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APAC Edition
14th March 2024
 
THE HOT STORY
The lure of the city grows still stronger in Vietnam's Mekong Delta
The lure of the city has always been strong for the poor in Vietnam's Mekong Delta, and climate change now exacerbates the challenges faced by the region's 17 million inhabitants, with floods, droughts, and rising sea levels all affecting livelihoods. The net outmigration from the delta has tripled since 1999, driven by a combination of climate change and economic factors. Experts emphasize that climate change acts as a catalyst and accelerant for migration, worsening existing inequities in an underdeveloped region. Moving to the city, however, does not guarantee a better life, and job losses and struggles persist. The government has approved a plan to strengthen the delta's agricultural economy, but the allure of Ho Chi Minh City remains strong. Young people, like 23-year-old Trung Hieu, see migration as a way out of poverty, even if it means leaving their homes behind.
STRATEGY
Paytm plans to cut 20% of staff at banking unit amid uncertainty
Indian digital payments firm Paytm plans to cut close to 20% of staff at its banking unit due to a looming central bank deadline. Paytm Payments Bank, which is owned by Paytm, was ordered by the Reserve Bank of India to halt most operations by March 15. The bank has decided to lay off staff in certain divisions, including operations. Paytm shares have lost 54% of their value since the regulatory clampdown. "Employees are frustrated because the management has gone back on their word that nobody will be laid off," said an employee at the banking unit. Paytm CEO Vijay Shekhar Sharma had assured staff there would be no layoffs. After the deadline, customers can still access their deposits, but no fresh deposits can be made.
HQ Capital opens Singapore office to tap Asia wealth
HQ Capital, a European private equity firm, has opened a new office in Singapore and hired former Ardian SAS executive Michael Hu as head of Asia. The firm aims to expand its investor base in Asia and provide access to U.S. and European mid-market private equity funds. HQ Capital is targeting investments with other asset managers in funds ranging from $300m to $2bn. Hu stated that the firm is looking at family offices and individuals with multi-billion dollar portfolios who want to increase their allocations to private equity. The new Singapore office will serve the growing base of Asia private wealth and institutional investors. HQ Capital has deployed around $2bn into Asia-based investments, part of the $11.9bn it has committed since inception.
WORKFORCE
Japan's largest industrial union reports record pay rise offered by firms
Japan's largest industrial union, UA Zensen, has announced that an average pay rise offered by 231 firms has reached the highest level since 2013. The union's report highlights what it sees as the positive impact of ongoing wage negotiations, which have resulted in better compensation for employees. 
LEGAL
Vietnam to debate ratification of labour reform convention
The National Assembly in Vietnam is set to debate and ratify the UN International Labor Organization's Convention 87, which mandates the free establishment of labour organisations. European officials are confident that Vietnam will ratify the convention by the end of this year to avoid potential sanctions. Pressure from the European Union and Canada has been mounting on Vietnam's ruling Communist Party to fulfill its promises on labour reform. However, there are concerns that Vietnam may delay the implementation of the convention's requirements. Vietnam distinguishes between trade unions and labor organisations, and the only legally permitted trade unions belong to the party-run Vietnam General Confederation of Labor. Despite criticisms of Vietnam's human rights record, ratification of the convention is expected to appease Western partners and strengthen trade relations. Bilateral trade between Vietnam and the EU has been increasing, but there are concerns about the alignment of Vietnam's labour standards with the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.
U.S. labor unions petition for probe into China's trade practices
Five U.S. labor unions have filed a petition with the office of U.S. Trade Representative Katherine Tai, requesting a probe into China's alleged unfair policies and practices in the maritime logistics and shipbuilding sectors. The unions accuse China of creating dependencies and vulnerabilities in multiple sectors, harming American workers and businesses. They also claim that China's drive to dominate the global shipbuilding, maritime, and logistics sector is built on non-market policies that are more aggressive than any other country. The petition urges the Biden administration to impose port fees on Chinese-built vessels and create a fund to revitalize U.S. shipbuilding. The U.S. Trade Representative's office will review the allegations and decide within 45 days whether they merit an investigation.
Singapore to tighten rules for corporate service providers
Businesses providing corporate services in Singapore will now need to be registered with the Accounting and Corporate Regulatory Authority, according to new proposals. The government is also planning to impose fines of up to S$100,000 on registered corporate-service providers and their senior management if they breach anti-money-laundering rules. The move comes after a money-laundering scandal involving Chinese-born individuals who used ill-gotten gains to fund lavish lifestyles. Nominee directors will also need to be vetted by registered corporate-service providers. The proposal is open for public feedback until March 25.
HEALTH & WELLBEING
Early menopause can mean earlier retirements for women
Early menopause can have a significant impact on how working women feel about their ability to do a good job, according to a study of Finnish women. The study found that women who experienced menopause before the age of 45 were more likely to perceive their job skills poorly and retire early on a disability pension. This is the first study to establish a connection between early menopause and workforce participation. The researchers recommend that employers provide more flexibility and support for women going through the menopausal transition to help them manage their symptoms and minimise the risk of prematurely ending their careers. "These findings reinforce the importance of addressing bothersome menopause symptoms to optimise a woman's quality of life, both personally and professionally," said Dr. Stephanie Faubion, medical director for the North American Menopause Society. Previous research has also shown a decrease in workforce participation for women who experience menopause before the age of 45.
CORPORATE
Listed companies will have to provide more detailed information on takeover deals
Listed companies will have to provide investors with more detailed information on whether takeover deals meet their initial promises, according to proposed revisions to international accounting rules. The International Accounting Standards Board (IASB) is seeking public consultation on the proposals, which are expected to take effect around 2027. The changes aim to bring greater detail and comparability to an existing accounting rule on business combinations. The disclosures, which will be externally checked by auditors, will require companies to explain the rationale behind the acquisition, how they will assess the performance of the acquired entity, and compare their initial view to the actual results. The proposed standard could also impact CEO remuneration tied to the performance of takeover deals, as well as help investors evaluate the validity of "goodwill" amounts on a company's balance sheet. Harvard Business Review has noted that a significant percentage of mergers and acquisitions fail to live up to their promises. IASB rules are applied in the European Union, Britain, China, Japan, Canada, Australia and Singapore, but not in the United States, which has its own norms.
ECONOMY
Chinese families cut back on extracurricular activities amid economic crisis
Chinese families in the midst of an economic crisis are cutting back on extracurricular activities for their children. The downturn in China's economy, exacerbated by trade tensions and a struggling property sector, has led to a loss of business for many companies. As a result, schools and clubs offering activities like soccer, swimming, piano, and dance have been forced to close. Parents are now reluctant to pay for long sets of lessons in advance, opting to pay for one class at a time instead.
INTERNATIONAL
EU adopts historic AI Act
The European Parliament has approved the world's first comprehensive framework for mitigating the hazards of artificial intelligence (AI). The AI Act will categorise items based on risk and tailor examination accordingly. The primary goal of the law is to control AI based on its potential to bring harm to society. The requirements become harsher as the risk increases. AI apps that pose a "clear risk to fundamental rights," such as those that handle biometric data, will be outlawed. AI systems deemed "high-risk," such as those employed in critical infrastructure, education, healthcare, law enforcement, border control, or elections, must meet stringent restrictions. Low-risk services, such as spam filters, will be subject to the lightest regulation; the EU anticipates that the majority of services will fall into this category. The Act also includes provisions to address the hazards posed by the systems that power generative AI tools and chatbots like OpenAI's ChatGPT. These would compel the creators of some so-called general-purpose AI systems, which can be used for a variety of jobs, to be open about the materials used to train their models and to follow EU copyright laws.
ASML threatens to quit Netherlands amid concerns over business climate
A threat by ASML, the Netherlands' largest company, to quit the country has highlighted concerns over the deteriorating local business climate. ASML's CEO has ruled out a total departure, but other Dutch blue chip firms say they are also considering their options. Corporate tax increases, protests, and court cases against companies have led to populist parties gaining ground in national elections, and this has prompted employers to voice their opposition to policies that discourage immigration and increase taxes. Similar concerns are being raised in Germany, where CEOs warn of the threat of right-wing extremism. Meanwhile, Dutch firms argue that plans to tax share buybacks and limit investment deductions are being pushed through without considering the consequences. A study found that a third of Dutch multinationals would consider moving their operations abroad. The government has launched an effort to persuade ASML to stay.
Half of UK workers would choose remote work over higher pay
A poll by Morgan McKinley shows that 51% of UK workers would choose remote or flexible working over a pay rise. While 40% of companies are urging their staff to return to the office more regularly, 93% of staff said they would prefer to continue working in a hybrid or remote model. The poll shows that one to two days in the office is the favoured weekly working pattern for 52% of UK professionals, while 22% said three to four days, and just 3% want to be in the office for a full five-day working week. The survey also found that 56% of staff who work onsite five days a week are looking for a new job in the next six months. This exceeds the rate among hybrid employees (41%) and fully remote employees (44%). KPMG research published in October showed that nearly two-thirds of bosses believe workers will return to the office five days a week within the next three years.
OTHER
Millions of dollars wasted as Australian supermarkets over-order and reject farmer stock
Millions of dollars worth of fresh vegetables are being wasted each year in Australia as supermarkets over-order and reject farmer stock, leading to significant financial losses for farmers, according to a submission to a federal Senate inquiry by industry group AUSVEG. Australian fresh produce suppliers estimate that farmers lose up to A$50m annually due to supermarkets overestimating their stock inventory. They say that supermarkets are rejecting a considerable portion of supply, with sometimes as little as 50% of produce appearing on the shelves. The practice is forcing farmers to either plough their surplus crop back into the soil or sell it on the wholesale market for a cheaper price.
 


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