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Sunday, February 17, 2019

2 young S’porean hawkers close Chinatown stall after 1 year of making less than S$1k per month each

Tanya Ong | February 17, 01:36 pm

After a $30k initial investment, it was simply not sustainable for them.

It is tough being a hawker in Singapore’s cutthroat F&B industry.

Sutachi to close

In a recent Channel NewsAsia report, two Singaporean hawkers, 32-year-old Gay Yu Ting and 28-year-old business partner Alex Ho have decided to close shop after making substantial losses over a year.

Both of them invested S$15,000 of their own savings each into the venture to open Sutachi in Dec. 2017.

Sutachi sells Japanese-Italian fusion food at Chinatown Complex, with one rice bowl costing between S$5 and S$7.50.

According to Gay, business was initially brisk for the first three months or so.

After that, however, the stall was not making enough money for the business to be sustainable.

Costs S$8,000 monthly to run the stall

Gay listed the high costs of running the hawker stall:

  • Rent, utilities, cleaning services: S$1,500
  • Ingredients: S$2,000 to S$3,400
  • Monthly salary of both of them: S$2,000 each

The total monthly expenses came up to around S$8,000 — meaning that they would have to sell 1,3000 rice bowls a month:

“With the expenses, it comes up to almost S$8,000. The average price of our food here is S$6. To hit S$8,000, we’ll have to sell about 1,300 rice bowls a month. It’s about 60 day. When we started the stall, we agreed that our daily target is 50 to 60 bowls or about S$500 a day.”

When the stall could not cover their salaries of S$2,000 each, they took pay cut and each took home around S$1,000, or less.

“We have never taken a full salary in the last 14 months,” she said.

The duo is not the first to highlight the costs of running a hawker business.

Last year, A Noodle Story posted a breakdown of the cost of their ingredients to explain how artificially depressed prices come at the expense of hawkers:

And more recently, Li Ruifang, a third-generation hawker, also spoke out against Singaporeans who complain about the price of hawker fare:

Social enterprise hawker centres

The topic of hawker centres in Singapore is a contentious one given, how more hawkers are finding it increasingly difficult to stay afloat with the low profit margins.

In a bid to help protect Singapore’s hawker culture, social enterprise hawker centres (SEHCs) were introduced by the government.

However, hawkers have faced numerous challenges, like a lack of visitors to the hawker centre:

High miscellaneous costs are also a problem.

Gay and Ho told CNA that they considered opening a stall in a social enterprise hawker centre, but found it too expensive.

They were quoted about S$4,000 in monthly costs to run a stall at a SEHC, including rent, conservancy charges, cleaning fees and rental of a cashless payment system.

On top of the S$4,000, they still had to consider food costs, salaries, and their utility bill.

Other initiatives to support hawkers

Other than SEHCs, Senior Minister of State for the Environment and Water Resources Amy Khor has previously highlighted other government initiatives, such as a productivity grant, an incubation stall programme, and a hawker business management course.

The incubation stall programme came out two months after Gay and Ho started Sutachi. In the CNA interview, Ho said:

“If we started our business later, we could have applied to the programme. Maybe it will help to cut some losses.”

Nevertheless, the duo felt that Sutachi was a good opportunity for them to learn about the hawker trade:

“I don’t think we failed. I take it as one year’s school fees. We still got to learn. We were losing money but we are happy that we managed to stay afloat for a year without having to top-up money or take loans.”


Top photo composite image, from Sutachi’s Facebook page & Joshua Lee.


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Belt and Road: How Mega Project of Six Magical Corridors Spurs Economic Growth

Belt and Road: How Mega Project of Six Magical Corridors Spurs Economic Growth

Boonyong, a Thai rice exporter, looks forward to lowering transport costs when a 845-km rail network connecting China and Thailand gets completed. Currently, his rice products are delivered by road and sea, which takes about three and five days, respectively. 

“It will only take us around 18 hours to send rice to China by train, with the freight cost lowered to about one-third of that of road or sea transport,” said Boonyong, a Thai businessman who sells rice to China at an annual profit of over 50 million yuan ($7.68 million). 

Through B&R, China wants to synchronize nearly 4.4 billion people, over 60-countries, take control of 30% of the global economy and a total of $2.1 trillion of gross production focusing infrastructure, trade, policy, finance, and people. 

In 2013, China’s President Xi Jinping announced Silk Route Economic Belt (SREB) and the 21st century Maritime Silk Route (MSR) during his visits to various states. The composition of these two initiatives was named Belt and Road or “δΈ€εΈ¦δΈ€θ·―” or “YΓ­dΓ iyΓ­lΓΉ” in Chinese. 

Silk Road Economic Belt (SREB) is planned to link China with Europe through central and western Asia; and the 21st Century Maritime Silk Route (MSR) is intended to connect southern China with South East Asia and Africa by sea. 

China is mulling six economic corridors to give a strong impetus to integrated economic growth between Eurasia and Africa: 

Corridors are set to run through China-Mongolia-Russia, New Eurasian Land Bridge, China-Central and West Asia, China-Indo-China Peninsula, China-Pakistan, and Bangladesh-China-India-Myanmar, said vice premier Zhang Gaoli. 

China-Pakistan Economic Corridor (CPEC) is the first of six corridors to start construction. This “fate changer” project is deriving a huge $51 billion investment in infrastructure, energy, and railway along with creating thousands of job and investment opportunities. 

It is about 20% of Pakistan’s GDP, divulges the scale and scope of the project. The whole project could add up to about 4.5% to Pakistan’s GDP, enlarging an overall GDP growth of 9% of the country. 

The construction of CPEC is being progressed on fast track basis and just about half of the project has already completed. Keeping in the significance of CPEC for both China and Pakistan, special troops have been deployed for its security, overseen by Pakistan armed forces. 

Gwadar Port, core of the CPEC, would help China to transport oil of $200 million/day ($73 billion/annum) from over 100-days to just about 30-days, besides other trade and strategic advantages. Gwadar, 18m, is the deepest port (9m; nearly double of Jebel Ali) in the world and could facilitate an 120-births or ships against Jebel Ali 67-births. 

We could imagine that if Jebel Ali Port with 9m depth and 67-births can make GCC grow to such extent, how greatly Gwadar Port with 18m and 120-birth can lead to Pakistan growth. 

70-countries have actively participated in scheme and 30-countries have already signed cooperative agreements with China to build B&R jointly. There are around 900 deals in negotiation valued at $890 billion, including a rail link between Beijing and Duisburg, a transport hub in Germany. 

China is expected to invest an estimated sum of eye-watering $900 in 60-countries included in the program to shore up road, rail, and maritime trade by creating economic corridors. Infrastructure construction in Asia would require an annual investment of around $730 billion from 2015 to 2020. 

It has been financed by Silk Road $40 billion, Asia Infrastructure Investment Bank (AIIB) $100 billion, and the incorporation of New Development Bank (formerly BRICS Development Bank) with an initial capital of $50 billion and to be increased up to $100 billion. B&R is backed by beefy China’s foreign exchange reserves valuing at about $3.2 trillion as of August 2016. 

Chinese Ministry of Commerce tells that in 2015, Chinese enterprises invested nearly $15 billion in 49-countries within the framework of Belt and Road cooperation, a year-over-year increase of 18.2%. 

In the next five years, China’s imports are expected to exceed $10 trillion, outwards direct investment (ODI) to reach $500 billion, and Chinese outbound tourist visits will also rise to 500 million. 

Belt and Road has a great potential to bring total revenue of $200 billion in tourism to countries engaged. In an ongoing tourism festival, a tourism official said that 150 million Chinese tourists are expected to visit Belt and Road countries in the next five years. 

“Another 85 million tourists from those countries are expected to visit China, bringing revenue of up to $110 billion, he said at the Silk Road International Tourism Festival in Lanzhou, Gansu Province.” Between China and B&R countries, over 25 million tourists travel annually and the market is anticipated to expand quickly as the projects link more than 60-nations. 

China is facing acute industrial over-capacity and OBOR provides a great opportunity to block this monster dilemma. In 2014, China signed 44% of its new engineering projects with Belt and Road countries and the figure has escalated to 53% in the first 05-months of 2016. 

During the first eight months of 2016, China’s trade with Belt and Road countries have surpassed $600 billion, 26% of China’s total trade volume. For the same period, China has invested up to $10 billion in Belt and Road countries through AIIB and Silk Fund. 

Deputy Head of Ministry of Commerce said that Chinese companies have established over 50-trade and economic cooperation zones in B&R countries, investing over $15.6 billion, earning host countries tax revenue of $900 million and creating 70,000 jobs. 

Trough B&R, China visualizes “more capital convergence and currency integration” and gradually lessening dependence on US dollar. The B&R countries will be pushed to trade in renminbi heading to yuan internationalization. 

Some countries such as Russia, Mongolia, Kazakhstan, Uzbekistan, Vietnam, and Thailand are already broadly using renminbi for trade. “By the end of 2014, offshore renminbi deposits amounted to ¥1.6 trillion and offshore renminbi bonds reached ¥350 billion – a trend supported by the belt-road initiative. Moreover, this initiative calls for establishing a renminbi-nominated Asian bond market." 

Targets 6.5% GDP Growth, 25-million New Jobs, and Reducing Poverty by 70 million 
In 13th Five Year Plan, President Xi Jinping targets 6.5% annual GDP growth. Close down middle-income economic trap, raise annual per capita income to $12,600, create 25 million new jobs, and reduce poverty in rural areas by 70 million through urbanization policies. 

According to China Bureau of Statistics, China’s GDP grew by 6.7% on y-o-y in first three quarters of 2016, to reach $7.87 trillion. 

Foreign trade declined for the same period by 1.9% to $2.61 trillion; exports dropped by 1.6% ($2.14 trillion) and imports plummeted by 2.3% (7.47 trillion yuan). 

However, China continues to retain its global leading position on trade in goods with a rise in global market share from 11.2% in 2013 to 13.8% in 2015. 

Foreign direct investment in (FDI) shoed a growth of 6% in 2015 and reached at $136 billion, ranked in top-3 in world, UN report says. 

Last year, in December, President Si announced at Johannesburg Summit in South Africa 10-major China-Africa cooperation plans worth of $60 billion in the next three years. 

Vice-Foreign Minister Zhang Ming said at a news conference that China and Africa have signed at least 243 cooperation agreements of various kinds worth $50.7 billion since the summit. 

“Among these agreements, Chinese companies’ direct investment and commercial loans to Africa surpass $46 billion, accounting for 91 percent of the total volume,” he said. 

At the close of 2015, China reported total debt of 168.48 trillion yuan ($25.59 trillion). However, Li Yang, a Chinese expert is convinced that this debt is controllable and China would not suffer from debt crisis as the government owns enough assets to handle debt risk. 

Li said that even taking the debt of local governments’ financing platform into account, the amount of total government debts at the end of 2015, reaching 56.8%, was still below the warning line of 60% set by the European Union. 

In contrast, the current debt ratio of the Japanese government has surpassed 200%, and that of the US government and French government is over or around 120%. 

Chinese capital goes beyond Belt and Road

If Belt and Road needed a boost in momentum, it came in the middle of 2017 when the Chinese leadership met hundreds of representatives of foreign governments, including 29 heads of state, at a forum in Beijing to discuss progress and map the direction of the programme for the coming two years.

Addressing international concerns over the geopolitical implications of the scheme, which is now widely seen as the cornerstone of Chinese foreign policy, topped the agenda. 

These concerns were summed up by India, which did not send a representative to the forum. The Indian government has made little secret of its displeasure over one of the most high-profile Belt and Road projects: the China–Pakistan Economic Corridor, including the development of the port of Gwadar. Explaining the south Asian power’s lack of attendance at the event, a government representative said, “No country can accept a project that ignores its core concerns on sovereignty and territorial integrity.”

Beijing used the forum to respond to negative reactions to Belt and Road infrastructure projects. Some of these developments are large enough to have deeply transformative impacts, including significantly raising China’s political influence in the countries and regions where they take place.

The sale of land at Hambantota in Sri Lanka for the development of a port city is perhaps the most high-profile recent Belt and Road deal to become mired in controversy. The Sri Lankan government’s proposal to sell the rights to Chinese state-owned interests on a 100-year lease stirred local sentiment to a level that threatened to completely undermine the project.

Hambantota is located about 250 km southeast of the port of Colombo. Export–Import Bank of China (China Exim Bank) originally provided a loan of more than USD1 billion for the development of the port, which is being constructed by China Communications Construction Company. 

The Sri Lankan government said it needed to hand over the facility to China on an extended lease because debt instalments and interest payments on the original loan were eating up one-third of the revenue of the Sri Lankan Ports Authority.

Various local groups, including politicians and unions, objected to the deal, saying it effectively amounted to the creation of a Chinese colony in the country. However, the sale went ahead as planned, with Hong Kong-listed China Merchants Port Holdings (CMPort) acquiring an 85% stake in the port for USD1.12 billion.

In his opening remarks at the forum, the Chinese president, Xi Jinping, focused on the significant benefits of Belt and Road projects in terms of filling infrastructure gaps in developing economies. He introduced five basic principles of Belt and Road that stress the initiative as a driver of peace, prosperity, people-to-people contact, and cultural exchange, as well as being a catalyst for trade, investment, and digital innovation. More than USD12 billion in development aid for countries along official Belt and Road routes was promised, separate from funding committed for infrastructure projects.

The focus on the principles and the promise of aid points to a more sophisticated approach by the Chinese leadership to engagement with foreign governments and people, which makes some effort to accommodate political, social, cultural, and economic concerns. This is new territory for China and an area in which its Communist Party leadership has limited experience.

Despite challenges with certain projects, the forum clearly demonstrated the continuing high level of interest in Belt and Road. The heads of state who attended the forum included Russian president Vladimir Putin, Indonesian president Joko Widodo, Malaysian prime pinister Najib Razak, and Philippine president Rodrigo Duterte. 

Outside the forum, an ongoing and sustained effort on the part of numerous governments around the world – and their maritime administrations and ports – to court Belt and Road funding and projects is evident. 

Next to allaying concerns over the effects of the projects, Xi’s opening remarks made clear that the focus of the programme would stay with the development of infrastructure linking Belt and Road countries with China, including ports, maritime and inland water transport, railways, and roads.

Additional funding

An additional USD113 billion was announced in funding for projects. This included an increase of USD14.5 billion in the pledged capital of USD40 billion for the Silk Road Fund and an additional allocation of USD43.5 billion by domestic Chinese lenders specifically for Belt and Road projects. China’s two main policy banks, China Exim Bank and China Development Bank, also pledged new dedicated lending worth USD36.3 billion for ‘overland’ Belt and Road projects. 

Much of the lending for Belt and Road projects only started in 2016 and the amount of Chinese capital that has actually made its way to these projects is still relatively small.

According to Washington’s Brookings Institute, the capital that left China by the end of 2016 went to less risky and more developed markets than those on the official Belt and Road list. A significant amount of funding is also going to less developed but resource-rich countries that are not on official Belt and Road routes.

“China is a very significant funder of infrastructure in the developing world, but it is happening everywhere, not just along the Belt and Road,” said Brookings Institute economist David Dollar. “There is significant Chinese investment in risky, non-OBOR [One Belt, One Road] countries such as Angola, the Democratic Republic of the Congo, and Venezuela. The common theme is that China has been willing to invest in risky environments in search of natural resources. So far, OBOR has not been an important factor in the allocation of [outward direct investment].”

The policy banks have also been lending heavily to non-Belt-and-Road markets, such as Latin America, and it is clear that the large port operators are not restricting their investments to Belt and Road routes. 

CMPort, a major implementer of Belt and Road policy, recently outlined its intention to create a sizeable footprint in Latin America. In September, it purchased Brazil’s TCP group, which operates the container terminal concession at the port of ParanaguΓ‘. The port has an annual capacity of 1.5 million teu, which will be increased to 2.4 million teu upon completion of an expansion scheduled to finish in the second half of 2019.

“The acquisition of TCP will allow the group to expand its business to the Latin America region and further consolidate its position globally,” the company said in its statement announcing the deal.

“Furthermore, the investment will provide the group the opportunity to make use of the marine transport hub of TCP to develop its logistics network, export/import and industrial zone and potential residential projects, and related financial service platforms, allowing for greater commercial synergies within the group.”

The expectation is that funding for Belt and Road projects will gear up over the course of next year. Project lending by the three multilateral development banks that support the programme – the Asian Infrastructure Investment Bank (AIIB), the New Development Bank (created by the BRICS in 2014) and the Silk Road Fund – started in 2016. 

The AIIB has a founding membership of 57 countries and financial firepower of up to USD100 billion and the New Development Bank has a total authorised capital of USD100 billion. Following the announcement at the Beijing forum, the Silk Road Fund has pledged capital of USD44.5 billion.

The Chinese government is keen to track and emphasise the global impact of the programme, and set up a series of indices to do just that in July. The Shanghai Shipping Exchange indices cover shipping and rail and include a trade volume index; a freight volume index; and a maritime Silk Road freight index that separately tracks coal, minerals, crude oil, and containers. 

“The purpose is to track trade and investment activity between China and Belt and Road countries to help assess the effectiveness of China’s efforts to open up,” said Beijing-based Xu Yating, a China economist with IHS Markit.

Southeast Asia to benefit

From a geographic point of view, southeast Asia is one of the regions that has benefited the most from Belt and Road. This is particularly true in terms of Chinese infrastructure investment, notably in the ports and the shipping sector.

The strong focus of the programme on the region is due in large part to its proximity to China, rapidly expanding export sectors in several of its economies, and the strategic location of some of its countries close to the Strait of Malacca. The region’s strong natural resource base and favourable demographics are also important factors.

Seven out of 10 heads of government from the Association of Southeast Asian Nations (ASEAN) attended the Beijing forum. Many of these countries are in strong export growth mode and keenly aware that in order to reach targets and compete well enough to keep growing, they need to reduce logistics costs as a percentage of GDP. This means finding external sources of investment for logistics infrastructure, particularly ports, and links to industrial and consumer hinterlands.

At the end of 2016, China and Malaysia agreed to bilateral deals of about USD34 billion, including a USD13.75 billion 20-year low-interest loan to Malaysia to finance the East Coast Rail Link project. A visit by Philippine President Rodrigo Duterte to Beijing at the end of 2016 resulted in a USD24 billion package of investment and credit facilities.

“With bilateral trade between China and ASEAN having grown from USD9 billion in 1991 to USD346 billion in 2015, the Belt and Road initiative has become a significant geopolitical priority for ASEAN countries,” said Rajiv Biswas, IHS Markit chief economist for the Asia Pacific.

Major Chinese-invested projects in southeast Asia include the expansion of Kuantan Port, the development of Samalaju Port and the Melaka Gateway project, all in Malaysia, Tanjung Sauh Port at Batam Island in Indonesia, and Maday Island in Myanmar, where an energy terminal and oil and gas pipelines linking to southwest China’s Yunnan province have been put in place and a high-capacity container terminal and large industrial zone are planned.

A port alliance between 11 Chinese and Malaysian ports has also been set up to support bilateral co-operation in port operations and technology.

The combination of high GDP growth and decrepit port infrastructure in many countries, together with south Asia’s strategic location close to the oil-producing Middle East, makes the region a major destination for Belt and Road investment.

South Asia is home to the programme’s highest-profile project, the China-Pakistan Economic Corridor and development of the port of Gwadar. China has bilaterally committed to invest USD62 billion in Pakistan to fund the development of Gwadar and a road and rail network to effectively link China to the Arabian Sea. Developments such as industrial parks are also part of the project.

Elsewhere in southern Asia, Sri Lanka is a major recipient of Belt and Road investment, including the development of Colombo International Container Terminal – a facility that has filled a major infrastructure gap in terms of handling Indian transhipment cargo – and the much wider Hambantota port city development, also being undertaken by CMPort. New projects in Bangladesh are also expected.

Beyond these two key regions, east Africa, central Asia, and the Mediterranean and Balkans regions in Europe are prime targets for Belt and Road project investments. But despite publication of an official list of countries, finding the right conditions – such as suitable local partners – to support viable long-term projects is an important factor for Chinese banks and port developers to take on projects. 

These firms are tasked with implementing the vision, but they also have commercial objectives that need to be met. It is not clear whether the tools and influence from the Chinese leadership are enough for lenders and developers to accept the financial and project risk premiums that accompany investments in poorer countries along the designated routes at the level needed to realise the full vision of the programme.

With the relatively limited amount of Chinese capital ending up on designated Belt and Road routes, it will be interesting to see how the map of projects develops ahead of the next Belt and Road forum in 2019.

Friday, February 15, 2019

New Yangon Development

New Yangon City to be Built on Land West of the Yangon River 

- New Yangon City aims to generate two million jobs;
- New Yangon Development Company Ltd., is 100% owned by the Yangon Regional Government;
- Initial infrastructure works in the first phase of the development are expected to exceed US$1.5 billion;
- NYDC Challenge model to be used to ensure fair competition, efficiency and transparency.


Laying the Foundation to Attract Businesses

Happy Myanmar New Year to all.

In my first blog, I had explained the vision of NYDC – which is to create 2 million new jobs. So what does it take to create 2 million new jobs? What are the requirements of turning this vision into a reality?

During the launch of NYDC in March, Yangon Chief Minister U Phyo Min Thein said that the improvement and promotion of the country’s manufacturing sector is one of the key focus of NYDC. The manufacturing sector is key to creating a large number of jobs within the shortest period of time as it is a sector that requires a large number of workers. It is therefore vital that the New Yangon City creates a foundation that is favourable to attract manufacturing businesses to the new City.

The key factors that would encourage and convince businesses to set up factories in the New Yangon City are i) an efficient and business friendly climate related to government policies and administrative systems: ii) reliable and sufficient supply of electricity and clean water; iii) good connectivity- roads, access to ports, telecommunications networks and other basic infrastructure support; and lastly, iv) skilled workers.

Having these key components lay the foundation for the creation of a strong manufacturing sector that creates new jobs. Without this foundation, we won’t be able to attract businesses and investors to the New Yangon City to set up factories. Without the factories, there won’t be jobs, and the NYDC’s vision of improving our people’s lives through access to new opportunities and employment will not come true. It would just be a dream. 

NYDC’s foremost focus at this inception stage is to concentrate on attracting investors who would fund the development of these basic infrastructure works so that we could turn the dream into reality. Negotiations with many potential investors are underway to undertake these investments and we look forward to reporting to the public shortly in this regard.

Serge Pun


New Yangon Development Company Limited has singed a Framework Agreement with China Communications Construction Company Ltd on 30 April 2018, for the preparation and submission of a detailed project proposal to provide infrastructures works related to the first phase of the development of the New Yangon City.

CEO’s Weekly Blog

Kick-starting Stage 1 of the NYDC Challenge

This week is an exciting week for NYDC. We officially embarked on the first stage of the NYDC Challenge with the signing of a framework agreement with a leading global infrastructure company whereby they will prepare and submit a detailed project proposal related to the building of key infrastructure for the new Yangon city. The company is Hong Kong-listed China Communications Construction Company Ltd., (CCCC). 
To recap -- the NYDC Challenge is a model adopted and modified from the global model of Swiss Challenge; a model that lays the foundation for fair competition, efficiency and transparency. This framework agreement marks the first stage of the NYDC Challenge Model where a company that is qualified and competent to undertake the first phase of the development is selected to submit a set of Pre-Project Documents (PPD) which includes technical specifications, financial proposal and business model for NYDC’s review. 
But let me be clear. This does not mean that CCCC has been awarded the contract for all the infrastructure works in Phase 1. Once CCCC submits the PPD and it is approved by NYDC, the PPD will be made public to allow any party to challenge the proposal with better terms if they feel they are qualified. However, it has to strictly follow the terms and conditions of the agreement as this allows us to compare apples with apples.
If there is a company who is able to challenge with a lower bid, CCCC will be allowed to match the offer or forego. If CCCC chooses to forego, the second party will be awarded with the contract and will have the obligation to reimburse all costs incurred in connection with the preparation and submission of the PPD. Those costs will be agreed between NYDC and CCCC prior to the initiation of the tender process.

Why China Communication Construction Company

Since the launch of NYDC last month, questions have risen on social media and news media on why is NYDC working with a Chinese company, and some fear that China’s national interest may take precedence over Myanmar. 
Firstly, for a project of this scope and size, it is important to work with companies that have the expertise, experience and financial capabilities. We welcome CCCC's project proposal to lay the groundwork for the tender process as we believe the company has the required capability and sufficient experience of planning, designing, financing, constructing and developing regional developments similar to this project.
CCCC is the world’s largest highway and bridge design and construction company and is Asia’s largest international contractor. It has designed or constructed seven of the world’s 18 suspension bridges with a main span of more than 1,000 meters. It built the bridge that links Hong Kong and Macau which is considered among the longest fixed-links in the world, as well as the Beijing-Shanghai high speed railway which is the world’s longest high-speed constructed in a single phase. CCCC comes with depth of experience.
CCCC is a publicly traded company listed in Hong Kong, and is one of China’s largest state-owned enterprise. It’s shareholders include a multiple of international institutional investors. CCCC comes with financial clout.
Why would we not want to work with one of the largest and more experienced company in the global infrastructure industry space? We look forward to receiving their pre-project document and kick-start the next stage of the challenge. 

Serge Pun

For more CEO Weekly Blog, Please visit : http://nydc.com.mm/en/ceo-weekly-blog/

JPMorgan Chase Moves to Be First Big U.S. Bank With Its Own Cryptocurrency

JPMorgan Chase Moves to Be First Big U.S. Bank With Its Own Cryptocurrency

In 2017, Jamie Dimon, JPMorgan Chase’s chief executive, declared Bitcoin a “fraud” and said that any employee caught trading it would be fired for being “stupid.”

On Thursday, JPMorgan became the first major United States bank to introduce its own digital token for real-world use, the latest step in Wall Street’s evolving approach to the blockchain technology that underpins cryptocurrencies like Bitcoin and Ether.

Despite questioning Bitcoin’s legitimacy, Mr. Dimon has said he recognizes blockchain’s potential in the future of the global financial system. And JPMorgan has already released a blockchain platform, Quorum, that several institutions are using to keep track of financial data.

With the announcement of its coin, JPMorgan is widening its experiment and moving to make the idea of digital currencies more palatable to its typically risk-averse corporate customers.

“Clients engaged us, saying they need a way to move money onto the blockchain,” Umar Farooq, who leads JPMorgan’s blockchain efforts, said in a telephone interview.

The bank’s token is unlikely to shake up the financial system anytime soon. Because it will be run by JPMorgan, it lacks the fundamental qualities that have made cryptocurrencies so radical: the freedom from middlemen and from regulatory oversight.

JPMorgan will control the JPM Coin ledger, and each coin will be backed by a dollar in JPMorgan accounts, giving the coins a stable value. That means JPM Coin will not be subject to the wild price volatility that has drawn speculators to other cryptocurrencies.

The bank is following in the footsteps of several smaller players that have introduced similar digital coins tied to the dollar. A consortium of European banks has been finalizing a similar product, Utility Settlement Coin, that would make it possible to move money between banks more quickly. Several cryptocurrency exchanges already have their own so-called stablecoins.

JPMorgan’s version will be less useful than other similar products because it will not be possible to move it outside the firm’s own systems, at least initially. What’s more, it is still just being tested and is not available to clients yet.

But the entry of a major Wall Street bank into the market shows the mundane ways in which cryptocurrency technology has begun to gain traction in the traditional financial system a year after the prices of Bitcoin and other digital tokens crashed in spectacular fashion.

The firm said it began working last year on what became JPM Coin to help its big customers, including major corporations and other banks, move money quickly and securely. (JPMorgan says it provides banking services for about 80 percent of Fortune 500 companies.)

Essentially, when customers want to move dollars using the bank’s blockchain system, money in their JPMorgan accounts will be converted into JPM Coins, each one backed by a dollar in JPMorgan’s accounts.

The token will be able to move nearly instantaneously on the coin’s ledger, which will initially be based on JPMorgan’s Quorum blockchain. Once transfers are competed, the coins can be converted back to dollars.

The advantage of such a token, Mr. Farooq said, is speed. Clients that want to move huge sums of money would traditionally need to do so via wire transfer, a process that could take hours or even days. With international transfers, changes in currency exchange rates during the long lag times could end up adding to customers’ costs.

Mr. Farooq said JPMorgan’s offering would be useful for big clients, but not for the smaller speculators who have typically taken an interest in cryptocurrencies.

“This is designed specifically for institutional use cases on blockchain,” he said. “It’s not created to be for public investment.”

Skeptics questioned why a blockchain ledger was necessary to move money between JPMorgan bank accounts.

“JPMorgan’s choice to issue a stablecoin on a closed blockchain is not a new concept,” said Lawson Baker, the founder of Relay Zero, a fund that invests in blockchain projects. “It is very similar to corporations’ desires to launch intranets as competition to the open internet system in the 1990s.”

Generally, blockchains are employed when companies want to move data or money between institutions that might otherwise have trouble reconciling accounts. Blockchain technology allows multiple computers to keep a shared set of records.

Barclays, Credit Suisse and several other banks have been developing the Utility Settlement Coin, which uses blockchain technology, to make it easier to transfer money between financial institutions.

JPMorgan said it hoped to increase its coin’s versatility. Over time, for instance, it could be expanded to represent currencies beyond the dollar. First, though, the testing phase must be competed.

After that, JPMorgan plans to work with regulators to gain permission for broader uses of JPM Coin. That process could take at least several months, Mr. Farooq said.


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