Museveni Slams West After US Removes Uganda From Economic Program

KAMPALA, UGANDA — Days after the United States removed Uganda from an economic assistance program due to human rights concerns, Uganda’s president harshly criticized the West.

In a speech Thursday, President Yoweri Museveni urged lawmakers from the Commonwealth of Nations to reject what he called the evil tendencies of Western countries toward societies different from them.

Museveni told the 33 parliament speakers from Commonwealth countries meeting in Kampala that the West’s oppression takes the form of aggression, looting, enslavement, displacement, ethnic cleansing, colonization and indirect domination without occupying one’s territory.

“If you want freedom, if you value freedom, then you should value the freedom of everybody,” he said. “If you value independence, if you value dignity, then you must respect the dignity of everybody. Stop manipulations and lectures to the societies that are different from yours.”

Museveni accused “some countries” of using technological progress to hold down other countries that have different values.

“Instead of using this human progress for the benefit of all, some actors out of greed and philosophical, ideological and strategic shallowness, miscalculate and seek to monopolize knowledge and also use knowledge to oppress others,” he said.

Since Ugandan lawmakers passed an anti-homosexuality law in May 2023, the East African country has come under pressure for the abuse of human rights.

The World Bank withdrew funding from the nation, and just this week, Uganda lost its eligibility for the U.S. African Growth and Opportunity Act, or AGOA.

Through AGOA, some countries in sub-Saharan Africa, including Uganda, had duty-free access to the U.S. market for close to 6,000 products.

Asuman Basalirwa, the member of Uganda’s parliament who introduced the anti-gay legislation that has been described as the world’s harshest law against the LGBTQ community, said he is not surprised that Uganda is facing consequences.

“I am really disappointed about their preferential treatment of rights,” Basalirwa said. “And that makes them lose the moral authority to attack the country over the anti-homosexuality law.”

Regardless, he said, “nobody should tell you that the country will not suffer as a result of closure of AGOA.”

Uganda’s earnings through AGOA grew from $4 million to about $8 million in the 12 months up to June 2023.

Museveni said Uganda could still take advantage of its access to the 2.4 billion people who live in Commonwealth nations, made up mostly of former British colonies, to grow its economy.

Basalirwa said Uganda also needs to find paths to markets in East Asia and get a foothold in the U.S. market.

Argentina Court Suspends Milei’s Labor Reforms

BUENOS AIRES, ARGENTINA — Argentine judges on Wednesday suspended labor law changes that form part of a decree of sweeping economic reforms and deregulation announced by the country’s new libertarian president, Javier Milei.

The CGT trade union body had challenged the changes, which technically took effect last Friday, on grounds that they erode basic worker protections such as the right to strike and parental leave.

Judges of Argentina’s labor appeals chamber froze elements of Milei’s decree, which, among other things, increased the legal job probation period from three to eight months, reduced compensation in case of dismissal and cut pregnancy leave.

Judge Alejandro Sudera questioned the “necessity” and “urgency” of the decree Milei signed on December 20 — just days after taking office — and suspended the measures until they can be properly considered by Congress.

Some of the measures, Sudera added in a ruling distributed to the media, appeared to be “repressive or punitive in nature,” and it was not clear how their application would aid Milei’s objective of “creating real jobs.”

The government can appeal Wednesday’s ruling.

Thousands took to the streets last week to protest the reforms of self-proclaimed “anarcho-capitalist” Milei, who won elections in November with promises of slashing state spending as Argentina deals with an economic crisis, including triple-digit inflation.

The CGT has called a general strike for January 24.

“Rebuilding the country”

The measures have drawn heated debate among jurists about their constitutionality and are the subject of several court challenges.

When he announced his decree, Milei said the goal was to “start along the path to rebuilding the country … and start to undo the huge number of regulations that have held back and prevented economic growth.”

The decree changed or scrapped more than 350 economic regulations in a country accustomed to heavy government intervention in the market.

It eliminates a law regulating rent, envisages the privatization of state enterprises and terminates some 7,000 civil service contracts.

Latin America’s third-biggest economy is on its knees after decades of debt and financial mismanagement, with inflation surpassing 160% year-on-year and 40% of Argentines living in poverty.

Milei has pledged to curb inflation but warned that economic “shock” treatment is the only solution, and that the situation will get worse before it improves.

Won election resoundingly

The 53-year-old won a resounding election victory on a wave of fury over the country’s decades of economic crises marked by debt, rampant money printing, inflation and fiscal deficit.

Milei has targeted spending cuts equivalent to 5% of gross domestic product.

Shortly after taking office, his administration devalued Argentina’s peso by more than 50% and announced huge cuts in generous state subsidies of fuel and transport.

Milei has also announced a halt to all new public construction projects and a yearlong suspension of state advertising.

Argentines remain haunted by hyperinflation of up to 3,000% in 1989 and 1990 and a dramatic economic implosion in 2001.

Global Shipping Firms Continue to Pause Red Sea Shipments

OSLO, NORWAY — Denmark’s Maersk and German rival Hapag-Lloyd said on Tuesday their container ships would continue to avoid the Red Sea route that gives access to the Suez Canal following a weekend attack on one of Maersk’s vessels.  

Both shipping giants have been rerouting some sailings via Africa’s southern Cape of Good Hope as Yemen-based Houthi militants attack cargo vessels in the Red Sea. The disruption threatens to drive up delivery costs for goods, raising fears it could trigger a fresh bout of global inflation.  

Maersk had on Sunday paused all Red Sea sailings for 48 hours following attempts by Houthi militants to board the Maersk Hangzhou. U.S. military helicopters repelled the assault and killed 10 of the attackers. 

“An investigation into the incident is ongoing, and we will continue to pause all cargo movement through the area while we further assess the constantly evolving situation,” Maersk said in a statement.  

“In cases where it makes most sense for our customers, vessels will be rerouted and continue their journey around the Cape of Good Hope.” 

Maersk had more than 30 container vessels set to sail through Suez via the Red Sea, an advisory on Monday showed, while 17 other voyages were put on hold. 

Hapag-Lloyd said its vessels would continue to divert away from the Red Sea — sailing instead via Africa’s southern tip — until at least January 9, when it will decide whether to continue rerouting its ships. 

The Suez Canal is used by roughly one-third of global container ship cargo. Redirecting ships around the southern tip of Africa is expected to cost up to $1 million extra in fuel for every round trip between Asia and northern Europe. 

The Maersk Hangzhou, which was hit by an unknown object during the weekend attack, was able to continue on its way. 

The Iran-backed Houthis, who control parts of Yemen after years of war, started attacking international shipping in November in support of Palestinian Islamist group Hamas in its war with Israel in the Gaza Strip. 

That prompted major shipping groups, including Maersk and Hapag-Lloyd, to stop using Red Sea routes, instead taking the longer journey around the Cape of Good Hope. 

But after the deployment of a U.S.-led military operation to protect ships, Maersk had said on December 24 that it would resume using the Red Sea. 

The Empire State Rings in New Year With Pay Bump for Minimum-Wage Workers 

ALBANY, N.Y. — New York’s minimum-wage workers had more than just the new year to celebrate Monday, with a pay bump kicking in as the clock ticked over to 2024.   

In the first of a series of annual increases slated for the Empire State, the minimum wage increased to $16 in New York City and some of its suburbs, up from $15. In the rest of the state, the new minimum wage is $15, up from $14.20.   

The state’s minimum wage is expected to increase every year until it reaches $17 in New York City and its suburbs, and $16 in the rest of the state by 2026. Future hikes will be tied to the Consumer Price Index for Urban Wage Earners and Clerical Workers, a measurement of inflation.   

New York is one of 22 states getting minimum wage rises in the new year, according to a recent report by the Economic Policy Institute.   

In California, the minimum wage increased to $16, up from $15.50, while in Connecticut it increased to $15.69 from the previous rate of $15.   

This most recent pay bump in New York is part of an agreement made last year between Democratic Gov. Kathy Hochul and the state Legislature. The deal came over the objections of some employers, as well as some liberal Democrats who said it didn’t go high enough.   

The federal minimum wage in the United States has stayed at $7.25 per hour since 2009, but states and some localities are free to set higher amounts. Thirty states, including New Mexico and Washington, have done so. 

President Hopeful Zimbabwe Economy Will Turn Around in 2024

Harare — President Emmerson Mnangagwa has predicted Zimbabwe’s moribund economy will turn around this year following the recent discovery of oil and gas near the country’s border with Mozambique and Zambia and improvement in the country’s mining and tourism sectors. Economists are not as optimistic, as Zimbabweans continue to leave the country.

In a new year message broadcast to Zimbabweans at home and in the diaspora on national television and on social media, President Emmerson Mnangagwa said all was shaping for a prosperous Zimbabwe. He said the mining sector had surpassed the target of $12 billion in 2023, while the country was now food sufficient. That’s not all, said the 81-year-old politician.

“I am encouraged by the increased number of both local and international tourists visiting our country. Equally, investments in new tourism products and facilities which bolstered the sector are a welcome development. As we drive towards energy self-sufficiency, the discovery of oil and gas in Muzarabani confirms Zimbabwe’s potential as a future producer of gas. This should translate into meeting our energy demands commensurate with the ever growing economy,” he said.

Gift Mugano, an economics professor at Durban University of Technology, responded to Mnangagwa’s speech.

“We are in agro-based economy. We sneeze when the agriculture sector catches a cold. We know that this year there is a drought. That will have a devastating impact on the economy. With drought, we will be importing food. Because of the Russia-Ukraine war, which has seen prices of food, globally, going up around 50%,” said Mugano.

“We will be forking [out] something in the region of close to $1 billion. Which is almost 20% or so of our total foreign currency receipt. So this will weigh down on the economy in terms of the economy performance. So, to be quite frank and quite honest, the economy will underperform in this year. Yes, we are talking about the discovery of gas and oil but it’s too early to talk about that development as the driver of the economy.”

Prosper Chitambara, senior economist with the Labor and Economic Development Research Institute of Zimbabwe, says the country’s agro-based economy will only improve this year if there is no drought as most farmers depend on rains.

“In terms of the discovery of oil and gas, I think it’s going to take a bit of time probably for the country to begin to benefit from this important discovery. I think they should be some gestation period, which obviously also then allows for the investor to fully set up and to start commercial activities. But overall, this year the economy is expected to grow by 3.5% which is lower than the 5.5% estimated growth there for last year,” said Chitambara.

Ranga Chivi is an electrical engineer who recently left Zimbabwe with his family for greener pastures in Australia who listened to Mnangagwa’s speech.

“It would be interesting to see how the gas and oil discoveries will turn around the economy. We did not leave Zimbabwe because we are unemployed, but we left Zimbabwe because of search of greener pastures and a much more stable economic environment you can raise a family in. So the discovery of gas and oil, it’s positive for the country and we are more than eager to help where we can, but what remains is the issue to do with stability that I am hoping that this project will bring,” said Chivi.

According to World Bank, the primary reason Zimbabweans migrate is to search for economic opportunities. It says of the approximately 908,000 emigrants counted in Zimbabwe’s 2022 census, a large majority (84%) had left the country in search of employment, while another 5% had migrated for education or training.

China’s Residential Property Sector Filled With Livid Buyers of Unfinished Units

Taipei, Taiwan — A growing number of home buyers in China have seen their dream of moving into new homes dashed in the past year after a slew of bankrupt developers left behind millions of unfinished pre-sold properties.

Many of the buyers could do nothing but vent their anger and frustration on Chinese social media platforms such as Douyin, known internationally as TikTok, over what they called “rotting apartments” that represented their lifetime savings. Police are cracking down on protests.

The crisis of confidence in a sector that was once a reliable route to building wealth may threaten China’s growth and stability in 2024, experts say.

“Since the real-estate market has historically been a key driver of China’s economy, losing this momentum is expected to result in a long-term average economic growth rate below 5% starting in 2024,” Darson Chiu, a research fellow at the Taiwan Institute of Economic Research in Taipei, told VOA Mandarin in a written reply on December 14.

Among countless victims, a Douyin user from the Henan province in north-central China with the name, “The happy life in my rotting apartment,” posted a short video clip on December 1 showing a local project where construction was halted.

“It’s been a year, but my apartment remains unfinished. … I hope the construction of the building can be restarted soon so that I can move into my future home,” he said in the video. 

A victim in the Hunan province city of Changsha, identified only as Ms. Chen in a local TV news report, said in late 2022 that her family could barely make ends meet after paying the monthly mortgage of $700 (5,000 yuan).

 “If my unfinished property keeps rotting, I personally won’t have the courage to go on living,” said Chen.

VOA Mandarin has approached a dozen owners of unfinished homes on Chinese social media platforms Douyin, Xiaohongshu, known as RED outside of China, and Weibo, China’s microblogging site similar to X. None agreed to talk.

Two lawyers in Shanghai and Beijing who specialize in property disputes also refused to be interviewed.

The Beijing lawyer said the city’s Bureau of Justice has banned lawyers from talking to foreign press, citing “the class action’s sensitivity.” None of his clients wanted to talk to foreign press.

The China Dissent Monitor, a project of U.S. rights group Freedom House, has been tracking postings across Chinese social media and tallied 1,841 demonstrations linked to the property sector between June 2022 and September 2023. Final 2023 figures won’t be available until January, said Kevin Slaten, Taipei-based research lead with the China Dissident Monitor project.

 

Two-thirds of the strikes were staged by homebuyers over issues like project delays, contract violations and alleged fraud, while the others have been triggered by construction workers demanding unpaid wages, according to Slaten.

One-fourth of the housing protests saw police repression, which Slaten said is an underestimate, as piecemeal evidence can only be captured from those video clips.

But the trend toward silencing protesters shows the gravity of threat to China’s leader, Xi Jinping.

“As the dictator of such a centralized system and a person who’s tried to centralize power, he [Xi] definitely sees this as a threat to his vision, which is keeping economic development high, making sure that he can deliver this to people as a way to co-opt them and garner enough support among the public for the authoritarian system,” Slaten told VOA Mandarin by phone.

Ting Lu, chief China economist at Nomura, estimated in mid-November that $448 billion is needed to complete the homes pre-sold between 2015 and 2020 that remain unfinished projects, assuming an average construction progress of 50%, according to his research provided to VOA Mandarin. That represents roughly 20 million homes.

In one of his research papers dated November 27, Lu urged Beijing to “play the role of lender of last resort to save the property sector” or the crisis could endanger social stability at some point next year.

But Nan Li, a Shanghai-based finance scholar, disagreed, saying that the proceeds from the liquidation of builders’ assets after they file for bankruptcy should be prioritized to ensure the delivery of unfinished homes.

Li added that any government bailout will only indulge the developers’ appetite for over-leveraging.

The biggest firms with the worst debt woes “have made a mistake in exercising excessive leverage. There’s no reason for the government to bail them out,” Li told VOA Mandarin.  

Li noted that China’s property sector should learn from the experience of Guangdong province, where its problem of massive unfinished homes around 1997 was eventually solved in years after builders’ nonperforming assets were all restructured in a lawful manner and in line with the market mechanism.

Tanzania Bans Soybean Imports from Malawi

BLANTYRE, MALAWI — Tanzania has banned imports of soybeans from Malawi to protect its agricultural sector from the presence of the tobacco ringspot virus in that neighboring country.

The Tanzania Plant Health and Pesticide Authority said in a recent statement that its pest risk analysis on soybeans from Malawi has established the presence of the tobacco ringspot virus, which poses significant risk to soybean production in Tanzania.

The virus is highly contagious and can lead to yield reduction and economic losses ranging from 25% to 100% for farmers, the statement said.

Some analysts are calling Tanzania’s action retaliatory, as it comes a few days after Malawi banned maize imports from Tanzania and Kenya over maize lethal necrosis disease in those two countries.

Grace Mijiga-Mhango, president of the Grain Traders Association of Malawi, said Tanzania’s ban on soybeans from Malawi is not surprising.

“We call it a trade war,” she said. “They started the war, and their friends are fighting back.”

Tanzania is among the biggest importers of soybeans from Malawi.

In February, Tanzania’s high commissioner to Malawi committed to facilitate the purchase of 100,000 metric tons of soybeans from Malawi, worth about $30 million. Agriculture authorities in Malawi say the country harvested about 400,000 metric tons of soybeans in the 2022-23 season.

Mijiga-Mhango said the impact of the ban will go beyond selling soybeans within Tanzania because, she predicted, Tanzania will not allow exports to other countries, especially in the East African market, to pass through it.

Ronald Chilumpha, an expert in crop protection in Malawi, said that a better solution to the diseases could have been reached had Malawian and Tanzanian authorities held discussions before imposing their respective import bans.

“Issues to do with plant diseases or pests — most of these are migratory and they will certainly move from one area to another, even when you have all the controls in place,” he said.

“You cannot stop maize from Tanzania coming into Malawi 100%, that’s not possible,” he said. “It just requires a single grain of contaminated maize.”

Tanzania has also banned the introduction of genetically modified maize seeds from Malawi, saying it wants to maintain a non-GMO status in its agricultural practices.

Malawian Minister of Agriculture Sam Kawale told VOA via a messaging app that he could not comment on Tanzania’s ban.

Malawian Principal Secretary for Ministry of Agriculture Dickxie Kampani said he was engaging experts on crop diseases for details about the presence of tobacco ringspot virus in his country.

Can Maui Get Tourists Without Compounding Wildfire Trauma?

LAHAINA, Hawaii — The restaurant where Katie Austin was a server burned in the wildfire that devastated Hawaii’s historic town of Lahaina this summer.

Two months later, as travelers began to trickle back to nearby beach resorts, she went to work at a different eatery. But she soon quit, worn down by constant questions from diners: Was she affected by the fire? Did she know anyone who died?

“You’re at work for eight hours and every 15 minutes you have a new stranger ask you about the most traumatic day of your life,” Austin said. “It was soul-sucking.”

Hawaii’s governor and mayor invited tourists back to the west side of Maui months after the August 8 fire killed at least 100 people and destroyed more than 2,000 buildings. They wanted the economic boost tourists would bring, particularly heading into the year-end holidays.

But some residents are struggling with the return of an industry requiring workers to be attentive and hospitable even though they are trying to care for themselves after losing their loved ones, friends, homes and community.

Maui is a large island. Many parts, like the ritzy resorts in Wailea, 48 kilometers south of Lahaina — where the first season of the HBO hit The White Lotus was filmed — are eagerly welcoming travelers and their dollars.

Things are more complicated in west Maui. Lahaina is still a mess of charred rubble. Efforts to clean up toxic debris are painstakingly slow. It’s off-limits to everyone except residents.

Tensions are peaking over the lack of long-term, affordable housing for wildfire evacuees, many of whom work in tourism. Dozens have been camping out in protest around the clock on a popular tourist beach at Kaanapali, a few miles north of Lahaina. Last week, hundreds marched between two large hotels waving signs reading, “We need housing now!” and “Short-term rentals gotta go!”

Hotels at Kaanapali are still housing about 6,000 fire evacuees unable to find long-term shelter in Maui’s tight and expensive housing market. But some have started to bring back tourists, and owners of timeshare condos have returned. At a shopping mall, visitors stroll past shops and dine at open-air oceanfront restaurants.

Austin took a job at a restaurant in Kaanapali after the fire but quit after five weeks. It was a strain to serve mai tais to people staying in a hotel or vacation rental while her friends were leaving the island because they lacked housing, she said.

Servers and many others in the tourism industry often work for tips, which puts them in a difficult position when a customer prods them with questions they don’t want to answer. Even after Austin’s restaurant posted a sign asking customers to respect employees’ privacy, the queries continued.

“I started telling people, ‘Unless you’re a therapist, I don’t want to talk to you about it,'” she said.

Austin now plans to work for a nonprofit organization that advocates for housing.

Erin Kelley didn’t lose her home or workplace but has been laid off as a bartender at Sheraton Maui Resort since the fire. The hotel reopened to visitors in late December, but she doesn’t expect to get called back to work until business picks up.

She has mixed feelings. Workers should have a place to live before tourists are welcome in west Maui, she said, but residents are so dependent on the industry that many will remain jobless without those same visitors.

“I’m really sad for friends and empathetic towards their situation,” she said. “But we also need to make money.”

When she does return to work, Kelley said she won’t want to “talk about anything that happened for the past few months.”

More travel destinations will likely have to navigate these dilemmas as climate change increases the frequency and intensity of natural disasters.

There is no manual for doing so, said Chekitan Dev, a tourism professor at Cornell University. Handling disasters — natural and manmade — will have to be part of their business planning.

Andreas Neef, a development professor and tourism researcher at the University of Auckland in New Zealand, suggested one solution might be to promote organized “voluntourism.” Instead of sunbathing, tourists could visit part of west Maui that didn’t burn and enlist in an effort to help the community.

“Bringing tourists for relaxation back is just at this time a little bit unrealistic,” Neef said. “I couldn’t imagine relaxing in a place where you still feel the trauma that has affected the place overall.”

Many travelers have been canceling holiday trips to Maui out of respect, said Lisa Paulson, the executive director of the Maui Hotel and Lodging Association. Visitation is down about 20% from December of 2022, according to state data.

Cancellations are affecting hotels all over the island, not just in west Maui.

Paulson attributes some of this to confusing messages in national and social media about whether visitors should come. Many people don’t understand the island’s geography or that there are places people can visit outside west Maui, she said.

One way visitors can help is to remember they’re traveling to a place that recently experienced significant trauma, said Amory Mowrey, the executive director of Maui Recovery, a mental health and substance abuse residential treatment center.

“Am I being driven by compassion and empathy or am I just here to take, take, take?” he said.

That’s the approach honeymooners Jordan and Carter Prechel of Phoenix adopted. They kept their reservations in Kihei, about 40 kilometers south of Lahaina, vowing to be respectful and to support local businesses.

“Don’t bombard them with questions,” Jordan said recently while eating an afternoon snack in Kaanapali with her husband. “Be conscious of what they’ve gone through.”

Red Sea Shipping Workarounds Add Costs, Delays for Suppliers, Retailers

LOS ANGELES — Toymaker Basic Fun’s team that oversees ocean shipments of Tonka trucks and Care Bears for Walmart WMT.N and other retailers is racing to reroute cargo away from the Suez Canal following militant attacks on vessels in the Red Sea.

Suppliers for the likes of IKEA, Home Depot HD.N, Amazon AMZN.O and retailers around the world are doing the same as businesses grapple with the biggest shipping upheaval since the COVID-19 pandemic threw global supply chains into disarray, sources in the logistics industry said.

Florida-based Basic Fun usually ships all Europe-bound toys from its China factories via the Suez Canal, the quickest way to move goods between those geographies, CEO Jay Foreman said in a telephone interview from his Hong Kong office.

That trade route is used by roughly one-third of global container ship cargo, and redirecting ships around the southern tip of Africa is expected to cost up to $1 million extra in fuel for every round trip between Asia and Northern Europe.

Yemeni Houthis’ drone and missile attacks in the Red Sea to show their support for Palestinian Islamist group Hamas fighting Israel in Gaza have upended shipping plans.

Basic Fun is now working through the holidays to send toys from China to ports in the U.K. and Rotterdam via the longer route.

It is also diverting some goods bound for ports on the U.S. East Coast from the Suez Canal to the drought-choked Panama Canal, while switching others to the West Coast via the direct route across the Pacific Ocean.

“It’s just going to take longer and it’s going to cost more,” said Foreman, who added that rates for some China-U.K. freight have more than doubled to around $4,400 per container since the Israel-Hamas conflict began in October.

The Suez Canal situation remains fast changing, and shippers MaerskMAERSKb.CO and CMA CGM are moving to resume voyages with military escorts through the Red Sea.

The biggest impact likely will come over the next six weeks, said Michael Aldwell, executive vice president of sea logistics for Switzerland’s Kuehne + Nagel KNIN.S.

“You can’t flick a switch” and reorganize global shipping, said Aldwell, who expects the diversions to cause a shortage of vessel space, strand empty containers needed for China exports in wrong places and send short-term transport price indexes sharply higher.

According to estimates from freight platform Xeneta, it costs $2,320 to ship a 40-foot equivalent unit (FEU) container from the Far East to the Mediterranean “post escalation” versus $1,865 per FEU in early December. It costs $1,625 to ship an FEU from China to the United Kingdom “post escalation” versus $1,425 per FEU in early December.

These rates do not include “extra ordinary” risk surcharges and “Emergency Recovery Cost” that can be between $400 and $2,000 per FEU, Peter Sand, chief analyst at Xeneta, said. 

Scramble for space

As of Wednesday, nearly 20% of the global container fleet — or 364 hulking container vessels capable of carrying just over 2.5 million full-sized containers — had been set on a new course due to the Red Sea attacks, according to Kuehne + Nagel data.

Mitsui O.S.K. Lines 9104.T and Nippon Yusen 9101.T, Japan’s largest shipping companies, said their vessels with links to Israel were avoiding the Red Sea area and both companies were monitoring the situation carefully for next steps.

Vessel owners already have begun rationing the less expensive, contract-rate space they reserve for customers, said Anders Schulze, head of the ocean business at digital freight forwarder Flexport.

For example, he said, a customer who delivers five containers a month versus the 10 promised in their contract may only get five containers at contract rates. The remainder would be subject to expensive spot market rates.

This has set off a scramble to reserve space ahead of the early February deadline to get goods out of China before factories there close for the extended Lunar New Year celebrations, logistics experts said.

“Every single booking [out of China] now needs to be reconfirmed. The dates could change, the routing may change,” said Alan Baer, CEO of OL USA, which handles freight shipments for clients. OL has contracts with ship owners and is part of the rush to secure spots on ships.

Small shippers are most at risk of being elbowed out.

Marco Castelli, who has an import/export business in Shanghai, has been trying to rebook three containers of Chinese-made machinery components bound for Italy after the shipments were canceled due to the crisis.

“Transfer my situation to a large corporation and you get what’s going on,” he said.

Foreman at Basic Fun, which plans to have about 40 containers on the water before the Lunar New Year, said the company’s contracts with customers don’t include a way to recover the extra expense. “The price is fixed. [Most suppliers] are going to have to eat those costs.” 

Vietnam Wary of China’s ‘Swift, Large-Scale’ Investment

WASHINGTON — An influx of Chinese investors in Vietnamese supporting industries could cause domestic businesses to suffer from the competition, the president of the Vietnam Association for Supporting Industries warned.

Phan Dang Tuat’s statement came a week after Vietnam and China agreed to expand their trade cooperation during Chinese President Xi Jinping’s mid-December visit, during which the two countries signed 36 cooperation documents. Vietnam and China pledged to strengthen their cooperation in economic zones, investment, trade and other areas, said a joint statement issued on December 13.

According to economic experts, the agreements will open opportunities for Vietnam to attract high-quality direct investment from China.

But Tuat said the wave of Chinese supporting-industry firms arriving in the Southeast Asian country is concerning.

Supporting industries supply raw materials and components to manufacturers.

Tuat voiced his concern at the Ministry of Industry and Trade’s year-end conference on December 20, questioning the rapid and large-scale entry of Chinese firms into the market, according VN Express International, a Vietnamese newspaper.

Chinese supporting industry companies are flocking to Vietnam, swiftly forming large-scale components and parts production chains to export to Europe and North America, Tuat said.

“This is a huge concern for domestic supporting industry enterprises,” Tuat said, according to VN Express International.

China-U.S. trade war

Since then-U.S. President Donald Trump launched a trade war with China in 2018, many Chinese products have been found to be disguised or labeled as “Made in Vietnam” to avoid U.S. tariffs on goods imported from China, according to reports by Reuters.

The trade war has also encouraged Chinese firms to move their production to other countries, including Vietnam, to bypass U.S. tariffs.

Meanwhile, Tuat told the ministry’s conference that because of a lack of economies of scale, Vietnam’s domestic firms are grappling with expensive capital and high manufacturing expenses, making it difficult to compete with Chinese firms, according to Vietnam-based Tuoi Tre.

Vietnamese companies in 2023 saw a 40% drop in revenue partly because of fewer orders from major markets, such as Europe, according to Tuat.

He also said that Vietnam’s unusually high lending rates have undermined the nation’s supporting industry enterprises, which number about 1,500 companies. (Whereas Vietnamese firms are required to borrow from Vietnamese banks at rates of 10% to 12%, foreign investors can borrow abroad at significantly lower rates, according to reports by Tuoi Tre.)

Ha Hoang Hop, an associate senior fellow at Singapore-based ISEAS-Yusof Ishak Institute, told VOA: “This should serve as a wake-up call for Vietnam to speed up its supporting industries in order to catch up with Chinese competitors who are way ahead.”

There is reason for concern, Pham Chi Lan, former general secretary of Vietnam Chamber of Commerce and Industry, told VOA.

“But we need to face that fact and learn from the lesson in the past where foreign investors chose Chinese suppliers instead of Vietnamese for their production in Vietnam,” he said.

Semiconductors a potential boon

The U.S.-China trade war has led semiconductor investors to shift their focus to Vietnam, a potential boon for the Southeast Asian nation, according to Hop and Lan.

“The U.S. has included Vietnam in its ‘friendshoring’ network, and Vietnam should make the most out of this,” said Hop, referring to the practice of focusing supply chain networks in countries regarded as U.S. political and economic allies.

Experts said Vietnam is well-positioned to draw U.S. investors seeking to de-risk supply chain investments in China.

“The competition between the U.S. and China is getting intense when the U.S. is banning the export of some equipment and technology to China, and this is a great opportunity for Vietnam to be able to secure some deals,” said Hop, referring to the U.S. export ban on chipmaking equipment and rare-earth technologies.

Lan, who was an adviser to the late Vietnamese Prime Ministers Vo Van Kiet and Phan Van Khai, agreed with Hop.

“The U.S., Japan and European countries want Vietnam to be strong for their benefits instead of being weak and dependent on China,” Lan said.

Following an historic U.S.-Vietnam business summit in September that bolstered ties between the countries, Vietnam then elevated Japan into its circle of comprehensive strategic partners, on par with China, in November. Washington and Tokyo sought to upgrade ties with Hanoi to offset Beijing’s expansion of power in the region and reduce its dependence on Chinese supply chains, according to experts who spoke with VOA.

Announcing its new partnership with Vietnam, the U.S. State Department described it as a way “to explore opportunities to grow and diversify the global semiconductor ecosystem” that “will help create more resilient, secure and sustainable global semiconductor value chain.”

Vietnam is poised to expand into chip-designing and possibly chip-making as trade tensions between the United States and China create opportunities for the country, according to Lan and Hop.

China OKs 105 Online Games Days After Hitting Industry with Draft Rules

TAIPEI, TAIWAN — Chinese authorities approved 105 new online games this week, bolstering support for the industry just days after proposing regulatory restrictions that sent stocks tumbling.

The National Press and Publication Administration (NPPA) announced approval of the 105 games Monday via WeChat, describing the move as a show of support for “the prosperity and healthy development of the online game industry.

“It was only Friday that those same regulators announced a wide range of proposed guidelines to ban online game companies from offering incentives for daily logins or purchases. Other proposed rules include limiting how much users can recharge and issuing warnings for “irrational consumption behavior.”

The draft rules, which were published as part of efforts to seek public comment on the proposals, caused an immediate, massive blow to the world’s biggest games market, leading to as much as $80 billion in market value being erased from China’s two biggest companies, industry leader Tencent Holdings and NetEase.

After the approval was announced Monday, video game stocks in companies such as NetEase began recovering from Friday’s tumble. China’s state-run CCTV said the approval “strongly demonstrates the clear attitude of the competent authorities to actively support the development of online games,” adding that most game companies are deeply encouraged.

Chinese netizens, however, aren’t optimistic.

“Isn’t it the daily work of the NPPA to [approve games] on a regular basis? Don’t make it look like [you’re doing the industry a favor]” said a commenter named “OldTimeBlues” on YYSTV, a Chinese media platform for online gaming.

Another commenter, named Mizu, described the back-to-back announcements as a proverbial carrot and stick tactic.

“You noticed your kid is [has] a concussion after [you’ve hit] him with a stick,” they said of Friday’s announcement of new guidelines. “Now you are giving him a [treat] to make him feel better.”

Syu Jhen, founder of the policy think tank Hong Kong Zhi Ming Institute, said that the draft rules would affect not only the stock prices of Tencent and NetEase but the entire online gaming industry, even if China’s economy relies on domestic consumption.

Syu said that Beijing’s “one-size-fits-all” regulation of online gaming shows that China’s economic decision-makers do not respect market rules and often resort to moral kidnapping, allowing the social value that officials want to encourage to override principles of economic development and business operations.

A comment on YYSTV said, “Thinking issuing an approval would boost market confidence? It’s completely scratching the surface.”

Chen Chung-hsing, director of the New Economy Policy Research Center at National Dong Hwa University, said that at a time when China’s economy is weak and sluggish, exports and investment can no longer boost China’s economy. China can only rely heavily on domestic consumption. He said if China continues to suppress the domestic online gaming industry, it may have economic consequences and cause public resentment.

“China’s current unemployment rate is so high that some people may need video games to kill time,” he told VOA in a phone interview. In this case, [the rules] are also [a kind of] deprivation. Then, after these people stop playing video games, what will happen? Don’t they think about other ways to express their dissatisfaction? So basically, [playing video games] is also a possible source of power for [social] stability.”

Tseng Wei-feng, an assistant researcher at the Institute of International Relations at National Chengchi University, said the reason why the Chinese government wants to restrict online games is that the games often have a “group-fighting” model, which has become a virtual platform for young people to gather. He said the government worries that players can be united and mobilized in the virtual world.

“A group of people may attack a city in a certain game, then evolve into a so-called organized force,” he said. “If one day they are dissatisfied with China’s policies, will they all go to the government gate to protest? I think this is an aspect that the Chinese Communist Party has been strictly controlling.”

Some information is from The Associated Press. 

Argentines Protest Milei’s Economic Reforms

BUENOS AIRES, ARGENTINA — Thousands of Argentines took to the streets of Buenos Aires on Wednesday to protest a decree of sweeping economic reform and deregulation proposed by President Javier Milei.  

Marching at the behest of labor unions, the protesters demanded the courts intervene to invalidate the mega-decree they say would carve away worker and consumer protections. 

Congress is sitting in an extraordinary session this week, at the request of ultra-libertarian Milei — in office since December 10 — to consider the plan.  

The decree would change or scrap more than 350 economic regulations in a country accustomed to heavy government intervention in the market.  

Among others, it abolishes a price ceiling on rent, eliminates some worker protections and scraps laws shielding consumers from abusive price increases at a time when annual inflation exceeds 160% and the poverty level has surpassed 40%.  

A number of civic groups on Saturday filed a judicial motion to have the decree declared unconstitutional.  

On Wednesday, protesters waved Argentine flags and placards reading: “The homeland is not for sale.” 

“We do not question the legitimacy of President Milei, but we want him to respect the division of powers. Workers need to defend their rights when there is an unconstitutionality,” construction union leader Gerardo Martinez told reporters at the march. 

Milei’s “chainsaw plan” to cut state spending has triggered a series of street protests against the government. 

Other aspects of the decree include an end to automatic pension increases, restrictions on the right to strike and easing away from price caps for private health services. 

It also terminates about 7,000 civil service contracts in a bid to cut state spending.  

Unless Congress scraps the plan in its entirety, the decree will enter into force on Friday.  

Milei’s far-right party, Freedom Advances, has 40 of the 257 deputies in Congress and seven of 72 senators.  

“The decree is destructive of all labor rights,” said 45-year-old teacher Martin Lucero, who took part in the protest.   

“The Argentine people chose Milei as president of the nation, not as emperor,” he said. 

Holiday Spending Up in US, Despite Financial Anxiety, Higher Costs

New York — Holiday sales rose this year and spending remained resilient during the shopping season even with Americans wrestling with higher prices in some areas and other financial worries, according to the latest measure.

Holiday sales from the beginning of November through Christmas Eve climbed 3.1%, a slower pace than the 7.6% increase from a year earlier, according to Mastercard SpendingPulse, which tracks all kinds of payments including cash and debit cards.

This year’s sales are more in line with what is typical during the holiday season, however, after a surge in spending last year during the same period.

“This holiday season, the consumer showed up, spending in a deliberate manner,” said Michelle Meyer, Chief Economist, Mastercard Economics Institute. “The economic backdrop remains favorable with healthy job creation and easing inflation pressures, empowering consumers to seek the goods and experiences they value most.”

The number of people seeking unemployment benefits has remained very low by historical standards and employers are still having a hard time finding enough workers.

Still, sales growth was a bit lower than the 3.7% increase Mastercard SpendingPulse had projected in September. The data released Tuesday excludes the automotive industry and is not adjusted for inflation.

Clothing sales rose 2.4%, though jewelry sales fell 2% and electronics dipped roughly 0.4%. Online sales jumped 6.3 % from a year ago and in-person spending rose a modest 2.2%.

Consumer spending accounts for nearly 70% of U.S. economic activity, and economists carefully monitor how Americans spend, particularly during the holidays, to gauge how they’re feeling financially.

There had been rising concern leading up to the holiday about the willingness of Americans to spend because of elevated prices for daily necessities at a time that savings have fallen and credit card delinquencies have ticked higher. In response, retailers pushed discounts on holiday merchandise earlier in October compared with a year ago. They also took a cautious approach on how much inventory to order after getting stung with overstuffed warehouses last year.

The latest report on the Federal Reserve’s favored inflation gauge, issued Friday, shows prices are easing. But costs remain still higher at restaurants, car shops and for things such as rent. Americans, however, unexpectedly picked up their spending from October to November as the holiday season kicked off, underscoring their spending power in the face of higher costs.

A broader picture of how Americans spent their money arrives next month when the National Retail Federation, the nation’s largest retail trade group, releases its combined two-month statistics based on November-December sales figures from the Commerce Department.

The trade group expects U.S. holiday sales will rise 3% to 4%. That’s lower than last year’s 5.4% growth but again, more consistent with typical holiday spending, which rose 3.6% between 2010 and 2019 before the pandemic skewered numbers.

Industry analysts will dissect the fourth-quarter financial performance from major retailers when they release that data in February.

The big concern: whether shoppers will pull back sharply after they get their bills in January. Nikki Baird, vice president of Aptos, a retail technology firm, noted customers, already weighed down by still high inflation and high interest rates, might pull back more because of the resumption of student loan payments that kicked in October 1.

“I am worried about January,” she said. “I can see a bit of a last hurrah.”

Christmas Rush to Get Passports to Leave Zimbabwe is Fed by Economic Gloom, Price Hike

Harare — Atop many Christmas wish lists in economically troubled Zimbabwe is a travel document, and people are flooding the passport office this holiday season ahead of a price hike planned in the New Year.

The desperation at the office in the capital city of Harare is palpable as some people fear the hike could push the cost of obtaining a passport out of reach and economic gloom feeds a surge in migration. 

Nolan Mukona said he woke up at dawn to get in line at the passport office but when he arrived at 5 a.m. there were already more than 100 people waiting. Some people had slept outside the office overnight. 

“The only thing that can make my Christmas a cheerful one is if I manage to get a passport,” said the 49-year-old father of three. “I have been saving for it for the last three months and I have to make sure I get it before January.” 

At $120, passports were already pricey for many in a country where the majority struggle to put food on the table. The finance minister’s budget proposals for 2024 said passport fees would rise to $200 in January, sparking an outcry. The hike was then reduced to $150. 

Several million Zimbabweans are estimated to have left the southern African country over the past two decades when its economy began collapsing. The migration has taken renewed vigor in recent years as hopes of a better life following the 2017 ouster of longtime president Robert Mugabe fade. The late president was accused of running down the country. 

Many people, including professionals such as schoolteachers, are taking short nursing courses and seeking passports to leave for the United Kingdom to take up health care work. 

According to figures released by the U.K.’s immigration department in November, 21,130 Zimbabweans were issued visas to work in the health and care sector from September last year to September this year, up from 7,846 the previous year. 

Only India and Nigeria, countries with significantly larger populations than Zimbabwe, have more people issued such work visas. 

Many more Zimbabweans choose to settle in neighboring South Africa. 

According to South Africa’s statistics agency, just over 1 million Zimbabweans are living in that country, up from more than 600,000 during its last census in 2011, although some believe the figure could be much higher as many cross the porous border illegally. 

The economic desperation has coupled with the expected increase in the price of travel documents to create an end-of-year rush. 

The passport office has increased working hours to operate at night to cater to the growing numbers. Enterprising touts sell spots for $5 for those who want to skip the line. 

“It’s my gateway to a better life,” said Mukona of the passport he hopes to get. 

He plans to leave his work as an English teacher at a private college to migrate to the United Kingdom as a carer. Once there, he hopes to have his family follow, a move that may be endangered by recent proposals by U.K. Prime Minister Rishi Sunak to change migration visa rules to limit the ability of migrant workers to bring their families to the U.K. 

Harare-based economist Prosper Chitambara said a lack of formal jobs and low prospects of economic recovery have turned the passport from a mere travel document into a life-changing document for many. 

“The challenging economic situation is not showing signs of remission so this is an incentive for Zimbabweans to migrate,” said Chitambara. “The passport is now more than just a travel document. Being in possession of a passport means changed economic fortunes because it’s a major step towards leaving.” 

The economist predicted a tougher New Year for Zimbabweans, citing a raft of new or higher taxes proposed by the finance minister. 

Zimbabwe’s government says the migration comes at a huge cost to the country because of a brain drain, particularly in the health sector. It has pleaded to the World Health Organization to intervene and stop richer countries from recruiting Zimbabwean nurses, doctors and other health professionals. 

Vice President Constantino Chiwenga earlier this year described the recruitment as “a crime against humanity” and proposed a law to stop health professionals from migrating. 

Life has not always turned out rosy for those leaving. 

The British press has reported the abuse of people settling in the United Kingdom as care workers, with some ending up living on the streets or barely earning enough to survive. 

A report by Unseen, a U.K charity, in October said “the care sector is susceptible to worker exploitation and modern slavery. Many people providing their labor in the sector receive low pay and the work is considered low-skilled.” 

The group, which campaigns against modern slavery and exploitation, said Zimbabweans were among the top nationalities to be victimized in the care sector. 

Despite such reports, many in Zimbabwe are not deterred. 

“I will deal with those issues when I get there. Right now my priority is getting hold of a passport and leaving. Anything is better than being in Zimbabwe right now,” said Mukona. 

British Businesses Wait on Sidelines as China’s Economy Struggles

London — Beijing’s hopes for a swift return of foreign investors after it began lifting its harsh COVID-19 restrictions late last year were not answered in 2023.  

A new survey of British businesses released last week is but the latest to confirm that trend. VOA’s Mandarin Service also spoke with British businesspeople who are shifting their investments elsewhere due to uncertainty, global tensions and China’s policies.

Problem is Xi   

One of those people is David Smith, a British businessman who lived in China from 2008 to 2020 and worked with local factories in China’s southern tech hub of Shenzhen. He says he used to be optimistic about investing in China, but Beijing’s zero-COVID policy during the pandemic changed that.    

“The draconian clearing policy after the 2020 outbreak led to the shutdown of many factories in Shenzhen, where I was located, and what was once a boom turned into a bust,” Smith told VOA. “I decided to leave China and also move my supply chain to Southeast Asian countries like Vietnam.”   

It wasn’t just COVID, he added; it was also the direction that Chinese President Xi Jinping is taking the country.

“A lot of British businessmen who left China at the same time as me felt that China’s future would be ruined by Xi Jinping who only cares about power and not about the economy, so we are no longer enthusiastic about investing in China,” Smith said.   

Last week’s survey by the British Chamber of Commerce in China reflects the waning enthusiasm. According to the survey of about 300 companies surveyed between October and November, 55% said they planned to reduce or maintain investment levels in China over the next year, a slight improvement over the previous year but still worse than any other year since the survey began in 2018.   

Expat community shrinks  

The survey said British companies operating in China significantly slowed their investment decisions in 2023 due to economic uncertainty and geopolitical tensions.  

Thirty-four percent of respondents said they now feel less welcome in China than a year ago, citing rising local protectionism, a lack of policy support for foreign companies and a general lack of equal treatment with Chinese companies.     

Over the past few decades, new British companies have continued to enter the Chinese market. However, according to the survey, only 1% of respondents had established a presence in China over the past 12 months, down by 2% from 2021, when COVID restrictions were in place.    

“For businesses, last year there was uncertainty around operations. Now there’s real uncertainty around revenue,” said Julian Fisher, chairman of the British Chamber of Commerce in China, in an interview with Bloomberg TV on December 11.  

While there are no official figures, Fisher said he has heard that the number of British expats in China has dropped to 16,000 from 35,000 before the pandemic, and that many companies have replaced foreign managers at all levels with domestic employees.   

Waiting but not out 

Peter Humphrey, a former journalist who later worked for more than a decade as a fraud investigator for Western firms in China, told VOA that he thinks the main reason for the pause is the downturn in the Chinese economy over the past two years. 

“The British Chamber of Commerce in China has been very pro-Beijing and pro-business for many years, as I recall, and you have to remember that there is a large proportion of businesses in the U.K. that do not want business to be influenced by moral values,” he said.

The figures in the survey “represent a mixed signal,” added Humphrey, who is currently an external researcher at Harvard University’s Fairbank Center for Chinese Studies.   

 

“Economic factors make it inadvisable to make new investments in China right now, and the country is much less attractive than it used to be,” he said. “But British businesses haven’t really realized that it’s not a good idea to do business with China under its leaders.”    

According to the survey, an increasing trend toward local protectionism and self-sufficiency and a lack of policy support for foreign businesses was the biggest factor contributing to foreign businesses feeling less welcome or unwelcome in the market. The next factors were unequal treatment with Chinese companies followed by a lack of channels for communication with the Chinese government.   

The survey also shows that the complexity of cybersecurity and IT regulations adds another layer of uncertainty for U.K. companies operating in China. 

The Chinese government implemented a newly revised counterespionage law on July 1 in the name of strengthening national security. The new version of the law expands the definition of espionage to include any documents, data and materials related to national security interests.

According to the U.S. National Counterintelligence and Security Center, this means any “documents, data, materials, or items could be considered relevant to PRC national security due,” which creates potential “legal risks and uncertainty for foreign companies, journalists, academics, and researchers.”

Although difficulties remain, there is evidence that optimism is slowly emerging. Of the businesses surveyed, about 46% expressed an optimistic outlook for 2024, which could signal a change if the economic and geopolitical climate improves. However, most U.K. investment businesses intend to wait and see how the situation develops before raising or lowering investment levels.

Adrianna Zhang contributed to this report.