Thailand Business News Thailand News with a Business Perspective Tue, 28 Mar 2017 03:57:33 +0000 en-US hourly 1 Thailand Business News 32 32 49569833 Venture Capitalism China style : The Communist way to Start-Up Boom Tue, 28 Mar 2017 03:57:33 +0000 The Chinese government is lavishing benefits like free rent and cash handouts on homegrown start-ups in an effort to move beyond the factory floor.

In Dream Town, a collection of boxy office buildings on the gritty edge of this historic city, one tiny company is developing a portable 3-D printer. Another takes orders for traditional Chinese massages by smartphone. They are just two of the 710 start-ups being nurtured here.

Anywhere else, an incubator like Dream Town would be a vision of venture capitalists, angel investors or technology stalwarts. But this is China. The Chinese Communist Party doesn’t trust the invisible hand of capitalism alone to encourage entrepreneurship, especially since it is a big part of the leadership’s strategy to reshape the sagging economy.

Which is why the government of Hangzhou — a former royal capital that has been a major commercial hub for more than a millennium — built Dream Town and lavishes resources on start-ups. The businesses here get a slate of benefits like subsidized rent, cash handouts and special training, all courtesy of the city.

Chemayi, which offers car repair services through a smartphone app, is staying rent-free at Dream Town for three years and is applying for as much as $450,000 in subsidies from city authorities to help pay salaries and buy equipment.

A Swell of Subsidies

After submitting a 10-page proposal in 2014 to join a Hangzhou incubator, Ai Binke sat nervously before a committee of tech industry executives who questioned his future prospects. His software company, Yun Ran Internet of Things, had only four employees, and its business deals had been small. But his start-up, Mr. Ai explained to the committee, had great potential.

That was sufficient for the judges to award him 100,000 renminbi in subsidies. The bulk, roughly 70 percent, was instantly transferred into his corporate bank account. “As long as you run projects that are encouraged by the Hangzhou government, you can get the subsidies,” said Mr. Ai, 29. “It’s not very difficult.”

Source: Venture Communism: How China Is Building a Start-Up Boom

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Seizing Opportunities in China’s Cold Chain Logistics Mon, 27 Mar 2017 21:32:55 +0000  

By Yong Teng,Buran Chen

As the economy improves and household incomes rise, Chinese consumers have been demanding higher standards for safety, health, and quality of life. However, there is increasing concern regarding food and drug safety, especially with increasing popularity of purchasing fresh produce online.

Cold chain logistics form the foundation to supply perishable products—fresh fruits and vegetables, meat, dairy, aquaculture products, fresh flowers—and medical products—drugs, reagents, vaccines, biological products—that have strict temperature, humidity, and other environmental requirements.

The Chinese cold chain market has grown more than 20 percent over the past five years, increasing from 80 billion RMB in 2011 to 160 billion RMB in 2015.

Increasing demand for fresh food and drugs will continue to drive growth in the cold chain industry— L.E.K. Consulting forecasts that the cold chain industry will be valued at 400 billion RMB by 2020, with transportation making up 40 percent of the market, cold storage at 30 percent, and the remainder of the market will be other services.

Figure 1, China’s Cold Chain Logistics Market Size

Despite this remarkable growth, the development of China’s cold chain industry is still in its infancy. The market is extremely fragmented; the China Federation of Logistics and Purchasing Cold Chain Logistics Committee estimates that revenue from the top 100 cold chain logistics companies accounts for less than 10 percent of the overall market.

Figure 2, China’s Domestic Cold Chain Market Split by Market Share and Top Ten Players

Although the market is rapidly growing, the unreliability and “breakage” of the cold chain remains a serious problem. As ownership of each stage of the cold chain—warehousing, ground transportation, airfreight, airports, distribution and other services—is fragmented, the lack of an end-to-end process control results in widespread mismanagement of logistics. Additionally, the use of temperature monitoring technology, information systems, and other forms of technical assistance is still very immature. As a result, the rate of cargo damage to fresh product within the cold chain is as much  as 20-30 percent—much higher than the average 5-10 percent in developed countries.

In recent years, the Chinese government has worked with industrial associations to jointly introduce a series of standards and policies to regulate and promote the development of the cold chain logistics market. With regards to industry standards, the General Administration of Quality Supervision, Inspection and Quarantine and Standardization Administration of China jointly issued the first Operation Specifications for drug cold chain…

Source : Seizing Opportunities in China’s Cold Chain Logistics

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Manufacturing Relocation Opportunities in Cambodia Mon, 27 Mar 2017 07:28:07 +0000 With production costs rising in China, manufacturers are looking at less costly places in which to diversify their factory investments, in particular to the ASEAN-CLMV countries – Cambodia, Laos, Myanmar and Vietnam.

In light of this, HKTDC Research recently visited Cambodia in order to assess its suitability as an alternative production base for Hong Kong manufacturers.

The first part of this article, Cambodia: Manufacturing Relocation Opportunities (1), provides an overview of Cambodia’s manufacturing landscape. The second part continues by examining its current investment environment and future opportunities under the increasingly integrated ASEAN supply chain, while keeping in mind the lingering concerns about the country’s soaring labour costs and backward infrastructure.

An FDI-Friendly Business Environment

While enjoying trade privileges with major developed countries, Cambodia has also made efforts to strengthen its attractiveness as a manufacturing production base by creating a welcoming investment climate. Cambodia’s corporate tax rate stood at 20% at the end of 2016, lower than the 25% of Myanmar and Indonesia.

The Cambodian government offers handsome incentives to attract FDI and bring in new technology to enhance productivity.

Unlike in Thailand companies can be 100% foreign-owned and there is no restriction on the repatriation of profit or capital.

Eligible projects approved by the Council for the Development of Cambodia (CDC), the country’s key FDI promotion body, can enjoy a tax holiday of up to nine years (a trigger period of up to three years, plus three years of automatic exemption, and another three years priority period) and duty exemption on imported intermediate goods and finished exports.

For small and medium enterprises (SMEs), it is also worth noting that in Cambodia, a relatively low level of start-up capital is required to enjoy foreign investment incentives. According to the CDC, a qualified investment project on manufacturing and production typically requires a minimum investment of between US$200,000 and US$500,000. By comparison, Myanmar requires investments of US$500,000.

In the World Bank’s 2017 Ease of Doing Business report, Cambodia was ranked 131th out of 190 economies, above Laos (139th) and Myanmar (170th) but far behind Thailand (46th), Vietnam (82th) and Indonesia (91th).


Chart: Ease of Doing Business Ranking 2017

The World Bank report said it took an average of three months to set up a company in Cambodia. To reduce the time and the number of procedures involved, the Cambodian government introduced a new online business registration system in 2016.

While there are various flaws, such as the lack of options to make online payments, the business community appreciates the effort the Cambodian government is making to transition to an online platform, which streamlines applications and is more transparent than the previous paper-based process.

Re-organisation of Regional Supply Chains

Map: Selected GMS Economic Corridors

Map: Selected GMS Economic Corridors

Inspired by the “China-Plus-One” concept, where rising labour costs and ongoing structural reform are driving Chinese manufacturers to diversify their labour-intensive production activities on the Chinese mainland into other low-cost Asian countries, the idea of “Thailand-Plus-One” has gradually taken hold among Thai manufactures in recent years.

Despite the military coup in 2014 and newfound stability in the country, cost pressures have invariably forced manufacturers to upgrade and move up the value chain and/or relocate part of the production to Thailand’s border zones or neighboring countries.

In terms of cross-country relocation, a great deal of interest has been placed on the Greater Mekong Sub-region’s (GMS) Southern Economic Corridor and Southern Coastal Economic Corridor, where industrial accumulation has gradually built up.

Table: List of SEZ along the Southern and the Southern Coastal Economic Corridor

Table: List of SEZ along the Southern and the Southern Coastal Economic Corridor

ASEAN Economic Community to Speed up Regional Integration

In 2015, the ASEAN Economic Community (AEC) was officially established. By creating a single production base, the AEC increases the opportunities for Cambodia to participate in the regional value chain. For example, the ASEAN Single Window (ASW)[1] will be implemented as part of the AEC integration process. Light-industry manufacturers with factories within the AEC stand to benefit from lower transaction costs through a reduction in tariffs and non-tariff barriers on goods and services.

Take Denso, a major Japanese auto-parts maker, as an example. The company has operations in Thailand, but is looking to shift its more labour-intensive work to less-developed ASEAN countries including Cambodia, while turning its Thai operations into a regional hub, which transfers technology to other plants in the region.

In 2015, Denso set up a 100,000-square-metre (sqm) site in the Phnom Penh Special Economic Zone (PPSEZ) as part of its effort to lower production costs. With Thai workers as trainers, the plant started operations in 2016 and employs about 100 Cambodian workers who produce magnetos and oil coolers.

Rising Labour Costs Erode Cambodia’s Competitiveness

Much of Cambodia’s attractiveness relative to its regional competitors in drawing FDI lies in its low labour costs. However, the rapid increase in Cambodia’s minimum wage has, to a certain extent, eroded the country’s low-cost advantage relative to its regional competitors.

In 2017, Cambodia’s monthly minimum wage of workers in its garment and footwear industry stands at US$153, some 2.5 times that of the 2012 level. According to an industry source, the proportion of wages to production costs has increased to 60-70%, compared with about 50-55% just a few years ago.

Chart: Cambodia’s Monthly Minimum Wage, 2012-2017

Chart: Cambodia’s Monthly Minimum Wage, 2012-2017

Cambodia’s minimum wage is below that of Thailand (US$250), an Indochina industrial base long favoured by Japanese investors, and Vietnam (US$166 for Zone 1, which covers the urban parts of Hanoi and Ho Chi Minh City), where Korean investment has poured in to turn electronics products into the largest export category. Landlocked Laos, and Myanmar under its reformist civilian government, have much lower minimum wages at about US$110 and US$90, respectively.

It is also worth noting that Cambodia has about 30 public holidays a year, almost double that of Vietnam or Laos, resulting in fewer working days. If monthly attendance bonuses, meal and transport allowances and overtime payments were added, Cambodia’s average monthly wage could rise to more than US$200, which may not be much lower than many regions in Vietnam.

The GMAC expressed concern about the fast-rising minimum wage, which ranks among the top challenges for some foreign manufacturers, many of which complain about shrinking profit margins. Despite the wage rises, Cambodia’s garment industry kept expanding in 2016, with the Ministry of Labour and Vocational Training noting that 149 new garment factories opened during the year. In contrast, 141 garment factories closed in 2016, nearly twice the number recorded in 2015.

Labour Productivity Fails to Keep Pace with Wage Growth

Many factory operators interviewed by HKTDC Research pointed out that the country’s labour productivity was not keeping pace with climbing wages. They cautioned that Cambodian workers could only achieve satisfactory levels of productivity if they were given more training and a longer time to adjust than workers in Vietnam or Thailand. In particular, some factory managers suggested that the average labour productivity of Cambodian workers was only about 50%-60% that of Chinese workers.

While manufacturers in general face no trouble finding workers, some indicated that the recruitment of experienced labour was becoming increasingly difficult. Employers have to make special efforts, such as offering extra allowances, in order to retain workers, particularly those in factories located outside central Phnom Penh. Due to a lack of technical and vocational training schools, there is also a shortage of skilled workers in the country, making it difficult to employ locals for middle-management roles.

Labour Relations

Cambodia’s garment industry has been plagued with strikes and protests over the past three to four years. Although this remains a key workplace issue in the country, the latest round of minimum-wage increases in the garment industry may help to ease tensions between employers and employees, thereby lessening the prospects of more widespread labour unrest.

In 2016, there were 220 strikes at 211 enterprises and factories, a decrease of 116 cases from the 336 reported in 2015, according to the Ministry of Labour and Vocational Training of Cambodia. HKTDC Research was told that responsible business practices and measures to facilitate better employer-employee communication has also contributed to the decrease in strikes and protests.

Photo: Workers’ good performances are recognised by a garment factory.
Workers’ good performances are recognised by a garment factory.


Photo: Workers’ good performances are recognised by a garment factory.
Workers’ good performances are recognised by a garment factory.
Photo: A canteen in one garment factory in Phnom Penh Special Economic Zone.
A canteen in one garment factory in Phnom Penh Special Economic Zone.


Photo: A canteen in one garment factory in Phnom Penh Special Economic Zone.
A canteen in one garment factory in Phnom Penh Special Economic Zone.

Backward Infrastructure Presents Additional Challenges

Cambodia also faces the problem of backward infrastructure, with electricity costs a frequent source of complaint. Costs are as high as US$0.20 per kilowatt-hour (kwh), compared with about US$0.08/kwh in Vietnam and US$0.10/kwh in Myanmar. While most electricity is generated domestically, Cambodia has to import power from neighbouring countries such as Vietnam and Thailand to meet the rapid growth in demand. On the bright side, HKTDC Research was told that electricity supply had become more stable in Cambodia, compared with frequent blackouts just a few years ago.

In terms of transport infrastructure, Cambodia ranked 106th out of 138 in infrastructure development in the World Economic Forum’s Global Competitiveness Report 2016-2017, considerably behind Thailand (49th), Indonesia (60th) and Vietnam (79th). To overcome the infrastructure bottleneck and take full advantage of regional integration, Cambodia will require significant investment in road, rail, sea and air links over the foreseeable future.

Table: Infrastructure Development Ranking

Table: Infrastructure Development Ranking

That said, Cambodia’s transport infrastructure looks set to improve over the medium term. Under its 2015-2025 Industrial Plan, the Cambodian government is committed to implementing a master plan for the transport and logistics system by 2018.

Further, Cambodia is a pivotal partner of the China-proposed Belt and Road Initiative (BRI), which aims to promote co-operation along the planned New Silk Road Economic Belt and 21st Century Maritime Silk Road. In implementing the BRI, a lot of attention is placed on the construction of a series of infrastructure projects, including transport and energy facilities. In this connection, the BRI can be a key facilitator to the development of Cambodia’s infrastructure and transportation network.

During Chinese President Xi’s visit to Cambodia in October 2016, a total of 31 agreements and Memorandum of Understanding (MoUs) were reached to engage in joint projects in industry, infrastructure and maritime business. China also agreed on a financial aid of about US$180 billion (RMB1.2 trillion) to Cambodia. This will help fund the construction of a highway from Phnom Penh to Sihanoukville, the upgrade of National Road No.11 and a new bridge crossing the Mekong River in Tbong Khmum and Kampong Cham provinces.

Cambodia: still a viable option for manufacturing relocation

Despite the undesirable wage trends and labour-market development in recent years, Cambodia remains a viable option for foreign manufacturing companies that are considering relocation and diversification. The overriding attraction is its preferential trade access to major developed countries, which should continue for the medium term. Together with a relatively stable economic performance, this could potentially give Cambodia a bigger role in the increasingly integrated regional supply chain for overseas companies and importers, despite lingering concerns about eroding labour-cost advantages and a backward infrastructure.

[1] The ASW for customs clearance will connect and integrate the National Single Windows (NSW) of individual ASEAN members to expedite the electronic exchange of customs data used by traders in obtaining customs clearances, permits and other documentation for trade within ASEAN.

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How to Deal with a Chronically Indecisive Boss Sun, 26 Mar 2017 11:23:29 +0000 Managers who can’t seem to pick a course of action — or who constantly change their minds – can be maddening.

You’re left spinning your wheels, or abruptly switching directions, and your team’s credibility across the organization is likely to suffer. So how can you help a wishy-washy boss make decisions? If your manager isn’t willing to steer, is it OK for you to take the driver’s seat?

What the Experts Say

Reporting to an indecisive boss is an unquestionably “challenging and frustrating situation,” says Sydney Finkelstein, the Director of the Leadership Center at the Tuck School of Business at Dartmouth College and author of the book, Superbosses: How Exceptional Leaders Manage the Flow of Talent. “It drives you crazy because without direction, you’re not sure what to do.” In addition to the daily annoyance, you might also have concerns about your professional prospects, says Nancy Rothbard, the David Pottruck Professor of Management at the University of Pennsylvania’s Wharton School. “From a career aspiration standpoint, you worry that your reputation will suffer,” she says. “If your boss isn’t being taken seriously in the organization, are you, by extension, seen as ineffective?” Here are some strategies for coping if your boss is chronically indecisive.

Diagnose the situation

According to Finkelstein, the first step is to “figure out what is behind the behavior.”

Pay attention to what’s going on in your boss’s work world because it will “give you some clues” as to why they’re acting the way they are. Try to have empathy.

“It could be that his own boss smacked him down the last time he went out on a limb.” It could be that he’s wary of your organization’s “blaming culture.”

Or perhaps your manager’s inability to move forward is due to his “inexperience or naturally risk-averse” disposition. As you diagnose the problem, it’s critical to do a “gut check” to ensure that you’re not “overestimating your boss’s indecisiveness or misinterpreting it,” he says. Ask yourself if “there might be a method to your manager’s madness. For example, “Is it possible your boss isn’t telling you how to do every little thing because he is waiting to see if you step up?” Rothbard agrees.

“As a subordinate, you don’t necessarily have all the information,” she says. “There could be all kinds of reasons why your boss is having trouble making a decision.” And indecision is sometimes defensible. “If an issue is hard and complicated, rushing to judgment is not a good thing. Sometimes your boss needs to be more thoughtful.”

Build trust

If you determine that the root of the problem is your boss’s insecurity, it’s your job to “lend [your manager] confidence” by being an “extremely competent and trustworthy” direct report, says Finkelstein. Think of it as “an opportunity for you to help your boss see a way forward.” If the indecisiveness stems from the fact that the decision is complicated and the answers unclear, Rothbard recommends acting as “a sounding board  — someone who’s willing to discuss and weigh the pros and cons of various actions.” Ask good questions; provide relevant, useful data; and offer your perspective.

Take charge

When you have a strong opinion about how the decision should go, but your boss is still stuck in “analysis paralysis” — take a different approach.  “Giving your boss more data to pore over will not necessarily help him move forward,” Rothbard explains. In these cases, “you need to help your boss sort through the information” and then offer “a clear rationale for your recommendation.” It’s also helpful to “enable your boss to delegate to you without formality,” says Finkelstein.

You could say something like, “I have been thinking a lot about this and there are a few ways we could address the issue. Can I give one or two of them a shot and then report back to you with my progress?”

Taking charge of the situation removes the decision-making burden from your boss. “It’s much easier for your manager to choose between Door Number One or Door Number Two than it is to take action versus do nothing.” The goal, he says, is to “ease [your manager] into empowering you.”

Talk to your boss
Depending on how receptive your manager is to feedback, it might be worth having an honest and respectful conversation about how her wishy-washiness impacts you and the rest of the team. Don’t be aggressive or confrontational, says Rothbard. “Signal that you know your boss’s intentions are good.

Your tone should say, ‘We’re in this together.’” She suggests broaching the subject with a line like, “I’m concerned that because we said one thing in the past and now we seem to be going back on it, it’s affecting morale.” The conversation should be constructive and one-on-one, Finkelstein adds. It’s always wise to “offer people a face-saving way to deal with problems.” That said, if your relationship with your boss is shaky and/or they’re not particularly open, trying to discuss her indecisiveness “could be seen as an aggressive” move.

Seek allies
Another way to speed up the decision-making process is “to form a coalition,” comprised of people “with whom you have a reasonably good relationship” and “who have influence over your boss,” says Finkelstein.

“Don’t spill your guts,” and, of course, don’t complain. Simply “ask for their advice” on what to do. He suggests saying something like, “I’m trying to figure out the best way to accomplish the goals of our team. Do you have any ideas?” If several people agree on a course of action, that’s further impetus for your boss to follow the recommendation.

Protect yourself
Having an indecisive boss is not only hard on your day-to-day productivity, it’s also bad for your “internal reputation and career development,” says Finkelstein.

Without a record of achievement, “What have you got to show on your resume?” If you come to the conclusion that your manager’s woolliness is harming your professional potential, Rothbard advises you “distance yourself and protect yourself” from your boss’s behavior by “developing your relationships and network internally.” She also suggests cultivating “mentors in other parts of the organization. You need people who have your back.” If the problem persists, you might also want to consider moving on.

Principles to Remember


  • Engender trust and confidence by being an extremely competent, high-performing employee who’s willing to serve as a sounding board.
  • Take the lead by helping your boss sort through information and then offering a clear recommendation.
  • Seek out colleagues who have influence over your boss and ask for their advice on how to handle the situation.


  • Take your boss’s behavior personally. Try to figure out what is behind the indecisiveness.
  • Be aggressive or confrontational if you decide to talk to your boss about their behavior.
  • Stay too long under a boss who can’t make a decision. It’s bad for your internal reputation and long-term career development.

Case Study #1: Seek advice from others and uncover the root of your boss’s indecisiveness
Early in Alexi Robichaux’s career, he worked under a boss—“Frank”—who suffered from “episodic” indecisiveness.

“At times, he could be very decisive, but there were many other times when he just couldn’t make up his mind and it was extremely frustrating,” Alexi recalls. “I was junior in my career, and I blamed myself. I thought I must be doing something wrong and must not be equipping him for success.”

But Alexi was determined to improve the situation. “I realized I could either choose to be a victim or try to help him move forward.”

Alexi’s first coping strategy was to seek advice from other senior leaders in the organization who had a longer history with Frank. “I asked them, ‘What am I missing?’” One colleague told him that Frank was “passionate” about the company and product design but lacked managerial experience. “Frank was very skilled but he was used to being the artist not the boss.”

That perspective helped Alexi to understand the root of the indecisiveness and to see that he and Frank were actually quite similar. “We are both intuitive thinkers, rather than systematic or rational ones,” he says. “I’m not even sure myself how I make decisions, and so I felt more empathy for Frank. We both wanted what was best for the organization.”

Not long after that, Frank, Alexi, and the rest of the team were embroiled in a strategic challenge. The team had created a new product, but “we were limited by technology at the time — the cloud infrastructure wasn’t very developed — and our solution wasn’t elegant.”

Frank hemmed and hawed about whether the product was ready to go to market. “It was never a ‘no.’ It was ‘Let me think about it some more. I’ll get back to you.’”

The team grew more and more aggravated. But, because Alexi appreciated his boss’s strong design aesthetic and perfectionist tendencies, he decided to show Frank that the product was the best it could be under the circumstances.

After each meeting with the engineering team, Alexi sent Frank detailed updates. He described what was discussed as the pros and cons of various scenarios. “I needed to show him that we had the best technical minds in the company working on this and that we weren’t being lazy; we were just limited by technology.”

Ultimately Frank agreed with the assessment and the product went to market.

Today Alexi is cofounder and CEO of BetterUp, the San Francisco-based company that connects employees with certified, executive-level coaching.

Case Study #2: Build trust and consider talking to your boss about their behavior
Several years ago, Kyle Libra was the first employee at a fast-growing software startup. His boss, “Charlie,” was indecisive about pretty much everything.

“Charlie once asked me to extend a job offer to a candidate, which I did. And then he came back a few days later and told me that we should try to go back and offer her less money,” recalls Kyle. “He also wanted to be involved in every little design decision, but he often changed his mind. One day he’d want us to make the buttons [on our product] slightly rounded; two weeks later, they needed to be perfectly square.”

Difficult as this was, Kyle was sensitive to Charlie’s situation. “He was a first-time CEO, and I think he was overwhelmed by all the things he had to do,” he says. “I tried to put myself in his shoes and think about things from his perspective.”

Kyle knew he needed to gain Charlie’s trust, while also demonstrating that the constant mind-changing was having a negative impact on the team. First, he provided Charlie with analytical customer feedback that indicated the company’s product launches were well received. This was meant to reassure Charlie that the team knew what it was doing.

Next, he talked to Charlie about his behavior. “It wasn’t personal, but I tried to be as direct as possible,” he says. Once again, he used data to prove his point. “I showed him a graph of the organization’s engineering output, and showed how his lack of decision-making was hurting their efficiency. They can’t do their jobs if he’s holding them up.”

Kyle succeeded in getting Charlie to delegate more. “Over time Charlie saw that things were running smoothly and trusted us to make good decisions,” he says.

Kyle left the company after two years and is now an internet product manager at Work Market, the New York City-based company that connects businesses with freelancers.

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Cambodia edging towards authoritarianism Sun, 26 Mar 2017 06:39:10 +0000 Cambodian Prime Minister Hun Sen has forced Sam Rainsy to resign from the leadership of Cambodia National Rescue Party (CNRP).

Hun Sen’s new law would dissolve any political party that’s leader is convicted of a crime. Due to a number of defamation charges, Rainsy has been in self-imposed exile in Paris to avoid arrest.

While it was never going to be easy for Rainsy to manage the upcoming political campaigns from France, the resignation still represents a large blow to the CNRP as they head in to the communal elections set for 4 June 2017 and the general elections in July 2018. The last general election in 2013 saw the CNRP return 55 out of the 123 available seats. All other seats were won by the Cambodian People’s Party (CPP), led by Hun Sen.

The 2013 results saw the greatest ever shift away from the CPP, but Rainsy’s resignation suggests that this trend will not continue. He was the figurehead of the party, often calling the Prime Minister out on his more authoritarian policies. The week before his resignation, Rainsy stated that he planned to sue Prime Minister Hun Sen in the International Criminal Court over the ‘alleged’ failed plan to create a militarised border between Cambodia and Thailand during the late 1970s and the early 1980s.

Regardless of whether this was political posturing or an actual move to challenge the Prime Minister, it seems that Hun Sen has won this round of political manoeuvring.

Another victory for the CPP would be especially good for China, who has been strengthening ties with Cambodia. Rainsy has been deeply critical of China’s investments, stating in late October 2016 that the China–Cambodia relationship has caused corruption and was ‘easy money’ for the government, yet had done little to help Cambodia’s economy.

The Lower Sesan 2 Dam exemplifies this. It is primarily funded by the Chinese state-owned company HydroLancang working in partnership with the Cambodian firm Royal Group. Despite the apparent economic advantages, little consideration has been given to the 5000 people, mostly from ethnic minorities, who are likely to be evicted from their homes. A further 40,000 people who live downstream are projected to lose the fishing stocks that they rely on both for food and for trade.

The dam also threatens key migration routes for fish and according to a 2012 study, it is the most damaging of all the dams proposed on the Mekong’s tributaries in Cambodia, Vietnam and Laos between now and 2030. The Cambodian government’s environmental assessment report of the dam fails to take this into account, and no compensation will be provided to affected citizens.

Transparency International’s 2015 Corruption Perceptions Index ranks Cambodia 150th out of the 168 countries surveyed and the most corrupt in ASEAN. Corruption in Cambodia is an inherent problem, hindering its ability to deal with international institutions and form bilateral relationships with many Western nations. As such, China is an easy source of money.

Cambodia drastically needs the money to invest in its infrastructure, but international institutions and Western nations often attach conditions to their loans concerning corruption and Cambodia’s human rights record. China does none of that, offering money with no explicit strings attached.

Yet this money does come with unspoken expectations. These expectations can be seen through Cambodia’s support of China’s South China Sea claim in ASEAN as well as reducing public support of the United States and scrapping of joint military exercises. These actions strengthen the ties between Cambodia and China, giving Cambodia access to the privileges that come with having a ‘great power’ ally.

It is also worth considering the way in which Rainsy was removed from political power. The introduction of a new law forcing the dissolution of the CNRP if Rainsy remained leader seems to emulate authoritarian processes. While China does not hold a monopoly on authoritarianism, this open action from Hun Sen is more closely aligned with Chinese methods than what would be expected in an officially democratic nation like Cambodia.

The CNRP is the voice in Cambodia for greater liberalism and further integration into the global market. It has been critical of the ‘no strings attached’ donations from China, so Hun Sen’s plan to weaken it will likely be appreciated by Beijing. The removal of a key CPP critic from a position of political power through open authoritarian methods is a clear rejection of the liberal international norms promoted by the West.

Author: Andrew Shearer, University of Exeter
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China’s Anti-Corruption Efforts Pay Off: Analysis of 2016 Corruption Perception Index Sun, 26 Mar 2017 06:26:40 +0000  

By Mini vandePol, and Vivian W. Wu

China’s ranking on Transparency International’s (TI) 2016 Corruption Perception Index (CPI) continues to improve, moving up four places to 79.

Significance of the CPI

The CPI was originally introduced in 1995 as a composite indicator used to measure perceptions of corruption in the public sector in countries around the world. Since then, it has been used as an important gauge by companies in managing corruption risks when conducting businesses in foreign countries. The 2016 CPI was published January 25, 2017.

A country or territory’s score indicates the perceived level of public sector corruption on a scale of 0 (highly corrupt) to 100 (very clean). A country or territory’s rank indicates its position relative to the other countries and territories in the index.

Highlights of the 2016 CPI

TI said this year’s results “highlight the connection between corruption and inequality, which feed off each other to create a vicious circle between corruption, unequal distribution of power in society, and unequal distribution of wealth.” The latest CPI is a reminder for companies that rely on its rankings to review their global compliance programs and make regional adjustments. Companies should pay attention to those countries and regions that have dropped significantly in the their rankings and scores, and identify compliance risks that were previously undetected.

Some highlights of the 2016 CPI include:

  • More than two-thirds of the 176 countries and territories in this year’s CPI scored below 50 on the index scale of 0 to 100.
  • More countries declined than improved, and a majority of Asia Pacific countries are in the bottom half of the CPI.
  • China’s rank has continued to improve, moving up four places  to 79 from 83, and its CPI score increased by three points.
  • Hong Kong also improved, moving up…

Source : China’s Anti-Corruption Efforts Pay Off: Analysis of 2016 Corruption Perception Index

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China’s new commerce minister vows to relax FDI restrictions Fri, 24 Mar 2017 09:37:01 +0000

China’s new commerce minister, Zhong Shan, has put increasing foreign direct investment (FDI) attractiveness high up on his agenda, since he was named for the post on February 24 by president Xi Jinping.

Mr Zhong declared his intentions to remove restrictions against foreign companies and expand free trade zones (FTZs) as a way to attract further FDI, at a meeting with policymakers in Beijing in late February, just before the National People’s Congress, according to a report on the People’s Republic of China (PRC) State Council website.

Reforms suggested

Specifically, Mr Zhong has argued for further supply-side reform. This includes reducing restrictions against previously banned foreign enterprises, such as healthcare and educational businesses, which are referred to as “experiments” by the PRC.

“A total of 114 innovative ways to get things done have been duplicated as a result of experiments that have taken place in the country’s four FTZs, including Shanghai and Guangdong,” said Mr Zhong in the State Council report.

Regardless of a slowing economy, China remains a hotspot for FDI. In 2016, foreign investors poured a record $139bn into the economy, up by 2.3% from a year earlier, according to figures from UN trade and development body Unctad. However, despite…

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Thailand’s TPI Polene Power to raise up to $500m in IPO Fri, 24 Mar 2017 03:43:39 +0000 TPI Polene Power Pcl, Thailand’s largest producer of waste-derived power, plans to raise up to 17.5 billion baht ($500.4 million) in an initial public offering, in what could be the country’s largest IPO in more than a decade.

The company plans to sell up to 2.5 billion shares, or a 30 percent stake, at a rate of 6 baht-7 baht ($0.17-$0.20) per share, parent firm TPI Polene Pcl said in a statement to the stock exchange on Friday.

Of the total, up to 125 million shares will be offered to TPI Polene’s existing shareholders on March 22-March 24, and the rest will be sold to the public on March 24-March 29, it said.

The power firm has said the sale proceeds will be used mainly to finance capacity expansion.

TPI Polene Power runs four plants with a total installed capacity of 150 MW. Two of the plants, with a combined capacity of 80 MW, use fuel derived from refuse, while the other two generate power from waste heat.

Maybank Kim Eng Securities Pcl, Tisco Bank and CIMB Thai Bank are financial advisers on the IPO.


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