|Frontier's "Invest Mongolia Tokyo 2018"||Frontier Securities||Tokyo Japan|
|"Open to Export" ICC WTO International business award||ICC WTO||London|
ULAANBAATAR (GoGo Mongolia) - In Nov 2016, Moody's Investors Service ("Moody's") downgraded Mongolia's government long-term issuer and senior unsecured ratings to Caa1 from B3.
Several green lights have turned on in Mongolian economy since then. Specifically, current account deficit stood at 358 million USD, meaning that it has dropped by 37 percent or 212 million USD from the same period of last year.
Goods and services account deficit dropped by 470 million USD and had a surplus of 248 million USD. Moreover, the balance of financial account had a surplus of 313 million USD.
Mongolia has received 645 million USD foreign investment in the same period of last year while as of Jul 2017, foreign investment amounted 313 million USD which decreased by 332 million USD compared to the same period of last year.
Meanwhile, the total balance of payments deficit was 48.8 million USD as of July 2017. A year ago, this amount was 41 million USD.
However, Caa1 ratings have not moved up and it is the lowest credit ratings in Mongolian history.
"Invest Mongolia 2017" conference which is being held in Ulaanbaatar during Sep 4-5 raised this issue. Private sector representatives noted that with the Caa1 rating, it is almost impossible to attract investment from foreign countries. If one could find investment, the cost would be high. The biggest banks of Mongolia including Trade Development Bank, Khas and Khaan are determined their credit rating separately. However, their ratings are directly affected by the country`s rating.
The Government pays for providers of credit ratings such as Moody`s, Fitch and S&P. Thus, private sector representatives recommended inviting representatives of these organizations to introduce the latest economic data and move the rating up. If Mongolia still has the Caa1 rating, Western investors consider Mongolia as a high-risk country to invest.
Russia’s geological research company Rosgeo and South African national oil company PetroSA have signed an offshore drilling agreement on the sidelines of the of the BRICS Summit in Xiamen, China.
The deal is worth an estimated $400 million over the next 10 years.
Rosgeo aims to start exploring two blocks off the country's south coast. The agreement covers a huge amount of geological exploration work, including drilling exploratory wells.
The company is expected to undertake 1,500 square miles of 3D seismic operations and over 8,000 miles of gravity-magnetic exploration activities.
The Russian company will get a 70 percent stake in the project with the remaining 30 percent going to PetroSA, according to Rosgeo’s CEO Roman Panov.
He stressed the project is aimed at oil and gas extraction and will be financed in partnership with Russian and South African banks.
The contract is seen as lucrative for the Russian company as it allows to employ its capacities, including drilling equipment and staff all year round.
Estimated reserves in the two blocks reportedly total 50 million tons of crude and 1.2 trillion cubic meters of natural gas.
Under the terms of the agreement, the daily volume of extracted gas is set to reach four million cubic meters. The gas will then be delivered to a gas-to-liquid refinery at Mossel Bay.
The director general of Finland’s energy department, Riku Huttunen, announced that the country will introduce legislation to phase out coal and increase carbon taxes.
The new rules, which Huttunen said would “leave room for manoeuvre,” are expected to be in place by 2018 and the goal is to get rid of coal by 2030.
Flexibility in the legislation is needed to ensure supply and avoid the risk of blackouts, he added, particularly taking into account that 10 per cent of the country’s energy is produced by coal. In fact, Finland uses the most coal of all the Nordic countries.
To replace this source of energy, the Sauli Niinistö government will focus its efforts on making sure that the Olkiluoto 3 reactor comes online in 2018 and the Hanhikivi 1 reactor follows suit in 2024. Once this happens, about 60 per cent of Finland’s demand will be met by nuclear power. At present, operative reactors cover roughly 30 per cent of the country’s energy needs.
Instability in power supply could be in sight in the short term, however, as Sweden has plans to phase out two reactors. This means that there will be less energy available through the two countries’ interconnected grids.
US aircraft manufacturer Boeing has won a victory in a long-running dispute with European rival Airbus.
The World Trade Organization has reversed on appeal a ruling that Boeing received some state aid to help build its newest aircraft, the 777X.
"The WTO has rejected yet another of the baseless claims the European Union has made," Boeing said in a statement.
However, Airbus said "the 'game' is far from over" as other complaints over alleged aid are still to be resolved.
The two aviation giants have been locked for years in a sprawling set of disputes at the Geneva-based WTO.
Last year, the WTO backed a European Union complaint that Boeing got tax breaks to site a production facility in Washington state.
The US, acting on behalf of Boeing, appealed the decision and secured an outright victory that is not subject to further appeal, the WTO ruling said.
According to Airbus, Washington state has given Boeing tax breaks worth about $9bn (£7bn) and which were sufficient to shut out imports.
However, Boeing said the tax breaks amounted to no more than $1bn.
The WTO's appeals body has now ruled that the tax breaks were not explicitly to prevent free trade, removing them from its most severe category of banned aid known as "prohibited" subsidies.
However, the trade dispute is not over. Brussels and Washington have two larger cases pending at the WTO, centred on multiple claims and counter-claims about illegal subsidies for their respective aviation industries.
Boeing's general counsel, J. Michael Luttig, said in a statement: "The latest of the false claims Airbus and its government sponsors have made has now been rejected by the WTO.
"The EU and Airbus, meanwhile, continue to be in flagrant breach of WTO rulings and must eliminate the massive illegal subsidies the WTO said a full year ago had not been addressed, or risk US sanctions against European exports."
Airbus, which estimates it has lost $100bn in sales because of Boeing subsidies, said: "Boeing illegal subsidies are still illegal and need to be removed. The 'game' is far from over."
The Bank of Mongolia traded 597.2 billion MNT worth 1-week maturity central bank bill (“CBB”), with weighted average yield of 12.0 percent per annum. /For previous auctions click here/.
1 - week CBBs
1-week CBB plays an important role in managing the reserves of banks and is the core monetary policy instrument of the Bank of Mongolia. The interest rate on CBB will be the policy rate of the BOM and will serve as a guide interest rate on the interbank market. It was first introduced in July 2007, with fixed rate and unlimited bidding, and traded on a regular basis every Wednesday at the interbank market. This had attracted the banks’ interests providing the possibility for the banks to place their excess reserve in short term asset. Since the introduction of this instrument, there has been a substantial change in the way banks manage their reserves. For the favorable adjustment of CBB rate and loan principle along with the well balance of togrog and foreign exchange, 1 - week CBB auction has been held in the form of competitive interest rate since May 2010. In doing so, the upper and lower limits of the bank bids are to set +/- 2 per cent of the policy rate.
VLADIVOSTOK (Russia) (Sputnik) — The new South Korean administration is planning to enhance the country's economic ties with a number of states to the north, such as China, Mongolia as well as with the Far Eastern regions of Russia, the South Korean deputy prime minister said Monday.
"The new South Korean administration is planning now to actively promote a new policy on economic cooperation in the northern direction. Widening economic, person-to-person and trade ties especially with the Far East, as well as with China and Mongolia," Kim Dong-yeon said during the 16th session of the Russian-South Korean joint commission on economic, scientific and technological cooperation.
The official, who is also South Korea's minister of strategy and finance, added that new opportunities were opened up after the new administration came to power in Seoul.
"The Russian government is actively implementing its new eastern policy. That's why we can say that we have a common goal to explore and to develop Russia's Far East," the deputy prime minister said.
The minister added that Russia's Far Eastern regions are highly attractive for investments, expressing hope for investment growth in future.
"I highly appreciate and have a positive view on the investment attractiveness of the Far East. Of course, we had only good results on investments to the Far East, but I expect that they would be better in future," Kim said.
According to the South Korean official, the representatives of his country are interested in investments in Russia's Far East.
"The [South] Korean government and companies show major interest in the development of the Far East and I hope that we will see the growth of investments," Kim added.
The official added that the markets of South Korea had not been affected by the recent missile launch carried out by North Korea, because of the stable situation in Seoul's economy.
"Despite the problems stemming from the recent North Korean launch, it has not had a significant impact on [South] Korea's market situation. Such situation takes place, because the basis of the [South] Korean economy is very stable and because the Korean government manages the external risks in a very effective way," Kim told reporters after the 16th session of the Russian-South Korean joint commission on economic, scientific and technological cooperation in the Russian city of Vladivostok.
Seoul was ready to respond to any potential scenarios, but it was too early to implement more tough measures to influence markets, Kim Dong-yeon said.
"We consider that the North Korean nuclear tests in the short-run would affect [South] Korea's economy," the official said, adding that Seoul would take measures to stabilize markets if necessary.
The tensions on the Korean peninsula have escalated in recent months due to a series of missile launches and nuclear tests conducted by Pyongyang in violation of UN Security Council resolutions.
Russian oil major Rosneft has announced a strategic cooperation agreement and long-term oil supply contract with CEFC China Energy Company. The deal was sealed on the sidelines of the BRICS Summit in Xiamen, China.
According to Rosneft, the agreement would see the development of exploration and production projects in Western and Eastern Siberia. The two companies also agreed to cooperate in refining, petrochemicals and crude trading.
"We are convinced the Russian oil and gas sector has tremendous potential and (we are) interested in an integrated cooperation with Rosneft. We will use our trading expertise and build up the supply of Russian crude to the fast-growing Chinese market,” said CEFC China President Chan Chauto after signing the deal.
He also talked of plans for “joint investment in strategically important projects in the Russian oil and gas sector.”
The deal will boost direct supplies of crude oil to the “strategic Chinese market and ensure a guaranteed cost-efficient export channel for the company's crude sales,” said Rosneft.
Russian exports to China have more than doubled over the past six years, up by more than 550,000 barrels a day.
Russia began supplying China with crude through the Skovorodino-Mohe branch of the ESPO pipeline in 2011. That followed Rosneft, Transneft, and China National Petroleum Corporation’s (CNPC) signing agreements.
In 2014, Rosneft and CNPC inked a 25-year oil deal worth $270 billion under which the Russian company is expected to supply 360.3 million tons of crude to China.
Since then Russia has overtaken Saudi Arabia to become China's biggest crude supplier.
Experts say Chinese imports of Russian oil are likely to stay high over the coming years due to long-term crude supply contracts and rising demand from the world's second biggest oil consumer.
NHK has learned that 140,000 smartphones and tablets across the globe have been hacked in order to launch major cyberattacks against firms.
US-based Akamai Technologies says the smartphones and tablets from more than 100 countries with the Android mobile operating system were hacked for the attacks.
Akamai says the handsets were remotely controlled and targeted companies and institutions without the knowledge of their owners.
The firm says the first attacks took place in early August, and became full-scale in mid-August. They disrupted online transactions at more than 50 firms in the US, Europe and Asia.
The hackers spread virus-infected smartphone applications through Google's official website, most often free-of-charge. About 300 such applications, including video players, have been confirmed so far.
Google deleted the fraudulent apps, which are reportedly indistinguishable from normal ones.
Akamai official Kazuhiro Nakanishi calls the cyberattack a new way to abuse smartphones, which are constantly connected to the Internet.
He says the communication volume of a single handset may be small, but remotely controlling them worldwide resulted in large-scale cyberattacks.
The leaders of Brazil, Russia, India, China and South Africa are meeting amid heightened geopolitical tensions.
The summit of the so-called Brics nations brings together the five fast-growing economies, who are seeking a greater say in world affairs.
Economic ties will top the agenda at the three-day gathering in Xiamen, China which began Sunday.
But North Korea's nuclear test and a border standoff between China and India could also colour discussions.
So what are the four key things to watch out for at this meeting?
1. 'Growing the pie' without 'touching the cheese'
While US President Donald Trump has pushed a protectionist trade agenda, pulling the US out of the Trans Pacific Partnership and renegotiating the North America Free Trade Agreement, China is striking a very different tone.
Chinese President Xi Jinping told the meeting that there is little to fear from closer trade ties.
"We should push for an open world economy, promote trade liberalisation and facilitation, jointly create a new global value chain, and realise a global economic rebalancing," President Xi Jinping told Brics business leaders and senior officials in a speech on Sunday.
"The development of emerging markets and developing countries won't touch anyone's cheese, but instead will diligently grow the world economic pie," he said.
But many countries have criticised China's trade policies, saying they discriminate against foreign businesses.
Even within Brics, trade is heavily tilted in China's favour, which has led to complaints from fellow members.
China's vice minister of commerce, Wang Shouwen, also suggested China was interested in establishing a free trade agreement with Mexico.
The Mexican President Enrique Pena Nieto is attending the dialogue at the invitation of the Chinese president.
2. One Belt One Road
The sheer scale of China's massive international infrastructure project - known as One Belt One Road - means it is often on the agenda at high level economic meetings like this one.
The project aims to expand trade links between Asia, Africa, Europe and beyond through infrastructure investments.
"I am convinced that the Belt and Road initiative will serve as a new platform for all countries to achieve win-win cooperation," said President Xi.
But the initiative has made India in particular quite uneasy, as it includes projects worth $62bn (£48bn) to be implemented in its neighbour and rival Pakistan.
Also, tensions between China and India remain high after a border standoff, which was resolved just days before the conference.
President Xi Jinping and Russian President Vladimir Putin at a galleryImage copyrightGETTY IMAGES
President Xi Jinping and Russian President Vladimir Putin visit an exhibition ahead of the BRICS Summit
3. The New Development Bank
Construction began over the weekend on headquarters in Shanghai for the New Development Bank (NDB), which is the Brics alternative to the World Bank.
The NDB was seen as the first major Brics achievement after the group came together to press for a bigger say in the world's financial affairs.
The bank aims to address a massive infrastructure funding gap in the member countries, which account for almost half the world's population.
To date, the NDB has invested in 11 projects, lending $1.5bn in 2016 with an additional $2.5bn in loans set for this year.
Still, the bank is small potatoes when compared with the World Bank, and some have questioned China's commitment, given it heads up the bigger Asian Infrastructure Investment Bank.
4. The nuclear elephant in the room
The conference had an unwelcome surprise in the form of North Korea's sixth nuclear test on Sunday.
China's official Xinhua news agency reported that Chinese President Xi Jinping and Russian President Vladimir Putin met on the sidelines of the Brics meeting, and agreed to "appropriately deal" with North Korea's nuclear test.
China said it strongly condemned the nuclear test and urged Pyongyang to stop its "wrong" actions.
The US President suggested on Twitter that the US might stop "all trade with any country doing business with North Korea".
China is an obvious target of his comments, given that it is North Korea's largest trading partner.
Some critics, however, have suggested that this is very unlikely, as it would do significant damage to the US economy because China is also America's largest trading partner.
The China-Northeast Asia Expo will help to boost trade and stimulate investment through the promotion of regional economic integration, according to officials from Northeast Asian countries.
This year's expo runs from Sept 1 to 5 in Changchun, the capital of Jilin province in Northeast China.
The expo will "have important implications for the countries in the region to introduce their own policies and practices, exchange information and inform the direction of future cooperation", said Zanimah Saulu, Mongolian vice-minister of food agriculture and light industry, at the opening ceremony.
Expo to boost trade and investment ties
Northeast Asia consists of China, Russia, Mongolia, the Democratic People's Republic of Korea, the Republic of Korea and Japan, a market with a population of 1.7 billion and over 20 percent of the world's GDP.
The region boasts favorable transport conditions, covering a vast area with rich human resources, fossil fuels, and forest and marine resources.
A senior Chinese official said: "Although China has run a trade deficit with several countries in the region, we do not engage in trade protection and we are willing to further expand our imports from these economies to meet diversified needs."
China is also ready to sign high-standard trade agreements with all parties, said the official, when delivering his speech at the opening ceremony.
All parties in this region should explore opportunities for collaboration in sectors such as the internet, high-end and intelligent manufacturing, and modern services, said Qian Keming, vice-minister of commerce.
Thanks to its unique geographical location and market potential, Northeast Asia is considered one of the most attractive areas for linking states around the world and strengthening their cooperation and investments, according to Ku Ponthae, vice-foreign economic minister of the DPRK.
In 2016, the trade volume between China and the other five countries of Northeast Asia amounted to $605.9 billion, accounting for 16.4 percent of China's overall foreign trade, according to data from the Ministry of Commerce.
In the same year, these five countries' combined investment in China reached about $7.85 billion, with China's total investment in the above countries also maintaining growth.
Kang Sung-cheon, deputy minister of the ROK's Ministry of Trade, Industry and Energy, said, "Northeast Asian countries will diversify their trade and will also boost trade in services in the interests of mutual benefits." The Chinese government has recently announced moves to encourage foreign investment, reduce investment restraints and streamline investment procedures.
It is hoped that all countries will make efforts to further promote their investments, Kang said.
"A free trade agreement is a good idea. It can significantly reduce tariffs, promote free trade and stabilize investment trends."
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