China factory growth beats expectations

China’s factory activity expanded faster than expected in February as domestic and export demand picked up, adding to signs that the global economy is regaining momentum.


Growth in both output and orders accelerated last month, according to official and private factory surveys, giving the Chinese government more room to focus on tackling financial risks to the economy as debt continues to rise.

“This is the 7th consecutive month that China’s official manufacturing PMI stayed within expansionary territory, suggesting that industrial activity remains buoyant,” said Zhou Hao, emerging markets economist at Commerzbank AG in Singapore.

Zhou said it was “very likely” that China’s central bank would raise short-term interest rates by a another 10 basis points in March – which would mark the third such move in as many months – as authorities grow more confident that the economy is on steadier footing.

China’s central bank has cautiously shifted its stance in recent months to a tightening bias after years of super-loose policy to stave off the risk of a hard landing for the world’s second-largest economy.

The official Purchasing Managers’ Index (PMI) released on Wednesday rose to a three-month high of 51.6 in February, compared with the previous month’s 51.3, and above the 50-point mark that separates growth from contraction on a monthly basis.

Analysts had expected a reading of 51.1 in February.

China’s industrial sector has benefited from a construction boom since the middle of last year that has spurred demand and prices for building materials from cement to steel, boosting sales and profits.

Output rose at a faster pace of 53.7, compared to 53.1 in January, while overall new order growth also picked up.

A private survey which focuses more on small and mid-sized firms also showed factory activity picked up more than expected last month.

The Caixin/Markit Manufacturing Purchasing Managers’ index (PMI) rose to 51.7, up from 51.0 in January and beating analysts’ forecasts of 50.8.

A separate reading on the services sector showed growth remained robust in February.

The official non-manufacturing Purchasing Managers’ Index (PMI) stood at 54.2 in February, down from 54.6 in January, but well above the 50-point mark.

Fears new homes being left empty as housing prices soar

CoreLogic senior research analyst Cameron Kusher says there are fears many new units are being left empty, contributing to the housing crisis.


“There’s no hard and fast statistics on that, but if you go through Melbourne, and go through Brisbane in some of these areas you’re seeing a lot of new unit construction,” he said.

“You only have to go there at night time to see there is no furniture on the balcony, there’s very few lights on, so clearly a lot of these properties are being left vacant.”

Starr Properties agent, Douglas Driscoll said the number of those vacant properties could be in the hundreds of thousands.

“If you look at the census from 2011, it suggests there were 120,000 uninhabited properties across Sydney,” he said.

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“The advent of foreign investment only really kicked in, in 2012, [so] my rudimentary research suggests it could be as much as 200,000.”

That’s in Sydney alone according to Mr Driscoll, although there is no official statistical measurement.

“My evidence as such is hard and fast – I can’t find any data or statistical evidence anywhere,” he said.

“However, our network encompasses 30 offices in Sydney – I speak and deal with many other real estate professionals across the city as indeed developers and I speak to them on the coal face, as it were – and that’s predominantly where my evidence comes from.”

The Real Estate Institute’s Malcolm Gunning says many of those apartments may be legitimately empty.

“A lot of those properties might be used part-time, they might be used by ’empty nesters’ who have properties outside of Sydney and they may have a Sydney base, which is often the case or people who live interstate who use the property once a month or once or twice a year,” he said.

“Foreign investors will often buy the property and have their students occupy it for six months of the year and the other six months it lays vacant because they don’t want to lease it out.”

A more level playing field may include reserving a portion of new units for local residents or strategies like those used in Canada, which has a 15 per cent foreign buyer property surcharge.

But Mr Gunning warned such tactics had their drawbacks.

“In Vancouver, which is very similar to Sydney, what we see now is property prices falling rapidly because it’s a major disincentive for foreign investors,” he said.

The first step is to identify and quantify just how many apartments are being banked for capital gains benefits – and left empty.


Meanwhile, CoreLogic says dwelling prices nationwide rose by 1.4 per cent in February with the median price standing at $570,000.

That’s up nearly 11 per cent over the past 12 months.

Mr Kusher said there was no stopping the growth in Australian property prices.

“It’s really strong, if you look at what’s happening in Sydney you’re seeing the fastest rate of growth on an annual basis since 2002 and across the combined capital cities, the strongest annual rate of growth since 2010 so the housing market is strong at a macro level but it’s still largely being fuelled by what’s happening in Sydney and Melbourne,” he said.

Sydney continues to drive house price gains, up 2.6 per cent last month and more than 18 per cent over the past year.

Mr Kusher said low interest rates along with migration and population growth, particularly in New South Wales and Victoria, were fueling demand.

So too were investors, he said.

“If you look at the investor statistics in New South Wales, if you strip out refinances, they’re about 55 per cent of new lending in New South Wales, about 48 per cent in Victoria, historically those figures are much lower,” he said.

And foreign buyers continue to be a significant factor in the market.

A recent NAB report found they accounted for nearly 11 per cent of all new property purchased in the December quarter.


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Trump wants Aust-style immigration system

US President Donald Trump has flagged introducing an Australian-style immigration system as part of a sweeping overhaul of rules for foreigners wanting to make a new life in America.


Mr Trump praised Australia’s points-based system for skilled migrants during an hour-long speech to a joint sitting of congress in which he also called on America’s allies for military support and hinted at trade reforms that could include new tariffs on overseas-made goods.

Returning to his election campaign mantra of making America great again, Mr Trump said a merit-based immigration system like Australia’s and Canada’s would save money and benefit low-income earning families.

“It is a basic principle that those seeking to enter a country ought to be able to support themselves financially,” he said.

“Switching away from this current system of lower-skilled immigration and instead adopting a merit-based system will have many benefits: it will save countless dollars, raise workers’ wages and help struggling families – including immigrant families – enter the middle class.”

About two-thirds of the 190,000 visas Australia awards each year go to skilled migrants deemed to have enough “points” based on their age, English language skills, work experience and education qualifications.

Mr Trump’s speech largely focused on domestic issues like kickstarting the economy, scratching Obamacare and boosting military spending but offered no precise details on what he wants congress to approve.

He also again promised to build a wall along the Mexican border and beef up vetting procedures to “keep out those who would do us harm”.

US allies including Australia were put on notice that Mr Trump is preparing for a “robust” engagement with them and wants their support to destroy ISIS.

“We expect our partners, whether in NATO, in the Middle East or the Pacific to take a direct and meaningful role in both strategic and military operations and pay their fare share of the cost,” he said.

US political expert Dr John Hart, from ANU’s School of History, said allies like Australia would be wondering if they might be dragged into Mr Trump’s plan to destroy ISIS or potential military action in the disputed waters of the South China Sea, where Beijing has been building islands.

“If we are drawn into a military conflict with China or even a trade war with China the normal Australian rhetoric whenever America’s goals and China’s goals clash won’t be enough,” he told AAP.

“If there is a trade war and if there is a military confrontation Australia will be forced to choose.”

Meanwhile, Mr Trump has suggested foreign companies exporting to the US could have new tariffs imposed on their goods as part of his plan to kickstart the US economy.

“Currently when we ship products out of America, many other countries make us pay very high tariffs and taxes but when foreign companies ship their products into America, we charge them almost nothing,” he said.

Dr Hart described the remark as “ridiculous” given the difficulties Australian sugar growers have exporting to the US.

Cambodia orders US NGO to close and expels foreign staff

The order comes a day after the strongman premier threatened the Cambodia Daily, one of the country’s few remaining critical newspapers, with closer over an alleged unpaid tax bill of $6.


3 million, calling them “thieves”.

In a statement on Wednesday the Ministry of Foreign Affairs said foreign employees of the National Democratic Institute (NDI) have seven days to leave after the group allegedly failed to formally register or pay correct taxes.

“Authorities are geared up to take the same measures against any foreign association or non-government organisation that fails to abide” by Cambodia’s laws, the statement added.

In recent weeks a string of foreign-funded organisations including the NDI have been named in Cambodia’s pro-government press or by officials as facing tax or regulatory probes.

Political playbook

Analysts say the cascade of legal cases is straight from the political playbook of Hun Sen, who has cornered opponents throughout his three-decade rule, in the run-up to elections.

Cambodians are due to go to the polls in just under a year, in a poll many expect to be a close-run affair.

Apart from the Cambodia Daily, which is owned by an American, the US-funded Radio Free Asia and Voice of America have also been legally targeted.

All have denied wrongdoing and said they are being selected for their independent reporting.

In a statement, the Overseas Press Club of Cambodia said the Cambodia Daily “has a history of running stories that have angered the government, leading many to believe the tax department is being used to target critics” before the poll.

The NDI, which says it works to strengthen democratic institutions worldwide, has been operating in Cambodia since 1992.

A country ravaged by war

In recent weeks, pro-government media have accused the organisation of helping Cambodia’s opposition party to try to topple the government.

The NDI, chaired by former US Secretary of State Madeleine Albright, did not immediately respond to requests for comment.

But they have previously declared themselves as “strictly non-partisan”, adding they also trained many members of Hun Sen’s ruling party.

To supporters, Hun Sen – one of the world’s longest serving leaders – has brought growth and stability to an impoverished country ravaged by decades of war.

But critics say corruption, inequality and rights abuses have also flourished.

Growing closer to China

In recent years he has grown closer to China while criticising the US, one of Cambodia’s largest donors.

In 2015 the government passed a broadly-worded law regulating NGOs. Critics warned the legislation would make it much easier to shutter organisations deemed critical of the government.

Impoverished Cambodia is home to some 5,000 NGOs.

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Queensland to implement safety laws following Dreamworld disaster

Rides at theme parks, shows and fetes also require less stringent inspections than cranes, the state government’s recently published review of Workplace Health and Safety Queensland (WHSQ) regulations has also shown.


The review, commissioned after the death of four people on Dreamworld’s Thunder River Rapids ride and a fatal workplace accident at Eagle Farm racecourse last year, has outlined a number of gaping holes in public safety issues at these facilities.

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It prompted the government to introduce industrial manslaughter laws that will hold corporations and negligent individuals responsible for any deaths.

The review found some rides at school fetes and small local shows are more than 30 years old, and aren’t subjected to any major inspection requirements.

It has earmarked “poor mechanical integrity and lack of modern safety control measures” as a “significant concern” for these older rides.

“High turnover of operators (especially for mobile amusement devices at smaller shows) and lack of effective operator training are significant contributing factors to amusement device incidents,” the report also noted.

Similar concerns were raised for established theme parks like Dreamworld.

Following the deaths of Cindy Low, Kate Goodchild, Luke Dorsett and Roozi Araghi on October 25 last year when Dreamworld’s Thunder River Rapids ride malfunctioned, WHSQ conducted audits on 90 rides at major theme parks.

It found annual inspections of rides are legally required but that they fall short of the type of inspections required for plant equipment like cranes.

Inspectors also noted there were no strict rules surrounding competency of ride operators.

“By way of comparison, a high-risk work licence is required to operate a forklift truck and arguably the risk associated with the operation of certain large amusement devices is significantly higher than for a forklift,” the review said.

Industrial Relations Minister Grace Grace said the government’s implementation of the 58 recommendations in the review would give the public more confidence in the amusement industry.

“Our harsher penalties will serve as a deterrent to employers who are tempted to cut corners when it comes to safety in the workplace,” she said.

Queensland Emergency service personnel are seen at amusement theme park Dreamworld on the Gold Coast, Queensland, Tuesday, Oct. 25, 2016 (AAP)AAP

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Turnbull tries to turn page at paper mill

With three of his ministers bound for the High Court and the same-sex marriage debate raging on, Malcolm Turnbull was struggling for clear air.


It was time for the company of some familiar faces, to turn over a new page.

Or better yet, an enormous stockpile of freshly-made paper in Tumut to try and rewrite the script.

So on came the hard hat, headset and high vis as he headed off for a tour of paper giant Anthony Pratt’s mill in southern NSW.

The location was not lost on the prime minister as he stepped out of the car and into the town where his father was born in 1926.

As the eligibility of his cabinet colleagues dominated headlines across the country, it was a fact Mr Turnbull returned to several times throughout the day.

“There’s been a lot of discussion about people having citizenship by descent, so on that basis I’m a citizen of Tumut by descent. I hope you won’t disown me,” he told those attending a lunch on site.

Taking a turn around the mill, Mr Turnbull was surprised to learn how few workers were required at any one time to keep the manufacturing plant afloat.

He and Mr Pratt talked shop as they trotted over boardwalks high above the ground and snaked through a series of throbbingly loud factory floors, as a throng of photographers followed their every move.

“Anthony, we are so proud, all of us here, of what your family has achieved. It is a remarkable Australian success story,” Mr Turnbull later proclaimed as he dined with the Pratts.

The PM’s extraordinary outburst at Bill Shorten – whom he labelled a parasite and social-climbing sycophant for sipping champagne with billionaires including the Pratts – must have seemed a distant memory.

“You are great Australians, making a great commitment to our great nation,” Mr Turnbull told the family.

Mr Pratt on Wednesday announced a $2 billion plan to create thousands of manufacturing jobs over 10 years.

He made the same pledge to Donald Trump in New York three months ago, which the prime minister was also in town to see.

A $100 million upgrade to the Tumut mill would be the first in a series of investments in Visy’s Australian operations, creating some 13,000 permanent jobs plus another 14,000 construction jobs.

The prime minister gave a long and wide-ranging press conference on the virtues of jobs and investment, Australia’s involvement in global wars and the simmering citizenship crisis.

But there was one question he would not go near – just why was he in town?

“There’s no federal funding in this announcement today, so what are you doing here? Is this to assure voters that you’re not distracted?” he was asked by a reporter.

“Thanks for the editorial,” Mr Turnbull fired back. “Do you have any other questions?”

Shoppers reject Reject Shop’s new products

Discount retailer The Reject Shop says it has failed to get its product range right amid a decline in consumer spending.


The Reject Shop’s net profit dropped 28 per cent to $12.3 million in the year to July 2, as the company had forecast in April.

Weak trading conditions, particularly in Western Australia and the Australian Capital Territory, contributed to a fall in like-for-like sales of 1.6 per cent.

Chief executive Ross Sudano said sales were particularly challenging in the second half of the year, largely due to declines in consumer spending and a poorly received merchandise strategy.

He said the group had over invested in new products at the expense of everyday value and branded bargains.

“The impact was a perceived loss in value by some of our customers and reduced foot traffic,” Mr Sudano said.

“This occurred at a time when the availability of discretionary income is challenged, and consumer confidence amongst our core customers continued to deteriorate.”

Mr Sudano said The Reject Shop was returning to basics, with a focus on everyday items at good prices, and branded bargains.

However, the tough trading conditions experienced in the second half of 2016/17 have continued into the current financial year.

The company’s comparable sales in the first seven weeks of 2017/18 were down three per cent on the same period a year ago.

“Nonetheless, we are confident that our continuing initiatives to improve sales, along with the positive effects expected from the promotional activities planned from September, will see the company return to positive comparable sales growth during the half, albeit at a low level,” he said.

Shares in The Reject Shop dropped 26 cents, or 5.9 per cent, to $4.14.


* Full year net profit down 27.8pct to $12.3m

* Total sales revenue down 0.7pct to $794m

* No final dividend, down from 19 cents

Aussie squad feels the heat in Bangladesh

The Bangladeshi weather is proving challenging in more ways than one for Australia’s Test squad, with allrounder Glenn Maxwell suffering heatstroke during training.


Maxwell has revealed he fell ill during the first day of training in Dhaka ahead of the first Test starting on Sunday.

The local monsoon season has made for punishing weather, with periodic rain and thunderstorms giving way to sweltering heat and humidity.

“I copped a bit of heatstroke on the first day, which wasn’t a good start,” Maxwell said on Wednesday.

“I think just doing some running outside, then I had to go inside to do some fitness testing, and going back outside probably didn’t help too much.

“Basically, my body shut down a little bit but I was fine after a bit of an ice bath and plenty of fluids.”

Steve Smith’s men had a light training session on Wednesday, with a waterlogged ground having earlier forced the cancellation of a tour match on the outskirts of Dhaka.

It was a different story on Tuesday when the squad trained in the heat for almost three hours, pushing pacemen Josh Hazlewood, Pat Cummins and Jackson Bird to the point of exhaustion.

“Yesterday was obviously pretty tough,” Maxwell said.’

“Obviously with the morning rain and the overnight rain, I think all the moisture’s coming out of the ground and making it quite sweaty work for us.

“But it’s been good. We’ve got a lot out of the last few days, basically putting on the finishing touches for day one.”

Australia’s disrupted preparation has raised questions about their level of readiness to face an improving Bangladeshi side which has proven tough to beat on home soil.

But Maxwell said the squad’s pre-tour training camp in tropical Darwin had been more than ample preparation.

“The way we prepared in Darwin, I think the wickets were perfect,” he said.

“Even coming here and having a couple of hits on these wickets, it’s very similar to what we were facing in Darwin, if not a little bit easier I suppose in the nets.

“We put extreme conditions in Darwin with the wickets where we made them ridiculously tough to bat on, and guys tested themselves really well during that week.

“I think the guys are more than well-equipped to handle whatever comes at us in this first Test.”

US Navy removes admiral after collisions

The US Navy has relieved Seventh Fleet Commander Vice Admiral Joseph Aucoin of his duties after two fatal collisions involving warships in Asia in less than three months.


Admiral Scott Swift, the commander of the US Pacific Fleet, relieved Aucoin from duty at the US Navy’s Yokosuka naval base in Japan, a US Navy spokesman said.

Rear Admiral Phil Sawyer, the deputy commander of the Pacific Fleet, will assume command immediately, he added.

A pre-dawn collision between a guided-missile destroyer and a merchant vessel east of Singapore and Malaysia on Monday was the fourth major incident in the US Pacific Fleet this year .

The decision to relieve Aucoin was made “due to a loss of confidence in his ability to command,” the spokesman said.

Aucoin was due to step down next month.

An international search-and-rescue operation involving aircraft, divers and vessels from the United States, Singapore, Malaysia, Indonesia, and Australia is looking for the 10 US sailors missing since Monday’s accident.

On Tuesday, US Navy and Marine Divers found human remains inside sealed sections of the damaged hull of the USS John S McCain, which is moored at Singapore’s Changi Naval Base.

The Navy has not yet announced the identities of the bodies discovered.

The US Navy is also working to identify a body found by the Malaysian navy about eight nautical miles northwest of the collision site.

The latest collision has already prompted a fleet-wide investigation and plans for temporary halts in US Navy operations.

The USS John S. McCain’s sister ship, the USS Fitzgerald, almost sank off the coast of Japan after colliding with a Philippine container ship on June 17.

The bodies of seven US sailors were found in a flooded berthing area after that collision.

The USS John S. McCain and the tanker Alnic MC collided on Monday while the US ship was approaching Singapore on a routine port call.

The impact tore a hole in the warship’s port side at the waterline, flooding compartments that included a crew sleeping area.

AFL veteran Jarrad McVeigh keen to play on

Former Sydney captain Jarrad McVeigh is keen to play on next year, even if it means leaving the AFL club he’s spent almost half his life at.


Talks are ongoing but McVeigh, who comes off contract at the end of this season, is yet to be offered a new deal by the Swans.

Provided Sydney contest at least two finals, McVeigh will next month play his 300th game.

There is every chance the 32-year-old, who grew up on NSW’s Central Coast, will be unsure of his future whenever the Swans’ campaign ends.

McVeigh insists that prospect doesn’t worry him, likewise if coach John Longmire later tells him he is no longer part of the club’s plans for 2018.

“I understand the game of AFL. It is a ruthless business. I have got to perform and there has got to be a spot for me,” he told reporters on Wednesday.

“It is a two-way street.

“I have a really strong relationship with everyone at the club and we all know where we stand … I’ve been in constant communication with the club all year and I’m pretty comfortable with where it sits.

“I have always said all year that I want to play on if my body is right and I am playing at a high level, so definitely I want to play on next year.”

McVeigh added there was a “a lot of trust and honesty” in the ongoing discussions between him, Longmire and Swans football manager Tom Harley.

“I don’t think it matters when it is,” McVeigh said, when asked if he’d like the Swans to make a call soon.

McVeigh has only played 10 games this year because of a calf injury but remains one of Sydney’s best users of the ball and will be a crucial part of their push for a premiership.

Former Brisbane captain and three-time premiership forward Alastair Lynch penned an open letter to McVeigh earlier this month, asking him to consider joining the Lions.

McVeigh has also been linked with Greater Western Sydney, where his older brother Mark is an assistant coach.

Hayne’s swipe at sacked Titans coach Henry

Gold Coast fullback Jarryd Hayne has launched a stinging attack on sacked coach Neil Henry, despite denying the pair were ever involved in a feud.


The under-fire Hayne claimed the coach was using the media, rather than approaching himself directly, to work through any differences.

Hayne surprised journalists with an unscheduled media conference before training on Wednesday, saying the tipping point in the pair’s relationship was a media report which said the mentor didn’t support signing him.

Henry was sacked on Monday with club boss Graham Annesley attributing the fractured relationship between coach and star player as a factor in the decision.

Denying the pair had any “verbal arguments”, Hayne made a point of expressing his disappointment at what he alleged to be a “relationship” between Henry and News Corp journalist Paul Kent.

Hayne said he was upset to read Henry didn’t want him at the club, an accusation Henry later countered by saying his signing was a “mutual decision”.

The NSW Origin star said it was the second such disappointment after an article earlier in the year indicated the Titans mentor wasn’t happy with Hayne’s attitude at training.

Henry was not quoted in either unsourced article, the coach even expressing his own disappointment at the timing of the initial article while still in the job last week.

“For it to happen again really took me over the edge,” Hayne said.

“I’d rather Neil just tell me instead of a journalist write it.”

But Kent hit back at the claims, saying Henry was not the source of the story about Hayne’s poor training habits.

“Jarryd’s got it in his head that Neil is feeding me all this stuff for some reason to unsettle Jarryd,” Kent told Fox Sports’ NRL 360.

“He made that up because I didn’t speak to Neil.

“To say I’m a friend of Neil Henry’s like Jarryd’s alleged there, that’s not right.”

Hayne said he told Henry that he would leave the club if he was not wanted, before repeating it to a journalist.

The ensuing article prompted crisis meetings between Hayne and Henry and club hierarchy before an emergency board meeting that eventually led to the coach’s sacking.

Hayne said constant focus on his relationship with Henry, being described as a “coach killer”, had not really bothered him.

But the 29-year-old did feel for his teammates, hence Wednesday’s impromptu media call.

“It hasn’t been that bad because I understand the media; they sell papers, not write truths and that’s something I’ve become accustomed to,” Hayne said.

“It’s more my teammates getting asked questions of me, being under the pump with repeated questions.

“I thought I’d just speak up and answer questions about what you guys think was going on.”

Henry did not reply when contacted by AAP on Tuesday night.

Annesley said while Hayne was entitled to his view, the club had nothing to add.

“It’s about moving on now and getting on with the future of the club,” Annesley told Fox Sports.

Australian foreign spy chief ‘courtesy calls’ Duterte in Manila

The head of Australia’s overseas intelligence agency has been snapped posing with a clenched fist beside president of the Philippines Rodrigo Duterte.


Nick Warner, director-general of the Australian Secret Intelligence Service, held talks with the leader at Malacanang Palace in Manila on Tuesday.

The president’s office released video of the meeting, with separate photos showing the pair talking and making Mr Duterte’s signature hand gesture.

President Duterte meets with Australian Secret Intelligence Service Director General Nick Warner in Malacañang pic.twitter长沙桑拿按摩论坛,/3u1sLFUEgb

— Pia Gutierrez (@pia_gutierrez) August 22, 2017

A spokeswoman for Foreign Affairs Minister Julie Bishop told AAP the director-general meets with leaders and ministers of regional countries regularly “to advance co-operation in information sharing to counter terrorism”.

According to a palace official, it was “basically a courtesy call” that “touched on regional security issues and declaration of mutual support”.

It comes just a week after the federal government moved to formally list Islamic State in East Asia as a terrorist organisation, with the group responsible for numerous terrorist attacks in the Philippines.


Attorney-General George Brandis said IS was using the conflict in Marawi as a “call to arms”, with foreign fighters believed to be actively fighting against Philippine security forces.

“Only last week, ISIL released a propaganda video of Australian-accented extremist Abu Adam Al-Australi urging fighters to go to join the conflict in Mindanao,” he told parliament last Wednesday.

The head of the domestic intelligence agency ASIO, Duncan Lewis, has previously said one of the greatest terrorist threats to Australians is in South East Asia.


0:00 Filipino President takes aim at human rights campaigners Share Filipino President takes aim at human rights campaigners

Egypt FM, Kushner meeting cancelled

Egyptian Foreign Minister Sameh Shoukry has cancelled meeting US President Donald Trump’s adviser and son-in-law Jared Kushner, a copy of his schedule sent out to journalists showed.


A Foreign Ministry official told Reuters Wednesday’s meeting had been cancelled but did not provide a reason. A US embassy official in Cairo said Kushner’s meeting with Shoukry had never been set in stone because “the schedule was never fixed.”

Shoukry had been scheduled to meet with a US delegation led by Kushner to discuss the Middle East peace process.

Kushner is still expected meet with Egyptian President Abdel-Fattah al-Sissi in Cairo later on Wednesday.

Two US sources familiar with the matter told Reuters on Tuesday that US authorities would deny Egypt $US95.7 million ($A121.2 million) in aid and delay a further $US195 million payment over its failure to make progress on respecting human rights and democratic norms.

“Egypt sees this measure as reflecting poor judgment of the strategic relationship that ties the two countries over long decades and as adopting a view that lacks an accurate understanding of the importance of supporting Egypt’s stability,” the foreign ministry said in a statement.

The decision could have “negative implications” on achieving common goals and interests between the two countries, it added.

Last year, al-Sissi welcomed Trump’s election, hoping the new president would “breathe a new spirit into Egyptian-US relations” after ties with the administration of former president Barack Obama became strained.

The 2013 military-led ouster of Islamist president Mohamed Morsi in Egypt prompted Washington briefly to halt some military aid to Cairo, although that was later restored.