tech firms such as Amazon, Facebook, Google and Netflix.
“There’s always collateral damage.”
Black said the US administration “correctly identified some of the problems” with trade involving China but “missed all the problems of internet companies doing business in China”.
Black said the tech industry understands the need to confront China over trade barriers and other practices, but that Washington’s efforts to go alone could “weaken the international trading system.”
The relationship of US tech firms with China has long been complicated by concerns about censorship, labour and human rights and the potential for stealing trade secrets.
Google shut down its search engine for China in 2010 after it found accounts of Chinese human rights activists hacked and some US-based online platforms are banned by Beijing.
But Apple recently agreed to base its cloud storage for Chinese users in the country, saying it had to comply despite concerns over Beijing’s surveillance of citizens. And Airbnb said it would share customer data with the Chinese government as well.
Susan Aaronson, a George Washington University professor of international affairs who specialises in digital trade, said that as American firms battle for supremacy in artificial intelligence (AI), they are hungry for sources of data, including from China.
“In almost everything the US produces the key source of value is data,” Aaronson said.
She wrote in a recent research paper that China “uses the lure of its large population, relatively low and poorly enforced privacy regulations, and subsidies to encourage foreign companies to carry out AI research in China”.
Her paper argued that American trading partners “need to encourage the data flows that power AI while simultaneously protecting citizens from misuse or unethical use of algorithms”.
Some analysts say the Trump administration has correctly identified some of Beijing's unfair trade policies but that tariffs may be counterproductive.
“China uses mercantile practices and the Trump administration is right to contest those actions, but there are many reasons the tariff approach is not the right one,” said Stephen Ezell, vice-president for global innovation policy at the Information Technology and Innovation Foundation, a technology-focused think tank.
With tariffs, he said, “US consumers and businesses will pay more in the long term. We need to take on China but we shouldn't be penalising ourselves in the process”.
Aaronson agreed that China has disadvantaged foreign firms but argued for a multilateral approach involving allies and global institutions “to move China towards more openness and the rule of law.” – AFP
HOUSTON, April 8 — Saudi Aramco took the first steps to integrating a petrochemicals business into the United States’ biggest oil refinery, which is operated by its subsidiary Motiva Enterprises. Aramco’s Chief Executive Amin Nasser signed…
PETALING JAYA: Fresh from securing US$1 million (RM3.87 million) in a pre-series A round last month, social commerce enabler Avana is building up momentum to test the Indonesian market for its next phase of growth.
Avana transforms social media from a promotional platform to a transactional platform by bridging product discovery purchases and closes the loop between digital marketing and trade for both online and offline sales channels.
By subscribing to Avana’s packages of RM399 or RM699 a year, SMEs can sell on web, social media, mobile and tablet and manage customers, orders, and process payment.
Avana CEO Luqman Adris, 35, said its foray into Indonesia began in November 2017. He noted that the number of SMEs and Facebook users in Indonesia is 10 times more of Malaysia’s.
“It (Indonesia) is a test market for us at this moment. If you go all in to Indonesia, you need a lot of capital and US$1 million is not enough. It’s a huge market,” he told SunBiz.
Prior to this, the start-up has decided not to push its business in Singapore as the e-commerce scene there is crowded and competitive, while the market size there is relatively small compared with other countries in the region. Currently, the majority of Avana’s business is from Malaysia.
Luqman said it is looking to raise US$10 million in its next round of funding in 2019 for its regional market expansion. He said Avana aspires to be a global company in five years, growing from Malaysia to the regional scene and subsequently the global stage.
“The challenge is growing our team or human capital. We’re on fast growth and we need to get people to adapt to fast change and perform,” said Luqman, adding that the start-up has 22 staff in Malaysia and eight in Indonesia, and is hiring more talent.
A former aerospace engineer and digital agency entrepreneur, Luqman formed the start-up under The Future Commerce Sdn Bhd in June 2016 after he noticed that many SMEs and micro-SMEs could not afford to pay some RM30,000-RM50,000 for a good e-commerce platform.
He said these SMEs often promote their business through Facebook and Instagram and would sell their products elsewhere, where most processes are manual.
Avana COO Soh Yien Yee, 30, who previously worked in social media management and marketing, echoed the issues with small sellers.
“These sellers usually don’t last long. They do all things manually, from sourcing, modeling, taking orders, shipping orders and COD (cash on delivery). It’s not easy to grow the business. They often hit a roadblock and when they start working full time or when they get married, they give up,” said Soh.
Avana, which has 25,000 merchants currently, allows sellers to reduce drop rates across multiple sales channels and manage the purchase intent, transactions and inventory within a single dashboard. Sellers are equipped with tools to manage their complete sales cycle, including payment, shipping and inventory management.
Last month, Awana raised US$1 million in a pre-series A round led by Gobi Partners, Cradle Seed Ventures (CSV) and TH Capital. Luqman revealed that it is also in talks with one Indonesian investor.
In its seed round, Avana raised US$500,000 from CSV and Captii Ventures in June 2016.
PETALING JAYA: AmBank Research expects Malaysia’s export growth to rebound in the upcoming months supported by firm commodity prices, moderate demand growth in electrical and electronic and resource-based products as well as healthy global growth and trade.
“Despite the poor showing of exports (in February 2018), we believe exports will rebound in upcoming months and project the full-year growth average at 8.5%,” its analysts said in a report last Friday.
Nevertheless, the research house said the high base will impact export performance to some degree, adding that a trade war will cause some headwinds through the country’s major trading partners, China and the US.
On a separate note, PublicInvest Research said it is starting to see the damage from the fast-rising ringgit to external demand, which could be worse if external demand turns out to be softer.
“Our fear of the fast rise in the value of the ringgit is with basis nonetheless, already manifested in the dent caused in February’s exports. Of note, the ringgit is getting less competitive against the rupiah and the peso following these currencies’ y-o-y drops of 10.1% and 13.8% in real effective terms in February, continuing the trend we saw in January.
“Perhaps an intervention by the central bank could slow down the pace of the ringgit appreciation, which in turn can help with our competitiveness,” it added.
February’s export contracted 2.0% year on year (yoy), from a rise of 17.9% yoy in January, weighed by the slowdown in exports of resource-based goods such as petroleum, natural gas, natural rubber, timber and timber-based products. It was also dampened by the high base following February 2017’s strong export growth of 26.6%.
At the same time, imports fell 2.7% yoy after climbing 11.6% yoy in the previous month, also hit by the high base factor.
“There was a noticeable slowdown in the importation of intermediate goods during the month, reflected by the contraction of 14.6% yoy which we reckon is due to the rise of the ringgit.
“There was no letup in trade surplus, however, as it touched RM9 billion, thanks to the bigger drop of imports against exports,” PublicInvest Research said.
It added that the strong cumulative trade surplus of RM18.6 billion year-to-date is 38.7% higher than the same period last year, supporting its conviction of steady gross domestic product growth in the first quarter of 2018.
SINGAPORE, April 8 — Singapore’s state-owned natural gas importer brought in its first cargo of a super-chilled form of the fuel for domestic use. Pavilion Energy Pte, owned by Singapore’s Temasek Holdings Pte, unloaded the liquefied…
BEIJING, April 8 — China’s foreign-currency holdings resumed gains last month as the government kept capital curbs in place and the yuan capped its best quarter in a decade. Reserves rose US$8.34 billion (RM32.2 billion) to US$3.143 trillion…