Fresh fears of a trade war between the world’s top two economies sent most Asian markets tumbling on Monday after the United States and China imposed tit-for-tat tariffs on billions of dollars of imports.
Energy firms were among the biggest losers as oil prices plunged ahead of a key OPEC meeting, where Saudi Arabia and Russia are expected to lift a two-year-old production cap.
Donald Trump’s decision to hit China with 25 percent levies was met with an immediate retaliation, moving the two closer to a trade war that could potentially batter the global economy.
The announcement came despite weeks of talks between the two sides.
The developments sent stocks into the red across Europe and on Wall Street, and Asian investors followed suit on Monday.
Tokyo ended 0.8 percent down, while Singapore sank more than one percent, Seoul dropped 1.3 percent and Manila tumbled 2.5 percent.
Wellington and Bangkok were both down but Sydney eked out a 0.2 percent gain.
Hong Kong and Shanghai were closed for public holidays.
“Many folks will tell you this isn’t a trade war. But when one side whacks a bunch of tariffs and the other side retaliates with its own set of tariffs against the other side, that looks very much to me like the battle has been joined,” said Greg McKenna, chief market strategist at AxiTrader.
“Whether it escalates is a different question.”
Oil prices sink
With traders fleeing to safer assets, the yen rose against the dollar, while the greenback rallied against most high-yielding currencies with the Australian dollar, South Korean won and Mexican peso all sharply down.
After losing around four percent last week, oil plunged again Monday as investors fret over Russia and Saudi Arabia’s expected move to ramp up output at an OPEC meeting that starts Friday.
The two major producers have kept a ceiling in place since late 2016, which has helped ease a supply glut and lift prices, which had fallen to multi-year lows.
“Russia has been aggressively affirming itself by adding oil to market ahead of the upcoming meeting and is pushing for a significant output hike, Saudi Arabia is suggesting for a modest increase and others are in favour of the status quo,” said Stephen Innes, head of Asia-Pacific trade at OANDA.
“While most industry observers are expecting a production rise, the magnitude and timing of the boost remain uncertain.”
Benjamin Lu, a commodities analyst at Phillip Futures Singapore, said crude was also being weighed by trade war fears.
“We expect for global trade tensions to weigh on prices sporadically as populist sentiments pervade the financial markets,” he said.
“Enhanced volatility can be expected… as markets worry about the prospect of weaker trade activity, with economic battle lines being drawn.”
In early European trade London rose 0.1 percent but Paris fell 0.3 percent and Frankfurt was 0.4 percent off.
Key figures around 0720 GMT
Tokyo – Nikkei 225: DOWN 0.8 percent at 22,680.33 (close)
London – FTSE 100: UP 0.1 percent at 7,638.09
Hong Kong – Hang Seng: Closed for a public holiday
Shanghai – Composite: Closed for a public holiday
Euro/dollar: DOWN at $1.1596 from $1.1606 at 2100 GMT on Friday
Pound/dollar: DOWN at $1.3270 from $1.3281
Dollar/yen: DOWN at 110.47 yen from 110.68 yen
Oil – West Texas Intermediate: DOWN $1.21 at $63.85 per barrel
Oil – Brent Crude: DOWN 68 cents at $72,76 per barrel
New York – Dow Jones: DOWN 0.3 percent at 25,090.48 (close)
— AFP

Google will invest more than half a billion dollars in China’s second-largest e-commerce company JD.com as part of a move to expand retail services around the world, the companies said Monday.
The announcement comes as US giant is pushing Google Shopping, a platform allowing customers to compare prices between different sellers, which poses a challenge to Amazon.
The firms will marry JD’s supply chain and logistics experience with Google technology to create “next generation” personalised retail in regions including Southeast Asia, the US and Europe, the joint statement said.
“This partnership with Google opens up a broad range of possibilities to offer a superior retail experience to consumers throughout the world,” JD.com’s chief strategy officer Jianwen Liao said.
Google will put $550 million in cash into JD.com and in return, the California-based company will receive 27.1 million newly issued JD.com Class A ordinary shares.
The shares are equivalent to a nearly one percent stake in the company, according to a JD.com spokesman.
Google chief business officer Philipp Schindler said the move will give customers “the power to shop wherever and however they want.”
However, the partnership is unlikely to affect Google’s status in mainland China, where Gmail, Google Search and Google Maps are all blocked in China.
“The announcement isn’t focused on China,” JD.com spokesman Josh Gartner confirmed to AFP.
Chinese internet users face fines or even jail for unfavourable social media posts. Authorities have further tightened internet controls in recent months, shutting down celebrity gossip blogs and probing platforms for “obscenity”.
In China, JD.com competes aggressively with e-commerce leader Alibaba, which runs the popular Taobao and Tmall shopping platforms.  — AFP

On a pot-holed street by Uganda’s sprawling central jail, young men stream into a luminous betting shop that stands out from the surrounding dingy grocery stores lit by paraffin lamps.
Inside, dozens of men clasp handfuls of betting slips as they huddle around a flat-screen television blasting out live commentary from the opening game of the 2018 World Cup in Russia.
Ronald Nyenje, a driver, is backing the hosts to win against Saudi Arabia. “I support Russia because they’re the hosts and they’ll win this game and the whole competition,” said the 25-year-old who staked 50,000 Uganda shillings ($13; 11 euros) on the curtain-raiser.
“I’ll try to watch every game of the World Cup,” said Nyenje, who gambles at the same betting shop every day.
Sports gambling has become a phenomenon across East Africa in recent years, driven by the ubiquity of satellite and digital television, and smartphones that enable online and app-based gambling.
“I feel very good when I’m betting,” said Innocent Opiyo, a 26-year-old bricklayer.
“Sometimes I bet because I just want to pass time. I win. I lose. I win. I lose. So I don’t know exactly if I have eaten them or they have eaten me, but I think I’ve eaten them,” he said, totting up a vague but optimistic mental ledger of his six-year contest with the bookmakers.
In just a few years, betting shops have become a feature of cities, towns and villages across Uganda.
And while the national side failed to qualify for the World Cup — which kicked off in Russia on Thursday — Ugandan fans are set to flood betting shops during the month-long competition.
Good/not good
“Betting is good, but also not good,” said Opiyo, acknowledging that a gambling addiction can cause you to bet money you don’t have.
Government efforts to regulate gaming have proved patchy.
The National Gaming Board, established in 2016, has few resources, said boss Edgar Agaba, and little idea even of the scale of the industry.
New laws on the location, opening hours and minimum age for betting are widely ignored and rarely enforced.
On a recent big game night a bookie was open late at night, in a busy market, and heaved with young men, many apparently under 18, thus breaking the rules in three different ways.
Eddy Wanyangha, 24, said he once won 250,000 Uganda shillings ($65; 56 euros) betting on a football match. He spent his winnings on a goat and hopes for more success during the World Cup.
“I take it as leisure,” he said, “but there are some people who take it as a job.”
Ivan Kalanzi, 30, has found a less risky way to cash in on the sports betting craze, running a specialist consultancy offering advice on how to beat the bookies.
He claimed to have thousands of clients in Uganda and among the far-flung diaspora, running his global operation from a computer in the back of a small sportswear shop in a shabby Kampala mall.
Betting with heart or head
Using social media groups and text message platforms Kalanzi tips thousands of subscribers on which games offer the best chance to overcome the odds, keeping tabs on form in leagues “from Albania, Armenia, Azerbaijan all the way to Zambia.”
Gamblers typically stake just 2,000 Uganda shillings ($0.50 dollars; 0.44 euros) but in a poor country like Uganda even small losses can quickly add up and the promise of a life-changing win encourages risky behaviour, according to researcher Sylvan Herskowitz.
With few functioning public services, problem gamblers commonly lack support.
But Kalanzi says he has a rule of thumb that excludes vulnerable clients: if you understand the odds system then, he reckons, “It’s most likely you understand the meaning of losing a bet.”
He predicts business will surge as the World Cup hots up but complains that with such a high-profile tournament the heart frequently rules the head.
“Most people think they know the results so they don’t come to me,” he said.
As an avid fan, Kalanzi is no different. When asked which team will win, he answers, “Brazil” without hesitation and not even a glance at his spreadsheets. — Michael O’HAGAN, AFP
 

Imports of US aircraft helped push Japan to a trade deficit in May, official data showed Monday, but experts said it was a temporary effect not linked to ongoing trade tensions.
Japan’s imports rose 14.0 percent in May from a year earlier, according to finance ministry data.
Exports also enjoyed an 8.0 percent rise but the overall effect was a net deficit of 578.3 billion yen ($5 billion).
The deficit was nearly three times the size of the figure last year and came after two consecutive months of surplus.
“The deficit came from a surge in imports from the United States,” said Takeshi Minami, chief economist at the Norinchukin Research Institute, noting a quadrupling of Japan’s purchases of US aircraft.
He also noted that crude oil prices rose strongly, pushing Japan’s import bills higher.
“It’s a temporary rise and is not linked to trade policies,” he said, ruling out the possibility that Japan was boosting purchases of US products as Washington adopts an increasingly protectionist trade policy.
“Exports will keep growing for a while but we should be cautious against protectionist moves, a possible slowdown in the robust US economy, and how emerging markets are faring in light of hikes in US interest rates,” Minami told AFP.
Overall Japanese imports from the US rose nearly 20 percent year-on-year, meaning its politically sensitive trade surplus with Washington fell 17.3 percent.
Meanwhile, Japan’s deficit with its biggest trading partner China shrank 10.4 percent with exports growing 13.9 percent.
Worries about a trade war are growing as Washington and Beijing exchange tit-for-tat tariff announcements.
Marking a departure from a decades-long, US-led drive for open and free trade, President Donald Trump has claimed that massive flows of imports to the United States threaten national security.

Malaysia was once a loyal partner in China’s globe-spanning infrastructure drive but a new government is now pledging to review Beijing-backed projects, threatening key links in the much-vaunted initiative.
Kuala Lumpur’s previous regime, led by scandal-mired Najib Razak, had warm ties with China and signed a string of deals for Beijing-funded projects, including a major rail link and a deep-sea port.
But the long-ruling coalition was unexpectedly turfed out of power last month by voters disgusted at allegations of corruption and angered at rising living costs.
Critics say many agreements lacked transparency, fuelling suspicions they were struck in exchange for help in paying off debts from a financial scandal which ultimately helped bring down Najib’s regime.
The new government, led by political heavyweight Mahathir Mohamad, has pledged to review Chinese deals seen as dubious, calling into question Malaysia’s status as one of Beijing’s most cooperative partners in its infrastructure push.
China’s ambitious initiative to revive ancient Silk Road trading routes with a global network of ports, roads and railways — dubbed “One Belt, One Road” — was launched in 2013 and is the economic crown jewel of President Xi Jinping’s presidency.
Malaysia, along with Beijing ally Cambodia, were seen as bright spots in Southeast Asia, with projects in other countries often facing problems, from land acquisition to drawn-out negotiations with governments.
“Malaysia under Najib moved quickly to approve and implement projects,” Murray Hiebert, a senior associate from think-tank the Center for Strategic and International Studies, told AFP.
Chinese foreign direct investment into Malaysia stood at just 0.8 percent of total net FDI inflows in 2008, but that figure had risen to 14.4 percent by 2016, according to a study from Singapore’s ISEAS-Yusof Ishak Institute.
However, Hiebert said it was “widely assumed” that Malaysia was striking quick deals with China in the hope of getting help to cover debts from sovereign wealth fund 1MDB.
Najib and his cronies were accused of stealing huge sums of public money from the investment vehicle in a massive fraud. Public disgust at the allegations — denied by Najib and 1MDB — helped topple his government.
Beijing’s plans derailed?
Malaysia’s first change of government in six decades has left Najib facing a potential jail term — and appears to have already unsettled Beijing’s plans in the country.
New prime minister Mahathir has announced a planned high-speed rail link between Kuala Lumpur and neighbouring Singapore will not go ahead as he seeks to reduce the country’s huge national debt.
The project was in its early stages and had not yet received any Chinese funding as part of “One Belt, One Road”.
But Chinese companies were favoured to build part of the line, which would have constituted a link in a high-speed route from China’s Yunnan province to trading hub Singapore, along which Chinese goods could have been transported for export.
Work has already started in Malaysia on another line seen as part of that route, and which had received Chinese funding — the $14-billion East Coast Rail Link, running from close to the Thai border to a port near Kuala Lumpur.
Mahathir has said that agreement is now being renegotiated.
Other Chinese-funded initiatives include a deep-sea port in Malacca, near important shipping routes, and an enormous industrial park.
It is not clear yet which projects will be changed or cancelled but experts believe axing some will be positive.
Alex Holmes, Asia economist for Capital Economics, backed cancelling some initiatives, citing “Malaysia’s weak fiscal position and that some of the projects are of dubious economic value”.
The Chinese foreign ministry did not respond to request for comment.
But a recent commentary in China’s Global Times, a nationalist state-run tabloid, warned Mahathir if he damaged the interests of Chinese companies, they had the right to seek compensation.
“The Chinese government will also take concrete measures to safeguard the interests and rights of Chinese enterprises,” it said.
Adding to China’s woes, Mahathir has a clear preference for Beijing’s rival Japan, and last week went to Tokyo for his first foreign trip since taking office.
During the visit, the 92-year-old signalled ties with Beijing would cool: “We will be friendly with China, but we do not want to be indebted to China.” — Sam Reeves, AFP

Donald Trump dangled the carrot of foreign investment in front of North Korean leader Kim Jong Un at their nuclear summit, but analysts say few will want to put money into one of the highest-risk business environments in the world.
The US president showed Kim a movie of bright lights, high-speed trains and soaring tower blocks — pitching a future that could be possible if Pyongyang gives up its weapons.
Optimists say that with mineral wealth, cheap labour, and a helpful geographical location, the North has huge potential.
But the history of overseas firms who have tried to set up operations in the isolated, impoverished country is a long and sorry one.
Rules that can change on a whim, bills that are never paid, and the threat of expropriation hang over foreigners who step into the wildest of wild east investment destinations.
For now, dozens of restrictions apply under the various sanctions regimes imposed on the North over its nuclear ambitions.
Joint ventures are banned by the UN Security Council, the European Union blocks financial transfers of more than 5,000 euros, and US regulations mean international banks are loath to enable transactions of any kind –- so much so that even humanitarian organisations struggle to fund their activities.
And even if they are lifted, there are major challenges to working in the North.
Infrastructure is poor, and analysts say corruption is widespread.
Crucially, said a diplomatic source in Pyongyang, “legal guarantees for business are very weak”.
‘Huge cultural gaps’
During the Sunshine Policy, a previous period of warmer ties, South Korean conglomerate Hyundai poured hundreds of millions of dollars into a tourist resort for Southerners to visit the scenic Mount Kumgang.
But the trips came to an abrupt halt when a North Korean soldier shot dead a woman from the South who strayed into a forbidden zone.
Many South Korean firms set up operations in the joint-venture Kaesong Industrial Complex where they employed cheap labour from the North, but Seoul closed the project in 2016 over Pyongyang’s weapons programmes.
Egyptian telecom firm Orascom poured hundreds of millions of dollars into setting up the North’s first mobile phone network, Koryolink, only for the government to set up a rival operator of its own.
The company was also unable to get its money out.
“I am taking all the hits,” Orascom’s billionaire owner Naguib Sawiris told Bloomberg last month. “I am being paid in a currency that doesn’t get exchanged very easily, I have put a lot of money and built a hotel and did a lot of good stuff there.”
Construction giant LafargeHolcim last year disposed of its stake in a North Korean cement plant for an undisclosed sum, nursing significant losses.
“Governance is weak, information is lacking and there are huge cultural gaps with local partners,” said Geoffrey See, founder of Choson Exchange, a non-profit that trains entrepreneurs and economic policymakers in the North.
The most successful foreign firms in the North, he added, focus on trading activities to avoid having assets in the country that are vulnerable to seizure.
‘Filthy wind of bourgeois liberty’
Kim undoubtedly wants to make his country better off. He declared earlier this year that having completed the development of his nuclear arsenal, “socialist economic construction” was now his top priority.
State media’s coverage of the Singapore summit included extensive pictures of the prosperous city-state, a port, and even Kim’s motorcade passing a Cartier advert -– images that would not have been shown in the past.
It was an indication of “permissible aspiration”, said an Asia-based diplomat.
The highly secretive North has been quietly bringing in reforms for several years, allowing private traders to operate in informal markets, giving state-owned enterprises some freedoms to operate, and turning a blind eye to private company operations.
The moves are reminiscent of China’s “reform and opening” under Deng Xiaoping, which propelled the country from a basketcase to the world’s second-largest economy.
Foreign firms have also begun to make inquiries since Pyongyang’s recent diplomatic thaw, says Michael Spavor of Paektu Consulting, who has been working with the country for 20 years.
“Our organisation has had much interest recently from investors interested in market research as well as face-to-face matchmaking with potential DPRK ministries and future partners,” he told AFP, using the official acronym for North Korea.
But the North has not officially embraced the market. At the last ruling party congress, Kim decried the “filthy wind of bourgeois liberty and ‘reform’ and ‘openness’ blowing in our neighbourhood”.
China has taken North Korean officials on study tours of Beijing, Shanghai and its coal-rich provinces to try to encourage them to follow its example, and diplomats say it is offering detailed development planning.
But they add that Pyongyang is wary of being too dependent on Beijing, and prefers to look to Vietnam for an example of how a smaller Communist country has been able to adopt capitalism while not weakening the authorities’ hold on power.
North Korea does have some advantages, says Gareth Leather, senior Asia economist for Capital Economics, pointing out natural resources including zinc, magnesite, iron and copper, low-cost labour, and an advantageous location.
But even if sanctions are lifted, he said, “it’s basically a police state and you have a long way to go to North Korea becoming a normal economy”.
“It’s going to take a very brave investor to venture in again.” — Sebastien Berger, AFP

A unit of Manila Water Co., Inc. received on Monday a “notice to proceed” to provide water and septage services in the town of Sta. Barbara, Pangasinan province with the passage of a municipal ordinance on the matter.
Manila Water told the stock exchange its wholly owned subsidiary Manila Water Philippine Ventures, Inc. (MWPV) was granted the franchise through Municipal Ordinance No. 2018-10, Serieis of 2018 for the provision of water supply and the improvement, operation, maintenance management, financing, and expansion of water supply facilities, and the provision of septage management in Sta. Barbara.
“The Municipality of Sta. Barbara is immediately adjacent to the Municipality of Calasiao in the Province of Pangasinan, where Manila Water has a Concession Agreement with the Calasiao Water District,” Manila Water said. — Victor Saulon

MRC Allied, Inc. may choose to participate only in the power plant component of the liquefied natural gas (LNG) facility it is studying to build, its top official said.
“We are given an option to just be part of the [power] generation,” Gladys N. Nalda, MRC Allied president and chief executive officer, told reporters after the company’s annual stockholders meeting on Monday.
However, the company is open to join the “entire chain,” she said, enumerating this to include an import terminal, regasifying facility, power generation and a distribution pipeline.
“The capacity is big and the partner is big so we are looking into the feasiblity — checking the place, looking at the costing, the suppliers, so medyo it’s something that needs to be studied for a long period of time,” she said.
She declined to disclose numbers for the power plant capacity because of a non-disclosure agreement that the company signed with its Chinese partner. She also declined to mention the project’s location.
“Hypothetically if I’m going to say yes, probably somewhere in Luzon because [of] logistics — kasi currently meron kami Luzon (because we have presence in Luzon),” she said. — Victor Saulon

Philippine National Oil Co.-Exploration Corp. (PNOC-EC) is studying the viability of taking over the Malampaya gas-to-power project when its present contract expires in 2024, an Energy official said on Monday.
Leonido J. Pulido III, assistant secretary at the Department of Energy (DoE), told reporters, that a study that PNOC-EC targets to complete this year seeks to answer two main technical issues relating to the project.
“The first part is, is it commercially viable? Is it more beneficial for the national government for PNOC-EC to continue the concession agreement?” he said.
Shell Philippines Exploration B.V. (SPEx). and consortium partners Chevron Malampaya LLC and PNOC-EC operate the Malampaya natural gas platform, which fuels several power plants in Batangas.
The gas-to-power project also supplies Pilipinas Shell Petroleum Corp.’s refinery and compressed natural gas refilling station. It delivers about a fifth of the country’s electricity requirements.
“The second part is, will it be commercially viable, as an additional source — it amounts to 1,000 megawatts (MW) worth of natural gas to the east of SC 38 — whether PNOC-EC will actually drill and extract that gas,” Mr. Pulido said.
However, Senator Sherwin T. Gatchalian, chairman of the Senate’s energy committee, expressed reservations about the government taking over the project, citing previous experiences in managing the metrorail and other public services. — Victor Saulon

BDO Unibank, Inc. has partnered with a Japanese regional bank to help Japanese businesses enter the Philippine market.
In a regulatory filing Monday, the Sy-led lender said Bank of Fukuoka, Ltd. (BoF), Japan’s third-largest regional bank, has chosen BDO as its partner-bank in the Philippines
The partnership, which was sealed through a memorandum of agreement, is aimed to service BoF’s clients who wish to expand it business or put up shops in the country.
BDO noted that the deal is the first time a Japanese regional bank (JRB) has partnered with a Philippine lender.
Founded in 1942, BoF has 170 branches and representative offices in Dalian, Shanghai, Hong Kong, Taipei, Bangkok, Singapore, Ho Chi Minh City and New York.
“Since 2013, BDO has sealed agreements with several JRBs strategically located in various prefectures of the world’s third-largest economy,” BDO said. — Karl Angelo N. Vidal

Senator Sherwin T. Gatchalian is looking to the importation of liquefied natural gas (LNG) to supplement the expected depletion of the Malampaya gas field, projected in 2024.
“Mauubos na ang Malapaya in 2024, so as early as now, pinag-uusapan natin na i-develop ang importation dahil malaking tipid ‘to sa ‘ting consumers,” Energy Committee Chair Senator Sherwin T. Gatchalian told reporters on Monday.
The senator recently concluded an inquiry on the Philippine downstream natural gas industry policy, which determined that importing natural gas is cheaper than using coal.
“For now, based on the DOE (Department of Energy), lumalabas na mas mura ang mag-import ng natural gas kaysa sa coal,” Senator Gatchalian said, adding that this would benefit consumers environmentally.
“Ang natural gas kasi masmalinis ‘to, almost 80% cleaner than coal, so mura na malinis pa. there’s now an incentive na i-develop ang natural gas sa bansa,” he said.
According to the DOE, Malampaya gas costs about P4.67 per kilowatt hour (kWh) and coal costs P5.49 per kWh, while LNG will cost P4.53 per kWh. — Charmaine A. Tadalan