THE United States can export “Reaper”-style and other advanced military drones more easily following a reinterpretation of its export control policies approved by Secretary of State Marco Rubio, the State department announced on Monday.

Drones will now be treated like fighter jets, such as the F-16, rather than missile systems, allowing the US to sidestep the 35-nation Missile Technology Control Regime (MTCR) agreement it signed in 1987 and enabling drone sales to countries like the United Arab Emirates and Eastern European nations that have struggled to acquire America’s best unmanned aerial vehicles.

More immediately, the change unlocks the sale of more than 100 MQ-9 drones to Saudi Arabia, which the kingdom requested in the spring of this year and could be part of a $142-billion arms deal announced in May. US allies in the Pacific and Europe have also expressed interest.

The new policy lets large drone manufacturers General Atomics, Kratos, and Anduril have their products treated as “foreign military sales” by the State department, allowing them to be easily sold internationally.

The MTCR agreement was signed to curb long-range missile sales, and military drones that proliferated years later were considered to be covered by the agreement because they can fly far and carry weapons.

US drone manufacturers are facing stiff competition overseas, especially from Israeli, Chinese and Turkish rivals who often sell under lighter or no restrictions. — Reuters

HONG KONG — Foreign investors are plotting a return to China’s stock markets in a big way three years after pulling back and terming them uninvestable, encouraged by the tech opportunities on offer, and a growing demand for diversification beyond U.S. assets.

Progress in China’s adoption of artificial intelligence and its development of semiconductors and innovative drugs this year has given comfort to global investors that the Sino-U.S. trade war and Washington’s tech export bans have not deterred innovation in the world’s second-biggest economy.

The U.S.-China tariff truce and a domestic monetary easing environment have further boosted sentiment. As a consequence, the Shanghai Composite index touched a decade high last week while Hong Kong stocks hit a four-year high.

The changing sentiment of foreign investors could potentially add fuel to the market rally, which has so far been mainly driven by domestic players.

Foreign early birds are already back in China, lured by this year’s bull run and as they seek diversification from crowded U.S. assets, said Brett Barna, a former hedge fund manager who now manages two New York-based single-family offices.

“China is interesting because it’s very uncorrelated to the rest of the world, at least the onshore A-share market,” Barna said, adding he plans to set up an investment platform that would allow U.S. and European capital to access China’s capital markets.

Data on fund launches and flows illustrates the growing enthusiasm for a $19 trillion Chinese stock market, including Hong Kong.

August marked the biggest monthly buying of China stocks by global hedge funds in six months, according to a report by Morgan Stanley, which did not detail numbers.

Morningstar data showed the number of emerging market ex-China equity fund new launches slid to eight in 2025 versus 21 in 2024 and 16 in 2023. That meant demand for emerging market investments that did not include China had cooled substantially this year.

“A year ago, people wanted to exclude China from indices. Now, China is seen as a standalone asset class (they cannot ignore),” said Zheng Yucheng, chief investment officer of the China fund unit of Allianz Global Investors.

MORE EVIDENCE
The anecdotal evidence is also piling up.

Polar Capital, a London-based $20 billion asset manager, pivoted to a positive stance on China in late 2024 from underweight and has further increased the China allocation to over 30% from the low 20% range within its emerging market portfolio this year, said its fund manager Jerry Wu.

The firm’s annual conference in February this year attracted a full house of 55 clients to the China session, more than double the attendance in 2023, he said.

There is “a revaluation of Chinese innovative assets” triggered by DeepSeek’s breakthrough, said Wu, referring to the creator of the highly cost-efficient AI model that rivals ChatGPT. He said momentum has picked up across the board, from AI to biotech and robotics.

Benjamin Low, senior investment director at investment firm Cambridge Associates, said his team has received some 30 client inquiries about searching for China funds this year, in a sharp contrast to the trough in 2023 when there were very limited queries about China-focused mandates.

Many non-Asia-based allocators are planning trips to China and Hong Kong later this year to explore investment opportunities, with some for the first time since COVID, he said.

To be sure, some of China’s long-standing problems are persisting. Its broad economy remains mired in weakness, as indicated by August factory output, retail sales data and some other indicators.

Foreign direct investment in the first five months of 2025 slumped 13.2% from the year-earlier period, forcing China to unveil new measures in July to reverse the decline.

The fragile economy is one of the main reasons that, while early movers are coming in, it has not yet translated into meaningful long-term capital inflows.

CLSA chief equity strategist Alexander Redman said the deflationary pressure in the economy is preventing him from overweighting the entire market.

And Wu of Polar Capital said the AI boom has to benefit the broader economy to sustain the rally beyond 2025.

Foreign investors are now in a “rerating” phase, focusing on China’s long-term competitiveness, said Cheng Yu, a portfolio manager at the Allianz China fund unit.

“Foreign capital is standing at the door and watching. They haven’t stepped in yet — but are at least thinking about coming back.” — Reuters

JAKARTA — Indonesia on Monday announced a new economic stimulus package worth 16.23 trillion rupiah ($989 million), including food assistance and an infrastructure building programme that could provide temporary work for more than 600,000 people.

The stimulus measures will be implemented in the fourth quarter of 2025, the country’s chief economic minister Airlangga Hartarto told reporters, adding that some measures would be extended to 2026.

Southeast Asia’s largest economy grew 5.12% annually in the second quarter, its best growth rate in two years, but some policymakers said there were signs it was slowing in the subsequent quarter.

“With this stimulus package, we hope we could still reach the 5.2% economic growth target this year,” Airlangga told reporters after holding a meeting with the president.

The government will give 18.3 million households 10 kilograms of rice in the fourth quarter, remove personal income tax for workers in the tourism sector and allocate 5.3 trillion rupiah for a “cash for work” scheme for more than 600,000 people in the September to December period, Airlangga said.

“Cash for work” schemes usually involve providing daily wages to employ people, mostly from rural communities, to work on infrastructure projects like roads and bridges.

The stimulus package also included a paid internship programme for 20,000 university graduates and a 50% discount to policy payments for state-provided work injury insurance for ride-hailing motorcycle taxi drivers and truck drivers, Airlangga said.

The removal of personal income tax for certain sectors and the insurance scheme will be extended to 2026, Airlangga said.

Income tax on small businesses was supposed to rise to 1% of turnover next year, from 0.5% now, but Airlangga said the government has decided to maintain the current rate until 2029.

The government will also launch a replanting programme on 870,000 hectares (2.15 million acres) of plantations for commodities such as sugar cane, cocoa, coffee, cashew, nutmeg and coconut in 2026, a programme that could create 1.6 million new jobs, Airlangga said.

Jakarta will also introduce discounts on airfares for year-end holiday trips, Airlangga added, without providing more details.

Finance Minister Purbaya Yudhi Sadewa expected no impact on the forecast for the 2025 budget deficit from the new measures. The latest deficit forecast was 2.78% of GDP.

Housing Minister Maruarar Sirait also said the government through state banks will disburse 130 trillion rupiah worth of construction loans for certain property developers and small businesses to scale up their stores.

Maruarar added the government will cover 5% of the annual interest cost of the loans, which are part of efforts by the Prabowo administration to provide 3 million affordable homes annually and create more jobs. — Reuters

NEW YORK/TOKYO — The Japanese founder of fashion brand Uniqlo said on Monday the US may bear the highest price from the impact of tariffs on global trade.

Tadashi Yanai, Japan’s richest man and the chief executive of Uniqlo operator Fast Retailing 9983.T, has been outspoken on the potential economic damage from wide-ranging tariffs imposed by the administration of US President Donald Trump.

Yanai reiterated that sentiment on the sidelines of a Uniqlo event in New York City, where the company was promoting its LifeWear clothing and art collaboration with Japan’s Toray Industries 3402.T and The Museum of Modern Art.

“I’m afraid the world could (go) bankrupt,” Yanai said through a translator. “America is the one that could suffer the most,” he said, without elaborating.

Fast Retailing is an apparel powerhouse throughout Asia, and is charting an aggressive growth campaign in Europe and North America.

In July, the company said higher US tariffs would start impacting its American operations significantly from later this year and it planned to raise prices to mitigate the blow.

The majority of Uniqlo products sold in the US are produced in Southeast Asia and South Asia. — Reuters

BRUSSELS, Sept 15 (Reuters) – The European Union does not expect to reach an agreement on its new UN-mandated climate target in time for a key deadline this month, and has instead drafted plans to submit a temporary goal, which could change later, an EU negotiating document seen by Reuters showed.

EU countries are struggling to reach a deal on their new climate target for 2040, which has derailed plans for the bloc to submit a 2035 target to the United Nations by a deadline this month for all countries to do so. The EU had planned to derive its 2035 climate target from the 2040 goal.

The draft EU document, seen by Reuters, showed the bloc is now instead considering submitting a “statement of intent” to the UN about what its 2035 goal will be – indicating it will be between a 66.3% and a 72.5% emissions reduction by 2035, from 1990 levels.

The EU will decide its final 2035 target later, after it reaches a deal on its 2040 climate goal, the document said. EU countries’ ambassadors will on Tuesday discuss the draft, which could still change during the negotiations.

The move aims to avoid the EU being empty-handed at the UN general assembly next week, where UN Secretary-General Antonio Guterres has asked countries to announce their climate targets, to drum up momentum for the global COP30 climate negotiations in November.

But it leaves open the question of how ambitious the EU’s final target will be – and increases the likelihood that the EU will lag behind other major emitters, including China, in setting its new climate goal.

Manon Dufour, an executive director at think tank E3G, said the plan could allow the EU to agree on a more ambitious target later, ahead of COP30 – but that it raised questions about EU leadership on climate change.

“It does very little to dispel doubts about the EU’s domestic transition, or galvanise global partners ahead of the UN General Assembly, in such a critical year for global climate action,” she said.

The higher end of the target range reflects a pathway towards a 90% emissions reduction by 2040 – which is what EU countries are negotiating as their 2040 climate goal, the document said.

The lower end is calculated by drawing a straight line between the EU’s existing 2030 and 2050 climate goals.

Countries including Poland have backed a range starting at the lower end. — Reuters

GENEVA – A landmark agreement to curb billions of dollars in subsidies contributing to overfishing came into force on Monday, the World Trade Organization said – a move activists hailed as a step towards helping global fish stocks recover.

It was the first agreement to take effect at the WTO since 2017 after years of stalled debates and infighting on top of, more recently, a surge in US tariffs that left some critics asking whether the Geneva-based body had a future.

The formal ratification by Brazil, Kenya, Tonga and Vietnam on Monday meant the deal, first agreed in 2022, now had the required support of two thirds of members, a WTO spokesperson said.

Governments are now prohibited from providing subsidies for overfished stocks and for fishing in international waters beyond their jurisdictions. Poorer states will be able to access a fund to help ease them into the deal.

“Fish stocks around the world will have a chance to recover, benefitting local fishers who depend on a healthy ocean,” Megan Jungwiwattanaporn from the Pew Charitable Trusts said.

Governments around the world pay out roughly $35.4 billion annually to their fishing fleets, including fuel handouts that allow them to fish in distant oceans, a 2019 study in Marine Policy showed. It listed the top five subsidisers as China, the EU, the United States, South Korea and Japan – though not all of them are within the scope of the WTO deal.

Negotiations on further fishing rules covering divisive issues excluded from the first deal have floundered, as India and other developing economies seek carve-outs that many other states see as unworkable.

The first part of the agreement that came into force on Monday took more than 20 years of negotiations and will expire in four years if more comprehensive rules are not agreed.

Director-General Ngozi Okonjo-Iweala said in an interview earlier this month that she saw grounds for optimism that the body could either conclude the talks or find a way to stop the first deal from expiring. — Reuters