15 Aug 2015

Yuan and you: How China's devalued currency affects U.S. consumers

The Chinese reduced the value of their currency this week in relation to the US Dollar, which should have repercussions in both markets. Kaja Whitehouse tells you what this means for both the US and China.

China on Wednesday devalued its yuan currency for a second day running. It could have an effect on American consumers and investors. Here's how.

If you like your goods made in China, a weakened yuan is your friend. When the yuan falls in value, goods imported to the USA from China become cheaper. And China makes a lot of things from cars and computers to clothing and furniture. Conversely, American businesses will find it more expensive to sell their goods to China.

The Federal Reserve is poised to raise extraordinarily low interest rates as employment returns to healthier levels. But a stronger dollar against the yuan could depress inflation because Chinese goods are cheaper. That, in turn, could lead the Fed to hold off on upping rates this fall because it already is worried about inflation being too low. Those with mortgages rates explicitly tied to base rate moves would benefit. Savers looking for more interest — not as much.

Many U.S. companies do a considerable amount of their business abroad, either selling directly to Chinese consumers, manufacturing or via overseas units that produce income in the local currency. Apple, for example, relies on China to make its iPhone and iPad. A stronger dollar compared to the yuan means any income generated in China loses value as it is repatriated back to America. Similarly, manufacturing for U.S. firms becomes more expensive. All this could lead to lower earnings for U.S. companies. And when earnings dry up, so do jobs.

China, the world's second largest economy, consumes a lot of oil, second only to the U.S. However, oil prices are denominated in dollars, so a gutted yuan means China's purchasing power is reduced, which could prompt the Chinese to spend less on oil-based products. That reduction in demand could lower prices, an upside for American drivers.

Investors have worried for some time about China's slowing growth and what this might mean for global markets. As the yuan slid this week, so have stock prices. Of particular concern for consumer investors is what is perceived to be Beijing's apparent preference for surprise interventions in currency markets.


CBL takes action to halt sliding LD black market exchange rate

The Central Bank of Libya (CBL) yesterday announced a number of urgent measures with regard to the decline of the exchange rate of the local currency against the main international currencies on the black market.

The announcement followed an extensive meeting in Tripoli revealed yesterday, attended by representatives of local commercial banks, businessmen and officials from the CBL.

The approved plan proposed solutions for the decline in the exchange rate of the Libyan Dinar by providing the banks with hard currency, fighting corruption in the issuing procedures of Letter of Credit (LCs) and supporting local banks in finding ways to provide citizens with debit cards.

“The two mains reasons are the decrease of the export of oil by two thirds and the corruption in the issuing Letter of Credit at commercial banks in which some obtain this benefit in order to import products to the local market but instead they resell the hard currency in the black market by using these credits” CBL Media office manager Essam Al-Oul said.

Salem Ali, a 50-year-old Tripoli resident with six children, says that he is fed up with price increases due to the decline of the dinar. “It is always ordinary people who pay the price of any crisis” he said disconsolately.

As part of its proposed reform plans, the CBL promised to provide all local banks with enough foreign currency to meet the general public’s demand for use for medical, study and tourism purposes.

The CBL has also proposed a new mechanism for issuing LCs in order to decrease the corruption in that sector as well as reorganizing the process of the issuing of debit cards. The whole issue of the issuance of debit cards has become a black market racket.

It will be recalled that Libya has been suffering an acute financial crises due to political and military infighting, a crash in its oil production as well as a crash in international crude oil prices. The fall in Libya’s oil revenues and failure to cut spending has meant that it has suffered recurring budget deficits.

These deficits have had to be subsidised from Libya’s 100 bn plus foreign currency surplus amassed by the Qaddafi regime over decades.

However, the high demand on foreign currency has meant that the CBL is tightening the outflow of foreign currency to the general public which has in turn contributed to the near doubling of the dinar’s black market rate from circa 1.30 to 2.50 per US dollar.

This rocketing of the black market rate has raised the cost of living and eroded Libyans’ purchasing power and has put pressure on the CBL to stem the rise of the dollar’s black market rate.

Russia and Ukraine: A Legal Perspective

MOTYL: Your recently published book, Aggression against Ukraine, argues that Russia’s annexation of the Crimea and war in eastern Ukraine is a challenge to international law and global public order at large. Has Russia effectively destroyed the postwar security architecture in Europe?

GRANT: One hopes that there is still time to save the post-1945 system of public order in Europe. The Soviet Union, whatever its faults, had a keen appreciation for territorial stability. The Helsinki Final Act enshrines that appreciation. The Final Act addresses Western concerns over human rights; but the USSR insisted that it also secure the boundaries of Europe against any future attempt to change them by force or threat. In the case of Germany’s borders, the postwar treaty practice went even further: no change at all is permitted, those borders being legally entrenched beyond the general privilege that international law accords to territorial settlements.

Reasons for pessimism about the postwar security architecture however exist. The Russian Federation today seems to have jettisoned the USSR’s relative conservatism. Instead of the principle of territorial stability, the Russian Federation since March 2014 espouses an historicist view that says that old boundaries might be brought again to life, including by force if Russia so chooses. International law had good reason for moving beyond historical claims as a solvent of settled boundaries. Every country has a history. If the law permitted a country to plead new boundaries on the basis of whatever page of its history it chose, then claims to revise the territorial settlement would be without end. Law aims to achieve predictability. A history-based revision of modern territorial relations is inimical to law. In any event, even valid claims are not to be prosecuted by force or threat. We have an orderly process to deal with valid claims—look at the docket of the International Court of Justice for a demonstration of how that process functions when states accord with it. That is the process that we should hope survives the current crisis. And the stable borders that so benefited Europe for 70 years, it is to be hoped, are not thrown into doubt by Russia’s attacks on Ukraine.

MOTYL: Why did Russia act so destructively? Is the system at fault? Putin? Or does the fault lie with the West?

GRANT: Russia’s conduct since the start of 2014 presents a degree of puzzlement. Russia, notwithstanding the grievances it asserts against the West and others, has undergone a stunning transformation since the end of the USSR. The early 2000s in particular, if I understand the economists, witnessed an unprecedented growth in Russia’s wealth. Russia has become connected to the wider world in a way that had been unthinkable in the days of the USSR. This is no isolated state, culturally or economically. Its people travel; its investors are entwined with other countries’ economies; it derives vast income from the export of raw materials and certainly has the potential to do more than that. Yet with the forcible seizure of Ukrainian territory and the cascade of threats and violence that followed, Russia seems to be rejecting the system that, in a fair view, was serving it well.

There are commentators who say that the expansion of NATO or the discussions between the EU and Ukraine precipitated Russia’s aggression. The difficulty is that saying this is to reject one of the cornerstones of modern international law. States are free to choose what states they deal with, and how. States are free to choose what domestic political and social order they maintain as well. The International Court of Justice famously reminded us of this in the Nicaragua v. United States case: it was not for the United States to complain that Nicaragua had formed an alliance with the USSR and elected, under that alliance, to follow the socialist path. This is one of the main reasons why the court came down so hard on the United States in that case. The thing is, in that case, the United States had credible evidence that Nicaragua was actively working, by means of armed force, to overthrow the governments of neighboring Central American states. Nobody believes that Ukraine is using armed force to overthrow, say, the government of Belarus. To say that NATO poses a threat to Russia, likewise, is groundless. The point about the Nicaragua case is this: if Nicaragua’s right to choose its own international and domestic orientation meant that the United States had no right to intervene there, then Ukraine’s right is even more clear; it is an a fortiori case. The West has done nothing to give rise to an international law right of forcible intervention in Ukraine.

One should note in this connection that criticizing a state’s human rights record is not forcible intervention! It is simply holding a state to account when evidence suggests that the state has failed to accord with its human rights obligations. President Putin’s assertions that the EU has an unlawful agenda, when the EU criticizes Russia’s domestic human rights record, have no validity whatsoever. Chapter 7 in the book addresses Russia’s idea that human rights somehow constitutes a threat to Russia’s independence and territorial integrity. I suggest there that that idea relates closely to Russia’s new foreign policy of territorial aggrandizement. I am writing separately at the moment on the old Soviet idea of international intervention. There are some surprising continuities between that idea and the Russian Federation’s present ideological orientation. Russia’s jettisoning of the Soviet belief in stability of boundaries is a profound discontinuity, and dangerous—yet plus ├ža change…

MOTYL: What can the international community—the United Nations, the European Union, the West—do to repair the damage Russia did to international law?

GRANT: A range of options exists for repairing the damage. Many of the options, or most, can be pursued together; they are not mutually exclusive. Ukraine, for example, already has brought inter-state claims against Russia under the European Convention on Human Rights. How the Strasbourg court decides will depend on the application of the convention to the facts of the case, but the Cyprus v.Turkey case suggests one of the possibilities: the court there held the occupying power responsible for payment of substantial compensation. I have suggested elsewhere some of the other procedural mechanisms that Ukraine might invoke in its resistance against Russia’s attack. (See for example theChicago Journal of International Law, volume 16.1.)

As for the general response—that is to say, the response by states at large—this is important as well. A core principle of international law is that no state shall recognize, or imply the recognition, of a situation that has resulted from a serious breach of international law. A corollary to that principle is that all states shall cooperate to bring an end to the situation. Applied to Russia, this means that all states must refrain from recognizing Russia’s unlawful annexation of Crimea; must refrain from recognizing Russia’s unlawful attempt to separate Donetsk and Luhansk from Ukraine by force; and must cooperate to bring an end to the situation in Ukraine that has resulted from Russia’s armed attack. How exactly states shall engage in this cooperation is not specified under international law. Sanctions against Russia, in my view, are consistent with states’ obligation to cooperate. There is also the right of Ukraine, under Article 51 of the UN Charter, to self-defense. This is an inherent right; it does not depend upon its embodiment in Article 51; and no procedural step by the UN is needed for Ukraine to invoke the right. Moreover, the right also involves the right of collective self-defense. It is within Ukraine’s right to call upon other states to assist it with its defense. Now, states inevitably will enter into prudential calculations about involving themselves in Ukraine’s defense. It would not however be convincing for them to say that international law compels them to refrain from involving themselves. International law compels nothing of the sort. To the contrary, international law envisages collective response to aggression.

MOTYL: What should Ukraine and its friends do about Crimea and the Donbas?

GRANT: The answer to this question, to some extent, follows from the answer to the preceding question. First, nobody should say or do anything that gives even the slightest indication of acceptance of or acquiescence in Russia’s unlawful presence in those parts of Ukraine. Second—and this is a point distinct from the answer above—Ukraine and its friends should insist on accurate reporting of the facts. The principal institutions of international law available to address the situation have been absolutely clear about the facts. For example, the referenda purporting to have separated those regions are not valid. The General Assembly and Parliamentary Assembly of the Council of Europe are among the institutions that have said so. And observers, including those of the OSCE, dismiss out of hand Russia’s fiction that Russia’s men and materiel are not involved in the fighting in the eastern part of Ukraine. Western media should not indulge that fiction. They should reject it. Russia is involved; this is not a civil conflict; it is an armed invasion. Ukraine and its friends should continuously remind people and governments of the facts.

MOTYL: Can you imagine Russia’s being reintegrated into the international community anytime soon?

GRANT: Our international system is resilient. It is so resilient that even a state that has carried out aggression against its neighbor continues to be a member of the international community, at least in some sense. This at times can exasperate those who seek to hold the aggressor to account. Why, one might ask, do we “let” Russia sit in the General Assembly of the United Nations? Why does Russia wield a veto in the Security Council? Why do we continue to have diplomatic relations with Russia? The answer to these questions is that countries are too deeply interconnected today for the international community as a whole to cut off a country entirely from the community. This at any rate goes for most countries. So I do not believe that we yet have reached the point where Russia is going to be thrown out of the international community as such. This is not really the way to look at it.

Instead, we are looking at a range of sanctions that countries should adopt against Russia to impose as much cost on Russia for its aggression as we can it. We should also be looking at more vigorous steps to help Ukraine in its lawful exercise of the right of self-defense.

I would add that membership in the international community does not mean the same thing for all countries at all times. If no action is taken, Russia will be hosting the FIFA World Cup in 2018. This will make a sorry spectacle. Governments should consider whether they really wish to lend credibility to the current Russian government by being its guests for this sort of event. Some channels must always remain open, even to the worst violators of international law; but others should be closed until the violator returns to lawful conduct.

To answer the question directly: the full normalization of relations with Russia must await Russia’s reversal of its aggression against Ukraine. This means the withdrawal of Russia from Crimea and the Donbas. It also means reparation from Russia for the injuries that Russia’s aggression to date has caused Ukraine and others. This is not about punitive measures against Russia. It is about appropriate measures that Russia must take to reverse its serious breaches of international law and to reverse the consequences of those breaches.

Letupan Tianjin: Angka kematian meningkat kepada 85 orang

TIANJIN, China: Angka kematian akibat letupan kuat di bandar pelabuhan Tianjin sudah meningkat kepada 85 orang, kata media rasmi Xinhua hari ini. Beratus-ratus lagi cedera akibat letupan dahsyat yang berpunca dari sebuah gudang menyimpan bahan kimia, sekali gus menyebabkan ramai bimbang mereka terdedah kepada pencemaran kimia beracun. 

Dalam pada itu, pasukan penyiasat dikatakan tidak dapat mengenal pasti apa bahan kimia yang berada di kawasan itu ketika letupan berlaku. Sekumpulan 217 pakar bahan nuklear dan biokimia dari tentera China juga dikerah ke kawasan insiden selepas letupan itu. 

Tetapi kumpulan pakar terbabit memaklumkan gas toksik yang tersebar dari letupan itu adalah dalam julat normal dan udaranya selamat untuk penduduk. - AFP

M&A syarikat china ke Malaysia bernilai AS$830j hingga Julai

KUALA LUMPUR: Jumlah nilai penggabungan dan pengambilalihan (M&A) syarikat China ke Malaysia berjumlah AS$830 juta setakat Julai 2015, hampir empat kali ganda angka bagi keseluruhan 2014, demikian menurut HSBC Bank Malaysia Bhd.

"Setakat tahun ini, M&A China ke Malaysia menjadi yang paling sibuk mengikut rekod, baik dari segi jumlah dan perjanjian besar dengan sektor hartanah, produk pengguna dan runcit menjadi yang paling aktif," katanya dalam satu kenyataan.

M&A menjadi cara yang paling cepat untuk syarikat-syarikat China meneroka pasaran asing dan bergerak lebih tinggi dalam rantaian nilai manakala susut nilai mata wang asing berbanding renminbi menyediakan persekitaran yang baik untuk M&A.

Peningkatan pendapatan boleh guna pengguna China sebanyak 1.4 bilion juga mengisi minat pengambilalihan dalam sektor barangan pengguna dan riadah.

Perkembangan berkenaan dapat disaksikan dalam pelaburan China ke Malaysia, kata kenyataan itu lagi.

Perjanjian utama termasuk pembelian tanah Southern Crest Development Sdn Bhd oleh Greenland Holding Group di Plentong, Johor (AS$658 juta), pembelian hartanah Pearl Discovery Development Sdn Bhd (AS$89 juta) oleh Longcheer Holdings dan Parkson Retail Group membeli YeeHaw Best Practice Sdn Bhd dalam industri makan dan penginapan. - BERNAMA

Ringgit dijangka didagangkan secara berhati-hati minggu depan

KUALA LUMPUR: Ringgit dijangka mengalami dagangan berhati-hati minggu depan berikutan ketidaktentuan sentimen global, kata seorang wakil peniaga. 

"Mata wang ekonomi baru muncul Asia diunjur terus dipengaruhi oleh faktor-faktor luar seperti prestasi minyak mentah dunia dan ketidaktentuan hala tuju dasar di negara ekonomi utama terutamanya Amerika Syarikat berhubung keputusan kadar faedah Rizab Persekutuan serta China dengan penurunan nilai yuan.

"Isu-isu yang dihadapi 1Malaysia Development Bhd dan kemelut politik dalam negara juga antara cabaran yang dihadapi ringgit," katanya. Data untuk dipantau minggu depan ialah indeks harga pengguna bagi Julai dan rizab asing bagi tempoh berakhir 14 Ogos, katanya.

"Pelabur mungkin terus mencari dolar dan kurang bagi ringgit minggu depan dengan tiada paras sasaran segera. Secara teknikalnya, pasaran mungkin menguji paras 4.15 manakala 4.00 kekal sebagai sokongan utama," katanya. 

Bagi minggu yang baru berakhir, ringgit diniagakan rendah daripada 1,530 mata asas berbanding dolar AS pada 4.0750/0800 daripada 3.9220/9250 yang dicatatkan Jumaat lalu. 

Ringgit mencecah paras terendah harian pada 4.15 berbanding dolar pada Jumaat minggu lalu buat kali pertama sejak krisis kewangan Asia 17 tahun lalu. Mata wang tempatan juga terus turun berbanding dolar Singapura pada 2.9037/9087 berbanding 2.8291/8317 pada Jumaat lalu dan rendah berbanding yen kepada 3.2784/2837 daripada 3.1429/1458 sebelumnya. 

Ringgit rendah berbanding pound sterling kepada 6.3603/3693 daripada 6.0881/0943 minggu lalu dan susut berbanding euro kepada 4.5424/5496 daripada 4.2836/2885 sebelumnya. - BERNAMA

SKMM keluar notis untuk Malaysiakini

Kuala Lumpur: Suruhanjaya Komunikasi dan Multimedia Malaysia (SKMM) telah mengeluarkan notis kepada portal berita Malaysiakini untuk menurunkan dua artikel daripada laman webnya yang didapati tidak benar.

SKMM dalam satu kenyataan berkata artikel berkenaan bertajuk ‘Report filed against Chief Sec, PSD Head’ dan ‘Laporan terhadap KSN, Ketua Pengarah JPA’ yang diterbitkan semalam.

“SKMM mendapati berita dalam kedua-dua artikel yang diterbitkan itu adalah tidak benar berdasarkan Suruhanjaya Pencegahan Rasuah Malaysia (SPRM) sudah menafikan wujudnya pegawai SPRM membuat laporan terhadap Ketua Setiausaha Negara dan Ketua Pengarah Perkhidmatan Awam mengikut peruntukan Seksyen 48 Akta SPRM 2009,” kata kenyataan itu.

Sehubungan itu, SKMM mengingatkan portal berita untuk lebih bertanggungjawab dan memastikan kesahihan sesuatu berita sebelum ia disiarkan.

Suruhanjaya itu turut menegaskan sebarang perbuatan menghantar kandungan palsu melalui aplikasi laman sesawang merupakan satu kesalahan mengikut Seksyen 233 (1)(a) Akta Komunikasi dan Multimedia 1998.

Ia memperuntukan hukuman denda maksimum RM50,000 atau penjara maksimum setahun atau kedua-duanya, jika sabit kesalahan. - Bernama

Tragedi buah epal

Kuala Lumpur: “Saya menyesal kerana mengikut kata hati dan tamak untuk mendapat gaji lebih selain mengharapkan kekayaan dalam masa singkat.

“Sudahnya, saya kini menanggung kerugian kerana terpaksa mengeluarkan semua wang simpanan untuk menggantikan wang orang ramai yang diberikan kepada ejen utama,” kata Mohd Faidzol Ismail, 44, ahli perniagaan yang mendakwa ditipu oleh ejen mencari pemetik buah di Australia, awal Januari lalu.

Menurut Mohd Faidzol, dia kini sudah serik kerana sudah tiada apa lagi yang tinggal melainkan terpaksa berdepan dengan orang ramai yang menjadi mangsa penipuan membabit kerugian lebih RM600,000.

Menceritakan bagaimana dia terjebak dengan penipuan berkenaan, Mohd Faidzol berkata, pada awalnya dia seperti orang lain ingin mencuba pekerjaan baru sebagai pemetik epal di sebuah ladang di Melbourne, Australia semata-mata mahu mendapatkan gaji lebih untuk memberi kesenangan kepada keluarga.

Katanya, menerusi iklan yang tertera di sebuah akhbar tempatan (bukan akhbar kumpulan The New Straits Times Press (M) Bhd), dia kemudian menghubungi ejen berkenaan yang menawarkan pakej ‘selamat’ iaitu semua pekerja menggunakan agensi terbabit akan mendapat permit kerja berbanding mereka yang bekerja secara haram di negara itu.

Rempuh tangga bangunan, bakar diri

Kuala Lumpur: Seorang wanita dipercayai cuba membunuh diri dengan merempuh tangga bangunan pejabat di Bangsar South, dekat sini, dengan keretanya sebelum membakar diri di dalam kereta itu, 5 petang tadi.

Difahamkan, wanita itu adalah bekas pekerja sebuah syarikat di bangunan itu dan dipercayai bertindak sedemikian kerana tidak puas hati dengan syarikat tempatnya bekerja.

Ketua Jabatan Siasatan Jenayah Kuala Lumpur Datuk Zainuddin Ahmad berkata, mangsa melecur hampir 50 peratus di keseluruhan tubuhnya.

Katanya, mangsa berjaya diselamatkan dan dihantar ke Pusat Perubatan Universiti Malaya (PPUM) untuk dirawat.

"Sepasukan anggota polis sudah dihantar ke lokasi dan PPUM untuk mendapatkan maklumat lanjut berhubung kejadian berkenaan," katanya ketika dihubungi, malam tadi.

Related Posts Plugin for WordPress, Blogger...