Trade & Investment
For Canadian investors, business as usual in tumultuous Asia
Manulife reports double-digit growth . . .
Despite recent domestic turmoil in India and tense relations with China, some Canadian institutions are reporting record earnings and announcing large investments in the region. Manulife Financial CEO Roy Gori recently said double-digit growth in its Asia unit accounted for a significant portion of his firm's C$200-million increase over the same quarter last year. According to the APF Canada Investment Monitor, Manulife has invested C$6 billion in the Asia Pacific since 2003 – the bulk of it in mainland China (C$2.5 billion) and Singapore (C$1 billion).
Pension plans looking to India . . .
The Ontario Teachers’ Pension Plan, meanwhile, recently announced that its fund and Australia’s largest pension fund, AustralianSuper, will each invest US$250 million in India’s infrastructure-focused sovereign wealth fund, the National Investment and Infrastructure Fund. The agreement includes the possibility of increasing the investment to US$1 billion, providing much-needed dollars for Indian Prime Minister Narendra Modi’s plan to boost Indian infrastructure with foreign investment. This piece of news coincides with the Canada Pension Plan Investment Board’s (CPPIB) announcement of a new credit arm in India. CPPIB, a significant foreign investor in India since it opened its Mumbai office in 2015, is looking to inject capital into the nation’s financial system and offer debt by partnering with non-bank providers.
Asia features in long-term growth strategies . . .
While tensions and turmoil in Asia and Canada-Asia relations are relatively recent, these Canadian institutions have spent years investing in their Asia operations. Manulife CEO Gori, for example, cited his company’s long-term growth strategy when explaining why Manulife recently entered into an asset management joint venture agreement in India. And CPPIB’s global strategy is focusing on emerging markets that are poised to generate higher rewards than those in North America.
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Demographics & Culture
Countdown to Tokyo 2020 stirs debate
Olympics preparations on schedule . . .
On July 24, Tokyo entered the last leg of its preparations for the 2020 Summer Olympics. Despite concerns about extreme heat and rising costs, organizers say the Games are on track for success. Speaking about infrastructure, the President of the International Olympic Committee said he had never seen a city “as prepared as Tokyo one year to go before the Olympic Games.”
Mixed-heritage athletes revive old debate over identity . . .
At the same time, the 2020 Games have churned up an old and sensitive question within Japanese society about what it means to be “Japanese.” Several Japanese athletes who are medal-contenders are of mixed racial heritage and were born after Japan relaxed its immigration policy in the 1990s. This includes, for example, tennis player Naomi Osaka, who is part Haitian, and sprinter Soni Brown, who is part Ghanaian. As these athletes come under the spotlight so too do questions about Japan’s national identity and its immigration policies.
Broader demographic issues . . .
Japan’s aging and shrinking population has contributed to labour shortages, the emptying of rural areas, and strains on the health-care system. All of these challenges are happening in a country that has been viewed as resistant to opening up to immigration and refugee intake. Although the number of foreign residents in Japan has grown significantly over the last decades, totalling about 2.56 million at the end of 2018, or roughly two per cent of the population, foreign residents still account for a significantly lower percentage of the population than in North America or Western Europe. It remains to be seen if policies adopted by Japan in recent years to attract foreign talent will help alleviate its demographic challenges. Nevertheless, it will be interesting to see whether the participation of Japanese mixed-heritage athletes makes an impact on how identity is defined – or redefined – in modern Japan.
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Politics & Democracy
Hong Kong enters 10th week of demonstrations
A week of turbulence . . .
This weekend will mark the 10th straight week of pro-democracy protests in Hong Kong, with no signs of a de-escalation. In fact, pro-democracy protests have become more frequent, and episodes of violence have spread more widely throughout the city. On August 3, a pro-democracy march in Kowloon erupted into violent clashes with riot police, and the Chinese national flag was tossed into the harbour, triggering an uproar on the mainland. The following day, two government-approved pro-democracy demonstrations took place on Hong Kong Island and the New Territories. On August 5, city-wide strikes brought transportation services to a halt in no less than seven districts, with 224 flights being cancelled and major roads blocked. Most recently, on the evening of August 9, hundreds of activists began a three-day occupation of the city’s international airport.
No government concessions . . .
The governments in Beijing and Hong Kong said they will not make concessions to the protesters. A press conference held by the Hong Kong and Macau Affairs Office on August 5 largely reiterated the earlier narrative of a need to return to law and order and of support for Hong Kong’s police and government, including Chief Executive Carrie Lam. Meanwhile, some 400 protesters have reportedly been arrested, facing serious charges including “rioting, unlawful assembly, possessing offensive weapons, and assaulting officers and obstructing police operations.” China ordered Cathay Pacific, a Hong Kong-based airline, to remove employees involved in recent protests from flights to the mainland.
A city’s uncertain future . . .
Yesterday, Ottawa issued a travel warning for Canadians travelling to Hong Kong after similar travel advisories were also issued by Australia, Singapore, and the U.S. The escalating turmoil may not only undermine business confidence in Hong Kong, but also travellers’ and residents’ confidence in a city that has seen a decrease in in-bound tourists and an increase in out-migration since the protests began, casting a dark cloud over Hong Kong’s future prosperity and stability.
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Sustainability
China’s carbon emissions projected to peak ahead of schedule: Report
Targets exceeded . . .
China’s carbon emissions are expected to peak years earlier than the 2030 pledge it made under the Paris Agreement, according to a new international study published in Nature Sustainability. China committed in the 2015 Paris Agreement to peak carbon emissions around 2030 and to increase the non-fossil fuel share of its primary energy to 20 per cent. With many climate-friendly policies in implementation, the country has already reached its 2020 carbon emission target three years ahead of schedule. It peaked its coal consumption in 2013, at least seven years earlier than expected, and the energy intensity of the economy (ratio of primary energy use to total GDP) has decreased by more than 45 per cent since 2005, meeting its Copenhagen target three years earlier than promised. It is also on track to meet its 2030 target for increasing the non-fossil fuel share of its primary energy consumption.
Cities playing a leading role . . .
One of the major contributors to this achievement is rising incomes in China’s cities. The Nature Sustainability study examined CO2 emissions from 50 Chinese cities over a 17-year period, from 2000 to 2016, and found that carbon emissions peaked for most cities at a per capita GDP threshold of US$21,000, a point at which – according to The Environmental Kuznets Curve theory – money is often invested back into the environment, and the ecosystem is restored. Based on these results, the study projected that emissions for China as a whole should peak between 2021 and 2025.
Meanwhile, across the Pacific . . .
China’s achievement in cutting carbon emissions will contribute significantly to the global effort to limit the average temperature increase to less than two degrees Celsius in this century. In contrast, six G20 members including Canada and the U.S. are either not projected to meet their pledges, or are uncertain as to when their targets will be met.
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ABOUT APF CANADA
The Asia Pacific Foundation of Canada is a not-for-profit organization focused on Canada's relations with Asia. Our mission is to be Canada's catalyst for engagement with Asia and Asia's bridge to Canada.
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