Business
Ray S. Eñano, Editor business@manilastandard.net extrastory2000@gmail.com
B4
MONDAY, MAY 15, 2017
China’s pledges $78b for new trade project P RESIDENT Xi Jinping laid the framework for Chinese-style globalization and his ambition to lead it during a speech inaugurating his cornerstone diplomatic trade initiative for a new Silk Road.
Grounding the plan in China’s history, Xi described the Belt and Road Initiative as a “project of the century” that had its inspiration in the ancient trade routes linking the country with the world. He pledged an additional 100 billion yuan ($14.5 billion) for China’s Silk Road Fund, 380 billion yuan in new lending for participating nations, and 60 billion yuan in coming years to developing countries and international organizations that join the program. Xi repeated his call for multilateral trade, calling his initiative a force for peace in “a world fraught with challenges.” He told the almost two dozen world leaders gathered at the forum that countries should “uphold and grow an open world economy.” The speech built on an image of Xi as a champion of global free trade that he sought to hone since President Donald Trump’s election, most notably in a January speech in
Davos. It set the tone for a major two-day forum starting Sunday to discuss the Belt and Road plan, which aims to connect China with Europe, Asia and Africa through infrastructure and investment. “They see an opportunity to fill the vacuum and take advantage of perceptions globally,” said Andrew Gilholm, director of analysis for North Asia at Control Risks Group, referring to changing perceptions of US leadership in the Trump era. The presence of major leaders in Beijing to hear China’s plans “fits with the kind of image China has been trying to project.” Assembled delegates included representatives from more than 100 countries and heads of state including Russian President Vladimir Putin, Turkish President Recep Tayyip Erdogan and Pakistani Prime Minister Nawaz Sharif. The US sent Matt Pottinger, senior director for Asia on the National Security Council and special assistant to Trump. During the opening ceremony, the first speakers to follow Xi were Putin and Erdogan, who pledged support for China’s initiative while showcasing their own regional projects. Putin called the initiative “timely and promising” while highlighting the Russia-led Eurasian Economic Union. Erdogan told delegates that the world’s economic center of gravity was shifting to the East and said he would like Turkey’s planned in-
frastructure expansion to be linked with the Belt and Road. Other world leaders lined up to praise the project. UK finance minister Philip Hammond called the initiative “truly groundbreaking,” stressing the country’s desire for new global trade ties as it prepares to leave the European Union. Pakistan’s Sharif called the forum a “historic event” that would “tear down barriers to trade and commerce.” Addressing concerns that the initiative will become a bonanza for Chinese companies or a strategic play for regional domination, Xi declared that the plan would be open to all countries and would complement each nation’s development goals. The speech also drew implicit contrast between Chinese-style development objectives and those of the West, saying the initiative won’t resort to “outdated geopolitical maneuvering.” He stressed that China doesn’t seek to export its development model to other nations while also calling for mutual respect of one another’s sovereignty, territory and “core interests.” Xi proposed the initiative, then known as the Silk Road, in 2013. China’s investment in Belt and Road countries has surpassed $50 billion, according to the official Xinhua News Agency. Credit Suisse Group AG estimates the plan could funnel investments worth as much as $502 billion into 62 countries over five years. Bloomberg
International Monetary Fund Managing Director Christine Lagarde (right) arrives for the opening ceremony of the Belt and Road Forum in Beijing on May 14, 2017. China opened on May 14 a summit to promote an ambitious global trade infrastructure project highlighting its growing leadership on globalization, but a North Korean missile test threatened to overshadow the event. AFP
Bordeaux 2016 wine prices top ’15 vintage By Guy Collins BORDEAUX estates are starting to price their 2016 wines for release to the international trade at a higher level than the 2015 vintage, according to data from the London-based Liv-ex online wine exchange, reflecting the assessment of producers and critics that the vintage is potentially the best for at least six years. Alter Ego, the second wine of Chateau Palmer in Margaux, was priced at 49 euros ($53.50) a bottle for its 2016 vintage by Bordeaux merchants, up 11 percent from the 2015 price of 44 euros, according to Liv-ex data. Chateau d’Armailhac, a Pauillac vineyard owned by Baron Philippe de Rothschild SA, was priced at 32.40 euros a bottle, up 13 percent. The vintage comes after a volatile decade for Bordeaux, which saw prices peak in 2011 on the back of speculative buying, then slump more than 40 percent in the following five years. Mediocre or poor harvests between 2011 and 2013 were followed by an improved vintage in 2014 and a highquality crop in 2015. Now producers in the region say 2016 marks a new high point. “Despite the trials and tribulations of the 2016 vintage, the wet
Alter Ego 2016, the second wine of Chateau Palmer. Bloomberg
weather in the first six months and the drought until the harvest, the vintage turned out to be a remarkably successful one,” James Snoxell, head of buying at Armit Wines in London, wrote in his Bordeaux vintage report. Buyers who attended trade tastings in the region last month agreed quality is high and indicated they expect that to be reflected in increases of 10 percent or more for many 2016 release prices relative to 2015s. What growers and buyers are saying about the 2016 vintage: The wine, which they said is comparable in structure and
richness with the landmark 2009 and 2010 wines and in some respects surpasses them, is sold forward while still maturing in barrels. UK-based buyers face additional costs because of the 10 percent decline in the pound against the euro since the UK vote to leave the European Union last June. August temperatures last year were 5 degrees Celsius more than normal while the month had 30 percent more sunshine than average, according to a study by Laurence Geny and Axel Marchal of the University of Bordeaux. The first 13 days of September were
the hottest since 1950, followed by brief rain and then more sun which helped ripening. Chateau Branaire Ducru in Saint Julien was priced this week at 39.60 euros a bottle for its 2016 wines by Bordeaux merchants, up 7 percent from the 2015 vintage, while further north Chateau Ormes de Pez in Saint Estephe was priced at 21.60 euros a bottle, up 9 percent, according to Liv-ex. Prices of Chateau Clerc Milon and Chateau Cantemerle also rose. Last month, Chateau Cos d’Estournel’s 2016 wines were priced at 120 euros a bottle by Bordeaux merchants, unchanged from its 2015 release price. The estate is in Saint Estephe, at the northern end of the Medoc, and is a close neighbor of Chateau Lafite Rothschild. Sweet white wines from the 2016 vintage in Sauternes have generally been priced at the same level as the 2015s, with Chateau Rieussec priced at 42 euros a bottle and Chateau Suduiraut at 45.60 euros, according to Liv-ex. The 2016 wines are being priced at a time when growers across Bordeaux are assessing damage caused by frost last month to the 2017 crop. Smaller growers were generally harder hit than the larger, higher-priced estates. Bloomberg
President Joko Widodo and President Rodrigo Duterte look out as the M/V Super Shuttle RORO sets sail, undoubtedly, into our brighter future in ASEAN.
FIRST OF MANY: THE ASEAN RORO LAUNCH IN GRADE school, we learned that the three most prominent ethnic groups that dwelled in Pre-Hispanic Philippines were the Negritos, the Indons, and the Malays. The Indons were the ones who came in from the south from the islands we would later know of as Indonesia. Through the centuries, the exchange of goods and people by sea have continued, notwithstanding the advent of air travel. Use of the traditional routes, however, have kept maritime transport at an average of two weeks. Not anymore. Recently, Philippine President Rodrigo Roa Duterte and Indonesian President Joko Widodo were in Davao City to launch the new Asean RoRo (short for RollOn/Roll-Off) Shipping Service between Davao City, General Santos City and Bitung City on the northern coast of Sulawesi in Indonesia. The new route is expected to cut travel time from two weeks to just two to three days, depending on weather conditions. This will, undoubtedly, boost trade between the two neighboring countries, particularly of agricultural products and implements. The M/V Super Shuttle Ro-Ro vessel, operated by the Asian Marine Transport System and with a capacity of 500 TEUs (Twenty-foot Equivalent Unit containers), was the first vessel to set sail at the launch and will be running the route on a weekly basis. It needs to be mentioned that the new shipping route is part of the Brunei DarussalamIndonesia-Malaysia-Philippines
East Asean Growth Area (BIMP-EAGA), a sub-regional economic cooperation initiative launched in 1994, also in Davao City, when Fidel V. Ramos was President, and Rodrigo Roa Duterte was Davao City Mayor. This RoRo launch, thus, in some ways, was a “coming to full circle”, so to speak, of our current President. As what President Duterte had said in his speech at the launch ceremonies, “This route shall be the first of many routes to be formed for the international RoRo network envisioned by our Asean leaders to provide more accessibility and opportunities for our countries. Let this event serve as a reminder that our relationship is not just between trade partners, but between friends that are tied together by a bond that transcends borders.” Indeed, this launch is a major accomplishment of the Philippine government as chairman for Asean this year. I am optimistic that the current administration, with President Duterte at the helm and with Finance Secretary Sonny Dominguez, Budget Secretary Ben Diokno, Transport Secretary Art Tugade and Trade Secretary Mon Lopez at his side, pushing forward the “Build, build, build” thrust of its Dutertenomics, would surely bridge the seas, not just between the Philippines and its Asean brethren, but also the waters between our 7,107 islands.
President Joko Widodo and President Rodrigo Duterte
With DTI Secretary Mon Lopez, DOTr Seretary Arthur Tugade and PCG Commodore Joel Garcia
With Aboitiz Group’s Jokin FirstPacific’s Atty. Marilyn Aboitiz and DJ Sta.Ana with First Aquino and Super Shuttle ’s Paul Pacific’s Atty. Marilyn Aquino Rodriguez