Global currencies weaken in currency war against super US dollar; exporters gain

Central banks making moves to check appreciating currencies against US dollar

A number of central banks have been making moves to shake up their currencies over the past few months.

Faced with slowing global growth and lower inflation – disinflation or deflation in a number of countries – central banks started taking action primarily by cutting interest rates or injecting liquidity into the system.

From Japan increasing its monetary stimulus to Singapore putting the brakes on its currency’s appreciation against a trade-weighted basket of currencies, stemming currency appreciation has led to talk that a currency war could be brewing.

Using the value of currencies to boost trade-heavy economies has been the flavour, as global economic growth slows.

The International Monetary Fund cut its global growth outlook from 3.8% to 3.5% this year and with growth easing in China, Europe and a number of emerging economies, giving support to such economies has been the focus of governments.

The European Central Bank instituted its own quantitative easing (QE) policy on Jan 22 to get growth going in the European Union.

The effectiveness of that policy has been questioned, but the immediate result was that the euro, which has been weakening against the US dollar, continued to fall against the greenback.

With Japan flooding the market with liquidity to get growth and inflation going with its own QE, the result has been a marked weakness in the currency.

The yen’s steep depreciation against the dollar, according to reports, is causing uneasiness in South Korea, which competes almost head-to-head with Japan in the export markets.

What is allowing countries that have taken action to cut their interest rates has been the slowing inflation.

The steep fall in crude oil prices since June last year to below US$50 a barrel has eased inflationary pressure worldwide, as energy is usually the biggest component of inflation. It’s been reported that over the past six months, 18 out of 50 MSCI countries have cut rates.

The Reserve Bank of India, which has an inflation targeting policy, cut interest rates this month. India, along with Denmark, Switzerland, Canada, Egypt and Turkey, has cut interest rates this month itself.

That was followed by Singapore’s move to slow its rise against a basket of currencies, which saw the Singapore dollar continue its recent drop against the US dollar.

Falling inflation was the primary reason for the Monetary Authority of Singapore (MAS) to make its pre-emptive move to slow down the appreciation of its currency by reducing the pace of increase. But quite a number do not pin that move as a significant competitiveness boost.

“The adjustment does not translate into a massive competitiveness impact,” says Saktiandi Supaat, Malayan Banking Bhd’s head of foreign exchange (forex) research based in Singapore.

MAS’ next policy statement will be due in April where it could give some clarity on the competitiveness angle, but the drop in the Singapore dollar against the greenback does help to boost inflation, which is expected to be lower than had been earlier estimated. The previous outlook was for a -0.5% to 0.5% rise in inflation.

A slower rate of appreciation would also help Singapore’s economy, which is already dealing with cost pressures from a tight labour market where the unemployment rate was a meagre 1.6%.

Furthermore, with non-oil domestic exports reportedly dropping for the past two years, a weaker Singapore dollar will help, especially when exports to China and the United States have fallen on a year-on-year basis.

Pressure is also emerging in Thailand, where the stronger baht is also not helping with exports, which dropped 0.4% last year.

Finance Minister Sommai Phasee was recently reported to have said that the Thai central bank should “in theory” lower borrowing costs, and that exports are under pressure from a stronger baht.

Fundamentals back appreciation

The Philippine peso and the baht are two currencies in this region that have in recent months seen an appreciation against the dollar. The reason for this is that the fundamentals of these economies have improved.

“The Philippines is not reliant on commodities as much as Malaysia, Indonesia and Thailand and that is the biggest driver of its currency,” says a currency strategist in Singapore.

“It just registered its strongest gross domestic product (GDP) growth over three years since the 1950s.”

The Philippine economy grew by 6.1% last year after expanding by 7.2% in 2013.

Thailand, recovering from floods and political unrest, has also been a flavour for foreign investors since stability returned.

Its stock market in US dollar terms is now bigger than Bursa Malaysia and one of the reasons for the currency’s rise is the drop in oil prices.

The fall in crude oil prices is expected to have the biggest economic benefit to Thailand and the Philippines among countries in this region, according to Bank of America Merrill Lynch.

“Lower oil prices have not resulted in any sizeable GDP growth upgrade as yet for emerging Asia, in part because of slowing global growth outside the United States.

“Lower oil prices have, however, improved the trade surplus significantly, supporting the current account balance and FX reserves positions.

“Lower oil prices have also resulted in a sharp drop in inflation, particularly in Thailand, the Philippines and India, which has allowed central banks to stay accommodative. Emerging Asian countries will likely see a boost to GDP growth in the range of +10bp to +45bp with every 10% fall in oil prices, if the oil price drop was purely a supply shock,” it says in a note.

The low-inflation environment will also allow central banks in this region to become more accommodative.

“Lower crude oil prices and loose global monetary policy will likely keep inflation lower in 2015 with rising probability of rate cuts in Asean,” says Morgan Stanley in a note.

How low will the ringgit go?

The past three months have been a volatile period for global currencies and no more so when it comes to the ringgit, which is the second-worst performing currency in Asia against the US dollar over the past 12 months after the yen.

Directly, the drop in crude oil prices has affected the fundamentals of Malaysia and carved a chunk out of government revenue, as receipts from crude oil production account for slightly less than 30% of income.

With revenues depleted, the Government has revised its budget for this year to take into account crude oil averaging US$55 a barrel in 2015 from an earlier projection that it would average US$105 a barrel when the budget was announced last October.

The revised budget also led to a slight increase in the fiscal deficit to 3.2% of GDP from an earlier projection of 3%.

That percentage is lower than the 3.5% target for 2014.

Apart from fiscal discipline, the ringgit’s fortunes have been loosely linked to the price of crude oil.

With this July marking the 10th year when the ringgit peg to the US dollar was lifted, the decision to remove the RM3.80 to the US dollar peg was to ensure that the ringgit reflected the fundamentals of the economy.

Prior to that decision, the price of crude oil had started to rise, delivering valuable additional revenue to the Government.

When the peg was lifted, brent crude oil was trading at US$55.72 a barrel, and over the years, the ringgit loosely tracked the value of crude oil, often appreciating against the dollar when crude oil prices were high and weakening when crude oil prices dropped.

Anecdotally, the ringgit gained strength against the dollar when oil prices soared and approached the RM3 to the dollar mark when crude oil hit more than US$140 in 2008.

It dropped in value as crude oil prices retreated from there, and as crude oil prices went up again and stayed at elevated levels for a prolonged period, the ringgit then crossed the RM3 level into the RM2.90 range.

Forex strategists say sentiment does affect the movement of a currency, but it moves in parallel with the fundamentals of an economy. With Malaysia’s fortunes closely linked to the price of crude oil, it is inevitable that the thinking of the country’s fundamentals will also change.

“If energy prices continue to drop, then it will hurt the ringgit,” says a forex strategist based in Singapore.

Bank Negara governor Tan Sri Dr Zeti Akhtar Aziz recently said the ringgit, which is currently trading at multi-year lows against the US dollar, did not reflect Malaysia’s strong underlying fundamentals.

“Once the global events settle down and stabilise, the ringgit will trend towards our underlying fundamentals,” Zeti told reporters at an event.

Apart from lower crude oil prices, the ringgit has also been hurt by capital outflows.

Malaysia’s forex reserves in the first two weeks of January were at its lowest level since March 2011 and foreign investors held 44% of Malaysian Government Securities (MGS) as of the end of last year.

Analysts say while foreigners have sold off a chunk of government debt, the remaining are not expected to do so as long as they are making a decent return on their holdings. The rise in the value of the 10-year MGS will give support to their holdings.

A number of forex analysts think the ringgit will not slip below RM3.70 to the US dollar, but some do admit they did not think it would be trading at the current level of around RM3.63 a few months ago.

“If it does go to RM3.80, then people will get panicky,” says one forex analyst.

By Jagdev. Singh Sidhu The Star/ANN

Semiconductor and rubber glove makers to gain from weak ringgit

Kenanga Research believes that the semiconductor industry will stay resilient with the global sales continuing to show healthy momentum.

THE decline of the ringgit is generally viewed as a problem for the economy but there are always two sides to the story.

Exporters with high local ringgit-denominated content and strong external demand are the obvious winners as they are expected to benefit from the weakening ringgit.

The winners are said to be the semiconductor and technology, rubber gloves and timber-based sectors. The share prices of a number of those companies have already factored in the benefits to their business from the weaker ringgit after the currency started its decline,which was more pronounced since the beginning of the fourth quarter of last year.

On the semiconductor front, Kenanga Research says believes that industry will stay resilient with the global sales continuing to show healthy momentum. Bottom-fishing is recommended as a strategy especially with the current risk-reward ratio less favourable following rich valuations in some counters.

“Typically, first and last quarters of a calender year, the earnings for the semiconductor players are seasonally weaker.

“That said we see any price weakness in these stocks as opportunities to accumulate as the earnings shortfall could be made up by the seasonally stronger second and third quarters on the back of the resilient industry prospects,” it says in a recent report.

Screening through the semiconductor value chain, Kenanga Research sees Vitrox Corp Bhd, being the leading solution providers of automated vision inspection systems to continue benefiting from the increasing complexity of semiconductor packages, which requires enormous inspection.

The research house is sanguine over OSAT (outsourced chips assembly and testing) players such as Unisem (M) Bhd. Inari Amertron Bhd is among the research house’s top pick.

PIE industrial Bhd managing director Alvin Mui says the group would see its sales rising this first quarter.

“But this is due to the new box built products we are doing for the medical equipment segment.

“The weakened ringgit will of course boost our revenue and bottom line,” Mui says.

Meanwhile, Elsoft Research Bhd chief executive officer CE Tan says the weak ringgit has boosted orders for its LED test equipment for the first quarter of this year.

“We expect to perform by a strong double digit percentage growth over the same period last year,” he says.

Tan says the LED testers the group produces are niche products with competitive pricing.

Rubber gloves players have seen strong price appreciation since late last year. Maybank IB Research likes Kossan Rubber Industries Bhd due to its stronger earnings growth in financial years 2015 and 2016, underpinned by the full contributios of its latest three plants.

Meanhile, JF Apex Securities mentions Latitude Tree, Poh Huat and Heveaboard among the timber-based industry stocks that can benefit from strengthening US dollar against ringgit.

The US market is the biggest for the industry which will gain from cheaper ringgit-denominated local content and stronger US economic growth.

The losers from a weaker ringgit, JF Apex Securities Bhd senior analyst Lee Cherng Wee mentions, are automotive players which import a lot of parts especially for completely-knocked down vehicles.

Lee says counters such as Tan Chong Motors and UMW Holdings are likely to be affected.

RHB Research in a recent report says about 60% of Tan Chong’s manufacturing cost of sales is transacted in foreign currency (80% in US dollars) which RHB sees as a risk.

“Continued US dollar strength will crimp margins that will not be offset by a weaker Japanese yen,” it says.

Lee also predicts the consumer sector players with high imported content in dollar terms could risk slimmer margins coupled with sluggish consumer sentiment due to goods and services tax.

MIDF Investment Research analyst Kelvin Ong said he foresees banking groups with higher foreign shareholdings like CIMB Group Holdings Bhd, Alliance Financial Group Bhd, AMMB Holdings Bhd and Public Bank Bhd as banks that can be impacted by the weaker ringgit.

“Foreign shareholding may slip if the domestic currency continues to weaken. The Fed’s tightening of the interest rate turns out to be more aggressive than expected, and crude oil prices continue to be on a downward trend. This will impact valuations of banks, but on the flip side, it will present buying opportunities for investors on a more attractive valuation,’’ he says.

By Sharidan M. Ali and David Tan The Star/ANN

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Welcome Goat, may you goad us to greater heights 2015!

The sheep really gets my goat

The Horse is about to gallop off and in comes the Sheep ... or is it the Goat? Which is better?

THIS is the Year of the Yang. That’s the word in Mandarin for “a ruminant mammal, generally with horns on its head”. ( In Chinese, the goat is a homophone of yang and so represents the solar, masculine principle; it also signifies peace and the good)

To the Chinese, yang can refer to either sheep (mianyang) or goat (shanyang), so therein lies the confusion as to what animal is the eighth in the 12-year cycle of the Chinese zodiac. To the Japanese, it’s the Year of the Sheep, to the Vietnamese, it’s the Goat, for the Koreans, it’s the Ram. The Chinese don’t mind either one.

But after a tumultuous Year of a runaway wild Horse, which would be a better animal for the year ahead? Let’s take a look at the characteristics of both cud-chewing critters, starting with the sheep.

According to David Murray in his essay, 12 Characteristics of Sheep, this is one stupid animal.

“I don’t know what sheep would score in an animal IQ, but I think they would be close to the bottom of the scale. They seem to only know how to do one thing well – eat grass (and produce more grass-eating sheep).

“It’s possible to know little, yet not be foolish; but not if you are a sheep. They are so irrational. You watch them as they pause in front of a stream. They know they can’t jump it or swim it. So what do they do? They jump in any way!” writes Murray, a pastor who got to know the animal well after 12 years in the sheep-infested Scottish Highlands.

Another characteristic is being slow to learn. Murray cites the example of a sheep getting caught in barbed wire while trying to break through a fence. Instead of learning from that painful lesson, it will do it again and again. That’s why sheep are dependent creatures, requiring close supervision by their shepherd, he adds.

Granted, scientists say new research shows sheep to be as intelligent as monkeys. But it will take a great deal more to change the long-held perception of this creature as being not just woolly on the body but in the head, too.

After all, we think “sheep” when it comes to mindlessly following the crowd, or for imitating what others do without understanding why.

Murray describes their behaviour thus: “When one sheep decides to start running, they all decide to start running. If you were able to ask one, ‘Why did you start running?’ it would say, ‘Well, because he started running.’ The next would say the same. And the next one. And when you got to the last sheep he would just say, ‘I dunno’.”

Goats, on the other hand, are described by animals.pawnation.com as “independent, intelligent and tolerant of interaction in general”. In other words, they don’t spook easily and don’t bunch together to graze.

The goat is also seen as a nimble, agile animal who can take on hilly terrain with ease. It’s even associated with determination for its ability to climb mountains and trees.

Because they are curious creatures, goats will try out new things and explore the unfamiliar – usually with their hyper-sensitive lips and tongue – and often end up chewing and eating strange stuff.

While the male goat is a symbol of virility and stamina, the female goat is a symbol for nurturing and nourishment. Which is why someone entrusted with looking after young children is called a nanny, which is a female goat.

After all that, which animal would you prefer for the Year of the Yang? My pick is the goat, for all the reasons I have listed.

We have enough of sheep-like behaviour from people who are spooked easily by certain groups and individuals using loud and intimidating tactics. What’s more, after being spooked, these people blindly and unquestioningly accept those noisy pronouncements and exhortations.

We also don’t need people who, like sheep, stick to their own kind, or harbour irrational fears and suspicions against their fellow citizens. Being more goat-like by mixing around and interacting with others is what we need more of in our society.

Neither can we afford any sheep-like slowness to learn and respond to the ever-changing socio-economic environment within and without the nation.

We can’t forever depend on a super shepherd (aka the Government) to think for and look after us. That has led to what we know as the crutch or subsidy mentality.

Of course Billy Goat has his critics too. Among Christians, being a sheep is preferable to a goat as the latter is depicted as devious and insincere in the famous parable about separating sheep from goats in favour of the sheep. There is also the view that goats are too independent and unpredictable to be good followers, unlike the mild and meek sheep.

Indeed, a citizenry can happily be meek and mild if there is a good shepherd who takes care of all its needs.

But this is not the time for meekness and mildness, but rather for fearlessness and fortitude.

We need to have both qualities if we as a nation are to hold fast against forces bent on tearing apart our multiracial, multicultural and multi-religious fabric. And if we are to compete on the global economic front, we need the goat-like sense of inquisitiveness and boldness to be innovative and explore new possibilities and ventures.

Critically, in such challenging times, we need leaders who are like mountain goats who can nimbly guide us on the rocky path ahead, and not silly sheep that jump into water without knowing how to swim.

All this will require a lot of ram-like determination and stamina – if not virility – from leaders and citizens. So I say “Welcome, Goat”, and may you goad us to greater heights!

 So Aunty, So What? by June H.L. Wong

 Aunty discovered that a possible explanation for the idiom, “really gets my/your goat”, which means something that really infuriates you, involves the olden-day practice of using goats as companions to racing horses to keep the latter calm. Hence, taking away the goat could upset the horse and affect its performance in a race! Feedback to junewong@thestar.com.my

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Abe’s strategy clearer after Japanese ISIS hostage crisis

The release of a video on Saturday showing a message that Haruna Yukawa, one of the Japanese hostages captured by Islamic State (IS) militants, had been slaughtered, shocked both Japanese society and its Western allies. Official institutions in both Japan and the US consider the video is likely to be authentic.

The IS claimed last Tuesday it had abducted two Japanese and gave the Japanese government 72 hours to pay $200 million in ransom for the captives. The Abe administration was put in a conundrum. In front of requests from the victims' families to save the hostages, the Japanese government vowed it would never give in to terrorism on one hand, on the other, it displayed a high-profile stance of striving to free the hostages. But it's believed that the Abe administration would be unlikely to carry out a dramatic rescue, which has already decided the fate of the hostages.

The brutality of the IS has become well-known. They kill hostages in a cold-blooded manner. Now that Japan has become a victim of global terrorism, Tokyo may reassess the challenges it faces. In the past few years, Japanese rightists portrayed China as Japan's major threat, despite the fact that China has never infringed upon Japan over the past century. It's instead Japan that invaded China and persecuted Chinese people again and again.

The death of the hostage also offers a new excuse for Abe to lift the ban on collective self-defense. Abe will face fewer hurdles now if he decides to cooperate with the US strategic deployment and strengthen Japan's military activities in the Middle East and its security deployment in East Asia.

Some claimed that Abe is more concerned about promoting rightist policies than rescuing hostages. For the good of peace in East Asia and the Japanese public, we hope such analysis is just speculative. Japan is not capable of playing an active role in the Middle East. East Asian countries are not supposed to be key targets of the atrocious IS. The Japanese hostage case sends a warning signal.

In the aftermath of the 9/11 attacks, the US has spent great efforts in ensuring its domestic security. However, US allies such as European countries and Japan have been constantly targeted by terrorism. It's worthwhile studying the underlying reasons.

The attack on Charlie Hebdo seemingly unveiled the conflicts between the whole of European society and the Muslim community, but it was striking to see how the US tries to remain neutral over the issue.

Having a geopolitical advantage, Japan should be a country without enemies. However, the country is plagued with a terrible mess in its national strategy. It misperceives China as an imaginary enemy. Tokyo's ultimate goal is said to be getting rid of US control, however, it is forced to defer to the US due to its confrontation with China. The killing of the Japanese hostage is more or less the price that Japan has paid for its support to Washington.

We strongly condemn the brutal killing by the IS. In the meantime, we hope Japanese public opinion will take a clear-cut attitude against any terrorist attack launched on China. - Global Times

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We need local councillors who can do the job

I REFER to the article “Local govt polls may cause racial polarisation” ( Sunday Star, Jan 25) and would like to share my views on matters.

The core functions of local government is to look at matters that are closest to the people.

Both the state and federal governments are too far from the people for them to have good understanding of the needs of the people at the micro level. Today the local authority has become a government agency and the councillors have been a rubber stamp of the decisions made by the local authority. Many who were appointed to the post lacks quality and knowledge in functions and power of a councillor.

Appointed councillors are political party nominees. The council seats are shared according to an agreed ratio among the component parties. They are not independent. Appointments are given as part of political rewards to grassroot party leaders.

At times decisions made by the council are not in the best interest of the people as for the councillors, party interest comes first. There are clear professional conflicts of interest between political parties nominees and between those meeting the needs the people.

In my area, the appointed councillors do not understand their role as councillors. They have been turned into “complaint centre” for people to bring their issues to the local authority.

These councillors have been assigned certain zones and have been tasked to look after drainage, rubbish collection and grass cutting.

They have very poor knowledge of the local authority by-laws. They fail to function as a “Board of Directors” of the local authority and provide the much needed check and balance between addressing the needs of the people and the local authorities.

While we can accept the point of maintaining the current system but we cannot accept the fact that the powers-that-be failed to nominate “independent people with strong knowledge on the governance of local authority” as specified under Section 10(2) in Act 171.

The law says that the state authority must appoint councillors who have wide experience in local government affairs or have achieved distinction in any profession, commerce or industry, or are otherwise capable of representing the interests of their communities in the local authority area.

Unfortunately the state government appoints party members who are grassroot leaders who in most cases do not meet the requirement of the law.

In Petaling Jaya, the capable ones were removed as councillors and replaced with mediocre group of people. In Ampang, we have unemployed party members and people with poor education background serving as councillors. They do not meet the requirement of the Local Council Act.

The question remains which political parties in power will be the first to push forward the agenda that focuses on the people and not their respective parties.

By Dr Mohamed Fafick Khan Ampang The Star/Asia News Network

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Living life to the fullest

Chan, an avid mountaineer and myelofibrosis patient, with a photo of himself (in red jacket) and fellow climbers at the summit of Mount Kinabalu. Photo: UU BAN/The Star >>

Despite having a rare blood disorder, Tan Sri Chan Choong Tak not only continued his active lifestyle , but also took up mountain-climbing.

FORMER Dewan Negara president Tan Sri Chan Choong Tak’s motto in life is to live it to the fullest.

Not surprising then that among his many accomplishments are two Malaysian Book of Records titles as the oldest Malaysian to reach the top of Mount Kilimanjaro’s Uhuru Peak (on Aug 31, 2003, at the age of 70) and the oldest Malaysian to reach the top of Mount Kinabalu’s King George Peak (on Aug 29, 2004, at the age of 71).

Uhuru Peak is the highest point on Mount Kilimanjaro, which is the tallest freestanding mountain in the world (from sea level) and the tallest mountain in Africa, while King George Peak is located on the more challenging and lessclimbed Eastern Plateau of Mount Kinabalu, Sabah.

What makes these two records more significant – aside from the impressive fact that Chan only took up mountain-climbing in his sixties – is that he was suffering from a rare bone marrow disorder at the same time.

His condition, primary myelofibrosis, is one of a group of diseases called myeloproliferative neoplasms, which are caused by abnormal production of blood cells in the bone marrow.

In the case of myelofibrosis, the problem lies in the abnormally-increased production of megakaryocytes, which are the cells that directly give rise to platelets. This results in an initial increased number of platelets in the body.

Cytokines – protein growth factors that are produced by megakaryocytes – are also correspondingly increased.

And as these cytokines are what stimulate the bone marrow’s fibroblasts to produce collagen, this results in an excessive amount of collagen being made.

The collagen deposits in the bone marrow as webs of fibre – similar to scar tissue on the skin – resulting in the disease’s characteristic fibrosis of the bone marrow.

With the collagen taking up so much space in the bone marrow, regular blood cell production is disrupted.

Red blood cells (RBCs) are usually decreased in number and abnormally formed, resulting in anaemia, while white blood cells (WBCs) are abnormal and immature, resulting in increased infection rates.

With production of blood cells in the bone marrow disrupted, the spleen, which is the body’s secondary supplier of blood cells, steps up to meet the body’s needs.

This extra work usually causes the spleen to enlarge (splenomegaly), resulting in pain or a feeling of fullness below the left rib.

Occurring commonly in those above 50 years of age, myelofibrosis is caused by a spontaneous genetic mutation (i.e. not inherited) in the affected person’s blood stem cells. This is what causes the uncontrolled production of megakaryocytes.

The cause of the mutation itself in primary myelofibrosis is, as yet, unknown.

Accidental discovery

As the symptoms of myelofibrosis, like fatigue, shortness of breath, pallor, frequent infections and easy bruising, are quite vague, diagnosis can be quite difficult.

In Chan’s case, he did not notice any signs or symptoms of myelofibrosis prior to his diagnosis.

In fact, it was a combination of a road accident and his wife, Puan Sri Cecelia Chia’s sharp eyes that alerted them to the possibility of a problem.

He shares: “My son gave me a racing bike for my 60th birthday – that was 21 years ago. So, I used to cycle around. Then, I met with a road accident.”

Chan was cycling along the narrow, winding roads of his hillside residential area in Seremban, Negeri Sembilan, when he suddenly met an oncoming car.

With no space to avoid the car, he braked hard and was thrown to the ground in a head-first fall.

“My helmet broke and I thought I would be paralysed. My friend, who is a doctor, straightaway rang up the hospital and they sent the ambulance,” he says.

Fortunately, Chan suffered no major injuries from the accident.

However, his cardiologist son insisted that he be checked more thoroughly for brain injuries, which resulted in him seeing a neurologist.

While his brain turned out to be fine, his wife noticed that his platelet count from the blood test were quite high – between 600,000 to 700,000 platelets per cubic millimetre, when the upper limit for normal is 400,000.

His son then sent him to consultant haematologist Dr Ng Soo Chin, who prescribed hydroxyurea to bring down his platelet count.

That seemed to work quite well for Chan, and it was, in fact, shortly after this that he began mountain-climbing with a group of fellow MBA (Masters of Business Administration) alumni from Tenaga Nasional Bhd.

Chan was then a director of the company, and had gone to Ohio University, United States, to study his MBA along with other Tenaga Nasional executives.

“So, as I climbed, I continued to take hydroxyurea and everything was normal.

“But Soo Chin said, hydroxyurea will eventually bring down your red corpuscles (another term for RBCs), and recommended anagrelide,” he says. Anagrelide is a platelet-reducing agent.

Accelerating disease

Chan continued happily with the two medications, until the year 2011, 18 years after his initial diagnosis.

By then, he was seeing consultant haematologist Datuk Dr Chang Kian Meng at Hospital Ampang, Selangor, as Dr Ng had advised him to continue his follow-ups at a public hospital as his medications are quite expensive.

Chan shares that Dr Chang started him on epoetin alfa and pegylated interferon that year as his blood cell levels were fluctuating.

While interferon decreases the production of blood cells in general, epoetin alfa stimulates the production of RBCs to counteract the effects of anaemia.

However, his haemoglobin levels dropped even further, and he started requiring blood transfusions about once every two months.

The transfusions made a big difference as he reports feeling “very energetic” after receiving the first one. (Fatigue is a common symptom of anaemia.)

The following year, it was the WBCs turn to go “completely haywire”, when a blood test revealed that they had dramatically increased to about 56 from the regular range of about 4 to 10.

He also started experiencing profuse night sweats and cramps, along with the occasional itchiness that had started in his seventies – all of which are among the symptoms of myelofibrosis.

“Then, both Dr Chang and Soo Chin agreed that I had entered into myelofibrosis in acceleration,” he says.

The only cure for myelofibrosis is a bone marrow transplant, but aside from the difficulty of finding a suitable donor and the riskiness of the procedure, Chan’s age rendered him unsuitable for such a treatment.

Fortunately for him, a new drug had recently been approved by both the European Commission and the United States Food and Drug Administration for use in myelofibrosis at that time.

A new drug

The drug, ruxolitinib, inhibits certain enzymes in the JAK pathway, which regulates blood cell production. Half of primary myelofibrosis cases are caused by mutations in the JAK genes, which results in the dysfunctional production of blood cells in the bone marrow.

However, the drug was not available in Malaysia then. (It was only launched in the Malaysian market in 2013.)

This is where his political connections as a Gerakan life member and former secretary-general came in useful.

Then Minister in the Prime Minister’s Department and Gerakan president Tan Sri Dr Koh Tsu Koon offered to help pass on the letter Chan had written to the Health Ministry requesting approval to use the drug on compassionate grounds, to the Health secretary-general.

Four days later, Chan received the approval he needed, and received his first dose of ruxolitinib in October 2012.

Since then, after some adjustments in dosage, Chan’s blood cells are back in the normal range and his last transfusion was in December 2013.

He is currently doing well enough for his doctor to lower his dosage of ruxolitinib, while still taking epoetin alfa and interferon.

Life goes on as normal for this active 81-year-old, who still climbs hills, reads newspapers of various languages and blogs daily, works out in the gym and does regular morning calisthenics.

Of his condition, Chan shares that he never felt the need to know about the disease, being only interested in his blood test results.

“I didn’t know what myelofibrosis was all about until I was asked to do this interview. That was the first time I went into Google to see what was myelofibrosis,” he says with a laugh.

“But I knew it was a dangerous disease, but I wasn’t bothered. I continued to carry on with my normal life.”

He adds: “I’m not bothered with what happens because I have full trust in my doctors.

By Tan shiow China The Star/ANN

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US: an engine or a threat to the world economy? Unwise to write shortsighted rules!

Is the US an engine or a threat to the world economy?

According to the World Economic Outlook published by the World Bank, the international economy is forecast to grow by 3 percent in 2015 and 3.3 percent in 2016. The US and the UK will maintain their economy recovery while Japan and the eurozone will remain sluggish, with growth forecast at no more than 1.1 percent. The World Bank also predicted that the US economy will grow by 3.2 percent in 2015. Developing countries are facing lots of challenges in its economic development.

The US seems to be the only engine of the world economy. But the US Federal Reserve is likely to raise its interest rate from 0 to 0.25 percent. The World Bank worries that any such move will make it more difficult for emerging economies to raise money. The US has emerged from its financial crisis while other countries are still trapped in economic troubles. From this perspective it is hard to assess whether the US is an engine or a threat to the world economy.

There is still a worry that Greece will exit the eurozone. If this happens, the eurozone will be thrown into turmoil. In Japan, so-called "Abenomics" have failed to generate the anticipated results. Russia and Venezuela are each facing their own troubles and threats.

The US economy is closely linked to the whole. Only when other economies achieve sound development, can the US economy maintain sustainable development. The US can't just focus on its own development.

This article was edited and translated from 《美国是引擎还是威胁？》, source: People's Daily Overseas Edition, Author: Zhang Hong

It is unwise for the U.S. to write shortsighted rules

In the latest State of the Union Address, President Barack Obama mentioned China many times. He claimed that China wants to write the rules for the world's fastest-growing region (Asia-Pacific) but the U.S. should write those rules. He went on to urge Congress to give him the authority to promote trade with this region.

Obama is setting considerable store by the Trans-Pacific Strategic Economic Partnership (TPP) Agreement (TPP) and Transatlantic Trade and Investment Partnership (TTIP). These trans-regional trade and investment agreements are designed to increase America's competitiveness and encourage its exports. Although Obama's government has tried hard to promote these agreements and to make his mark on presidential history in the U.S., parts of the bills of the two agreements are opposed by some of the negotiation partners, and it is not clear whether Congress will support the agreements.

The U.S. is avoiding queries over its strategic rebalancing toward the Asia-Pacific. The American government cannot give a clear answer to whether TPP targets any specific country. However Obama has now made his position clear: "We should write those rules. We should level the playing field. That’s why I’m asking both parties to give me trade promotion authority to protect American workers, with strong new trade deals from Asia to Europe that aren’t just free, but fair."

It is readily apparent that America is not satisfied with international trade rules set by the World Trade Organization (WTO). Some countries are trying to break rules while China is attempting to set rules for the world's fastest-growing region. However, China's efforts could undermine American interests. Obama hold the view that China is taking advantages of existing free trade rules and it is not fair to the U.S.

It is not wrong for America to benefit from reform of international trade rules. But from a country good at promoting global rules in the past to one now busy promoting trans-regional rules between Asia and Europe, America's leadership in international system gradually fades out. The U.S. thinks that it has suffered losses from past world trade rules and therefore wants to establish new trans-regional institutions that exclude China and other counties.

America is no longer a country positively promoting global financial trade rules. It now seems to be focused on short-term rules to suit itself and a few allies. Although these agreements will co-exist with the WTO, world trade may become more fragmentized due to trans-regional agreements. A conflict of interests is slowly developing between a group of developed countries, including America, and the developing countries. Trade interests between developing countries might also be damaged. In view of this situation, it is hard to say that the world will be freer or fairer.

Are the trade rules established by WTO really unfair? The U.S. thinks that the standards involving environmental protection, intellectual property protection, and markets are too low. However, America should always bear in mind that it too encountered these problems during its industrialization. Progress was achieved only after a long period. If America remains reluctant to cooperate with other countries to define international rules, it might lose international respect and miss out on new opportunities for development.

The article is edited and translated from 《美国切莫制定短视规则（望海楼）》, source: People's Daily Overseas Edition, author: Shen Dingli, Vice Dean and professor of Institute of International Studies, Fudan University

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Don't worry about China slowdown !

Last evening, Beijing time, Premier Li gave the most anticipated speech at Davos. One day after China's GDP came in at 7.4 percent, Li assured the packed audience, of international business and government leaders, that China will avoid a hard landing, continue its ongoing reform and restructuring and ensure a prolonged period of sustainable future medium-to-fast growth.

Even before the release of the GDP numbers, a number of Western media and policy pundits were predicting a China stall. Issues with the real estate sector, local government debt, SOE intransience, shadow banking, over capacity and a weak global economy were cited as the factors which would continue to push growth rates lower in the future. But even amongst the hardened doubters, there were signs of dissension, with the Wall Street Journal grudgingly indicating respect for China's handling of its economic affairs.

Premier Li: Don't worry about a China slowdown

The 2014 results represented the slowest growth in 24 years and the first time the government has missed its target on the downside. But Li was in no way defensive, while acknowledging China's 10-trillion-dollar economy will continue to face downward pressures in 2015, Li indicated that the country will avoid systemic financial risks and will improve its quality of growth to ensure an "appropriate" pace of expansion. The rise in urban and rural employment numbers, rising real income levels, moderate inflation, a 50 percent individual savings rate, a 5 percent decrease in energy per unit of GDP, significant growth in China's tertiary industries/services and record numbers of new businesses, added meat to his assertions.

Li, in essence continued the line of thought he voiced at the Summer Davos in Tianjin, where he indicated China's actions are predicated on the realization that its economic growth pattern wasn't sustainable and that to avoid the "Middle Income Trap" China's economic engine needed to be restructured to be more efficient and competitive.

Highlights

"We will continue to pursue a proactive fiscal policy and a prudent monetary policy," Li said. "We will step up anticipatory adjustment and fine-tuning as well as targeted macro-regulation, in order to stabilize economic growth, upgrade its structure and achieve better quality and performance."

Li is clear that China does not regard the fiscal and monetary policy tools Western governments are limited to, as an effective means of transforming its economy.

"For the Chinese economy to maintain medium-to-high speed of growth and achieve medium-to-high level of development," Li said, "China must properly use the hand of the government and the hand of the market, and give full scope to both the traditional and new engines of growth."

This highlights a sharp contrast between China's "Big Hand" (government) over the "Invisible Hand" (market) approach, and Western democratic/capitalist models, which put the market on top and government as a kind of enabling and clean up mechanism.

"To foster a new engine of growth," Li said, "we need to encourage mass entrepreneurship and innovation, and mobilize the wisdom and power of the people."

The word innovation was repeated 33 times during Li's Summer Davos speech and it continues to be central to Li's vision of a more prosperous China. With 3 of the top 5 mobile phone manufactures and a host of other technological innovators like Alibaba and Tencent, there is a new sense of confidence within and outside about China's future.

"To transform the traditional engine of growth, we need to focus on increasing the supply of public goods and services, and strengthening the weak link of the economy," the premier said.

This references the need to make China's SOEs, government and financial sectors more efficient and responsive to the needs and pressures of the market.

China, he added, "will continue to promote trade and investment liberalization and facilitation, and open up its service sector, central and western regions as well as the capital market wider to the outside world."

This is a list of areas which China will be opening up to more investment internally and externally. The Shanghai FTZ has been used as a model and will be extended to Fujian, Tianjin and Guangzhou. They represent the cutting edge of a new kind of economic development platform which will be extended inland once the models have been proven.

"China will encourage its companies to explore the international market, and work for common development with other countries through greater openness towards each other," Li said.

Premier Li is signaling strong support for globalization and indicating a desire to work regionally and internationally to create better trade mechanisms. The New Silk Road, extension of transportation infrastructure into Southeast Asia, AIIB, BRICS Bank etc… are strong indicators of this desire which is essential to China's resources imports and finished goods exports.

So, what can we expect from China, the second largest economy in the world in 2015?

Some say the single biggest risk for the economy is still the interlinked and rising problems associated with shadow banking, local government and corporate debts and a stagnant real estate sector. But at about 54 percent of China's GDP, China's debt is far below most developed nations. The key will be how local governments are funded and regulated. This touches on the real estate sector as well which is badly in need of reform but because it represents 25 percent of the economy it must be handled carefully.

Continued increase in consumption. Consumption now accounts for 51.2 percent of GDP in China. Though it is still considerably lower than the 70 percent average for the developed countries, it continues to move in a positive direction. The services sector has now overtaken the industrial sector as the largest segment of the Chinese economy and seems to be following the government's playbook to re-balance the economy.

China is developing more confidence in its ability to innovate and lead cutting-edge FMCG markets and this trend will continue further balancing the public-investment and export-driven, forces which drove the economy in the past.

China has also taken some steps to solve its overcapacity issues. A two pronged approach which is shifting heavy industrial capacity in areas like transportation infrastructure to projects in neighboring areas and the world stage. For example the merging of China's major railroad companies and the projects they will being doing in the Mekong delta region. The second prong is the identification and closing of first and second generation industrial plants which is how China has been able to achieve a 5 percent increased efficiency in energy use per unit of GDP.

In the financial sector expect more pressure on the big banks to be more SME focused in exchange for more liberal controls of lending and deposit rates. An example: the lifting of the deposit rate ceiling, the deposit insurance draft plan being considered and the new property registration system will standardize the markets and provide new financial product opportunities. To make things more transparent the government has adopted new budgetary laws, local government debt regulations and encouraged state-owned enterprises to adopt mixed ownership structures.

It is clear though that fiscal and monetary policy will be part of the symphony not the main players. Premier Li was clear that he opposed another monetary stimulus to push growth rates and instead, would rely primarily on structural reforms. A thought which was expressed in Davos on Wednesday, by Zhou Xiaochuan, governor of the People's Bank of China, who also expressed a willingness to sacrifice growth for stability.

"If China's economy slows down a bit, but meanwhile is more sustainable for the medium and long term, I think that's good news," he said.

China's growth cannot be delinked from the global context. As the main driver of the world's economy since the US mortgage crisis meltdown, China has taken on a new role. Just as importantly and expanding China needs access to raw materials if it intends to consume and export finished goods. A resurgent US will help China, but a stagnating EU will hurt it. These seem to be the dominant trends which WTO started and which will carry on for some years.

The premier said China will go full speed ahead with liberalizing interest rates, allowing markets to play a greater role in setting prices, in forging trade agreements and opening up its financial system.

"We will not be afraid of difficulties, and we will continue to move along the path of reform and restructuring," Li said.

All of this, he suggested, was not only in China's interests but also that of the global economy.

"China's reform and development will bring more opportunities for the world."

China Economic path firm, despite lower growth

Since China revealed its 2014 annual growth rate of 7.4 percent on Tuesday, there has been heated discussion worldwide. Some observers cited the figure, the lowest in China since 1990, as proof of the lost glory of the Chinese economy.

Several Western institutes predicted that China's economic growth would tumble to about 6.5 percent in 2015 and some even proclaimed that 2015 would be the last year that China would see growth figures above 6 percent. Last week, a column in the Financial Times said the Indian economy may outstrip China's this year.

When China's GDP growth was above 10 percent, many voices expounded that such a high rate would be harmful. However, just as China is committed to economic restructuring and a turn to the "new normal," there appears to be more catcalls and scary predictions for the future. We have to be unswerving in our commitment not to return to the GDP-oriented path.

GDP figures are so favored by the media as they are easy to grasp. But China has passed the era of GDP-fixation and Chinese people now harbor more expectations for economic development. Despite continued pursuit of wealth, we highly value safety, environmental protection, equal opportunity and explicit rules. With money, there should also be dignity.

Chinese economic and social development has entered an era of multiple targets, which will become more effective. But sometimes the effects are invisible. This makes it harder to measure than what GDP does.

It's different in India. Long overshadowed by China, it is keen to become the best in some aspects. It is in dire need of evidence to show that it is not inferior to China.

Even if the Indian economy does outstrip China's one day, the impact on the Chinese public will be far less than on its own people, since India has been waiting for the outcome for so long. The West seems to be also long expecting the day. Some Western media attach more significance to India's overtaking China than Chinese people do.

China's GDP growth is unlikely to always rank top of the global list and we won't modify our set direction in social and economic development.

The "new normal" in the Chinese economy doesn't mean stagnation nor recession, but a strategic adjustment toward quality and sustainable development. We have such a widespread capacity to push forward economic and social development and meet people's expectations for a better life.

China's growth of 7 percent maintained in the period of economic and social restructuring is no less significant than 10 percent in the past times of extensive development. While the Chinese government is capable of achieving higher growth, its choice of lowering the rate deserves more praise.

China has never been applauded by the West in its development since the end of the Cold War. We have grown used to this. We need to stay firm to achieve our target of deepening reform.

West should end its hypocrisy on anti-terror war!

Chinese and Russian policemen attend a joint anti-terror drill in Manzhouli City, north China's Inner Mongolia Autonomous Region, Oct 20, 2014. [Photo/Xinhua]

Senior US leaders invited sharp criticism at home for not attending last week's solidarity rally in Paris against the terrorist attack on French satirical magazine Charlie Hebdo in which 12 people were killed. As a result, US Secretary of State John Kerry was in Paris this week to make up for the mistake.

However, terrorist attacks on innocent civilians in Nigeria, where Boko Haram fighters killed hundreds of, if not more, ordinary people early this month, have not received the same attention in the US and the Western world as the Paris attack. Yet such double standards and hypocrisy of the Western world is nothing new.

Over the past few years, the US and some Western countries have not responded to the terrorist attacks against innocent civilians in Beijing, Kunming and the Xinjiang Uygur autonomous region the way they reacted to the Paris attack.

On several occasions, US State Department spokespersons have used the excuse that they need more information and investigation into the incidents in China to condemn them as terrorist attacks. But they did not ask any such question after the Paris attack.

Some Western news organizations have refused to describe the perpetrators at Kunming railway station in Yunnan province as terrorists, insisting on calling them "knife-wielding attackers". And on the rare occasions that they have used the word terrorist, they put it within quotation marks as if the ruthless killers in China were any different from those in Paris or elsewhere in the Western world. One CNN report even posed the question, "Terrorism or Cry of Desperation?", as if killing innocent civilians in China can be somehow justified.

Even though China and the US have common interests in fighting terrorism, some Americans still seem to believe that only those setting off bombs in New York are terrorists while those doing the same in Beijing or any other Chinese city demand a different description.

The West's double standards are not restricted to China and Nigeria. The decade-old wars in Iraq and Afghanistan have cost the lives of hundreds of thousands of civilians, but the mainstream media outlets in the US have largely ignored the tragedies and focused on the loss of their own troops.

If the number of civilian casualties is a measure of the intensity of a terrorist attack, tragedies like the Sept 11, 2001, attacks have occurred multiple times in Iraq and Afghanistan. But the Western media don't seem to care much about them.

Some Western observers have even found excuses for West's inadequate response to the terrorist attacks in Kunming on March 1 last year in which 31 were killed and 141 injured. But by failing to immediately condemn the attacks against innocent civilians in Kunming and Xinjiang, these people have by default condoned the action of the perpetrators.

It is true that terrorists in the eyes of some could be freedom fighters in the eyes of others. That is why Osama bin Laden was a freedom fighter to the US in the 1980s but a top terrorist in the 21st century. And Nobel Peace Prize winner Nelson Mandela was still on the US terrorism watch list as late as 2008, years after stepping down as South Africa's president.

There is no doubt that the US and its allies have failed miserably in their "war on terror" despite the more than 1,000 air strikes launched against the Islamic State group. In spite of the heavy bombardments, we have seen terrorists gaining strength and spreading their tentacles to more areas across the world.

And the Western world responds to this deadly threat with double standards.

By Chen Weihua China Daily/Asia News Network

The author, based in Washington, is deputy editor of China Daily USA. chenweihua@chinadailyusa.com

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