Chairman
Mao Tse-tung Chairman Liu Shao-chi
Tien An Men rostrum.
and on the
also expected to be a big one, has been started in central China.
China's cement industry has shown a considerable leap forward. Chinese ex- ports of cement to Hongkong have shown a steady increase since 1960, as do
exports to the U.S.S.R. up to 1962, though they have fallen off to Malaya.
These reports are probably fairly ac curate indications of the renewed trend towards industrialisation in China. Since the Party Central Committee meeting in September 1962 there has been a move towards expansion in this sector, still in the planning stage rather on the ground, but quite evident in Chinese thinking and in foreign trade moves.
Po 1-po, Vice-Premier and Director of the Office of Industry and Communica- tions, published an article, also at the beginning of October, in Cuba Socialista which explained very clearly the kind of role which the Chinese leadership envi- sages at present for industry, heavy and light, and agriculture. Agriculture and the rural population provide the market for industry, said Po, and they also provide a large number of the raw ma- terials. There will be no one-sided emphasis on heavy industry, but the
The Far Eastern Economic Review
out
puts
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various sectors will be expanded simul- taneously.
It is safe to take this as a statement of official policy, and one which the Chinese leaders expect to pursue for some time.
MALAYSIA
Ants May Bite?
From K. G. Tregonning, Singapore INDONESIA'S decision to stop all trade with Malaysia may hit Singapore hard. Yet Singapore has reacted with a stock market steadiness and a general air of unconcern. Is this attitude justified?
Over 3,000 workers in Singapore pro- cess the very dirty rubber that Indonesia exports to the world. Seven rubber firms in Singapore work three shifts daily on Indonesian rubber. They are Tropical Produce, Kota Trading, Hock Soon, Eng Keok Teck, Mayfair Rubber, Aik Hoe and Hiap Soc.
This rubber, nearly 300,000 tons so far this year, comes very largely from nearby Sumatra, Indonesian Borneo and the Riau archipelago. Little comes from Java, home of the politicians. Without the specialised treatment it receives here this dirty, badly sorted and ungraded rubber would find few buyers overseas,
Again, the 50,000 tons of copra import ed annually from Indonesia come from areas of Indonesia that regard Singapore and not Java as their natural outlet and as their economic heart. There are ten mills here that extract oil from the copra. While copra oil is an industry in Manila, and Singapore is not unique, the close business links built up between supplier and miller are not paralleled elsewhere.
Considerable quantities of this copra come from nearby Indonesian islands
FAR EASTERN
ECONOMIC RE W
this crude oil will now come. Possibly Pulau Bukom will concentrate on Brunei oil, where a new oil strike has just oc- curred. At any event, it seems as if the problem caused by this confrontation is not what will happen to Pulau Bukom, but where can the Sumatran oil be refined.
Over 1,300 tons a month of rattan bamboo are brought into Singapore from the myriad Indonesian isles that cluster near to Singapore. It is bartered by the small producer for cloths, Nescafc, cigarettes, sewing machines, outboard mo- tors and much else. For over a hundred years this trade has continued.
Credit facilities, in this and in other branches of the Indonesian trade, have played a vital role. Chinese shopkeepers
here know the Sumatran rattan collector or the Borneo copra dealer, and the links are intimate. The rubber credit facilities in particular are intricate and unique. There are no substitute credit facilities in far distant Manila, in Java or anywhere else.
The question is, can all this- repre- senting 25% of Indonesia's export trade
he broken by decree, and presumably by the Indonesian Navy? Economic con- frontation may remain, but most non- Javanese trade with Singapore will
continue. You cannot control an ant heap by jamming in
a post marked "Stop". Quite possibly, those ants may do some biting of their own.
Singapore has had long experience as a slightly raffish, rather illegal but eminently desirable trading centre. It will flourish; but officially you will never learn the details.
PHILIPPINES
such as Sumatra, Borneo and Riau in Bully for Bears?
small tongkangs. A long voyage to a strange new centre is quite out of the question unless absolutely essential.
Virtually all of Indonesia's tin ore is smelted by Straits Trading and Eastern Smelting in Butterworth, Singapore and Penang. This ore comes from the two tin islands of Bangka and Billiton south of Singapore. By deciding to send the heavy ores all the way to Arnhem in Holland Sukarno is being both economi- cally wasteful and politically pro-colonial,
This will not affect Malaya to any ex- tent; with no assets in Indonesia, neither Straits Trading nor Eastern Smelting have experienced any Stock Exchange reaction to this move.
On the island of Pulau Bukom, off Singapore, Shell has the largest oil re- finery in Southeast Asia. It is fed with oil from the Sumatran fields. None of
From Bernardino Ronquillo Our Manila Correspondent
WHEN LONDON reported Russian in- terest in Philippine coconut oil in con- nection with the recent large-scale pur- chases of wheat and other foodstuffs from the west by the Soviet Union, the initial reaction from Manila
was definitely
bullish. Russian buying of coconut oil, on top of expanded demand from tradi- tional western customers the United States and Europe would certainly boost prices of copra and coconut oil and give Philippine producers a larger wind- fall from exports than they have been getting so far.
But when it was realised here that Rus- sia was using her large gold holding to embark on heavy importation of dairy
October 31, 1963
products as well as wheat and other food grains, Philippine reaction has turned from one of optimism to apprehension and even alarm.
It is not because the increasing flow of Russian gold into the west has a de- pressing influence on the price of the
INDONESIA
Ports for Free
From a Correspondent
MEASURES taken by the Indonesian
precious metal in the free market. Philip Government this month in the wake of
pine gold producers, like those in other countries, are still getting a subsidy from the Government, although it is getting to be inadequate owing to the rising cost of production.
What is worrying Filipinos are the possible repercussions of large-scale Rus- sian buying on prices of prime com- modities, many of which are still being imported from abroad. Should the Soviet Union, for instance, embark on a really large-scale buying of such items as milk, butter and cheese which the Philip pines is buying in rather substantial quantities from the U.S., Holland, Denmark and other European countries,
it would inevitably push up prices owing to the heavy pressure that such previous ly unforeseen demand would have on world supplies.
Philippine trade circles warn that any massive Russian buying in western markets would affect purchases of dairy items by both private commercial firms and the Government-operated trading firm the National Marketing Corpora
tion
(NAMARCO). These quarters have been advised by their principals abroad that the Soviets were negotiating for dairy products to fill the shortages caused by bad harvests and crop failures which in turn affected output of livestock and dairy industries,
The Government trading agency has already made its orders of milk, cheese and other dairy products to replenish its stocks, while private food importers are now negotiating for additional supplies from Europe and the U.S. to meet the expected heavy holiday demand during the Christmas season.
When it was reported a few weeks ago that Canada was committed to filling Soviet orders for grain and that the Canadians may not be able to allocate enough wheat for Philippine flour millers, the reaction here was one of alarm right away. Local millers voiced immediately their apprehension.
The Canadian Trade Minister in Manila, in behalf of the Canadian Wheat Board, assured Philippine flour millers, however, that Canada would honour her commitments to this country and that there was sufficient wheat available to meet the local mills' requirements.
the trade boycott against Malaysia suggest that the policy of ckonomie konfrontasi
has come to stay.
Sabang, a fine harbour on the island of Pulau Weh, about 20 miles off the coast of Sumatra's northernmost tip at the entrance to the Straits of Malacca, was declared a free port by President Sukarno on October 10. A free in
port pre-war times, Sabang is the first port of call for vessels coming from Europe castward to pass through the Straits of Malacca. Priok (the port of Djakarta) and Belawan (north Sumatra), Tandjung
Makasar (south Sulawesi) were declared
on the free trade zones
same day.
According to Deputy Chief Minister Leimena, as an initial step, "bonded ware- houses" will be erected in these zones in which no customs duties will be levied on imported goods.
KOTOE (supreme economic operation command) announced two days later that the harbours of Belawan, Dumai (central Sumatra, 60 miles opposite the town of Malacca across
the Malacca Straits), Palembang (south Sumatra), Djakarta, Surabaja (east Java) and Makasar have been made tranship ports for exports of all kinds of commodities.
Ambon (central Maluku), Bitung and Menado (both north Sulawesi) have been appointed tranship ports for exports of copra while Kupang (the capital of Timor) has been assigned especially for the export of cattle and copra. ports will be open round the clock. Other ports not on the list will not be permitted to ship export commodities abroad with out a special permit from KOTOE.
These
Dr Subandrio, Supreme Commander for the economic operation in the areas bordering Malaysia, made an on-the-spot survey last week at the harbour of Belawan and decided that this port was
be given top priority to Indonesia's trade with other countries. Extension of quays is now underway at this harbour by the Citra company of France.
to
serve
Indonesia's second largest foreign ex- change earner after Sumatra, Kalimantan, by implication, is not allowed to conduct trade directly with other countries since not a single port of this area has been appointed a tranship port. However, it is believed that exports from this area would be carried out by special permit of
Page 270 of,344
219
KOTOE although nothing has
been
mentioned in this connection by the
authorities.
CEYLON
Water for Kandy
From H. E. R. Abayasekara Our Colombo Correspondent
THE FRENCH firm of Ste Eau Et As- sainissement--Socoman has been given a Rs 164 million contract by the Ceylon Government to construct a water supply system for Kandy, the historic hill capi- tal, within 21⁄2 years. The foreign expen- diture of 10 million French Francs will be met by credit extended by the firm and will be repaid to them over a period of
years.
The present
water supply system, originally constructed in 1879, has been so deficient that in time of drought, prac-
tically an annual occurrence, water has had
to be obtained from the Kandy Lake. The new source of supply will be the Mahaweli River which flows by the famous Peradeniya Botanical Gardens and in which elephants disport themselves.
Water will be pumped to a water treatment station and from there the
purified water will be sent through a 20- inch main 31⁄2 miles long to a 800,000 gallon reinforced concrete reservoir in
town to feed the low level zone. Another
250,000 gallon reservoir, which will be supplied from the main reservoir, will meet the requirements of the high level
zone.
The two distribution networks will have over 55 miles of mains varying from 5 to 28 inches in diameter. The existing impounding reservoir will be retained but given a net treatment station. The new water supply scheme will be capable of supplying 5 million gallons of purified water a day and is designed to meet Kandy's water requirements for the next
25 years.
EUROPE
Flattery or Insult?
From Malcolm Subhan Our Brussels Correspondent
IT IS not clear whether the recent deci sion of the Common Market to grant India tariff concessions on a score or so of products flatters India or insults her. The concessions are being offered unila- terally, withoupete fich delay of formal negotiations, so to speak!220