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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.” 
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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.
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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. 
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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. 
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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.”
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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. 
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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.
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BLANTYRE, MALAWI — Malawi, which already is suffering from food shortages, this week banned the import of unmilled maize from Kenya and Tanzania over concerns that the spread of maize lethal necrosis disease could wipe out the staple food.

The ministry of agriculture announced the ban in a statement that said the disease has no treatment and can cause up to 100% yield loss. The statement said maize can be imported only after it is milled, either as flour or grit.

Henry Kamkwamba, an agriculture expert with the International Food Policy Research Institute, told VOA that if the disease were introduced into the country, it would be difficult to contain.

He used the banana bunchy top virus as an example of the potential danger.

“Think of how we lost all of our traditional bananas in the past and now Malawi is a net importer of bananas … due to our lax policies in terms of imports,” he said.

“There are these similar concerns with maize,” he said, with maize being the nation’s main food crop.

Kamkwamba predicted the ban would help Malawi prevent the disease from spreading.

Kenya and Tanzania have long been primary sources of maize for Malawi during periods of food shortage.

Malawi is facing shortages largely because Cyclone Freddy destroyed thousands of hectares of maize last March.

The World Food Program in Malawi and the Malawi Vulnerability Assessment Committee estimate that 4.4 million people — around a quarter of the population — would face food shortages until March 2024.

Grace Mijiga Mhango, the president of the Grain Traders Association of Malawi, said that while she understands the severity of the impact of the maize disease, banning imports at a time of need would likely result in higher costs.

“If we really don’t have enough food, then we are creating another unnecessary maize [price] increase,” she said.

The next alternative for maize imports is South Africa, she said.

“South Africa is quite a distance,” she said, “and they don’t have enough. … It will be expensive.”

Malawi’s government said the ban will be temporary as it explores other preventive measures to combat the spread of maize lethal necrosis disease.
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Immigrants from Belarus, Ukraine and other Eastern European countries are actively exploring the American IT startup market. One immigrant-run venture capital firm is helping them find investments. Evgeny Maslov has the story, narrated by Anna Rice. Camera: Michael Eckels.
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Beijing — China will step up policy adjustments to support an economic recovery in 2024, state media said on Tuesday, following an agenda-setting meeting of the country’s top leaders.

Investors are closely watching for clues on next year’s policy and reform agenda as Beijing has been struggling to spur a post-pandemic economic recovery amid a deepening housing crisis and mounting local government debt.

China will focus on boosting effective demand next year, and make concerted efforts to spur domestic demand, state media said, citing the annual Central Economic Work Conference held from Dec. 11-12, during which top leaders set economic targets for 2024.

“We must introduce more policies that are conducive to stabilizing expectations, stabilizing growth, and stabilizing employment,” state media said, quoting top officials led by President Xi Jinping at the meeting.

“It is necessary to strengthen counter-cyclical and cross-cyclical adjustments of macro policies, continue to implement a proactive fiscal policy and a prudent monetary policy, and strengthen innovation and coordination of policy tools.”

The Politburo, a top decision-making body of the ruling Communist Party, said on Friday that fiscal policy would be moderately strengthened and will be “flexible, moderate, precise, and effective” to help spur the economic recovery.

China plans to implement structural tax and fee cuts and plans a new round of fiscal and tax reforms, state media said, adding that the government will improve the structure of fiscal spending to support strategic tasks.

China will maintain reasonable and sufficient liquidity and ensure that the scale of social financing and money supply match the expected goals of economic growth and price levels, according to state media.

China will guide financial institutions to increase support for technological innovation, green transformation, inclusive small and micro businesses, and the digital economy.

The government is likely to rely on fiscal stimulus, especially spending on infrastructure, to drive growth, as the central bank still faces limited space to ease policy due to concerns over capital outflows, analysts say.

In October, China unveiled a plan to issue 1 trillion yuan ($139 billion) in sovereign bonds by the end of the year, raising the 2023 budget deficit target to 3.8% of GDP from the original 3%.

“Fiscal policy will focus on stabilizing investment to help offset the decline in real estate and external demand,” said Nie Wen, an economist at Hwabao Trust.

“Moderate cuts in the reserve requirement ratio (RRR) and interest rates are expected.”

2024 Growth target eyed  

Top leaders also pledged to “to facilitate stability through progress,” which may signal greater emphasis on growth, and “establish first before demolishing”, which could indicate more support for the troubled property sector.

“To further promote economic recovery, we need to overcome some difficulties and challenges,” state media said. “The main problems are insufficient effective demand, overcapacity in some industries, weak public expectations, and many hidden risks.”

Last week, Ratings agency Moody’s slapped a downgrade warning on China’s credit rating, saying costs to bail out debt-laden local governments and state firms and control its property crisis would weigh on the growth outlook.

Prior to the meeting, government advisers had told Reuters they would recommend economic growth targets for 2024 ranging from 4.5% to 5.5%, with the majority favoring a target of around 5% – the same as this year.

The government may set a growth target of around 5% for 2024 sources said. Hitting such targets would require Beijing to step up stimulus given that this year’s growth has been flattered by last year’s low-base effect of COVID-19 lockdowns, analysts say.

Top leaders traditionally endorse a growth target at the December meeting, which is then publicly announced at the opening of the annual parliament meeting, usually held in March.

China’s growth is seen on track to hit the government’s target of around 5% this year.

China will speed up the establishment of a new model of property development, quickening construction of affordable housing, and coordinate the resolution of local debt risks and stable development, according to state media.
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Taylor Swift’s Eras Tour is the first tour to cross the billion-dollar mark, according to Pollstar’s 2023 year-end charts.

Not only was Swift’s landmark Eras Tour the No. 1 tour both worldwide and in North America, but she also brought in a whopping $1.04 billion with 4.35 million tickets sold across 60 tour dates, the concert trade publication found.

Pollstar data is pulled from box office reports, venue capacity estimates, historical Pollstar venue ticket sales data, and other undefined research, collected from November 17, 2022, to November 15, 2023.

Representatives for the publication did not immediately clarify if they adjusted past tour data to match 2023 inflation in naming Swift the first to break the billion-dollar threshold.

Pollstar also found that Swift brought in approximately $200 million in merch sales and her blockbuster film adaptation of the tour, “Taylor Swift: The Eras Tour,” has reportedly earned approximately $250 million in sales, making it the highest-grossing concert film of all time.

According to their estimates, Pollstar predicts a big 2024 for Swift as well. The magazine projects the Eras Tour will once again reach $1 billion within their eligibility window, meaning Swift is likely to bring in over $2 billion over the span of the tour.

Worldwide, Swift’s tour was followed by Beyoncé in second, Bruce Springsteen & The E Street Band in third, Coldplay in fourth, Harry Styles in fifth, and Morgan Wallen, Ed Sheeran, Pink, The Weeknd and Drake.

In North America, there was a similar top 10: Swift, followed by Beyoncé, Morgan Wallen, Drake, P!nk, Bruce Springsteen & The E Street Band, Ed Sheeran, George Strait, Karol G, and RBD.

Beyond the Swift of it all, 2023 was a landmark year for concert sales: worldwide, the top 100 tours of the year saw a 46% jump from last year, bringing in $9.17 billion compared to 2022’s $6.28 billion.

In North America, that number jumped from $4.77 billion last year to $6.63 billion.

Earlier this week, Swift was named Time Magazine’s Person of the Year. Last month, Apple Music named her its artist of the year; Spotify revealed she was 2023’s most-streamed artist globally, raking in more than 26.1 billion streams since Jan. 1 and beating Bad Bunny’s three-year record.
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Ratings agency Moody’s downgraded the outlook on Hong Kong’s credit rating to negative from stable on Wednesday, following a similar change for China the day before.

The city’s economy was buoyed by China’s post-pandemic reopening but recovery has slowed in the latter half of the year, with the government last month revising full-year growth estimates down to 3.2 percent.

Moody’s said the “principal driver” of Hong Kong’s negative rating outlook was the “tight linkage between the credit profiles” of the finance hub and China. 

“The change in Hong Kong’s rating outlook reflects Moody’s assessment of tight political, institutional, economic and financial linkages between Hong Kong and the mainland,” the agency said in a statement.

This is the first time Hong Kong has lost its “stable” rating outlook since January 2020.

The agency said China’s downside risks would translate to risks for Hong Kong’s own creditworthiness, adding that changes in “institutional and political linkages” were a key element of the city’s risks.

“Following signs of reduced autonomy of Hong Kong’s political and judiciary institutions, notably with the imposition of a National Security Law in 2020 and changes to Hong Kong’s electoral system, Moody’s expects further erosion of the (city’s) autonomy of political, institutional and economic decisions to continue incrementally,” it said.

“This ongoing process is currently reflected in Moody’s assessment of the quality of Hong Kong’s executive and legislative institutions.”

Beijing imposed a sweeping national security law in Hong Kong after the former British colony saw huge and at times violent democracy protests in 2019.

Authorities have since ousted opposition figures from the legislature and set up a “patriots-only” electoral system, which extends down to the local level. 

Moody’s also said the weakening trend growth in mainland China would affect Hong Kong’s economy, including “through more slowly expanding opportunities for Hong Kong as the key regional economic and financial hub.”

“In turn, weaker growth in Hong Kong could erode the government’s fiscal buffers, as support to the economy broadly leads to a rise in public spending,” it added.

AFP has contacted the Hong Kong government for comment.

The agency a day earlier downgraded its outlook for China’s credit rating to negative citing rising debt in the world’s second-largest economy and concerns over its battered property sector.

Beijing’s finance ministry said in response it was “disappointed with Moody’s decision” and that the agency’s concerns about growth prospects and fiscal sustainability were “unnecessary.”
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Ratings agency Moody’s cut its outlook on China’s government credit ratings to negative from stable on Tuesday, in the latest sign of mounting global concern over the impact of surging local government debt and a deepening property crisis on the world’s second-largest economy.

The downgrade reflects growing evidence that authorities will have to provide more financial support for debt-laden local governments and state firms, posing broad risks to China’s fiscal, economic and institutional strength, Moody’s said in a statement.

“The outlook change also reflects the increased risks related to structurally and persistently lower medium-term economic growth and the ongoing downsizing of the property sector,” Moody’s said.

China’s blue-chip stocks slumped to nearly five-year lows on Tuesday amid worries about the country’s growth, with talk of a possible cut by Moody’s denting sentiment during the session, while Hong Kong stocks extended losses. 

China’s major state-owned banks, which had been seen supporting the yuan currency all day, stepped up U.S. dollar selling very forcefully after the Moody’s statement, one source with knowledge of the matter said. The yuan was little changed by late afternoon.

The cost of insuring China’s sovereign debt against a default rose to its highest since mid-November.

“Now the markets are more concerned with the property crisis and weak growth, rather than the immediate sovereign debt risk,” said Ken Cheung, chief Asian FX strategist at Mizuho Bank in Hong Kong.

The move by Moody’s was the first change on its China view since it cut its rating by one notch to A1 in 2017, also citing expectations of slowing growth and rising debt.

While Moody’s affirmed China’s A1 long-term local and foreign-currency issuer ratings on Tuesday — saying the economy still has a high shock-absorption capacity — it said it expects the country’s annual GDP growth to slow to 4.0% in 2024 and 2025, and to average 3.8% from 2026 to 2030.

Moody’s outlook downgrade comes ahead of the annual agenda-setting Central Economic Work Conference, which is expected around mid-December, with government advisers calling for a steady growth target for 2024 and more stimulus.

Analysts say the A1 rating is high enough in investment-grade territory that a downgrade is unlikely to trigger forced selling by global funds. The other two major rating agencies, Fitch and Standard & Poor’s, rate China A+, which is equivalent to Moody’s. Both have a stable outlook.

China’s Finance Ministry said it was disappointed by Moody’s decision, adding that the economy will maintain its rebound and positive trend. It also said property and local government risks are controllable.

“Moody’s concerns about China’s economic growth prospects, fiscal sustainability and other aspects are unnecessary,” the ministry said. 

Struggling for traction

Most analysts believe China’s growth is on track to hit the government’s target of around 5% this year, but that compares with a COVID-weakened 2022 and activity is highly uneven.

The economy has struggled to mount a strong post-pandemic recovery as the deepening crisis in the housing market, local government debt concerns, slowing global growth and geopolitical tensions have dented momentum.

A flurry of policy support measures have proven only modestly beneficial, raising pressure on authorities to roll out more stimulus.

Analysts widely agree that China’s growth is downshifting from breakneck expansion in the past few decades. Many believe Beijing needs to transform its economic model from an over-reliance on debt-fueled investment to one driven more by consumer demand.

Last week, China’s central bank head Pan Gongsheng pledged to keep monetary policy accommodative to support the economy, but also urged structural reforms to reduce a reliance on infrastructure and property for growth. 

Deeper in debt

After years of over-investment, plummeting returns from land sales, and soaring costs to battle COVID, economists say debt-laden municipalities now represent a major risk to the economy.

Local government debt reached 92 trillion yuan ($12.6 trillion), or 76% of China’s economic output in 2022, up from 62.2% in 2019, according to the latest data from the International Monetary Fund (IMF).

In October, China unveiled a plan to issue 1 trillion yuan ($139.84 billion) in sovereign bonds by the end of the year to help kick-start activity, raising the 2023 budget deficit target to 3.8% of gross domestic product (GDP) from the original 3%.

The central bank has also implemented modest interest rate cuts and pumped more cash into the economy in recent months.

Nevertheless, foreign investors have been sour on China almost all year.

Capital outflows from China rose sharply to $75 billion in September, the biggest monthly figure since 2016, according to Goldman Sachs.

($1 = 7.1430 Chinese yuan renminbi) 
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Stocks slipped on Wall Street Monday ahead of some key reports this week on the job market that might provide more insight into the Federal Reserve’s thinking about interest rates.

The S&P 500 was off 0.9%. The index is coming off its best month in more than a year, and reached its highest level in more than a year on Friday.

The Dow Jones Industrial Average fell 150 points, or 0.4%, to 36,097 as of 11:20 a.m. Eastern. The Nasdaq composite fell 1.5%.

Treasury yields were higher, putting some pressure on stocks. The yield on the 10-year Treasury, which influences mortgage rates, rose to 4.29% from 4.21%. 

Technology companies were among the biggest weights on the market. Microsoft fell 2.6% and Apple fell 1.8%. 

Spotify surged 7% after announcing its third round of layoffs this year. Uber gained 5.6% after the ride-hailing service was named to join the S&P 500 index. 

Alaska Air Group slumped 15.6% after announcing it will buy Hawaiian Airlines in a $1.9 billion deal, a tie-up that would test the Biden administration as it fights consolidation in the airline sector. 

U.S. crude oil prices fell 0.3%. Oil prices have been slipping recently, helping ease pressure on inflation. 

Markets were mixed in Europe and Asia. 

Wall Street is coming off a solid week and a strong November on hopes that inflation is easing enough to allow the Federal Reserve to stop raising interest rates. Investors are also hoping that the economy remains strong enough to avoid a recession. 

Investors will get several key updates on the economy this week, including reports on the services sector and the jobs market. 

The Institute for Supply Management will release its November report on the services sector on Tuesday. The sector is a key component in the U.S. economy and accounts for the majority of the nation’s jobs. The report could provide more insight into consumer spending and the jobs market. 

Wall Street will get several reports this week that focus on the broader employment picture in the U.S. The government will release its October update on job openings on Tuesday and a weekly report on applications for unemployment benefits on Thursday. 

Investors will be closely watching the government’s monthly jobs report for November, which is on Friday. Analysts polled by FactSet expect U.S. employers to have added 175,000 jobs last month. They forecast that the unemployment rate remained steady at 3.9%. 

The labor market has remained strong in the U.S. even as the Fed has raised interest rates sharply in order to fight inflation by slowing the entire economy. Inflation has been falling since the middle of 2022. The central bank paused raising rates after its most recent increase in late July. 

Wall Street expects rates to remain steady into early 2024, when the Fed could begin cutting interest rates back from their highest level in two decades. The Fed’s next decision on rates will follow the close of their next two-day meeting on Dec. 13.
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