1 MONGOLIA-CHINA AGREE TO COLLABORATE IN INCREASING MEAT EXPORT WWW.MONTSAME.MN PUBLISHED:2018/09/21      2 U.S. AND MONGOLIA SEEK TO STRENGTHEN ECONOMIC RELATIONSHIP WWW.STRTRADE.COM PUBLISHED:2018/09/21      3 MONGOLIA, U.S. LEADERS DISCUSS BILATERAL TIES WWW.XINHUANET.COM PUBLISHED:2018/09/21      4 BELT AND ROAD SIGNIFICANT TO MONGOLIA, PEOPLE AROUND WORLD -- ACADEMIC WWW.ENG.YIDAIYILU.GOV.CN PUBLISHED:2018/09/21      5 PETRO MATAD UPDATES MONGOLIA EXPLORATION WWW.OGJ.COM PUBLISHED:2018/09/21      6 RIO TINTO’S EXIT FROM COAL PAYS OFF, TO RETURN $3.2B FROM SALES PROCEEDS TO SHAREHOLDERS WWW.MINING.COM PUBLISHED:2018/09/21      7 OPENING CEREMONY OF SAINSHAND SALKHIN PARK HELD WWW.MONTSAME.MN PUBLISHED:2018/09/21      8 ALIBABA’S MA SAYS TRUMP’S TRADE WAR ‘DESTROYED’ HIS PROMISE TO CREATE JOBS FOR 1MN AMERICANS WWW.RT.COM  PUBLISHED:2018/09/21      9 LEGAL DISPUTE OVER EMC OWNERSHIP COMES TO AN END WWW.ZGM.MN PUBLISHED:2018/09/20      10 ERDENES TAVAN TOLGOI REVENUE SURGES DUE TO HIGHER COAL PRICES WWW.NEWS.MN PUBLISHED:2018/09/20      НУРАХ ДӨХСӨН БАЙРУУДЫГ ШИНЭЧЛЭХ КОМПАНИ ОЛДОХГҮЙ БАЙНА WWW.ZGM.MN НИЙТЭЛСЭН:2018/09/21     МОНГОЛ УЛС ВАШИНГТОН, ПЁНЬЯНЫ ХЭЛЭЛЦЭЭРТ ЗУУЧЛАХАД БЭЛЭН ГЭДГЭЭ ЗАРЛАЛАА WWW.EAGLE.MN НИЙТЭЛСЭН:2018/09/21     УЛСЫН ХЭМЖЭЭНД 85.3 МЯНГАН ТОНН ТӨМС ХУРААН АВААД БАЙНА WWW.MONTSAME.MN НИЙТЭЛСЭН:2018/09/21     ЗГ: БУЦАЛТГҮЙ ТУСЛАМЖИЙГ УСНЫ НӨӨЦИЙГ САЙЖРУУЛАХ, ХЭРЭГЛЭСЭН УСЫГ БУЦААН АШИГЛАХАД ЗАРЦУУЛНА WWW.BLOOMBERGTV.MN НИЙТЭЛСЭН:2018/09/21     ҮСХ: УЛААНБААТАРТ АЖИЛЛАГЧДЫН САРЫН ДУНДАЖ ЦАЛИН УЛСЫН ДУНДЖААС 121.7 МЯНГАН ТӨГРӨГӨӨР ИХ БАЙНА WWW.BLOOMBERGTV.MN НИЙТЭЛСЭН:2018/09/21     МОНГОЛ УЛСЫН ИХ ХУРАЛ, ЕВРОПЫН ПАРЛАМЕНТ ХООРОНДЫН XII УУЛЗАЛТААР ХАМТАРСАН МЭДЭГДЭЛ ГАРГАЛАА WWW.DNN.MN НИЙТЭЛСЭН:2018/09/21     ТӨРИЙН АЛБАНЫ УДИРДАХ АЖИЛТНЫ УЛСЫН ЗӨВЛӨГӨӨН БОЛЖ БАЙНА WWW.UNUUDUR.MN НИЙТЭЛСЭН:2018/09/21     2019 ОНЫГ МОНГОЛ, АМЕРИКИЙН ЗАЛУУЧУУДЫН ЖИЛ БОЛГОНО WWW.EAGLE.MN НИЙТЭЛСЭН:2018/09/21     УУРХАЙЧДЫН АЖЛЫН БАЙР НЭМЭГДЭЖ, ЦАЛИН ӨСЧ БАЙНА WWW.GOGO.MN НИЙТЭЛСЭН:2018/09/20     “ЭРДЭНЭТ”-ИЙН 49 ХУВИЙН ӨМЧЛӨЛ ТОЙРСОН ХУУЛЬ ЗҮЙН МАРГААН ЭЦЭС БОЛЛОО WWW.ZGM.MN НИЙТЭЛСЭН:2018/09/20    

Events

Name organizer Where
Frontier's "Invest Mongolia Tokyo 2018" Frontier Securities Tokyo Japan
"Open to Export" ICC WTO International business award ICC WTO London

NEWS

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Vietnam joins Russia-led free trade zone www.rt.com

A free trade agreement between the Russian-led Eurasian Economic Union (EEU) and Vietnam takes effect on Wednesday with its ratification. The deal opens the EEU's market of 181 million people to Vietnam.
 
The EEU countries – Russia, Armenia, Belarus, Kazakhstan and Kyrgyzstan – get the opportunity to sell goods in Vietnam on a preferential basis.
 
The free trade deal covers more than 90 percent of all goods traded between the EEU and Vietnam. It will save exporters from the EEU about $40-60 million in the first year. Vietnamese companies can expect savings of up to $5-$10 million a year.
 
With the deal Hanoi expects to significantly increase its foreign trade. Trade with Russia is expected to more than double to $10 billion by 2020.
 
"Specific conditions will be created for Russia in order to increase the supply of its products on the Vietnamese market. It concerns not only high value-added products, but also agricultural produce, consumer goods and so on," said the Russian Trade Mission in Vietnam.
 
Russia’s main exports to Vietnam include nuclear reactors, mineral fuels, oil and its distillation products and fertilizers. Imports from Vietnam include electrical machinery, boilers and knitwear.
 
In terms of the agreement, Russian automotive companies GAZ, Kamaz and Sollers will be able to create joint ventures to produce buses, trucks, special vehicles, and passenger cars. The localization of production is expected to reach 40 to 50 percent over the next decade.
 
Vietnam signed the free trade zone agreement with the EEU in 2015, becoming the first non-regional country to join the bloc.
 
More than 40 countries and international organizations, including China, Indonesia, Israel and Iran have expressed interest in a free trade deal with the bloc.
 
The deal to establish the EEU was signed by the presidents of Russia, Belarus and Kazakhstan in 2014. Armenia and Kyrgyzstan joined later. The bloc was designed to ensure the free movement of goods, services, capital and workforce between member countries.
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World Bank expects 6.4% growth of Asian economies www3.nhk.or.jp

The World Bank predicts that emerging economies in the Asia-Pacific region would grow 6.4 percent this year. The figure is 0.1 percentage points lower than last year's due to the slowing Chinese economy.
 
The World Bank announced its predictions of 14 countries in the region, excluding Japan. China and Southeast Asian nations are among the countries.
 
The 6.4 percent growth prediction was raised by 0.1 percentage points from the figure in April.
 
It says the moderate slowdown in China's economy is expected to continue this year. The bank also says the growth rate of the Malaysian economy would fall due to lower prices of raw materials.
 
It says the Philippine and Indonesian economies would continue to grow steadily thanks to brisk domestic demand. The 2 countries' governments have actively invested in public works.
 
The bank warns that the economic slowdown in industrialized nations and slump in world trade are likely to hamper the growth in emerging economies.
 
It also calls on countries to strengthen fiscal discipline.
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Japanese firms seek business opportunity in Iran www3.nhk.or.jp

Japanese companies are promoting their products and technology in Iran where business opportunities will likely increase as economic sanctions were lifted.
 
More than 900 companies in and outside Iran took part in an international trade fair in Teheran on Wednesday.
Participants included many Chinese and European companies.
 
International economic sanctions over Iran's nuclear program were lifted in January. The demand for industrial machinery is expected to rise in industries such as manufacturing, construction, and energy development.
 
Organizers of the trade fair say the number of foreign companies has risen nearly 70 percent compared to last year.
 
The Japan External Trade Organization, or JETRO, set up a pavilion that is double the size of the previous year.
 
JETRO officials said smaller and regional companies, as well as major businesses, are becoming increasingly interested in the Iranian market.
 
An official of a company in Japan's Niigata Prefecture said the company's biggest advantage is the high quality of its products that can be used for a long time. The official said the company hopes to expand business in Iran where the market is expected to grow.
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IMF warns of financial stability risks www.bbc.com

The International Monetary Fund (IMF) has warned that risks to financial stability are growing.
It warns about what it calls "medium-term" dangers in both emerging and developed economies, in its twice-yearly report.
It expresses particular concerns about Europe, Japan and China.
On a more positive note, the fund does say that short-term risks have abated since its previous assessment of global financial stability in April.
Pressures on emerging markets have eased, the report says. Rising commodity prices (though they are still relatively low) have helped and so has the reduced uncertainty about China's prospects in the near term.
Bank profits
The report says investors were taken by surprise by the result of the British referendum on the European Union, but the political shock was absorbed by markets. They passed what it calls "this severe stress test".
But looking further ahead, the IMF sees growing risks. A key factor is bank profits.
The good news is that banks are in some respects stronger than they were before the financial crisis. They have more capital, a kind of financial buffer that enables them to survive losses. Their liquidity has improved, which means they have more chance of coping if they suddenly have to find funds quickly.
But they are struggling to make money.
Weak profitability makes it harder for them to build up their capital (which they can do by holding on to some profit rather than giving it all to shareholders as dividends). It also makes it harder for them to expand lending to business and consumers, as is needed to support economic recovery.
The problems partly reflect the very low interest rate environment that developed-country banks have to operate in. The struggle to make profits also reflects the persistent economic weakness in the developed world, which means weaker demand for credit.
Some banks in the eurozone have a burden of problem loans, which are not being repaid and that they have still not dealt with.
The report identifies Italian and Portuguese banks as facing serious challenges of profitability and capital levels.
There is also a warning about Japanese banks and their expansion overseas, which the report says is the result of economic weakness and very low interest rates in their home market. That leaves them exposed to some risk in terms of access to the foreign currency funds they need to maintain that business.
The report warns about pension funds and insurance companies, whose position is also undermined by persistent low interest rates.
Recommended medicine
Outside the rich countries, China is seen as a potential trouble spot. The report says that rapid credit growth and the expansion of "shadow banking" (lending done by firms that are not banks) "pose mounting risks to stability".
The rapidly growing financial system in China is becoming increasingly "interconnected", the report says. The extent to which firms in the sector are interconnected - that is, have transactions with one another - was identified as a key factor in the financial contagion that was a feature of the international financial crisis.
The IMF's recommended medicine for these mounting risks is partly about generating a stronger economic recovery, including reforms to underpin growth. There are also calls for more specific financial steps, such as making it easier for banks to tackle problem loans and the banks themselves tackling high costs.
There's no sense in this report that another financial crisis is discernible on the horizon. But there certainly is a concern that the damage done by the last one is far from fully repaired.
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Hitachi Construction to buy Australia’s Bradken for $528 million www.mining.com

Hitachi Construction Machinery, the world’s No.1 maker of mammoth excavators, has made a $528 million offer (A$689 million) to acquire Australian mining supplier Bradken Ltd.

The deal, Hitachi’s largest-ever overseas acquisition, was accepted by Bradken’s board. It follows a similar move by fellow Japanese manufacturer of mining equipment Komatsu (TYO: 6301), which decided in July to buy US-based competitor Joy Global (NYSE:JOY) in a transaction valued at $3.7 billion.

Hitachi has offered A$3.25 per share to buy the Aussie equipment supplier, it said in a note posted in its website, a 34% premium over Bradken’s closing share price on Friday.

By purchasing Bradken, Hitachi Construction Machinery aims to supplement its parts business for mining equipment and boost earnings.

Last year, Bradken rebuffed a A$428 million offer from Koch Industries Inc. and Pacific Equity Partners, because the firm believed it didn’t reflect a fair value.

The acquisition is the latest takeover in a string of outbound M&A deals by Japanese companies encouraged by a strong yen.

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China to reach target in cutting coal overcapacity by year-end www.mining.com

China’s effort to cut surplus capacity in the coal industry and, at the same time, manage pollution in most of its major cities, are paying off earlier than anticipated, with the world’s largest producer of the commodity anticipating it will reach its targets by year-end, which is earlier than planned.

In an interview with Bloomberg, Xu Shaoshi, chairman of the National Development and Reform Commission, said reducing overcapacity in the steel sector is also likely to surpass the nation’s annual goal.

By the end of August this year, coal production had fallen to 2.17 billion tons, down 10.2% from the same period in 2015. What’s more, according to the officer, China has begun importing more coal.

Soaring coal prices, particularly the steel-making kind, have made the task more challenging. However, Beijing is forging ahead with its plans to shut more than 1,000 coal mines by the end of the year. It is also keeping its decision to not approve any new coal mines until at least 2019, and — most recently — China’s government limited coal mines to operating a maximum 276 days annually.

Over the next three to five years, the goal is to reduce total output to 500 million tons.

“The coal industry is being dismantled faster than demand is decreasing, which has led to the price of coal rising by 40% this year,” Frank Sieren, who has lived in China for over 20 years,” writes Frank Sieren for Deutsche Welle, Germany’s international broadcaster.

“Since February, there is a gap in production of 60 million tons based on the average monthly consumption of the past four years,” he notes.

Conversely, China is boosting its renewables sector. According to the UN's annual environment report, Beijing invested a total of $103 billion or 36% of the world total on renewable energy last year.

The country also has 26 nuclear reactors currently under construction, another 40 in the planning stage and more than 100 being proposed which would require a five-fold increase in the country's uranium requirements.

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Toyota launches 'baby' robot for companionship www.bbc.com

A palm-sized robot that can hold conversations will go on sale in Japan next year, developer Toyota has announced.
Kirobo Mini, who was 10cm (4in) high, had been designed to provide companionship, the company said.
And it could tailor conversations to include comments about journeys based on data from its owner's vehicle.
It also has childlike attributes, but a robotics expert told the BBC a robot could not be a substitute for a child.
"He wobbles a bit, and this is meant to emulate a seated baby, which hasn't fully developed the skills to balance itself," Fuminori Kataoka, Kirobo Mini's chief design engineer, told the Reuters news agency.
"This vulnerability is meant to invoke an emotional connection."
Prof Dr Kerstin Dautenhahn, from the school of computer science at the University of Hertfordshire, said the "cute" robot may appeal to young people.

"They are appealing to people's nurturing instincts."
However, Prof Dautenhahn, said it was "offensive" to believe it could be a child substitute for women without children, as some reportshave suggested.
Some of Toyota's marketing material shows women cradling the robot, but the company does not not explicitly make this claim.
"It might make people feel good, but there is no human component here, robots cannot be substitutes for children," said Prof Dautenhahn.
'Casual conversation'
Toyota says Kirobo Mini can:
engage in "casual conversation", using gestures, facial expressions and blinking
remember user preferences and previous events, such as likes, dislikes and outings
use data from connected devices such as those in the home or car to generate comments
It has a provisional price tag of 39,800 yen (£300), and there are no plans to sell it outside of Japan.
It is considerably cheaper than other companion robots - Aldebaran's humanoid robot, Pepper, cost 198,000 yen at launch.
Kirobo Mini's predecessor, a 34cm robot called Kirobo, was sent up to the International Space Station in 2013.
Its job was to accompany Japanese astronaut Kochi Wakata as part of a study about isolation.

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Aeon brings Japanese sensibilities to Myanmar food shopping www.asia.nikkei.com

YANGON -- Japanese supermarket giant Aeon has become the first foreign retailer to enter Myanmar since the 2011 transition to civilian rule, a development that could herald change in a retail industry still dominated by traditional markets.

Aeon signage, a familiar sight to Japanese consumers, made its Myanmar debut Friday in a largely middle-class area along a major road in Yangon's North Okkalapa district. The store packs some 8,000 products into a relatively compact 613 sq. meters of sales-floor space. The lineup includes about 80 items imported from Japan, including selections from Aeon's Topvalu private brand. About 70% of the products are imported from Thailand or elsewhere, with the remaining 30%, mainly fresh foods, coming from Myanmar.

A slice of Japan

Upon entering the store, the first thing that catches the eye is a refrigerated case featuring neatly wrapped packages containing three or four slices of melon or watermelon, priced at 600 kyat to 800 kyat (47 cents to 63 cents).

"Foods from Japan like cup noodles can be eaten quickly and easily," a worker at a beverage plant noted. The 24-year-old praised the low prices, as well as the store's thoughtfulness in offering small servings of fruit that can be polished off before they go bad.

Refrigerated products are a rare sight in Myanmar supermarkets, since quality control is difficult. Produce is typically sold by the piece. Refrigerators are also relatively uncommon in households, so if a customer buys a watermelon, for example, it is usually eaten all at once. The Aeon store offers small packs of sliced fruit, meat and fish, giving customers the option of Japanese-style shopping -- buying only as much as they need, when they need it.

Another peculiarity is prepared foods such as boxed meals, which are almost unheard of in Myanmar supermarkets or convenience stores. Ahead of the supermarket opening, Aeon set up a central kitchen in Yangon, where about 10 Myanmarese staffers cook food tailored to local tastes. A lunch box with curry, rice and salad costs 1,280 kyat, while rice balls with pork or other fillings go for 550 kyat. By comparison, a noodle dish from a local vendor typically costs around 800 kyat.

Aeon announced in August a joint venture with Creation Myanmar Group of Cos., a local company which operates 14 supermarkets in the country under the Orange brand. The venture, Aeon Orange, aims to open 10 or so stores in five years. "This is a milestone in transplanting the Japanese values of convenience, security and safety," Aeon Orange President Yoshimitsu Kawato enthused.

An industry in transition

Modern retail is still a work in progress in Myanmar. Local player City Mart Holding, established in 1996, runs about 40 supermarkets in the country. But these stores serve mostly upper- and middle-class consumers in urban areas. Most people still turn to traditional public markets, known as zei. Modern retailers such as supermarkets account for just 10% or so of the retail industry.

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Kremlin-Owned Rosneft Cleared to Privatize Russian Oil Giant Bashneft www.themoscowtimes.com

State-owned energy giant Rosneft will be able to take part in the privatization of Bashneft, Russia's First Deputy Prime Minister Igor Shuvalov has announced.

Rosneft's participation in the deal has been the subject of fierce debate in Russia. Although the company is not directly controlled by the Kremlin, the Russian state owns a 50.8 percent stake in the firm through its parent company, Rosneftegaz.

Both presidential aide Andrei Belousov and Deputy Prime Minister Arkady Dvorkovich have opposed the idea, with Belousov even labeling the idea “absurd.”

Prime Minister Dmitry Medvedev even agreed to postpone the prizatization because he and President Vladimir Putin could not decide on whether to grant Rosneft access to the deal. One government official said that Rosneft CEO Igor Sechin had “put a lot of pressure” on the government to grant him the permission he needed.

A turning point came when President Putin told Bloomberg that the Russian budget depended on selling Bashneft to the highest bidder- and that the state should not discriminate against any market participant.

One senior official revealed that Rosneft had promised to outbid its competitors, but declined to reveal the exact amount of the bid. The government has already given the 50.08 percent stake a preliminary value of from 297 billion ($4.7 billion) to 315 billion rubles ($5 billion).

Sechin has justified Rosneft's bid by claiming that the company will experience “significant synergy” — adding up to 160 billion rubles to the value of the company — by buying the Bashneft stake.

This is significant due to the 19.5 percent stake which the Russian government holds in Rosneft— although the Kremlin has planned to sell the shares for some time. Under Sechin's proposed scheme, Rosneft would first purchase Bashneft for a higher price than other bidders, thereby putting more money into the government coffers and raising the Rosneft's value. Only then would the government sell its 19.5 percent stake in Rosneft.

The Finance Ministry has budgeted 382 billion rubles ($6.1 billion) in privatization revenues in 2016, factoring in the sale of diamond company Alrosa as well as Bashneft. Yet the privatization of the Rosneft stake at this higher price could generate as much as an additional $11 billion of revenue.

Senior Rosneft managers stand to benefit from the plan as well. According to the Rosneft website, CEO Igor Sechin owns a 0.1273 percent share in the company, Deputy Chairman of the Board Matthias Warnig holds 0.0009 percent, Independent Director Donald Humphreys owns 0.0021 percent, and Management Board members Yury Kalinin, Didier Casimiro, Peter Lazarev, Eric Lion, Yury Narushevich, Zeljko Runje, and Andrei Shishkin own 0.0019 percent, 0.0043 percent, 0.0042 percent, 0.0051 percent, 0.00006 percent, 0.0036 percent, and 0.0036 percent respectively.

Yet the plan also has potential sticking points. Rosneft currently has a great deal of liquidity, but some are already concerned about where the money to buy the Bashneft stake will come from. “There should definitely be no state money in any form used in the deal,” one senior official warned.

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New asset management giant in Asia www3.nhk.or.jp

Japan's Mizuho Financial Group and major life insurer Dai-ichi Life Holdings have set up a new company to integrate their asset management services. Asset Management One is one of the biggest firms of its type in Asia.

The company is set to handle about 50 trillion yen, or 500 billion dollars, in assets from individual customers, pension funds and others.

Company President Yasumasa Nishi told reporters that demand for financial products that offer stable returns is growing amid market volatility. He said his firm plans to deliver products that balance return and risk.

The move comes as financial institutions in Japan are reporting declining profits. The Bank of Japan's negative interest rate policy is squeezing their margins.

Many of these firms are counting on commissions from asset management as a stable source of income.

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