Author: CensorBiz

BANGKOK — Southeast Asia is bearing the mounting brunt of U.S. trade curbs aimed at stemming the forced labor of ethnic minority Uyghurs in China, with billions of dollars in blocked exports, the latest U.S. trade figures show.

Economists and human rights experts ascribe the heavy hit the region is taking to global supply chains shifting to reroute exports from China through Southeast Asia and to China’s persistent dominance in key commodities.

With both powerful forces at play, Southeast Asia is “caught in the middle,” Jayant Menon, a senior fellow at the ISEAS Yusof Ishak Institute in Singapore, told VOA.

The United States has detained $3.56 billion worth of imports in all since its Uyghur Forced Labor Prevention Act, or UFLPA, took effect in mid-2022, according to recent figures from U.S. Customs and Border Protection. Some 86% of those, more than $3 billion worth, arrived from Malaysia, Thailand and Vietnam. Only $395 million arrived directly from China.

The act forbids imports of any products made in whole or in part in China’s Xinjiang autonomous region, the Uyghurs’ historic homeland, presuming they have been made with forced labor. While many of the shipments are eventually allowed to enter the United States, the burden is on the importer to secure their release by proving the products are produced without forced labor, a process that can take months.

The United States and other governments have accused China of genocide over its treatment of the mostly Muslim Uyghurs for subjecting them to not only forced labor but mass surveillance and detention, religious persecution and forced sterilization — all denied by Beijing.

Xinjiang is a major source of some commodities crucial to the global supply chain, including 12% of the world’s aluminum, more than a third of the polysilicon for solar panels and 90% of the cotton produced by China, according to the Coalition to End Forced Labor in the Uyghur Region, a global network of rights groups.

Many of those supply chains now flow through Southeast Asia for reasons beyond just the UFLPA, said Nick Marro, principal Asia economist and global trade lead analyst for the Economist Intelligence Unit.

“For years, multinational companies — both Chinese and non-Chinese owned — have been pouring investment into Southeast Asia to construct supply chains aimed at dodging U.S. tariffs,” he told VOA.

While far from the only reason for the influx, he said, “shifting some production chains to Vietnam or Thailand, for example, can obfuscate whether a good might originally be produced in China.”

“This isn’t necessarily a fool-proof strategy,” Marro said. “U.S. trade authorities are very sensitive to illegal transshipments and other efforts aimed at circumventing U.S. duties. But for some supply chains, cracking down on these activities can be challenging — especially for products like cotton, which is notoriously difficult to trace.”

Evolving supply chains now require looking beyond exports arriving directly from China to catch what’s made there, said Menon, a former lead economist for trade with the Asian Development Bank.

“Increasingly there’s production and value addition in multiple countries,” he said. “Simply looking at goods that emanate from Xinjiang to the U.S. will not capture the intended objective.”

Of the slightly more than $3 billion worth of exports the United States has detained from Malaysia, Thailand and Vietnam because of the UFLPA, the vast majority, $2.96 billion, have been electronics, including solar panels.

Louisa Greve, global advocacy director for the Washington-based Uyghur Human Rights Project, ascribes that to the surge of investment from Chinese solar panel makers into Southeast Asia starting more than a decade ago.

“We don’t know of any Uyghurs working in Southeast Asia in solar, but we do know where the polysilicon has to come from. That’s the issue,” she told VOA. “It’s about the components.”

Greve added that the Southeast Asian countries and companies involved in importing and incorporating that polysilicon into the solar panels they help make and export also risk being complicit in the state-sponsored forced labor that goes into producing it in China.

“Thirty-five percent of the world’s polysilicon, or solar-grade polysilicon, is coming from China. It’s up to every manufacturer, like the plants that are actually making solar panels in Southeast Asia … to say, ‘We have to be responsible for the raw materials that we’re using,’” she said.

Menon asserted the UFLPA could benefit low-wage countries less tainted by forced labor than China by driving more business their way, but he said that Southeast Asia will still struggle to wean itself off Chinese supplies.

“China is still the hub or the center of ASEAN [Association of Southeast Asian Nations] supply chains. That hasn’t changed. There’s been some reconfiguration taking place, but by and large, China’s not going away,” he said.

Menon said that “blunt” trade tools like the act can also hurt the countries in the middle of those supply chains by driving existing production and investment away, leaving local workers with less work or fewer jobs.

“This [act] is quite a big move, quite a massive measure, and so I’d be surprised if it doesn’t have some impact in moving production around,” he said. “If you ban imports in this way, inevitably there will be some shifts that move production in a way that tries to circumvent those bans.”

Marro said the same pressures that drove companies to “de-risk” by moving production from China to Southeast Asia years ago could yet prove a “double-edged sword.” While the shift has boosted Southeast Asia’s economies, the costs may mount as the United States and others start taking a harder look at countries helping China evade their trade curbs.

Even with only 11 months of the 2024 fiscal year reported, U.S. customs figures show the UFLPA blocked more imports from Southeast Asia over the past year than the year before.

Marro said enforcement efforts were at a “very real risk” of picking up but added that geopolitics could also intervene.

“As much as U.S. officials want to crack down on Chinese tariff circumvention, there’s an equal effort to avoid isolating Southeast Asia when it comes to the U.S.’s increasingly hawkish strategy towards China,” he said. “This balancing act will characterize the future of U.S. policy to the region.”
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NAIROBI, KENYA — Africa has seen the capacity of its ports grow significantly over the years, but a report from the Africa Finance Corporation says the expansions, upgrades and investments have not led to better inland logistics and supply chains.

Since 2005, African ports have received an estimated $15 billion in investments, allowing them to accommodate larger ships and offload more cargo for transportation across the continent.

According to the African Development Bank, port development has led to increased traffic. Between 2011 and 2021, container units passing through African ports increased by nearly 50%, from 24.5 million to 35.8 million.

Gabriel Sounouvou, a Guinean specialist in logistics and supply chain management, said port investments have multiple benefits, including better integration with the global supply chain and a reduction in corruption.

“We cannot modernize the port without technology integration,” Sounouvou said. “So … when the government modernizes the port, they also create this transparency that reduces corruption.”

However, according to the Africa Finance Corporation’s 2024 report, “State of Africa’s Infrastructure,” the increased capacity at ports has yet to lead to an efficient logistical supply chain across the continent.

The researchers say African governments have neglected road and railway networks, which are unevenly distributed, of poor quality and underused, which limits their usefulness.

Sounouvou said bad roads make it hard to do business in Africa, especially outside coastal areas.

“Many road corridors are not good for trucks,” Sounouvou said, adding that trucks “can spend more than 10 days instead of three in landlocked countries.”

Jonas Aryee, head of Maritime Economics and International Trade Modules at Plymouth University in England, said human factors also make it difficult to transport goods across Africa.

“Some countries are still not opening up, and they’re protecting their local industries from those of their fellow African countries,” Aryee said.

“You will find several roadblocks — from police, from customs, from gendarmes — in many countries when goods are going through,” he said. “And it’s made the cost of doing business in Africa so high.”

The Africa Finance Corporation study shows the continent has 680,000 kilometers of paved roads, just 10% of the total found in India, which has a similar population but one-tenth the land area.

Experts say the roads connecting countries in Africa have remained in bad shape because countries have not formed a joint team to invest in, build and manage highways that could improve the free flow of goods and people.

While road networks remain underdeveloped in many African countries, the AFC report said port investments are expected to continue, with several new terminals confirmed for development in countries such as Angola, Benin, Cameroon, the Democratic Republic of Congo, Ghana and Ivory Coast.
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The European Central Bank, which sets interest rates for the 20 countries that use the euro currency, cut borrowing costs once again on Thursday after figures showed inflation across the bloc falling to its lowest level in more than three years and economic growth waning. 

The bank’s rate-setting council lowered its benchmark rate from 3.5% to 3.25% at a meeting in Llubljana, Slovenia, rather than its usual Frankfurt, Germany, headquarters. 

The rate cut is its third since June and shows optimism among rate-setters over the path of inflation. Inflation sank to 1.8% in September, the first time in three years that it has been below the ECB’s target rate of 2%. 

Inflation has been falling more than anticipated — in September, it was down at 1.8%, the first time it has been below the ECB’s target of 2% in more than three years — and analysts think the bank will lower rates in December, too. Mounting evidence that the eurozone is barely growing — just 0.3% in the second-quarter — has only accentuated the view that ECB President Christine Lagarde will not seek to dislodge that expectation. 

“The trends in the real economy and inflation support the case for lower rates,” said Holger Schmieding, chief economist at Berenberg Bank. 

One reason why inflation has fallen around the world is that central banks dramatically increased borrowing costs from near zero during the coronavirus pandemic when prices started to shoot up, first as a result of supply chain issues built up and then because of Russia’s full-scale invasion of Ukraine which pushed up energy costs. 

The ECB, which was created in 1999 when the euro currency was born, started raising interest rates in the summer of 2021, taking them up to a record high of 4% in Sept. 2023 to get a grip on inflation by making it more expensive for businesses and consumers to borrow, but that has come at a cost by weighing on growth. 
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Germany plans to introduce measures aimed at boosting its domestic wind industry, the economy ministry said on Thursday, amid concerns from European governments and companies over Chinese firms gaining momentum on the continent.

The measures will focus on improving cybersecurity, reducing dependency for critical components like permanent magnets, and ensuring fair competition in global markets, the ministry said following a meeting with unnamed European wind turbine manufacturers and suppliers in Berlin, without giving further details or a time frame.

China accounts for about 60% of global rare earth mine production, but its share jumps to 90% of processed rare earths and magnet output.

“We must continue improving conditions to keep this industry competitive and ensure future value creation within Germany and Europe. These measures are a crucial step,” Economy Minister Robert Habeck said in a statement.

The plan will also address securing financing for increased production and adjusting public funding mechanisms to prevent market distortion.

The ministry did not immediately respond to a request for further details.  

Tensions are high between Beijing and the European Union, the world’s two largest wind markets. The European Commission launched an investigation in April into whether Chinese companies are benefiting from unfair subsidies.
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Nairobi — The World Bank said on Monday it had lowered its economic growth forecast for sub-Saharan Africa this year to 3% from 3.4%, mainly due to the destruction of Sudan’s economy in a civil war.  

However, growth is expected to remain comfortably above last year’s 2.4% thanks to higher private consumption and investment, the bank said in its latest regional economic outlook report, Africa’s Pulse.  

“This is still a recovery that is basically in slow gear,” Andrew Dabalen, chief economist for the Africa region at the World Bank, told a media briefing.  

The report forecast next year’s growth at 3.9%, above its previous prediction of 3.8%.  

Moderating inflation in many countries will allow policymakers to start lowering elevated lending rates, the report said.  

However, the growth forecasts still face serious risks from armed conflict and climate events such as droughts, floods and cyclones, it added.  

Without the conflict in Sudan, which devastated economic activity and caused starvation and widespread displacement, regional growth in 2024 would have been half a percentage point higher and in line with its initial April estimate, the lender said.  

Growth in the region’s most advanced economy, South Africa, is expected to increase to 1.1% this year and 1.6% in 2025, the report said, from 0.7% last year.   

Nigeria is expected to grow at 3.3% this year, rising to 3.6% in 2025, while Kenya, the richest economy in East Africa, is likely to expand by 5% this year, the report said.   

Commodities  

The sub-Saharan Africa region grew at a robust annual average of 5.3% in 2000-2014 on the back of a commodity supercycle, but output started flagging when commodity prices crashed. The slowdown was accelerated by the COVID pandemic.  

“Cumulatively, if that were to continue for a long time, it would be catastrophic,” Dabalen warned.  

Many economies in the region were starved of public and private investments, he said, and a recovery in foreign direct investments that started in 2021 was still tepid.  

“The region needs much, much larger levels of investments in order to be able to recover faster… and be able to reduce poverty,” he said.  

Growth across the region is also hamstrung by high debt service costs in countries like Kenya, which was rocked by deadly protests against tax hikes in June and July.  

“There are staggering levels of interest payments,” Dabalen said, attributing this to a shift by governments to borrow from financial markets in the last decade and away from the low-priced credit offered by institutions like the World Bank.  

Total external debt among economies has risen to about $500 billion from $150 billion a decade and a half ago, he said, with the bulk owed to bond market investors and China.  

Chad, Zambia, Ghana and Ethiopia went into default in the last four years and have overhauled their debt under a G20 initiative Common Framework. Ethiopia is still working to restructure its debt while the others have completed their debt restructuring.  

“As long as these debt issues are not resolved, there is going to be a lot of ‘wait and see’ games going on, and that is not good for the countries, and certainly not good for the creditors as well,” he said.
…

OCEAN CITY, N.J. — For generations of vacationers heading to Ocean City, the towering “Giant Wheel” was the first thing they saw from miles away.

The sight of the 140-foot-tall (42-meter) ride let them know they were getting close to the Jersey Shore town that calls itself “America’s Greatest Family Resort,” with its promise of kid-friendly beaches, seagulls and sea shells, and a bustling boardwalk full of pizza, ice cream and cotton candy.

And in the heart of it was Gillian’s Wonderland Pier, an amusement park that was the latest in nearly a century-long line of family-friendly amusement attractions operated by the family of Ocean City’s mayor.

But the rides were to fall silent and still Sunday night, as the park run by Ocean City’s mayor and nurtured by generations of his ancestors, closed down, the victim of financial woes made worse by the lingering aftereffects of the COVID-19 pandemic and Superstorm Sandy.

Gillian and his family have operated amusement rides and attractions on the Ocean City Boardwalk for 94 years. The latest iteration of the park, Wonderland, opened in 1965.

“I tried my best to sustain Wonderland for as long as possible, through increasingly difficult challenges each year,” Mayor Jay Gillian wrote in August when he announced the park would close. “It’s been my life, my legacy and my family. But it’s no longer a viable business.”

Gillian did not respond to numerous requests for comment over the past week.

Sheryl Gross was at the park for its final day with her two children and five grandchildren, enjoying it one last time.

“I’ve been coming here forever,” she said. “My daughter is 43 and I’ve been coming here since she was 2 years old in a stroller. Now I’m here with my grandchildren.”

She remembers decades of bringing her family from Gloucester Township in the southern New Jersey suburbs of Philadelphia to create happy family memories at Wonderland.

“Just the excitement on their faces when they get on the rides,” she said. “It really made it feel family-friendly. A lot of that is going to be lost now.”

There were long lines Sunday for the Giant Wheel, the log flume and other popular rides as people used the last of ride tickets many had bought earlier in the year, thinking Wonderland would go on forever.

A local non-profit group, Friends of OCNJ History and Culture, is raising money to try and save the amusement park, possibly under a new owner who might be more amenable to buying it with some financial assistance. Bill Merritt, one of the non-profit’s leaders, said the group has raised over $1 million to help meet what could be a $20-million price tag for the property.

“Ocean City will be fundamentally different without this attraction,” he said. “This town relies on being family-friendly. The park has rides targeted at kids; it’s called ‘Wonderland’ for a reason.”

The property’s current owner, Icona Resorts, previously proposed a $150-million, 325-room luxury hotel elsewhere on Ocean City’s boardwalk, but the city rejected those plans.

The company’s CEO, Eustace Mita, said earlier this year he would take at least until the end of the year to propose a use for the amusement park property.

He bought it in 2021 after Gillian’s family was in danger of defaulting on bank loans for the property.

At a community meeting last month, Gillian said Wonderland could not bounce back from Superstorm Sandy in 2012, the pandemic in 2020 and an increase in New Jersey’s minimum wage that doubled his payroll costs, leaving him $4 million in debt.

Mita put up funds to stave off a sheriff’s sale of the property, and gave the mayor three years to turn the business around. That deadline expired this year.

Mita did not respond to requests for comment.

Merritt said he and others can’t imagine Ocean City without Wonderland.

“You look at it with your heart, and you say ‘You’re losing all the cherished memories and all the history; how can you let that go?’” he said. “And then you look at it with your head and you say, ‘They are the reason this town is profitable; how can you let that go?’”
…

Geneva — The head of the U.N. refugee agency warned on Monday that displacement crises in Lebanon and Sudan could worsen, but said tighter border measures were not the solution, calling them ineffective and sometimes unlawful.

Addressing more than 100 diplomats and ministers in Geneva at UNHCR’s annual meeting, Filippo Grandi said an unprecedented 123 million people are now displaced around the world by conflicts, persecution, poverty and climate change.

“You might then ask: what can be done? For a start, do not focus only on your borders,” he said, urging leaders instead to look at the reasons people are fleeing their homes.

“We must seek to address the root causes of displacement, and work toward solutions,” he said. “I beg you all that we continue to work — together and with humility — to seize every opportunity to find solutions for refugees.”

Without naming countries, Grandi said initiatives to outsource, externalize or even suspend asylum schemes were in breach of international law, and he offered countries help in finding fair, fast and lawful asylum schemes.

Western governments are under growing domestic pressure to get tougher on asylum seekers and Grandi has previously criticized a plan by the former British government to transfer them to Rwanda.

In the same speech he warned that in Lebanon, where more than one million people have fled their homes due to a growing conflict between Israel and Hezbollah, the situation could worsen further.

“Surely, if airstrikes continue, many more will be displaced and some will also decide to move on to other countries.”

He called for a drastic increase in support for refugees in Sudan’s civil war, saying lack of resources was already driving them across the Mediterranean Sea and even across the Channel to Britain.

“In this lethal equation, something has got to give. Otherwise, nobody should be surprised if displacement keeps growing, in numbers but also in geographic spread,” he said.

The UNHCR response to the crisis that aims to help a portion of the more than 11 million people displaced inside Sudan or in neighboring countries is less than 1/3 funded, Grandi said.

The number of displaced people around the world has more than doubled in the past decade.

Grandi, set to serve as high commissioner until Dec. 2025, said the agency’s funding for this year had recently improved due to U.S. support but remained “well below the needs.”
…

Paris — Chinese state-owned carmaker GAC is exploring the manufacture of EVs in Europe to avoid EU tariffs, the general manager of its international business told Reuters on Sunday, joining a growing list of Chinese companies planning local production. 

The company is among China’s largest automakers and is targeting 500,000 overseas sales by 2030. It does not yet sell EVs in Europe but will launch an electric SUV tailored to the European market at the Paris Auto Show, which kicks off Monday. 

GAC still viewed Europe as an important market that was “relatively open” despite moves by the European Commission to impose tariffs on EVs made in China, Wei Heigang said, speaking in Paris ahead of the show. 

“The tariffs issue definitely has an impact on us. However, all this can be overcome in the long term … I am positive there is going to be a way to get it all resolved,” he said. 

“Local production would be one of the ways to resolve this,” he added. “We are very actively exploring this possibility.” 

Discussions were at a very early stage and the company was still considering whether to build a new plant or share — or take over — an existing one, according to Wei. 

The compact SUV on display in Paris, a 520-kilometer (323-mile) range vehicle called “Aion V,” should launch in some European markets in mid-2025, priced at less than 40,000 euros ($43,748), though the final price has not yet been set, GAC said. 

After that launch, the next GAC vehicle due for sale in Europe will be a small electric hatchback, to be released in late 2025. 
…

Mount Juliet, United States — Amazon is bolstering its e-commerce empire while continuing a march deeper into people’s lives, from robots to healthcare and entertainment.  

Innovations unveiled in recent days by the Seattle-based tech titan included a delivery van computer system to shave time off deliveries by its speed-obsessed logistics network.   

Amazon Stores boss Doug Herrington said that the technology enables vans to recognize stops and signal which packages to drop off.  

“When we speed up deliveries, customers shop more,” Herrington said.  

“For 2024, we’re going to have the fastest Prime delivery speeds around the world,” he added, referring to Amazon’s subscription service.  

On top of that, according to Herrington, Amazon last year managed to cut 45 cents off the cost per unit shipped, a huge savings when considering the massive volume of sales.  

Prime is the ‘glue’  

Amazon last year recorded profit of more than $30 billion on revenue of $575 billion, powered by its online retail operation and its AWS cloud computing division.  

“They have this whole flywheel model with Amazon Prime membership in the middle,” said eMarketer analyst Suzy Davidkhanian.  

“That’s the glue that keeps everything together.”  

Businesses include retail, advertising, cloud computing and streamed movies and music.  

But that very model has the 30-year-old company facing a US government lawsuit, accused of expanding an illegal monopoly and otherwise harming competition.   

Amazon makes money from data gathered about consumers, either by targeting ads or through insights into what products they might like, Davidkhanian said.  

That was why Amazon paid for expensive rights to stream NFL American football games on Prime Video in a move that promises to help it pinpoint fans of the sport.  

Amazon’s digital assistant Alexa can order items on command and has been even built into appliances such as washing machines to let them automatically buy supplies like laundry soap as needed.  

A ‘pocket pharmacy’  

Amazon showed off enhancements to its virtual health care service called One Medical.  

For $9 a month Prime members are promised anytime access to video consultations with health care professionals, along with record keeping and drug prescriptions.  

An Amazon Pharmacy takes advantage of the company’s delivery network to get prescriptions to patients quickly, striving for speeds of less than 24 hours for 45 percent of customers by the end of next year.  

“We’re building a pharmacy in your pocket that offers rapid delivery right to your door,” Amazon Pharmacy chief Hannah McClellan said, referring to the option of using a smartphone app.  

The healthcare market promises to be lucrative for Amazon, which is “trying to be the platform that has everything for everyone,” said analyst Davidkhanian.  

Real world wrinkles  

Amazon has suffered setbacks when it comes to brick-and-mortar stores but it continues to strive for a winning strategy.  

The company next year will open its first “automated micro warehouse” in Pennsylvania, next to a Whole Foods Market organic grocery shop, the chain it bought in 2017.  

People will be able to pick up certain items selected online, with orders filled by robots, after shopping next door for fresh produce and groceries.  

Meanwhile, Amazon is ramping up use of artificial intelligence at its online store with tools helping sellers describe and illustrate products.  

Product labels will change according to the user, displaying terms likely to catch their attention such as “strawberry flavor” for some and “gluten-free” for others.   

“The things that Amazon is doing with AI are to make sure that you go from researching something to making the purchase as quickly as possible,” Davidkhanian said.  

At the logistics center near Nashville, robotic arms deftly placed packages in carts that autonomously made their way to trucks.  

Logistics center automation improves safety and frees up workers for more interesting tasks, according to Amazon robotics manager Julie Mitchell.  

However, critics cite delivery speed pressure and other factors as making Amazon warehouses more dangerous than the industry average. 
…

BUENOS AIRES — Argentina’s triple-digit inflation, among the world’s highest, is starting to slow down but this offers little relief for workers whose salaries have stayed the same while costs of basic goods skyrocketed and the government slashed state subsidies.

“We’re losing track of what’s expensive and what’s cheap,” said university professor Daniel Vazquez while shopping in Buenos Aires. “Prices keep going up and the only thing that isn’t going up is salaries.”

“The gap is very, very big,” he said.

While annualized inflation in September remained well into the triple digits at 209%, month-on-month price hikes slowed to their lowest level since late 2021 at 3.5%, data from the national statistics agency showed on Thursday.

The data landed in line with the forecasts of analysts, who predict that inflation will end 2024 at 124%.

Libertarian President Javier Milei has cut subsidies to sectors such as energy and transportation, while vowing to trim what he calls bloat in the public sector, shuttering some offices and trimming jobs.

“You’ve never seen inflation being fought like this before. It takes a little longer but it’s genuine,” Milei wrote on X after the inflation data was published Thursday.

The tough austerity drive has prolonged a recession and caused poverty rates to surge to around 53%.

Computer programmer Ivan Cortesi, 30, said that while food prices remained similar to last month, utility costs rose significantly.

“This past month there has been a significant increase in all utilities,” he said.

According to the statistics agency, rents as well as water, power and gas prices led monthly inflation, up over 7%, followed by clothing and shoes which rose 6% and education costs that increased over 4%.

Food prices increased just 2% from last month but more than tripled their level from a year ago, while housing and utility costs nearly quadrupled. Cigarettes, alcohol, health care, transport and communications also tracked annual inflation well above 200%.

Milei devalued the local currency when he took office in December, and the sharp spending cuts have particularly hit informal workers, civil servants, pensioners, doctors and teachers.

On Wednesday, Argentina’s Congress failed to overturn Milei’s controversial veto of a law that would have shored up university spending in line with inflation, following mass protests by students and university workers against the measure.

Milei has vowed to veto any law that threatens the fiscal balance.
…

beijing — China said Saturday it would issue special bonds to help its sputtering economy, signaling a spending spree to bolster banks, shore up the property market and ease local government debt as part of one of its biggest support packages in years.

The plan is part of a series of actions undertaken by Beijing to draw a line under a years-long property sector crisis and chronically low consumption that has plagued the world’s second-biggest economy.

Beijing’s planned special bonds are aimed at boosting the capital available to banks — part of a push to get them lending in the hopes of firing up sluggish consumer spending.

China is also preparing to allow local governments to borrow more to fund the acquisition of unused land for development, aimed at pulling the property market out of a prolonged slump.

No figures were provided on the planned special bonds announced at a highly anticipated news conference by Finance Minister Lan Fo’an and other officials, following a series of steps launched in recent weeks that have included interest rate cuts and liquidity for banks.

But Lan said China still has room “to issue debts and increase the deficit” to fund the new measures.

Officials have been battling to reverse China’s slowdown and achieve a growth target of five percent this year — enviable for many Western countries but a far cry from the double-digit expansion that for years boosted the Asian giant.

On Saturday, Lan said Beijing was “accelerating the use of additional treasury bonds, and ultra-long-term special treasury bonds are also being issued for use.”

“In the next three months, a total of 2.3 trillion yuan of special bond funds can be arranged for use in various places,” he added.

On top of that, Beijing also plans to “issue special government bonds to support large state-owned commercial banks,” Lan said, although he did not say how much.

Chinese authorities have been urging commercial banks to lend more and lower mortgage rates — measures that would put more cash into the pockets of consumers.

Beijing’s bonds would therefore offer banks help to shore up their capital, giving them greater leeway to lend more.

Bonds for buildings

And local governments will be issued special bonds enabling them to acquire unused and idle land for development, Vice Finance Minister Liao Min said, in action that could prop up the housing market.

The move would “help ease liquidity and debt pressures on local governments and real estate companies,” he explained.

Beijing will also encourage the acquisition of existing commercial properties to be used as affordable housing.

However, analysts expressed frustration that Beijing had refrained from putting a number on further fiscal stimulus.

“The key messages are that … the central government has the capacity to issue more bonds and raise fiscal deficit, and… the central government plans to issue more bonds to help local governments to pay their debt,” Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, said.

Beijing was likely “still working on the minute details of the fiscal stimulus,” Heron Lim at Moody’s Analytics told AFP.

“In the meantime, investors might be taking a step back until they are absolutely certain of the direction fiscal policy is taking.”

‘Lack of forward guidance’

China’s economic uncertainty is also fueling a vicious cycle that has kept consumption stubbornly low.

Julian Evans-Pritchard, head of China economics at Capital Economics, said that “notably absent was any mention of large-scale handouts to consumers” on Saturday.

“The lack of forward guidance on the scale of next year’s budget deficit means it is still difficult to judge how large and long-lasting the fiscal boost will be,” he pointed out.

Chinese policymakers have in the last weeks unveiled a string of stimulus measures including a suite of rate cuts and a loosening of rules on buying homes, but economists said that more action is needed to pull the economy out of its slump for good.

Earlier Saturday, China’s top banks said they would cut lower interest rates on existing mortgages from October 25, state media said, following a government call for the action.

“Except for second mortgages in Beijing, Shanghai, Shenzhen and some other regions, the interest rates on other eligible mortgages will be adjusted” to no less than 30 basis points below the prime lending rate, the central bank’s benchmark rate for mortgages, state broadcaster CCTV said.

CCTV reported that major banks, including the Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China and China Construction Bank had announced that they would make the adjustments “in batches.”

The People’s Bank of China last month requested that commercial banks lower such rates by October 31.

Beijing also last month slashed interest on one-year loans to financial institutions, cut the amount of cash lenders must keep on hand and pushed to lower rates on existing mortgages.

And the central bank this week boosted support for markets by opening up tens of billions of dollars in liquidity for firms to buy stocks. 
…

MELBOURNE, Australia — China will resume importing Australian live lobsters by the end of the year, removing the final major obstacle to bilateral trade that once cost Australian exporters more than 20 billion Australian dollars ($13 billion) a year, Australia’s prime minister said Thursday. 

Prime Minister Anthony Albanese made the announcement after meeting Premier Li Qiang on the sidelines of a Southeast Asian summit in Vientiane, Laos. 

The ban on lobsters was the last of a series of official and unofficial trade barriers that Beijing has agreed to lift since Albanese’s center-left Labor Party government was elected in 2022. 

“I’m pleased to announce that Premier Li and I have agreed on a timetable to resume full lobster trade by the end of this year,” Albanese told reporters. 

“This of course will be in time for Chinese New Year, and this will be welcomed by the people engaged in the live lobster industry,” he added. 

Albanese has given assurances that relations with China have been improved without compromising Australian interests. Beijing is unhappy with restrictions Australia has placed on some Chinese investments because of security concerns. 

“What’s important is that friends are able to have direct discussions. It doesn’t imply agreement, it doesn’t imply compliance, and I’ll always represent Australia’s national interest. That’s what I did today. It was a very constructive meeting,” Albanese said. 

“I’m encouraged by the progress that we have made between Australia and China’s relationship in producing stabilization to the benefit of both of our nations and with the objective of advancing peace and security in the region,” Albanese added. 

China’s embassy in Australia did not immediately respond to a request for comment on Thursday. 

Australian lobster exports to China had been worth $700 million Australian dollars ($470 million) in 2019. 

Beijing ended trade with Australia in 2020 on a range of commodities including lobster, coal, wine, barley, beef and wood as diplomatic relations plumbed new depths. 

Conservative Prime Minister Scott Morrison had angered Beijing that year by demanding an independent investigation into the origins of and responses to the COVID-19 pandemic. 

Tom Ryan, a manager at lobster exporter Five Star Seafoods at Port MacDonnell in South Australia state, said he was disappointed that his trade would be the last to resume with China. 

“It’s been a long time coming,” Ryan told Australian Broadcasting Corp. of Albanese’s announcement. 

“Between myself and other people in Port MacDonnell, it’s an absolute relief,” he added. 

The industry had found new markets for lobster products but at lower profit margins, Ryan said. 

Li said during a state visit to Australia in June that he had agreed with Albanese to “properly manage” their nations’ differences. 

Beijing had severed minister-to-minister contacts during the conservatives’ nine years in power.
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TAIPEI, TAIWAN — As Laos hosts this year’s summit of the Association of Southeast Asian Nations, Beijing is calling for additions to its free-trade agreement with the regional forum that focus on smart cities, 5G, artificial intelligence and e-commerce.

Ahead of the ASEAN summit, which began Sunday and ends Friday, Chinese state media have stepped up efforts to promote the benefits of what they call an upgrade to the China-ASEAN Free Trade Area, or CAFTA, agreement.

Analysts point out that the two sides have not reached agreement on what’s being called “CAFTA 3.0,” and that it remains to be seen whether including China’s electric vehicles and e-commerce would benefit Southeast Asian industries that are struggling to compete with their Chinese counterparts.

“The establishment of a free-trade demonstration zone is actually nothing more than the hope that things can be sold into China,” Ming-Fang Tsai, a professor in the Department of Industrial Economics at Taiwan’s Tamkang University, told VOA.

However, he said the Chinese market is facing a lack of domestic demand and overproduction, leading to price competition.

“So, is the FTA 3.0 really an upgrade? Actually, it is a big question mark,” he said by email.

Nevertheless, some specific areas in the 3.0 agreement still attract the attention of experts, including its focus on the EV industry.

Although ASEAN is also actively developing an EV industry, He Jiangbing, a China-based economist and finance commentator, told VOA if China’s major EV manufacturers pour into Southeast Asia through changes in the agreement, it would likely have a huge impact on the local automobile industries.

“China’s mainland started relatively early in new-energy vehicles and has developed rapidly for 10 years. But the automotive industry in ASEAN is relatively weak. If China’s new-energy vehicles are sold in ASEAN, it will be difficult for Southeast Asian [traditional] car companies to resist,” He said.

Southeast Asia’s own automobile industry will be greatly affected or cease to exist, He said.

But Lu Xi, a senior lecturer at the Lee Kuan Yew School of Public Policy at the National University of Singapore, told VOA that most of China’s EVs are not getting into Southeast Asia through exports but through production-line transfer, similar to joint ventures, so a price war should not cause a negative impact.

“With the transfer of [China’s EV] manufacturing industry chain, the economic structure of Southeast Asia will undergo a huge transformation,” Lu said by email. “Depending on the current political and economic situation between China and the US, Southeast Asia itself also has a very broad local market and a very good young population structure, so on the whole, the Southeast Asian market should be one of the important engines of economic growth in the whole region in the future.”

Tsai noted that Chinese manufacturers will set up factories in Southeast Asia to avoid the “Made in China” label and restrictions on Chinese products.

“U.S. controls on technology may affect the components of EVs in the future,” he said, “which brings great pressure to Chinese manufacturers.”

In addition to EVs, the 3.0 agreement also focuses on smart cities, 5G, artificial intelligence and e-commerce.

Analysts say China’s e-commerce is already having a negative impact on the region as orders of cheaper Chinese imports and knockoffs are flooding Southeast Asia. Half of the ceramic factories in Thailand’s northern Lampang province have closed, and Indonesian textile workers are facing mass layoffs, the South China Morning Post and the Bangkok Post reported.

“In the face of the massive entry of the [Chinese] e-commerce, frankly speaking, these Southeast Asian countries are relatively uncompetitive,” said Tsai. “Because first, [they] will not be able to compete with China in marketing and sales. Second, [China’s] own products are cheaper.

“If my entire e-commerce system is better than yours,” Tsai said, “and my products are not more expensive than yours, then how can you compete with me?”

Nonetheless, in a September speech for the Regional Comprehensive Economic Partnership, or RCEP, in Nanning, China, ASEAN Secretary-General Kao Kim Hourn called on businesses to take full advantage of the partnership as they move toward the changes.

He touted the RCEP, the world’s largest trade bloc, covering nearly 30% of global gross domestic product at $29 trillion and 2.3 billion people across the Asia Pacific region.

“ASEAN’s multidirectional economic relations have been a major driver behind the use of RCEP,” said Hourn, according to a written statement. “China, for example, has remained ASEAN’s largest trading partner for the past 15 years and has also climbed from the 5th largest source of FDI to ASEAN in 2022 to the 3rd largest in 2023. With both RCEP and ACFTA 3.0 in place, I am confident that trade and investment between ASEAN, China, and the rest of the RCEP partners will continue to flourish for the benefit of the people in this wider region.”

ASEAN calls the free-trade agreement ACFTA; Beijing refers to it as CAFTA.

The agreement was established by China and ASEAN in 2009, and the ASEAN-China Summit announced the launch of negotiations for the changes in November 2022.

VOA’s Adrianna Zhang contributed to this report.
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Beijing/Paris — China imposed temporary anti-dumping measures on imports of brandy from the EU on Tuesday, hitting French brands including Hennessy and Remy Martin, days after the 27-state bloc voted for tariffs on Chinese-made electric vehicles, or EVs.

China’s commerce ministry said preliminary findings of an investigation had determined that dumping of brandy from the European Union threatens “substantial damage” to its own sector.

France’s trade ministry said the temporary Chinese measures were “incomprehensible” and violated free trade, and that it would work with the European Commission to challenge the move at the World Trade Organization.

In a sign of the rising trade tensions, China’s ministry added in another statement on Tuesday that an ongoing anti-dumping and anti-subsidy investigation into EU pork products would make “objective and fair” decisions when it concludes.

It also said that it was considering a hike in tariffs on imports of large-engine vehicles, which would hit German producers hardest. German exports of vehicles with engines of 2.5 liters or larger to China reached $1.2 billion last year.

France was seen as the target of Beijing’s brandy probe due to its support of tariffs on China-made EVs. French brandy shipments to China reached $1.7 billion last year and accounted for 99% of the country’s imports of the spirit.

As of Oct. 11, importers of brandy originating in the EU will have to put down security deposits mostly ranging from 34.8% to 39.0% of the import value, the ministry said.

“This announcement clearly shows that China is determined to tax us in response to European decisions on Chinese electric vehicles,” French cognac producers group BNIC said in an email.

French President Emmanuel Macron said last week that China’s brandy probe was “pure retaliation,” while EV tariffs were needed to preserve a level playing field.

Shares tumble

LVMH-owned Hennessy and Remy Martin were among the brands hardest hit by the measures, with importers having to pay security deposits of 39.0% and 38.1%, respectively.

The deposits would make it more costly upfront to import brandy from the EU. However they could be returned if a deal is eventually reached before definitive tariffs are imposed.

Both the investigation and negotiations remain ongoing, said an executive at a leading cognac company, who declined to be identified due to the sensitivity of the matter.

Chinese investigators visited producers in France last month and were due to make further site visits, the executive said, while Chinese and EU officials held negotiations on Monday.

The outcome was unclear, however, and doubts around the EU’s willingness to make a deal were emerging, they added.

Shares in Pernod Ricard were down 4.2% at 0839 GMT, while Remy Cointreau’s dropped 8.7% and shares in LVMH fell 4.9%.

Companies that cooperated with China’s investigation were hit with security deposit rates of 34.8%, with that imposed on Martell the lowest at 30.6%.

Pernod Ricard, Remy Cointreau and LVMH did not immediately respond to requests for comment.

The measures could mean a 20% price rise for consumers in China, said Jefferies analysts, reducing sales volumes by 20%.

Remy, with the greatest exposure to the Chinese market, could see its sales decline by 6%, with Pernod group sales seeing a 1.6% impact, they said.

China is the second largest export market for cognac after the United States but is the industry’s most profitable territory. Difficult economic conditions in both markets have already prompted a sharp decline in cognac sales.

James Sym, fund manager at Remy investor River Global, said despite this, there was no sign that demand for cognac had fundamentally changed, pointing to an uptick in cognac sales in Japan driven by Chinese tourists when the yen was weak.

“That’s obviously a sign that cognac is not out of fashion,” he said, adding volumes – and the companies’ share prices – should recover long-term, although the tariffs would likely hit volumes and margins while in place.

Talks continue

Luxury goods shares fell by as much as 7% on Tuesday, with one trader attributing this to fears that the sector, which is heavily reliant on China, could be next to see trade measures.

The brandy measures follow a vote by the EU to adopt tariffs on China-made EVs by the end of October.

Before the vote in late August, China had suspended its planned anti-dumping measures on EU brandy, in an apparent goodwill gesture, despite determining it had been sold in China at below-market prices.

At the time, the commerce ministry said its probe would end before Jan. 5, 2025, but that it could be extended.

China’s commerce ministry previously said it had found that European distillers had been selling brandy in its 1.4 billion-strong consumer market at a dumping margin in the range of 30.6% to 39% and that its domestic industry had been damaged.

In the EU’s decision to impose tariffs on China-made EVs, the bloc set tariff rates on top of the 10% car import duty ranging from 7.8% for Tesla to 35.3% for SAIC and other producers deemed not to have cooperated with its investigation.

The European Commission has said it is willing to continue negotiating an alternative, even after tariffs are imposed.
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LISBON — Chinese lithium producers are flooding the global market with the critical metal and causing a “predatory” price drop as they seek to eliminate competing projects, a senior U.S. official said on a visit to Portugal that has ample lithium reserves.

Jose Fernandez, undersecretary for economic growth, energy and the environment at the U.S. Department of State, told a briefing late on Monday that China was producing much more lithium “than the world needs today, by far.”

“That is an intentional response by the People’s Republic of China to what we are trying to do” with the Inflation Reduction Act – the largest climate and energy investment package in U.S. history valued at over $400 billion, Fernandez said.

“They engage in predatory pricing… [they] lower the price until competition disappears,’’ Fernandez said. ‘’That is what is happening.”

China accounts for about two-thirds of the world’s lithium chemical output, which is mainly used in battery technologies including for electric cars. Prices of lithium have fallen more than 80% in the past year largely due to overproduction from China and a drop in demand for electric vehicles.

However, the price collapse is also affecting China as it has forced Chinese companies like battery giant CATL to suspend production at certain mines.

Job cuts

Europe aims to reduce its dependence on imports from China and other countries of lithium and other materials essential to the green transition.

Fernandez said the low price “constrains our ability to diversify our supply chains on a broad, global scale” and also hurts countries such as Portugal that need investment to develop these industries.

Falling prices have forced many global lithium producers to scale back production and cut jobs.

Portugal, with some 60,000 tons of known reserves, is already Europe’s biggest producer of lithium, traditionally mined for ceramics.

Along with neighboring Spain, the country wants to take advantage of local lithium deposits, aiming to cover the entire value chain from mining and refining to cell and battery manufacturing to battery recycling.

Several mining companies in Portugal have been looking for financing, customers and suppliers to crank up projects.

“We want to help them, and we think we can… lithium mining companies, everywhere, have to survive this difficult phase that was created by predatory pricing,” Fernandez said.

China’s Premier Li Qiang in June used his address at a World Economic Forum meeting in Dalian to hit back at accusations from the United States and E.U. that Chinese firms benefit from unfair subsidies and are poised to flood their markets with cheap green technologies.

Trade tensions intensified last Friday when the European Union said it would press ahead with hefty tariffs on China-made electric vehicles to counter what it sees as unfair Chinese subsidies, after a year-long anti-subsidy investigation. China on Tuesday imposed temporary anti-dumping measures on imports of brandy from the E.U.
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Washington — Despite ongoing U.S. sanctions targeting Chinese companies linked to Uyghur forced labor in Xinjiang, United States-based footwear and apparel company Skechers opened a new outlet in Urumqi, the region’s capital.

The store opened on September 28, days before Chinese national holiday week, one of the country’s busiest shopping periods.

Its opening has drawn criticism from human rights advocates who question Skechers’ decision to expand its presence in a region under international scrutiny and subject to U.S. import bans on goods tied to forced labor.

Jewher Ilham, forced labor project coordinator at the Worker Rights Consortium, expressed concern over Skechers’ decision.

“By opening a store in the Uyghur region, Skechers is making a shocking statement that it does not care about human rights,” she said.

Skechers did not respond to multiple requests for comment from VOA.

Xinjiang, in northwest China, has been at the center of international controversy over allegations of human rights abuses against Uyghurs and other Turkic Muslim minorities, including forced labor, mass incarceration and repression — claims Chinese authorities have consistently denied. Xinjiang produces one-fifth of the world’s cotton.

In response, the United States passed the Uyghur Forced Labor Prevention Act in 2022, which bars goods from Xinjiang unless proven to be free of forced labor.

Skechers promoted its Urumqi store opening heavily on Chinese social media, with actor and brand ambassador Donnie Yen encouraging his nearly 130 million followers on Weibo to visit the outlet and explore its “comfortable treasures.”

Yen did not respond to multiple media inquiries from VOA regarding his visit to Xinjiang or his views on the treatment of Uyghurs by Chinese authorities.

Timothy Grose, an associate professor of China studies at Rose-Hulman Institute of Technology, pointed out that “from a profit-seeking perspective, of course, Donnie Yen makes sense, especially since nearly 75% of Urumqi’s population is Han Chinese.”

“Unfortunately, few Han are either fully aware or are concerned about state violence against the Uyghurs, so I doubt they will be judging Donnie Yen’s appearance with their moral compasses,” he told VOA.

Corporate responsibility

This isn’t the first time Skechers has faced scrutiny over alleged ties to forced labor in Xinjiang.

In response to a 2020 report by the Australian Strategic Policy Institute alleging its supplier employed Uyghur workers under coercive conditions, Skechers denied the allegations. The company said audits of its supplier, Dong Guan Lu Zhou Shoes, found no evidence of forced labor, and that Uyghur workers were employed under the same terms as other employees.

Skechers’ recent move comes as the U.S. continues to intensify its efforts to eliminate forced labor from global supply chains. On October 2, the U.S. Department of Homeland Security added two more Chinese companies to the Uyghur Forced Labor Prevention Act Entity List, bringing the total number of restricted entities to 75.

“Today’s actions reaffirm our commitment to eliminating forced labor from U.S. supply chains and upholding our values of human rights for all,” DHS undersecretary for policy Robert Silvers said in a statement on the DHS website. “No sector is off-limits. We will continue to identify entities across industries and hold accountable those who seek to profit from exploitation and abuse.”

Chinese pushback

In China, Western companies that publicly declared a break from sourcing products from Xinjiang have long faced backlash from Chinese consumers.

In September, PVH, parent company of Calvin Klein and Tommy Hilfiger, became the first Western firm investigated by Chinese authorities, who accused the company of violating Chinese law by allegedly halting the purchase of cotton and garments from Xinjiang.

Corporate responsibility in Xinjiang has become a contentious issue. Grose pointed out that companies like Skechers may view doing business in Xinjiang and China as a safe financial bet, despite human rights concerns.

The company’s actions are a stark reminder that companies should be held accountable not just by governments but by consumers, as well, said Adrian Zenz, a senior fellow and director in China studies at the Victims of Communism Memorial Foundation.

“[B]rands are simply out for profit, with no regard to human rights,” he said. “Western consumers are not showing much outrage over this. There is little backlash, so they will do it,” Zenz said.
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