CHINA & HONG KONG
China may remain the “primary threat” to the US military for as long as a century after learning how to fight more effectively by watching American wars in the Middle East, US President Donald Trump’s nominee to lead the Joint Chiefs of Staff said.
“China went to school on us,” General Mark Milley said in response to lawmakers’ questions during his confirmation hearing Thursday (11 July) before the Senate Armed Services Committee. “They watched us very closely in the first Gulf War, the second Gulf War. They watched our capabilities and in many, many ways they have mimicked those, and they have adopted many of the doctrines and organisations.”
Evolving threats from China and Russia are cited as the primary challenges in the current US defence strategy, supplanting the war on terrorism as the top priority. China, with the world’s second largest economy, is making major investments in military capabilities to challenge America’s post-World War II dominance, especially in the Asia Pacific region.
The US this month denounced Chinese anti-ship missile tests in the disputed South China Sea, underscoring the continued strategic tensions between the two Pacific powers even as they try to restart trade talks.
Ties between the countries have been strained since May when Trump hiked tariffs after accusing Beijing of reneging on commitments in trade negotiations.
“China is improving their military very, very rapidly in space, air, cyber, maritime, land domains,” said Milley, who said the US needs to make sure that “we do not lose our advantages that we have relative to other countries, specifically relative to China.”
He also added, “China is not an enemy. I want to make that clear. They are an adversary.” – Bloomberg News.
The Shanghai Composite Index added 0.08% to 2,917.76 on Thursday (11 July) while the Hang Seng Index gained 0.81% to 28,431.80.
REST OF ASIA
Malaysia expects to beat its approved investments target this year by working with, rather than competing against, its neighbours.
The Southeast Asian country has already reached 47% of its full year goal of MYR113.5b (USD27.6b) in the first quarter, with the following two months showing increases compared to 2018, Malaysia Investment Development Authority Chairman Abdul Majid Ahmad Khan said in an interview. The target is a drop from the MYR201.7b achieved last year.
The region, which has a combined gross domestic product of USD2.8t, is seeking ways to withstand the impact of a trade war that has widened beyond the US and China.
“We don’t want to be competing or pinching from each other, we want to complement each other,” Abdul Majid, who took the post in April, said at his office in Kuala Lumpur. “Each country has its own niche and strengths. That’s the ecosystem we are working on.”
Malaysia borders regional giant Indonesia and manufacturing stronghold Thailand, so it must not directly compete with them, he said. Instead, the country will seek to draw in higher technology investments in sectors including medical devices, aerospace, and biotechnology.
Malaysia will position itself as a regional supply hub, taking advantage of its location near maritime routes like the Strait of Malacca that connects India to Southeast Asia to China. The country has many ports, a growing infrastructure network, and robust rule of law, which makes it an attractive jumping-off point for multinational companies, he further commented.
Investments have been a bright spot amid Malaysia’s slowing growth outlook. The central bank warned this week (ending 12 July) of downside risks to its 4.3% to 4.8% forecast, even as trade diversions could add about 10 bps to this year’s expansion. The country seeks to attract investors fleeing trade tensions by offering incentives, simplifying processes, and ensure returns. – Bloomberg News.
South Korea’s Kospi Index gained 0.07% to 2,081.98 at the open on Friday (12 July). It increased 1.06% to 2,080.58 on Thursday.
Shares in Sydney were lower on Friday with the S&P/ASX 200 Index losing 0.36% to 6,692.20 at the open. The index climbed 0.39% to 6,697.20 the previous session.
The Taiwan Stock Exchange Weighted Index added 0.42% to 10,843.42.
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