Currency Wars! China Fends Off Pressure on Yuan; Dollar Falls Toward 8-Month Low !

China Fends Off Pressure on Yuan, Keeps Gradual Gain

By Ye Xie and Mark Deen

 

(Updates with Zhou’s comments on unemployment from first paragraph. See {GMEET <GO>} for more on the IMF meetings.)

Oct. 11 (Bloomberg) -- China countered mounting pressure from major trading partners for a stronger yuan as central bank Governor Zhou Xiaochuan highlighted a domestic unemployment rate he estimated at more than 9 percent.

A “very fast” appreciation probably wouldn’t bring balance to the world economy, Zhou said yesterday in the U.S. capital. China’s central bank is balancing inflation, growth, fiscal policy, the international balance of payments and the “sensitive issue” of unemployment, he said.

Debate about competitive devaluations dominated meetings of finance ministers and central bankers gathered for meetings at the International Monetary Fund. China faces demands from Western nations to let the yuan rise more quickly at a time when the U.S. is trying to trim its trade deficit and European nations are trying to stem an outflow of manufacturing jobs.

Billionaire investor George Soros called for China to let its currency appreciate by 10 percent a year against the dollar to help address the global economic imbalance, saying a failure to act on the currency would mean “the current system is liable to break down and other countries will be driven to capital control.” Soros made the comments in an interview with Emerging Markets magazine.

‘Nasty Proposals’

For the Chinese government, any such action would be economically and politically difficult. Punitive measures on China to push for a faster appreciation are “nasty proposals,” Li Daokui, an adviser to the People’s Bank of China, said in Washington. The Chinese currency has risen “pretty fast” in recent months, he said.

China aims to cut its trade surplus to less than 4 percent of gross domestic product within five years, from 11 percent in 2007 and 5.8 percent in 2009, said Deputy Governor Yi Gang.

“We are committed to a more flexible exchange regime,” Yi said. “A more flexible, market-based, managed floating regime is better for China and is better for the rest of the world. But the approach is probably a gradual one.”

Yi said criticism of China is undeserved because the government in Beijing has allowed the yuan to appreciate more than 20 percent in the past five years.

Global governments tasked the IMF with calming the recent outbreak of tensions over currencies amid signs they are already triggering a protectionist backlash.

Interest Rates

China is in no “hurry” to reduce overall inflation and will focus on pushing down housing prices to strengthen the economic recovery, Zhou also said in Washington. It may take two years for the inflation rate to fall below 3 percent, from a 22- month high of 3.5 percent in August, he said

“Since the fiscal and monetary expansion has already got into effect, we cannot be very hurry to get inflation under control,” said Zhou, speaking in English. “We have a medium- term plan. I hope this medium-term plan is credible.”

Zhou’s comments buttressed economists’ median forecast in a Bloomberg news survey last month for the central bank to keep benchmark rates on hold this year. To rein in growth in money supply, the PBOC has ordered lenders to set aside more cash as reserves and targeted a 22 percent reduction in new loans this year.

While China reported an urban unemployment rate of 4.2 percent at the end of June, that number excludes millions of migrant workers.

Zhou said that the overall jobless rate is more than 9 percent; “always something around that, but after the financial crisis it becomes a more sensitive issue.”

Premier Wen Jiabao said Sept. 22 that excessive gains by the yuan could lead to “major social upheaval” in China as factories went bankrupt and migrant workers returned to the countryside.

--Editors: Mark Rohner, Paul Panckhurst.

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Dollar Falls Toward 8-Month Low on Prospects of More Fed Easing

By Ron Harui

 

Oct. 11 (Bloomberg) -- The dollar fell toward an eight- month low against the euro on speculation that Federal Reserve policy makers will signal this week their willingness to buy more government debt to support economic growth.

The greenback touched a 15-year low versus the yen before tomorrow’s release of the Fed’s Sept. 21 policy meeting minutes and after a U.S. report last week showed job cuts were bigger than expected. The euro strengthened against 12 of 16 major counterparts as Asian stocks and commodities rose, underpinning demand for riskier investments. Australia’s dollar strengthened toward the highest level since it began trading freely in 1983 after home-loan approvals climbed for a second-straight month.

“The dollar is likely to continue to fall over the coming months as the Fed provides increasing dollar liquidity, although its weakness will be tempered by the fact that a lot of this is already priced into the currency,” said Mitul Kotecha, Hong Kong-based head of global foreign-exchange strategy at Credit Agricole CIB in Hong Kong.

The U.S. currency slid to $1.3973 per euro as of 6:45 a.m. in London from $1.3939 in New York on Oct. 8. It fell to $1.4029 on Oct. 7, the lowest level since Jan. 28. The dollar traded at 82.02 yen from 81.93 yen last week, after earlier reaching 81.39 yen, the weakest since April 1995. The euro advanced to 114.61 yen from 114.19 yen.

Australia’s currency rose 0.1 percent to 98.57 U.S. cents. It reached a record 99.18 cents on Oct. 7. Financial markets in Japan are closed for a holiday today.

U.S. Data, Fed

U.S. employers cut payrolls by 95,000 workers in September after a revised 57,000 decrease in August, Labor Department figures in Washington showed on Oct. 8. The median forecast of 87 economists surveyed by Bloomberg News called for a 5,000 drop. The unemployment rate unexpectedly held at 9.6 percent.

Fed Chairman Ben S. Bernanke said on Oct. 4 that the central bank’s first round of large-scale asset purchases aided the economy and that further quantitative easing, or QE, is likely to help more. New York Fed President William Dudley, who has voiced support for more government bond purchases, will speak in Washington later today.

“Since August, the Fed has been leaning towards more quantitative easing measures to underpin the weakened U.S. recovery,” Philip Wee, a senior currency economist in Singapore at DBS Group Holdings Ltd., wrote in a research note today. “We have downgraded the outlook for the dollar.”

DBS Cuts Forecasts

DBS lowered its year-end forecast for the dollar to trade at $1.40 per euro from $1.28 previously, and to be at 83 yen from 88 yen before, according to the note.

The euro traded near an eight-week high against the Swiss franc as the MSCI Asia Pacific excluding Japan Index gained 0.6 percent and the price of gold rose 0.5 percent.

“Risk-taking appetite may be positive, given higher equities and commodities,” said Yusuke Tanaka, a senior dealer at Mitsubishi UFJ Trust & Banking Corp. in Singapore. “This is probably a plus for the euro.”

Europe’s common currency was at 1.3432 Swiss francs from 1.3419 francs on Oct. 8, when it reached 1.3494 francs, the strongest since Aug. 13.

Gains in the yen were tempered on speculation that Japan will intervene to stem the appreciation of its currency.

Japanese Finance Minister Yoshihiko Noda said on Oct. 8 Group of Seven officials understand Japan’s position on the yen’s gains and agreed that excessive foreign-exchange movements are undesirable.

‘No Official Criticism’

“There was no official criticism of Japan’s decision to intervene in the foreign-exchange market by selling yen,” said Gareth Berry, a currency strategist at UBS AG in Singapore. “This increases the chance of a further round of intervention should the yen continue to appreciate.”

At the International Monetary Fund’s annual meeting in Washington over the weekend, governments tasked the agency with calming the recent outbreak of tensions over currencies amid signs they are already triggering a protectionist backlash. Officials including U.S. Treasury Secretary Timothy F. Geithner and Egyptian Finance Minister Youssef Boutros-Ghali said the lender should outline how countries can expand their economies without damaging those of other nations.

Australia’s dollar gained for a fifth day versus its U.S. counterpart on prospects the nation’s central bank will raise its benchmark interest rate next month.

Australian home-loan approvals rose 1 percent in August from a month earlier, the statistics bureau said today, matching the median estimate of economists surveyed by Bloomberg News.

“The market is very keen to take the Aussie higher,” said Khoon Goh, head of market economics at ANZ National Bank Ltd. in Wellington. “The rhetoric is certainly pointing toward providing more stimulus for the U.S. economy and that’s why the market is pricing in a decent probability of QE2, putting the U.S. dollar under downward pressure.”

Benchmark interest rates are 4.5 percent in Australia and 3 percent in New Zealand, compared with as low as zero in Japan and the U.S., attracting investors to the South Pacific nations’ assets. The risk in such trades is that currency market moves will erase profits.

--With assistance from Candice Zachariahs in Sydney. Editors: Garfield Reynolds, Rocky Swift

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Currency Wars: U.S. Economy Needs More Fiscal Stimulus, Not Deficit Reduction, Yuan revaluation no panacea, GBP-USD to Target 1.5996

Soros Says U.S. Economy Needs More Fiscal Stimulus, Not Deficit Reduction

By Rebecca Christie and Ye Xie 

Billionaire investor George Soros said the U.S. economy should pursue more fiscal stimulus instead of joining international efforts to reduce budget deficits.

Soros said spending cuts are the “wrong consensus” in the current economic environment. He said the global economy is still not at equilibrium, even though financial markets are functioning again, and U.S. fiscal restraint is limiting the recovery.

“It threatens to push the global economy into a much longer-lasting stagnation than would be necessary,” Soros, chairman of Soros Fund Management LLC, said in a forum at the International Monetary Fund’s annual meetings. The U.S. has been “driven to quantitative easing because the political debate has been won basically by the Republicans, who argue for balancing the budget and no more stimulus.”

The U.S. is using this weekend’s meetings to call for the IMF to take a more active role in promoting global rebalancing and in rebuking countries that undervalue their currencies. The initiative is aimed at China, which has limited the yuan’s rise to about 2 percent since agreeing in June to allow appreciation.


Soros said China deserves a stronger voice at the IMF as the fund deliberates how to give emerging-market nations a bigger share of board seats and voting rights.

“China is a part of the IMF, but it’s more or less a passive part, because it doesn’t have enough voice and is not sufficiently drawn into the deliberations,” Soros said. “A lot depends on how this is going to work out.”
Corruption, Governance

Soros said China ought to join international efforts to reduce corruption and improve governance in poor countries, especially those with natural resources that could be contributing to prosperity. He said China’s decision to stay out of many international initiatives could be destabilizing if widely adopted.

“China in particular feels much more comfortable with bilateral relations” and “what I call state capitalism as opposed to international capitalism,” Soros said. “As long as China is the only one following that course, it actually derives very substantial benefits, advantages from that. But if everybody does it, it’s the end of the multilateral system.”

On the subject of international bank regulation, Soros said there is not yet a solution to the problems caused by financial institutions that are “too big to fail.” These firms are currently backed by an “implicit guarantee” from regulators, who now bear increased responsibility to make sure that protection won’t be used, he said.
To contact the reporter on this story: Rebecca Christie in Washington at rchristie4@bloomberg.net; Ye Xie in New York at yxie6@bloomberg.net
 
To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net

Fast yuan revaluation no panacea - China's Zhou

International Monetary Fund (IMF) Managing Director Dominique Strauss-Kahn (L) talks to Governor of People's Bank of China Zhou Xiaochuan at the beginning of the International Monetary and Financial Committee (IMFC) meeting at the IMF headquarters building in Washington October 9, 2010.

Credit: Reuters/Yuri Gripas

By Kristina Cooke and Paul Eckert

WASHINGTON | Sun Oct 10, 2010 11:59pm BST
 

WASHINGTON (Reuters) - Demands that China rapidly revalue its yuan currency are akin to seeking a magic cure to a problem that requires a slow-working, herbal remedy, the country's central bank governor, Zhou Xiaochuan, said on Sunday.

Beijing realizes it must raise the value of its currency, but the strength of the yuan depends on carefully gauging economic fundamentals like inflation, growth and employment, said Zhou, the head of the People's Bank of China.

"China would like to use more gradual ways to realise a balance between domestic and external demand," he said, repeating the message he drove home at the weekend's International Monetary Fund meetings.

Zhou, speaking to a seminar on the sidelines of the IMF gathering, used a metaphor of the differences in medical practices in the East and West to highlight the challenges faced in addressing the currency debate that has pitted the United States and other industrialized countries against China.

"In China, a lot of people believe in Chinese doctors. In Western countries, they believe in Western-trained doctors," he said.

The currency debate is like a contest between "pills that solve your problem overnight" and Chinese-style treatments of "10 herbs put together ... that solve the problem not overnight, but maybe in one month or two months," Zhou said.

The often jovial Zhou and his deputies pushed back at the IMF meetings against a chorus of pressure for China to let the yuan rise further and more rapidly than the roughly 2 percent gains seen since June 19, when Beijing loosened the yuan's peg to the U.S. dollar.

Many U.S. lawmakers, labour unions and manufacturing groups believe China deliberately keeps the yuan, also called the renminbi, undervalued to keep Chinese exporters in business.

The U.S. House of Representatives last month stepped up pressure on China to let the yuan rise more quickly, passing a bill just weeks before U.S. congressional elections on November 2 that would provide new muscle to combat undervalued currencies by allowing the imposition of tariffs on goods.

Zhou earlier told reporters during the IMF meetings he believed the currency issue might "gradually fade out along with the recovery" of Western economies and job markets.

"For China, we have a package to enhance the internal demand including ... consumption, social security system reform, new investments in the rural areas," he said.

These measures, he told reporters, show "that China sincerely wants to bring the current account surplus down to a reasonable level."

On Sunday, Zhou seemed to suggest there was more potential for agreement as major advanced and emerging countries prepare for the Group of 20 ministerial and summit meetings in South Korea in coming weeks.

"It seems (there's) not very much difference between emerging markets, including China, and industrialized countries. What I see is everybody is emphasizing that the global imbalance is something that we need to deal with," he said. He noted the differences over whether rebalancing should be achieved via exchange rates or by other means to boost internal demand in countries with trade surpluses and differences over the pace at which rebalancing should occur.

China faces trade-offs between its economic fundamentals and trade surpluses, Zhou said.
"It is quite a complicated art to perform, but if we successfully keep low inflation... the yuan is going to be stronger," he said.

(Editing by Leslie Adler)

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GBP-USD to Target 1.5996

By Mohammed Isah

NEW YORK (TheStreet) -- The pound-dollar currency pair (GBP-USD) is preparing to return to 1.5996, its Aug. 8 high, after it wiped out last week's marginal losses this week and closed higher Friday. 

A penetration of 1.5996 will resume the pound-dollar's short-term uptrend toward 1.6274, its Jan. 24 high.
Conversely, support comes in at the 1.5713 level, where a reversal of roles is likely.

However, if that level gives way, additional lower prices should occur toward the 1.5502 level, where a violation will allow for further downside pressure toward 1.5295, the Sept. 7 low.

A break there will expose 1.5122, the July 21 low, and then 1.5000, the currency pair's psychological level.
Overall, the pound-dollar currency pair now looks as though it will eventually recapture the 1.5996/1.6016 level now that it has recovered strongly.


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Robot cars invade California, on orders from Google

By Edward Moyer

Google has been testing self-driving cars on roads in California, according to a report, and so far they've avoided everything but a minor fender bender--caused by a human-driven car.

The New York Times reports that seven test cars have traveled 1,000 miles without need for human intervention (a driver has been stationed behind the wheel just in case, accompanied by a technician to monitor the navigation system), and that they've covered more than 140,000 miles with the human chaperone stepping in only occasionally. One of the cars was even able to safely make its way down Lombard Street in San Francisco, the fabled "crookedest street in the world," the Times says.

'Stanley,' devised by Sebastian Thrun and his team from Stanford, won the DARPA Grand Challenge in 2005.

(Credit: Stefanie Olsen/CNET)

 

Google's robot car is equipped with artificial-intelligence software; a rotating sensor on its roof, which can scan more than 200 feet in all directions to create a 3D map of the car's environs; a video camera mounted behind the windshield, which helps the navigation system spot pedestrians, bicyclists, and traffic lights; three radar devices on the front bumper, and one in the back; and a sensor on one of the wheels that allows the system to determine the car's position on the 3D map, the Times says. The car also features a GPS device and a motion sensor. The car follows a route programmed into the GPS system, and it can be instructed to drive cautiously, or more aggressively.

Engineers say robot cars aren't susceptible to drowsiness or driving under the influence, and that eventually they might allow for more cars on the road, because they can drive closer to other vehicles, and less fuel consumption, because their safety would allow them to be made lighter, with less defensive armor, the Times says.

The man behind the project, Sebastian Thrun, a Google engineer and co-inventor of Google's Street View mapping project, was also behind the autonomous auto that won the $2 million prize in the Defense Advanced Research Project Agency's 2005 DARPA Grand Challenge, a contest to see if a driverless vehicle could successfully navigate nearly 150 miles in the California desert.

The Google researchers said that at the moment they don't have a plan for marketing the system, the Times says. Thrun is a promoter of the idea of robot cars making roads safer and helping to cut down on energy costs, as is Google co-founder Larry Page, the Times reports.

Edward Moyer has been editing on and off for CNET since the days of the CD-ROM.

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Lee Kuan Yew: The last farewell to my wife; A pioneer in her own right

This eulogy by Singapore’s Minister Mentor Lee Kuan Yew was delivered at the funeral service of his wife, Kwa Geok Choo, at a private ceremony at Mandai Crematorium on Wednesday. 

Kwa Geok Choo
1920-2010

ANCIENT peoples developed and ritualised mourning practices to express the shared grief of family and friends, and together show not fear or distaste for death, but respect for the dead one; and to give comfort to the living who will miss the deceased.

I recall the ritual mourning when my maternal grandmother died some 75 years ago. For five nights the family gathered to sing her praises and wail and mourn at her departure, led by a practised professional mourner.
Such rituals are no longer observed. My family’s sorrow is to be expressed in personal tributes to the matriarch of our family.

In October 2003 when she had her first stroke, we had a strong intimation of our mortality.

Lee Kuan Yew bidding farewell to his ‘tower of strength’. –AFP

 

My wife and I have been together since 1947 for more than three quarters of our lives. My grief at her passing cannot be expressed in words. But today (Wednesday), when recounting our lives together, I would like to celebrate her life.

As a young man with an interrupted education at Raffles College, and no steady job or profession, her parents did not look upon me as a desirable son-in-law. But she had faith in me.

We had committed ourselves to each other. I decided to leave for England in September 1946 to read law, leaving her to return to Raffles College to try to win one of the two Queen’s Scholarships awarded yearly. We knew that only one Singaporean would be awarded. I had the resources, and sailed for England, and hoped that she would join me after winning the Queen’s Scholarship. If she did not win it, she would have to wait for me for three years. In June the next year, 1947, she did win it.

We have kept each other company ever since. We married privately in December 1947 at Stratford-upon-Avon. At Cambridge, we both put in our best efforts. She took a first in two years in Law Tripos II. I took a double first, and a starred first for the finals, but in three years.

Returning to Singapore, we both were taken on as legal assistants in Laycock & Ong, a thriving law firm in Malacca Street. Then we married officially a second time that September 1950 to please our parents and friends. She practised conveyancing and draftsmanship, I did litigation.

In February 1952, our first son, Hsien Loong, was born. She took maternity leave for a year.
That February, I was asked by John Laycock, the Senior Partner, to take up the case of the Postal and Telecommunications Uniformed Staff Union, the postmen’s union.

They were negotiating with the government for better terms and conditions of service. After a fortnight, they won concessions from the government. Choo, who was at home on maternity leave, pencilled through my draft statements, making them simple and clear.

Over the years, she influenced my writing style. Now I write in short sentences, in the active voice. We gradually influenced each other’s ways and habits as we adjusted to and accommodated each other.

We knew that we could not stay starry-eyed lovers all our lives; that life was an on-going challenge with new problems to resolve and manage.

We had two more children, Wei Ling in 1955 and Hsien Yang in 1957. She brought them up to be well-behaved, polite, considerate and never to throw their weight around as the prime minister’s children.
As a lawyer, she earned enough to free me from worries about the future of our children.

She saw the price I paid for not having mastered Mandarin when I was young. We decided to send all three children to Chinese kindergarten and schools. She made sure they learned English and Malay well at home. Her nurturing has equipped them for life in a multi-lingual region.

We never argued over the upbringing of our children, nor over financial matters. Our earnings and assets were jointly held. We were each other’s confidant.

She had simple pleasures. We would walk around the Istana gardens in the evening, and I would hit golf balls to relax. Later, when we had grandchildren, she would take them to feed the fish and the swans in the Istana ponds. Then we would swim.

She was interested in her surroundings, for instance, that many bird varieties were pushed out by mynahs and crows eating up the insects and vegetation. She discovered the curator of the gardens had cleared wild grasses and swing fogged for mosquitoes, killing off insects they fed on. She stopped this and the bird varieties returned. She surrounded the swimming pool with free flowering scented flowers and derived great pleasure smelling them as she swam.

She knew each flower by its popular and botanical names. She had an enormous capacity for words.
She had majored in English literature at Raffles College and was a voracious reader, reading everything from Jane Austen to J.R.R. Tolkien, from Thucydides’ The Peloponnesian Wars to Virgil’s Aeneid, to The Oxford Companion to Food, and Seafood of Southeast Asia, to Roadside Trees of Malaya, and Birds of Singapore.

She helped me draft the Constitution of the PAP. For the inaugural meeting at Victoria Memorial Hall on 4 November 1954, she gathered the wives of the founder members to sew rosettes for those who were going on stage.

In my first election for Tanjong Pagar, our home in Oxley Road became the HQ to assign cars provided by my supporters to ferry voters to the polling booth.

She warned me that I could not trust my new found associates, the leftwing trade unionists led by Lim Chin Siong. She was furious that he never sent their high school student helpers to canvass for me in Tanjong Pagar, yet demanded the use of cars provided by my supporters to ferry my Tanjong Pagar voters.

She had an uncanny ability to read the character of a person. She would sometimes warn me to be careful of certain persons; often, she turned out to be right.

When we were about to join Malaysia, she told me that we would not succeed because the Umno Malay leaders had such different lifestyles and because their politics were communally-based, on race and religion.
I replied that we had to make it work as there was no better choice. But she was right. We were asked to leave Malaysia before two years had passed.

When separation was imminent (in 1965), Eddie Barker, as Law Minister, drew up the draft legislation for the separation. But he did not include an undertaking by the Federation Government to guarantee the observance of the two water agreements between the PUB (Public Utilities Board) and the Johor state government. I asked Choo to include this. She drafted the undertaking as part of the constitutional amendment of the Federation of Malaysia Constitution itself.

She was precise and meticulous in her choice of words. The amendment statute was annexed to the Separation Agreement, which we then registered with the United Nations. The then Commonwealth Secretary Arthur Bottomley said that if other federations were to separate, he hoped they would do it as professionally as Singapore and Malaysia.

It was a compliment to Eddie and Choo’s professional skills. Each time Malaysian leaders threatened to cut off our water supply, I was reassured that this clear and solemn international undertaking by the Malaysian government in its Constitution will get us a ruling by the UNSC (United Nations Security Council).

After her first stroke, she lost her left field of vision. This slowed down her reading. She learned to cope, reading with the help of a ruler. She swam every evening and kept fit. She continued to travel with me, and stayed active despite the stroke. She stayed in touch with her family and old friends.

She listened to her collection of CDs, mostly classical, plus some golden oldies. She jocularly divided her life into “before stroke” and “after stroke”, like BC and AD.

She was friendly and considerate to all associated with her. She would banter with her WSOs (woman security officers) and correct their English grammar and pronunciation in a friendly and cheerful way. Her former WSOs visited her when she was at NNI (National Neuroscience Institute). I thank them all.

Her second stroke on 12 May 2008 was more disabling. I encouraged and cheered her on, helped by a magnificent team of doctors, surgeons, therapists and nurses.

Her nurses, WSOs and maids all grew fond of her because she was warm and considerate. When she coughed, she would take her small pillow to cover her mouth because she worried for them and did not want to infect them. Her mind remained clear but her voice became weaker. When I kissed her on her cheek, she told me not to come too close to her in case I caught her pneumonia. When given some peaches in hospital, she asked the maid to take one home for my lunch. I was at the centre of her life.

On 24 June 2008, a CT scan revealed another bleed again on the right side of her brain. There was not much more that medicine or surgery could do except to keep her comfortable. I brought her home on 3 July 2008. The doctors expected her to last a few weeks. She lived till 2nd October, 2 years and 3 months.

She remained lucid. That gave time for me and my children to come to terms with the inevitable. In the final few months, her faculties declined. She could not speak but her cognition remained. She looked forward to have me talk to her every evening.

Her last wish she shared with me was to enjoin our children to have our ashes placed together, as we were in life.

The last two years of her life were the most difficult. She was bedridden after small successive strokes; she could not speak but she was still cognisant. Every night she would wait for me to sit by her to tell her of my day’s activities and to read her favourite poems. Then she would sleep.

I have precious memories of our 63 years together. Without her, I would be a different man, with a different life. She devoted herself to me and our children.

She was always there when I needed her. She has lived a life full of warmth and meaning.
I should find solace in her 89 years of a life well lived. But at this moment of the final parting, my heart is heavy with sorrow and grief.

October 4, 2010

A pioneer in her own right

LKY’s late wife, however, chose to remain on the sidelines in public, content to play a supporting role.

IN life, Kwa Geok Choo was a quiet, dignified cheongsam-clad presence by her husband Lee Kuan Yew’s side. In death, she leaves behind a void that not only her husband, but also the entire island nation, will feel.

Kwa, known to the world as the wife of Singapore’s first Prime Minister Kuan Yew, died on Saturday evening at her Oxley Road home. She was 89.

Life-long lovers: A Sept 9, 2004 file picture of Lee and Kwa during the wedding ceremony of Brunei’s Crown Prince Al-Muthadee Billah Bolkiah and Sarah Salleh in Bandar Seri Begawan.— AFP

 

Her husband of 63 years was in hospital with a chest infection.

Elder son Singapore Prime Minister Lee Hsien Loong, 58, cut short an official visit to Belgium where he was to attend the Asia-Europe Meeting summit.

The wake will be held today and tomorrow at Sri Temasek, the official residence of the Prime Minister located within the Istana grounds. Kwa had spent many hours watching her children, and later her grandchildren, play at Sri Temasek, while their father went about his business or exercised.

Visitors may pay their respects there from 10am to 5pm on those days. A private funeral will take place on Wednesday at the Mandai Crematorium.

In a moving tribute, President S.R. Nathan said: “To know Mrs Lee’s greatness, one has to listen to what has not been said of her until now. Mrs Lee was great in many ways – as a legal luminary, as a mother of an illustrious family, and more than that, for her stoic presence next to Mr Lee Kuan Yew during times of turbulence and tension in the many years of his political struggle.

“There was not a single important event or development that she was not an intimate witness of. Indeed, she lived a life that had its fair share of pain and uncertainty, which was not evident in public.”

Prime Minister Datuk Seri Najib Tun Razak and Taiwanese President Ma Ying-jeou also conveyed their condolences to the Lee family.

Kwa had been ill for some time. A stroke in 2003 had left her frail, with weakened peripheral vision, but she remained bravely active, accompanying Lee on numerous official functions here and overseas.

On one trip to China, she gamely donned a long-sleeved swimsuit with long pants, and swam in the hotel pool, never mind zig-zagging across the lane. Her gait was uncertain and she needed a supporting arm, but she continued in good cheer, her sharp wit intact.

In 2005, on a visit to Temasek House in Kuala Lumpur, Lee pointed out a photograph on the wall and described the picture to her: “This is a picture of you doing the joget.” Her swift retort: “Put it in the furnace.”

She suffered another two strokes in 2008 which left her unable to walk or speak. Nurses cared for her at the Lees’ Oxley Road home.

In the last two years, Lee had spent many hours by her bedside, reading from her well-thumbed copies of English poetry and novels and telling her about his day.

In an upcoming book to be published by The Straits Times in January, Lee reveals that in her last days, “I’m the one she recognises the most. When she hears my voice, she knows it’s me.”

Theirs was a life-long love story.

Kwa, a brilliant student who came out tops in her Senior Cambridge year, and who went on to build a successful law practice at Lee & Lee, was the intellectual equal of Lee, but she saw herself first and foremost as a wife and mother, in keeping with her upbringing in a conservative Straits-Chinese home.

In public, she was a traditional Asian wife who metaphorically walked two steps behind her husband, as she once quipped.

In private, she was a devoted mother, a caring, gentle woman, and a quick-witted conversationalist who loved literature, classical music and botany. She was a “tower of strength” to her husband and family, emotionally and intellectually.

She believed in the same causes as Lee did – independence from colonial rule in the early years, and later, a multiracial, meritocratic Singa­pore.

She saw Lee through the nation’s toughest moments in 51 years in office, 31 as Prime Minister, girding him for battle the way only a wife can. She helped him through the anguish of separation. She shared with him her instinctive grasp of character among the people they met. She helped him draft and polish his speeches, memoirs and even legal documents.

She engaged him in heated debate on policy matters like the rights of women and was wont to chide him if she thought him too demanding of others.

An intensely private woman who shunned the limelight, Kwa trod softly through Singapore’s history. She was a pioneer in her own right, but she chose to remain on the sidelines in public, content to play a supporting role.

But her imprint on Singapore was no less significant for being so gentle. Her quiet dignity and self-discipline, her selflessness and modesty, were unique. The nation will not see the likes of Kwa again. — The Straits Times / Asia News Network

News Analysis: For global recovery, a laundry list of risks

More than two years since the onset of the worst recession since the 1930s, advanced economies are starting to revive -- at a snail's pace.

While respectable growth is expected of the global economy -- nearly 5 percent this year and more than 4 percent next year -- demand is still weak in many advanced countries and unemployment still lingers at or near the double digits in both the United States and the Euro zone, according to the International Monetary Fund (IMF)'s World Economic Outlook released on Wednesday.

While a rebound is proceeding, experts fear any number of factors -- from debt consolidation to anti-trade sentiment -- could damage the still fragile recovery.

FISCAL CONSOLIDATION

According to the IMF, the main challenge for advanced economies is fiscal consolidation.

"What is essential here is not to so much to phase out fiscal stimulus now, but to offer a credible medium term plan for debt stabilization, and eventually for debt reduction," said the IMF's chief economist Olivier Blanchard at a press briefing on Wednesday.

Still, many will be reluctant to cut spending if growth is weak, and there are risks in cutting spending too soon.

Dean Baker, co-director of the Center for Economic and Policy Research, said the greatest risk to the recovery is the push to austerity in much of Europe and even in the United States, as the end of the stimulus will be contractionary.

"This could very well upend an extremely weak recovery," he said.

HOUSING

Diane Swonk, chief economist at Mesirow Financial, said weakness in the U.S. housing market will impact the global recovery for some time to come, as the level of activity in this crucial sector of the world's largest economy will be so muted that it will hold down growth.

Indeed, the level of current housing sector activity is more consistent with a recession, she said.

A large chunk of the millions of American jobs lost in this recession have been in the construction industry, and the housing sector continues to be a major factor holding down employment, as it is not reviving enough to create a sufficient number of jobs, she said.

VARIED PACE OF GROWTH

The IMF is also urging more coordination between developed and developing economies, as the two worlds are seeing very different levels of growth.

Blanchard said on Wednesday that demand in developed world nations remains weak, as people are saving more and spending less, while emerging economies are rebounding at a much faster clip.

The IMF forecasts sluggish growth for advanced economies, at 2. 7 percent for 2010 and 2.2 percent for 2011. For the Euro area, a 1.7 percent growth is forecast for this year and 1.5 percent for 2011.

But in emerging economies, consumption and investment are contributing to strong growth, which as a whole is forecast to reach 7.1 percent in 2010 and 6.4 percent for 2011, according to IMF statistics.

"Sustained, healthy recovery rests on two rebalancing acts: internal rebalancing, with a strengthening of private demand in advanced economies, allowing for fiscal consolidation; and external rebalancing, with an increase in net exports in deficit countries, such as the United States, and a decrease in net exports in surplus countries, notably emerging Asia," according to the World Economic Outlook.

Many interpret this to mean that a part of the IMF's push for a "rebalancing" should involve appreciating the Chinese Yuan.

But Chinese Premier Wen Jiabao on Wednesday urged European leaders in Brussels to refrain from pushing for a stronger Chinese currency.

"If the yuan is not stable, it will bring disaster to China and the world," he said in a speech. "I say to Europe's leaders: Don't join the chorus pressing to revalue the yuan."

"If we increase the yuan by 20 percent or 40 percent, as some people are calling for, many of our factories will shut down and society will be in turmoil," he said.

IMF Chief Dominique Strauss-Kahn on Friday urged nations not to succumb to a currency war.

RISING TIDE OF ANTI-TRADE FEELING

Perhaps the greatest threat to recovery in the long run, according to some economists, is growing populist sentiment against international trade, which is on the rise in the United States.

"This issue seems to be unraveling quickly. And we know from history that protectionism shrinks the economy and does not increase the economy," Swonk said.

"We got ourselves into this mess together, and the only way out of it is to coordinate policies across borders and instead we are all starting to throw stones and we all live in glass houses," she said.

Ralph C. Bryant, senior fellow at the Brookings Institution, said such feelings are worrying.

"It's very easy to look at foreigners and say 'you're preventing us from exporting' and there have been times in history when it has had adverse effects," he said.

UNANSWERED QUESTIONS

Still, the fundamental question at the heart of the global economic recovery remains unanswered: where is demand going to come from?

Ben Carliner, director of research at the Economic Strategy Institute, said the global economy has not yet adjusted to a decrease in demand from the developed world.

The continuing efforts in the United States and Europe to recover from systemic financial crises have left consumers, banks and public sectors struggling to improve their balance sheets, he said.

As these efforts depress aggregate demand, easy monetary policies, in the form of low nominal interest rates and in some cases quantitative easing, are and will continue to be used to offset the demand shock, he said.

For emerging economies that depend on exports of manufactured goods, the principal challenge is how to respond to this external shock, as foreign demand for emerging world exports has dried up, he said.

IS THERE HOPE?

In spite of the many risks that could derail a recovery, there may be some good news on the horizon, some economists said.

The countries that did not experience the drastic slowdown via housing will most likely be able to perform much better, said Andy Busch, a global currency and public policy strategist at BMO Capital Markets.

While unemployment is high in the United States, a new congress will be voted in November, and could move to settle down some of the uncertainties for small business, which some economists say are unable to make hiring decisions because they do not know what legislation will come out of Washington next.

"That will lead to faster growth than many people are anticipating right now," he said. Still, not all economists agree with that assessment, and some observers predict that Congress will continue to be deadlocked along party lines after the elections.

Source: Xinhua
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