VIF Neighbourhood News Digest: 21th June, 2018

PAKISTAN

Moody’s downgrades Pakistan’s rating outlook to negative: Dawn
June 21, 2018

Moody’s Investors Service has downgraded Pakistan’s rating to negative from stable. A statement released by the credit rating agency in the evening on Wednesday stated that the decision to change the outlook to negative was driven by heightened external vulnerability risk as ongoing balance of payment pressures erode foreign exchange buffers. The rating agency expects the government’s tax amnesty scheme — due to expire on June 30 — to have a modest impact of around $2-3 billion in foreign exchange inflows. Moody’s said that the foreign exchange reserves have fallen to low levels and in the absence of significant capital inflows ‘would will not be replenished over the next 12-18 months’. Click here to read.... [2]

AFGHANISTAN

Taliban kill 30 Afghan troops in first attack after Eid: Dawn
June 21, 2018

Taliban militants killed 30 Afghan soldiers and captured a military base in the western province of Badghis on Wednesday, the provincial governor said, their first major attack since a ceasefire for the Eid al-Fitr holiday. The three-day Taliban ceasefire ended on Sunday. Provincial governor Abdul Ghafoor Malikzai said the Taliban attacked two security posts in the early hours. Abdul Aziz Bek, head of the Badghis provincial council, said one military base was targeted, in the district of Balamerghab. “Large numbers of Taliban came from several directions,” Bek said. “After hours of heavy fighting 30 Afghan security forces were killed and the Taliban captured the base.” Fifteen Taliban were killed in other areas of the province overnight, he said, adding that the militants prepared their attacks and did reconnaissance of the area during their ceasefire. Click here to read.... [3]

NEPAL

Oli, Xi strike strong personal rapport: Kathmandu Post
June 21, 2018

It is perhaps too early to tell the significance of Prime Minister KP Oli’s current China visit, his second in two years to the Middle Kingdom as head of government. But there are clear signs that this visit could very well be the turning point in shaping Nepal-China relationship and developing it beyond the platitudes and promises of shared mountains and common rivers. This visit will potentially shape Nepal’s foreign policy narrative for years to come. Mooted in the current visit, the Trans-Himalayan Multidimensional Network is an ambitious agenda of connectivity and blueprint for new regionalism where geography is not a barrier for a deeper engagement. Click here to read.... [4]

SRI LANKA

Chinese firm pays $584 million in Sri Lanka port debt-to-equity deal: Reuters
June 21, 2018

China Merchants Port Holdings (0144.HK) has made a $584 million payment as part of a $1.12 billion deal to operate Sri Lanka’s deep sea Hambantota port, a state-run agency said on Wednesday. Under the deal, signed in July 2017, China Merchants Port (CM Port) will run the $1.5 billion Chinese-built port on a 99-year lease. The $1.12 billion total price is to be used to reduce the Sri Lankan government’s debt to China. “With this payment, CM Port fulfils the $976 million investment ... CM Port has agreed to deposit a further sum of $146 million being investment to be utilized for port and marine-related activities,” the Sri Lanka Ports Authority (SLPA) said in a statement. The port is near the main shipping route from Asia to Europe and likely to play a major role in China’s “Belt and Road” initiative. But since it opened in 2010, it has been incurring losses due to a lack of commercial activity. Click here to read.... [5]

MYANMAR

Chinese manufacturers eye Myanmar base as trade war escalates: Myanmar Times

Myanmar stands to gain from the ongoing trade spat between China and the US, U Than Aung Kyaw, deputy director general of the Directorate of Investment and Company Administration (DICA), said yesterday. Interest to set up manufacturing and production facilities in Myanmar among the Chinese has risen ever since the US this month imposed a 25 percent tariff on up to $50 billion of Chinese products, he told The Myanmar Times during the sidelines of Myanmar-Korea Investment Promotion Seminar in Yangon. “Chinese businesses have been making enquiries at DICA about investing and setting up base in Myanmar,” he said. Myanmar may well see a spike in manufacturing companies from China setting up operations as the latter’s trade war with the US escalates. Click here to read.... [6]

CHINA

President, Nepal PM cite role of Belt, Road: China Daily
June 21, 2018

China would like to enhance cooperation with Nepal in such areas as infrastructure, post-earthquake reconstruction and trade and investment under the Belt and Road framework, President Xi Jinping said on Wednesday. Xi made the remark while meeting with Nepali Prime Minister Khadga Prasad Sharma Oli at the Great Hall of the People in Beijing. Xi said the China-Nepal relationship is facing new opportunities for development, and the two countries should enhance high-level exchanges, boost strategic communication, respect each other's core interests and strengthen the political basis of bilateral ties. Click here to read.... [7]

Nation safeguards S. China Sea routes: China Daily
June 21, 2018

China has been contributing to the freedom and safety of navigation in the South China Sea, researchers conclude in a new report. According to the 2017 Report on Navigation in the South China Sea, China's regular patrols and administration of the sea have safeguarded civilian ships' passage through the region. In March last year, 7,909 vessels and in the following June, 7,502 vessels sailed through the South China Sea, roughly the same numbers as in the previous year. These vessels, most of which weighed more than 30,000 metric tons, navigated safely through the sea, according to the report. Click here to read.... [8]

Xi: Kim's visits usher in new journey: People’s Daily
June 21, 2018

President Xi Jinping said on Wednesday that with DPRK top leader Kim Jong-un's three China visits within 100 days, both sides are making history with high-level exchanges between the two countries. Xi made the remark when meeting with Kim, chairman of the Workers' Party of Korea and chairman of the State Affairs Commission of the Democratic People's Republic of Korea, at the Diaoyutai State Guesthouse. This is the second meeting between the two leaders during Kim's two-day China visit. Kim left Beijing for home on Wednesday. Xi, also general secretary of the Communist Party of China Central Committee, said he is glad that the important consensus reached by China and the DPRK is being implemented gradually, re¬freshing the bilateral friendly cooperative relations with vitality. Click here to read.... [9]

Trump weighing plan to curb Chinese investment in more than 1,000 U.S. companies: South China Morning Post
June 21, 2018

New U.S. investment restrictions could restrict Chinese access to over 1,000 U.S. companies in technology and other sectors that the administration has deemed vital to U.S. national security, an administration official told POLITICO. The administration is expected to release the new restrictions at the end of next week, consistent with the timetable President Donald Trump outlined in a statement in late May in which he announced plans to proceed with tariffs on Chinese goods because of concerns about intellectual property theft and forced technology transfers. Click here to read.... [10]

Expert predicts China may shortly have a third aircraft carrier: People’s Daily
June 20, 2018

China might soon have its third aircraft carrier, said military expert Song Zhongping, after a picture showing three aircraft carriers was made public in a news piece by China Shipbuilding Industry Corporation (CSIC) on Wednesday. Song told Global Times that the three aircraft carriers shown could be China’s original aircraft carrier Liaoning, with the first domestically-developed aircraft carrier alongside a new one with electromagnetic aircraft launch systems. Click here to read.... [11]