Indonesia destroys $1.3M of illegal imports, cracks down on underground economy

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Jakarta, Indonesia — Cellphones, electric pots and pans, and car washing machines were among goods worth $1.3 million destroyed Monday by the Indonesian Trade Ministry in West Java. Alcoholic drinks with an ethyl alcohol or ethanol content ranging from 5% to 20% were also destroyed.

The ministry demolished the goods as part of the government’s crackdown on illegal imports, a major issue that experts say stems from Indonesia’s unpreparedness for the ASEAN-China Free Trade Agreement signed 15 years ago.

Trade Minister Zulkifli Hasan said the goods did not comply with state regulations and lacked a surveyor’s report, goods registration number, or import approval, and exceeded import quotas or failed to meet Indonesian national standards.

This is the third operation conducted by the Trade Ministry, following operations at the Cikarang customs and excise storage area in West Java and at Jakarta’s Cengkareng Port.

On August 6, the Trade Ministry disclosed that $2.9 million of illegal imports were found at the Cikarang facility. The Trade Ministry confiscated 20,000 textile rolls. The National Police seized 1,883 bales of used clothing, while customs’ officers at Tanjung Priok port seized 3,044 bales of used clothing. In addition, hundreds of carpets, towels, cosmetics, footwear and more than 6,500 electronics were seized.

Since its establishment in July, the Anti-Illegal Imports Task Force has been investigating illegal import schemes, collecting data and seizing illegal goods.

The head of the Indonesian National Police’s criminal investigation unit, Wahyu Widada, said, “Illegal imports not only harm the country in terms of revenue loss, but also has an impact on small and medium scale entrepreneurs.”

Mohammad Faisal, executive director of the Center on Reform of Economics, links the current problem to Indonesia’s unpreparedness when it signed the ASEAN-China Free Trade Agreement 15 years ago.

“Indonesia’s domestic industries were not ready to compete with China’s competitive products in the local market. Indonesia had a huge domestic market and very low trade barriers then. It’s not just tariff barriers but also the non-tariff barriers were very limited. So that’s why it’s actually easy for foreign suppliers to enter the Indonesian market,” Faisal said.

According to recent data from the Ministry of Cooperatives and Small and Medium-sized Enterprises (SMEs), approximately 50% of imported textiles and textile products are unregistered. That means the state loses out on $399 million from unpaid taxes and excise duties.

In 2022, China exported $3.95 billion of textiles to Indonesia but only $2.04 billion of Chinese textile imports were recorded. Overall, the financial loss is equal to the potential creation of 67,000 jobs and over $762 million in gross domestic product. Indonesia’s GDP in 2023, according to the World Bank, was $1.37 trillion.

Zulkifli said one of the major obstacles to fighting illegal imports is the existence of an underground economy. The Minister of Cooperatives and SMEs, Teten Masduki, said that almost 30% to 40% of goods sold in Indonesian markets are involved in the underground economy and therefore the state does not receive taxes on them.

As a result, Zulkifli added that Indonesia’s tax ratio is lower than other developed Asian nations such as South Korea, Japan and China.

“Imagine if we sent illegally imported goods to South Korea or China. Don’t expect that to happen, it’s impossible. That’s why these nations can become developed countries. If our “house” continues to get burglarized, how can we move forward?” he said.

Zulfkli announced in late June a plan to impose stiff tariffs of up to 200% on some products. The plan, which is still under review, initially was announced as an import duty on Chinese goods, but the minister said later the duties would apply to all countries.

Indonesia’s Shopping Center Retail and Tenant Association has detected shops suspected of selling illegally imported goods online across North Sumatra to East Java, and some have opened shops at Jakarta’s wholesale shopping centers.

Budihardjo Iduansjah, chairman of the association, said “These Chinese entrepreneurs store their goods at local warehouses and sell them online. But now many have started selling at shops including at International Trade Centers.”

During a visit to shops suspected of selling illegally imported goods from China, VOA spotted clothing with labels written in Mandarin that were sold for $1 each. A seller there admitted that he and many other sellers sold their goods online and shipped the clothes in bulk to resellers across the country.

Zulkifli claims that the investigations carried out by his task force have caused many foreign nationals suspected of dealing in illegal imports to leave.

He plans to work with universities to research the root causes of illegal imports. He is confident that the illegal imports crackdown will continue under President-elect Prabowo Subianto, who will be inaugurated in October.
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Archaeologists in Virginia find colonial-era garden, clues about slaves who tended it 

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williamsburg, virginia — Archaeologists in Virginia are uncovering one of colonial America’s most lavish displays of opulence: an ornamental garden where a wealthy politician and enslaved gardeners grew exotic plants from around the world. 

Such plots dotted Britain’s colonies and served as status symbols for the elite. They were the 18th-century equivalent of buying a Lamborghini. 

The garden in Williamsburg belonged to John Custis IV, a tobacco plantation owner who served in Virginia’s colonial legislature. He is perhaps best known as the first father-in-law of Martha Washington. She married future U.S. President George Washington after Custis’ son Daniel died. 

Historians also have been intrigued by the elder Custis’ botanical adventures, which were well-documented in letters and later in books. And yet this excavation is as much about the people who cultivated the land as it is about Custis. 

“The garden may have been Custis’ vision, but he wasn’t the one doing the work,” said Jack Gary, executive director of archaeology at Colonial Williamsburg, a living history museum that now owns the property. “Everything we see in the ground that’s related to the garden is the work of enslaved gardeners, many of whom must have been very skilled.” 

Posts, paths

Archaeologists have pulled up fence posts that were 3 feet (1 meter) thick and carved from red cedar. Gravel paths were uncovered, including a large central walkway. Stains in the soil show where plants grew in rows. 

The dig also has unearthed a pierced coin that was typically worn as a good-luck charm by young African Americans. Workers have also found the shards of an earthenware chamber pot, or portable toilet, that likely was used by people who were enslaved. 

Animals appear to have been intentionally buried under some fence posts. They included two chickens with their heads removed, as well as a single cow’s foot. A snake without a skull was found in a shallow hole that had likely contained a plant. 

“We have to wonder if we’re seeing traditions that are non-European,” Gary said. “Are they West African traditions? We need to do more research. But it’s features like those that make us continue to try and understand the enslaved people who were in this space.” 

The museum tells the story of Virginia’s colonial capital through interpreters and restored buildings on 300 acres (120 hectares), which include parts of the original city. Founded in 1926, the museum did not start telling stories about Black Americans until 1979, even though more than half of the 2,000 people who lived there were Black, the majority enslaved. 

In recent years, the museum has boosted efforts to tell a more complete story, while trying to attract more Black visitors. It plans to reconstruct one of the nation’s oldest Black churches and is restoring what is believed to be the country’s oldest surviving schoolhouse for Black children. 

There also are plans to re-create Custis’ Williamsburg home and garden, known then as Custis Square. Unlike some historic gardens, the restoration will be done without the benefit of surviving maps or diagrams, relying instead on what Gary described as the most detailed landscape archaeology effort in the museum’s history. 

The garden disappeared after Custis’ death in 1749. But the dig has determined it was about two-thirds the size of a football field, while descriptions from the time refer to lead statues of Greek gods and topiaries trimmed into balls and pyramids. 

Correspondence with Briton

The garden’s legacy has lived on through Custis’ correspondence with British botanist Peter Collinson, who traded plants with other horticulturalists around the globe. From 1734 to 1746, Custis and Collinson exchanged seeds and letters via merchant ships crossing the Atlantic. 

The men possibly introduced new plants to their respective communities, said Eve Otmar, Colonial Williamsburg’s master of historic gardening. For instance, Custis is believed to have made one of Williamsburg’s earliest written mentions of growing tomatoes, known then as “apples of love” and native to Mexico and Central and South America. 

Custis’ gardeners also planted strawberries, pistachios and almonds, among 100 other imported plants. It’s not always clear from his letters which were successful in the Virginia climate. A recent pollen analysis of the soil indicates the past presence of stone fruits, such as peaches and cherries, which weren’t a big surprise. 

The garden existed at a time when European empires and slavery were still expanding. Botanical gardens often were used for discovering new cash crops that could enrich colonial powers. 

But Custis’ garden was primarily about showing off his wealth. A study of the area’s topography placed his garden in direct view of Williamsburg’s only church house at the time. Everyone would have seen the garden’s fence, but few were invited inside. 

Exotic lily

Custis delighted his guests with the likes of the crown imperial lily, which was native to the Middle East and parts of Asia, and boasted clusters of drooping, bell-shaped flowers. 

“In the 18th century, those were unusual things,” Otmar said. “Only certain classes of people got to experience that. A wealthy person today — they buy a Lamborghini.” 

The museum is still trying to learn more about the people who worked in the garden. 

Crystal Castleberry, Colonial Williamsburg’s public archaeologist, has met with descendants of the more than 200 people who were enslaved by the Custis family on his various plantations. But there is too little information in surviving documents to determine if an ancestor lived and worked at Custis Square. 

Two people, named Cornelia and Beck, were listed as property with the Williamsburg estate after Daniel Custis died in 1757. But their names prompt only more questions about who they were and what happened to them. 

“Are they related to one another?” Castleberry asked. “Do they fear being split up or sold? Or are they going to be reunited with loved ones on other properties?”
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Sidelined at the DNC, pro-Palestinian Democrats still see progress

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Chicago — Hundreds of pro-Palestinian delegates were sidelined at the Democratic National Convention that ended with Vice President Kamala Harris reaffirming her support for Israel.

“The people of Israel must never again face the horror that a terrorist organization called Hamas caused on October 7,” she said in her speech accepting the party’s presidential nomination Thursday evening.

As anti-war protesters filled the streets throughout the week, 270 pro-Palestinian Democrats calling themselves “cease-fire delegates” signed a petition demanding Harris, if she’s elected, enact an arms embargo on Israel.

The unheeded petition was pushed by leaders of the “Uncommitted” movement, which garnered hundreds of thousands of votes in Democratic primaries across the nation.

These delegates staged a sit-in outside Chicago’s United Center, the convention’s venue, to protest the Democratic National Committee, who denied a speaking request for Tanya Haj-Hassan, a pediatric doctor who treats wounded children in Gaza.

The DNC, according to Uncommitted National Movement spokesperson Layla Elabed, didn’t want Harris to be “overshadowed.”

Asked by VOA for a reaction to Elabed’s claim, the Harris campaign said, “There have been a number of speakers who have spoken about the war in Gaza and the need to secure a cease-fire and hostage deal.”

Uncommitted delegates

Elabed spoke to VOA on behalf of the 30 “Uncommitted” delegates who voted present in the nomination roll call. That’s less than 1% of the roughly 4,700 delegates who voted for Harris.

The pro-Palestinian group, however, was given a speaking opportunity Monday in a panel event outside of the convention.

Minnesota Attorney General Keith Ellison, a Muslim sympathetic to the Palestinian cause who spoke on the panel, was given time at the convention main stage on Wednesday. However, he did not mention Gaza in his speech.

The war in Gaza is “not the topic that I would decide” to speak about, Ellison told VOA before his speech, indicating that pragmatism is key to affect change within the party.

“I’m not one of those people who believe that we vote for perfection. What we vote for is conversation,” he said.

Party platform supports Israel

As the convention kicked off, Democrats voted to adopt the party’s platform that recommitted support for Israel, a cease-fire for hostage release deal and the two-state solution.

Pro-Palestinian delegates tried to include language backing enforcement of laws that ban giving military aid to individuals or security forces that commit gross violations of human rights.

“What we are asking is that our tax dollars not be used to kill men, women and children. This is not a controversial demand and is actually more aligned with our Democratic values,” Elabed said.

Compared to Biden, Harris appears to offer more sympathy for Palestinian suffering, repeating Thursday of the “devastating” situation in Gaza over the past 10 months.”

“So many innocent lives lost. Desperate, hungry people fleeing for safety, over and over again,” she said in her convention speech. “The scale of suffering is heartbreaking.”

But policy-wise she signaled continuity from the current administration.

“President Biden and I are working to end this war such that Israel is secure, the hostages are released, the suffering in Gaza ends, and the Palestinian people can realize their right to dignity, security, freedom and self-determination,” she said in her speech to thunderous applause.

Harris’ current and former aides say her Israel policy is unlikely to diverge from President Joe Biden. Halie Soifer, national security adviser to Harris while she was in the Senate, said that the vice president has always been a “strong supporter of the U.S.-Israel relationship,” while upholding humanitarian values.

“She does not want to see the suffering of innocent civilians, nor do the vast majority of Americans and Jewish Americans,” said Soifer, who is now CEO of Jewish Democratic Council of America.

“We don’t have to view it through binary lens,” she told VOA. “We support both.”

Not discouraged

Uncommitted delegates say they’re not discouraged.

Inga Gibson, a delegate from Hawaii, a state where seven out of 31 delegates are uncommitted, said she has made “tremendous progress” with her fellow delegates.

“I found that a lot of people are really with us on this issue, but they don’t know where to begin or how to get involved,” she told VOA.

She and other uncommitted delegates gave out keffiyehs, “Democrats for Gaza” flyers and “No More Bombs” pins. The pro-Palestinian symbols are emblematic of a key area of disagreement among Democrats – how much support to give to Israel.

Pro-Israel delegates say it should not create division within the party.

“We can all do better to try to understand the complications of the conflict,” Andrew Lachman, a delegate from California told VOA. “We’re all concerned about the civilians of Gaza, but we’re also concerned about the people of Israel and their safety and security.”

Polls show an increasing number of Americans want their leaders to reduce support for Israel. Some say Harris missed an opportunity.

As a former prosecutor, Harris can and should strictly enforce laws and suspend weapons even to allies who violate international or U.S. law, said Nancy Okail, president and CEO of the Center for International Policy, a left-leaning think tank.

“She could make clear this doesn’t just apply to their misuse by Israel to cause disproportionate civilian harm in Gaza, but to their misuse by Netanyahu’s extremist government to dispossess and abuse Palestinians in the occupied West Bank,” she told VOA.

Turning protest into agenda

Scholars of social movements say it takes time and work to turn protests into a political agenda. Elisabeth Clemens, a sociologist from the University of Chicago, said that includes building coalitions, negotiating and compromising.

“Finding a way forward that almost never gets all the way to where the protesters hoped it would get but is nevertheless an important change,” she told VOA.

And on an issue as complicated as the Middle East peace process, there are different pressures exerted on multiple sides.

“American domestic politics only garners a slice of that,” she said.

Elabed said they’re in for the long game.

“Our strategy is not to abandon the Democratic Party, but to essentially revolutionize the Democratic Party and listen to its core base.”

For now, the vice president is their best bet.

“I don’t care what you think, you need to win to have power,” Ellison said. “Harris, the numbers are up everywhere. The chances for success are higher.” 
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Генштаб: війська РФ намагаються відтіснити Сили оборони на Харківщині, триває бій біля Вовчанська

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Російські війська 15 разів атакували українські позиції на Куп’янському напрямку: «ситуація напружена, тривають чотири боєзіткнення»
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Chinese entities turn to Amazon cloud, rivals to access US chips, AI

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BEIJING/SINGAPORE/NEW YORK — State-linked Chinese entities are using cloud services provided by Amazon or its rivals to access advanced U.S. chips and artificial intelligence capabilities that they cannot acquire otherwise, recent public tender documents showed.

The U.S. government has restricted the export of high-end AI chips to China over the past two years, citing the need to limit the Chinese military’s capabilities.

Providing access to such chips or advanced AI models through the cloud, however, is not a violation of U.S. regulations since only exports or transfers of a commodity, software or technology are regulated.

A Reuters review of more than 50 tender documents posted over the past year on publicly available Chinese databases showed that at least 11 Chinese entities have sought access to restricted U.S. technologies or cloud services.

Among those, four explicitly named Amazon Web Services, or AWS, as a cloud service provider, although they accessed the services through Chinese intermediary companies rather than from AWS directly.

The tender documents, which Reuters is the first to report on, show the breadth of strategies Chinese entities are employing to secure advanced computing power and access generative AI models. They also underscore how U.S. companies are capitalizing on China’s growing demand for computing power.

“AWS complies with all applicable U.S. laws, including trade laws, regarding the provision of AWS services inside and outside of China,” a spokesperson for Amazon’s cloud business said.

AWS controls nearly a third of the global cloud infrastructure market, according to research firm Canalys. In China, AWS is the sixth-largest cloud service provider, according to research firm IDC.

Shenzhen University spent $27,996 (200,000 yuan) on an AWS account to gain access to cloud servers powered by Nvidia A100 and H100 chips for an unspecified project, according to a March tender document. It got this service via an intermediary, Yunda Technology Ltd Co, the document showed.

Exports to China of the two Nvidia chips that are used to power large-language models, or LLM, such as OpenAI’s ChatGPT, are banned by the United States.

Shenzhen University and Yunda Technology did not respond to requests for comment. Nvidia declined to comment on Shenzhen University’s spending or on any of the other Chinese entities’ deals.

Zhejiang Lab, a research institute developing its own LLM, called GeoGPT, said in a tender document in April that it intended to spend 184,000 yuan to purchase AWS cloud computing services as its AI model could not get enough computing power from homegrown Alibaba.

A spokesperson for Zhejiang Lab said that it did not follow through with the purchase but did not respond to questions about the reasoning behind this decision or how it met its LLM’s computing power requirements. Alibaba’s cloud unit, Alicloud, did not respond to a request for comment.

Reuters could not establish whether the purchase went ahead.

Moving to tighten access

The U.S. government is now trying to tighten regulations to restrict access through the cloud.

“This loophole has been a concern of mine for years, and we are long overdue to address it,” Michael McCaul, chair of the U.S. House of Representatives Foreign Affairs Committee, told Reuters in a statement, referring to the remote access of advanced U.S. computing through the cloud by foreign entities.

Legislation was introduced in Congress in April to empower the Commerce Department to regulate remote access of U.S. technology, but it is not clear if and when it will be passed.

A department spokesperson said it was working closely with Congress and “seeking additional resources to strengthen our existing controls that restrict PRC companies from accessing advanced AI chips through remote access to cloud computing capability.”

The Commerce Department also proposed a rule in January that would require U.S. cloud computing services to verify large AI model users and report to regulators when they use U.S. cloud computing services to train large AI models capable of “malicious cyber-enabled activity.”

The rule, which has not been finalized, would also enable the Commerce secretary to impose prohibitions on customers.

“We are aware the Commerce Department is considering new regulations, and we comply with all applicable laws in the countries in which we operate,” the AWS spokesperson said.

Cloud demand in China

The Chinese entities are also seeking access to Microsoft’s cloud services.

In April, Sichuan University said in a tender document it was building a generative AI platform and purchasing 40 million Microsoft Azure OpenAI tokens to support the delivery of this project. The university’s procurement document in May showed that Sichuan Province Xuedong Technology Co Ltd supplied the tokens.

Microsoft did not respond to requests for comment. Sichuan University and Sichuan Province Xuedong Technology did not respond to requests for comment on the purchase.

OpenAI said in a statement that its own services are not supported in China and that Azure OpenAI operates under Microsoft’s policies. It did not comment on the tenders.

The University of Science and Technology of China’s Suzhou Institute of Advanced Research said in a tender document in March that it wanted to rent 500 cloud servers, each powered by eight Nvidia A100 chips, for an unspecified purpose.

The tender was fulfilled by Hefei Advanced Computing Center Operation Management Co Ltd, a procurement document showed in April, but the document did not name the cloud service provider. Reuters could not determine its identity.

The University of Science and Technology of China, or USTC, was added to a U.S. export control list known as the “Entity List” in May for acquiring U.S. technology for quantum computing that could help China’s military, and for involvement in its nuclear program development.

USTC and Hefei Advanced Computing Center did not respond to requests for comment.

Beyond restricted AI chips

Amazon has offered Chinese organizations access not only to advanced AI chips but also to advanced AI models such as Anthropic’s Claude, which they cannot otherwise access, according to public posts, tenders and marketing materials reviewed by Reuters.

“Bedrock provides a selection of leading LLMs, including prominent closed-source models such as Anthropic’s Claude 3,” Chu Ruisong, president of AWS Greater China, told a generative AI-themed conference in Shanghai in May, referring to its cloud platform.

In various Chinese-language posts for AWS developers and clients, Amazon highlighted the opportunity to try out “world-class AI models” and mentioned Chinese gaming firm Source Technology as one of its clients using Claude.

Amazon has dedicated sales teams serving Chinese clients domestically and overseas, according to two former company executives.

After Reuters contacted Amazon for comment, it updated dozens of posts on its Chinese-language channels with a note to say some of its services were not available in its China cloud regions. It also removed several promotional posts, including the one about Source Technology. Amazon did not give a reason for removing the posts and did not answer a Reuters query about that.

“Amazon Bedrock customers are subject to Anthropic’s end user license agreement, which prohibits access to Claude in China both via Amazon’s Bedrock API [application programming interface] and via Anthropic’s own API,” the AWS spokesperson said.

Anthropic said it does not support or allow customers or end-users within China to access Claude.

“However, subsidiaries or product divisions of Chinese-headquartered companies may use Claude if the subsidiary itself is located in a supported region outside of China,” an Anthropic spokesperson said.

Source Technology did not respond to a request for comment.
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Oil tanker burns after Yemen rebels’ attack in Red Sea

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DUBAI, United Arab Emirates — Fires broke out Friday on a Greek-flagged oil tanker that was attacked by Yemen’s Houthi rebels this week, with the vessel now appearing to be adrift in the Red Sea, authorities said.

It wasn’t immediately clear what happened to the oil tanker Sounion, which was abandoned by its crew Thursday and reportedly anchored in place.

The Houthis didn’t immediately acknowledge the fire. The rebels are suspected to have gone back and attacked at least one other vessel that later sank as part of their monthslong campaign against shipping in the Red Sea over the ongoing Israel-Hamas war in the Gaza Strip. The attacks have disrupted a trade route that typically sees $1 trillion in goods pass through it annually.

The British military’s United Kingdom Maritime Trade Operations center reported the fires in a note to mariners Friday night.

“UKMTO have received a report that three fires have been observed on vessel,” the center said. “The vessel appears to be drifting.”

A U.S. defense official, speaking on the condition of anonymity to discuss intelligence matters, said American officials were aware of the fires and continued to monitor the situation.

The vessel had been staffed by a crew of 25 Filipinos and Russians, as well as four private security personnel, who were taken by a French destroyer to nearby Djibouti, the EU’s Aspides naval mission in the Red Sea said Thursday.

The Sounion has 150,000 tons of crude oil aboard and represents a “navigational and environmental hazard,” the mission warned. “It is essential that everyone in the area exercises caution and refrains from any actions that could lead to a deterioration of the current situation.”

The Houthis have targeted more than 80 vessels with missiles and drones since the war in Gaza started in October. They seized one vessel and sank two in the campaign that also killed four sailors.

Other missiles and drones have either been intercepted by a U.S.-led coalition in the Red Sea or failed to reach their targets.

The rebels maintain that they target ships linked to Israel, the United States or Britain to force an end to Israel’s campaign against Hamas in Gaza. However, many of the ships attacked have little or no connection to the conflict, including some bound for Iran.

As Iran threatens to retaliate against Israel over the assassination of Hamas leader Ismail Haniyeh in Tehran, the U.S. military told the USS Abraham Lincoln aircraft carrier strike group to sail more quickly to the area. Early Thursday, the U.S. military’s Central Command said that the Lincoln had reached the waters of the Middle East, without elaborating.

Washington also has ordered the USS Georgia guided missile submarine to the region, while the USS Theodore Roosevelt aircraft carrier strike group was in the Gulf of Oman.

Additional F-22 fighter jets have flown into the region, and the USS Wasp, a large amphibious assault ship carrying F-35 fighter jets, is in the Mediterranean Sea.
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US national security adviser to hold talks with Chinese foreign minister in China next week 

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State Department — U.S. President Joe Biden’s national security adviser, Jake Sullivan, is heading to China next week for talks with Chinese Foreign Minister Wang Yi, according to sources familiar with the plan.

The discussions are expected to include a potential meeting between Biden and Chinese President Xi Jinping later this year.

This would be Sullivan’s first trip to China as the White House national security adviser. The planned meetings would be the latest in a series of high-level diplomatic moves aimed at stabilizing U.S.-China relations.

The talks, described as broad and strategic, would come after China suspended discussions with the U.S. on nuclear safety and security. China said in July it had halted nascent arms-control talks with Washington.

“The U.S. would like to deepen discussions on strategic stability, but the Chinese are reluctant. They prefer to discuss an agreement on the no first use of nuclear weapons, but the United States is not prepared to adopt such a doctrine,” former CIA China analyst Dennis Wilder, now a Georgetown University professor, told VOA.

“As a result, there’s been a bit of an impasse, with little progress made in the few working group meetings that have occurred,” he said.
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How fast will interest rates fall? Fed chair may provide clues in high-profile speech

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JACKSON HOLE, Wyoming — With the Federal Reserve considered certain to start cutting its benchmark interest rate next month, Chair Jerome Powell’s highly anticipated speech Friday morning at an economic conference will be closely watched for any hints about how many additional rate cuts might be in the pipeline.

Powell is expected to say the Fed has become more confident that inflation is nearing its 2% target, more than two years after it hit a painful four-decade high. Yet the Fed chair may take an overall cautious approach in his remarks at an annual conference of central bankers in Jackson Hole, Wyoming. Economists note that forthcoming economic data, including a monthly jobs report on Sept. 6, will help determine the size of future Fed rate cuts — whether a typical quarter-point cut or a more aggressive half-point drop — and how fast they occur.

“We think he will seek to dampen expectations of [a half-point cut] as well as reiterate that the Fed is data-dependent and does not make decisions in advance,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote in a research note.

Powell’s speech comes as the central bank is moving toward achieving a much sought-after “soft landing,” in which its rate hikes — 11 of them in 2022 and 2023 — manage to curb inflation without causing a recession. Inflation was just 2.5% in July, according to the Fed’s preferred measure, having tumbled from a 7.1% peak two years ago.

The progress made on inflation has likely made many Fed officials more open to cutting rates several times this year now that elevated borrowing costs have largely succeeded in cooling the economy and taming inflation.

Still, a slowdown in hiring and an uptick in the unemployment rate last month heightened concern that the Fed could soon make a mistake in the other direction — by keeping rates too high for too long, throttling growth and plunging the economy into recession. Powell will likely refer to that balancing act in his speech Friday.

On Wednesday, minutes from the Fed’s most recent meeting, held July 30-31, showed that the “vast majority” of policymakers said at the time that they would likely support a rate reduction at the next meeting in mid-September as long as inflation stayed low. Several of the Fed’s 19 officials even supported a rate cut at that meeting, the minutes showed.

Also Wednesday, the Labor Department revised its estimate of job growth for the 12 months that ended in March: It said that 818,000 fewer jobs were added during that year than it had earlier reported. The revisions, which were preliminary, will be finalized in February.

Hiring over that period was still solid, averaging 174,000 a month rather than 242,000, the government said. Yet because the figures show that hiring wasn’t as robust as was previously thought, a Fed rate cut next month is “a certainty,” Shepherdson wrote.

Economists generally agree that the Fed is getting closer to conquering high inflation, which brought hardship to millions of households beginning three years ago as the economy rebounded from the pandemic recession. Yet few economists think Powell or any other Fed official is prepared to declare “mission accomplished.”

After the government reported this month that hiring in July was much less than expected and that the jobless rate reached 4.3%, the highest in three years, stock prices plunged for two days on fears that the U.S. might fall into a recession. Some economists began speculating about a half-point Fed rate cut in September and perhaps another identical cut in November.

But healthier economic reports last week, including another decline in inflation and a robust gain in retail sales, partly dispelled those concerns. Wall Street traders now expect the Fed to cut its benchmark rate by a quarter-point in both September and November and by a half-point in December. Mortgage rates have already started to decline in anticipation of rate reductions.

A half-point Fed rate cut in September would become more likely if there were signs of a further slowdown in hiring, some officials have said.

Raphael Bostic, president of the Fed’s Atlanta branch, said in an interview Monday with The Associated Press that “evidence of accelerating weakness in labor markets may warrant a more rapid move, either in terms of the increments of movement or the speed at which we try to get back” to a level of rates that no longer restricts the economy.

“I’ve got more confidence that we are likely to get to our target for inflation,” he said. “And we’ve seen labor markets weaken considerably relative to where they were” last year. “We might need to shift our policy stance sooner than I would have thought before.” Several months earlier, Bostic had said he would likely support just one rate cut in the final three months of the year.
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Takeaways from the Democratic National Convention

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CHICAGO — It was U.S. Vice President Kamala Harris’s big night Thursday, but she wasn’t the only U.S. Democrat to knock it out of the park during a week of rousing speeches, celebrity cameos and lashings of hope and joy.

Here are some takeaways from the Democratic National Convention in Chicago:

Star-studded convention

Oprah Winfrey stole the show, exhorting voters to “choose joy” and Stevie Wonder took the convention to Higher Ground.

John Legend lit up the United Center with a tribute to Prince, while comic actress Mindy Kaling shared stories of cooking lessons from the vice president.

And there was comedy with a serious message from Saturday Night Live star Kenan Thompson, who brought a giant book on stage to represent the radical Trump-linked Project 2025 governing agenda.

There was feverish speculation over a potential appearance by global superstar Beyonce, but it didn’t pan out.

Family affair

On the biggest stage of their careers, political leaders often look to dewy-eyed family moments that, if seen as genuine, can humanize them and make them relatable to voters.

Minnesota Governor Tim Walz’s 17-year-old son, Gus, touched a nation as he wiped away joyous tears, pointed to his father accepting the vice presidential nomination and sobbed: “That’s my dad!”

Second Gentleman Doug Emhoff provided another indelible memory, referring to Harris as “my wiiiiife” as he recounted the goofy, endearing story of their romance.

And President Joe Biden’s daughter Ashley was a highlight of the opening night as she paid tribute to “the O.G. Girl Dad.”

Obamas sizzle

Barack and Michelle Obama — the undisputed power couple of Democratic politics — partied like it was 2008 as they gave the convention a shot of star power on Day Two.

The 44th president got the night’s biggest laugh as he goaded Donald Trump over the Republican’s “obsession with crowd sizes.”

But he was upstaged by the former first lady — by far the country’s most popular Democrat — who spoke of the “contagious power of hope” in the most cheered speech of the week.

The party made use of a deep bench of luminaries, including former president Bill Clinton, whose raspy speech was more than twice the allotted time but included some memorable applause lines.

Gaza fizzles

There were protests across Chicago against the administration’s handling of the Israel-Hamas war, and particularly over the decision not to allow a Palestinian American to speak from the main stage.

The largest protest Thursday featured several thousand marchers but was still much smaller than the demonstrations of tens of thousands predicted by organizers, and it was not the fly in the ointment that the Democrats had feared.

Protests were largely peaceful, although several demonstrators were arrested when they broke through a security fence earlier in the week around the United Center where the main program was staged.

Although the activists were largely pro-Palestinian, they were joined by others marching against a variety of progressive causes, from reproductive rights to migrant welfare.

Bye-bye Biden

The president gave an emotional keynote speech to open a conference that he thought just weeks ago he would be headlining.

Biden took to the stage, dabbing his eyes, and spoke at length about his achievements while making a case for Harris that was criticized for lacking the pizzazz of the Obama endorsements.

Flanked by first lady Jill Biden and Harris, the veteran Democrat’s final bow marked at long last the passing of the torch for a politician who has been in the public eye for more than half a century.

“Democracy has prevailed. Democracy has delivered. And now democracy must be preserved,” he declared, to one of many standing ovations from the rapt audience. 
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