Monthly Archives: June 2020

Is the liberal international order ending? What is next? | Daily Sabah – Daily Sabah

Posted: June 22, 2020 at 6:05 pm

Following the end of World War II, with fascism defeated, the West under the U.S.' hegemonic leadership created multilateral institutions including the United Nations, the World Bank, the International Monetary Fund (IMF) and the General Agreement on Tariffs and Trade (GATT) that became the World Trade Organization (WTO) in 1995 to support an international system favorable for liberal economic relations and democracies. During the Cold War years, the Communist bloc, although part of the U.N., emerged as a competing group. During the 1990s, however, most former communist countries became part of the same liberal international system. Over the decades, multilateral cooperation expanded into various other issues including the environment, health, skies, space, open seas, human rights and proliferation of nuclear weapons under U.S. leadership. Even though the U.S. role and policies in this world system have often been criticized, many believe that the sustainability of it has depended on its leadership.

Yet, the U.S. hegemonic guidance has become increasingly questionable, especially during the current administration. President Donald Trump withdrew the U.S. from several multilateral treaties, including the Joint Comprehensive Plan of Action (Iran nuclear deal), the Paris Agreement on climate change and recently the Treaty on Open Skies, in addition to defunding the World Health Organization (WHO). He disregarded the WTO when he engaged the U.S. in a trade war with China seeking bilateral trade deals. He pulled out of negotiations of multilateral trade and investment agreements, namely the Trans-Pacific Partnership (TPP) and Transatlantic Trade and Investment Partnership (TTIP), and renegotiated the North American Free Trade Agreement (NAFTA). Institutions of the liberal order and long-term U.S. allies have been repeatedly criticized by Trump. Although the U.S.' hegemonic leadership has been questioned from time to time in past decades, it is now more pronounced under his administration.

The Foundation for Political, Economic and Social Research (SETA) in Washington, D.C., organized a webinar on June 1 with Alexander Cooley and Daniel Nexon, authors of the book "Exit from Hegemony: The Unraveling of the American Global Order." They argue that the international order has been undergoing a fundamental transformation and that Trump is just a symptom of this change. Russia, as a strong nuclear power, and China, as the worlds economic powerhouse, have been demonstrating illiberal domestic and foreign policy behaviors targeting the Western order, pushing counter-norms, promoting alternative institutions and being revisionist powers in their regions. Weaker nations have started to seek alternative patronage and security partnerships with these states, rather than the U.S. and its allies. For example, Saudi Arabia is seeking close relations with China. Various transnational networks also promote illiberalism, ethnic nationalism and extremist values, thus challenging the anti-authoritarian and progressive networks of the 1990s. These developments are eroding the liberal international order and the Trump administration, with its "America First doctrine, contributes to the further weakening of the system rather than reasserting American leadership.

Indeed, scholars such as Yale H. Ferguson and Richard W. Mansbach have written along these lines before, but these ideas have become more pronounced these days. The Trump administration, instead of bolstering U.S. leadership, is undermining it. The U.S. no longer shows plausible authority to solve regional conflicts either. The obvious example is the Israeli-Arab/Palestinian conflict. Although U.S. policies have been far too lenient to Israel's demands in the past, with the Trump administration, the U.S. has become an open supporter of Israeli positions, including its declaration of Jerusalem as its capital and its annexation of the West Bank, disregarding the rights of Palestinians.

Based on these developments, many international relations scholars are observing that the liberal world order is crumbling as U.S. power is losing its effectiveness. The fate of U.S. leadership in the coming years and decades is uncertain. For some, the Trump administration has damaged America's status to the extent that U.S. hegemonic leadership is not recoverable. The reassertion of America's superpower status now would require strong cooperation among advanced industrialized countries that embrace democracy and the institutions and values of the liberal international order. Without it, Trumps presidency might mark the end of the system, which was the product of the U.S. strong leadership during the post-war period.

Evolution of reality

It seems that current international institutions are not going to hold without American leadership and the cooperation of major powers, contrary to what proponents of liberal internationalism hope for. Will global interdependence ensure increasing cooperation? Will interdependence and the spread of liberal democracies preserve peace and cooperation? It is clear that it is not the end of history as Francis Fukuyama argued in the 1990s, with the participation of former communist countries in modern economic systems. What the world order is evolving into is debatable. Donald J. Puchala, in his book, "Theory and History in International Relations," argues that the system is evolving into a balance of power system, which was, historically speaking, susceptible to major power confrontations, conflicts and wars.

The U.S. relative economic power has also been declining for decades now. The U.S. share of world gross domestic product (GDP) has declined from about 50% of the world economy at the end of World War II to about 20% today. Cooley and Nexon also show in their book that in the 1980s, Group of Seven (G-7) economies with the U.S.' as the biggest accounted for half of the world economy, and BRICS (Brazil, Russia, India, China, South Africa) countries among them the Chinese economy being largest controlled about 15% of global GDP. The BRICS share of the world economy caught up with the G-7 countries share, both being around 31%, in the middle of the last decade. Now, there are multiple economic power centers, including the European Union, North America and Asia. Chinese and Asian growth, however, has been more robust than the rest of the world. In Asia, India is another country with large economic potential, as its economy has grown rapidly in recent decades. Japan had a lost decade in the 1990s in terms of its economic growth, but it was still the second-largest economy in the 1980s and remains financially powerful.

Russia has not been as big economically, but with its strong military power and its nuclear weapons arsenal, it started to reassert itself in the 2000s, creating its own sphere of influence under former Prime Minister and current President Vladimir Putins rule. Chinas economic and political influence has been increasing with its Belt and Road Initiative and its increasing presence in Africa. Its influence on Asias economy and politics has been growing for the past three decades. In the 2000s, China's expanded influence created arguments about the transition of power. In Zhiqun Zhus book "U.S.-China Relations in the 21st Century: Power Transition and Peace," China is expected to become the next superpower. The theory builds on the experiences of past power transitions, all of which occurred with a war between the dominant power and the newly emerged power. Zhu in his book hopes that the transition this time will be peaceful.

The change and its effect

Even as we observe historical similarities of great power rivalries, we still have a very changed world. If we just compare this century with the 19th century, for example, all great powers of this generation have nuclear stockpiles, which means that any war among them could result in mutually assured self-destruction. Would this not deter statesmen and peoples of these countries from engaging in a possibly disastrous war?

In addition to nuclear technologies, unprecedented levels of communication and transportation technologies along with liberal government policies have led to multidimensional globalization, creating our global village. As all parts of the world become interconnected, people living in different corners of the globe increasingly become aware of one another, cognizant of common environmental, health and economic problems. Even though nation-states and national borders have not withered away and national identities are still strong, wouldnt people put enough pressure on their governments to solve common problems rather than escalate conflicts that reduce the welfare level of all peoples?

Economic and financial globalization is strong. Financial markets are globally connected and its institutions operate worldwide, while multinational corporations and their operations have grown tremendously. All economies are more dependent on global trade, as it grew faster than the worlds average economic growth rate since World War II. Now, production, finance and trade are global, and the welfare of nations is tied to one another. Wouldnt such a level of interdependence sufficiently pressure governments to cooperate in order to ensure the continuity of their economic well-being? Of course, such globalization is reversible, but with a huge cost in losses for all countries. Who would want that?

And yet, we are about to enter the age of artificial intelligence (AI). As machines and tools get smarter, economic and social life will change, and such changes will lead to power changes within and among countries. I am not able to describe what is coming next, but it seems to me that the world is evolving into something unique and quite different from its historical episodes. Your thoughts?

*Associate professor and chair of the Department of Business Administration, American University of Iraq, Sulaimaniah

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The Liberal Party’s rocky relationship with multilateralism – The Strategist

Posted: at 6:05 pm

Covid-19 is a shared crisisa reminder that many problems are best solved or, indeed, can only be solved through cooperation. At the heart of successful international cooperation is the concept that each country shares, rather than yields, a portion of its sovereign decision-making. And in return, each gets something from it that is greater than their contribution.

Australian Foreign Minister Marise Payne, National Security College, 16 June 2020

Australias foreign minister has made a wonderful argument for multilateralism.

Stress argument. Marise Payne does battle for the heart and mind of her party. Paynes Australia and the world in the time of Covid-19 confronts the multilateral rejectionism in the Liberal Party over the past 25 years.

The speech is one of Paynes strongest because it draws on the personality and philosophy that have marked her career. Reflecting her life inside the party, the speech builds a bridge between conservative instincts and liberal principles.

Some might see it as offering mere truisms on multilateralism. Not so in the Liberal Party context. For the Libs, this is a fight about whats true and the true faith.

Payne does gentle pushback joined to persuasion in support of principlethe way she usually navigates rough party terrain.

The bridge Payne offers the Libs is that national interests can be well served by multilateralism. She is mounting a sophisticated case to counter the rejectionism that John Howard directed at the United Nations and multilateral institutions.

The rejectionist view is that the UN is a distraction from, even an impediment to, Australias core foreign policy interest; Australia should engage multilaterally only when the system is doing practical stuff that clearly serves our national interests. A decade ago, I noted that Howards phobia about the UN was on full display in his memoir:

There have beentwo strands of Australian political opinion on the United Nations: Evatt Enthusiasm and Menzies Scepticism. [Robert] Menzies preferred the reassurance of great and powerful friends to the ambition of the world body. John Howard shares that sentiment and has pushed the Menzies position so far that hes almost created a new category. Howard has gone from scepticism and sniping about the UN to give the Menzies strand a grudging, even rejectionist tinge.

Australias second-longest-serving prime minister had a mental tic about the UN that became a rejectionist party mindset. The Lib chant of bilateral good, multilateral bad is a strange mix of Oz pragmatism and US neocon rants.

Rejectionism can be risible: during the foreign policy debate for the 2010 election, Julie Bishop made the exasperated point that the Libs werent actually arguing that Australia should withdraw from the UN.

The chant oversimplifies Howard. His rejectionism in retirement isnt an accurate guide to what he did in power. In office, he often embraced multilateral institutions and instruments. His national interest language fed a quiet commitment to internationalist solutionsthe same bridge Payne offers the party.

Rejectionism coloured Prime Minister Scott Morrisons negative globalism moment in October in his Lowy Institute foreign policy lecture: We should avoid any reflex towards a negative globalism that coercively seeks to impose a mandate from an often ill-defined borderless global community. And worse still, an unaccountable internationalist bureaucracy. Globalism must facilitate, align and engage, rather than direct and centralise.

Morrison ordered the Department of Foreign Affairs and Trade to do a comprehensive audit of global institutions and rule-making processes where we have the greatest stake.

As Canberras truest multilateralism believer, DFAT looked beyond Morrisons coercion language to embrace his thought that Australia hasnt been involved as it should be in setting global standards.

The audit is done andsurprisethe PMs diagnosis is absolutely correct. And the answer is that Australia needs to do much more on the multilateral stage (theres a reason DFATs art is called diplomacy). Greg Earl offers a characteristic Earlism (astute and dry): the Libs have discovered the joys of positive globalism.

Presenting the audit findings, Payne demonstrates anew that a foreign ministers most important diplomatic relationship is with her prime minister. She reorients ScoMos negative globalism to the positive.

The audit, she says, affirmed that multilateral organisations, especially international standard-setting bodies, create rules that are vital to Australias security, interests, values and prosperity.

Most politicians learn by doing. And the pandemic has given the Morrison government deep lessons, in the Payne telling:

Covid-19 has shown that our international order is as important as ever. There is need for reform in several areas, but the pandemic has brought into stark relief the major role of international institutions in addressing and coordinating a global response to a global problem across multiple lines of effort. What has been exposed is the magnitude of the consequences if we fail to ensure these institutions are fit for purpose, accountable to member states, and free from undue influence.

Australia wants global institutions fit for purpose, free from undue influence, with a strong Indo-Pacific focus. The UN and its agencies must be reformed to improve transparency, accountability and effectiveness. Oz foreign policy will seek to preserve system fundamentals:

rules that protect sovereignty, preserve peace, and curb excessive use of power, and enable international trade and investment

international standards related to health and pandemics, plus areas such as transport and telecommunications that underpin the global economy, which will be vital to a post-Covid-19 economic recovery

norms that underpin universal human rights, gender equality and the rule of law.

New rules are needed, Payne said, for critical technologies, including cyber and artificial intelligence, critical minerals and outer space.

Multilateral rules and norms enlist nations to deal with nasty stuff. The news headlines from the speech focused on the kick at Russia and China for pushing disinformation about the pandemic: [I]t is troubling that some countries are using the pandemic to undermine liberal democracy to promote their own more authoritarian models.

Fighting words unite the party, as Payne points the Libs to the golden goals of globalism and the valuable norms of multilateralism.

The Libs know they want rules: the 2016defence white paperreferred torules60 times45 of them in the formulation rules-based global order. The answer to the rejectionists lies in the ambitious complexities of that simple phrase: a rules-based global order.

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Liberal Party pays tribute to Jovito Salonga on his 100th birth anniversary – Manila Bulletin

Posted: at 6:05 pm

Published June 22, 2020, 1:19 PM

By Mario B. Casayuran

The leadership of the 74-year-old Liberal Party (LP) paid tribute today to former Senate President Jovito R. Salonga who was born 100 years ago.

Senator Francis N. Pangilinan, LP president, described Salonga as a true patriot and statesman.

Pangilinan said Salonga served as leader of the Liberal Party guided by his wisdom, selflessness, and love for country. Salonga was the 14th chief of the Senate of the Philippines.

Salonga, who served as Senate President from 1987 to 1992, led a group of 12 senators in rejecting the proposed extension of the RP-US Military Base Agreement in September, 1991.

Ka Jovy has endured many battles that maimed his body, but not his spirit. He has confronted the plagues of dictatorship, corruption, and economic crisis, and he carried on, Pangilinan said.

How fascinating it would have been if the gentle sage and fighter that is Ka Jovy were here, amid a pandemic endangering the peoples health and livelihood, and an anti-terrorism bill threatening their rights, he stressed.

Birthdays are for celebration of life, struggles, and triumphs. We are grateful for the encounters and lessons we had with Ka Jovy in his lifetime. We are fired up to carry his work forward, he added.

Pangilinan said that Salonga represents the enduring LP tradition of service and love of country.

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FERC schedules technical conferences on carbon pricing, offshore wind integration challenges – Utility Dive

Posted: at 6:02 pm

Dive Brief:

Federal regulators on Thursday announced they would hold two technical conferences based on issues raised by stakeholders one on carbon pricing and one on whether current grid operator frameworks are suitable for offshore wind integration.

Transmission development company Anbaricfiled a complaint with the Federal Energy Regulatory Commission against the PJM Interconnection last November, asking the commission to find that PJM's transmission interconnection procedures deny meaningful access to offshore wind and similar remote generation technologies. FERC dismissed the complaint, but agreed to hold a technical conference to explore the issue more.

The commission also announced it would host a commissioner-led technical conference on carbon pricing, in response to a request from competitive power suppliers, clean energy advocates, the gas industry and others. "When such a broad group of voices asked the commission to convene an exchange of ideas, I think it's important that we do so," FERC Chair Neil Chatterjee said during the meeting.

Commissioners were broadly in consensus on the importance of the offshore wind and carbon pricing conferences during Thursday's monthly open meeting.

"The fact that we're going to be having a technical conference on how to develop offshore wind and the transmission issues involved with it is very important," Commissioner Bernard McNamee said during the meeting, echoing comments from Commissioner Richard Glick, the lone Democratic appointee on the commission.

Glick said he agreed with the commission's decision to dismiss the Anbaric complaint, but said key questions related to offshore wind and transmission "warrant further investigation." Specifically, he pointed to Anbaric's argument that transmission planning under the eastern regional transmission operators' jurisdiction and elsewhere should plan transmission ahead of offshore wind deployment, to avoid expensive and inefficient development.

"Offshore platform transmission projects, where the transmission is built in anticipation of generation, may be the most efficient approach for accommodating the growth of offshore wind," said Glick. "I commend Chairman Chatterjee for noticing a technical conference to explore whether existing RTO [and]ISO frameworks can accommodate this anticipated growth."

As more eastern states set large offshore wind goals, having a system to minimize costs as well as environmental harm to the ocean, and maximizing efficiency is essential, Anbaric argued in its complaint. On land, the grid already exists and is relatively easier to connect to, but things are "very different" with the ocean, Theodore Paradise, senior vice president of transmission strategy and counsel at Anbaric told Utility Dive.

"We're talking about tens of gigawatts across the Atlantic seaboard to start to meet some of these targets in the near term, not really that many years out," he said. "You can't just run a radial to each wind farm. It's super expensive, that's a ton of cables, kind of spaghetti on the ocean floor, as some people describe it. environmentally, it's kind of a disaster which is ironic because that's what you're trying to avoid."

Overall, the company is pleased with the commission's decision to hold a technical conference, and Paradise says it could lead to a rulemaking process that would address their initial complaints with PJM. "Getting to the technical conferences is a really good outcome from today," he said. Offshore wind advocates were pleased with the move as well.

"FERC's initiative to take a holistic look at how offshore wind can be better integrated in organized markets is forward-thinking, given the significant growth expected for the U.S. offshore wind industry in the near future," Laura Morton, senior director of policy and regulatory affairs for offshore at the American Wind Energy Association, said in an email to Utility Dive.

Offshore wind stakeholders have also criticized the commission for its December order directing PJM to adopt a minimum offer price rule for all new generation that receives a state subsidy, which most analysts agree is likely to raise the prices for offshore wind and make it more difficult for the resource to compete in the wholesale capacity market.

Chatterjee on Thursday told reporters that the decision to hold the technical conference was directly related to the anticipated growth of offshore wind, but that the two issues are related in that the conference and the MOPR "are similarly forward looking."

"I've always been a big believer in renewables and their ability to compete in the marketplace if given the chance. But if you don't have a competitive marketplace then all generation types, including renewables, will be harmed in the long run," he said.

FERC also announced it would examine carbon pricing more closely through a technical conference, as was requested by a diverse array of stakeholders, including NextEra Energy, Vistra Energy, Calpine, the American Council on Renewable Energy, the Natural Gas Supply Association, Advanced Energy Economy and others. The coalition applauded the commission's move in a statement.

"Carbon pricing in organized markets could be a powerful and cost-effective tool to drive down emissions and achieve state policy goals while preserving the benefits of competition," the group said. "There is overwhelming support for a FERC-led conference on carbon pricing from all corners, including state regulators."

The group first wrote to FERC in April, asking the commission to examine more closely how the policy could help states reach their clean energy goals. Chatterjee said he expects the conference to be a "lively exchange," and will likely include discussions over whether FERC even has the legal authority to implement carbon pricing.

"Certainly some of my colleagues will be raising those questions," he said.

The staff-led offshore wind technical conference will be held Oct. 27 and the commissioner-led carbon pricing conference will be held Sept. 30.

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Lendy bosses have assets frozen amid offshore investigation – P2P Finance News

Posted: at 6:02 pm

Liam Brooke and Tim Gordon the directors of collapsed peer-to-peer platform Lendy have had their assets frozen while administrators investigate suspicious payments to an offshore account.

In the latest investor update, Lendy administrator RSM revealed that it was looking into 6.8m in payments made to entities registered in the Marshall Islands.

Although the money was said to have been spent on marketing services, RSM said that it is the administrators positionthat these payments were ultimately for the benefit of Liam Brooke and Tim Gordon.

On 1 June 2020, RSM applied for a worldwide freezing injunction to be granted over the assets of both Brooke and Gordon, as well as proprietary injunctions on the properties owned by companies linked to the directors RFP Holdings Limited and LP Alhambra Limited. The injunction was granted three days later.

Read more: Lendy investors face prolonged recovery process

Proceedings have now been commenced against Liam Brooke, Tim Gordon, RFP Holdings Limited and LP Alhambra Limited, RSM confirmed in the latest administrators update.

Owing to the nature of these claims, the joint administrators are unable to provide further information at this time. The joint administrators are continuing to investigate the affairs of the company.

RSM also revealed that it has now interviewed Brooke and Gordon, as well as carrying out reviews of the companys books and records, performing detailed analysis of the companys bank statements and reviewing the results of key word searches of approximately 480,000 company emails.

Read more: P2P administrations face delays due to Covid-19

These investigations have revealed a number of discrepancies in the companys accounts. Solicitors Pinsent Masons have been advising RSM on any legal action that may be required.

Earlier this year, RSM received court approval to extend the Lendy administration process by three years, due to the complex nature of the administration process and the impact of the Covid-19 pandemic.

In the period covered since appointment, the joint administrators have incurred significant time costs in managing the wind down of the loan book, said RSM in the latest update.

As previously advised, the loanbook has proved to be in a considerably worse state than was immediately apparent on our appointment.

As a result, the process to realise secured assets has been more complex, difficult and time-consuming than was first envisaged. It has become apparent there were significant issues in Lendys underwriting and administration processes, which has contributed significantly to the complexity of the wind down and directly led to an increase in costs. As an example, on multiple cases there is a range of litigation directly linked to the historical Lendy practices.

Lendy went into administration on 24 May 2019 with a loanbook valued at 152m. Just under 17m has been realised to date.

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Green giants exit, US offshore tradewinds and hydrogen steps on the gas – Recharge

Posted: at 6:02 pm

The CEOs of two of the biggest names in global renewable energy headed for the door this week.

First to announce his departure was Henrik Poulsen of Orsted, who will leave the offshore wind giant by February next year at the latest.

The resignation of the fossil-to-wind trailblazer prompted an outpouring of tributes from normally hard-bitten financial analysts, who hailed his transformational role at the Danish group.

Poulsen was non-committal over his future plans, but confirmed they don't include leading the energy transition of another oil and & gas group.

The second high-profile exit was Markus Tacke at Siemens Gamesa "by mutual agreement". Unlike Poulsen, Tacke won't be hanging around until a successor is found the turbine OEM immediately named offshore chief Andreas Nauen as his replacement.

Recharge spent the latter part of last week providing comprehensive coverage of US Offshore Wind 2020 Virtual, as official news provider to the high-profile industry event.

You can read all the great news, analysis and interviews from the conference at our special virtual newsletter page here.

But Recharge kicked-off the proceedings in style with two exclusive in-depth articles a long-read interview with Thomas Brostrm, the North America chief of Orsted, and a feature on the transmission challenges facing US offshore.

Hydrogen is never far from the energy transition headlines, with global players descending on the emerging sector from all directions.

This week it was the turn of utility giant RWE, which said it may kit-out a new LNG terminal to accept green hydrogen, and oil & gas player Repsol, which wants to use the gas in synthetic fuels.

Even the nuclear sector is getting in on the act, and a report from a UK government-backed agency warned that the nation may need nuclear hydrogen to hit its stretching net-zero ambitions.

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What has Shanghai FTZ Done to Support and Revitalize Offshore Trade? – China Briefing

Posted: at 6:02 pm

On April 29, 2020, Volvo Construction Equipment (CE) signed a memorandum with the government of Pudong New District, Shanghai, which signaled the official movement of Volvo CEs Asia headquarters from Singapore to Shanghai. This is believed to be a result of Shanghai Free Trade Zones (FTZ) endeavors to promote offshore trade businesses.

Offshore trade, or documentation processing trade, refers to a trade model in which the goods are transferred directly from the exporting country to the importing country without entering the border of the middle country where the contracts, payments, logistics, insurances, financial arrangements, as well as other trading documentations are processed in.

For example, in 2019, Volvo CE shipped two excavators to Nigeria directly from its manufacturing subsidiary in South Korea. In this transaction, the equipment did not enter China, but Volvo CEs Shanghai subsidiary handled all the paperwork, including accepting the order and signing the contract, getting the deposit and the final payment, arranging the production and the later logistics, insuring the goods and settling the tax, etc.

In offshore trade, the subsidiary in the middle country actually plays the role of centralizing and allocating the resources of the supply chain, which in not only good for improving the host countrys role in global trade, but also implies greater tax benefits. Meanwhile, the huge capital turnover in offshore trade can nourish the financial sector and make it more prosperous.

Given this, offshore trade has always been welcomed by major free trade hubs, such as Hong Kong and Singapore. However, it was underdeveloped in Shanghai and other mainland cities, mostly due to the strict regulatory controls.

The customs and the foreign exchange authorities had long held on to the idea that it is hard to determine the authenticity of offshore trade, considering the exporting and importing parties are located outside of China, and the goods, capital, and trade documentation are all separate from each other under this trade model. As fabricated transactions can be very harmful to a countrys economic order and foreign exchange market squeezing the capital from real economy, accelerating the imbalance of international payments, and encouraging unreasonable investments in foreign exchange authorities in China tended to be very cautious and strict towards offshore trade transactions.

In fact, since 2012, Chinas State Administration of Foreign Exchange (SAFE) has released several administrative documents to exert greater control to foreign exchange in offshore trade and combat fake transactions. In particular, in 2016, the SAFE issued the Notice on Further Facilitating Trade and Investment and Improving Authenticity Check (Huifa [2016] No.7), requiring the bank to review the contract, invoice, transportation documents, and the ownership license of the offshore transactions one by one. Enterprises who failed the reviews would not be able to receive money or make payments.

This strict scrutiny made it hard to do offshore trade business in China where payments and settlements were slow. In the past, many well-established companies engaged in offshore trade have had to shift to Singapore or Hong Kong.

The development of offshore trade is in line with Shanghais ambition to play a bigger role in global finance and become an international trade center.

After years of strict control, offshore trade was brought back into attention again when China planned to build Shanghai FTZ into a first-class free trade port.

In 2017, when the draft plan of Shanghai free trade port was released, offshore trade was listed as one of the top targets to promote.

On October 31, 2019, Shanghai FTZ announced seven preferential policies for offshore trade companies, at a conference about promoting the development of offshore trade business.

Some of the above policies have already been put into practice.

On April 13, 2020, the Shanghai Free Trade Zone Offshore Trade Service Center was officially launched in Waigaoqiao Bonded Area, Shanghai, which signified that the development of offshore trade has entered the fast track.

So far, 47 companies are reported to have enjoyed preferential foreign exchange policies in offshore trade businesses.

According to the official news, the next step is to put the financial support into place and reduce the tax burden on offshore trade businesses.

In the current promotion of offshore trade in Shanghai FTZ, more and more companies engaging in offshore trade are expected to set up as a legal entity in the zone or move their regional headquarters here, like Volvo CE.

However, companies are still advised to get themselves familiar with Chinas regulatory environment and pay close attention to the policy changes now and in the future. In this way, they can stay agile while avoiding compliance and financial risks. For further information orassistance in China, please email us atchina@dezshira.com.

About Us

China Briefing is written and produced by Dezan Shira & Associates. The practice assists foreign investors into China and has done so since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please contact the firm for assistance in China at china@dezshira.com.

We also maintain offices assisting foreign investors in Vietnam, Indonesia, Singapore, The Philippines, Malaysia,Thailand, United States, and Italy,in addition to our practices in Indiaand Russia and our trade research facilities along the Belt & Road Initiative.

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Offshore Oil and Gas Market Research Report Insights and Forecast 2020 to 2025 – Cole of Duty

Posted: at 6:02 pm

Offshore Oil and Gas Market report is segmented on the basis of type, service type, application, and region & country level. Based upon type, offshore oil and gas market is classified into liquefied natural gas, heavy crude oil, and light crude oil. On the basis of service type, the market is classified into directional drilling, logging while drilling, measurement while drilling, offshore contract drilling, and subsea production and processing. On the basis application, the market is classified into a deep water drilling, shallow water drilling, and ultra-deep water drilling.

Offshore Oil and GasMarket is valued at USD 86,900 Million in 2018 and expected to reach USD 151.851 Million by 2025 with CAGR of 8.3% over the forecast period.

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Market Analysis ofOffshore Oil and Gas-

Offshore oil and gas is the extraction and drilling process of natural gas and oil from below the oceans floor. Natural gas and oil are extracted through the wells and then transferred by pipelines and ships to refineries. In 2013, the industry has faced a downfall in the price due to major environmental disasters which have taken place in Mexico in 2014 i.e. Oil Spill in the Deepwater Horizon Gulf Of Mexico. However, it has been observed that the oil & gas sector is recovering. The global infrastructure and economies highly depend on the petroleum-based products which have led to an increase in the worlds dependence on oil and gas. It has been estimated that the world production of oil and gas is expected to increase because of growing demand which may result in the shrinking of the global economy and availability of oil.

The developing countries like China, Russia, and Brazil are increasing production and exploration efforts. However, geopolitical deliberations such as the ongoing dilemmas in Iran, Qatar, and Venezuelas exit from the Organization of the Petroleum Exporting Countries will hugely influence oil and gas supply. The trend of alternative and renewable energy is another threat to traditional oil and gas companies coupled with the rise in governmental pressure and pro-eco legislation has the industry is under more scrutiny than ever. Electricity producing from offshore wind and solar power plants has increasingly become cost-effective and cheaper. According to the International Renewable Energy Agency, over 80% of newly commissioned renewable energy will be cost-effective and cheaper than new natural gas and oil sources. These factors are expected to hamper the growth of offshore oil and gas market.

The regions covered in this offshore oil and gas market report are North America, Europe, Asia-Pacific and Rest of the World. On the basis of country level, the market of Offshore Oil and Gas is subdivided into U.S., Mexico, Canada, U.K., France, Germany, Italy, China, Japan, India, South East Asia, Middle East Asia (UAE, Saudi Arabia, Egypt) GCC, Africa, etc.

Key Players

The major players operating in the offshore oil and gas market are BP, ExxonMobi, Chevron, Royal Dutch Shell, Total, ConocoPhillips, Eni, Petrobras, Statoil, CNOOC and Others.

The Reduction in Price of Crude Oil and Recovery of Offshore Sector are the Major Factors Driving Factors for the Growth of this Market

The oil and gas industry will continue to manipulate the politics and international economics, particularly in the U.S. the level of employment in the sector as more than 10 Mn jobs, are supported and depend on the oil and gas industry. Recently, there has been a recovery in the industry as it enters its third year. The growth is predicted to increase at a significant rate due to increased upstream production which will continue to have a positive effect for midstream businesses. The crude price has also become stable at around $50/barrel. Additionally, 1 million jobs are estimated to be made in 2019 and the number of active drilling rigs has increased to more than 780 as compared to previous years which were 591 in the U.S. The UK offshore sector is also expected to recover as there are planned 16 greenfield projects with recognized development plans and around 29 greenfield projects is estimated to start production between 2019 and 2025.

Middle East and Africa is expected to be the Most Prominent Market for the Offshore Oil and Gas.

Geographically, Offshore Oil and Gas Market report is segmented into North America, Europe, Asia-Pacific and Rest of the World. The Middle East and Africa are expected to grow at the fastest CAGR during the forecast period. The increasing growth is mainly because this region has the highest production of natural oil and gas which export to the other region and countries as well. It has been estimated that around 30 Bn barrels are consumed each year, globally, mainly by developed economies. Oil also accounts for major energy consumption share regionally, Europe and Asia account for 32%, North America with 40%, Africa with 41%, and South with 44% and the Middle East with 53%.

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Offshore Oil and Gas Market Research Report Insights and Forecast 2020 to 2025 - Cole of Duty

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Things to consider when looking for an offshore jurisdiction – Yogonet International

Posted: at 6:02 pm

O

ffshore jurisdictions remain popular for all manner of businesses. Holding companies, asset management, iGaming, blockchain and bitcoin, and even forex are popular sectors for offshore incorporation and operation. But how do you go about picking the right one? It is not as simple as choosing which one you think, superficially, is the best option. You need to dig deep and take a considered decision as to which will be the best fit for you, your company, and your ongoing requirements.

How much will it cost?

One of your key considerations is likely to be how much it will cost you to operate in an offshore jurisdiction. First, you need to take into account the setup costs and then any fees for ongoing maintenance. Additionally, if you are setting up a company you should note additional expenses such as compliance with permanent establishment and/or economic substance requirements. These are just some of the things you need to ascertain before making any concrete decisions on where you will base your business.

Is it a stable jurisdiction?

When choosing the right location, you should aim for one that is politically, socially, and economically stable. It is all very well and good enjoying fiscal benefits and low operating costs but if the economic outlook is poor and the political system is volatile, you will soon encounter issues.

Being in an unstable jurisdiction can make it difficult to conduct short and long term planning. It can also impact relationships with partners and third parties. Choosing a location with a good all-round climate facilitates strategic planning and the smooth running of your business. An additional bonus of stability is not having to worry about currency fluctuations or issues when it comes to remitting profits and revenue elsewhere.

What about Tax?

How much tax you will pay in your jurisdiction of choice is a very important matter. This will directly impact how much of your business income remains yours and how much you can remit elsewhere.

The best-case scenario is to find a place with a zero or low-rate of tax that is not blacklisted. Many jurisdictions have favourable fiscal incentives but are still in line with international best practices.

Is it reputable?

If you pick a jurisdiction with a bad reputation or that is blacklisted, it will severely impact your ability to conduct business. Your reputation is worth more than the money you could save on a zero tax rate or cutting corners. Finding a jurisdiction that has a good reputation and offers you the benefits you want is attainable, with some professional guidance.

Is my confidentiality protected?

Different jurisdictions have different levels of confidentiality that are afforded to those operating there. Information sharing, details of Ultimate Beneficial Owners, and annual or periodic filings are just some things that vary depending on where you are located.

Depending on your business and requirements, you need to decide what level of privacy you want and then pick a jurisdiction accordingly. However, in our view, all jurisdictions will become transparent eventually.

Is it suitable for my needs?

Not every offshore jurisdiction is suitable for every business. As an example, not all are geared up for efficient tax planning and some dont have legislation to properly handle asset management. Furthermore, some might be good for tax and assets, but may not be good for the nature of your business.

Before deciding, you need to consider several factors including filing obligations, capital requirements, tax, nominee and disclosure requirements, audits, incorporation times, and other regulations, statutes or policies. This list is not exhaustive and there are many other considerations you should be aware of before taking the plunge.

Can I find the right professional partner?

Not all corporate service providers are created equally. Some are better than others and have different priorities when it comes to working with clients. You should look for a provider that has experience in all of the jurisdictions you consider, and that works with a large network of international partners. Experience in your industry or sector is also important.

It is also recommended to ask for detailed quotes when inquiring about company formation services as many service providers won't even include the most basic incorporation documents to offer you an incredibly low price. However, you will need to pay those additional/hidden fees later on. If it seems too good to be true, it probably is.

Beware of hidden fees and unnecessary charges and instead opt for custom turn-key packages that are designed to incorporate all of your needs.

The last word

Offshore incorporation and other business activities is not a matter to be taken lightly. After all, it can impact every aspect of your business. Taking the advice of a professional with an extensive track record of working in the offshore sector is the first step towards ongoing success.

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Things to consider when looking for an offshore jurisdiction - Yogonet International

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CEO of worlds largest offshore wind developer resigns – Electrek

Posted: at 6:02 pm

Danish green energy giantrsted CEO Henrik Poulsen has resigned after an eight-year tenure. rsted is now the worlds biggest offshore wind developer. It recently installed its 1,500th offshore wind turbine, in announced on June 11.

Poulsen will leave rsted by January, the company announced yesterday. The company is now searching for a replacement. He was previously an executive at McKinsey and Lego.

Poulsen said [via the Financial Times]:

Its been an incredible ride over the past eight years, and I have a tremendous amount of affection for Orsted, its vision, and not least its people.

Weve transformed a Danish utility predominantly based on fossil fuels into a global leader in green energy, which was ranked as the worlds most sustainable company earlier this year.

rsted plans to double its wind capacity in the next five years to 20GW. It employs almost 7,000 people worldwide, and had revenues of around $10.3 billion in 2019.

The Financial Times reports:

The companys stock has risen more than 70% since the beginning of last year, brushing off a dip in valuation inflicted by the pandemic and giving it a market capitalization of roughly $48 billion.

The Danish green energy company is growing its onshore wind business, too.

As Electrek previously reported on April 8, in 2013, rsted announced it would stop developing onshore wind to concentrate on offshore wind, but in 2018, it returned to onshore wind development with the acquisition of Lincoln Clean Energy. It completed its largest onshore wind farm, in Texas, in April.

rsteds onshore operational installed capacity has increased to 1.3GW. The company intends to reach 5GW installed onshore capacity by 2025.

It aims to reach 99% green energy production overall by 2025.

Poulsen transformed what was a fossil-fuel company known as Danish Oil & Natural Gas into Orsted, which is now known as the most sustainable company in the world.

He also proved that green energy can be profitable. Lets hope he keeps his hand in the game, as he has achieved remarkable things for the green energy sector and the environment at large.

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CEO of worlds largest offshore wind developer resigns - Electrek

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