The Synthetic & Rayon Textiles Export Promotion Council

MARKET WATCH 24 FEBRUARY, 2016

NATIONAL

INTERNATIONAL

Textile Raw Material Price 2016-02-23

Item

Price

Unit

Fluctuation

Date

PSF

977.42

USD/Ton

1.43%

2/24/2016

VSF

1999.26

USD/Ton

0.93%

2/24/2016

ASF

1911.17

USD/Ton

0%

2/24/2016

Polyester POY

980.48

USD/Ton

0.55%

2/24/2016

Nylon FDY

2206.08

USD/Ton

0%

2/24/2016

40D Spandex

4825.80

USD/Ton

0%

2/24/2016

Nylon DTY

5708.23

USD/Ton

0%

2/24/2016

Viscose Long Filament

1156.66

USD/Ton

1%

2/24/2016

Polyester DTY

2022.24

USD/Ton

0%

2/24/2016

Nylon POY

2095.01

USD/Ton

0%

2/24/2016

Acrylic Top 3D

1049.42

USD/Ton

0.74%

2/24/2016

Polyester FDY

2466.52

USD/Ton

-0.62%

2/24/2016

30S Spun Rayon Yarn

2726.96

USD/Ton

0.56%

2/24/2016

32S Polyester Yarn

1562.64

USD/Ton

0%

2/24/2016

45S T/C Yarn

2451.20

USD/Ton

0%

2/24/2016

45S Polyester Yarn

1731.16

USD/Ton

0%

2/24/2016

T/C Yarn 65/35 32S

2114.16

USD/Ton

0%

2/24/2016

40S Rayon Yarn

2849.52

USD/Ton

0.54%

2/24/2016

T/R Yarn 65/35 32S

2420.56

USD/Ton

0%

2/24/2016

10S Denim Fabric

1.07

USD/Meter

0%

2/24/2016

32S Twill Fabric

0.90

USD/Meter

0%

2/24/2016

40S Combed Poplin

0.97

USD/Meter

0%

2/24/2016

30S Rayon Fabric

0.72

USD/Meter

0%

2/24/2016

45S T/C Fabric

0.74

USD/Meter

0%

2/24/2016

Source: Global Textiles

Note: The above prices are Chinese Price (1 CNY = 0.15320 USD dtd. 24/02/2016)

The prices given above are as quoted from Global Textiles.com.  SRTEPC is not responsible for the correctness of the same.

 

Jat stir: Ambala's wholesale cloth market suffers huge loss

The biggest wholesale cloth market of Haryana at Ambala City has suffered a huge loss due to the Jat agitation in the state. There are around 900 wholesale cloth shops besides several retail outlets in Ambala City where daily large number of customers from Haryana, Himachal Pradesh, Chandigarh and Punjab and Uttar Pradesh come, President of Haryana Cloth Traders Association Dinesh Grover told reporters today. "The market has suffered a huge loss due the agitation, which could be around Rs 100 crore. After the Jat agitation intensified in most parts of Haryana, 80 percent of the customers avoided coming to Ambala as most of the highways and other roads remained blocked," he said. He said the cloth mills at Maharashtra, Gujarat, Jaipur, Mumbai, Delhi, Bengaluru, and Surat are the main supplier of cloth to this market. "Most of the cloth material reaches us through road transport and due to the blockade on highways, no supply could be delivered in Ambala," he said. The science equipment market of Ambala Cantonment has also suffered a big loss. The area is one of the biggest markets of science equipment in the country. Besides, the equipment is also exported, especially to the Gulf countries, a trader said, adding they had suffered losses in the wake of the Jat agitation.

SOURCE: The Economic Times

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Fiscal metrics remain weak: Moody's

India's economic growth at more than 7 per cent may be faster than that of its peers, but subdued rural demand and weak corporate profitability will contribute to hampering fiscal consolidation in the upcoming Budget, Moody's Investors Service said. The credit rating agency said that even if the February 29 budget shows deficit targets are being met or surpassed, fiscal metrics in India will remain on a weaker footing than other countries with similar sovereign credit ratings. “Even if budgetary consolidation continues, India’s fiscal metrics will remain weaker than rating peers in the near term, because of the relatively high level of India’s state and central government deficits and debt. The fiscal weakness is partly due to structural factors,” according to a statement issued by Moody’s on Tuesday. Low per-capita incomes limit the tax base and raise pressure for subsidies and development spending, while high debt levels (63.8 per cent of GDP in 2015-16) restrict fiscal flexibility. India's credit rating will not just depend on the forecasts for fiscal management but the specific measures the Budget takes to expand the revenue base, at a time when tax collections are tapering off, and insulate government expenditure from economic shocks.

Separately, cyclical and unanticipated developments would heighten fiscal pressures and any improvements in the fiscal deficit are ‘likely to be limited in the near-term,” the agency stressed, referring to a rise in food subsidy costs owing to a drought, revision of civil servant salaries next year and the need to recapitalise public sector banks. Economic Affairs Secretary Shaktikanta Das acknowledged these fiscal constraints on Monday and indicated that the government would neither go overboard with public spending to jumpstart the economy as some people have suggested, nor stick ‘tightly’ to the fiscal deficit goalposts. “The reality is somewhere in the middle,” he said. India’s fiscal deficit stood at 4.1 per cent of GDP in 2014-15 and the government has committed to a target of 3.9 per cent for this fiscal and 3.5 per cent for 2016-17, deviating from an original target to bring the deficit down to three per cent of GDP by then. “…Whether the central government deficit meets, modestly outperforms or slightly underperforms current targets, India’s fiscal position will remain weaker in the near term than its peers,” Moody’s said. The shift in the roadmap made last year underscores the agency’s expectation that even with very modest deficit reduction goals, fiscal consolidation will be ‘difficult to achieve’ though the government is committed to it over the medium term. “While it may or may not be a part of the Budget speech, clarity on the Goods and Services Tax regime would provide insight into how revenues could evolve over the longer term. On the expenditure side, the Budget will reveal how the government allocates current and capital spending in the context of the recommendations of the Seventh Pay Commission and , the still sluggish outlook for capital investment and efforts to strengthen state-owned banks’ balance sheets,” according to Moody’s statement.

The rating agency did highlight one silver lining for India compared to its peers – lower reliance on foreign currency debt, even though its public debt to GDP ratio is higher than similarly rated countries like Indonesia, Philippines, Romania and Turkey. “This insulates government finances from gyrations in the exchange rate, which have been particularly severe in the last few years, and will continue to be so. Emerging markets with a higher reliance on foreign currency financing have witnessed sovereign borrowing costs rise as global risk appetite diminishes,” said the Moody’s note put together by a team of four analysts led by associate managing director Atsi Sheth.

SOURCE: The Hindu

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Exporters told to make use of preferential duty tariff under free trade pacts

Preferential duty tariff that exporters can claim under the FTAs (free trade agreements) is not being fully utilised. Data shows that only 10 to 12 per cent of the entire trade is happening under the FTAs, said Ravi Capoor, Joint Secretary, Ministry of Commerce and Industry. At an awareness programme organised by the Director General of Foreign Trade, Coimbatore in association with the Federation of Indian Export Organisations (FIEO) and EEPC India here, Capoor said “FTAs are the least understood. India has signed 16 trade agreements so far out of the 200 inked by various countries across the world between 2000 and 2015. Most of the agreements signed by India are with countries in the South-East Asian region.” “While the partnering country to the agreement can avail itself of the preferential tariff agreed to by the group (of countries) amongst its members, it is not being utilised either due to lack of awareness or because of the exporter’s dependence on the clearing agent,” Capoor said. He urged the participants to look up the indiantradeportal and avail the concessional tariff. “Every one can access the site for free, know the countries which are partners to the various trade agreement inked with India and the tariff advantage for the product. We are concerned that while we have the membership of these clubs, we have not taken advantage of it,” he said and admitted to the huge gap in data collection on export under FTA.

Justifying the reluctance/delay in signing the FTA with the European Union, he said “the EU has strength in areas such as wine, automobile and dairy products and is interested in selling these products to India. And, in a globalised environment, every country will look to manufacture products where it has the core competence/strength be it labour, raw material, technology, resources and so on. “India is becoming a hub for small cars and textiles is another emerging area. Tariff will not be an issue 15 years down the line.”

Get the best standard

“As the world moves towards non-tariff barriers, India will have to move up into high technology and high value added products to compete in the global market. Work towards getting the best standard,” Capoor said. Speaking on the sidelines, he said the Commerce Ministry is analysing how the Trans Pacific Partnership would impact India. “The Centre for WTO studies is now doing a study on this. Signing the TPP would take another year or two.”

SOURCE: The Hindu Business Line

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Govt. studying proposed TPP agreement

Union Ministry of Commerce is studying the proposed Trans-Pacific Partnership (TPP) agreement and the impact that it would have on Indian trade. The Centre of WTO Studies is also analysing the possible impact of the agreement on India, according to Ravi Capoor, Joint Secretary of Department of Commerce, Ministry of Commerce and Industry. He was speaking at an outreach programme on Free Trade Agreements signed by Federation of Indian Export Organisation here on Tuesday. The TPP would cover 12 countries and about 35 per cent of the global trade was controlled by these countries. The agreement was expected to be signed in the next one or two years. The Ministry was looking at the possible impact it would have. India had so far signed 16 trade agreements and most of them were with South Asian and African countries. However, only 10 per cent to 12 per cent of the entire trade from the country happened under these agreements. Exporters should make use of these agreements, he said. The Indian Trade portal would give details of the benefits if the exporters typed out the HS code or products that they were interested in exporting or importing. The Ministry was also trying to develop a mobile application for this portal to simplify it further.

In the globalised scenario, countries would manufacture only the products that they were strong in. In the next 10 or 15 years, tariff would not be an issue for international trade. It would be the non-tariff barriers. So industry should move towards value addition and adoption of technology. India had to move to a level to develop standards for all products. He later told presspersons that global trade was expected to grow at 3.3 per cent. But, it would end up growing at about two per cent this year. The global trade had shrunk and there were issues such as low oil prices. They were affecting exports. Regarding Free Trade Agreement with the European Union, he said that Europe was strong in wine, dairy products and automobiles. India had emerged as a hub for manufacture of automobiles. These sectors were likely to be affected if the FTA was signed.

SOURCE: The Hindu

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India, US economic ties on upswing since last year: American ambassador

Economic ties between India and the US are on an upward swing and American investment in the country has seen a more than three-fold jump in 2015-16, US Ambassador to India Richard R Verma today said while noting that a "stable tax regime and legal certainty" were key for growth in this area. Here to make a tour of "fast-progressing Bihar", Verma underlined the utility of the single-window clearance system for attracting investment and hailed the southern states for having implemented such processes. Lauding Bihar for the turnaround it has achieved in recent years, he said, "We hear about positive success story of Bihar in last few years. When I meet Chief Minister Nitish Kumar and Governor Ramnath Kovind, we will identify specific areas where American establishments could have involvement." Verma pointed to the American multinational General Electric company manufacturing locomotives in Marauhra and Madhepura in Bihar at an investment of 2.5 billion dollar. The US company is to make 900 locomotives in Bihar, he said.

The US Ambassador said that economic ties between his country and India would increase in the future. He added that American companies have two prime concerns before making any investment -- "they look for stable tax regime and legal certainty for their investment". "US investment in India increased to $105 billion in 2015-16 as compared to $30 billion 10 years back," he told reporters here. "About 200 US companies were present in India in 2005, which has increased to 500 in 2015-16," added Verma. More than 1.2 millions Indian got US visas in 2015, said Verma, who was accompanied by the US Consul General Craig L Hall on his visit to the state capital. Asked about the JNU row, he underlined the importance of freedom of speech in a democracy, but refused to comment further, saying "the government is looking into the matter". On the sale of F-16 fighter aircraft to Pakistan, he said the US Congress was looking into it. As to India raising its concerns over terror outfits operating from Pakistani soil, Verma said, "We take the concerns seriously and have asked Pakistan to take more effective steps to check terrorism and demolish safe heavens of the terrorists."

SOURCE: The Economic Times

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Lanka will sign ETCA with India by mid-2016: Wickremesinghe

Sri Lankan Prime Minister Ranil Wickremesinghe today said that his government will sign the proposed Economic and Technical Cooperation Agreement (ETCA) with India by the middle of this year notwithstanding opposition from political parties and trade unions. Speaking in Parliament, Wickremesinghe said an Indian delegation is due to visit the country early next month to finalise the draft agreement and "the government will go ahead signing it despite opposition coming from opposition political parties, trade unions and professional groups."

Stating that it was a misconception that the country would be flooded with Indian workers, he said, "What we are trying to sign will be better than the CEPA (Comprehensive Economic Partnership Agreement). CEPA was to include services. "We did not accept that. So the Indians coming here and threatening our jobs is not true. There will be more job opportunities for Sri Lankans." Wickremesinghe, who had earlier branded as "traitors" those opposed to the deal, said, "We have not got a document just yet. This will not be done in secrecy." Sri Lanka's opposition has criticised the proposed trade deal with India as an attempt to "foreignise" the country's economy and demanded that the shortcomings in the existing FTA should be sorted out before concluding the deal. It said the agreement would be advantageous to India and inimical to Sri Lankan economic interests. The opposition demands that the agreement include goods, trade in services and investment. In recent weeks the doctors' trade union and several other employees' organisations have taken to the streets to protest the ETCA with India.

SOURCE: The Business Standard

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Japan seeks investment from Indian companies

Japan has sought direct investment from Indian companies as part of its target to attract overseas Foreign Direct Investment (FDI) of $300 billion by 2020. "Japanese government targets FDI of nearly $300 billion from overseas by 2020. To promote direct investment into Japan, we will provide assistance to interested Indian companies," Japan External Trade Organization (JETRO) President Shigeki Maeda told reporters here during the 'Invest Japan Seminar'. The event was organised in association with industry body Ficci as part of the "Japan-India Internet of Things (IoT) Investment Initiative". "We will also establish "India Desk" with Indian staff in our Tokyo HQ for Indian companies to ease consultation," Maeda added. "We are also planning to deploy sector based experts in our offices in India to support potential direct investment to Japan", Maeda said. According to him, Indian corporates can look at Japan as the new market for IT, pharma and hospitality sectors. JETRO has supported over 12,000 projects from across the world in the past 11 years and 1,245 foreign companies, including 25 Indian companies have started their business in Japan.

SOURCE: The Economic Times

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Global Crude oil price of Indian Basket was US$ 30.79 per bbl on 23.02.2016

The international crude oil price of Indian Basket as computed/published today by Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas was US$ 30.79 per barrel (bbl) on 23.02.2016. This was lower than the price of US$ 31.26 per bbl on previous publishing day of 22.02.2016.

In rupee terms, the price of Indian Basket decreased to Rs 2113.53 per bbl on 23.02.2016 as compared to Rs 2142.93 per bbl on 22.02.2016. Rupee closed weaker at Rs 68.64 per US$ on 23.02.2016 as against Rs 68.55 per US$ on 22.02.2016. The table below gives details in this regard: 

Particulars

Unit

Price on February 23, 2016 (Previous trading day i.e. 22.02.2016)

Pricing Fortnight for 16.02.2016

(28 Jan to  11 Feb, 2016)

Crude Oil (Indian Basket)

($/bbl)

30.79             (31.26)

30.05

(Rs/bbl

2113.53         (2142.93)

2040.70

Exchange Rate

(Rs/$)

68.64             (68.55)

67.91

 

SOURCE: PIB

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More and more countries will go into technical textiles

Messefrankfurt is one of the largest textile trade fair organisers in the world. Based in Germany, it holds fairs in the most promising textile markets of the world. The fairs are targeted towards bringing the latest innovations, new and existing products. Michael Janecke, director of brand management - Technical Textiles and Textile Processing of Messefrankfurt talks about emerging and established markets and trends with Fibre2Fashion.com

How do you rate the pace of growth in the Indian technical textiles market?

It can always be faster but we need to consider the fact that the Indian technical textile industry started just 10 years back. If you see the improvements, the situation is quite positive. The big issue is research and development. We have centres of excellence in India. But the question is, how fast can the development in research be brought to the market? There is room for improvement and speed. From the winds, I think more and more countries will get into technical textiles. I don’t know by what time it will happen. It could be in five years or 10 years or more. But from experience, it can be said that technical textiles are growing.

What are the other requirements for technical textiles to grow?

Markets like China, who wish to grow in technical textiles, have to grow in technology first. Markets like India, Bangladesh and Pakistan are famous for traditional textiles and home textiles.

Is there a lot of room for investments in segments like geo textiles?

Geo textiles, by law, have to be used by the government. The United States of America is going through a recovery phase. Please share some information on that market. We have had a number of visitors from the United States of America. The industry is growing and developing. Companies are buying and investing. From that point of view, we are very optimistic about growing in this market through our shows. As of now, it looks very good. We also have China, where we will hold shows. China is still a big market.

China is experiencing a reduction in growth, but still it is a big market, isn't it?

There is 70 per cent growth in the markets of China. But it is too little compared to developed countries since growth rate is still in double digits only. Nevertheless, China can boast of big consumption and big producers.

Is Bangladesh a growing market in view of the rise in exports?

Bangladesh is a country which can produce garments, so there is immense scope for sourcing.

What about Indonesia?

We bring Indonesian people to our platform. In future, I think there will be more and more practice beyond the traditional areas of textiles, like in technical textiles. History tells us that companies stay in the existing markets as long as the markets are satisfying. After that, they look at other options like technical textiles.

SOURCE: Fibre2fashion

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Vietnam looks to TPP to boost its textile market share

Vietnam, as almost a “sole supplier of textile products” among Trans-Pacific Partnership (TPP) member countries, is banking on the TPP deal to expand its textile market share, according to VITAS – the Vietnam Textile and Garment Association. Moreover, a spokesperson from the association says: “Many Hong Kong, South Korean and Australian firms are developing and planning major textiles FDI [foreign direct investment] in Vietnam to produce yarn and fabric, the supporting textiles industry for apparel production.” Investors are eyeing Vietnam because it is an important supplier of textiles to large consumer markets of TPP countries, such as South Korea and the US. “In 2015, export turnover of Vietnam’s garment market to TPP member countries reached US$14.7bn, up 10% compared to 2014, accounting for 66.55% of total export turnover of Vietnam items and contributing 89.17%...of the whole industry export turnover increase,” says a VITAS report. Furthermore, in 2016, “garment exports from Vietnam to the TPP markets would rebound strongly, with growth expected to be 13% compared to 2015.” Its analysis stressed that 2013 was a turning point for the sector as it was “the first year Vietnam’s textile and apparel export turnover exceeded US$20bn.” In 2014, the industry generated US$24.45bn in exports, up nearly 16% compared to 2013. “That shows the result of the outstanding efforts of the industry in the past 10 years,” says the report. As per estimates from VITAS in 2015, the garment export turnover in Vietnam reached US$27.02bn, up 9.43 % over the same period in 2014.

One repercussion of recently struck free trade agreements such as the TPP and Vietnam-EU trade deal is a sudden increase of mergers and acquisitions in Vietnam’s textile and garment industry. While large and medium-sized companies have confidence in their ability to compete in resulting open markets, smaller Vietnamese enterprises could struggle to fulfil larger orders due to a lack of capital. As a result, according to a VITAS spokesperson, there has been a trend towards smaller businesses merging to create larger, stronger companies, or even selling their business and quitting the sector. “Yes, there was some small garment companies [that] closed down recently because they are too small and could not meet up with the changing and rising competition,” says the VITAS spokesperson. Meanwhile, Vietnam’s weak backwards linkages have once again been exposed by increases in clothing and apparel input imports. In 2015, “Vietnam imported fabrics estimated at 10.1 billion, up 8.2 % compared to the same period of 2014,” says the report. Imports of fibre and fibre raw materials to Vietnam in 2015 was estimated at 790,000 tonnes, worth US$1.5bn, up 6.8% in volume and 2.7% in value over the same period of 2014,” says the report. And in 2015, cotton imports into Vietnam imported increased 34.3% in volume to 1.01 million tonnes, worth US$1.6bn and 12.4% in value over the same period in 2014. Despite this, Vietnam is slowly growing its textile and input sector. Textile product exports have risen according to the report: “Exports of fibres, yarns of Vietnam was estimated at 957,000 tonnes in 2015, worth US$2.5bn, up 11.4% in volume and 0.7% in value when compared with 2014.”

SOURCE: The CCF Group

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Indonesian textile body for streamlining stimulus package

Indonesia's textile industry has called for effective implementation of the government's economic stimulus packages to improve competitiveness as the country moves toward free trade agreements with several countries. Indonesian Textile Association (API) chairman Ade Sudrajat said while the Association welcomed the 10 stimulus packages announced by the government, the packages need to be implemented in an effective manner. “The stimulus packages are a response to our concerns and they have provided certainty for business. However, the implementation can still be improved,” Sudrajat said at a press conference in Jakarta. The government's third stimulus package stipulates that industrial activities get electricity price cuts from 11 p.m. to 8 a.m. But the textile industry and the state electricity company PLN, which supplies the power, interpret the stipulation differently.

According to the PLN, the price cut will only be given to companies consuming more than they usually do every day. But the textile industry says the price cut should be given to industrial activities during the specified timeframe regardless of the quantity of their power consumption. “We're asking for a further discussion with PLN, the Finance Ministry and the Office of the Economic Coordinating Minister on the matter,” Sudrajat said. He also said his association also requested lower gas prices for the textile industry. In the government's seventh stimulus package, the government reduced gas prices for the textile industry from $12 per million British thermal unit (mbbtu) to $9 per mbbtu, while in fact oil exported to Singapore is priced at $3.70 per mbbtu, he said. Benny Soetrisno, Chairman of the API's board of advisors, welcomed the economic packages as they provide more business certainty. But he pointed out that a relatively high production cost because of electricity and gas prices has made local products less competitive. Benny also said Indonesia's trade deal with the European Union under the Indonesia-EU Comprehensive Economic Partnership Agreement (CEPA) and a possible participation in the US-led Trans-Pacific Partnership (TPP) would help boost exports of its textiles and textile products.

SOURCE: The CCF Group

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Myanmar’s opportunity: Investing in all its people

Myanmar is experiencing a historic transformation. The November 8 elections marked a milestone after four years of peaceful transition, with a new Parliament chosen and one political party – the National League of Democracy – holding a majority of seats. In parallel, Myanmar’s economy is also undergoing transformation, growing at seven percent a year – among the fastest in East Asia. When the new government takes office next month it will pick up the baton to deliver on the people’s aspirations for a prosperous and harmonious Myanmar. While it will have solid successes to build on, there remain great challenges ahead. About a third of the population still lives in extreme poverty. Almost three quarters of children in rural Myanmar grow up in homes without electricity to run a refrigerator or power lights to do homework at night. Only 29 percent of the poorest children graduate from secondary school.

Myanmar has a real opportunity to ensure that economic growth is inclusive and that a growing share of people benefit from the new opportunities that economic growth creates. This means not only sustaining a strong pace of growth, but doing so through a diversified economy that can create good jobs in higher-productivity sectors. Myanmar’s agriculture sector is a good place to start. It employs 65 percent of the country’s labor force, but suffers from low productivity. The average rice paddy yields 2.5 tons per hectare, only half the amount of other exporters in the region. New investments to enhance agricultural productivity by supplying quality seeds and adopting modern farm technologies can raise incomes for farm families, which comprise most of Myanmar’s poor. Such steps can enable a structural shift for the rural workforce to more labor-intensive and higher-productivity sectors and sustainable reductions in poverty and inequality. Inclusive growth also means greater investment in Myanmar’s greatest resource – its people – by ensuring education for all, healthcare for all, and energy for all. Providing these essential services will require policy to ensure sound public financing through tax collection, sound public spending, and public investments that favor infrastructure and human development. Infrastructure investments can spur private sector job growth and support more productive and labor-intensive economic activities, such as manufacturing and textile production. Inclusive growth also requires a concerted effort to reach the poorest communities, mostly located in rural and remote parts of Myanmar. Myanmar’s National Community-Driven Development (CDD) program, which is supported by the World Bank, is doing just that by providing financial support to the poorest communities in the country.

Through its 1,700 projects across nine townships, the CDD program directly engages local communities in Myanmar’s transformation, empowering those communities to choose to invest in the things they decide are most essential – whether repairing a school, health center or a road, or providing safe drinking water. This program shows us how it is possible to reach and empower even the poorest communities with small investments that yield big dividends in their daily lives – so that everyone can share in the country’s good fortune. Today, Myanmar faces both the opportunity and the challenge of building on the development gains made since 2011. An extended period of inclusive growth and transformation for the entire country, when everyone benefits and is engaged, offers the best prospects for the end of conflict and a lasting peace. In the final analysis, it is the people of Myanmar who will make the critical decisions that will guide the development of their country. The international community, including multilateral institutions like the World Bank Group, can play an important supportive role. We are privileged to accompany Myanmar on its journey toward a more peaceful and prosperous future.

SOURCE: The World Bank

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The TPP and its implications for Beijing

The Trans-Pacific Partnership signed at Auckland, New Zealand, earlier this month has 12 APEC members (Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam and the United States). Led by the US, the TPP is one of the largest free trade agreements in the world with its members accounting for about 40 percent of the global economic output. Though all negotiating members have signed the TPP, it will need to be ratified by each member country, which could take a couple of years because their legislatures will minutely scrutinize it before doing so. The implementation of the TPP will have major implications for the Asia-Pacific region, many of which are particularly significant for China. All TPP member countries are also members of Asia-Pacific Economic Cooperation, and some other APEC members, such as the Philippines, Thailand, the Republic of Korea and Colombia, have expressed interest in joining the TPP. If the majority of APEC members decide to sign the agreement, the TPP could isolate the remaining members, particularly China, because most APEC members will come under common trade rules of the TPP and the APEC members will do business according to these rules. And as an APEC member, but not a TPP member, China might have problems in doing business with TPP members, because the US-led trade partnership will have many different rules and standards. The TPP is moving on to trade standards that are higher than those in the World Trade Organization and most FTAs across the world. Its implementation will also require members to change their domestic policies in a number of fields. These include quality standards, intellectual property rules, government procurement laws, and laws relating to labor, investment and the environment.

While there are challenges, the TPP also gives many countries the opportunity to reform their existing policies. Joining the TPP could give China the opportunity to change many of its domestic rules and move to more market-oriented trade and business systems-similar to the opportunity China had in 2001 while joining the WTO. In this regard, the TPP can help usher in the second phase of domestic reforms in China. But the TPP has another dimension that might be a greater challenge for China. It comprises the US and several of its political allies and partners. The US played the leading role in the TPP negotiations with the Barack Obama administration making it a top priority. The trade agreement is consistent with the Obama administration's strategic emphasis on the US becoming a major actor in the Asia-Pacific region. Indeed, the US has made it clear that by pushing the TPP it wants to ensure that it is able to write the rules of trade in Asia-Pacific, which makes joining the TPP an uncomfortable proposition for China.

Apart from being a US-led agreement, the TPP also includes several members with whom China has difficult political relations and territorial disputes in the East China Sea and the South China Sea such as Japan, Vietnam, Brunei and Malaysia. This makes the TPP an even greater political challenge for China. What then are the options for China? One possibility is quick conclusion of the Regional Comprehensive Economic Partnership negotiations that include China, Japan, the Republic of Korea, India, Australia and New Zealand and member states of the Association of Southeast Asian Nations. But the RCEP might not be as ambitious as the TPP. Many RCEP members, who are members of the TPP, might see more economic gains from the TPP, which could make the RCEP insignificant in the long term. Perhaps a better option for China would be to press for convergence of the RCEP with the TPP and push for a Free Trade Area for the Asia-Pacific, which it has already proposed. But the FTAAP must be as ambitious as the TPP to make it a credible alternative. Otherwise, more regional economies will choose the US-led TPP leading to strategic complications for China.

SOURCE: The China Daily

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Minister of International Trade and Industry (MITI) Datuk Seri Mustapa Mohamed confident that RCEP will be concluded by end of this year

Minister of International Trade and Industry (MITI) Datuk Seri Mustapa Mohamed is confident that the Regional Comprehensive Economic Partnership (RCEP) will be concluded by year end. He said that the recently concluded 11th round of negotiations in Brunei showed great promise. He said all 16 countries in the grouping want outstanding issues resolved and concluded by year end. The RCEP comprises ASEAN countries, India, China, South Korea, Japan, Australia and New Zealand. Mustapa was speaking to reporters at the MoU signing ceremony between MITI and the World Economic Forum (WEF). The deal will see the "World Economic Forum on ASEAN 2016" held in Kuala Lumpur from June 1-2, with the theme "Shaping the ASEAN Agenda for Inclusion and Growth"

SOURCE: The New Straits Times Online

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TPP foe Clinton threatens action against Japan, China ‘currency manipulation’

Hillary Clinton, a leading candidate to be the next U.S. president, warned Tuesday of retaliatory actions against Japan and China if she becomes American leader, saying they intentionally lower the value of their currencies to help exporters. “China, Japan and other Asian economies kept their goods artificially cheap for years by holding down the value of their currencies,” Clinton said in her column for the Portland Press Herald, a news outlet in Maine. Clinton, a former secretary of state, has led the campaign for the presidential nomination of President Barack Obama’s Democratic Party ahead of the Nov. 8 election, according to U.S. media polls and the results of state-level primary elections so far. “We need to crack down on currency manipulation — which can be destructive for American workers,” Clinton said, claiming such foreign exchange problems have hurt the U.S. labor market. “We need to expand our toolbox to include effective new remedies” such as retaliatory duties or tariffs on imported goods, she said.

Clinton reiterated she is opposed to the Trans-Pacific Partnership free trade agreement the Obama administration signed with Japan and 10 other Pacific Rim countries as part of measures to revitalize the U.S. economy. She expressed opposition to a TPP that fails to create jobs in the United States and raise wages for American workers and said she “would oppose future agreements if they failed to meet that bar.” China is not a member of the TPP, which would cover some 40 percent of the global economy.

SOURCE: The Japan Times

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China, Georgia vow to reach comprehensive FTA within 2016

China and Georgia officially launched here Monday the first round of negotiations for a free trade agreement (FTA), pledging to work closely together to conclude a comprehensive deal within 2016.  "We are expected to reach a high-standard FTA with China to push forward the future development of our trading cooperation," said Genadi Arveladze, Georgia's chief negotiator and deputy minister of economy and sustainable development, at the beginning of the talks.  "China has become the fourth largest trading partner and one of the fastest increasing export destinations for Georgia in 2015," Arveladze said.  Liu Yuhua, chief negotiator and commercial counselor of the Chinese Ministry of Commerce, said launching the negotiations represents an important milestone in bilateral relations and provides further evidence of China's commitment to deepening cooperation with Georgia in all fields.  The two sides agree that a balanced and comprehensive FTA will greatly push forward economic and trade cooperation and benefit the two peoples.  According to the agenda, in the first round of negotiations, the two sides will have an in-depth exchange of views on topics including the framework document, the establishment of a work group and text consultation.  A memorandum of understanding was reached by the Chinese Ministry of Commerce and the Georgian economic department in December 2015 to begin the FTA negotiations.

SOURCE: The CCF Group

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