Loading

Asia Monitor February 2019

Notable Developments

The second summit between US President Donald Trump and North Korean leader Kim Jong Un in Hanoi, Vietnam ended in failure due to a disagreement over terms of denuclearisation and the lifting of US sanctions. President Trump was unwilling to lift existing sanctions imposed on the Communist country until Kim commits to the complete dismantlement of the Yongbyon Nuclear Research Centre– the most important nuclear site in North Korea and heart of its weapons programme. Even in the event that the Yongbyon nuclear facilities close down, there is still no certainty that North Korea’s nuclear weapons programme would come to a true stop due to undisclosed sites across the country which may continue to develop nuclear weapons unbeknownst to the world.

The relationship between the two nuclear-powered nations in South Asia, India and Pakistan, reached a breaking point which pitted the countries closer to war than at any point over the last twenty years. Pakistan’s nuclear weapon policy is aimed at deterring India from military aggression given the former has rejected the No First Use of such weapons in the case of wars. That being said, we have seen a more statesmen-like approach from the country under Prime Minister Khan who has committed to reducing tension with India through diplomatic dialogue, having reached out to India’s Prime Minister for bilateral talks. With the general election approaching in India later this year, Prime Minister Modi’s chances of re-election may be dependent on his reaction on this issue.

Focus Industry: Space Programmes

In January 2019, China became the first country to successfully land a spacecraft, Chang’e-4, on the far side of the Moon after making significant investment into the country’s ‘Space Dream’. The Chinese government has been focused on encouraging public and private sector partnerships through implementing a series of policy changes starting from 2014 with the aim of Space First. The recent landing of Chang’e-4 not only signifies one further step in human space exploration but also represents an opportunity for China to showcase its astronautical capabilities on the global stage, with the objective of matching up to NASA in the near future.

India, the second largest economy in Asia after China, has expressed its intention to send an Indian national into space by 2020, the 75th anniversary of the country’s independence from British rule. For the past decade, India has been investing USD1.0 Billion a year into its space programme with the goal to become the fourth nation to send a person into space. Nevertheless, India’s space programme has come under criticism with the opposition claiming that funds should be used for eradicating widespread poverty instead.

Taiwan’s Premier, Su Tseng-Chang, recently approved the third phase of its 10-year space programme with the aim of improving technology and recruiting talents. The third phase is estimated to cost USD814.0MM and will see the launch of 10 satellites, one of which will orbit the Moon.

Investment Manager Commentary

Whilst tensions between India and Pakistan continues to escalate and puts the two countries on the brink of war, China’s reluctance to back its supposed ally, Pakistan, further adds complexity to this situation. China’s trade war with the US has forced the former to look for alternative trading partners and rebuild its relationship with India. Therefore, it cannot afford to alienate India at this crucial time. China should work alongside the United States to resolve the situation as there are likely to be no winners from this conflict.

Following the breakdown in talks between the United States and North Korea, Pyongyang has resorted to ordering the construction of a rocket launch site it had previously said it would dismantle. If North Korea does decide to press ahead with its construction plans, it will likely find severe sanctions placed on the country which would further cripple its economy.

Disclaimer: This material is prepared by Adamas Finance Asia Limited/Harmony Capital Investors Limited and is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. This material is intended for information purposes only and does not constitute investment advice or an offer or solicitation to purchase or sell any securities, Adamas Finance Asia shares or any investment strategy pursued by Adamas Finance Asia nor shall any securities be offered or sold to any person in any jurisdiction in which an offer, solicitation, purchase or sale would be unlawful under the securities laws of such jurisdiction.

Contact Details: Adamas Finance Asia Limited, 811-817, 8/F, Bank of America Tower, 12 Harcourt Road, Central, Hong Kong Email: info@adamasfinance.com

Credits:

Created with images by Victor Garcia - "Marina Bay" • conan_mizuta - "north korea pyongyang building" • PublicDomainPictures - "pakistan border signage" • WikiImages - "rocket launch smoke rocket" • skeeze - "soyuz launch space shuttle" • Andrea Sonda - "Moon"

Report Abuse

If you feel that this video content violates the Adobe Terms of Use, you may report this content by filling out this quick form.

To report a copyright violation, please follow the DMCA section in the Terms of Use.