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China and U.S. clash again on trade and regional security -Reuters

[A]t the Shangri-La Dialogue in Singapore, Asia’s premier defense summit, China’s Defense Minister Wei Fenghe warned the United States not to meddle in security disputes over Taiwan and the South China Sea.

On Saturday, acting U.S. Defense Secretary Patrick Shanahan told the meeting that the United States would no longer “tiptoe” around Chinese behavior in Asia.

Modi eyes fiercer rivalry with China over neighbors in second term India to be tested in Sri Lanka and Bangladesh while ignoring Pakistan -Nikkei

India Roiled as Trump Yanks Its Status as a Developing Nation -Bloomberg 

“I have determined that India has not assured the United States that India will provide equitable and reasonable access to its markets,” Trump said in a proclamation. “Accordingly, it is appropriate to terminate India’s designation as a beneficiary developing country effective June 5, 2019.”

Strategic imperatives for Indonesia’s foreign policy One area that needs careful thinking and debate is foreign policy. It is time for Indonesia, after a focus on strengthening national capacity (economic development) for almost five years, to start deepening its regional and international engagement. -The Jakarta Post

 GLOBAL BUSINESS

China strikes defiant tone on trade in new white paper, blaming U.S. for 'unacceptable' demands -The Japan Times

“Whatever the future might bring, China is confident of meeting challenges head on, turning risks into opportunities and opening new chapters,” it said. “China remains committed to its own cause no matter how the external environment changes.”

US sanctions threaten to sink China at sea Bipartisan bill if passed will severely sanction a long list of Chinese entities and individuals involved in Beijing’s expansion and militarization in the South China Sea -The Asia Times

Translation: China's New Draft 'Data Security Management Measures' Rules for personal information, 'important data,' and cybersecurity practices open for public comment -New America

As China Takes Aim, Silicon Valley Braces for Pain The Chinese government said Friday that it was putting together an “unreliable entities list,” a counterattack against the United States for denying important technology to Chinese companies. No companies were named or details given, but tech firms seemed all but assured of being a prime target. -NYT

Twitter apologizes for suspending accounts critical of China ahead of Tiananmen anniversary -The Japan Times

While Huawei will be bruised by tech war, some Chinese suppliers could suffer a knock-out blow -SCMP

·       Small Chinese suppliers are worried that wider US-China trade standoff could result in lost orders and business going elsewhere

China Targets FedEx in ‘Warning’ to U.S. As details of China’s criteria trickled out, the investigation into FedEx’s “wrongful delivery of packages” was framed by the state news agency as a warning by Beijing after the Trump administration imposed a ban on business with telecom giant Huawei Technologies Co. -Bloomberg

 SAP to launch its first Asian startup incubator in Japan German enterprise software giant unveils Chinese and Indian ambitions -Nikkei

Toshiba to sell U.S. LNG business to French energy giant Total Toshiba Corp. said Saturday it will sell its U.S. liquefied natural gas business to French energy giant Total SA after a previous deal with a Chinese gas firm was canceled earlier this year. -The Japan Times

Trade dispute shifts business out of the ‘Factory of the World’ Vietnam and other Asian nations are benefiting, but labor quality is an issue -Taipei Times

 More supply chains to shift to Việt Nam, ASEAN -VNews

 “The changes in global trade are causing businesses to revisit their supply chain investment and capacity strategies, but we have yet to see this convert into wide-scale shifts to Southeast Asia, South Asia or other parts of the world.”

Melco buy-in triggers regulatory review of Crown's $1.5 billion Sydney casino An Australian regulator said it will review its approval for Crown Resorts’ $1.5 billion casino being built in Sydney, after the gambling giant’s founder James Packer sold nearly half his stake in the company to Hong Kong’s Melco Resorts. -Reuters

New PNG leader drops a nationalistic gauntlet Prime Minister James Marape railed against multinational energy companies and vowed to “take back” the economy in his inaugural address but few see revolution on the horizon -Asia Times

Total expects Papua New Guinea to honour LNG deal French energy company Total said on Friday that it expected Papua New Guinea’s incoming government to honour a contract signed by the previous administration for a liquefied natural gas project in the South Pacific archipelago. -Reuters

GLOBAL MACRO

Is Trump now launching a currency war, too? The US Treasury Department added Singapore, Malaysia and Vietnam to its watchlist. China, Japan and South Korea are there too -Asia Times

If China cuts rare earth supplies, what can the US do? Short-term stockpiling and a mid-term deal with Japan could help solve the problem -Asia Times

China produces about 97% of rare earth ore, 97% of rare earth oxides, 89% of rare earth alloys, 75% of neodymium iron boron magnets (NdFeB) and 60% of samarium cobalt magnets (SmCo). The United States almost entirely lacks the refining, fabricating, metal-making, alloying and magnet manufacturing capacity to process rare earths and is nearly completely dependent on China

People need to calm down about rare earth issue -Taipei Times

Still, Washington’s relaxed approach to the 2010 flap was, in general, the right one. Supplies of rare materials are, by their nature, concentrated in a few countries. Unless we are truly heading to an autarkic war footing, those supply chains will continue to crisscross the globe. Most of us will barely have to think about them until the next panic breaks out.

Beijing warns US farmers may lose China market for good, but plays down tariffs impact at home -SCMP

·       Top agriculture official says Chinese farmers can export products to non-US markets to weather impact of trade war

·       Country will also be able to source enough soybeans to meet domestic demand, according to Han Jun

Indonesia wins S&P upgrade as Jokowi victory fuels growth bets -The Business Times

YOUR GEOPOLITIX BOTTOM LINE

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QUESTION PRESENTED Whether Section 232 of the Trade Expansion Act of 1962, 19 U.S.C. 1862, which empowers the President to take action to adjust imports that threaten to impair the national security, impermissibly delegates legislative power to the President. -Brief for The Respondents (DOJ) in Opposition

Trump announces tariffs on Mexico over immigration The punitive measure, starting at 5 percent on all goods, is aimed at stemming the tide of Central American migrants crossing the U.S. border -Politico

Grassley slams Trump tariffs on Mexico: 'A misuse of presidential tariff authority' -The Hill

Henry Kissinger is still brilliant — and still wrong about China -The Hill

GLOBAL BUSINESS

Trade War Starts Changing Manufacturers in Hard-to-Reverse Ways ControlTek, which makes circuit boards in Vancouver, Wash., has begun shifting supply chains out of China and designing products that don’t require Chinese parts. -NYT

Trade can no longer anchor America’s relationship with China The world should be worried about that -The Economist

Disney CEO says it will be 'difficult' to film in Georgia if abortion law takes effect Walt Disney Co Chief Executive Bob Iger told Reuters on Wednesday it would be “very difficult” for the media company to keep filming in Georgia if a new abortion law takes effect because many people will not want to work in the U.S. state. -Reuters

Internet service providers spent over $80 million on lobbying in 2018 -The Hill

A Tough Task for FTC: Regulating Instagram When Anyone Can Be an Influencer Lack of resources at regulator, platform's seamless ad design make it difficult to monitor what people are hawking -Morning Consult

Trump Pushes USMCA Approval Plan in Move That Irks Pelosi White House officials submitted a so-called Statement of Administrative Action, a step toward introducing legislation that would bring the United States-Mexico-Canada Agreement into force. The move starts a minimum 30-day period for consultations between the White House and Congress to finalize the bill before a vote can take place. -Bloomberg

Pence protests China’s detention of Canadians and pledges to ‘stand with’ Canada -The Toronto Star

China says hopes Canada understands consequences of siding with U.S. China hopes Canada understands the consequences of siding with the United States and doing its bidding, China’s foreign ministry said on Friday, after U.S. Vice President Mike Pence called for the release of two Canadians detained in China. -Reuters

GLOBAL MACRO

Fed May Consider Lower Rates if Inflation and Global Risks Worsen -NYT

China Puts U.S. Soy Buying on Hold as Tariff War Escalates China, the world’s largest soybean buyer, has put purchases of American supplies on hold after the trade war between Washington and Beijing escalated, according to people familiar with the matter. -Bloomberg

Clamping down on U.S. soybean purchases is a direct strike at Trump’s political base. In the 2016 election, Trump carried eight of the 10 states with the largest soybean production, all of them in the Midwest. Iowa, the country’s second-largest soybean producer after Illinois, swung from Democrat to Republican in 2016 and could swing back again in 2020

Maybe the Economy Won’t Re-Elect Trump After All Several indicators are moving in the wrong direction. -Bloomberg

Mexican peso tumbles as Trump jolts markets with new tariffs, yen gains The Mexican peso sank to three-month lows against the dollar early on Friday after Washington unexpectedly said it will slap tariffs on all goods coming from its southern neighbor. -Reuters

Your Geopolitix Bottom Line

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EU election results country by country Ballot was also informal confidence vote in governments across the bloc. But while in theory, Europeans were deciding on who gets a seat in the EU legislature, in practice the election was also an informal vote of confidence for governments and leaders across the bloc. -Politico.eu

France, Germany spar over EU leadership Angela Merkel and Emmanuel Macron are at odds over the best candidate to lead the European Commission. The German chancellor backs center-right Manfred Weber, but the French president has other ideas. -DW

PODCAST OF THE WEEK Why were so many Romanians refused the chance to cast their vote in the EU elections? Plus: North Macedonia's plans to join Nato, talks of a merger between Fiat and Renault and the politics of olive crops in Italy. -The Globalist

GLOBAL BUSINESS

How Ireland became Europe's data watchdog Social media giant Facebook and its subsidiaries Instagram and WhatsApp have been the subject of most data investigations in the Republic of Ireland since the European Union's new data protection regulation came into force a year ago. -BBC

How Silicon Valley gamed Europe’s privacy rules The region’s data protection overhaul was supposed to help citizens. Instead, it’s helped Big Tech. -Politico.eu

GDPR Penalties Prove Why Compliance Isn't Enough—And Why Companies Need Clarity EU policymakers and data protection authorities should focus on clarifying the legislation, specifying the technical requirements to provide information, and take into account the costs and difficulties compliance may impose on companies in some cases. Otherwise European businesses will continue to face difficulties interpreting and complying with the GDPR. -TechDirt

Newscoop: A Facebook for news with a Wikipedia twist The Amsterdam-based startup aims to democratize news by leveraging a global network of citizen journalists. The platform is harnessing blockchain technology to verify its content and keep a check on fake news. -DW

P&O seeks £33m in damages over Brexit ferry settlement -BBC

UK by far the biggest enabler of global corporate tax dodging, groundbreaking research finds Of the top 10 countries allowing multinationals to avoid paying billions in tax on their profits, four are British overseas territories. -The Independent

Germany: Porsche offices raided in corruption probe Prosecutors have said that six people, some in "leadership" roles, could be charged with breach of trust. Secret information from the tax office was allegedly passed to a financial advisor within the company. -DW

Deripaska Says Treasury Response to Lawsuit Is Poorly Researched Deripaska is fighting back in a U.S. court against American sanctions that he said are unfairly destroying his global businesses and are based on unproven allegations about his close ties to Putin’s government. Deripaska, the founder of aluminum producer United Co. Rusal, was among the most prominent tycoons hit with sanctions by President Donald Trump’s administration, following the passage of a law to retaliate against Moscow for its meddling in 2016 U.S. elections. -Bloomberg

Why Huawei's Google woes worry Africa Google's decision to withhold its Android software from Huawei is being seen as the beginning of a technology cold war that could compel African countries - in the future - to choose between US and Chinese technology, analysts have told the BBC. -BBC

GLOBAL MACRO

EU could slap 3 billion euro fine on Italy for excessive debt: Salvini -Reuters

Oil Rises as Supply Risks Ripple Through Mideast, Great Plains There was less enthusiasm about London-traded Brent futures, which flopped between gains and losses before ending the day unchanged near $70 a barrel. Flows on a key Russian pipeline resumed to central Europe on Monday after a contamination scare, while U.S. President Donald Trump blunted some of his rhetoric against Iran. -Bloomberg

Russia to consider extending oil output cut with OPEC: deputy PM -Reuters

Africa's CFA Franc – colonial relic or stabilizing force? Some praise the French-backed CFA franc for its stability, others denounce it as a colonial hangover. The benefits and drawbacks of Africa's CFA currencies are being more hotly disputed than ever before. -DW

YOUR GEOPOLITIX BOTTOM LINE

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Sumo diplomacy as Abe courts Trump, but U.S. leader's tweets may have left Tokyo unnerved -The Japan Times

“Great progress being made in our Trade Negotiations with Japan,” Trump tweeted later in the day. “Agriculture and beef heavily in play. Much will wait until after their July elections where I anticipate big numbers!”

Xi raises anti-US banner and pushes party 'education' campaign Beijing shifts to hard-line stance as tariff war escalates -Nikkei

China must stop fanning the flames of anti-American nationalism Beijing risks creating unrealistic domestic expectations that could boost tensions with US -Nikkei

Hong Kong and the US-China New Cold War Will Hong Kong be a “Free World outpost” or a bastion for “Red China”? -The Diplomat

Modi Has a Huge Mandate in India. Now What Will He Do? -NYT

Taiwan merits inclusion at WHA The WHO Secretariat has failed to stay politically neutral, as an intergovernmental organization should, and ignores that the international community — including the US, Japan and the EU — have spoken out in support of Taiwan participating in the WHA. -Taipei Times

VN, US to augment economic and defence ties -VNews

GLOBAL BUSINESS

Tech Cold War Will Force World to Choose Team China, or America? Don’t expect it to be easy. -Bloomberg

Trade battles and big power competition—more pain for the tech industry After a lull, the trade war is back on. From new moves to lock Huawei out of the US to tightening visa reguations for Chinese nationals, from new tariffs to new Trump tweets, both China and the US are ramping up for another battle after the March cease-fire. While many are still crossing their fingers in hopes of a quick resolution, leadership in both countries show no signs of backing down. -TechNode

China tech transfer complaints rising The EU Chamber of Commerce’s Charlotte Roule said that its members reported compelled technology transfers were double the rate of 2017 -Taipei Times

China says U.S. needs to fix 'wrong actions' as Huawei ban rattles supply chains -Reuters

China’s cybersecurity laws may be used to block US tech firms on national security grounds, says expert -SCMP

·       The draft measures have been released online for public feedback until June 24

·       They were published amid escalating trade war tensions between Beijing and Washington

Trump knocks trade advantage while urging Japanese business leaders to increase investments in U.S. U.S. President Donald Trump on Saturday urged Japanese business leaders to increase their investment in the United States while saying Japan has a substantial edge on trade that negotiators are trying to even out. -The Japan Times

Amazon Japan halts direct sales of Huawei devices E-tailer still allows third-party vendors to sell Chinese company's products -Nikkei

Cultural differences a hurdle for Chinese tech firms in Southeast Asia, India The most critical problem for Chinese companies to expand to overseas markets is how to acclimatize, according to panelists speaking on Thursday at the Emerge by TechNode conference in Shanghai. Southeast Asia consists of 11 countries with different languages and culture, while India is a multi-ethnic country with 22 official languages. -TechNode

GLOBAL MACRO

China says U.S. demand on its state-owned enterprises is 'invasion' on economic sovereignty -Reuters

“Obviously, this is beyond the scope of trade negotiations and touches on China’s fundamental economic system,” Xinhua said.

China regulator downplays trade war impact -The Straits Times

China's top banking regulator says yuan bears will suffer 'heavy losses' China’s banking and insurance regulator said on Saturday it did not expect a persistent decline in the yuan and warned speculative short sellers they would suffer “heavy losses” if they bet against the currency. -Reuters

China's April soybean imports from U.S. up 15.9% month-on-month, Brazilian imports soar -Reuters

Boost tax revenue from digital economy -The Jakarta Post

Thais could gain from US tariffs "If the US raises import tariffs as threatened, we expect Thailand will benefit from increased exports to the US worth $200 million-copy billion," she said. "However, US consumers themselves will be hard... -Bangkok Post

In Malaysia, a snag in US search for alternative to Chinese rare earths -SCMP

·       As the trade war threatens to put Chinese rare earth minerals out of America’s grasp, Washington turns to alternative supplies to fill the gap

·       Few Malaysians are willing to tolerate the environmental damage that would entail

Vietnam Culls 1.7 Million Pigs as Virus Spreads to New Areas -Bloomberg

YOUR GEOPOLITIX BOTTOM LINE

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National unity is a foreign policy virtue — especially given China's challenge -The Hill

President’s Immigration Plan Could Use Some Work But it’s important step away from earlier calls to restrict legal immigration. -The American Spectator  

Top US commander warns Maduro 'mafia' poses threat beyond Venezuela The ongoing crisis in Venezuela is boiling over and aggravating security concerns throughout the Western Hemisphere, according to the top U.S. military commander for South America, Central America and the Caribbean. -The Hill  

GLOBAL BUSINESS

Zuckerberg dismisses calls to break up Facebook The Facebook chief, whose company has come under heavy scrutiny on issues from election security to harmful content to data privacy, argued a break-up would only make it more difficult to address those challenges. -Politico

We might be better off if Facebook, Instagram and Twitter vanished: Sen. Josh Hawley -USA Today

Maybe. But maybe social media’s innovations do our country more harm than good. Maybe social media is best understood as a parasite on productive investment, on meaningful relationships, on a healthy society.

Trump Wields a More Powerful Weapon Than Tariffs for Trade War President Donald Trump’s trade war against China has so far focused on attacking imports. His new front: Weaponizing American exports. -Bloomberg

Trump planning more restrictions on tech exports to China -Politico

U.S. lawmakers want to help rural telecoms replace Huawei, ZTE equipment A bipartisan group of U.S. lawmakers introduced legislation on Wednesday to provide about $700 million in grants to help U.S. telecommunications providers with the cost of removing Huawei equipment from their networks. -Reuters

Trump Administration Could Blacklist China’s Hikvision, a Surveillance Firm -NYT

301 EXCLUSIONS REQUESTS HERE  –U.S. Federal Register

JAMA ON IT IN AMERICA: An Enduring Partnership Over nearly four decades, Japanese-brand automakers have built up a vast American presence -JAMA

·       approximately $51 billion in cumulative manufacturing investment

·       over 84 million vehicles produced

·       over $1 trillion in U.S. auto parts purchased

American importers of metals from Canada and Mexico gain relief from tariffs. But the overall direction is still towards protectionism -The Economist

Operator of Venezuelan PDVSA's fleet seeks to detain tankers: document, sources German shipping firm Bernhard Schulte Shipmanagement (BSM) has moved to legally detain three of Venezuelan PDVSA’s oil tankers to collect on late payments owed to it by the state-run oil company, according to a document seen by Reuters and sources close to the decision. -Reuters

GLOBAL MACRO

Trade tensions slam Wall St. as global growth worries mount -Reuters

Buying Anything Linked to China Is a Risky Bet Markets seem to be underpricing the risk of the trade war, but that will change. Also, political uncertainty and the Ides of May. -Bloomberg

Why Trump’s new $16B farmer bailout could hurt agriculture -Politico

Sen. Chuck Grassley, an Iowa Republican, told reporters Wednesday that the White House should have been more cautious about the timing of the announcement because farmers are still planting.

“[W]e want farmers to make decisions on how many acres of corn and soybeans to plant based on the market and not something the government’s doing,” he said.

BEER SERVES AMERICA Beer industry blames Trump's tariffs for loss of 40K jobs A study released this week by the Beer Institute and National Beer Wholesalers Association found that direct, indirect and induced jobs were at 2.19 million in 2018, a drop of 40,000 jobs from 2016. -The Hill

Full study here A Study of the U.S. Beer Industry’s Economic Contribution in 2018

Canada Agrees to Take Back Trash Sent to Philippines Years Ago A protest calling for the return of tons of garbage to Canada from the Philippines at the Canadian Embassy in Makati on Tuesday. -NYT

The Real Cost of Trump’s Tariffs Whereas winners tend to outnumber losers when trade is liberalized, raising tariffs normally has the opposite result. US President Donald Trump appears to have engineered a spectacular example of this: his trade war with China has hurt almost every segment of the US economy, and created very few winners -Project Syndicate

YOUR GEOPOLITIX BOTTOM LINE

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CHINA V AMERICA A new kind of cold war How to manage the growing rivalry between America and a rising China -The Economist

The United States and China are contesting every domain, from semiconductors to submarines and from blockbuster films to lunar exploration. The two superpowers used to seek a win-win world. Today winning seems to involve the other lot’s defeat—a collapse that permanently subordinates China to the American order; or a humbled America that retreats from the western Pacific. It is a new kind of cold war that could leave no winners at all.

America's struggle with China and North Korea is for keeps Existential struggles are not conducive to compromise, especially when the opposing sides see the competition in those stark terms. The United States is in such confrontations with the People’s Republic of China (PRC) and its junior communist ally, the Democratic People’s Republic of Korea (DPRK). -The Hill

Why the US and China See Negotiations Differently The recent breakdown in trade talks between the United States and China may in part reflect the two countries’ different approaches to negotiation. Hopefully, this contrast in styles will not cause the talks to fail unnecessarily, given the importance to the global economy of a US-China agreement. -Project Syndicate

China’s Latest Crackdown Target Is Liberal Economists -Bloomberg

Five Indian politicians to watch on last day of election PM Modi likely to return to power with thin majority for ruling coalition -Nikkei

Morrison Wins in Australian Election, Confounding Pollsters Scott Morrison, Australia’s conservative prime minister, won his first full term in office on Saturday, confounding expectations that the country’s voters were ready for a change in course after six years of tumultuous leadership under his party. -NYT

GLOBAL BUSINESS

Huawei ban ripples across global supply chain Companies vexed by dragnet cast by US export restrictions -Nikkei

China threatens to retaliate over US sanctions China has threatened to retaliate against US sanctions seen as an attempt to restrict international trade by the Chinese technology giant Huawei. -BBC

Carrefour considers sale of stake in China business -Reuters

Carrefour, Europe largest retailer, is exploring the sale of a minority stake in its loss-making business in China and has started sounding out potential buyers, people familiar with the matter said.

No U.S. auto import quota in works, says Japan's economic revitalization chief Toshimitsu Motegi -The Japan Times

“There is no worry judging from the U.S. announcement,” Motegi said on a television program, noting that such a quota was not specified in the announcement.

Accelerating the exodus from China -Taipei Times

Hon Hai Precision Industry Co chairman Terry Gou (郭台銘) in October last year said that electronic components maker Cheng Uei Precision Industry Co would be moving some of its production back to Taiwan, while Delta Electronics Inc has announced plans to invest NT$13.2 billion (US$422 million) in Taiwan in the next three years.

However, Cheng Uei and others have brought up concerns over insufficient power, land and skilled labor in Taiwan and Southeast Asia. They have also cited problems with insufficient infrastructure and restrictive bureaucratic policies in ASEAN countries.

Royalty feud threatens to tear apart FamilyMart's profitable joint venture in China -The Japan Times

Under the terms of the partnership, Ting Hsin effectively operates more than 2,500 FamilyMart stores in China, sharing profits and paying royalties to the Japanese company. Although Ting Hsin’s founders are Taiwanese, the company has had a presence in China since the late 1980s before the country’s economy opened up, and is considered a local entity. It also controls other food and beverage brands, including China’s leading instant noodle maker.

Miners look to S. Korea, China amid low investment -Jakarta Post

GSB, Airbnb join forces on homestay State-owned Government Savings Bank (GSB) will offer special loans to homestay operators, and Airbnb will help these operators access travellers through the accommodation-sharing giant's platform. -Bangkok Post

Ministry eyes new management of ride-hailing platforms The Ministry of Information and Communications (MIC) has proposed managing ride-hailing platforms in a different way than other transport firms. -VNews

Gojek vs Grab – Dawn of the Super App with Jon Russell on Russell, reporter from TechCrunch, joined us in a conversation about the continuing war between Gojek and Grab with the dawn of the super app. We discuss Uber’s recent IPO S1-filing and their implications to Didi, Grab and Ola and what it means for the Asian ecosystem for the long term. -Analyse Asia

ZTE signs deal to help launch 5G in Myanmar Embattled Chinese player carves out foothold in emerging Asia -Nikkei

GLOBAL MACRO

Japan's coming recession -- Trump to blame, or Abe? Domestic reform failures magnify the impact of U.S.-China trade war -Nikkei

China Trade Turmoil Makes U.S. Investors Nervous Some buy Treasurys and plan to sell stocks, saying 10-year bull market could be in danger -WSJ Asia

Will India’s Watchman Be Good for Investors? Foreign traders should be wary about what Prime Minister Narendra Modi might do with a second term. -Bloomberg

There's a Mystery in Just How Much U.S. Pork Is Going to China So far this year, China has purchased 163,825 metric tons of U.S. pork, up more than 700% from the same period in 2018, according to the USDA’s weekly data. -Bloomberg

Coffee shots may get cheaper as supply from Sumatra swells Coffee production in Indonesia, the world’s third-largest grower of robusta beans favored by instant drinks makers like Nestle SA, will probably climb to the largest in four years in 2019, boosting global supplies and potentially further reducing costs for caffeine addicts. -Jakarta Post

Logistics sector grapples with poor infrastructure -VNews

YOUR GEOPOLITIX BOTTOM LINE

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In Weapons Tests, North Korea Revives an Old Playbook, With a Strategic Twist In the weeks before North Korea fired rockets and guided weapons on Saturday, President Trump countermanded the Treasury Department, reversing an announcement that it was tightening economic sanctions against the country. -NYT

China's hypersonic weapons leave US defenseless, for now -The Hill

China’s Selective Memory This year’s anniversaries of the 1919 and 1989 student protests in China will again highlight the Chinese authorities’ contradictory attitudes toward the two movements. As the People’s Republic looks ahead to the 70th anniversary of its founding this October, the country continues to reckon with its own history. -Project Syndicate

Japan and Vietnam agree to promote defense cooperation The two nations will promote exchange programs for their defense industries while Japan’s Maritime Self-Defense Force vessels will make port calls in Vietnam -The Japan Times

GLOBAL BUSINESS

YOUR CREDIT IS ONLY GOOD HERE Party Loyalty in China Helps Private Companies Get Cheaper Loans A new government program offers low-interest “red loans” to firms supporting the Communist cause. -Bloomberg

Digital or Trade? The Contrasting Approaches of China and US to Digital Trade -Journal of International Economic Law

GEOPOLITICAL RISK ON South Korea's Lotte to resume $2.6 billion China project after missile row Lotte Group said on Thursday it would resume work on a $2.6 billion real estate project in China this month, after work was halted following the South Korean firm’s decision in 2017 to offer land in South Korea for a U.S. anti-missile system. -Reuters

I Drank Myself to the Bottom of Luckin Coffee's IPO The financial taste test says this company is selling tech-bubble Kool-Aid as much as espressos and lattes. Like any good purveyor of addictive substances, its twist on that model has been to hand out free coffee. The U.S. listing of a Chinese company that gives away stuff makes for the perfect mashup of socialism and capitalism.-Bloomberg

Japan sales tax to rise as planned: ruling party heavyweight Senior LDP official Katsunobu Kato acknowledges need for additional stimulus -Nikkei

PODCAST OF THE WEEK How I Made $8,000 per Month Podcasting, and Why You Probably Don’t Want To -Disrupting Japan

60% of foreigners working Taiwan's tech industry are Filipinos At over 60 percent, Filipino workers comprise the majority of foreign workers in Taiwan's electronics and technology industry, and many Taiwanese companies are shifting production from China to the Philippines. -Taiwan News

VN poised to become manufacturer of established global brands -VNews

Buffett-owned footwear maker moves output from China to Vietnam Brooks Running fears US tariffs on shoes will surge to 45% as trade talks grind on Brooks Sports will move the bulk of its manufacturing operations from China to Vietnam as the trade talks between Washington and Beijing drag on with no certain conclusion -Nikkei

Rabobank to stop Indonesian operations in June 2020 -Jakarta Post

“The closure of Rabobank International Indonesia will depend on the agreement of the authorities. Its implementation will pay attention to the interests of both customers and employees”

Malaysia set to see new wave of China FDI -The Star

GLOBAL MACRO

Japan calls on Asian Development Bank to reduce loans to China -The Japan Times

Chinese banks quietly lower daily limit on foreign-currency cash withdrawals -SCMP

·       Lenders have reduced the ‘scrutiny benchmark’ for US dollar withdrawals to US$3,000 from US$5,000 on the instructions of the central bank

·       Chinese banks have increased their scrutiny of foreign-currency withdrawals and quietly reduced the amount of US dollars people are allowed to withdraw, tightening the country’s capital controls

 Leave the Renminbi Out of US-China Trade Talks -Project Syndicate

Canadian farm exports hit new Chinese obstacles amid diplomatic dispute An expanding list of Canadian farm exports is hitting obstacles at Chinese ports, leaving sellers of soybeans, peas and pork scrambling amid a bitter diplomatic dispute. -Reuters

Trump versus Abe -- the trade end game US president struggling to squeeze tough deal out of Japan -Nikkei

India's oil import dependence jumps to 84 per cent -Economic Times

Your Geopolitix Bottom Line

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America Can’t Be Great Without a Grand Strategy -Bloomberg

Once a Protectionist, Always a Protectionist Why is NAFTA still the law of the land? -The American Spectator

Whether the strategy worked is still up for debate. Yes, NAFTA was renegotiated through the USMCA, but that agreement hasn’t been approved by the U.S. Congress or ratified by Mexico or Canada, either. In other words, NAFTA is still the law of the land. Unfortunately, the uncertainty over whether (and when) the USMCA will replace NAFTA places a significant economic burden on companies trying to make investment decisions and predictions throughout North America.

Trump must rely on human rights issue against North Korea -The Hill

Cracks appear in U.S. bipartisan unity on Venezuela -Reuters

Senator Bob Menendez, top Democrat on the Foreign Relations Committee, said Washington must work harder to convince foreign partners to back multilateral sanctions against Maduro. Few countries have matched harsh U.S. punitive measures against Venezuela’s vital oil sector and its banks.

“The sanctions that we have are unilateral. They’re important,” Menendez told reporters. But the United States should “internationalize” those sanctions, he said.

America Must Lead on Venezuela -The National Interest

GLOBAL BUSINESS

DOJ Issues New and More Robust Guidance on Evaluation of Corporate Compliance Programs -JDSupra

U.S. Department of Justice U.S. Department of Justice Criminal Division Evaluation of Corporate Compliance Programs -USDOJ

Comfort in Chaos A Silicon Valley pioneer talks populism and technology. -The American Interest

Facebook, Instagram ban Alex Jones, Louis Farrakhan, far-right figures -Politico

“We've always banned individuals or organizations that promote or engage in violence and hate, regardless of ideology," a Facebook spokesperson said in a statement. "The process for evaluating potential violators is extensive and it is what led us to our decision to remove these accounts today.”

Silicon Valley is awash in Chinese and Saudi cash — and no one is paying attention (except Trump) A tough, new enforcement regime is becoming a geopolitical minefield for venture capitalists and startups. -VOX

“You thought you’re in business. You’re actually in politics.”

Facebook's potential settlement with FTC will likely include WhatsApp Politico reported on Wednesday that Facebook and the Federal Trade Commision (FTC) were negotiating a possible settlement that would require the company to create an independent privacy oversight committee and take other steps to safeguard users. -Reuters

Chinese ride-hailing company buys billboards in Times Square to demand refunds from Tesla -The Hill

Foreign government leases at Trump World Tower stir more emoluments concerns The U.S. State Department allowed at least seven foreign governments to rent luxury condominiums in New York’s Trump World Tower in 2017 without approval from Congress, according to documents and people familiar with the leases, a potential violation of the U.S. Constitution’s emoluments clause. -Reuters

Big Banks Stay On as Sponsors of Bolsonaro Gala Shunned by Delta Delta Air Lines Inc. and the Financial Times this week joined Bain & Co. in pulling their sponsorship of a New York gala dinner honoring Jair Bolsonaro, the polarizing president of Brazil. -Bloomberg

In Cuba, Carnival Cruise Ships Have Been Using Stolen Ports, Original Owners Say Revolutionaries confiscated the Havana Docks Company in 1960.CreditCreditHavana Docks Company -NYT

GLOBAL MACRO

Trump Fed pick Stephen Moore withdraws amid GOP opposition President Donald Trump announced Thursday that conservative commentator Stephen Moore has withdrawn as a candidate for the Federal Reserve, a stinging blow to the president’s efforts to install political loyalists at the central bank. -Politico

Trump Hails Steel Tariffs in Defiance of GOP Request to End Them -Bloomberg

Puerto Rico Seeks to Have $9 Billion in Debt Ruled Unconstitutional The government oversight board leading Puerto Rico through its $123 billion debt crisis sued dozens of banks and financial firms on Thursday, saying that they had helped the island issue $9 billion of debt illegally, and that the people of Puerto Rico should not have to repay it. -The New York Times

Trump ally in House calls for doubling gas tax to pay for infrastructure -The Hill

Tesla expects global shortage of electric vehicle battery minerals Tesla Inc expects global shortages of nickel, copper and other electric-vehicle battery minerals down the road due to underinvestment in the mining sector, the company’s global supply manager for battery metals told an industry conference on Thursday, according to two sources. -Reuters

Trump erases offshore drilling rules enacted after BP oil spill -Politico.eu

Quebec Keeps Electricity Cheap for Crypto Miners Under New Rules New rules released by the Canadian province’s energy regulator Monday create blockchain as a client category of its own and order utility Hydro-Quebec to set aside an extra 300 megawatt for the industry, on top of 368 megawatts already committed. Applying companies will be judged on four criteria, including the number of jobs created, planned investments and heat recovery plans for the energy-intensive computing process that makes transactions with digital currencies possible. -Bloomberg

YOUR GEOPOLITIX BOTTOM LINE

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GEOPOLITICAL RISK+GLOBAL MARKETS

EMEA MARKETS - IMPACT+OPPORTUNITY

An Agenda for Europe’s Next Decade The EU cannot afford another decade of crisis management and indecision. Instead, it must build a sustainable future on four pillars: an ambitious agenda, a focus on results, reform of EU institutions, and a renewed emphasis on European values. -Project Syndicate

5 takeaways from Spain’s election Pedro Sánchez remains the only Socialist leading a major European country. -Politico.eu

1. Social democratic tactics

2. Combinations in parliament

3. Popular Party catastrophe vs. the rise of Ciudadanos

4. The far right

5. The Catalan factor

US: Russia convinced Maduro to stay in Venezuela US Secretary of State Mike Pompeo has said Maduro was ready to go into exile in Cuba but was persuaded by Russia to stay. President Donald Trump has called on Cuba to immediately cease its military support for Venezuela. -DW

GLOBAL BUSINESS

EU belittles U.S. claims as 'frankly childish' at WTO Airbus hearing -Reuters

EU court backs use of trade tribunals to protect foreign investors The European Union won backing from the bloc’s top court on Tuesday for its system to protect foreign companies, which proponents say is essential for future trade agreements but critics say unfairly favors multinationals. -Reuters

EU governments cannot regulate Airbnb without asking Brussels, says ECJ EU’s top court advocate general finds applying French letting regulations to Airbnb is a breach of EU rules protecting ‘the free movement of information society services’ -Bloomberg

EU court advisor sides with Airbnb over row in France -France24

How Big Tech’s ties to Ireland threaten data privacy around the world Last May, Europe imposed new data privacy guidelines that carry the hopes of hundreds of millions of people around the world — including in the United States — to rein in abuses by big tech companies. -Politico.eu

Almost a year later, it’s apparent that the new rules have a significant loophole: The designated lead regulator — the tiny nation of Ireland — has yet to bring an enforcement action against a big tech firm.

Vodafone Found Hidden Backdoors in Huawei Equipment While the carrier says the issues found in 2011 and 2012 were resolved at the time, the revelation may further damage the reputation of a Chinese powerhouse. -Bloomberg

Britain strikes an artful compromise on Huawei and 5G Its measured approach to dealing with the controversial Chinese firm is a model for other countries -The Economist

The West Finally Has Its Huawei Smoking Gun It may not be enough to sway those who are already convinced of the Chinese company’s innocence. -Bloomberg

Bayer shareholders angry over stock price fall German chemical giant Bayer has faced the anger of environmentalists and lawyers following the takeover of the US agricultural group Monsanto, and its controversial herbicide Roundup. Now it’s shareholders are furious too. -DW

JLR to build new Land Rover Defender in Slovakia Jaguar Land Rover (JLR) will build its next-generation Land Rover Defender 4x4 in Slovakia rather than the UK. -BBC

GLOBAL MACRO

For investors, bloom is off Europe amid Brexit, yellow vest worries Among the concerns: Great Britain will experience a hard Brexit separation from Europe, resulting in financial calamities; “yellow vest” protesters demanding equality in France will push the country toward unsustainable economic policies; Italy is not dealing with underlying issues that sent it to a third recession in a decade; big banks across Europe, including Deutsche Bank AG, have not dealt with money-losing exposures stemming from the 2008 financial crisis; and the European Central Bank has run out of options to fix all the troubles on its own.  -Reuters

Nord Stream 2: What Berlin thinks about halting construction Manfred Weber, a candidate for the office of president of the European Commission, is speaking out against the planned Nord Stream 2 gas pipeline. What is the German government's response? -DW

Abu Dhabi Weighs Multi-Billion Dollar Gas Pipeline Deal Abu Dhabi National Oil Co. is seeking to raise billions of dollars from its natural-gas pipelines, months after the state-owned explorer got a $4 billion investment in its oil infrastructure assets, according to people familiar with the matter. -Bloomberg

Gambia signs oil exploration deal with BP for A1 block -Reuters

YOUR GEOPOLITIX BOTTOM LINE

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GEOPOLITICAL RISK+GLOBAL MARKETS

APAC MARKETS - IMPACT + OPPORTUNITY

Xi Jinping makes plenty of promises on belt and road plan, but can China deliver? -SCMP

·        Chinese president vows to stick to international rules and standards as he seeks to show that Beijing is paying heed to concerns

·        Joint statement issued after three-day summit emphasizes financial sustainability, pollution control and anti-corruption efforts

Thousands take to Hong Kong streets to protest new extradition laws Thousands of people marched on Hong Kong’s parliament on Sunday to demand the scrapping of proposed extradition rules that would allow people to be sent to mainland China for trial — a move which some fear puts the city’s core freedoms at risk. -The Japan Times

Under pressure for win, Trump sought swift Japan trade deal Abe promises to deliver by US elections, but has own calendar calculations -Nikkei

US-Japan Trade Agreement Negotiations: Why Now? Japan is ready to give Trump a signature economic win. Here’s why. -The Diplomat

GLOBAL BUSINESS

China urges UK not to discriminate against Huawei in 5G development China on Sunday warned Britain not to discriminate against companies involved in developing the 5G network and to resist pressure from other countries over whether it should work with Huawei Technologies. -Reuters

Italian PM assures Huawei it won't face discrimination -Reuters

Nidec to add plant in China's Dalian for electric-car motors Japanese manufacturer plans $500m investment to build up new growth engine. Japan's leading electric motor manufacturer, plans to invest $500 million in a new electric-vehicle motor factory in China, doubling down on a field with high hopes for growth, Nikkei has learned. -Nikkei

No China-US cold war but visa freeze puts mutual insight on ice -SCMP

·        Essential but non-official connections between the two countries are being pulled apart just as they are needed most

Number of Japan visas issued in 2018 hit record high The number of visas issued by Japan’s diplomatic missions abroad in 2018 rose 18.5 percent from the previous year to a record 6,952,804, the Foreign Ministry has said. -The Japan Times

Japan denounces WTO ruling in favor of South Korean ban on some Japanese seafood Tokyo on Friday denounced a recent World Trade Organization ruling that supported a South Korean ban on imports of some Japanese fishery products introduced in the wake of the 2011 Fukushima nuclear disaster. -The Japan Times

Jet Airways: India's aviation boom runs into turbulence -BBC

LG Electronics to move smartphone production to Việt Nam The Republic of Korea (RoK)’s LG Electronics plans to move its smartphone production to Việt Nam to cut losses its mobile devices business has suffered since the second quarter of 2017. The firm is scheduled to shut the Pyeongtaek plant in the south of Seoul and shift its production line to the northern port city of Hải Phòng. -VNews

MOU between UOB, SGX and Chinese business association to help Chinese firms expand into Asean Two Singapore firms have inked a deal with a Chinese business association to help Chinese companies wanting to expand to Singapore and beyond. -Straits Times

Malaysia revived China railway to avoid $5 bn penalty: PM Malaysia would have faced a $5-billion penalty if a China-backed rail project was axed entirely, the prime minister said Monday, after a deal was reached to revive the controversial scheme. -The Jakarta Post

GLOBAL MACRO

China's securities regulator says has not changed rules for IPO review The China Securities Regulatory Commission said in a statement published on its website that it will continue to strictly control the access to capital market and enhance market anticipation to better serve high-quality development of the real economy. -Reuters

China's swine fever outbreak sets off scrap over pork Meat prices climb worldwide as importers scramble and consumers switch products -Nikkei

In trade war talks, China may want US agricultural imports, but what it needs is food security -SCMP

·        Washington and Beijing should know that a deal to end the trade war that increases Chinese reliance on US agriculture and US farmers’ dependence on Chinese markets is actually a lose-lose

Forestry exports on the rise Forestry exports were estimated to have hit US$3.3 billion in the period, a year-on-year increase of 17.8 per cent, including $875 million in April alone. -VNews

Key markets for Vietnamese forestry products included the US, Japan, the EU, China and the Republic of Korea, accounting for 87 per cent of the exports, it said.

After Duterte’s Threats Over Tons of Old Trash, Canada Says It’s Working on It -NYT

Episode 294: Blockchain & Cryptocurrency Regulation across Asia Pacific Discusses the major misconceptions on the regulation of cryptocurrency and blockchain by governments across Asia Pacific and how startups and major corporations need to do in order to navigate the ever-changing industry with blockchain and cryptocurrency. -Analyse Asia