CHINESE
FILE PHOTO: Xiaomi branding is seen on a carrier bag at a UK launch event in London, Britain, November 8, 2018. REUTERS/Toby Melville
April 26, 2019
BENGALURU (Reuters) – Chinese brands controlled a record 66 percent of Indian smartphone market in the first quarter, led by Xiaomi Corp, a report showed, with volumes rising 20 percent on the back of popularity for brands like Vivo, RealMe and Oppo.
Xiaomi’s India shipments fell by 2 percent over last year, but the Beijing-based company was still the biggest smartphone brand in the country, followed by Samsung Electronics Co Ltd, according to Hong-Kong based Counterpoint Research.
Shipment volumes for Vivo jumped 119 percent, while those of Oppo rose 28 percent.
“Vivo’s expanding portfolio in the mid-tier range ($100 to $180) drove its growth along with aggressive Indian Premier League cricket campaign,” Counterpoint analysts said.
India is the world’s fastest growing market for smartphones, where affordable pricing coupled with features like “selfie” cameras and big screens have popularized Chinese brands.
Video streaming services like Netflix Inc and Hotstar, as well as heavy usage of messaging apps like Facebook Inc’s WhatsApp have further spurred demand.
“Data consumption is on the rise and users are upgrading their phones faster as compared to other regions,” Counterpoint’s Tarun Pathak said.
“As a result of this, the premium specs are now diffusing faster into the mid-tier price brands. We estimate this trend to continue leading to a competitive mid-tier segment in coming quarters.”
(Reporting By Arnab Paul in Bengaluru; Editing by Subhranshu Sahu)
Source: OANN
LinkSpace’s reusable rocket RLV-T5, also known as NewLine Baby, is carried to a vacant plot of land for a test launch in Longkou, Shandong province, China, April 19, 2019. REUTERS/Jason Lee
April 26, 2019
By Ryan Woo
LONGKOU, China (Reuters) – During initial tests of their 8.1-metre (27-foot) tall reusable rocket, Chinese engineers from LinkSpace, a start-up led by China’s youngest space entrepreneur, used a Kevlar tether to ensure its safe return. Just in case.
But when the Beijing-based company’s prototype, called NewLine Baby, successfully took off and landed last week for the second time in two months, no tether was needed.
The 1.5-tonne rocket hovered 40 meters above the ground before descending back to its concrete launch pad after 30 seconds, to the relief of 26-year-old chief executive Hu Zhenyu and his engineers – one of whom cartwheeled his way to the launch pad in delight.
LinkSpace, one of China’s 15-plus private rocket manufacturers, sees these short hops as the first steps towards a new business model: sending tiny, inexpensive satellites into orbit at affordable prices.
Demand for these so-called nanosatellites – which weigh less than 10 kilograms (22 pounds) and are in some cases as small as a shoebox – is expected to explode in the next few years. And China’s rocket entrepreneurs reckon there is no better place to develop inexpensive launch vehicles than their home country.
“For suborbital clients, their focus will be on scientific research and some commercial uses. After entering orbit, the near-term focus (of clients) will certainly be on satellites,” Hu said.
In the near term, China envisions massive constellations of commercial satellites that can offer services ranging from high-speed internet for aircraft to tracking coal shipments. Universities conducting experiments and companies looking to offer remote-sensing and communication services are among the potential domestic customers for nanosatellites.
A handful of U.S. small-rocket companies are also developing launchers ahead of the expected boom. One of the biggest, Rocket Lab, has already put 25 satellites in orbit.
No private company in China has done that yet. Since October, two – LandSpace and OneSpace – have tried but failed, illustrating the difficulties facing space start-ups everywhere.
The Chinese companies are approaching inexpensive launches in different ways. Some, like OneSpace, are designing cheap, disposable boosters. LinkSpace’s Hu aspires to build reusable rockets that return to Earth after delivering their payload, much like the Falcon 9 rockets of Elon Musk’s SpaceX.
“If you’re a small company and you can only build a very, very small rocket because that’s all you have money for, then your profit margins are going to be narrower,” said Macro Caceres, analyst at U.S. aerospace consultancy Teal Group.
“But if you can take that small rocket and make it reusable, and you can launch it once a week, four times a month, 50 times a year, then with more volume, your profit increases,” Caceres added.
Eventually LinkSpace hopes to charge no more than 30 million yuan ($4.48 million) per launch, Hu told Reuters.
That is a fraction of the $25 million to $30 million needed for a launch on a Northrop Grumman Innovation Systems Pegasus, a commonly used small rocket. The Pegasus is launched from a high-flying aircraft and is not reusable.
(Click https://reut.rs/2UVBjKs to see a picture package of China’s rocket start-ups. Click https://tmsnrt.rs/2GIy9Bc for an interactive look at the nascent industry.)
NEED FOR CASH
LinkSpace plans to conduct suborbital launch tests using a bigger recoverable rocket in the first half of 2020, reaching altitudes of at least 100 kilometers, then an orbital launch in 2021, Hu told Reuters.
The company is in its third round of fundraising and wants to raise up to 100 million yuan, Hu said. It had secured tens of millions of yuan in previous rounds.
After a surge in fresh funding in 2018, firms like LinkSpace are pushing out prototypes, planning more tests and even proposing operational launches this year.
Last year, equity investment in China’s space start-ups reached 3.57 billion yuan ($533 million), a report by Beijing-based investor FutureAerospace shows, with a burst of financing in late 2018.
That accounted for about 18 percent of global space start-up investments in 2018, a historic high, according to Reuters calculations based on a global estimate by Space Angels. The New York-based venture capital firm said global space start-up investments totaled $2.97 billion last year.
“Costs for rocket companies are relatively high, but as to how much funding they need, be it in the hundreds of millions, or tens of millions, or even just a few million yuan, depends on the company’s stage of development,” said Niu Min, founder of FutureAerospace.
FutureAerospace has invested tens of millions of yuan in LandSpace, based in Beijing.
Like space-launch startups elsewhere in the world, the immediate challenge for Chinese entrepreneurs is developing a safe and reliable rocket.
Proven talent to develop such hardware can be found in China’s state research institutes or the military; the government directly supports private firms by allowing them to launch from military-controlled facilities.
But it’s still a high-risk business, and one unsuccessful launch might kill a company.
“The biggest problem facing all commercial space companies, especially early-stage entrepreneurs, is failure” of an attempted flight, Liang Jianjun, chief executive of rocket company Space Trek, told Reuters. That can affect financing, research, manufacturing and the team’s morale, he added.
Space Trek is planning its first suborbital launch by the end of June and an orbital launch next year, said Liang, who founded the company in late 2017 with three other former military technical officers.
Despite LandSpace’s failed Zhuque-1 orbital launch in October, the Beijing-based firm secured 300 million yuan in additional funding for the development of its Zhuque-2 rocket a month later.
In December, the company started operating China’s first private rocket production facility in Zhejiang province, in anticipation of large-scale manufacturing of its Zhuque-2, which it expects to unveil next year.
STATE COMPETITION
China’s state defense contractors are also trying to get into the low-cost market.
In December, the China Aerospace Science and Industry Corp (CASIC) successfully launched a low-orbit communication satellite, the first of 156 that CASIC aims to deploy by 2022 to provide more stable broadband connectivity to rural China and eventually developing countries.
The satellite, Hongyun-1, was launched on a rocket supplied by the China Aerospace Science and Technology Corp (CASC), the nation’s main space contractor.
In early April, the China Academy of Launch Vehicle Technology (CALVT), a subsidiary of CASC, completed engine tests for its Dragon, China’s first rocket meant solely for commercial use, clearing the path for a maiden flight before July.
The Dragon, much bigger than the rockets being developed by private firms, is designed to carry multiple commercial satellites.
At least 35 private Chinese companies are working to produce more satellites.
Spacety, a satellite maker based in southern Hunan province, plans to put 20 satellites in orbit this year, including its first for a foreign client, chief executive Yang Feng told Reuters.
The company has only launched 12 on state-produced rockets since the company started operating in early 2016.
“When it comes to rocket launches, what we care about would be cost, reliability and time,” Yang said.
(Reporting by Ryan Woo; Additional reporting by Beijing newsroom; Editing by Gerry Doyle)
Source: OANN
FILE PHOTO: Small toy figures are seen in front of a displayed Huawei and 5G network logo in this illustration picture, March 30, 2019. REUTERS/Dado Ruvic
April 26, 2019
By Charlotte Greenfield
WELLINGTON (Reuters) – China’s Huawei Technologies said Britain’s decision to allow the firm a restricted role in building parts of its next-generation telecoms network was the kind of solution it was hoping for in New Zealand, where it has been blocked from 5G plans.
Britain will ban Huawei from all core parts of 5G network but give it some access to non-core parts, sources have told Reuters, as it seeks a middle way in a bitter U.S.-China dispute stemming from American allegations that Huawei’s equipment could be used by Beijing for espionage.
Washington has also urged its allies to ban Huawei from building 5G networks, even as the Chinese company, the world’s top producer of telecoms equipment, has repeatedly said the spying concerns are unfounded.
In New Zealand, a member of the Five Eyes intelligence sharing network that includes the United States, the Government Communications Security Bureau (GCSB) in November turned down an initial request from local telecommunication firm Spark to include Huawei equipment in its 5G network, but later gave the operator options to mitigate national security concerns.
“The proposed solution in the UK to restrict Huawei from bidding for the core is exactly the type of solution we have been looking at in New Zealand,” Andrew Bowater, deputy CEO of Huawei’s New Zealand arm, said in an emailed statement.
Spark said it has noted the developments in Britain and would raise it with the GCSB.
The reports “suggest the UK is following other European jurisdictions in taking a considered and balanced approach to managing supplier-related security risks in 5G”, Andrew Pirie, Spark’s corporate relations lead, said in an email.
“Our discussions with the GCSB are ongoing and we expect that the UK developments will be a further item of discussion between us,” Pirie added.
New Zealand’s minister for intelligence services, Andrew Little, did not immediately respond to a request for comment.
British culture minister Jeremy Wright said on Thursday that he would report to parliament the conclusions of a government review of the 5G supply chain once they had been taken.
He added that the disclosure of confidential discussions on the role of Huawei was “unacceptable” and that he could not rule out a criminal investigation into the leak.
The decisions by Britain and Germany to use Huawei gear in non-core parts of 5G network makes it harder to prove Huawei should be kept out of New Zealand telecommunication networks, said Syed Faraz Hasan, an expert in communication engineering and networks at New Zealand’s Massey University
He pointed out Huawei gear was already part of the non-core 4G networks that 5G infrastructure would be built on.
“Unless there is a convincing argument against the Huawei devices … it is difficult to keep them away,” Hasan said.
(Reporting by Charlotte Greenfield; Editing by Himani Sarkar)
Source: OANN
FILE PHOTO: KPN logo is seen at its headquarters in Rotterdam, Netherlands, January 30, 2019. REUTERS/Piroschka van de Wouw
April 26, 2019
By Bart H. Meijer and Toby Sterling
AMSTERDAM (Reuters) – Dutch telecom firm Royal KPN NV said on Friday it would select a Western supplier to build its core 5G mobile network, making it one of the first European operators to make clear it would not pick China’s Huawei for such work.
The United States has been seeking to discourage its allies from using equipment made by Huawei because of concerns that it could eventually be used for Chinese government spying. Huawei says such worries are baseless and U.S. policy is driven by economic interests.
The Hague-based KPN, the Netherlands’ largest telecom firm, said its decision took into account “the evolving assessment on the protection of vital infrastructure and the influence this may have on future Dutch policy.”
The Dutch government has not taken a decision on the issue.
KPN, which also reported on Friday slightly worse than expected first quarter core earnings of 563 million euros ($627 million), said it would still use equipment made by Huawei in some capacities.
In addition, the company announced a preliminary deal with Huawei to upgrade existing mobile telecommunications gear to make it safer. Huawei has been a key supplier to KPN in the past decade.
The Dutch government set up a task force with KPN and other major operators in the Netherlands this month to analyze the “vulnerability of 5G telecommunications networks to misuse by technology vendors … and measures needed to manage risks.”
KPN said it would use equipment made by Huawei, which it described as a world leader in radio and antenna technology, to improve security on its existing network.
“This preliminary agreement can be adjusted or reversed to align it with future Dutch government policy,” it added.
Sources told Reuters on Wednesday that Britain’s National Security Council (NSC) had decided to bar Huawei from core parts of the country’s 5G network and restrict its access to non-core areas.
(Reporting by Bart Meijer; Editing by Kirsten Donovan and Edmund Blair)
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International Monetary Fund (IMF) Managing Director Christine Lagarde attends a thematic forum of the second Belt and Road Forum for international cooperation in Beijing, China, April 25, 2019. REUTERS/Jason Lee
April 26, 2019
BEIJING (Reuters) – China’s massive Belt and Road infrastructure program should only go where it is needed and where the debt it generates can be sustained, International Monetary Fund Managing Director Christine Lagarde said on Friday.
In brief remarks to nearly 40 world leaders and other high-ranking officials at China’s second Belt and Road summit in Beijing, Lagarde said the program to build ports, railroads and other trade-enhancing infrastructure was having a positive impact on growth in certain countries but needed to be managed carefully.
She called for a revamped “Belt and Road 2.0” to include increased transparency, an open procurement process with competitive bidding and better risk assessment in project selection.
“History has taught us that, if not managed carefully, infrastructure investments can lead to a problematic increase in debt,” Lagarde said in remarks prepared for delivery at the conference. “I have said before that, to be fully successful, the Belt and Road should only go where it is needed. I would add today that it should only go where it is sustainable, in all aspects.”
Lagarde said that Chinese authorities were taking positive steps with a new debt sustainability framework that will be utilized to evaluate projects.
The sustainability initiative was announced on Thursday as China seeks to allay concerns that the Belt and Road plan to boost trade links was saddling poor countries with debts they cannot repay.
She also applauded the launch of a green investment principle for Belt and Road projects at the Beijing conference, emphasizing low-carbon and climate resilient investments.
“Debt sustainability and green sustainability will strengthen BRI sustainability,” Lagarde said.
The IMF chief said the Belt and Road initiative was helping to stimulate infrastructure investment and developing new global supply chains. She cited a new manufacturing zone in Kazakhstan linked to Belt and Road and construction of a highway in Senegal linking three cities to the country’s main airport, which has helped underpin strong growth.
(Reporting by David Lawder in Washington; Editing by Richard Borsuk)
Source: OANN
FILE PHOTO: U.S. Secretary of State Mike Pompeo and Kim Yong Chol, a North Korean senior ruling party official and former intelligence chief, return to discussions after a break at Park Hwa Guest House in Pyongyang, North Korea, July 7, 2018. Andrew Harnik/Pool via REUTERS/File Photo
April 26, 2019
By Hyonhee Shin
SEOUL (Reuters) – The demotion of Kim Yong Chol, North Korean leader Kim Jong Un’s point man for nuclear talks with the United States, signals he has taken the fall for the failed second summit between the two countries, diplomats in Seoul and regional experts said.
The hawkish former general and spymaster was recently removed from a key party post and is expected to hand over his leading role in the nuclear talks to diplomats who had been previously restrained to playing a secondary part, they said.
Kim Yong Chol remains a formidable force in Pyongyang but there is no word whether he has been given a new role in the ultra-secretive North Korean power structure. He did not accompany Kim Jong Un to Russia this week for a summit with President Vladimir Putin, the North Korean leader’s first international foray since his meeting with U.S. President Donald Trump in Hanoi in February ended in disarray.
“The summit damaged the North’s long-held principle that its leader never makes an error, so they have to shift the blame,” said Kim Hyun-wook, a professor at the Korea National Diplomatic Academy in Seoul.
“This may not mean an immediate shift in their U.S. strategy, but the diplomats will likely take the initiative to contain the fallout from Hanoi and promote diplomacy with various countries.”
Kim Yong Chol was beside Kim through the last 12 months, including for his three meetings with South Korean President Moon Jae-in, two with Chinese President Xi Jinping and the two Trump summits, in Singapore and Hanoi.
But for those who have known him as a hardline military general, Kim Yong Chol never seemed comfortable with the art of negotiating the roll back of his country’s nuclear program in exchange for concessions from the United States.
Kim avoided getting into details at negotiating sessions, instead leaving it to diplomats to build strategy, two diplomatic sources in Seoul familiar with the North’s diplomatic engagements said.
Even then, he refused to yield control, one of the sources said.
“Whether or not he understood the issues, he kept a tight grip on the negotiations. It seemed like: ‘Over my dead body I’m going to let Ri Yong Ho take over,’” the source said, referring to the North’s foreign minister.
‘REAL SPOKESWOMAN’
Ri and his deputy, Choe Son Hui, are seen to be taking over the vacuum left by Kim Yong Chol, flanking the leader as he met Putin on Thursday.
The collapse of the Hanoi summit was a major setback for Kim Jong Un, who, several sources said, was led to believe by hawkish aides like Kim Yong Chol that he was about to win sought-after sanctions relief in return for a promise to partially scrap nuclear facilities.
Cheong Seong-chang, a senior fellow at South Korea’s Sejong Institute, said the demands Kim made of Trump in Hanoi had the hallmarks of the “best scenario” strategy advocated by hawks like Kim Yong Chol.
“But it turned out to be a scenario that the United States could never accept,” Cheong said. “Kim Jong Un cutting his reliance on Kim Yong Chol is a positive sign for the negotiations.”
The person who now appears to have Kim’s ear is Vice Foreign Minister Choe, North Korea experts said.
She has steadily grown in influence over the last 15 years, rising from a junior player on the North’s U.S. diplomacy team to become vice foreign minister and a member of the powerful State Affairs Commission.
She held several news conferences after the collapse of the Hanoi summit, playing the rare role of conveying Kim Jong Un’s thinking.
Thae Yong Ho, former North Korean deputy ambassador in London who defected to the South in 2016, said Choe has joined an inner circle of women close to Kim Jong Un, including his sister and his wife.
“Now she’s the real spokeswoman for Kim Jong Un,” Thae told a forum hosted by the Asan Institute of Policy Studies on Wednesday in Seoul. “How can Choe read his mind? Because she has access.”
A diplomatic source also said Choe appears to have built rapport with Kim Yo Jong, Kim’s sister who is also a senior party official, which contributed to her recent promotion.
“We have to remember that (Foreign Minister) Ri and Choe are not only North Korea’s best people for the job of dealing with the U.S.,” said Michael Madden, a North Korea leadership expert at the U.S.-based Stimson Center.
“But they both have known the leader since he was a small boy so there is a dynamic of their wanting to see Kim Jong Un thrive and succeed.”
(Reporting by Hyonhee Shin; Additional reporting by Joyce Lee; Editing by Jack Kim and Raju Gopalakrishnan)
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Chinese President Xi Jinping speaks at the opening ceremony for the second Belt and Road Forum in Beijing, China April 26, 2019. REUTERS/Florence Lo
April 26, 2019
By Brenda Goh and Yilei Sun
BEIJING (Reuters) – China’s Belt and Road initiative must be green and sustainable, President Xi Jinping said at the opening of a summit on his grand plan on Friday, adding that the massive infrastructure and trade plan should result in “high quality” growth for everyone.
Xi’s plan to rebuild the old Silk Road to connect China with Asia, Europe and beyond with huge spending on infrastructure, has become mired in controversy as some partner nations have bemoaned the high cost of projects.
China has repeatedly said it is not seeking to trap anyone with debt and only has good intentions, and has been looking to use this week’s summit in Beijing to recalibrate the policy and address those concerns.
Xi said in a keynote speech to the summit that environmental protection must underpin the scheme “to protect the common home we live in”.
“We must adhere to the concept of openness, greenness, and cleanliness,” he said.
“Operate in the sun and fight corruption together with zero tolerance,” Xi added.
“Building high-quality, sustainable, risk-resistant, reasonably priced, and inclusive infrastructure will help countries to fully utilize their resource endowments.”
Western governments have tended to view it as a means to spread Chinese influence abroad, saddling poor countries with unsustainable debt.
While most of the Belt and Road projects are continuing as planned, some have been caught up by changes in government in countries such as Malaysia and the Maldives.
Those that have been shelved for financial reasons include a power plant in Pakistan and an airport in Sierra Leone, and Beijing has in recent months had to rebuff critics by saying that not one country has been burdened with so-called “debt traps”.
Since 2017, the finance ministries of 28 countries have called on governments, financial institutions and companies from Belt and Road countries to work together to build a long-term, stable and sustainable financing system to manage risks, China’s finance ministry said in a report released on Thursday.
Debt sustainability has to be taken into account when mobilizing funds, the finance ministry said in the report, which outlined a framework for use in analyzing debt sustainability of low-income Belt and Road nations and managing debt risks.
The framework is based on the IMF/World Bank Debt Sustainability Framework for Low Income Countries while penciling in local conditions and development of partner nations, according to the report.
CHINESE PROMISES
The Belt and Road initiative will also open up development opportunities for China just as China itself is further opening up its markets to the world, Xi said.
“In accordance with the need for further opening up, (we’ll) improve laws and regulations, regulate government behavior at all levels in administrative licensing, market supervision and other areas, and clean up and abolish unreasonable regulations, subsidies and practices that impede fair competition and distort the market,” he said.
Xi promised to significantly shorten the negative list for foreign investments, and allow foreign companies to take a majority stake or set up wholly-owned companies in more sectors.
Tariffs will be lower and non-tariff barriers will be eliminated, Xi added.
China also aims to import more services and goods, and is willing to import competitive agricultural products and services to achieve trade balance.
“China will strengthen macroeconomic policy coordination with major economies in the world and strive to create positive spillover effects to promote a strong, sustainable, balanced and inclusive growth for the world economy,” said Xi.
VISITING LEADERS
Visiting leaders include Russia’s Vladimir Putin, as well as Prime Minister Imran Khan of Pakistan, a close China ally and among the biggest recipients of Belt and Road investment, and Prime Minister Giuseppe Conte of Italy, which recently became the first G7 country to sign on to the initiative.
The United States, which has not joined the Belt and Road, is expected to send only lower-level officials, and nobody from Washington, citing concerns over opaque financing practices, poor governance, and disregard for internationally accepted norms.
“The United States is not sending high level officials from Washington to the Belt and Road Forum,” a spokesman for the U.S. Embassy in Beijing said.
“We continue to have serious concerns that China’s infrastructure diplomacy activities ignore or weaken international standards and best practices related to development, labor protections, and environmental protection.”
(Reporting by Brenda Goh and Yilei Sun; Additional reporting by Tony Munroe, Stella Qiu, Ryan Woo, Cate Cadell and Tom Daly; Writing by Ben Blanchard; Editing by Simon Cameron-Moore)
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A man stands in a doorway during heavy rain near the security cordon surrounding St. Anthony’s Shrine, days after a string of suicide bomb attacks on churches and luxury hotels across the island on Easter Sunday, in Colombo, Sri Lanka April 25, 2019. REUTERS/Thomas Peter
April 26, 2019
SYDNEY (Reuters) – Muslims in Sri Lanka were urged to pray at home on Friday and not attend mosques or churches after the State Intelligence Services warned of possible car bomb attacks, amid fears of retaliatory violence for the Easter Sunday bombings.
The U.S. embassy in Sri Lanka also urged its citizens to avoid places of worship over the coming weekend after authorities reported there could be more attacks targeting religious centers.
Sri Lanka remains on edge after suicide bombing attacks on three churches and four hotels that killed 253 people and wounded about 500. The attacks have been claimed by the extremist Islamic State group.
Nearly 10,000 soldiers are being deployed across the Indian Ocean island state to carry out searches and provide security for religious centers, the military said on Friday.
Fears of retaliatory sectarian violence has already caused Muslim communities flee their homes amid bomb scares, lockdowns and security sweeps.
The All Ceylon Jamiyathul Ullama, Sri Lanka’s main Islamic religious body, urged Muslims to conduct prayers at home on Friday in case “there is a need to protect family and properties”.
Cardinal Malcolm Ranjith also appealed to priests not to conduct mass at churches until further notice.
“Security is important,” he said.
Police have detained least 76 people, including foreigners from Syria and Egypt, in their investigations so far.
Islamic State provided no evidence to back its claim that it was behind the attacks. If true, it would be one of the worst attacks carried out by the group outside Iraq and Syria.
Islamic State released a video on Tuesday showing eight men, all but one with their faces covered, standing under a black Islamic State flag and declaring their loyalty to its leader, Abu Bakr Al-Baghdadi.
The Sri Lankan government said there were nine homegrown, well-educated suicide bombers, eight of whom had been identified. One was a woman.
Authorities have focused their investigations on international links to two domestic Islamist groups – National Thawheed Jama’ut and Jammiyathul Millathu Ibrahim – they believe carried out the attacks.
Government officials have acknowledged a major lapse in not widely sharing an intelligence warning from India before the attacks. Defense Secretary Hemasiri Fernando resigned over the failure to prevent the attacks.
The Easter Sunday bombings shattered the relative calm that had existed in Buddhist-majority Sri Lanka since a civil war against mostly Hindu ethnic Tamil separatists ended 10 years ago.
Sri Lanka’s 22 million people include minority Christians, Muslims and Hindus. Until now, Christians had largely managed to avoid the worst of the island’s conflict and communal tensions.
Most of the victims were Sri Lankans, although authorities said at least 38 foreigners were also killed, many of them tourists sitting down to breakfast at top-end hotels when the bombers struck.
They included British, U.S., Australian, Turkish, Indian, Chinese, Danish, Dutch and Portuguese nationals. Britain warned its nationals on Thursday to avoid Sri Lanka unless it was absolutely necessary because there could be more attacks.
(GRAPHIC: Sri Lanka bombings – https://tmsnrt.rs/2Xy02BA)
(GRAPHIC: A decade of peace shattered – https://tmsnrt.rs/2W4wZoU)
(Reporting by Sanjeev Miglani; Writing by Michael Perry; Editing by Paul Tait)
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FILE PHOTO: A HNA Group logo is seen on the building of HNA Plaza in Beijing, China February 9, 2018. REUTERS/Jason Lee
April 26, 2019
By Jennifer Hughes and Julie Zhu
HONG KONG (Reuters) – Shareholders summoned by Hong Kong Airlines this month for a meeting were greeted with some shocking news: the airline needed at least HK$2 billion in fresh funds or it would lose its operating license.
The carrier had lost HK$3 billion ($382.54 million) in 2018, they were told, and an infusion was crucial, according to people present.
Dialed in, but silent for the hour-long meeting on April 1, were executives for Hainan-based HNA Group,, which holds 29 percent of the airline’s shares.
Investors were blunt about HNA’s role in the company’s troubles, according to people at the meeting – including accusations that it was siphoning off cash, which the conglomerate denies.
“There’s no point raising fresh capital if we cannot solve the problem of (a) major shareholder pumping out HKA’s assets,” said Zhong Guosong, who holds 27 percent of the shares and is vying for chairmanship of the company.
Another shareholder echoed his views: “This is Hong Kong, not Hainan.”
In the last week, drama from the call has spilled into the open as HNA and a rival group battled for control of Hong Kong Airlines’ chairmanship. The airline declined to comment on shareholders’ activities and said its operations “remain normal.”
The infighting illustrates the convoluted nature of HNA’s holdings around the world, which range from real estate to banks and are often divided among opaque, related entities.
On paper, HNA gave up control of Hong Kong Airlines two years ago just as it began selling off assets collected in a $50 billion worldwide acquisition spree.
But the carrier has close ties with several HNA affiliates.
“HNA’s shareholding structure and how they structure investments has always been very complicated, and the HKA case isn’t any different,” said David Yu, adjunct professor of finance at New York University, Shanghai. “The issue now is that there is some distress at the parent group, and this is obviously having implications on the underlying companies, including HKA.”
HNA TANGLE
Since Beijing in 2017 began cracking down on Chinese conglomerates’ rapid debt-fuelled global expansions, HNA has sold about $26 billion in assets, according to Dealogic data and Reuters calculations.
Disposals include control of the Radisson hotel group; a quarter stake in Hilton Hotels; prime property in New York, Sydney, Shanghai, San Francisco and Hong Kong; regional Chinese airlines; a stake in aircraft lessor Avolon; and half of its stake in Deutsche Bank.
But the prices HNA has sought and the complex structures, loans and other business links that bind its holdings have made unwinding its investments difficult.
HNA’s wider Hong Kong interests are a case in point. This week, HNA-controlled CWT International said lenders had seized assets, including U.S. property and its Singapore-based commodity trading and logistics unit, because it failed to repay a HK$1.4 billion ($178 million) loan.
HNA said that it was monitoring the situation, but that it was a matter for CWT and its creditors. Yet HNA units own 51 percent of CWT’s shares, and each of CWT’s executive directors has ties to other HNA businesses. CWT’s co-chairman, Mung Kin Keung, is a shareholder in Hong Kong Airlines.
HNA’s involvement with the airline is just as complicated. The conglomerate took control of CR Airways in 2006 and renamed it Hong Kong Airlines. In July 2017 it cut its stake, according to filings, by selling 34 percent to Chinese private equity group Frontier Investment Partners.
According to Hong Kong Airlines’ 2017 accounts, seen by Reuters, the airline held shares in four unlisted HNA affiliates, worth $367 million at the end of 2017, and had loaned $300 million to two other HNA firms.
That year, the airline’s trade receivables – money owed to it but not collected – jumped 50 percent even as revenue rose only 11 percent. Of those payments due, the amount HNA companies owed the airline more than doubled to HK$1.3 billion, or 73 percent of receivables.
Zhong is closely linked with HNA as well, having been a director of the airline for almost four years until August 2018. Since 2017, he has also been chairman of Hong Kong Express, Hong Kong Airlines’ low-cost sister, which HNA recently agreed to sell to Cathay Pacific for HK$4.93 billion.
Cathay’s announcement of the deal contained a warning that an HK Express shareholder planned to contest it. That shareholder is Zhong, according to two sources with direct knowledge of the issue. They declined to be identified because they were not authorized to speak to the media.
In a further sign that the relationship between Zhong and HNA had soured, court papers show that HNA in December sued the company through which Zhong holds his 27 percent stake in the airline, seeking repayment of a HK$854 million debt from 2010.
A representative for Zhong did not provide comment.
CONTROL DISPUTES
Since the April 1 meeting, Frontier has aligned itself with Zhong, working to appoint him chairman of the airline as part of efforts to seize control and investigate its financial ties with HNA.
Late last week they won an injunction that blocked directors and executives from removing or destroying the airline’s documents.
That followed a week in which both Zhong and airline executive Hou Wei – still listed on its website as chairman – claimed control and fought over who had access to the company’s headquarters.
Adding to the confusion, a group called Grand City Investment Capital Limited this week said it owned the Frontier stake after a transfer dated April 11.
A spokesman for Grand City declined to discuss his company’s ownership. Frontier disputes Grand City’s claim to the stake.
Frontier and Zhong have also accused HNA of “embezzlement of HKA assets and serious financial misappropriation by HNA Group parties” – accusations that HNA has denied.
They and other shareholders are still demanding access to the airline’s 2018 accounts and details of how it lost so much money before they address its HK$2 billion capital shortfall.
Amid the court orders and competing statements uncertainty remains over who is in charge – although both sides have gone to lengths to ensure the airline keeps operating normally.
“There are so many moving parts that corporate control is under dispute because the changes are happening too rapidly for the company to organize coherently,” said Andrew Collier, managing director of Orient Capital Research, which focuses on China. He described HNA as “a poster child for overexpansion of China’s worst conglomerates.”
He added: “Because there is always a lack of transparency at HNA, this makes it twice as hard to figure out what the nature of the dispute is.”
(Reporting by Jennifer Hughes, Julie Zhu, Kane Wu and Alun John; Additional reporting by Shellin Li and Jamie Freed; Editing by Gerry Doyle)
Source: OANN
FILE PHOTO: Employees of Toyota Motor Corp. work on the assembly line of Mirai fuel cell vehicle (FCV) at the company’s Motomachi plant in Toyota, Aichi prefecture, Japan May 17, 2018. REUTERS/Issei Kato
April 26, 2019
By Stanley White
TOKYO (Reuters) – Japan’s factory output fell in March for the first time in two months and inventories rose at the fastest pace in a year as the U.S.-Sino trade war dents the country’s manufacturing sector.
Separate data showed retail sales picked up in March and labor demand remains the strongest in decades, but these positive figures are unlikely to ease policymakers’ concerns about a slowdown in global trade flows.
Factory output fell 0.9 percent in March, data by the Ministry of Economy, Trade and Industry (METI) showed, more than a median estimate for a 0.1 percent decline in a Reuters poll of economists. That followed a 0.7 percent increase in February.
The mounting pressure on Japan’s economy from weak external demand has hurt exports and threatens corporate profits, which could weigh on capital expenditure and make it more difficult to keep growth on track, analysts say.
Industrial output fell in March due to a 3.4 percent decline in car output and a 6.7 percent decline in the production of machines used to make semiconductors and flat-panel displays, the data showed.
In another source of concern, inventories rose 1.6 percent in March, the fastest increase in a year, due to higher inventories of metals, plastics, and heavy equipment.
The rise in inventories suggests makers of these goods could curb output in the future.
Manufacturers surveyed by the ministry expect production to rise 2.7 percent in April and 3.6 percent in May, but METI changed its assessment of output to say it is weakening recently.
Retail sales – a key gauge of private consumption that makes up about 60 percent of the economy – rose 1.0 percent in March from a year earlier, more than a 0.8 percent annual gain expected by economists.
Friday’s batch of data comes a day after the Bank of Japan said it would keep interest rates low for at least another year, in a move to dispel uncertainty over its commitment to support the economy and drive inflation.
Japan’s policymakers are nervously monitoring developments overseas but have few policy options if weakness in the global economy continues to damage the country’s outlook, some economists say.
The Sino-U.S. trade war has also had a negative effect on domestic growth, as a slowing Chinese economy curbed demand for mobile phone parts and chip-making equipment from Japan.
Uncertainty over Britain’s exit from the European Union and jittery global financial markets have added to a growing list of worries for policymakers.
Additional data released on Friday showed Japan’s jobless rate edged up to 2.5 percent in March from 2.3 percent previously, and job availability held steady at 1.63 per applicant, hovering at a 44-year high.
Tokyo’s core consumer price index (CPI), which includes oil products but excludes fresh food prices, rose an annual 1.3 percent in April from a year earlier, more than the median estimate for a 1.1 percent annual increase.
(Editing by Jacqueline Wong)
Source: OANN
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