SINGAPORE (Nov 25): “There are new things happening in new parts of the world, and we need to be part of that story.” — Prime Minister Lee Hsien Loong, wrapping up his official visit to Mexico at the invitation of President Andrés Manuel López Obrador, where the two governments exchanged memoranda of understanding on cooperation in science and technology, water resources, culture, industrial property and international development.
Kissinger says US and China in ‘foothills of Cold War’
Former US Secretary of State Henry Kissinger said the US and China were in the “foothills of a Cold War”, and warned that the conflict could be worse than World War I if left to run unconstrained.
“That makes it, in my view, especially important that a period of relative tension be followed by an explicit effort to understand what the political causes are and a commitment by both sides to try to overcome those,” Kissinger told a session of the New Economy Forum in Beijing on Nov 21. “It is far from being too late for that, because we are still in the foothills of a Cold War.”
Kissinger said China and the US were countries of a magnitude exceeding that of the Soviet Union and the US, and that the world’s two largest economies, which are locked in a protracted trade war, “are bound to step on each other’s toes all over the world, in the sense of being conscious of the purposes of the other”.
He deems it “essential” that they discuss their mutual purposes and an attempt be made to limit the impact of conflict. “If conflict is permitted to run unconstrained, the outcome could be even worse than it was in Europe. World War I broke out because a relatively minor crisis could not be mastered,” he said. — Bloomberg LP
Economists see glimmer of hope even as Singapore exports extend slump
Economists are gaining optimism that the worst might soon be over for Singapore’s economy despite non-oil domestic exports (NODX) slumping for the eighth consecutive month in October.
Official figures released by trade agency Enterprise Singapore on Nov 18 pointed to a 12.3% y-o-y drop in October — weaker than the 8.1% decline in the previous month and worse than the consensus expectation of a 10.4% contraction.
The latest drop was mainly due to the high base from a year ago, and comes on the back of lower electronics and non-electronics exports fuelled by the tensions between the US and China.
Economists at RHB Group Research see a “slight recovery” in NODX growth in 2020, but warn that exports are unlikely to bounce back quickly, especially owing to continued weakness in electronics exports.
“The NODX slump seen at the beginning of the final quarter reinforces our view that such exports are unlikely to post a quick turnaround amid the global economic slowdown,” RHB economists say. The research house forecasts a sharp 10% decline in NODX this year, before improving to a more moderate 2% contraction in 2020.
Meanwhile, Maybank Kim Eng Research analyst Chua Hak Bin believes that the manufacturing sector is likely to emerge out of recession in 2020. “We think manufacturing and exports will recover at a gradual pace as the tariff shock dissipates,” Chua says. “A partial US-China trade deal would help reduce uncertainty and spark some modest recovery in capex spending and trade in 2020.” — By Amala Balakrishner
Singapore aims to be global hub for developing, deploying AI solutions
Singapore has invested over $500 million to further artificial intelligence research innovation and enterprise, and has no intention of slowing down its quest for AI supremacy.
The government has set its sights on establishing Singapore as a global hub for developing, test-bedding, deploying and scaling AI solutions as part of its National Artificial Intelligence Strategy, according to Minister for Foreign Affairs Vivian Balakrishnan, who is also minister-in-charge of the Smart Nation Initiative.
Speaking at the opening session of the Smart City Expo World Congress in Barcelona, Spain on Nov 19, Balakrishnan highlighted that Singapore’s AI strategy constitutes a plan to enable the city state to seize the new opportunities brought about by AI, and create value for its citizens and the rest of the world.
“We believe that AI is a transformative technology. The fact that computers and systems can now see, hear, understand and speak is transformational. It will transform our economy and societies, and disrupt our politics. It will alter the nature of jobs and the skills our people will need,” Balakrishnan said. “Consequently, we have decided that AI will define the next phase of our Smart Nation journey.”
To this end, Singapore has established a National AI Office which will drive the national AI agenda. It will also catalyse efforts across research, industry and government stakeholders to work on identified areas of priority.
“AI will change the world, and cities that master AI will get ahead,” Balakrishnan said. “If you do not, you are at risk of being left behind.” — By Uma Devi
Asia food spending to double to US$8 tril by 2030
Asia is expected to double its total spending on food over the next decade to more than US$8 trillion ($10.9 trillion) by 2030, from US$4 trillion currently, in line with rising demand on the back of population growth and changing food requirements.
According to a report by PwC, Temasek and Rabobank, an additional US$800 billion worth of investments will be needed to grow Asia’s food and agriculture industry to a sustainable level over the next 10 years.
Some US$550 billion of these investments will enable key requirements around sustainability, safety, health and convenience, while the remaining US$250 billion will be used to drive increased quantities of food to feed the region’s growing population.
“A fundamental change is required across the entire food supply chain in Asia to enable and sustain the region’s food security,” says Anuj Maheshwari, managing director of agribusiness at Temasek. “We see immense opportunities for start-ups, businesses and governments to work together in creating innovative solutions that can transform our global food systems.” — By Uma Devi
MAS mulls approval of crypto-token derivatives
The Monetary Authority of Singapore has proposed allowing crypto-token derivatives to be listed and traded on approved domestic exchanges.
Under the proposal, trading of derivatives on common cryptocurrencies such as Bitcoin and Ether will be subject to the Securities and Futures Act, MAS said in a Nov 20 statement. The plans are in response to interest from hedge funds and asset managers that trade such products, the regulator added.
Singapore is joining the global race for crypto derivative trading as institutional investors increasingly seek ways to hedge their exposure to the assets. Giant US bourse operators CME Group and Intercontinental Exchange already offer futures and plan to introduce other derivative products in the next few months.
The amount of derivatives traded worldwide on Bitcoin alone is around US$5 billion to US$10 billion a day — exceeding spot volume by 10 to 18 times — according to recent estimates from data trackers Skew and BitcoinTradeVolume.com. The volumes were about equal at the start of the year, though definitive figures are hard to come by from exchanges.
“MAS’s proposal will allow approved exchanges in Singapore to meet the need of investors to manage their exposure to payment tokens while bringing the activity under regulatory oversight,” the regulator said in the statement. — Bloomberg LP
