Saudi Arabia’s Crown Prince Mohammed bin Salman — known universally as MBS — has been named prime minister of the G-20 country. The move violates the Saudi constitution, but at this point in MBS’ trajectory, and in the overall context of Saudi oppression, that’s a minor detail.
Meanwhile, at the Milken Asia Summit Thursday, we’ve seen a mix of firm and fearful comments — often in relation to China.
THE WORLD TRANSFORMED — INDO-PACIFIC REALITIES
Jonathan Kaplan, the U.S. ambassador to Singapore, kick-started the day by warning that Singapore’s remarkable transformation is at risk due to Beijing’s expansionist policies:
“Singapore transformed itself from a third world to a first world country in just a generation,” Kaplan said, but “now more than ever, we need to reject authoritarians who disregard the will of their nations [and] who blatantly ignore basic human rights,” he said.
Warning from Washington: “Peace will not be ubiquitous. It will not be cost-free,” in this new geopolitical era,” Kaplan said, adding “we must redefine global trade strategy.”
CHINA UNDER THE MICROSCOPE
FUTURE OF U.S.-CHINA RELATIONS: U.S. Ambassador to China Nicholas Burns mostly continued the straight talk. Skirting questions about President Joe Biden’s repeated insistence that the U.S. will use its military to defend Taiwanese democracy, Burns flipped the script on whether Washington still believes in the One China policy: “We’re seeing a new offensive, if you will, by the People’s Republic of China … That’s the party changing things,” and “we’re not going to go along with this.”
Burns criticized China for sending two different messages on Russia’s invasion of Ukraine — ”To the world, China’s saying ‘Hey, we’re neutral.’ In the local newspapers, however, Beijing’s “saying the United States and NATO instigated this war.”
On Hong Kong: It’s now “a shadow of what it was.”
Are we in, or entering, a new cold war with China? Burns is well-positioned to answer that one — the first 10 years of his career were also the last 10 of the first Cold War. “I wouldn’t use that term,” he said. During the Cold War, “We were two blocs, but with no economic connection. Today, we have a major economic connection.” The U.S.’s relationship with China is “by far the most consequential relationship we have,” Burns said. “We’re not seeking decoupling.”
Don’t forget: China’s Xi Jinping might be getting a third term next month, but his new ministers won’t be confirmed until March 2023, so we’re in for a five-month transition period.
HOW XI GAINED A LIFETIME PRESIDENCY BUT LOST THE WORLD: Pew Research on shifting global public opinion on China during the reign of Xi
When Xi assumed power, U.S. public opinion was evenly split on China: around 40 percent favorable and 40 percent unfavorable. That’s now changed dramatically, with nearly everyone coming off the fence: Today 82 percent have unfavorable views to 16 percent favorable.
The International Republican Institute released a survey of case studies on the Chinese Communist Party’s “Quest for Global Influence,” detailing what it called efforts to “undermine institutions of democratic governance.”
NOTHING TO SEE HERE, PER CHINESE PARTICIPANTS
A panel examining “what to expect in post-pandemic China” became anti-climactic when the speakers mostly avoided answering the valiant questions of moderator Wenchi Yu. Even predictions of what might change after October’s 20th Communist Party Congress were beyond the high-powered panelists.
“It’s very exciting to see what China was able to step up on” during Covid, said Nisa Leung, managing partner of Qiming Venture Partners. “They always find a way to overcome difficulties,” said Mingpo Cai, of Cathay Capital. Don’t take our word for it. Watch the video here.
Cynthia Zhang, founder of FutureX Capital, has been quarantined 10 times for a total of five months since March 2020. But you won’t hear her complain!
Eventually a critical thought emerged: Today “Outside investors are not able to come into China to do due diligence. They don’t know what’s going on,” said Leung, who hoped that would change soon.
Charles Li, founder of MicroConnect, finally admitted “China’s going to be very different” after the party Congress, predicting a new focus “on redistribution rather than enormous growth.” He also said China’s financial system “does not work for the little guy” today.
Are there things that worry you about China, as an investor? Henry Han of Soul Capital started one sentence with “My biggest fear …” but didn’t end up finishing the thought. Nor did any other panelist.
How did it end? When Li, in his closing comment, said the panel had been “too optimistic,” two tables broke into applause.
“If South Korea joined [the Quad] you could call it The Squad,” said Kishore Mahbubani, a former Singaporean U.N. ambassador, now with the National University of Singapore.
IS A PRIVATE JET ‘RESPONSIBLE CONSUMERISM?’
Bold move of the day: Inviting the CEO of a private jet maker and the head of sustainability at a fashion retailer onto a panel on “accelerating the path toward responsible consumerism.”
Bombardier CEO Éric Martel said his company spends 80 to 90 percent of its R&D budget on reducing emissions, and insisted that private aviation accounts for a tiny percentage of global emissions. Sustainable aviation fuel and better aircraft design can more than halve an aircraft’s emissions — but there’s a shortage of the fuel available, Martel said.
AdamWhinston, the global head of ESG at Shein (the world’s largest online-only fashion retailer) faces an uphill battle every day. Though his customers wear their clothes only up to 12 times on average, and get them individually shipped to their homes around the planet, he said they often recycle them via gifts, reselling or through charity donations. NGOs, including Greenpeace, have pointed out they often end up in dumps in developing countries.
AWKWARD: Asked whether he himself was wearing a Shein outfit for his panel appearance, Whinston looked down at his impeccable suit, laughed nervously and admitted: “Not today. … I wish I was.”
SPOTTED: Outside the panel on responsible consumerism, one attendee eschewing the bountiful ceramic crockery to use two single-use cups for one tea … and then dropping the tea bag wrapper on the floor and not picking it up.
ASIA CONTENT CONTINUES TO SURGE
The rise of streaming and the depressing thud of Covid lockdowns combined to create a seismic shift that took Asian creative content global. No longer just one-off Bollywood or K-Pop crossover hits, now the world is full of multiracial and globally appealing waves of content.
So who’s the next Korea for creative investors? Actress Raline Shah’s home country, Indonesia, could be one to watch. Indonesia is by far the biggest Southeast Asian economy, and also the third-biggest democracy in the world. There’s little risk that censorship or sanctions would complicate the rise of content from this country of 280 million.
“There’s so much potential,” said Shah, but she warned the Indonesian government does not provide competitive tax rebates for foreign productions. One effect is that creatives themselves get exploited: The effect is that those who do fill in Indonesia exploit the creatives: ”18 hour, 19 hour days to keep the costs down.” Shah said it’s only been the last couple of years as a major star that she’s been able to avoid that sort of schedule.
Abandoning America to make it big in Asia: Singer Eric Nam grew up in Atlanta, Ga., but said he had to move to Korea to become a star. “Asia was the only place I could go where people did not judge me on who I was and what I looked like” — as an Asian-American. Learn about Eric’s Nam Nation community.
Henry Golding, star of “Crazy Rich Asians,” said the difference for Asian performers in recent years is “now, we can tell our stories and we don’t have to water them down” to be successful, and to connect with a global audience.
BY THE NUMBERS — MOST FOLLOWED PANEL: The Asia creative industries panel featured performers with a combined 16 million followers on Instagram alone. But you know you’re at a business conference when U.S. ambassadors address standing-room-only crowds, and three of the world’s top entertainers get the side room.
Raline Shah, actress and entrepreneur, has 8.9 million Instagram followers.
Eric Nam, singer: 4.5 million.
Henry Golding, actor: a mere 2.4 million
UK FOREIGN SECRETARY JAMES CLEVERLY — ‘I’VE ALWAYS LOVED MAPS’
Singapore was the scene, in 1942, of the greatest military surrender in British history. This week, it’s the British economy headquartered in London that’s been surrendering.
That didn’t stop Foreign Secretary James Cleverly from opening a new Indo-Pacific office for British International Investment, the U.K.’s development finance body.
That move was overshadowed even here by the Bank of England, Britain’s central bank, warning of a “material risk” to Britain’s financial stability and pumping around $75 billion into pension funds to save them from potential disaster. The funds had been forced into selling assets to stay afloat, after the plummeting pound depleted their liquid reserves.
The translation of the problem here: Rich countries including the U.K. are careening into recession, in addition to driving high inflation around the world. That is forcing harsh interest rate rises, which is seeing money flood into U.S. dollars, and pummeling Asia currencies.
No wonder Cleverly chose not to take any questions from his audience, or from journalists.
“I’ve always loved maps”: That was how Cleverly started his speech, before adding he now prefers globes, because unlike on a printed map, every country is at the center of the planet.
In a nod to the turmoil in Liz Truss’ government, Cleverly noted that he had been in his current portfolio for just three weeks — six weeks shy of his previous stint as education secretary.
While China is usually top of mind in this region, Cleverly turned to Beijing last in his 19-minute address — and didn’t say very much when he did get to it. After arguing that Britain has now “firmly cemented our Indo-Pacific tilt,” Cleverly said “security and prosperity in the Indo-Pacific is indivisible from Europe’s.”
He said “no U.K. government would ever turn a blind eye to repression,” but made no specific commitments. “China will always have a choice about the direction it wants to take,” he said, urging Beijing to stick to international norms.
Too Cleverly by half: “The U.K. recognizes the centrality of ASEAN to the region,” Cleverly said, as he touted that Britain is now a “Dialogue Partner” of the group.
In making the comment, Cleverly risked giving a free pass to China, given the group is notorious for accepting anyone and everyone at their table, including dictators (Cambodia), military juntas (Myanmar) and China. Also an ASEAN dialogue partner: Russia.
Making a pitch to join the CPTPP trade agreement, despite not being a Pacific country, Cleverly argued “geography matters less — our values make us neighbors.”
WHEN WILL A WOMAN AGAIN RACE IN FORMULA 1? In five years, per McLaren Racing CEO Zak Brown, whom you might recognize from Netflix smash hit “Drive to Survive.” Speaking at a panel on the future of sports and entertainment Thursday, Brown said a 15-year-old-girl somewhere in the carting world today is likely to be the next female F1 driver. The last woman to race in a world championship F1 race was Lella Lombardi in the 1976 Austrian Grand Prix, her 17th race.
Spotted: F1 racers Fernando Alonso and EstebanOcon, unveiling the new Alpine A110 at the ION shopping center down the road from the Four Seasons at 4 p.m. The queue started forming at 2:30 p.m., when Global Insider strolled down for a look.
INSIDER MILKEN TIPS
Livestream | Agenda | Speaker List | Thought leadership background reading
$17 ICED COFFEE: We’ve boldy reported on the $24 bottles of water in Davos; now it’s time to warn you that an iced coffee in the Four Seasons Executive Lounge (third floor) is $17 a glass. It’s good — but it’s definitely not that good. You’re paying for the table, not the caffeine.
BEST HAWKER CENTER: Newtown (h/t Philippe Batani). Full of delectable food at incredible prices, and open late into the night. Global Insider went for dinner and can vouch for the BBQ squid, chicken wings and skewers (try the mutton — surprisingly tender). For 3 Singaporean dollars, you can get a glass of icy cold refreshing soursop juice, or upgrade to a jumbo, bucket-sized serving for $6.
MORE SINGAPORE COFFEE TIPS
Abseil, Nylon, Double Shot, PPP Coffee and % Arabicah/t Peter Anderson
Think Magazine recommends Spinelli’s.
Stuart Meek recommends Tiong Hoe.
NO MICROPHONE HERE: “It’s really important to increase the number of off-record conversations,” said Milken Institute’s Laura Deal Lacey, explaining that an uncertain economic and geopolitical environment makes many participants reluctant to speak in open settings.
None of the public sessions at the conference allowed questions from the audience.
IT’S RAINING MEN: Milken participants are about 85 percent men. That’s sadly typical of major business and political conferences around the world. These ones don’t come with a fun soundtrack though.
ON OUR RADAR
Here are the sessions we’re keeping a close eye on over the final day of the Milken Asia Summit. Singapore is 12 hours ahead of Washington, D.C., as your time reference point.
Opening the Road to Space for Humanity,10 a.m.-10:45 a.m. SGT at the voco Orchard Grand Ballroom, featuring Interstellar Technologies founder TakafumiHorie, former astronaut NaokoYamazaki, now a member of Japan’s Space Policy Cabinet Office Committee and a council member for the Earthshot Prize, and Space Films founder SatoshiTakamatsu.
Former Australian Prime Minister Julia Gillard, now the chair of the Global Institute for Women’s Leadership, on “authentic leadership” at 11:30 a.m.-12:20 p.m. SGT at the Four Seasons Ballroom.
The Future of Cuisine featuring chefs Wolfgang Puck and Daniel Boulud at 11:30 a.m.-1 p.m. at the Four Seasons Crescent Ballroom.
PUTIN TO ANNEX MORE OF UKRAINE ON FRIDAY: Russian President Vladimir Putin will formally annex four additional regions of Ukraine on Friday, after running sham referendums seeking cover for the move earlier in the week. The ceremony is taking place at 3 p.m. Moscow time Friday (8 a.m. in D.C.). Putin will then deliver a speech, the Kremlin said.
Are Russians really about to strike? Economist Konstantin Sonin has proposed a nationwide labor strike in Russia on Mon, Oct. 3.
The 12 people ready to ruin Russia next, after Putin. By POLITICO’s Douglas Busvine.
AMERICAN WINS GLOBAL INTERNET SHOWDOWN IN BUCHAREST: U.N. countries voted on Thursday to select a new leader of the International Telecommunication Union, the U.N.’s telecom agency, to replace China’s Houlin Zhao.
The winner: American candidate Doreen Bogdan-Martin, who whipped Russia’s Rashid Ismailov 139 to 25, and who will now be responsible for efforts to set global standards for telecom and tech infrastructure, and internet rules. Full story here.
The choice was between preserving the internet as it’s known today or laying the groundwork for more government control, often misused by authoritarian countries including China, Saudi Arabia and Iran.
U.S.-PACIFIC ISLANDS SUMMIT WRAP: Leaders from 12 of 14 invited countries joined the events, which the White House styled as the first U.S.-Pacific Island Country Summit. It was the first time Pacific Island leaders have visited the White House; Australia and New Zealand participated as observers.
The White House said all the visiting leaders had endorsed an 11-point partnership statement. That was greeted with relief after Solomon Islands Prime Minister Manasseh Sogavare earlier said he would not sign. The administration has showered the region with attention in 2022 (including multiple Cabinet-level visits) out of fear that more countries would follow the lead of Solomon Islands and sign security deals with Beijing.
Thanks to editor Dave Brown, Stuart Lau and producer Hannah Farrow.
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