Counterfeit goods, mainly from China, have become as profitable for Asia’s criminal gangs as illegal drug trafficking, the United Nations said

April 16, 2013, 1:58 a.m. ET

Fake Goods Rival Drug Profits for Asia’s Criminals

By CAROLINE HENSHAW

SYDNEY—Counterfeit goods, mainly from China, have become as profitable for Asia’s criminal gangs as illegal drug trafficking, the United Nations said in a report published Tuesday.

The U.N.’s Office on Drugs and Crime, or UNODC, looked into international organized crime across much of the Asia-Pacific region. Its report, the first ever published by the agency on the topic, catalogues how rapid economic growth has led to the proliferation of criminal networks profiting from illegal trade in goods and people.

A surge in Asia’s exports, which have nearly quadrupled in the past decade or so to $5 trillion, according to the World Trade Organization, has been accompanied by a rise in the trafficking of fake-branded products including handbags and medicines, the U.N. report found. Read more of this post

Chinese billionaires nervous about BVI revelations exposed by journalists

Chinese billionaires nervous about BVI revelations: report

Staff Reporter, 2013-04-16

An in-depth report on global tax havens has made many wealthy individuals across the globe anxious due to the increasing possibility that their overseas fortunes will be exposed by journalists, reports the Guangzhou-based 21st Century Business Herald.

Reports by the International Consortium of Investigative Journalists said hundreds of thousands of billionaires around the world, including many from China, have hidden their wealth in territories like the Cayman Islands and British Virgin Islands to dodge taxes. While this is hardly a new revelation, the prospect that individuals could be named publicly has caused consternation among those who fear their financial affairs might come under investigation. Read more of this post

Beijing defends ‘new look’ SOEs

April 15, 2013 1:43 pm

Beijing defends ‘new look’ SOEs

By Simon Rabinovitch in Beijing

The voice of the Communist party has defended the role of the state in China’s corporate sector, saying that government-owned companies are competitive on the global stage and paying important dividends to the country.

In a front-page article about the “new look” of state-owned enterprises, the People’s Daily said they were the backbone of the Chinese economy and stronger than at any point in the past two decades. Read more of this post

China’s banking regulator has banned the country’s lenders from creating new loans via local government financing vehicles (LGFV) as it tries to rein in ballooning risks with rising defaults

China Regulator Bans Lenders From Creating New LGFV Loans

04-15 16:26 Caijing

“For LGFVs with a lower-than-100 percent cash flow coverage ratio or higher-than-80 percent debt-to-assets ratio, their loans as a share of total bank lending should not be higher than that in the previous year”

China’s banking regulator has banned the country’s lenders from creating new loans via local government financing vehicles (LGFV) as it tries to rein in ballooning risks with rising defaults. Banks should control loans to LGFVs and must not increase its size, according to a guideline issued by the China Banking Regulation Commission. “For LGFVs with a lower-than-100 percent cash flow coverage ratio or higher-than-80 percent debt-to-assets ratio, their loans as a share of total bank lending should not be higher than that in the previous year,” the CBRC said. The CBRC has also reiterated banks should take a “cautious” approach in holding bonds from LGFVs, and bar local governments from using public assets as loan guarantees on behalf of their financing vehicles. Most Chinese local governments are forbidden from borrowing money directly. Some have set up special financial vehicles to help get round such restrictions and provide funding for costly infrastructure projects which usually take years to generate returns. Read more of this post

Slower China Growth Signals Days of Miracles Are Waning; Prices for knife fish, a delicacy, have fallen to $13 each from $220

Updated April 15, 2013, 10:11 p.m. ET

Slower China Growth Signals Days of Miracles Are Waning

By JAMES T. AREDDY and TOM ORLIK

Shanghai property developer Sun Ping recalled offering a bloc of villas for sale in 2006, a time when buyers queued overnight and traded spots in line for money. He sold 62 houses in three hours and figures those homeowners quickly saw their investments triple in value.

“That was a miraculous time,” Mr. Sun said. A recent open house he hosted drew only a handful of shoppers.

The days of miracles appear to be over in China, the world’s second largest economy. A cleanup is under way, following an economic party of epic proportions that lifted incomes but left behind debt, corruption and a mess of the environment.

After three decades of annual economic growth averaging around 10%, many industries are experiencing less bling and more blah. Read more of this post

China’s Cities Drag Feet on Home-Price Curbs: Mortgages

China’s Cities Drag Feet on Home-Price Curbs: Mortgages

All real estate markets are local, says the industry axiom, one that China’s central government is painfully aware of as its efforts to rein in home prices are undermined by uncooperative municipal authorities.

Former Premier Wen Jiabao, in his final endeavor to make housing affordable, set an April 1 deadline for higher down payments and interest rates for second-home loans in cities with “excessively fast” price gains and ordered stricter enforcement of taxes on sales. Thirty-five provincial-level cities responded with measures insufficient to curb prices that climbed 150 percent from 2003 to 2012.

“The local governments are just making a gesture to show they are following the orders,” said Ding Shuang, a senior China economist with Citigroup Inc. in Hong Kong. “Some of the targets are almost like jokes. The government’s enforcement of policies will be compromised.” Read more of this post

Paulson Gold Bet Loses Almost $1 Billion; Paulson started the year with about $9.5 billion invested across his hedge funds, of which 85 percent was in gold share classes.

Paulson Gold Bet Loses Almost $1 Billion: Chart of Day

Hedge-fund manager John Paulson’s wager on gold wiped out almost $1 billion of his personal wealth in the last two trading days as the precious metal plummeted 13 percent.

The CHART OF THE DAY shows gold’s tumble since the start of the year has cut his riches by $1.52 billion on paper, including about $973 million in the rout that began on April 12 and continued with today’s 9.3 percent drop. Paulson started the year with about $9.5 billion invested across his hedge funds, of which 85 percent was in gold share classes. Read more of this post

Does China Really Want a Nuclear Japan and South Korea? The potential for an atomic arms race in East Asia is real. Beijing must realize this

April 15, 2013, 7:28 p.m. ET

Does China Really Want a Nuclear Japan and South Korea?

The potential for an atomic arms race in East Asia is real. Beijing must realize this.

By BOB CORKER

North Korea’s increased belligerence has alarmed the U.S. and its allies and heightened tensions in the Asian-Pacific region. As usual, though, the hand-wringing in Washington, Tokyo, Beijing and Seoul isn’t accompanied by any new ideas on what to do to solve the perennial problem of Pyongyang and its illicit nuclear weapons program.

Most problematic, perhaps, is that nothing has altered the strategic calculus of China—the most influential player with respect to North Korea, and the one without which it is hard to see a resolution. Read more of this post

Australia Must Wean Itself From China; “I’m fed up with this government telling me, over and over, how lucky we are, how everyone is jealous of Australia. We need less talk and more help dealing with rising prices, and more progress creating new and better paying jobs.”

Australia Must Wean Itself From China

Viewed from afar, even the bad news in Australia looks pretty good. Unemployment reached a three- year high last month and is now all of 5.6 percent. Leaders such as U.S. President Barack Obama and French President Francois Hollande would kill for such a number. Australia has avoided a recession for 21 years, boasts a budget remarkably close to surplus and continues to enjoy low inflation. On any economic report card, the country deserves a string of A’s.

That stellar performance should make Prime Minister Julia Gillard a shoo-in for another term, right? Oddly, the prospects for Gillard’s Labor Party in September elections appear to dim with each new batch of economic data. Less than 30 percent of Australian voters are satisfied with the prime minister — her weakest numbers since September 2011. (Only 35 percent are satisfied with opposition leader Tony Abbott, according to a Newspoll survey published in the Australian newspaper on April 9.) Economic insecurity ranks as the main concern among voters. A reminder was delivered yesterday, when China reported slowing growth, sending Australia’s main stock index down the most in a month.

“I’m fed up with this government telling me, over and over, how lucky we are, how everyone is jealous of Australia,” Laurie Bracker, a 34-year-old insurance agent, said in Sydney last week. “We need less talk and more help dealing with rising prices, and more progress creating new and better paying jobs.” Read more of this post

Jakartans struggle to cope with city’s air pollution

Jakartans struggle to cope with city’s air pollution

Despite its poor air quality, many people living in Jakarta choose – or perhaps have no choice – to stay in the capital. -Jakarta Post/ANN
Tue, Apr 16, 2013
The Jakarta Post/Asia News Network

INDONESIA – Despite its poor air quality, many people living in Jakarta choose – or perhaps have no choice – to stay in the capital.

After leaving Jakarta for Bali for about a year for work, Devi Agustina, who moved back to the capital earlier this year, could not ignore the deteriorating quality of the air in Jakarta. “After living in a place like Bali, you realise how much you lose while living in Jakarta,” she told The Jakarta Post recently. “I miss Bali’s blue skies every time I see Jakarta’s polluted air.” Read more of this post

Demographic sands shift under Malaysian elite; Recalcitrance seems to have been woven into Malaysia’s success story as a nation

Demographic sands shift under Malaysian elite

BY:ROWAN CALLICK, ASIA-PACIFIC EDITOR 

From:The Australian

April 16, 2013 12:00AM

RECALCITRANCE seems to have been woven into Malaysia’s success story as a nation.

Mahathir Mohamad’s extraordinary spell as prime minister from 1981 to 2003 is just a part of it.

From Australia’s perspective, Malaysia has been a leading example of Asia’s inexorable progress towards a form of middle-class prosperity – while its leadership style has been from time to time decidedly edgy, especially when the ruling class has appeared to be on the ropes.

The country has been led in the 56 years through independence from Britain by Barisan Nasional – a coalition of 13 parties dominated by the United Malays National Organisation – and its predecessor coalition.

Malaysia’s next election, on May 5, is heading towards a tighter finish than the country has seen in decades. There is even a prospect – still somewhat remote – that Prime Minister Najib Razak’s BN might be defeated by the People’s Alliance Coalition (Pakatan Rakyat) led by charismatic former deputy prime minister Anwar Ibrahim, which combines his own People’s Justice Party, the Pan-Malaysian Islamic Party (PAS) and the Democratic Action Party that has recently attracted the lion’s share of ethnic Chinese voters. Read more of this post

Blank cheque IPOs sprouting in Malaysia; Firms with no profit, revenue or assets entice with plans to buy corporations

Blank check IPOs bring hope and caution to Malaysia

Sun, Apr 14 16:59 PM EDT

By Yantoultra Ngui and Elzio Barreto

KUALA LUMPUR/HONG KONG, April 15 (Reuters) – Malaysia’s bull market is seeing a type of initial public offering, still fairly new to Asia, that takes a special kind of company public: one with no profits, revenues or assets.

Cliq Energy Bhd last week became the second such firm – known as a special purpose acquisition company (SPAC) – to list in Kuala Lumpur and three more are preparing IPOs. The spurt comes after Malaysian equities rose for four straight years, including a banner year for IPOs in 2012, and as investors anticipate a jump in mergers and acquisitions in Southeast Asia.

But SPACs have historically been high-risk, high-reward investments. Some U.S.-listed SPACs have performed well and built market value, while others have failed to make any acquisition and were forced to delist.

“If the historical experience in the U.S. is any indication, it should provide a warning sign that these investments may not turn out to be particularly good ones,” said Stefan Lewellen, a SPAC expert who authored a study on U.S. SPACs at Yale University. Read more of this post

Gold’s Plunge Turns New York’s Diamond District Upside Down; “We currently have a line selling precious metals. I think it is type of paranoia. They are expecting gold to hit even lower than it is, and everyone is trying to get it in as fast as they can.”

Apr 15, 2013

Gold’s Plunge Turns New York’s Diamond District Upside Down

By Michael Casey

Few businesses have been impacted more by gold’s rollercoaster price ride in recent years than the 2,600 independent firms jammed into New York’s bustling Diamond District.

And since Friday, with the international price of gold falling more in dollar terms than in any previous two-day period since at least 1974, the activity on this crowded strip on 47th Street between 5th and 6th Avenues has gotten a little crazier. Gold dealers and their customers, accustomed to buying and selling according to the so-called “London PM fix” — the second of two daily benchmark prices set by a group of London bankers — had to adjust their reference prices by the minute as a plunging real-time market left them exposed to losses.

Roni Rubinov, proprietor of New York Gold and Silver Refiners, was forced to turn away one regular customer who’d come in toting a plastic bag of gold rings, necklaces and watches. The trading price was then at $1,370 per ounce, $25 less than the London fix, on which he had based his own delivery commitments for the day to larger wholesale refiners. By the end of trading Monday, the front-month April contract had settled on the Comex division of the New York Mercantile Exchange at $1,360.60 an ounce, down 9.4% on the day to mark a 13% decline in two days. “But I have a lot,” the man said. “Can you at least do half?” Since he was a regular customer, Rubinov, who owns both a gold dealing business and a pawnbroker, said he could have bought at a $5-per-ounce loss, but not at $25 down. He advised his customer to sit on his merchandise and wait for the price to come back at a later date. The man left, a despondent look on his face. Read more of this post

Gold’s Decline Rattles Some Small Investors’ Faith

April 15, 2013, 4:56 p.m. ET

Gold’s Decline Rattles Some Small Investors’ Faith

By MATT DAY

Gold’s two-day swoon has shaken even some of the metal’s most diehard fans.

Throughout gold’s 19-month rough patch, small investors – those who buy gold coins, or own shares in exchange-traded funds that buy the metal – were one group that never lost faith.

Gold coin sellers clogged the airwaves with advertisements making the case that there has never been a better time to buy. Newsletters from self-proclaimed gold-market experts proliferated, as did financial products designed to capitalize on interest in the metal. U.S. Mint gold coin sales hit a record high in January, even though gold prices were down 11% from record highs hit in August 2011.

Some of those buyers say they’re having second thoughts this week. A wave of selling that hit the market Friday morning accelerated when the market reopened Monday. During the two days, gold futures lost 13% of their value, falling $203 to $1,361.10 a troy ounce on the Comex division of the New York Mercantile Exchange. Monday’s $140 drop was the largest in 30 years. Read more of this post