U.S. intervention not conducive to Asia-Pacific stability

 Many facts have proved that major changes have taken place in regard to the South China Sea since Washington made a military and economic "pivot" toward Asia, a strategy many interpret as a bid to counteract China's influence in the region. 

Since the dispute over Huangyan Island between Beijing and Manila flared up in April, Washington not only held joint military drills with the Filipinos, but also sold two Hamilton-class warships to them. 

Washington must understand that returning to Asia by way of militarily flexing its muscle, and diplomatically intervening in bilateral disputes is wrong and short-sighted.

 
BEIJING, July 14 (Xinhua) -- Hillary Clinton's whirlwind tour of China's neighbors as part of the U.S. pivot to Asia strategy has made waves again in the South China Sea. The "strategic pressure" is not conducive to Asia's development or U.S. long-term interests.

The U.S. secretary of state's Asia trip, which took her to Afghanistan, Japan, Mongolia, Vietnam, Laos and Cambodia, was nothing but an apparent "diplomatic encirclement."

Though wary of overtly irking China, Clinton further meddled in the South China Sea issue by repeatedly highlighting America's interests there and openly supporting individual ASEAN members' scheme to complicate the maritime dispute.

Clinton also extended her hand to the East China Sea, clearly recognizing during the visit to Japan that the Diaoyu Islands fell within the scope of the 1960 Japan-U.S. security treaty, though Washington does not take a position on the ultimate sovereignty of the islets.

Many facts have proved that major changes have taken place in regard to the South China Sea since Washington made a military and economic "pivot" toward Asia, a strategy many interpret as a bid to counteract China's influence in the region.

In the past decades, there has been mainly a lull in the South China Sea issue, as China and other claimant states sought solutions based on bilateral friendly negotiations.

However, at the ASEAN foreign ministers' meeting two years ago, Clinton announced Washington had a "national interest" in the South China Sea and would return to Asia. Since then, tensions have been simmering below the surface.

In particular, China's maritime territorial sovereignty has been severely infringed this year, with the Philippines laying claims to Huangyan Island, Japan's farce in attempting to buy the Diaoyu Islands and Vietnam's enactment of a law asserting sovereignty over the Xisha Islands and Nansha Islands.

The United States claims it does not take a position on the one hand and intensively takes one-sided actions on the other.

Since the dispute over Huangyan Island between Beijing and Manila flared up in April, Washington not only held joint military drills with the Filipinos, but also sold two Hamilton-class warships to them.

Last month, U.S. Secretary of Defense Leon Panetta announced a shift of deployment of the U.S. Navy from its current 50-50 split between the Pacific and the Atlantic to 60-40 by 2020.

As the Chinese saying goes, "the tree craves calm but the wind keeps blowing." Though China always exercises restraint and insists on diplomatic solutions to the disputes, some countries keep challenging China, which certainly has something to do with U.S. re-engagement in the region.

President Barack Obama's strategy to focus U.S. foreign policy more intensely on the Asia-Pacific after a decade of wars in Iraq and Afghanistan is welcome, as long as it is beneficial to the peace, stability and prosperity of the region. However, what the strategic shift has brought in the past two years is evidently contrary to regional stability.

Washington must understand that returning to Asia by way of militarily flexing its muscle, and diplomatically intervening in bilateral disputes is wrong and short-sighted. It is wrong because it is favoring confrontation instead of cooperation, which does not contribute to Asia's development and also goes against U.S. long-term interests.

Americans should do more to promote regional and win-win cooperation rather than mess up peace and development in the Asia-Pacific region.

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News Analysis: Clinton's visit promotes U.S. strategic pivot towards Asia

SINGAPORE, July 13 (Xinhua) -- Regional and international economic cooperation is important, analysts said on the visit of U. S. Secretary of State Hillary Clinton to Asia.

Clinton participated in the 19th ASEAN (Association of Southeast Asian Nations) Regional Forum on Thursday in Phnom Penh, which gathers the foreign ministers of Asian countries and beyond. Clinton's visit to Asia has also taken her to countries such as Japan, Mongolia, Vietnam and Laos. She is also expected to attend an ASEAN-U.S. Business Forum on Friday. Full story 

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SE Asia meeting in disarray over sea dispute with China - Reuters (reuters.com)

Our cars are costing us our homes!

WHEN I first started my job as an architect in the 1960s, I was on a three-year contract with a monthly salary of RM628. I bought my first car, a Peugeot which cost RM7,724, equivalent to approximately one year of my salary. The car became my reliable companion for 14 years. Those were the good old days, when a car could be bought with just one year of a fresh graduate's salary.

Circumstances have since changed. Today, for a fresh graduate to own a car in Malaysia, it will easily cost him four years of his salary to purchase a foreign car, and even a local car costs around two years of his salary. If we take into consideration his living expenses and other commitments, it may take him even longer to settle his car loan. Hence, it has left him with very little option but to take the maximum car loan financing tenure of nine years.

In the table illustration below, a fresh graduate in the Washington D.C. earning about RM11,000 (about US$3,500) per month can easily buy a Japanese Honda Civic or Toyota Corolla worth RM50,000 as it is only 0.4 times of his yearly salary.

On the other hand, a fresh graduate in Malaysia earning about RM2,500 per month needs to pay RM120,000 if he would like to buy the same type of car. It costs him four times his gross yearly salary. This ratio is 10 times higher than his US counterpart.

For youths in Malaysia, buying a car is more expensive both in real terms, and in terms of debt-to-income ratio. In reality, it means they have to either purchase a car with lower price tag or commit to a longer term loan to own a car, which cost them the opportunity of owning a home.

This situation requires our youth to choose between buying a car or a house first, and many have committed to own a car first, considering our public transportation system is still in the process of being improved.

Many fresh graduates in Malaysia who start to serve their car loan tend to delay their plan of purchasing a home.

Unfortunately by the time they can afford to purchase a home, be it three, five or nine years later, the price of a property would have escalated due to among other things, inflation, higher construction cost and higher land prices.

While it may be safe to say that their salary would also increase, generally speaking the increment may not aligned to the rate of inflation. In most cases, owning a home will be a huge debt lasting 30 to 40 years of housing loan repayment.

What can be done differently to change the circumstances? Is there a better way for them to financially plan their future? These are questions that Malaysian youths ought to consider before purchasing any big-ticket items.

Let's look at the table again. It also lists the median price for three-bedroom apartments in the suburbs of these cities. The median price of an apartment in the Klang Valley is around RM300,000, equivalent to 10-year gross income of our fresh graduates. The affordability level is more favourable compared to other Asian countries, such as Indonesia and Thailand. The prices of same size apartments in Jakarta and Bangkok range from RM350,000 to RM400,000, and costing their fresh graduates 13 to 18 years of gross yearly income to purchase a house.

Therefore, when it comes to the question of home affordability in Malaysia, we are blessed compared to our regional peers.

However, there are many factors that contribute to the challenge for our youths to own a house. Two primary factors are the additional financial commitment of purchasing a car, and the relatively lower income level in our country compared to our Western counterparts.

When fresh graduates spend a substantial amount of their salary paying for a car, they are left with little savings to own a house, and their house affordability level decreases over the years as prices rise due to inflation.

Clearly the income level of our graduates has to rise, to enable better quality of living and higher affordability level, which is the current government's focus to make Malaysia a high income nation by 2020.

Perhaps it is also time to re-look at our national car policy and how it has affected the house affordability level in Malaysia. From the numbers above, it is clear that our cars are costing us our homes.

Food for thought  By DATUK ALAN TONG

> FIABCI Asia Pacific chairman Datuk Alan Tong has over 50 years of experience in property development. He was FIABCI World president in 2005/06 and was named Property Man of The Year 2010. He is also the group chairman of Bukit Kiara Properties. (email at feedback@bukitkiara.com) 

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'No’ to property price speculation

Houses prices hardly fall

'No’ to property price speculation

Excessive Asian property price appreciation may be over for now

PEOPLE generally like to invest in properties. It is easy to understand you buy a house. It is a simple, tangible investment. It is long term and financing is usually easy. Most people tend to have positive experience after buying their first home, which normally would appreciate after a decade or two.

Simple things can morph into complex series of events. Buying houses may turn to speculation, massive speculations become a boom and bust “housing bubble”; banks may collapse from huge bad mortgages, a financial crisis and then a government bailout ensues, an economic recession soon follows. These events sound a little too familiar.

Low interest rates, massive liquidity and investors shying away from volatile stock markets, are some of the many reasons cited for Asia's potential property bubbles today. From 2009 or so, private residential properties have seen large average price jumps in China (Beijing +100%), Hong Kong (+53%), Singapore (+53%), Malaysia (+21%) and Indonesia (Jakarta +14%).

Asian policy makers have taken many pre-emptive actions to control this property “bubble”, usually by regulating excessive speculation and guiding mortgage lending by banks. In Hong Kong, policy makers try to discourage speculators by raising special stamp duty for short term resale of residential property (5% to 15%, depending on holding period); in Singapore, measures include a hefty extra 10% stamp duty on purchase price for non-residents. In Indonesia, there's a maximum 70% property loan limit.

Recent data suggest such curbs did not slow the Hong Kong or Singapore property markets for long. Transactions or prices picked up again recently. We believe however, if Asian property prices rise rapidly again, tougher curbs may be in the cards. The slew of increasingly tough measures in China the last 18 months is seen as an example. An avalanche of curbs eventually made China home prices dip for eight straight months up to May 2012.

Historically, financial crisis in many countries (Japan 1991, US 2008 and Spain today) are caused by property price bubbles bursting hurting consumers, banks and businesses. Therefore, it makes a lot of sense to have responsible lending.

Asian policy makers, having learned bitter lessons from the 1997/98 financial crisis, sees pre-emptive measures to control any potential property “bubble” as crucial to avoid banking problems or crises.

Governments in Asia on the one hand want to curb excessive price speculation, while at the same time, know that home ownership is a very important (and personal) issue notwithstanding it is also a big contributor to domestic economic growth.

What Asian policy makers aim to do is best captured in a Chinese phrase, which literally means “in peace time, think about danger”. The best time to prepare for rainy days is when the sun is shining it's a lot harder to do so in a storm.

The biggest challenge for policy makers is to develop a sustainable property sector and promote home ownership (especially first time house buyers) without boom and bust. That includes the balancing act of curbing property speculation without inadvertently pulling the brakes on the economy.

Some Malaysian non-listed property developers I met recently have expressed deep concerns that sales of their high-end, new condominiums are lagging, because buyers find it difficult to get financing.

Bank Negara's curbs on lending for third property mortgage (maximum 70% financing) and stricter banks credit standards appears to be working for now.

The intent of Bank Negara, we believe, is to nip excessive property price speculation in the bud. Current property curbs ensure at least prices don't run up too fast and banks may allocate more funds to first time house buyers rather than investors or speculators.

Interestingly, property developers who don't complain about curbs are often the established ones who prefer sustainable growth, rather than a boom and bust property market. I believe many property companies have learnt not to borrow too much.

Tellingly, the top five Malaysian listed property developers have reduced average net gearing from 70% in 2000 to 18% in 2011, (Indonesian and Thai property developers reduced from 612% to 9% and 255% to 84% respectively). Asean property companies today are undoubtedly less leveraged with healthier cash reserves.

That's one reason why most property developers in Malaysia, Indonesia and Thailand for example, are not rushing to unload properties at massive discounts, even as property curbs bite into sales. They know current measures are temporary and consumer demand is likely robust for quite some time.

Asian consumers are financially better off today. Healthy employment and wage increases across Asia means consumer demand for housing will likely stay buoyant and house prices, like in normal times, will gradually rise over time.

However, the intriguing impact on Asian properties today given the mind set and propensity of policy makers to pre-empt any potential property bubble I believe periods of excessive property price appreciation in many Asian property markets may already be over for now.

I believe policy maker's curbs on excessive price speculation is a right policy. Even if there's short-term pain, it will likely make Asian economic growth sustainable for the longer term in these difficult times.

Singular Vision
By TEOH KOK LIN

Teoh Kok Lin is the founder and chief investment officer of Singular Asset Management Sdn Bhd.

A need to invest in security

With the recent spate of attacks, robberies and snatch thefts, we really need to pay more attention to security issues – with emphasis on ‘pay’.

On Sunday, I visited a friend who was staying in a hotel along Old Klang Road in Petaling Jaya. At the time, there was another man in the room.

Minutes later, there was a knock on the door. A boy rushed in, breathless.

The other man in the room had left the boy and a couple of girls in his car while visiting the friend. Someone on a motor-cycle had knocked on the car window, asking for directions. And when they lowered the windows, the knives had come out.

The trio lost what little money they had, along with their handphones. They couldn’t even call to tell the guy about their problem. Thus, the dash to the hotel room.

Reality had hit close to home, even as we were talking about the recent spate of robberies in car parks and malls.

Call it a weird coincidence, but that hotel overlooks the scene of probably the most-publicised case of car park abduction and assault in the country. It was here, along Old Klang Road, that Canny Ong, after being abducted in Bangsar, was raped, murdered and torched in 2003.

And only last week, I had visited the Bangsar Shopping Centre from where she had been taken.

After the recent spate of robberies and attacks on women in malls and hypermarkets, I had wanted to see how much the security in the mall had improved. I must say I came away fairly impressed.

The car park was quite brightly lit, there were guards at both entrances and exits – and they were peering into the cars that were entering and leaving. I guess that’s to ensure no abduction ever takes place again.

There were a couple of guys on bikes, and a couple of others on bicycles. And yet another was walking from car to parked car, checking if all were secure. And the guy in the long-sleeved shirt slouched near the fire hydrant? He was the supervisor.

These were not your retired pakciks and uncles, trying make some extra money. They were Nepali army-trained personnel. They looked nice and smiled at everyone but one wrong move, and they can turn nasty. Really nasty, I am told.

Vincent Tan, the BSC asset and property management senior manager says they have 350 CCTV cameras covering all basements and floors.

They’ve also got dog units that patrol the area after dark. And if you are afraid to walk to your car at night, all you have to do is ask and the guards come along in buggies to take you to your vehicle.

More importantly, there are these blue pillars with panic buttons on them. You press the buttons, and the guards come running. They are even to be found in the ladies’ washrooms – the panic buttons, not the guards.

Of course, all that sounds good but I did have a couple of unanswered questions. Other malls are mulling ladies-only parking areas but I didn’t see any such markings there. There may be plans, though, says a friend who works there.

And how many people would know about the panic buttons? There is little by way of education.

I would have plastered notices of these measures all over the mall to make sure everyone would know what to do – and also tell the ladies to take note of the nearest blue column when they park. That way, they would know where to run when faced with an emergency.

It’s bad enough having nowhere to run when robbers hit you at home, or target the elderly, as they have been doing recently. Being robbed while out having retail therapy is hardly therapeutic.

I would think that security, indeed, is something worth investing in as far as malls and hypermarkets are concerned. After all, a mall that’s seen to be safe is likely to bring in the crowds and the paying customers. The key word, however, is “investing”.

Security guards, by and large, get paid pittance. And they have to throw their bodies in the line of fire. Guards in many factories and residential areas are paid as low as RM700 a month.

And in the malls, I am told, they may get RM900 to RM1,000. And I know of Myanmars who help out at hawker stalls and earn about RM2,000 a month!

Maybe we should be rethinking the value of the security guards. After all, if we expect them to lay their life on the line to save ours, we should be ready to pay a fair price.

After all, it’s also the price of our limbs and our lives.

Why Not? By D. RAJ

> The writer is dreaming of the day when we can have mall cops – friendly, well-paid policemen who ensure our security everywhere. But, for now, that remains a dream. 

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70 more websites seized in US copyright crackdown

A Louis Vuitton clock at the Louis Vuitton Fall/Winter 2012-2013 ready-to-wear collection show at the Louvre, Paris, in March. US authorities seized 70 websites suspected of selling counterfeit goods using luxury brand names such as Louis Vuitton, Tiffany or Burberry and sports logos like NFL and MLB, officials said Thursday.

US authorities seized 70 websites suspected of selling counterfeit goods using luxury brand names such as Louis Vuitton, Tiffany or Burberry and sports logos like NFL and MLB, officials said Thursday.

The seizures under five separate warrants in US courts is the latest action of Project Copy Cat, an effort of the US Department of Homeland Security's Immigration and Customs Enforcement (ICE) office.

ICE director John Morton told AFP that the latest seizures included some highly sophisticated operations, which created websites that looked nearly identical to legitimate ones.

"These are copycat sites, it is a very sophisticated effort to masquerade as the legitimate site," Morton said. "It is not getting people to buy cheap knockoffs, it is getting people to pay full price or nearly full price."

Some sites also use a fake SSL (secure sockets layer) certificate that leads customers to believe their credit cards are encrypted, officials said.

"This allows people to believe their financial information is encrypted but that seal is counterfeited as well," ICE spokesman Justin Cole said.

Since the effort began in 2010, a total of 839 websites or domain names have been seized.

This includes websites using the name louisvuittononlineoutletus.com or tiffanyandcojewelrysale.net, aimed at deceiving consumers into thinking they are purchasing legitimate goods from Tiffany or Louis Vuitton.

Many of the goods are counterfeit items made in China, officials said.

Morton said cooperation with Chinese authorities is "uneven, but it is getting better."

"There is a distressingly high level of this activity coming out of China," he said.

The seized sites, all hosted in the United States, have their front page replaced with images of federal seals from the US Departments of Justice and Homeland Security.

Visitors to the sites are met with a message reading: "This domain name has been seized by ICE -- Homeland Security Investigations, pursuant to a seizure warrant issued by a United States District Court."

Cole said the owners of the websites have an opportunity to contest the seizure in court by showing they are selling legitimate goods.

"But in the most cases these are counterfeit producers and this is not happening," he said.

"In many cases these guys start up a new website and we have to find them again."

Of the 769 previous domain names seized, 229 have now been forfeited to the US government, officials said.

During the operation, federal agents made undercover purchases of a host of products, including baby carriers, professional sports jerseys, language and fitness DVD sets, and a variety of clothing, jewelry and luxury goods.

In cases where the goods were confirmed to be counterfeit or otherwise illegal, authorities went to court to obtain warrants to seize the domain names for the websites.

The probe stems from an intellectual property task force set up by the Justice Department.

Pending legislation would give US authorities even more tools to crack down on "rogue" websites accused of piracy of movies, television shows and music and the sale of counterfeit goods.

The bills have been backed by the Motion Picture Association of America, the Recording Industry Association of America, the US Chamber of Commerce and others.

But they have come under fire from digital rights groups and Internet heavyweights such as Facebook, Google, Twitter and Yahoo! who say they raise censorship concerns and threaten the architecture of the web.

(c) 2012 AFP
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