January 23, 2018

ASEAN-focused China fund raising up to $3 billion for Silk Road projects: sources

https://www.reuters.com/article/us-china-private-equity/asean-focused-china-fund-raising-up-to-3-billion-for-silk-road-projects-sources-idUSKBN1FC0SE

Julie Zhu

HONG KONG (Reuters) - A quasi-sovereign Chinese fund focused on Southeast Asia is targeting raising up to $3 billion in a new dollar fund, adding to its firepower for planned investments under Beijing’s “Belt and Road” initiative, people close to the matter said.

A map illustrating China's silk road economic belt and the 21st century maritime silk road, or the so-called "One Belt, One Road" megaproject, is displayed at the Asian Financial Forum in Hong Kong, China January 18, 2016. REUTERS/Bobby Yip/File Photo

The China-ASEAN Investment Cooperation Fund (CAF), backed by the Export-Import Bank of China, is currently pitching the fund to prospective investors, they said. Its plan to raise $1 billion mainly from Chinese state-owned enterprises was already known, but the fund has now tripled the amount it is seeking.

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The planned capital-raising is the latest in a series by China’s state-backed firms and comes as the country’s landmark Belt and Road scheme has been plowing billions of dollars into global infrastructure projects.

Beijing has called on financial firms to develop overseas lending businesses to help connect China with old and new trading partners such as the 10-member Association of Southeast Asian Nations (ASEAN). China’s state-controlled banks have already responded by raising billions.

Introduced in 2013, the Belt and Road project is aimed at building a modern-day economic “Silk Road”, connecting China by land and sea to Southeast Asia, Pakistan and Central Asia, and beyond to the Middle East, Europe and Africa.

This would be the second dollar-denominated fund for CAF, which counts the World Bank’s International Finance Corporation (IFC) and sovereign wealth fund China Investment Corp (CIC) as investors in its first fund that has almost fully invested the $1 billion it raised.

A unit of state-owned construction and engineering company China Gezhouba Group said late last year that it would invest $150 million of the $1 billion that CAF was seeking..

CAF aims to secure the $1 billion from state companies in the first half of 2018, and is also looking to attract global institutional investors for the remainder, said the people.

It was not immediately clear what kind of returns the new fund hoped to earn or if existing investors including IFC and CIC would take part in the latest fundraising.

One of the people said state-owned enterprises would not face capital-control obstacles in investing in the fund, given CAF was set up under the direction of China’s State Council, or cabinet, and that it managed to successfully raise and invest its first fund.

CAF declined to comment while the EXIM Bank didn’t respond to requests for comment. All the people declined to be named as the fundraising plans were not public.

Established in 2010, one year after then-premier Wen Jiabao pledged to set up a $10 billion fund to provide financing for major projects in the ASEAN countries, CAF primarily invests in infrastructure, energy and natural resources in the region.

It typically invests $50 million to $150 million in single companies and prefers minority stake investments, according to its website. (www.china-asean-fund.com)

Its portfolio includes stakes in Philippines’ top shipping and logistics firm Aboitiz Transport Systems, Thailand’s largest deep-water port Laem Chabang Port and largest biomass power generator National Power Supply Public

January 22, 2018

India, Japan to introduce artificial intelligence, robotics in defence sector

https://m.economictimes.com/default_pwa.cms?article=62598893


By Indrani Bagchi,TNN | Jan 22, 2018, 09.37AM IST

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While the latest buzzword in international geopolitics, 'Indo-Pacific', might sound American, its actually Japanese in origin, having been articulated by Abe himself as far back as 2007.

NEW DELHI: India and Japan will work together to introduce artificial intelligence and robotics in the defence sector, the next level of strategic cooperation between the two Asian partners.

Kentaro Sonoura, Japan's state minister for foreign affairs and a close adviser to PM Shinzo Abe, told TOI in an exclusive chat, "You should expect to see increased bilateral cooperation between us to develop unmanned ground vehicles (UGV) and robotics."

The strategic sphere is where the bulk of India-Japan convergence lies. After the nuclear agreement was ratified by the Japanese parliament late 2017, Sonoura said India and Japan would be setting up a joint task force for commercial agreements by the end of January. With the legislation behind them, the Japanese minister said Tokyo was keen to get this going. "The two PMs agreed to launch a working group, which will work on cooperation between nuclear companies. Japan's intention is to start this quickly, possibly by the end of this month," he said.

With an aggressive and expansionist Chinagrowing as a challenge to both India and Japan, the two countries are increasingly looking at the world from a similar lens. While the latest buzzword in international geopolitics, 'Indo-Pacific', might sound American, its actually Japanese in origin, having been articulated by Abe himself as far back as 2007.

In 2018, Japan's is aiming for a "free and open Indo-Pacific", a theme Sonoura expounded on at the recent Raisina Dialogue. This, he told TOI, was a coming together of Japan's Indo-Pacific policy and India's Act East policy. "We need to share the importance of rule of law and freedom of navigation among related countries. The next step is infrastructure development based on global standards, so that connectivity among countries is increased. The third step would be maritime law enforcement and disaster management that would ensure the stability and prosperity in the Indo-Pacific region. Therefore, we would like to connect and combine our Indo-Pacific strategy and India's Act East policy as a one big picture. That's the synergy we seek," Sonoura said.

This is the kind of grand strategy that incorporates a stronger bilateral relationship as well as a multilateral one, between Japan-India-US, Japan-US-Australia and the Quadrilateral, Japan-US-India-Australia, seeking to tilt the strategic balance away from China.

Working with India in the quadrilateral, Sonoura said, the aims were slowly crystallising. "Among these four countries, we have the same standards in terms of maritime strategy and basic values. So it's important to realise these values — non-proliferation, humanitarian assistance and disaster relief. Its important to utilise the strengths of these countries and use it. Rather than frameworks, its important what we can do — to create concrete results which should be visible to the world," he said. For India, the key aims of the quadrilateral is to come together on non-proliferation and on freedom of navigation.

To counter China's growing influence in India's neighbourhood, India has encouraged the presence of Japan and the US in South Asian countries, actions that might have elicited mild protests earlier. Consequently, New Delhi was remarkably quiet when Japanese foreign minister Taro Kono recently visited Pakistan, Maldives and Sri Lanka, increasing Japanese presence in these countries. Japan has already ramped up its involvement in Bangladesh and Myanmar, both countries on China's radar.

Questioned on this, Sonoura said, "Foreign minister Kono visited Maldives for the first time and Sri Lanka for the first time in 15 years. Last year I visited Mauritius, Madagascar, Kenya and Mozambique. If you place this within the rubric of Japan's Indo-Pacific strategy, you will get the larger picture."

In Islamabad, Sonoura said, the Japanese message was clear that Pakistan had to take action on terrorism and terrorists. "With Pakistan, we have an older relationship. But in terms of counter-terrorism, our foreign minister told the Pakistanis they need to do more," he said.

(This article was originally published in The Times of India