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The move sent stocks diving amid rising market fears the United States could provoke a trade war, since China has vowed to retaliate.
WASHINGTON: US President Donald Trump lit a slow-burning fuse on Thursday (Mar 22) to launch long-promised anti-China tariffs, but his actions appeared to be more of a warning shot than the start of a full-blown trade war with Beijing.
A presidential memorandum signed by Trump will target up to US$60 billion in Chinese goods with tariffs over what his administration says is misappropriation of US intellectual property, but only after a 30-day consultation period that starts once a list is published.
Trump also gave the Treasury Department 60 days to develop investment restrictions aimed at preventing Chinese-controlled companies and funds from acquiring U.S. firms with sensitive technologies.
The waiting periods will give industry lobbyists and US lawmakers a chance to water down a proposed target list that runs to 1,300 products, many in technology sectors.
It also will create space for potential negotiations for Beijing to address Trump’s allegations on intellectual property and delay the start of immediate retaliation against U.S. products from aircraft to soybeans.
“I view them as a friend,” Trump said of the Chinese as he started his announcement. “We have spoken to China and we are in the middle of negotiations.”
‘FIGHT TO THE END’
But his actions provoked a belligerent response from China’s embassy in Washington, which vowed Beijing would “fight to the end” in any trade war with the United States.
“We will retaliate. If people want to play tough, we will play tough with them and see who will last longer,” Chinese ambassador Cui Tiankai said in a video posted to the embassy’s Facebook page.
Stocks fell sharply on Trump’s announcement, with the Dow Jones Industrial Average falling nearly 3 percent. Major industrials that could become targets of Chinese trade retaliation slumped further, with aircraft maker Boeing down 5.2 per cent and earthmoving equipment maker Caterpillar falling 5.7 per cent.
The steps are based on the results of USTR’s eight-month investigation of suspected misappropriation of American technology by China.
US officials say that probe, undertaken through Section 301 of the 1974 Trade Act, has found that China engages in unfair trade practices by forcing American investors to turn over key technologies to Chinese firms.
Trump, who earlier this month announced steep tariffs on steel and aluminium imports to the United States, also wants the Chinese to take action that would lower the US$375 billion goods trade deficit that the United States is running with China.
White House officials told a briefing ahead of the trade announcement that the administration was eyeing tariffs on US$50 billion in Chinese goods. They said the figure was based on a calculation of the impact on the profits of US companies that had been forced to hand over intellectual property as the price of doing business in China.
There was no explanation of the difference between that figure and Trump’s US$60 billion.
“Many of these areas are those where China has sought to acquire advantage through the unfair acquisition and forced technology transfer from US companies,” said Everett Eissenstat, deputy director of the National Economic Council.
In addition, Trump will also direct the US Treasury to propose measures that could restrict Chinese investments in the United States, Eissenstat said.
China has threatened to target US exports of agricultural commodities, in particular the US$14 billion in exports of soybeans.
Reaction from US industry groups sought to strike a balance, applauding the president for tackling the persistent drain of US technology to Chinese competitors, but urging negotiations instead of tariffs.
“American business wants to see solutions to these problems, not just sanctions such as unilateral tariffs that may do more harm than good,” said John Frisbie, president of the US-China Business Council.
Despite threats of retaliation, China has been keen to portray itself as a defender of globalization, a message that was reinforced in a call between President Xi Jinping and French President Emmanuel Macron.
That said, there is a risk of a mounting cycle of retaliation. US Trade Representative Lighthizer warned on Wednesday that Washington would take “countermeasures” if Beijing targeted US agriculture.
The biggest risk to world trade over the longer term may not be a tit-for-tat trade war, but the breakdown of global supply chains that feed companies such as U.S. auto giant General Motors Co and Apple Inc.
“Tensions are likely to escalate further, even without a full-scale trade war. This could disrupt global supply chains and damage investor sentiment,” said Dario Perkins, head of global macroeconomics research at TS Lombard, a London-based economic consultancy.
Trump’s steel and aluminium tariffs, which are tied to Section 232 of the 1962 Trade Expansion Act, go into effect on Friday. Canada and Mexico have been given initial exemptions from the 25 per cent steel and 10 per cent aluminium tariffs.
Lighthizer told US lawmakers on Thursday that the European Union, along with Argentina, Australia, Brazil and South Korea, would also be exempted.
Source: Agencies/de/am
Read more at https://www.channelnewsasia.com/news/business/trump-moves-towards-china-tariffs-in-warning-shot-on-technology-10068614
A “why cannot” spirit led Pan-United Corporation on a transformation journey from a hardware company into Singapore’s biggest ready-mixed concrete supplier, and this appetite for risk has earned it a mention by Finance Minister Heng Swee Keat in Budget 2018.
SINGAPORE: It was September 1, 1958, when Mr Ng Kar Cheong started a hardware business called Hiap Soon & Company together with three friends.
They had been colleagues at a hardware store and despite saving little from their monthly pay of S$45, the four friends decided to have a go at becoming their own bosses. They pooled together what little money they had and borrowed the rest.
During the start-up phase, Mr Ng remembered toiling day and night in a little shophouse along Beach Road. “It was tough. We were working like coolies, rather than bosses.”
Fast forward 60 years, the 84-year-old is now enjoying the fruits of his labour as the former hardware business evolved into Pan-United Corporation – Singapore’s leading ready-mixed concrete and cement supplier with 1,200 employees and listed on the Singapore Exchange.
The homegrown firm has also spread its wings beyond Singapore and in an array of businesses including shipping, aggregate quarrying and until last year, port operations in China which it spun off into a separate listed entity.
For Mr Ng, his entrepreneurial journey has been “a bumpy ride” and remains an unexpected one that has transformed his life.
“Starting my own business? It was a dream that I didn’t dare think about,” he told Channel NewsAsia in Mandarin as he recalled the time when his friends floated the idea of venturing out on their own.
“I had my parents and my own family to feed after getting married at 22. I didn’t even have a cent in my pocket then.”
FROM YOUTIAO SELLER TO BOSS OF HIS OWN
And that had been the case since he was young.
Born in the Fujian province of China, Mr Ng embarked on a week-long ship ride bound for Singapore with his parents and siblings in 1941 to escape a brewing war back home. He was seven.
But war soon descended upon Singapore, throwing the Ng family’s life into disarray. Mr Ng pulled out of school and his parents struggled to find work. With little money at home after his father became addicted to opium, Mr Ng, being the eldest son, started selling youtiao (fried dough fritters) on the streets to supplement the family’s income.
Prior to starting his own business, Mr Ng was an employee at a hardware shop and spent his younger days selling youtiao on the streets of Telok Ayer. (Photo: Tang See Kit)
As this was a common job for children from poor families, competition was stiff so hitting the streets earlier than the rest would be key.
Mr Ng recalled starting his days at 7am with the collection of freshly-made youtiaos before selling them along the streets of Telok Ayer. For every 50 youtiaos he sold, Mr Ng earned S$1 – a “big sum” that would make his day though that was barely enough to support the big family of more than 10. Hence, returning to school was never an option.
That went on for nearly three years before Mr Ng was given the task to make and fry youtiaos – a “promotion” that raised his monthly salary to over S$100. But his grandmother urged him to call it quits.
“She was angry and told me it was time to leave before I end up doing this for the rest of my life,” said Mr Ng. “She said I had to look for a new job to learn another skill.”
Hence, he took on an apprenticeship which paid S$30 a month, before moving on to work at a hardware store where he met his co-founders.
When the time came for Mr Ng to decide whether to become his own boss, his grandmother lent him another helping hand. This time round, the start-up capital of S$3,750.
“She said those were loans from various people but that could have been her savings. I would never know… She doted on me and was the one who reminded me to have an ambition despite being poor.”
From then on, Mr Ng threw himself into the business.
Pan-United’s underwater concrete was used in the building of the Helix Bridge. (Photo: Pan-United Corporation)
Thankfully, opportunities flourished for hardware firms especially after Singapore gained its independence in 1965. But Mr Ng soon started to have doubts about the company’s bottomline given its practice of extending credit to customers.
It was then when he took the first step to steer the company into other areas.
The construction industry was booming on the back of demand and despite not having any prior experience, Mr Ng felt that the opportunity was too good to pass up.
“Don’t know anything about the industry? Why cannot? You just have to put your heart to it. If you dare to do it, you shouldn’t be afraid of not succeeding.”
What he lacked in proper education, Mr Ng devoted all his time to learn on the job. Even as he could not understand or speak English, he still sought out foreign companies that were setting up in Jurong following then-Finance Minister Goh Keng Swee’s push to develop the swampy wasteland into an industrial estate.
As the construction business grew, Mr Ng set up a subsidiary called Pan-United Shipping in 1974 to provide tug and barge services to move Indonesian logs to Singapore. Eight years later, he took over the Pan-United unit following the decision to split up the company after the death of one of its founders.
Over the years, Mr Ng spearheaded the company into other ventures, such as shipbuilding and repair in the 1980s, as well as the set-up of an aggregate quarrying business in Indonesia in 1990. In 1993, Pan-United successfully listed on the SGX mainboard.
When asked what underpinned his business strategies, Mr Ng replied: “If my business failed, how is my family going to live? That’s why when my children fell so sick that even my own father scolded me for focusing all my time on the business, I said I don’t have a choice.
“If I don’t have my company, I won’t have my family so I need to work hard.”
On whether his days as a street hawker honed his business acumen, he answered: “Let me tell you: At the end of the day, it’s just about being hardworking. There is no shortcut.”
STAYING ON ITS TOES
Today, Mr Ng’s pet phrase in Hokkien “an zua buay sai”, or loosely translated as “why cannot”, remains on Pan-United’s corporate website, and the company has been embracing that in a different way since he stepped down in 1993.
In 1994, the company’s port business began when it acquired a site in Changshu. Five years later, it started its concrete supply operations that now forms its core business. In 2004, its shipyard unit was demerged and listed as Pan-United Marine, which was later acquired by Dubai Drydocks World and delisted in 2007. Its next significant corporate move came last year when it decided to spin off its China river ports business and list it on Hong Kong as Xinghua Port Group.
Singapore’s founding father Lee Kuan Yew attended the 10th anniversary of Xinghua Port at Changshu, China, in June 2004. (Photo: Pan-United)
For the financial year of 2017, Pan-United posted a 45 per cent year-on-year rise in net profit to S$20.1 million. Of which, S$14.3 million was from the port business that has since been spun off. Revenue edged up 3 per cent year-on-year to S$629.3 million for the full year ended Dec 31 on the back of higher coal trading revenue.
Mr Ng’s eighth child, May Ng, took over the reins as chief executive in 2011 and has since steered the family business towards more research and development (R&D).
In particular, it has been pushing the boundaries for its array of ready-mixed concrete products.
“Whatever the company has right now is all achieved by my children,” said Mr Ng. (Photo: Tang See Kit)
To date, Pan-United has more than 300 types of specialised ready-mixed concrete products produced by its six-year-old R&D facility. The R&D team has also ballooned to 30 people and continues to expand.
For instance, one of Pan-United’s latest product is a type of flexible concrete that can cushion the landing impact of aircraft, as well as reducing wear and tear of aircraft runways.
Its other products boast a range of functionalities, such as being able to shield against the rays of proton radiation, environmentally-friendly, light weight, temperature-controlled and self-compacting.
These efforts were highlighted by Finance Minister Heng Swee Keat in his recent Budget speech. He said the company’s significant investments in R&D and innovation of new products have helped it to break into regional and global markets.
Ms Ng, who was named by Forbes as one of Asia’s 50 most powerful business women in 2016, told Channel NewsAsia that this was a necessary step to take for the 60-year-old company to remain in sync with the market.
“Projects are getting bigger with higher technical requirements. These changing demands will require more and more sophisticated products and we have to invest in development to keep up.”
These include demand for green products amid higher awareness of eco-sustainability, as well as the push for productivity.
Hence in 2007, it rolled out green and eco-friendly concrete made with high amounts of recycled materials, becoming one of the first to do so in Singapore. This product has since been used in the construction of Gardens by the Bay and Singapore’s first carbon-neutral building, Tampines Concourse.
The company’s self-compacting concrete, meanwhile, helps to cut down the manpower needed to spread and compact the concrete, as well as accompanying noise pollution.
For the new product targeted for airport runways and taxiways, Ms Ng noted that the development process, which took 18 months, began after the company noticed demand for a product that would meet the latest standards of the US Federal Aviation Administration.
The company set up an innovation centre in 2012 to expedite its R&D processes. (Photo: Pan-United Corporation)
These investments into R&D come amid a less-conducive environment back home for it to do so. Softer construction demand in Singapore over the past years has pressured its bottomline.
But Ms Ng noted that it remains crucial for the company to be “very open-minded”.
“We have to take into consideration how the market is going to be developing especially since in the last 5 years, there’s been huge shifts in the marketplace due to technology,” she said. “If we stand still, we can easily be outdated.”
The innovations in its products will also underpin its regionalisation strategy, which it is banking on for longer-term growth. The urbanisation trends in Southeast Asia, coupled with China’s One Belt One Road policy, will provide the company with abundant opportunities, reckoned Ms Ng.
“In an environment when everyone is trying to leapfrog, how do we advance? Not just do we become a total solution provider, but we have to be the best in class then can we compete in the new markets.”
When asked about the path Pan-United is taking now, the elder Ng, who is still affectionately addressed as “Ah Gong” by some employees, said he has left the running of the firm to his children since stepping down and emphasised that its achievements can no longer be attributed to him alone.
“If you ask me whether the company is profitable now, I wouldn’t know. As long as I receive some pocket money to spend, I’m happy,” said Mr Ng with a hearty laugh.
Turning to his daughter, he added: “Whatever the company has right now is the work of my children.”
Pan-United’s CEO May Ng (left) and founder Ng Kar Cheong. (Photo: Tang See Kit)
Apart from Ms Ng, her sister Jane Ng is the company’s executive director while her brother Patrick Ng is the deputy chairman after being group CEO from 2004 to 2011.
When asked if there was a phrase that would characterise her leadership style, Ms Ng paused before answering with a smile: “I don’t really have a pet phrase like my father but I’ll like to think that I’ve been continuing his ‘can-do’ spirit.
“I think it’s important that my team and I continue to be hardworking. This fear that we could be irrelevant will drive the motivation and keep us on our toes.”
Source: Channel News Asia
More Singaporeans will see their employment conditions such as hours of work and overtime pay protected under proposed changes to the Employment Act.
About 430,000 more professionals, managers and executives (PMEs) will be covered under the Employment Act when it is amended to remove the S$4,500 salary cap, said Manpower Minister Lim Swee Say in Parliament on Monday (Mar 5).
SINGAPORE: About 430,000 more professionals, managers and executives (PMEs) will be covered under the Employment Act when it is amended to remove the S$4,500 salary cap, said Manpower Minister Lim Swee Say in Parliament on Monday (Mar 5).
“The exceptions are public servants, domestic workers and seafarers who are covered separately, such as by other Acts due to their nature of work,” Mr Lim added in his ministry’s Committee of Supply debate.
The removal of the salary cap and other amendments to Singapore’s main labour law will be introduced in Parliament later this year for implementation by April 2019.
With the revisions, these PMEs will enjoy core employee benefits under the Act which include redress for wrongful dismissal, public holiday and sick leave entitlements, timely payment of salary and allowable deductions.
Currently, only Singaporeans earning under S$4,500 come under the Act’s core provisions.
“Our workforce is changing fast, we now have more PMETs (professionals, managers, executives and technicians), and fewer rank-and-files. This trend will continue. … With PMETs making up 56 per cent of the local workforce now, going up to 65 per cent by around 2030, it is timely to make a more fundamental change to the coverage of EA,” said Mr Lim.
The changes proposed come after a month-long public consultation earlier in January.
With changes to the salary cap, more non-workmen employees will see stronger protection of their rights.
Currently, additional protection that covers hours or work, overtime pay and rest days are accorded only to workmen earning up to S$4,500 and non-workmen earning up to S$2,500.
The salary cap for non-workmen, who are typically white-collar rank-and-file workers such as clerks, will go up from S$2,500 to S$2,600. The enhancement will cover half of the workforce.
In terms of overtime pay, the salary cap for non-workmen will also be revised upwards from S$2,250 to S$2,600. About 100,000 non-workmen will benefit from this increase.
Additionally, disputes between employees and employers will be made easier to tackle.
The Employment Claims Tribunal will start hearing claims related to wrongful dismissal, which was previously heard by the Minister for Manpower.
This will be on top of salary-related disputes that are currently heard by the tribunal if unresolved by mediation by the Tripartite Alliance for Dispute Management
Source: Channel News Asia