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Thailand’s recent pledge to finish a long-delayed high-speed rail line linking it to China through Laos within six years is reigniting doubts about the country’s commitment and whether the $12 billion megaproject will pay off.

Transport and Foreign Affairs ministries officials told reporters July 6 Thailand will complete the 609-kilometer line from the capital, Bangkok, to the Lao border at Nong Khai, now only 5% built, by 2028. Nong Khai is just across the Mekong River from the Lao capital of Vientiane, where a high-speed train to the Lao-China border started service in December.

With trains running at a maximum speed of 250 km/h, the new line will collapse the time the Bangkok-Nong Khai journey takes now on existing standard-gauge tracks.

The 2028 announcement came a day after Chinese Foreign Minister Wang Yi met with Thai Prime Minister Prayut Chan-ocha and Foreign Affairs Minister Don Pramudwinai in Bangkok. A Thai Foreign Affairs Ministry statement on Wang’s visit says the meeting included talks on a “Thailand-Laos-China Connectivity Development Corridor.”

The project is part of Beijing’s long-term plans to link China’s Yunnan province to the bustling ports of Singapore via high-speed trains cutting through Laos, Thailand and Malaysia in a key piece of its grand Belt and Road initiative.

Cautious commitment

When Thailand started planning its portion of the line with China over a decade ago, the goal was to have it done by about the same time as Laos finished its own 414-kilometer stretch, Ruth Banomyong, a professor of international trade, transport and logistics at Thailand’s Thammasat University, told VOA. But with that target long since abandoned, he said top government transport officials were still noncommittal on a new goal just last month at a seminar he attended, making the announcement on July 6 “a bit confusing.”

Ruth said the new target was feasible but may be more of a political statement than a “technical” one, made with an eye on national elections due next year and Prayut’s fractious coalition government looking increasingly unsteady.

“The prime minister is probably at his lowest in terms of various [opinion] polls that have been published, and he wants to stay in power, but he needs to have something to show for himself,” said Ruth. “So, they need to re-put this project in the public eye, saying that, oh yes, it is going to be done.”

He said growing frustration in Beijing with the pace of Thailand’s progress may have played a part in the announcement, too.

“The fact that it’s announced after a meeting with the Chinese foreign minister, Wang Yi, it does make it look like they’re feeling some pressure to be at least looking like they’re moving forward with this project,” said Greg Raymond, a lecturer at Australian National University studying China’s growing connections with mainland Southeast Asia.

“But when you look at the pattern of [Thailand’s] decision-making, the pattern of action … the degree of commitment has to be questioned,” he added.

Analysts say the line, once complete, will help plug some of Southeast Asia’s largest and most dynamic economies into China’s landlocked south, giving the underdeveloped region a much-needed boost.

As with much of the Belt and Road Initiative, Raymond said, it also builds on Beijing’s broader goal of forging a regional economy centered on China, and of wielding that position to bend the foreign policies of other countries to its will. He pointed to Thailand’s scrapping of plans years ago to host a NASA climate change monitoring program, which he said was probably because China would not like having something like that so close. At the same time, he added, linking southern China to some of mainland Southeast Asia’s main ports would ease the pressure on China’s vital sea trade routes in case of conflict.

“If there’s a conflict between China and the United States, I think one of the things that China’s vulnerable to is a blockade by the [U.S. Navy’s] 7th Fleet, particularly at the Malacca Strait, so I think there is that sort of strategic imperative,” Raymond said.

Cost and benefit

For Thailand, the new line could mean more exports to, and investment from, China.

Ruth, though, said it will take decades, not years, for the $12 billion project to pay for itself, and only if the government also invests in the additional freight and passenger services needed to bring out the line’s full potential. Done right, he added, the line could also spur new growth and development along its route through Thailand’s rural northeast.

But Ruth said the government has yet to share its forecasts for key factors such as passenger numbers or freight traffic, making a hard-nosed assessment of the project impossible.

“What we tend to see is that a lot of these forecasts are very, very optimistic, and that’s why you sometimes end up with having white elephants … nice infrastructure that is not utilized fully, so that’s really the risk,” he warned.

Bryan Tse, Southeast Asia analyst for the Economist Intelligence Unit, said the high-speed train line’s focus, for now, appears to be on passengers, not freight, dimming the odds that Thailand can make the $12 billion back in 10 or even 20 years. If the main goal were boosting freight traffic, he said China would probably have focused on upgrading the network of regular train tracks crisscrossing Southeast Asia already, which would be cheaper.

But the project need not necessarily pay for itself directly to pay off for Thailand in other ways, Tse added.

“If getting this railway done means that you get the good will of the Chinese government … then you may get a lot of things in return politically and economically, in terms of investment, for instance,” he said.

Still, the analysts say Thailand is likely to remain hesitant about the project; $12 billion is a lot, and the added strain the pandemic has put on the country’s economy will only make it harder to move forward on the line to Laos, not to mention any high-speed line that might eventually be built south of Bangkok to Malaysia.

Raymond said Thailand is also wary of any moves, the high-speed rail line included, that might draw China too close for comfort.

“They don’t want to be drawn in, really, to a Beijing-centered economy if they think it’s going to reduce their freedom of maneuver,” he said. “They’re always seeking to balance their relationships; they don’t want to become too dependent on any of them. This is the classic hedging behavior, but it’s very strong with Thailand.”

Now that Laos is done with its stretch of the line, the analysts agreed that China is likely to focus its attention on seeing that Thailand picks up the pace.

Whatever their reservations, Raymond said, their Thai partners “might eventually feel like they have to do it.”

 
…

Long lines are back at food banks around the U.S. as working Americans overwhelmed by inflation turn to handouts to help feed their families.

With gas prices soaring along with grocery costs, many people are seeking charitable food for the first time, and more are arriving on foot.

Inflation in the U.S. is at a 40-year high and gas prices have been surging since April 2020, with the average cost nationwide briefly hitting $5 a gallon in June. Rapidly rising rents and an end to federal COVID-19 relief have also taken a financial toll.

The food banks, which had started to see some relief as people returned to work after pandemic shutdowns, are struggling to meet the latest need even as federal programs provide less food to distribute, grocery store donations wane and cash gifts don’t go nearly as far.

Tomasina John was among hundreds of families lined up in several lanes of cars that went around the block one recent day outside St. Mary’s Food Bank in Phoenix. John said her family had never visited a food bank before because her husband had easily supported her and their four children with his construction work.

“But it’s really impossible to get by now without some help,” said John, who traveled with a neighbor to share gas costs as they idled under a scorching desert sun. “The prices are way too high.”

Jesus Pascual was also in the queue.

“It’s a real struggle,” said Pascual, a janitor who estimated he spends several hundred dollars a month on groceries for him, his wife and their five children aged 11 to 19.

The same scene is repeated across the nation, where food bank workers predict a rough summer keeping ahead of demand.

The surge in food prices comes after state governments ended COVID-19 disaster declarations that temporarily allowed increased benefits under SNAP, the federal food stamp program covering some 40 million Americans .

“It does not look like it’s going to get better overnight,” said Katie Fitzgerald, president and chief operating officer for the national food bank network Feeding America. “Demand is really making the supply challenges complex.”

Charitable food distribution has remained far above amounts given away before the coronavirus pandemic, even though demand tapered off somewhat late last year.

Feeding America officials say second quarter data won’t be ready until August, but they are hearing anecdotally from food banks nationwide that demand is soaring.

The Phoenix food bank’s main distribution center doled out food packages to 4,271 families during the third week in June, a 78% increase over the 2,396 families served during the same week last year, said St. Mary’s spokesman Jerry Brown.

More than 900 families line up at the distribution center every weekday for an emergency government food box stuffed with goods such as canned beans, peanut butter and rice, said Brown. St. Mary’s adds products purchased with cash donations, as well as food provided by local supermarkets like bread, carrots and pork chops for a combined package worth about $75.

Distribution by the Alameda County Community Food Bank in Northern California has ticked up since hitting a pandemic low at the beginning of this year, increasing from 890 households served on the third Friday in January to 1,410 households on the third Friday in June, said marketing director Michael Altfest.

At the Houston Food Bank, the largest food bank in the U.S. where food distribution levels earlier in the pandemic briefly peaked at a staggering 1 million pounds a day, an average of 610,000 pounds is now being given out daily.

That’s up from about 500,000 pounds a day before the pandemic, said spokeswoman Paula Murphy said.

Murphy said cash donations have not eased, but inflation ensures they don’t go as far.

Food bank executives said the sudden surge in demand caught them off guard.

“Last year, we had expected a decrease in demand for 2022 because the economy had been doing so well,” said Michael Flood, CEO for the Los Angeles Regional Food Bank. “This issue with inflation came on pretty suddenly.”

“A lot of these are people who are working and did OK during the pandemic and maybe even saw their wages go up,” said Flood. “But they have also seen food prices go up beyond their budgets.”

The Los Angeles bank gave away about 30 million pounds of food during the first three months of this year, slightly less than the previous quarter but still far more than the 22 million pounds given away during the first quarter of 2020.

Feeding America’s Fitzgerald is calling on USDA and Congress to find a way to restore hundreds of millions of dollars worth of commodities recently lost with the end of several temporary programs to provide food to people in need. USDA commodities, which generally can represent as much as 30% of the food the banks disperse, accounted for more than 40% of all food distributed in fiscal year 2021 by the Feeding America network.

“There is a critical need for the public sector to purchase more food now,” said Fitzgerald.

During the Trump administration, USDA bought several billions of dollars in pork, apples, dairy, potatoes and other products in a program that gave most of it to food banks. The “Food Purchase & Distribution Program” designed to help American farmers harmed by tariffs and other practices of U.S. trade partners has since ended. There was $1.2 billion authorized for the 2019 fiscal year and another $1.4 billion authorized for fiscal 2020.

Another temporary USDA “Farmers to Families” program that provided emergency relief provided more than 155 million food boxes for families in need across the U.S. during the height of the pandemic before ending May 31, 2021.

A USDA spokesperson noted the agency is using $400 million from the Build Back Better initiative to establish agreements with states, territories and tribal governments t o buy food from local, regional and underserved producers that can be given to food banks, schools and other feeding programs.

For now, there’s enough food, but there might not be in the future, said Michael G. Manning, president and CEO at Greater Baton Rouge Food Bank in Louisiana. He said high fuel costs also make it far more expensive to collect and distribute food.

The USDA’s Coronavirus Food Assistance Program, which included Farmers to Families, was “a boon” for the Alameda County Community Food Bank, providing 5 billion pounds of commodities over a single year, said spokesman Altfest.

“So losing that was a big hit,” he said.

Altfest said as many as 10% of the people now seeking food are first timers, and a growing number are showing up on foot rather than in cars to save gas.

“The food they get from us is helping them save already-stretched budgets for other expenses like gas, rent, diapers and baby formula,” he said.

Meanwhile, food purchases by the bank have jumped from a monthly average of $250,000 before the pandemic to as high as $1.5 million now because of food prices. Rocketing gasoline costs forced the bank to increase its fuel budget by 66%, Altfest said.

Supply chain issues are also a problem, requiring the food bank to become more aggressive with procurement.

“We used to reorder when our inventory dropped to three weeks’ worth, now we reorder up to six weeks out,” said Altfest.

He said the food bank has already ordered and paid for whole chickens, stuffing, cranberries and other holiday feast items it will distribute for Thanksgiving, the busiest time of the year.

At the Mexican American Opportunity Foundation in Montebello east of Los Angeles, workers say they are seeing many families along with older people like Diane Martinez, who lined up one recent morning on foot.

Some of the hundreds of mostly Spanish-speaking recipients had cars parked nearby. They carried cloth bags, cardboard boxes or shoved pushcarts to pick up their food packages from the distribution site the Los Angeles bank serves.

“The prices of food are so high and they’re going up higher every day,” said Martinez, who expressed gratitude for the bags of black beans, ground beef and other groceries. “I’m so glad that they’re able to help us.”
…

China’s economy contracted in the three months ending in June compared with the previous quarter after Shanghai and other cities shut down to fight coronavirus outbreaks, but the government said a “stable recovery” is under way after businesses reopened.

The world’s second-largest economy shrank by 2.6%, down from the January-March period’s already weak 1.4%, official data showed Friday. Compared with a year earlier, which can hide recent fluctuations, growth slid to 0.4% from the earlier quarter’s 4.8%.

Activity was “much weaker than expected,” Rajiv Biswas of S&P Global Market Intelligence said in a report.

Asian stock markets were mixed following the news. Hong Kong was down 0.8% at mid-morning while Shanghai, Tokyo and Seoul gained.

Anti-virus controls shut down Shanghai, site of the world’s busiest port, and other industrial centers starting in late March, fueling concerns global trade and manufacturing might be disrupted. Millions of families were confined to their homes, depressing consumer spending.

“The resurgence of the pandemic was effectively contained,” the statistics bureau said in a statement. “The national economy registered a stable recovery.”

Data on factory output, consumer spending and other activity suggest overall growth was even weaker than the headline figure, Julian Evans-Pritchard of Capital Economics said in a report.

“Even accounting for June’s strength, the data are consistent with negative y/y (year-on-year) growth last quarter,” Evans-Pritchard wrote. “This isn’t the first time that the official GDP figures have seemingly understated the extent of an economic downturn.”

The slump hurts China’s trading partners by depressing demand for imported oil, food and consumer goods.

China’s infection numbers are relatively low, but Beijing responded to its biggest outbreak since the 2020 start of the pandemic with a “zero-COVID” policy that aims to isolate every person who tests positive. The ruling party has switched to quarantining individual buildings or neighborhoods with infections but those restrictions covered areas with millions of people.

Repeated shutdowns and uncertainty about business conditions have devastated entrepreneurs who generate China’s new wealth and jobs. Small retailers and restaurants have closed. Others say they are struggling to stay afloat.

Cheng Hong, a mother of one who owns the Qifei Travel Agency in Shijiazhuang, southwest of Beijing, said business is down more than 80%.

“I almost couldn’t hold on, but I am lucky to see the start of a recovery,” said Cheng.

The ruling Communist Party is promising tax refunds, free rent and other aid to get companies back on their feet, but most forecasters expect China to fail to hit the ruling party’s 5.5% growth target this year.

Other major economies report growth compared with the previous quarter, which makes their levels look lower than China. Beijing for decades reported only growth compared with the previous year, which hid short-term fluctuations, but has started to release quarter-on-quarter figures.

Forecasters say Beijing is using cautious, targeted stimulus instead of across-the-board spending, a strategy that will take longer to show results. Chinese leaders worry too much spending might push up politically sensitive housing costs or corporate debt they worry is dangerously high.

Growth for the first half of the year was 2.5% over a year earlier, one of the weakest levels in the past three decades.

Retails sales were off 0.7% from a year earlier in the first half after plunging 11% in April.

Song Haixia, a shopkeeper who sells food and cigarettes in the northern city of Taiyuan, said sales have fallen by up to 70% to as little as 300 yuan ($45) a day. She said migrant workers who were among her customers were driven away by anti-virus measures.

“People are just not making money,” said Song, 45, the mother of two children. “I am not very optimistic about future prospects.”

Investment in factories, real estate and other fixed assets climbed 6.1%, reflecting the ruling party’s effort to stimulate growth by boosting spending on public works construction and ordering state-owned companies to spend more.

China also faces headwinds from weak global demand. Exports jumped 17.9% in June over a year earlier, but forecasters say that reflected ports clearing out cargo after anti-virus curbs lifted. They say growth is likely to fall back.

Slowing growth in the United States and Europe “could weaken demand for China’s manufacturing exports,” said Biswas.

China rebounded quickly from the pandemic in 2020, but activity weakened as the government tightened controls on use of debt by its vast real estate industry, which supports millions of jobs. Economic growth slid due to a slump in construction and housing sales.

Investors are waiting to see what happens to one of China’s biggest developers, Evergrande Group. It has struggled since last year to avoid defaulting on $310 billion owed to banks and bondholders.
…

The United States is pressing to implement a plan meant to force Russia to sell oil at artificially low prices on the global market, in order to deprive the Kremlin of funding for its war in Ukraine.

Speaking at a news conference in Bali, Indonesia, before the start of a meeting of the finance ministers of the G-20 large economies, Yellen restated the Biden administration’s condemnation of Russia’s invasion of Ukraine. She said that cutting its profits from crude oil sales “would deny [Russian President Vladimir] Putin the revenue his war machine needs.” 

She also argued that capping the price of Russian oil would further one of the administration’s major domestic aims: reducing inflation. 

“A price cap on Russian oil is one of our most powerful tools to address the pain that Americans and families across the world are feeling at the gas pump and the grocery store right now,” she said.  

However, the price cap plan relies on a complicated mechanism that has never been tried before, and some experts in global energy markets have said they believe it will not work. 

Cap tied to sanctions 

The plan that Yellen is proposing is tied to a new set of financial sanctions that the European Union, United Kingdom and the U.S. are preparing to impose on Russia.  

In order to bring its crude oil to market, Russia relies on various transactions with international lenders, shipping firms and insurance companies. The current plan is to cut Russia off from those services beginning late this year. In theory, this would make it practically impossible for it to export any oil at all in the near term, and much more difficult in the future. 

If fully implemented and successful, the results of the sanctions could be bad for everyone. Russia would lose its oil revenues, and the rest of the world would experience potentially devastating price increases because of the supply shock created by abruptly removing Russian crude from the market. 

What Yellen and the Biden administration are proposing is an “exception” to the ban. If Russia agrees to sell its oil at a price that is under a certain cap — the level of which is to be determined by the countries imposing the sanctions — it will be allowed access to the services it needs to bring the oil to market. 

This would avoid a global supply shock while simultaneously reducing Russia’s oil revenues. 

Experts dubious 

People deeply familiar with global oil markets say that they don’t believe the price cap plan will work. 

Julian Lee, an oil strategist for Bloomberg First Word, wrote in an analysis published by The Washington Post that the scheme “stands very little chance of actually working.” 

He wrote, “[Putin’s] calculation will almost certainly be that cutting off Russian oil exports will do more damage to the economies of buyers in Europe than it will to Russia. So it’s hopeless to expect him to acquiesce to a price cap imposed by the West.” 

When VOA asked Edward C. Chow, a nonresident senior associate with the Center for Strategic and International Studies, if he believed the price cap plan was feasible, he provided a one-word answer. 

“No,” he said.  

Many workarounds 

Chow, who has spent 45 years working in the international oil and gas business, including 20 years with oil giant Chevron, said, “I’ve canvassed every single energy expert I know. And not one person thinks it can work.” 

He listed a series of potential workarounds, including alternative insurance arrangements, contracts that shift the risk of delivery to the seller rather than the buyer and the extensive use of Russia’s domestic tanker fleet — one of the world’s largest — that Moscow could use to get around the sanctions and avoid a price cap. 

Chow, a former professor at Georgetown University, said that reading about the proposed price caps reminded him of teaching a graduate seminar on energy security. 

“It struck me, when I first heard it, that it’s the kind of bright idea a group of grad students would come up with,” he said. “And professors love that, because it’s a great teaching moment to explain why this wouldn’t work as a practical matter, if you understand markets.” 

Pressing forward 

Doubts aside, the Biden administration appears to be intent on pressing forward.  

The Treasury secretary said Thursday that the level at which the price cap would be set has not yet been determined, but that “we would want a number that clearly gives Russia incentive to continue to produce — that would make production profitable for Russia.” 

If Russia refused to go along, she noted, it would suffer in the short term, as it failed to realize any revenue from oil that was ready for market. And it would also face long-term costs related to shutting down production and losing market share as oil buyers began to look elsewhere. 

“I think from Russia’s point of view, a price cap or price exception to a policy that would otherwise be yet harsher on Russia is something that they should be willing to go along with,” Yellen said. 

China and India 

In the months since Russia invaded Ukraine and since Western countries became more reluctant to purchase Russian oil, China and India have stepped in to fill the gap, buying up to 1 million barrels per day, and accounting for as much as 20% of Russia’s exports. 

Whether demand will remain high is an open question, especially in China, where there are signs the economy is slowing significantly. Also unclear is whether either or both of the two countries would abide by a cap on Russian oil prices. 

Assuming that a price cap could be implemented, it would be a complex calculation. If Russia refused to sell oil below the rate at which the cap is set, China and India might continue purchasing its oil anyway but would have the leverage to demand a significant discount. At the same time, the removal of Russian oil from the broader market would drive up the price of the commodity around the world, including for China and India, which also buy oil from other producers. 

If Russia does agree to sell oil under the price cap, China and India would have no incentive to pay anything above the capped rate. 

“I’m hopeful that China and India will see that observing a price cap would serve their own interests in lowering the price that they pay for Russian oil,” Yellen said.
…

The African Development Bank (AfDB) agreed this week to help Zimbabwe clear its $13.5 billion debt during a visit by the Abidjan-based lender’s president. The AfDB has also started releasing loans from a $1.5 billion fund to help Africa avert a looming food crisis fueled by Russia’s invasion of Ukraine. Zimbabwe is one of 38 countries set to benefit from the bank’s fund, which is known as the African Emergency Food Production Facility.

African Development Bank, or AfDB, President Akinwumi Adesina said during his visit that Zimbabwe President Emmerson Mnangagwa had sought his assistance for Zimbabwe to clear its external debt, which started accumulating after the late Robert Mugabe’s administration defaulted.

“I believe that Zimbabweans, ordinary Zimbabweans, have suffered long enough. You have a country, a beautiful country in which you now have 40 percent of the population that is living in extreme poverty. And they do not have the resources to get out of that. So, we have to create a new hope, a new pathway so that tomorrow can be a better day than yesterday. Zimbabwe has a significant amount of debt areas that it needs to clear. But you cannot run up the hill if you are carrying a backpack of sand. So, Zimbabwe cannot run up a hill for its economic recovery and growth and prosperity if it’s carrying a backpack of sand,” he said.

AfDB and Zimbabwe are looking for ways Harare can get access to international financial money while the debt is being settled over a long period.

Mthuli Ncube is Zimbabwe’s Finance Minister.

“What we have done so far is to begin token payments for the African Development Bank, the World Bank, the European Investment Bank, and also all the 17 Paris Club partners. But what needs to be done is to fully implement the full roadmap for the arrears clearance. But for us to work well, we need a champion, and I am pleased to say that Dr. Adesina has agreed to be the champion, to cajole all partners around the world for us to be able to implement our arrears strategy,” he said.

Gift Mugano, an economics professor at Durban University of Technology, said the post-Mugabe government is still “reckless and careless,” and so the AfDB will not be able to satisfy the world on a plan to clear Zimbabwe’s arrears.

“In four years, our debt has doubled. Doubled because we were borrowing money recklessly, doubling because we created a new debt through white farmer compensation deed. There is also a component of debt, which we do not know where it is coming from because minister of finance is not going to parliament at each and every time he assumes new debt. If the government wants to clear the debt, it must stop increasing the debt,” said Mugano.

During his visit to Zimbabwe, AfDB President Adesina said his organization was filling a food security gap of 30 million metric tons caused by Russia’s invasion of Ukraine. That will come through the African Emergency Food Production Facility, a fund worth $1.5 billion.

“It will support Africa, produce 38 million metric tons of food with a value of $12 billion. Wheat, corn, maize, that will include 6 million metric tons of rice, 2.5 million metric tons of soyabeans. So, we are very sensitive to this. Africa has no business of going around with bowls in hand to beg for food. Africa has a business and must be in the business of putting seed in the ground and producing its own food and making sure that it can unlock tremendous agriculture potential that it has, but we can’t eat potential. We have to unlock the potential of agriculture,” he said.

Africa, Adesina said, imports mainly wheat and corn from Ukraine and Russia, as well as 2 million metric tons of fertilizers.
…

Japan’s Panasonic Corp. selected Kansas as the location for a multibillion-dollar mega-factory to produce electric vehicle batteries for Tesla and other carmakers, Governor Laura Kelly announced Wednesday.

The decision comes five months after the Democratic governor and Republican-controlled Legislature rushed to approve a taxpayer-funded incentive package of as much as $1 billion, the state’s largest ever, to attract the company and the promised “thousands of jobs,” even though most of them didn’t know what company was in play. Kelly said Wednesday that the actual incentives will total $829 million over 10 years.

The plant will be in De Soto, Kansas, a town with about 6,000 people and 48 kilometers southwest of Kansas City, Missouri.

“People across the country are looking at Kansas as a leader in economic development,” Kelly told a gathering of about 250 state officials and business leaders in downtown Topeka, the state capital, on Wednesday.

Japanese broadcaster NHK reported this year that the company was looking to build the factory in Kansas or Oklahoma, close to Texas, where Tesla is building an electric-vehicle plant. The two companies jointly operate a battery plant in Nevada.

Kelly’s administration said the facility it was pursuing would be the largest economic development project in Kansas history. They said the company would employ 4,000 people and that other businesses supplying or supporting it would add several thousand more jobs. They said the company would pay an average of $50,000, which would far exceed Kansas’ median income for individuals of less than $32,000.

Kelly pushed for the permission to offer tax credits, payroll subsidies and training funds to lure what her administration said was a $4 billion project that at least one other state was also pursuing.

The measure requires the state to cut its corporate tax rates by half a percentage point for every big deal closed so that all businesses benefit. That would save companies roughly $100 million a year and drop the state’s top rate to 6% from 7% if two deals close.

Backers of the measure argued that Kansas has lost out on other large projects because it couldn’t offer generous enough incentives.

Oklahoma’s Republican-controlled Legislature approved an incentive package this year to offer rebates of up to nearly $700 million in state funds if Panasonic reached specific benchmarks, including at least a $4.5 billion capital expenditure and the creation of at least 4,000 jobs during the project’s first four years. State officials say that money could be returned to the general fund or used to lure another major project.

Ohio recently offered Intel Corp. incentives worth roughly $2 billion to secure a new $20 billion chipmaking factory. Michigan lawmakers in December approved $1 billion in incentives, two-thirds of it for General Motors for plants to assemble batteries for electric vehicles.

Electric vehicle maker Canoo has announced plans to open a factory in northeastern Oklahoma next year that is expected to create 2,000 jobs.

But Wisconsin scaled back incentives for electronics giant Foxconn. It was supposed to invest $10 billion there and create 13,000 jobs but the deal now is for about 1,450 jobs with an investment of $672 million by 2026. 
…

With thousands of sanctions already imposed on Russia to flatten its economy, the U.S. and its allies are working on new measures to starve the Russian war machine while also stopping the price of oil and gasoline from soaring to levels that could crush the global economy.

The Kremlin’s main pillar of financial revenue — oil — has kept the Russian economy afloat despite export bans, sanctions and the freezing of central bank assets. America’s European allies plan to follow the Biden administration and take steps to stop their use of Russian oil by the end of this year, a move that some economists say could cause the supply of oil worldwide to drop and push prices as high as $200 a barrel.

Washington and its allies want to form a buyers’ cartel to force Russia to accept below-market prices for oil. Group of Seven leaders have tentatively agreed to back a cap on the price of Russian oil. Simply speaking, participating countries would agree to purchase the oil at lower-than-market price.

Russia has given no sign whether it might go along with this. The Kremlin also has the option of retaliating by taking its oil off the market, which would cause more turmoil.

High energy costs are straining economies and threatening fissures among the countries opposing Russian President Vladimir Putin for the invasion of Ukraine in February. President Joe Biden has seen his public approval slip to levels that hurt Democrats’ chances in the midterm elections, while leaders in the United Kingdom, Germany and Italy are coping with the economic devastation caused by trying to move away from Russian natural gas and petroleum.

The idea behind the cap is to lower gas prices for consumers and help bring the war in Ukraine to a halt. Treasury Secretary Janet Yellen is currently touring Indo-Pacific countries to lobby for the proposal. In Japan on Tuesday, Yellen and Japanese Finance Minister Suzuki Shunichi said in a joint statement that the countries have agreed to explore “the feasibility of price caps where appropriate.”

However, China and India, two countries that have maintained business relationships with Russia during the war, will need to get on board. The administration is confident China and India, already buying from Russia at discounted prices, can be enticed to embrace the plan for price caps.

“We think that ultimately countries around the world that are currently purchasing Russian oil will be very interested in paying as little as possible for that Russian oil,” Treasury Deputy Secretary Wally Adeyemo told The Associated Press.

The Russian price cap plan has support among some leading economic thinkers. Harvard economist Jason Furman tweeted that if the plan works, it would be a “win-win: maximizing damage to the Russian war machine while minimizing damage to the rest of the world.” And David Wessel at the Brookings Institution said an “unpleasant alternative” is not attempting the price cap plan.

If a price cap is not implemented, oil prices will almost certainly spike because of a European Union decision to ban nearly all oil from Russia. The EU also plans to ban insuring and financing the maritime transport of Russian oil to third parties by the end of the year.

Without a price cap mechanism to reduce some Russian revenues, “there would be a greater risk that some Russian supply comes off the market. That could lead to higher prices, which would increase prices for Americans,” Adeyemo said.

A June Barclay’s report warns that with the EU oil embargo and other restrictions in place, Russian oil could rise to $150 per barrel or even $200 per barrel if most of its sea-borne exports are disrupted.

Brent crude on Tuesday was trading just under $100 per barrel.

James Hamilton, an economist at the University of California, San Diego, said garnering the participation of China and India will be important to enforcing any price cap plan.

“It’s an international diplomatic challenge on how you get people to agree. It’s one thing if you get the U.S. to stop buying oil, but if India and China continue to buy” at elevated prices, “there’s no impact on Russian revenues,” Hamilton told the AP.

“The less revenue Russia gets from selling oil, the less money they have to send these bombs on Ukraine,” he said.

One possibility is that Russia could retaliate and take its oil off the market completely.

In that case, “the main question is will countries have enough time to find alternatives” to prevent massive price increases, said Christiane Baumeister, an economist at the University of Notre Dame who studies the dynamics of energy markets.

With five months until the end of the year, when EU bans begin to take effect, a Russian price cap plan would likely need to be in place and operating effectively to avoid further spikes in gas prices that have frustrated U.S. drivers. Biden has warned that high gas prices this summer were the cost of stopping Putin, but prices could climb to new records and lead to economic and political pain for the president.

Without the price cap, “if the EU import ban goes into effect together with the insurance ban,” Baumeister said, the impacts “will be passed onto consumers through gasoline prices.”
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U.S. consumer prices are still surging, up 9.1% in June compared to a year ago, the government reported Wednesday, the fastest increase in four decades.

The Bureau of Labor Statistics said prices were up 1.3% in June compared to May. That figure is also considered to be a big jump, following increases in previous months that are squeezing the household budgets of millions of American families, which include food, gasoline and housing.

The largest increase from May to June was the 7.5% increase in the energy index, which contributed nearly half of the overall increase in inflation. The energy index, which includes prices for fuel, oil, gasoline and electricity, is up 41.6% for the year, the largest 12-month increase since April 1980.

The cost of gasoline was up 11.2% in June, partly reflecting the turmoil in world oil prices brought on by Russia’s invasion of Ukraine, now in its fifth month. Prices at service station pumps, however, have been declining since the time frame of the latest inflation report.

“While today’s headline inflation reading is unacceptably high, it is also out-of-date,” U.S. President Joe Biden said in a statement. “Today’s data does not reflect the full impact of nearly 30 days of decreases in gas prices, that have reduced the price at the pump by about 40 cents since mid-June.

Inflation is our most pressing economic challenge,” he said. “It is hitting almost every country in the world. It is little comfort to Americans to know that inflation is also high in Europe, and higher in many countries there than in America. But it is a reminder that all major economies are battling this COVID-related challenge, made worse by [Russian President Vladimir] Putin’s unconscionable aggression” in his Ukraine invasion.

Aside from the cost of gasoline, most American families are most concerned about increasing food costs, up 1% in June over May and 10.4% compared to a year ago, which is the largest annual increase since February 1981. Apartment rents were eight-tenths of a percent higher in June compared to the month before.

Officials at the Federal Reserve and the White House have expressed ongoing concern about the rapid increase in consumer prices. Polls show it is the single biggest economic concern for American voters four months ahead of a nationwide congressional election, even as U.S. employers are still adding hundreds of thousands of new jobs to the economy each month.

Approval ratings for Democratic President Biden’s performance in office have plummeted, to a large degree over inflation concerns, leading to widespread predictions that Republicans will win control of the House of Representatives and possibly the Senate.

Policymakers at the Fed, the country’s central bank, have embarked on stiff hikes of their benchmark interest rate on the theory that action will curb inflation by increasing borrowing rates for consumers on mortgages, car loans and credit purchases.

That in turn could cut consumer demand and cool off the economy. But the Fed is hoping to impose the higher interest rates without sending the U.S. economy, the world’s largest, into a recession.
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Industry experts say post-pandemic trends are still driving the U.S. real estate market. Home prices are up nearly 30% compared with two years ago, according to Zillow, a U.S.-based real estate marketplace. Maxim Moskalkov has the latest. Camera – Andrey Degtyarev.
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Cameroon President Paul Biya says the government will increase funding to grow more wheat after protests over wheat shortages and price spikes sparked by Russia’s invasion of Ukraine. Before Russia’s Black Sea blockade, Cameroon imported 60 percent of its wheat from Ukraine. The cut-off has led to a nearly 50 percent increase in the price of bread. 

Cameroon government says President Paul Biya on Monday ordered an immediate disbursement of over $15 million to grow wheat in the central African state.

Cameroon’s agriculture minister, Gabriel Mbairobe, says Biya responded to pleas from civilians that the cost of living is becoming very high, and many Cameroonians are finding it very difficult to put food on the table.

Mbairobe says Russia’s war in Ukraine has completely disrupted supply chains of consumer goods, especially wheat, which is the main staple food in Cameroon. He says investing in wheat production is a wise decision because each Cameroonian consumes 33 kilograms of wheat each year which is far more than 23 kilograms of rice each Cameroonian eats annually. He says wheat can be grown in several places in Cameroon.

The government says Cameroon produces less than one-fourth of the 1.6 million tons of wheat it needs each year. Last year, the government imported more than 850,000 tons from Russia and Ukraine. Now, according to the Cameroon Importers Union, up to 25,000 tons have been imported since January 2022.

Mbairobe says while the nation waits for its own newly planted wheat to be harvested before the end of the year, local substitutes like sweet potato, cassava and yams should replace the wheat Cameroon imports from Russia and Ukraine.

Cameroon says while baking bread, backers should replace imported wheat with local substitutes such as cassava, yams and potato.

Biya’s instructions for more than $15 million to be invested to grow more wheat comes after several weeks of nationwide protest against cereal shortages. The shortage of wheat has led to a close to 50 percent increase in the price of bread.

Delor Magellan Kamseu Kamgaing, the president of Cameroon’s Consumers League,  says his league organized the protests to force the government to take immediate actions that will reduce growing hunger and anger among civilians.

Kamgaing says after COVID-19, Russia’s war in Ukraine is leading to severe food shortages and unprecedented hikes in the prices of imported staple foods like cereals. He says people are hungry and unable to afford bread which is consumed by a majority of households in Cameroon. Kamgaing says the government should dialogue with its citizens and take measures that will stop a looming famine.

Kamgaing said the government should provide fertilizers and subsidies to local farmers to increase plantain, rice, yam and cassava production.

Kamgaing said the war in Ukraine though causing sufferings, should provide an opportunity for Cameroon to invest in its local industries and stop over dependency on imports.

The government says the money ordered by Biya will either be used in buying fertilizers or paid out as subsidies to wheat farmers. Some of the money will be used to purchase tractors.

The U.N. reports that 1.7 billion people in 107 economies including 41 African countries are exposed to either rising food prices, rising energy prices or tightening financial conditions as a result of Russia’s war in Ukraine.
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The average U.S. price of regular-grade gasoline plunged 19 cents over the past two weeks to $4.86 per gallon.

Industry analyst Trilby Lundberg of the Lundberg Survey said Sunday that the continued decline comes as crude oil costs also fall.

“Assuming oil prices do not shoot up from here, motorists may see prices drop another 10-20 cents as the oil price cuts continue making their way to street level,” Lundberg said in a statement.

The average price at the pump is down 24 cents over the past month, but it is $1.66 higher than it was one year ago.

Nationwide, the highest average price for regular-grade gas was in the San Francisco Bay Area at $6.14 per gallon. The lowest average was in the city of Baton Rouge, Louisiana, at $4.19 per gallon.

According to the survey, the average price of diesel dropped 13 cents since June 24 to $5.76 a gallon.
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Sri Lanka’s prime minister said late last month that the island nation’s debt-laden economy had “collapsed” as it runs out of money to pay for food and fuel. Short of cash to pay for imports of such necessities and already defaulting on its debt, it is seeking help from neighboring India and China and from the International Monetary Fund.

Prime Minister Ranil Wickremesinghe, who took office in May, was emphasizing the monumental task he faced in turning around an economy he said was heading for “rock bottom.” On Saturday both he and President Gotabaya Rajapaksa agreed to resign amid mounting pressure from protesters who stormed both their residences and set fire to one of them.

Sri Lankans are skipping meals as they endure shortages and lining up for hours to try to buy scarce fuel. It’s a harsh reality for a country whose economy had been growing quickly, with a growing and comfortable middle class, until the latest crisis deepened.

How serious is this crisis?

The government owes $51 billion and is unable to make interest payments on its loans, let alone put a dent in the amount borrowed. Tourism, an important engine of economic growth, has sputtered because of the pandemic and concerns about safety after terror attacks in 2019. And its currency has collapsed by 80%, making imports more expensive and worsening inflation that is already out of control, with food costs rising 57%, according to official data.

The result is a country hurtling towards bankruptcy, with hardly any money to import gasoline, milk, cooking gas and toilet paper.

Political corruption is also a problem; not only did it play a role in the country squandering its wealth, but it also complicates any financial rescue for Sri Lanka.

Anit Mukherjee, a policy fellow and economist at the Center for Global Development in Washington, said any assistance from the IMF or World Bank should come with strict conditions to make sure the aid isn’t mismanaged.

Still, Mukherjee noted that Sri Lanka sits in one of the world’s busiest shipping lanes, so letting a country of such strategic significance collapse is not an option.

How is it affecting real people?

Tropical Sri Lanka normally is not lacking for food, but people are going hungry. The U.N. World Food Program says nearly nine in 10 families are skipping meals or otherwise skimping to stretch out their food, while 3 million are receiving emergency humanitarian aid.

Doctors have resorted to social media to try to get critical supplies of equipment and medicine. Growing numbers of Sri Lankans are seeking passports to go overseas in search of work. Government workers have been given an extra day off for three months to allow them time to grow their own food.

In short, people are suffering and desperate for things to improve.

Why is the economy in such dire straits?

Economists say the crisis stems from domestic factors such as years of mismanagement and corruption.

Much of the public’s ire has focused on President Rajapaksa and his brother, former Prime Minister Mahinda Rajapaksa. The latter resigned in May after weeks of anti-government protests that eventually turned violent.

Conditions have been deteriorating for the past several years. In 2019, Easter suicide bombings at churches and hotels killed more than 260 people. That devastated tourism, a key source of foreign exchange.

The government needed to boost its revenues as foreign debt for big infrastructure projects soared, but instead Rajapaksa pushed through the largest tax cuts in Sri Lankan history. The tax cuts were recently reversed, but only after creditors downgraded Sri Lanka’s ratings, blocking it from borrowing more money as its foreign reserves sank. Then tourism flatlined again during the pandemic.

In April 2021, Rajapaksa suddenly banned imports of chemical fertilizers. The push for organic farming caught farmers by surprise and decimated staple rice crops, driving prices higher. To save on foreign exchange, imports of other items deemed to be luxuries were also banned. Meanwhile, the Ukraine war has pushed prices of food and oil higher. Inflation was near 40% and food prices were up nearly 60% in May.

Why did the prime minister say the economy has collapsed?

The stark declaration in June by Wickremesinghe, who is in his sixth term as prime minister, threatened to undermine any confidence in the state of the economy and didn’t reflect any specific new development. The prime minister appeared to be underscoring the challenges facing his government as it seeks help from the IMF and confronts criticism over the lack of improvement since he took office weeks earlier. The comment might have been intended to try to buy more time and support as he tries to get the economy back on track.

The Finance Ministry said Sri Lanka had only $25 million in usable foreign reserves. That has left it without the wherewithal to pay for imports, let alone repay billions in debt.

Meanwhile the Sri Lankan rupee has weakened in value to about 360 to the U.S. dollar.

That makes the costs of imports even more prohibitive. Sri Lanka has suspended repayment of about $7 billion in foreign loans due this year out of $25 billion to be repaid by 2026.

What is the government doing about the crisis?

So far Sri Lanka has been muddling through, mainly supported by $4 billion in credit lines from India. An Indian delegation came to the capital, Colombo, in June for talks on more assistance, but Wickremesinghe warned against expecting India to keep Sri Lanka afloat for long.

“Sri Lanka pins last hopes on IMF,” read a June headline in the Colombo Times. The government is in negotiations with the IMF on a bailout plan, and Wickremesinghe has said he expected to have a preliminary agreement later this summer.

Sri Lanka has also sought more help from China. Other governments like the U.S., Japan and Australia have provided a few hundred million dollars in support.

Earlier in June, the United Nations launched a worldwide public appeal for assistance. So far, projected funding barely scratches the surface of the $6 billion the country needs to stay afloat over the next six months.

To counter Sri Lanka’s fuel shortage, Wickremesinghe told The Associated Press in a recent interview that he would consider buying more steeply discounted oil from Russia.
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While inflation remains high and economic forecasters are warning of a possible recession, the U.S. Bureau of Labor Statistics Friday reported job growth in the United States remains strong, with the economy adding 372,000 jobs in June and the unemployment rate remaining at 3.6% for the fourth month in a row.

In its report, the bureau said the job numbers are comparable to where they were in February 2020, just before the COVID-19 pandemic hit. The report shows the most notable job growth in June occurred in the professional and business services, leisure and hospitality, and health care sectors.

“Today, we learned that our private sector has recovered all of the jobs lost during the pandemic and added jobs on top of that. This has been the fastest and strongest jobs recovery in American history,” President Joe Biden said in a statement.

The bureau reports manufacturing employment increased by 29,000 in June and has returned to its February 2020 level.

“The historic strength of our job market is one reason our economy is uniquely well positioned to tackle a range of global economic challenges – from global inflation to the economic fallout from Putin’s war,” said Biden. “No country is better positioned than America to bring down inflation, without giving up all of the economic gains we have made over the last 18 months.”

The continued strong job growth may ease fears of a recession. Analysts say the U.S. Federal Reserve may see it as an inflation indicator and prompt another rise in interest rates. Last month, the central bank raised interest rates by three-quarters of 1% in the hope of bringing down the highest inflation rate seen in nearly 40 years.

There is fear that further interest rate hikes – designed to bring down prices by cooling demand – could spark a recession.  

The Washington Post reports economists and policymakers are hoping U.S. jobs growth — which has been hovering around 400,000 new positions per month for much of the past year — will slow to a sustainable pace that could help moderate inflation, without a significant rise in unemployment.

Some information for this report was provided by the Associated Press and Reuters. 
…

A U.N. study released Thursday shows the first three months of the war in Ukraine has driven up the global cost of fuel and food, creating record inflation that has helped drive 71 million people into poverty.

Speaking during a virtual news conference in Geneva, U.N. Development Program Administrator Achim Steiner said the analysis of 159 developing countries indicated that price spikes in key commodities were already having “immediate and devastating impacts on the world’s poorest households.”

The study shows that the economic shock of Russia’s invasion of Ukraine came after 18 months of COVID-19 pandemic lockdowns, which had a slower but cumulative and strong negative impact on world economies. He said the pandemic had already pushed about 125 million people into poverty.

At the same news conference, UNDP Senior Economist George Gray Molina said as a result many countries have faced 36 months of “shock after shock after shock.”

Molina said the impact of the war has been “drastically faster,” affecting global food and energy supplies and sparking the inflationary surge.

Steiner said failure by governments to take decisive and “radical” action risks sparking widespread unrest, as the patience and ability of people to cope with the situation runs out.

He pointed to the situation in Sri Lanka, where the government is in turmoil and the nation is facing food and fuel shortages and has defaulted on its national debt for the first time in its history.

The development program study offers some financial policy recommendations to address the crisis. Steiner suggested, for example, that it might be possible for some countries to tackle runaway inflation without resorting to the “blunt instrument” of raising interest rates.

He said multilateral investment institutions, such as the International Monetary Fund (IMF) could provide more capital to allow nations to address the crisis through targeted lending and other crisis-response measures.

Some information for this report was provided by the Associated Press and Reuters.
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The head of the FBI and the leader of Britain’s domestic intelligence agency raised fresh alarms Wednesday about the Chinese government, warning business leaders that Beijing is determined to steal their technology for competitive gain.

FBI Director Christopher Wray reaffirmed longstanding concerns in denouncing economic espionage and hacking operations by China, as well as the Chinese government’s efforts to stifle dissent abroad. But his speech was notable because it took place at MI5’s London headquarters and alongside the agency’s director general, Ken McCallum, in an intended show of Western solidarity.

The remarks also showed the extent to which Wray and the FBI regard the Chinese government as not only a law enforcement and intelligence challenge but are also attuned to the implications of Beijing’s foreign policy actions.

“We consistently see that it’s the Chinese government that poses the biggest long-term threat to our economic and national security, and by ‘our,’ I mean both of our nations, along with our allies in Europe and elsewhere,” Wray said.

McCallum said the Chinese government and its “covert pressure across the globe” amounts to “the most game-changing challenge we face.”

“This might feel abstract, but it’s real and it’s pressing,” he said. “We need to talk about it. We need to act.”

A spokesman for the Chinese embassy in Washington, Liu Pengyu, rejected the allegations from the Western leaders, saying in an emailed statement to The Associated Press that China “firmly opposes and combats all forms of cyber attacks” and called the accusations groundless.

“We will never encourage, support or condone cyber attacks,” the statement said.

In a nod to current tensions between China and Taiwan, Wray also said during his speech that any forcible takeover of Taipei by Beijing would “would represent one of the most horrific business disruptions the world has ever seen.”

Last week, the U.S. government’s director of national intelligence, Avril Haines, said at an event in Washington that there were no indications Chinese President Xi Jinping was poised to take Taiwan by military force. But she that did say Xi appeared to be “pursuing the potential” for such an action as part of a broader Chinese government goal of reunification of Taiwan.

After the appearance with his British counterpart, Wray said he would leave to others the question of whether an invasion of Taiwan was more or less likely after Russia’s invasion of neighboring Ukraine. But he said, “I don’t have any reason to think their interest in Taiwan has abated in any fashion,” and added that he hoped China had learned what happens “when you overplay your hand,” as he said the Russians have done in Ukraine.

The FBI director said there are signs the Chinese, perhaps drawing lessons from Russia’s experience since the war, have looked for ways to “insulate their economy” against potential sanctions.

“In our world, we call that behavior a clue,” said Wray, who throughout his speech urged caution from Western companies looking to do business in or with China. He said Western investments in China could collapse in the event of an invasion of Taiwan.

“Just as in Russia, Western investments built over years could become hostages, capital stranded (and) supply chains and relationships disrupted,” he said.

President Joe Biden said in May that the U.S. would respond militarily if China invaded Taiwan, offering one of the most forceful White House statements in support of Taiwan’s self-governing in decades. The White House later tried to soften the impact of the statement, saying Biden was not outlining a change in U.S. policy toward Taiwan, a self-governing island that China views as a breakaway province that should be reunified with the mainland.

The embassy spokesman said the Taiwan issue was “purely China’s internal affair” and said when it comes to questions of China’s territory and sovereignty, the country has “no room for compromise or concession.”

“We will strive for the prospect of peaceful reunification with utmost sincerity and efforts,” the statement said, though it noted that China will “reserve the option of taking all necessary measures in response to the interference of foreign forces.”
…

 The head of the FBI and the leader of Britain’s domestic intelligence agency raised fresh alarms Wednesday about the Chinese government, warning business leaders that Beijing is determined to steal their technology for competitive gain. 

FBI Director Christopher Wray reaffirmed longstanding concerns in denouncing economic espionage and hacking operations by China, as well as the Chinese government’s efforts to stifle dissent abroad. But his speech was notable because it took place at MI5’s London headquarters and alongside the agency’s director general, Ken McCallum, in an intended show of Western solidarity. 

The remarks also showed the extent to which Wray and the FBI regard the Chinese government as not only a law enforcement and intelligence challenge but are also attuned to the implications of Beijing’s foreign policy actions. 

“We consistently see that it’s the Chinese government that poses the biggest long-term threat to our economic and national security, and by ‘our,’ I mean both of our nations, along with our allies in Europe and elsewhere,” Wray said. 

McCallum said the Chinese government and its “covert pressure across the globe” amounts to “the most game-changing challenge we face.” 

“This might feel abstract, but it’s real and it’s pressing,” he said. “We need to talk about it. We need to act.” 

A spokesman for the Chinese embassy in Washington, Liu Pengyu, rejected the allegations from the Western leaders, saying in an emailed statement to The Associated Press that China “firmly opposes and combats all forms of cyber attacks” and called the accusations groundless. 

“We will never encourage, support or condone cyber attacks,” the statement said. 

In a nod to current tensions between China and Taiwan, Wray also said during his speech that any forcible takeover of Taipei by Beijing would “would represent one of the most horrific business disruptions the world has ever seen.” 

Last week, the U.S. government’s director of national intelligence, Avril Haines, said at an event in Washington that there were no indications Chinese President Xi Jinping was poised to take Taiwan by military force. But she that did say Xi appeared to be “pursuing the potential” for such an action as part of a broader Chinese government goal of reunification of Taiwan. 

After the appearance with his British counterpart, Wray said he would leave to others the question of whether an invasion of Taiwan was more or less likely after Russia’s invasion of neighboring Ukraine. But he said, “I don’t have any reason to think their interest in Taiwan has abated in any fashion,” and added that he hoped China had learned what happens “when you overplay your hand,” as he said the Russians have done in Ukraine. 

The FBI director said there are signs the Chinese, perhaps drawing lessons from Russia’s experience since the war, have looked for ways to “insulate their economy” against potential sanctions. 

“In our world, we call that behavior a clue,” said Wray, who throughout his speech urged caution from Western companies looking to do business in or with China. He said Western investments in China could collapse in the event of an invasion of Taiwan. 

“Just as in Russia, Western investments built over years could become hostages, capital stranded (and) supply chains and relationships disrupted,” he said. 

President Joe Biden said in May that the U.S. would respond militarily if China invaded Taiwan, offering one of the most forceful White House statements in support of Taiwan’s self-governing in decades. The White House later tried to soften the impact of the statement, saying Biden was not outlining a change in U.S. policy toward Taiwan, a self-governing island that China views as a breakaway province that should be reunified with the mainland. 

The embassy spokesman said the Taiwan issue was “purely China’s internal affair” and said when it comes to questions of China’s territory and sovereignty, the country has “no room for compromise or concession.” 

“We will strive for the prospect of peaceful reunification with utmost sincerity and efforts,” the statement said, though it noted that China will “reserve the option of taking all necessary measures in response to the interference of foreign forces.”
…

Dockworkers and shipping companies on the U.S. West Coast say operations will continue normally as they negotiate following Friday’s expiration of a contract between the two sides. 

A joint letter released by the Pacific Maritime Association and the International Longshore and Warehouse Union said, “cargo will keep moving, and normal operations will continue at the ports until an agreement can be reached.” 

The negotiations involve 29 ports in California, Oregon and Washington that together handle nearly 40% of all U.S. imports. 

The talks have been closely followed, including by the White House with President Joe Biden speaking with both sides. 

More than 150 business groups also urged Biden to push for a quick resolution to avoid any further disruptions on top of existing supply chain challenges. 

One major issue in the talks is the level of automation used at ports, with operators arguing more automation brings more jobs by processing more cargo and dock workers saying automation would reduce the number of workers needed. 

Some information for this report came from The Associated Press and Reuters.
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