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The Biden administration is taking steps to address the economic risks from climate change, issuing a 40-page report Friday on government-wide plans to protect the financial, insurance and housing markets and the savings of American families.

Under the report, the mortgage process, stock market disclosures, retirement plans, federal procurement and government budgeting are all being reconsidered so the country could price in the risks being created by climate change. The report is a follow-up to a May executive order by President Joe Biden that essentially calls on the government to analyze how extreme heat, flooding, storms, wildfires and broader adjustments to address climate change could affect the world’s largest economy.

“If this year has shown us anything, it’s that climate change poses an ongoing urgent and systemic risk to our economy and to the lives and livelihoods of everyday Americans, and we must act now,” Gina McCarthy, the White House national climate adviser, told reporters.

February storm in Texas led to widespread power outages, 210 deaths and severe property damage. Wildfires raged in Western states. The heat dome in the Pacific Northwest caused record temperatures in Seattle and Portland, Oregon. Hurricane Ida struck Louisiana in August and caused deadly flooding in the Northeast.

The actions being recommended by the Biden administration reflect a significant shift in the broader discussion about climate change, suggesting that the nation must prepare for the costs that families, investors and governments will bear.

The report is also an effort to showcase to the world how serious the U.S. government is about tackling climate change ahead of the United Nations Climate Change Conference running from Oct. 31 to Nov. 12 in Glasgow, Scotland.

Among the steps outlined is the government’s Financial Stability Oversight Council developing the tools to identify and lessen climate-related risks to the economy. The Treasury Department plans to address the risks to the insurance sector and availability of coverage. The Securities and Exchange Commission is looking at mandatory disclosure rules about the opportunities and risks generated by climate change.

The Labor Department on Wednesday proposed a rule for investment managers to factor environmental decisions into the choices made for pensions and retirement savings. The Office of Management and Budget announced the government will begin the process of asking federal agencies to consider greenhouse gas emissions from the companies providing supplies. Biden’s budget proposal for fiscal 2023 will feature an assessment of climate risks.

Federal agencies involved in lending and mortgages for homes are looking for the impact on the housing market, with the Department of Housing and Urban Development and its partners developing disclosures for homebuyers and flood and climate-related risks. The Department of Veterans Affairs will also look at climate risks for its home lending program.

The Federal Emergency Management Agency is updating the standards for its National Flood Insurance Program, potentially revising guidelines that go back to 1976.

“We now do recognize that climate change is a systemic risk,” McCarthy said. “We have to look fundamentally at the way the federal government does its job and how we look at the finance system and its stability.”
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First-time claims for U.S. unemployment compensation dropped last week to their lowest point since the coronavirus pandemic swept into the United States more than a year and a half ago, the Labor Department reported Thursday. 

A total of 293,000 jobless workers filed for assistance, down 36,000 from the revised figure of the week before. It was the lowest claims figure since the 256,000 total in mid-March last year, the government said.

The new figure was an indication the U.S. economy, the world’s largest, remains on a general recovery from the worst economic effects of the 19-month coronavirus pandemic, even as President Joe Biden and Washington policy makers voice concerns about other economic warning signs.

Filings for unemployment compensation often have been seen as a current reading of the country’s economic health, but economists are wary of sharply rising consumer prices, consumer goods supply chain issues that have severely slowed the unloading of dozens of container ships off the U.S. Pacific coast, and meager job growth.

Even as the U.S. said last month that its world-leading economy grew by an annualized rate of 6.7% in the April-to-June period, in September it added only a disappointing 194,000 new jobs, down further from the August figure of 235,000. The jobless rate fell to 4.8%, but that was because thousands of workers dropped out of the labor force.

The two-month total of more jobs was down sharply from the more than 2 million combined figure added in June and July.

About 8.4 million workers remain unemployed in the United States. There are 10.4 million available jobs in the country, but the skills of the available workers often do not match what employers want, or the job openings are not where the unemployed live.

Even with the limited job growth, the size of the U.S. economy — nearly $23 trillion — now exceeds its pre-pandemic level as it recovers faster than many economists had predicted during the worst of the business closings more than a year ago.

Policy makers at the Federal Reserve, the country’s central bank, have signaled that in November they could start reversing the bank’s pandemic stimulus programs and next year could begin to increase its benchmark interest rate.

How fast the U.S. economic growth continues is unclear. The delta variant of the coronavirus is posing a threat to the recovery even as the number of new cases has been declining in recent weeks, now down to under 100,000 a day from the 150,000 or so that were being recorded. The number of deaths each day also has been dropping somewhat below the 2,000 total of a few weeks ago.

But more than 65 million eligible Americans remain unvaccinated — and many are refusing to get inoculated. Thousands of workers have gotten shots in the last three weeks, some under the threat from their employers that they would be fired from their jobs if they did not.

Biden has ordered workers at companies with 100 or more employees to get vaccinated or be tested weekly for the coronavirus. In addition, he is requiring 2.5 million national government workers and contractors who work for the government to get vaccinated if they haven’t already been inoculated, but it will be weeks before the mandates take full effect.

Some anti-vaccination advocates are filing suit to block Biden’s orders while a handful of conservative Republican state governors, including Texas Governor Greg Abbott and Florida Governor Ron DeSantis, remain adamantly opposed to vaccination mandates in their states. But some local school districts and businesses are ignoring their directives and imposing the mandates anyway. 

More than two-thirds of U.S. adults have now been fully vaccinated against the coronavirus, and overall, 56.6% of the U.S. population of 332 million, according to the Centers for Disease Control and Prevention.
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Pakistan International Airlines (PIA) Thursday suspended flights to Afghanistan’s capital, Kabul, over what the state-run carrier alleged was “heavy-handed” interference by the neighboring country’s ruling Taliban.

The suspension came on the same day a Taliban Transport Ministry statement warned it will stop PIA flight operations between Islamabad and the Afghan capital unless the airline reduces ticket prices to the levels that existed before mid-August, when the Islamist group took control of the country.

The statement also ordered Afghan airlines Kam Air to reduce fares on the Kabul-Islamabad route to previous levels or face a halt to their flight operations.

“We have suspended our flights (between Islamabad and Kabul) indefinitely,” PIA spokesman Abdullah Khan told VOA on Thursday.

“The decision has been taken due to an inappropriate behavior by the local (Taliban) administration and inadequate conditions for flight operations,” Khan said.

He explained that PIA was flying charter flights out of Kabul on “purely humanitarian grounds,” and it was the only international airline linking the Afghan capital through Pakistan to the rest of the world.

“Information has been conveyed to PIA and Kam Air private company to reduce the fare on the Kabul-Islamabad route to the level prior to the victory of the Islamic Emirate. If the airlines do not agree to this proposal, their operations on the route will be stopped,” the Taliban said in the statement.

Both PIA and Kam Air operate chartered flights with high fares, citing high insurance costs as the reason for not resuming commercial operations.

PIA had been flying regular commercial flights between Islamabad and Kabul until the Taliban takeover of the country in August, and passengers were being charged up to $200 for a return ticket.

With most international airlines no longer flying to Afghanistan, PIA-chartered flights out of Kabul are charging $1,500 for a one-way ticket to Islamabad.

“The insurance cost of these flights is very high and the charter price cannot be reduced as per the insistence of (Taliban) authorities,” PIA’s Khan said.

PIA officials have complained that their staff in Kabul have faced last-minute changes in regulations and flight permissions and “highly

intimidating behavior” from Taliban commanders. They alleged the airline’s country representative had been held at gunpoint for hours at one point and was freed only after the Pakistan Embassy intervened.

Taliban officials have not yet commented on the allegations leveled by PIA officials.
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France has threatened to retaliate against Britain in yet another post-Brexit dispute, this time over fishing rights in what the British call the English Channel and the French refer to as La Manche, the narrow arm of the Atlantic Ocean separating England’s southern coast from the northern shores of France.

French government spokesman Gabriel Attal said Wednesday retaliation could begin by the end of next week.

France is fuming at the British government’s refusal to allow more French boats to fish in its territorial waters near Britain’s Channel Isles. Britain has issued 325 fishing licenses but declined 125 applications from French fishermen who say they also have been trawling those waters in recent years. Under the terms of the trade deal struck last year by Britain with the European Union as it exited the bloc, they should be granted access too, the fishermen say.

An exasperated French government has threatened a dramatic escalation in the dispute and warned it is considering cutting or reducing electricity supplies to the Channel Islands and the British mainland, which gets 7% of its power from France.

The dispute over French trawlers accessing waters off Britain’s Channel Islands prompted British Prime Minister Boris Johnson earlier this year to dispatch Royal Navy vessels to patrol the area with France responding by sending patrol ships to protect French trawlers.

On Tuesday French Prime Minister Jean Castex said his government was ready to review all bilateral cooperation with Britain, and French President Emmanuel Macron has been pressing the EU to consider wider reprisals.

Speaking in France’s National Assembly Castex called on the EU to get tougher with Britain and said Brussels should “do more.” He added, “We will refer the matter to the arbitration panel of the agreement to lead the British to respect their word [and] we will question all the conditions for the more global implementation of the agreements concluded under the aegis of the European Union, but also, if necessary, the bilateral cooperation that we have with the United Kingdom,” he said.

But Brussels appears reluctant to get deeply involved in the fishing dispute, although officially it is backing Paris and has berated the British.

Dueling  

France’s Europe Minister Clément Beaune has outlined some possible reprisals, including slapping tariffs on British fish exports. “Britons need us to sell their products, including from fishing, they need us for their energy, for their financial services and for their research centres,” Beaune said last week. “All of this gives us pressure points. We have the means to modulate the degree of our cooperation, to reduce it, if Britain does not implement the agreement,” he added.

In the grander scheme of things, a dispute over 125 fishing licenses would seem a minor matter that should not derail relations between European neighbors, but the two governments have been dueling angrily for months and the clash over post-Brexit fishing is adding venom to an already poisonous relationship.

Diplomats on both sides describe Anglo-French relations as “dreadful” and acknowledge they have never been as bad in their professional lifetimes. They say for a comparison you would have to go back to the 1960s. That was when French President Gen. Charles de Gaulle kept slamming the door on British Prime Minister Harold Macmillan’s efforts to get France’s backing for Britain to join the then-European Community. Macmillan was reduced to tears of frustration after one meeting with De Gaulle.

But at least the two statesmen met face-to-face. The British say they have been trying to arrange sit-down talks for months between Johnson and Macron. Their French counterparts say they doubt a sit-down between the two leaders would accomplish anything.

Other historians cite as a comparison the 1890s when Britain and France were locked in rivalry in a scramble for African colonies. That competition eventually ended when the two signed in 1904 the Entente Cordiale, a set of agreements that marked a significant improvement in Anglo-French relations.

But there are few prospects of a new Entente Cordiale. Some former British diplomats agree there is little point in a Johnson-Macron face-to-face. “The bilateral rows are more numerous and more public than at any time since the major rift over Iraq in 2003. Some level of trust has to be rebuilt before a summit would be worthwhile,” tweeted Peter Rickets, a retired senior diplomat and former chairman of Britain’s Joint Intelligence Committee under Prime Minister Tony Blair.

Post-Brexit friction

Since formally departing the EU more than year ago — and in the years of ill-tempered negotiations between Brussels and London leading up to Brexit — hardly a week has gone by without the British and French sniping at each other, a squabbling that has been amplified by Britain’s notoriously Francophobe tabloid press and France’s equally patriotic media.

In his New Year address in January, Macron assured Britain that France would remain a “friend and ally” despite Brexit, but he slammed the British decision to leave the bloc as one born from “lies and false promises.”

This year alone the two countries have clashed cross-Channel migration with London accusing French authorities of not doing enough to stop migrants and asylum-seekers — more than 10,000 this year so far — crossing La Manche in dinghies and small boats. The French have accused Britain of not having paid money it promised to help French authorities police their coastline to prevent migrants from trying to cross the Channel.

The countries have clashed also over supplies of the COVID vaccine made by AstraZeneca, a British-Swedish company, with the French left fuming at the Johnson government’s frequent readiness to compare the speed of the vaccine rollout earlier in the year in Britain with the much slower inoculation programs in France and the rest of Europe.

British ministers this week accused France of having stolen – earlier this year – five million coronavirus vaccine doses manufactured in Holland but destined for Britain. They say Macron worked with EU chiefs to divert the large batch of Oxford/AstraZeneca jabs to France. British government officials told Britain’s The Sun newspaper that the diversion was “outrageous” and could have cost lives, if Britain had not managed to secure Pfizer vaccines.

And the two governments have bickered over Australia’s decision last month to abandon a $66 billion deal to buy 12 French diesel-electric submarines and to purchase instead at least eight much more sophisticated nuclear-powered attack boats from Britain and America.

France’s defense minister cancelled scheduled talks with her British counterpart as the submarine row reverberated and amid accusations from Paris that Britain had been “opportunistic” and underhanded. Johnson responded blithely by saying in Franglais, “I just think it’s time for some of our dearest friends around the world to prenez un grip [get a grip] about all this and donnez-moi un break [give me a break].”

With next year’s French presidential election looming and the British prime minister under mounting economic pressure, both Macron and Johnson have domestic political reasons to prolong the duel, fear some political commentators. “French President Emmanuel Macron faces a tough and unpredictable election in six months’ time, and British Prime Minister Boris Johnson is looking for distractions and scapegoats as reality starts to contradict his cheerful bluster about a plucky, triumphant, stand-alone Brexit Britain,” John Lichfield, a former foreign editor of Britain’s Independent newspaper, noted in a commentary for the Politico.eu news site.

“Both countries are obsessed with each other, for different reasons, and often with silly outcomes,” tweeted Jonathan Eyal, an associate director of the Royal United Services Institute, a London defense think tank.

Ten EU member states including Germany, Italy, Spain and Belgium have joined the French in signing a joint statement that calls on Britain to abide by the terms of the Brexit trade agreement and to ensure “continuity” for French fishing fleets. But the joint statement also called for a negotiated solution and avoided any mention of retaliation.

Privately, EU officials say they are determined to ensure the Anglo-French fishing dispute does not escalate and are playing down the prospect of the bloc as a whole agreeing to retaliatory action. Their priority is on resolving a bigger dispute between the EU and Britain over Northern Ireland.
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President Joe Biden on Wednesday announced a plan to clear the backlog of container ships off the coast of Southern California by launching 24-hour operations at the port of Los Angeles. Mike O’Sullivan reports.
Camera: Roy Kim
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Finance ministers from the Group of 20 economies Wednesday pledged to keep economic stimulus policies in place to ensure a recovery from the COVID-19 pandemic.

Amid ongoing risks, “We will continue to sustain the recovery, avoiding any premature withdrawal of support measures,” according to the official communique released after the G-20 meeting.

While the global recovery has been solid, the statement notes that it has been “highly divergent” among countries.

“We reaffirm our resolve to use all available tools for as long as required to address the adverse consequences of COVID-19, in particular on those most impacted,” the statement continued.

At the same time, officials are closely watching rising prices, the statement said.

The meeting of finance ministers and central bank governors is being held at a time when suppliers are struggling to meet renewed demand and bottlenecks are causing shortages of key materials and pushing prices higher.

Oil prices, notably, have spiked above $80 a barrel for the first time in years.

The World Bank estimates 8.5% of global container shipping is stalled in or around ports, twice as much as in January.

Italy’s central bank chief Ignazio Visco agreed with the International Monetary Fund and others who have said the inflation pressures are mostly the result of transitory factors like the surge in demand.

But he acknowledged that “these may take months before fading away.”

G-20 central bankers are studying the issue to see if there are “more structural factors at work” in the bigger-than-expected inflation spike, and “whether there is some component which starts being transitory but that could become permanent,” Visco told reporters.

Central bankers are walking a fine line between supporting the recovery with easy financial conditions while warding off a permanent increase in inflation.

“Supply chain issues are being felt globally — and finance leaders from around the globe must collaborate to address our shared challenges,” said U.K. Chancellor of the Exchequer Rishi Sunak, who chaired the meeting of the world’s richest nations.

The G-20 communique said central banks “will act as needed” to address price stability “while looking through inflation pressures where they are transitory.”

But World Bank President David Malpass warned that some of the price spikes “will not be transitory.”

“It will take time and cooperation of policymakers across the world to sort them out.”

IMF chief Kristalina Georgieva said the lag in vaccination rates to contain the pandemic in developing nations is contributing to the supply constraints, and “as long as it widens, this risk of interruptions in global supply chains is going to be higher.” 

 
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A report marking the International Day for Disaster Risk Reduction finds many deaths and economic losses from natural disasters could be averted by investing in preventive risk reduction measures. 

Climate-related disasters have nearly doubled over the past 20 years, with developing countries bearing the brunt of the damage. Though extreme weather events and other emergencies are growing, the U.N. Office for Disaster Risk Reduction says little money is being allocated to help countries prevent or reduce risks. 

The report finds $133 billion of official development assistance was allocated for disaster-related aid between 2010 and 2019, but only $5.5 billion was invested in measures to reduce the risks and lessen the impact of disasters. 

For every $100 spent on disaster-related development aid, only 50 cents goes toward protecting development from the impact of disasters, according to the report. 

Ricardo Mena, director of the Office for Disaster Risk Reduction, said even that low-level funding should be better targeted to address the needs of poorer, more vulnerable countries. 

“One would think that countries that are more prone to disasters and that experience higher mortality rates would be the ones where DRR, disaster risk reduction, financing would be allocated the most. But that is unfortunately not the case,” he said. “Insufficient investment is being provided to prevent future disasters in areas where high mortality is likely.” 

Mena said failure to invest in DRR is like buying a nice car that has no brakes.

“Investing in DRR, we know it makes sense and, in terms of cost-benefit, it is tremendously positive,” he said. “So, yes, we are saying it is better to attack the underlying factors of risk, then having to spend more money at a time when disasters actually happen.” 

Academic studies find every dollar invested in disaster risk reduction prevention can result in savings of $3 to $15 in disaster losses. 

Mena is calling for an increase in funding to help poor countries adapt to climate change and implement national strategies for disaster risk reduction. 

 
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From the United States to Germany, developed countries are scrambling to source energy supplies and satisfy a booming consumer demand for goods. 

Supply chains disrupted by the COVID-19 pandemic are straining to cope and factories are unable to meet the surge in demand from consumers, who are spending far more than normal, a consequence of governments pumping $10 trillion collectively into their economies, say business analysts.

Shortages in Britain have made headlines with shoppers facing empty food shelves, with fruits and vegetables especially in short supply. Supermarket bosses warned Wednesday they might have to ration meat to prevent panic buying, particularly in the run-up to Christmas. 

Britain’s supply challenges have been intensified by its departure from the European Union, its main trading partner. But European neighbors, as well as the United States, are also reporting shortages of clothing and electronic goods. Manufacturers say they are finding it hard to source microchips due to factory shutdowns in Asia. 

Politicians have sought to reassure voters that things will return to normal soon and that shortages are transitory.

But are they? 

Some economists and trade analysts fear the developed world may be entering a new era of scarcity partly because of climate action, which will be costly and slow economic growth, and because of a growing trend toward economic protectionism. 

While few doubt that carbon reduction in economies is essential, if an existential climate disaster is to be averted, a rise in the imposition of tariffs and quotas and government regulations, aimed at restricting imports, has free market advocates and economists worried. 

Shortage economy 

They say turning away from globalization and free trade will slow economic growth, lead to scarcity, reduce productivity, and make the world poorer. Britain’s influential Economist magazine this week warned, “Around the world, economic nationalism is contributing to the shortage economy.” 

The magazine’s editors say, “Trade policy is no longer being written with economic efficiency in mind.” They pointed to the recent decision by U.S. President Joe Biden to keep in place tariffs from the prior administration of President Donald Trump, which average around 19%, on Chinese goods. 

Free trade opponents welcome the trend, arguing globalization results in job losses in developing countries, leads to increasing and unfair economic disparities and income inequalities, results in the exploitation and underpayment of workers and roils local communities. 

Debate aside on the benefits or drawbacks of globalization, economic protectionism has been increasing in recent years. Data compiled by the London-based Center for Economic Policy Research suggests that more than 50% of exports from G-20 countries are subject to trade measures, up from 20% in 2009. 

Global cross-border investment has declined dramatically during the past two pandemic years, but even before the emergence of the coronavirus, it was falling according to figures published by the Organization for Economic Cooperation and Development, a Paris-based intergovernmental body with 38 member states. 

Since 2015 foreign direct investment by companies has fallen by half relative to world GDP, according to the OECD. 

Governments are increasingly showing a reluctance to sign new free trade deals and instead have been talking up the need to boost manufacturing capacity and the economic security of their countries. 

Analysts and business leaders also say geopolitical rivalry, where nations see trade as a zero-sum game, meaning there have to be winners and losers, is also playing an increasing role in the policy-making and economic thinking of governments. 

Last week, a group of CEOs from some of the world’s biggest companies, brought together by the World Economic Forum, WEF, an independent international organization, called for greater global trade cooperation. In a joint statement, the business leaders drawn from 17 countries highlighted the potential of trade and investment to speed the global economic recovery from the pandemic. 

“We believe trade and investment support human development and that global recovery can be built upon a trade recovery. Governments must creatively re-engage on trade reform and refrain from protectionism,” they said. 

And the CEOs added, “Through jointly upholding environmental and social standards, trade cooperation should prevent a race to the bottom and avoid harmful distortions to markets for goods and services. Trade cooperation can improve outcomes for underrepresented members of society, including women and minorities.” 

Last month, Biden played down the prospects of a post-Brexit free trade deal between the United States and Britain during bilateral talks with British Prime Minister Boris Johnson at the White House.

Biden said he would discuss the issue “a little bit” with Johnson, who has been eager to strike an agreement with the U.S. in the wake of Britain’s exit from the EU. 

Later, Johnson told British reporters that a U.S.-UK trade deal was “just not a priority” for the Biden administration. 

The U.S. is not alone in running shy of new free trade deals and focusing on national self-reliance and boosting manufacturing capacity. When first elected in 2014, India’s prime minister, Narendra Modi, raised the prospect of implementing wide-ranging economic reforms and opening his country much more to free trade. 

Some incremental reforms were introduced, but soon after entering office Modi put a pause on trade deals and adopted policies focused on India supplying the goods and services it needs from within the country, rather than getting them from abroad. 

There has been some tempering of Modi’s self-reliance policy since, but his government has been highly cautious in discussing regional trade deals, say analysts.
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Sparked by an inflationary surge in the cost of food and gas, the U.S. Labor Department announced Wednesday that starting in January, it will increase the cost-of-living adjustment (COLA) of Social Security payments by 5.9%, the largest in decades.

The Labor Department also announced Wednesday that inflation jumped 5.4% in September compared to last year.

In the recent past, the COLA has been around 2%. In 2021, it was 1.3%.

“For almost everybody who is retired and still alive today and receiving Social Security, this will probably be the highest COLA they have ever received,” Mary Johnson, a Social Security policy analyst at the Senior Citizens League, said in an interview with MarketWatch.

“We are talking about an inflation rate that almost all Social Security recipients have never experienced,” she said.   

She said there are signs inflation will continue to rise at least into next year, and added that she has heard from hundreds of seniors having trouble affording food.

Some 64 million Americans, mostly retired seniors, receive Social Security payments.

″Today’s announcement of a 5.9% COLA increase, the largest increase in four decades, is crucial for Social Security beneficiaries and their families as they try to keep up with rising costs,” Jo Ann Jenkins, CEO of AARP, an interest group focused on those over 50, said in a statement.

Social Security benefit amounts are calculated using the Consumer Price Index for Urban Wage Earners and Clerical Workers.
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A global deal to ensure large multinational companies pay a minimum tax rate of 15% and make it harder for them to avoid taxation has been recently agreed upon by 136 countries. But as White House bureau chief Patsy Widakuswara reports, the world has a long way to go before the deal is implemented.

Produced by: Mary Cieslak           
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At a time when the Chinese economy is facing multiple challenges, including an energy shortage and supply chain problems that have disrupted multiple industries, an expanding crisis in the real estate sector threatens even further damage. 

For months, the slow-moving default crisis at China Evergrande Group, one of the country’s largest property developers, has put a spotlight on the real estate sector, which makes up a much larger share of gross domestic product in China – nearly 30% – than it does in most developed countries. 

The crisis has accelerated in recent days, with more real estate companies defaulting on their bond payments, or asking for forbearance from creditors in order to avoid default.

Experts warn that the deterioration of the Chinese real estate sector could lead to reluctance of foreign investors to place bets on Chinese companies in general – bad news at a time when the government in Beijing is struggling to manage multiple problems. 

Energy shortage 

The crisis in the property sector comes at a particularly bad time for China, which is currently facing widespread shortages of coal, which it uses to generate around 70% of its electricity. 

The coal shortage is driven by a number of factors, including a boycott by China of Australian coal put in place last year after officials in Canberra demanded an investigation into the origins of the COVID-19 pandemic, which first appeared in China.

But China has also placed a series of new regulations on coal mines while simultaneously requiring that energy prices be kept artificially low. This led to disinvestment in the coal sector, and lower production. 

This week, Beijing announced that it will allow energy firms to set prices on the open market without a ceiling, which will make electricity significantly more expensive, but will also incentivize more production.

The moves to improve the supply of energy are not expected to achieve real results until sometime next year. Meanwhile, the energy shortage has cascaded through the Chinese economy. The country has faced intermittent blackouts that have impacted everything from heavy industries like steel, aluminum and cement, to the manufacture of electronics and other consumer goods. 

Broader problems in real estate 

At a time when foreign investment could help drive improvement in the country’s energy sector, the struggles of the property development market are making those investments look more and more risky. 

Evergrande’s failure to make payments on a pair of dollar-denominated bonds last month – and the Chinese government’s apparent lack of interest in bailing out the company – has raised questions about the future of the conglomerate, which has more than $300 billion in debt still outstanding.

On Tuesday, investors in Evergrande bonds reported that the company had missed another payment of $148 million. 

Now, the crisis at Evergrande seems to be infecting other firms in the property sector. Last week, Fantasia Holdings Group, a Shenzhen-based property developer, shocked the markets by defaulting on a $206 million payment. Days before, the bonds had been trading at 99 cents on the dollar, suggesting that investors thought it highly likely that the company could service its debt. 

On Tuesday, another firm, Sinic Holdings, announced that it does not expect to be able to make a payment on a $250 million bond coming due next week, and that the failure will cause it to “cross-default” on two other outstanding bonds.

Funding crisis 

Still more firms are showing signs of imminent distress. Modern Land Co., based in Beijing, has asked creditors for a three-month extension on a pending payment, and Xinyuan Real Estate has asked its creditors to trade bonds coming due on Friday for new bonds that won’t mature until 2023, a move rating agencies see as tantamount to default. 

The series of defaults in the property sector has given international investors reason to be extremely leery of the Chinese property market. Moody’s Investors Service, Fitch Ratings and S&P Global Ratings have all slashed credit ratings on a host of Chinese developers.

Bondholders who were willing to accept a 10% interest rate on Chinese junk bonds – securities considered to be below “investment grade” by ratings firms – are now demanding rates above 20%, in some cases. Holders of existing bonds are expecting to take significant “haircuts” on their holdings, meaning that they will be forced to accept less than they are owed. 

A drag on economic growth 

High borrowing costs are likely to be a persistent problem for Chinese companies, Doug Barry, a spokesman for the U.S.-China Business Council, told VOA. 

“A problem for the Chinese economy is that it will cost higher rates of return to sell Chinese debt in world equity markets,” he said.

Barry said that the likely result is that China will receive less investment capital from overseas in the future, which will hamper economic growth.

“The immediate effects could be lower levels of investment and lower levels of growth,” he said. “This, paired with energy shortages, represents a one-two punch. Foreign companies with substantial investments in China are watching closely with an eye toward keeping supply chains intact and costs stable.” 

“The world economy is intertwined with China’s, ‘like lips and teeth,’ to use a Chinese expression,” he added. The hope is that officials will get a grip on the immediate problems and do the work necessary to stabilize for the longer term financial, property and energy markets.” 

Public concern limited 

Tianlei Huang, a research fellow at the Peterson Institute for International Economics, said in an email exchange with VOA that inside China, there doesn’t appear to be broad public concern about the crisis in the real estate sector seeping into other parts of the economy. 

However, he added, “There is no denying that Evergrande’s debt is worrying. Though the overall debt held by financial institutions is limited, certain banks with high exposure to Evergrande and other weak property developers could suffer a heavy blow and see a sharp deterioration in asset quality should there be a cross default.” 

The lack of widespread public concern may be due, in part, to how difficult it is to get a full picture of the indebtedness of large Chinese companies. 

Hidden debt 

“What is equally worrying is that Evergrande also has lots of off-balance-sheet debt and it is unclear how much,” Huang said.

Many Chinese firms supplement bank loans and bond issuances with other sources of funding, including investment capital routed through wealth management firms seeking high returns for their clients. 

“You may have seen videos of gatherings of investors in front of Evergrande’s office buildings asking for repayments,” he said. “Local governments are now on high alert for any large-scale gatherings related to Evergrande.” 

 
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The U.S. House of Representatives voted Tuesday to extend the government’s borrowing authority into early December, averting a first-ever default next week, when the United States said it would run out of money to pay its bills. 

The House vote increased the existing $28.4 trillion debt total by $480 billion through December 3, following approval last week by the Senate. The legislation now goes to President Joe Biden for his signature. 

While the congressional votes and Biden’s approval resolve the immediate financial crisis for the government, the Democratic-controlled Congress and the White House have yet to agree on how to approve a long-term expansion of the borrowing authority, perhaps through almost all of 2022. 

Senate Minority Leader Mitch McConnell secured enough of his fellow Republican senators’ votes last week to help Democrats pass the expanded borrowing authority in the short term but said he would not do so again as the December deadline approaches. 

McConnell has called on Democrats to approve the debt ceiling on their own through a legislative process known as reconciliation, for which they would not need any Republican support. But Democrats say the process is cumbersome and time-consuming, leaving uncertain how they will try to increase the borrowing authority come December. 

The U.S., almost alone among world governments, has a debt ceiling, one it has adjusted about 70 times since 1965, either by increasing it to a specific figure or by suspending it for a year or two. The U.S. needs to borrow money, much as individual consumers might, because it chronically spends more than it collects in corporate and individual taxes. 

U.S. Treasury chief Janet Yellen warned Sunday that it was “absolutely imperative” that Congress increase the country’s borrowing authority, even as the threat of an immediate default receded.

“It would be a catastrophe” if the United States did not increase the debt ceiling, Yellen told ABC’s This Week.

Yellen had said the U.S. would run out of money to pay its bills next Monday. McConnell and 10 other Republicans voted to clear the path for Democratic senators to increase the government’s borrowing authority on a 50-48 party-line vote.

Senate Majority Leader Chuck Schumer said Republicans should join Democrats in raising the debt ceiling because the country’s long-term debt had increased under both Republican and Democratic control of the White House and Congress.

The borrowing authority provides money to pay bills for debt already incurred, not future spending. But Republicans have balked at helping Democrats raise the debt ceiling this time, in protest of Biden’s proposal to spend $2 trillion or more on the biggest expansion of the country’s social safety net programs in five decades.

Yellen has called for doing away with the debt ceiling, but that is unlikely since both Republican and Democratic lawmakers, thinking it is a winning political tactic, repeatedly blame each other for what they contend is wasteful and unneeded spending by their opponents.

“It should be a shared responsibility (to increase the debt ceiling), not any one party,” Yellen said. “It is Congress’ responsibility.”

“We have to reassure the world that the United States is fiscally responsible,” she said, adding that if the borrowing authority is not increased before December 3, it would amount to “a self-inflicted crisis.”

Yellen said if the debt ceiling is not increased, 50 million older Americans may not receive government pension benefits and “our troops won’t know when or if they would be paid. The 30 million families that receive a child tax credit, those payments would be in jeopardy,” she said. 

 
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It was late last Christmas Eve when the European Union and Britain finally clinched a Brexit trade deal after years of wrangling, threats and missed deadlines to seal their divorce.

There was hope that now-separated Britain and the 27-nation bloc would sail their relationship toward calmer waters.

With Christmas closing in again one thing is clear — it wasn’t to be.

Britain’s Brexit minister on Tuesday accused the EU of wishing failure on its former member and of badmouthing the U.K. as a country that can’t be trusted. David Frost said during a speech in Lisbon that the EU “doesn’t always look like it wants us to succeed” or “get back to constructive working together.”

He said a fundamental rewrite of the mutually agreed divorce deal was the only way to fix the exes’ “fractious relationship.” And he warned that Britain could push an emergency override button on the deal if it didn’t get its way.

“We constantly face generalized accusations that we can’t be trusted and that we aren’t a reasonable international actor,” Frost added — a response to EU claims that the U.K. is seeking to renege on the legally binding treaty that it negotiated and signed.

Post-Brexit tensions have crystalized into a worsening fight over Northern Ireland, the only part of the U.K. to share a land border with an EU country, which is Ireland. Under the most delicate and contentious part of the Brexit deal, Northern Ireland remains inside the EU’s single market for trade in goods, in order to avoid a hard border with EU member Ireland.

That means customs and border checks must be conducted on some goods going to Northern Ireland from the rest of the U.K., despite the fact they are part of the same country. The regulations are intended to prevent goods from Britain entering the EU’s tariff-free single market while keeping an open border on the island of Ireland — a key pillar of Northern Ireland’s peace process.

The U.K. government soon complained the arrangements weren’t working, saying the rules impose burdensome red tape on businesses. Never short of a belligerent metaphor, 2021 has already brought a “sausage war,” with Britain asking the EU to drop a ban on processed British meat products such as sausages entering Northern Ireland.

Northern Ireland’s British Unionist community, meanwhile, says the Brexit deal undermines the 1998 Good Friday peace accord — which sought to protect the rights of both Unionist and Irish Nationalist communities — by weakening Northern Ireland’s ties with the rest of the U.K.

The bloc has agreed to look at changes to the Protocol, and is due to present proposals on Wednesday. Before that move, Britain raised the stakes again, with Frost demanding sweeping changes to the way the agreement is governed.

In his speech in the Portuguese capital, Frost said the Protocol “is not working.”

“It has completely lost consent in one community in Northern Ireland,” he said. “It is not doing the thing it was set up to do – protect the Belfast (Good Friday) Agreement. In fact it is doing the opposite. It has to change.”

Most contentiously, he said the EU must also remove the European Court of Justice as the ultimate arbiter of disputes concerning trade in Northern Ireland and instead agree to international arbitration. He said the role of the EU court “means the EU can make laws which apply in Northern Ireland without any kind of democratic scrutiny or discussion.”

The EU is highly unlikely to agree to the change. The bloc’s highest court is seen as the pinnacle of the free trade single market, and Brussels has vowed not to undermine its own order.

Ireland’s Deputy Prime Minister, Leo Varadkar, said Britain’s demand was “very hard to accept.”

“I don’t think we could ever have a situation where we had another court deciding what the rules of the single market are,” he said.

Some EU observers say Britain’s demand to remove the court’s oversight shows it isn’t serious about making the Brexit deal work.

Frost repeated the U.K.’s threat to invoke Article 16, a clause allowing either side to suspend the agreement in exceptional circumstances. That would send already testy relations into a deep chill and could lead to a trade war between Britain and the bloc — one that would hurt the U.K. economy more than its much larger neighbor.

The economically tiny but symbolically charged subject of fish, which held up a trade deal to the final minute last year, is also stoking divisions now.

France wants its EU partners to act as one if London wouldn’t grant more licenses for small French fishing boats to roam close to the U.K. crown dependencies of Jersey and Guernsey, just off France’s Normandy coast.

In France’s parliament last week, Prime Minister Jean Castex accused Britain of reneging on its promise over fishing.

“We see in the clearest way possible that Great Britain does not respect its own signature,” he said.

In a relationship where both sides often fall back on cliches about the other, Castex was harking back to the centuries-old French insult of “Perfidious Albion,” a nation that can never be trusted.

Across the English Channel, U.K. Brexit supporters often depict a conniving EU, hurt by Britain’s departure, doing its utmost to make Brexit less than a success by throwing up bureaucratic impediments.

“The EU and we have got into a low equilibrium, (a) somewhat fractious relationship,” Frost conceded. “(It) need not always be like that, but … it takes two to fix it.”
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One reason America’s employers are having trouble filling jobs was starkly illustrated in a report Tuesday: Americans are quitting in droves.

The Labor Department said that quits jumped to 4.3 million in August, the highest on records dating back to December 2000, and up from 4 million in July. That’s equivalent to nearly 3% of the workforce. Hiring also slowed in August, the report showed, and the number of jobs available fell to 10.4 million, from a record high of 11.1 million the previous month.

The data helps fill in a puzzle that is looming over the job market: Hiring slowed sharply in August and September, even as the number of posted jobs was near record levels. In the past year, open jobs have increased 62%. Yet overall hiring, as measured by Tuesday’s report, has actually declined slightly during that time.

The jump in quits strongly suggests that fear of the delta variant is partly responsible for the shortfall in workers. In addition to driving quits, fear of the disease probably caused plenty of those out of work to not look for, or take, jobs.

As COVID-19 cases surged in August, quits soared in restaurants and hotels from the previous month and rose in other public-facing jobs, such as retail and education. Nearly 900,000 people left jobs at restaurants, bars, and hotels in August, up 21% from July. Quits by retail workers rose 6%.

Yet in industries such as manufacturing, construction, and transportation and warehousing, quits barely increased. In professional and business services, which includes fields such as law, engineering, and architecture, where most employees can work from home, quitting was largely flat. 

Other factors also likely contributed to the jump in quits. With many employers desperate for workers and wages rising at a healthy pace, workers have a much greater ability to demand higher pay or go elsewhere to find it. 

The data from August is probably too early to reflect the impact of vaccine mandates. President Joe Biden’s mandate was not announced until Sept. 9. United Airlines announced its mandate in early August, but it was one of the first companies to do so. And layoffs were unchanged in August, the report found.

The government said Friday that job gains were weak for a second straight month in September, with only 194,000 jobs added, though the unemployment rate fell to 4.8% from 5.2%. Friday’s hiring figure is a net total, after quits, retirements, and layoffs are taken into account. Tuesday’s report, known as the Job Openings and Labor Turnover Survey, or JOLTS, includes raw figures, and showed that total hiring in August fell sharply, to 6.3 million from 6.8 million in July.

The data is “highlighting the immense problems businesses are dealing with,” said Jennifer Lee, an economist at BMO Capital Markets, in an email. “Not enough people. Not enough equipment and/or parts. Meantime, customers are waiting for their orders, or waiting to place their orders. What a strange world this is.”

Quits also rose the most in the South and Midwest, the government said, the two regions with the worst COVID outbreaks in August.

When workers quit, it is typically seen as a good sign for the job market, because people usually leave jobs when they already have other positions or are confident they can find one. The large increase in August probably does reflect some of that confidence among workers.

But the fact that the increase in quits was heavily concentrated in sectors that involve close contact with the public is a sign that fear of COVID also played a large role. Many people may have quit even without other jobs to take.

The sharp increase in job openings also has an international dimension: Job vacancies have reached a record level in the United Kingdom, though that is partly because many European workers left the U.K. after Brexit.
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The International Monetary Fund is slightly downgrading its outlook for the global recovery from the pandemic recession, reflecting the persistence of supply chain disruptions in industrialized countries and deadly disparities in vaccination rates between rich and poor nations. 

In its latest World Economic Outlook being released Tuesday, the IMF foresees global growth this year of 5.9%, compared with its projection in July of 6%. 

For the United States, the world’s largest economy, the IMF predicts growth of 6% for 2021, below its July forecast of 7%. The downward revision reflects a slowdown in economic activity resulting from a rise in COVID-19 cases and delayed production caused by supply shortages and a resulting acceleration of inflation. 

The IMF predicts that for the world’s advanced economies as a whole, growth will amount to 5.2% this year, compared with a meager predicted gain of 3% for low-income developing countries. 

“The dangerous divergence in economic prospects across countries,” the IMF said, “remains a major concern.” 

The monetary fund expects the total output from advanced economies to recoup the losses they suffered during the pandemic by 2022 and to exceed their pre-pandemic growth path by 2024. 

But in emerging and developing countries outside of China, the IMF warns, output will remain an estimated 5.5% below the output growth path that the IMF had been forecasting before the pandemic struck in March of last year. That downgrade poses a serious threat to living standards in those countries, the monetary fund said. 

The IMF attributed that economic divergence to the sizable disparities in vaccine access between wealthy and low income countries. It said the outlook for poorer countries had “darkened considerably,” reflecting the surge in cases of the delta variant that has elevated the COVID death toll worldwide to nearly 5 million. 

While nearly 60 percent of the population in advanced economies are fully vaccinated, only about 4% of the population in the poorer countries are. 

Along with lagging vaccination levels, poorer nations face headwinds from a spike in inflation, with food prices rising the most in low-income countries, the IMF said. 

The 5.9% rise in global output being forecast in the IMF outlook would represent a sizable gain after a 3.1% decline in output because of the pandemic last year. For 2022, the IMF foresees an expansion of 4.9%, unchanged from its July forecast. 

The 6% gain in U.S. growth this year follows a deep 3.4% contraction in 2020. The IMF expects solid U.S. growth of 5.2% in 2022. For the 19 nations that use the euro currency, the IMF predicts a 5% expansion this year and 4.3% in 2022. 

China, the world’s second-largest economy, is expected to register growth of 8% this year, down slightly from the IMF’s forecast of 8.1% in July, with growth of 5.6% in 2022. 

The new World Economic Outlook was prepared for this week’s fall meetings of the 190-nation IMF and its sister lending organization, the World Bank, as well as of finance ministers and central bank presidents of the Group of 20 major industrial countries. It was released hours after the IMF expressed confidence in its managing director, Kristalina Georgieva, in response to allegations that while serving as a senior World Bank official, she and others pressured staffers to change business rankings in an effort to placate China. 

The IMF’s 24-member executive board said in a statement that a review it conducted “did not conclusively demonstrate” that Georgieva played an improper role in the situation. 

“Having looked at all the evidence presented, the executive board reaffirms its full confidence in the managing director’s leadership and ability to continue to effectively carry out her duties,” it said. 

Among the agenda items for the meetings this week will be efforts to persuade rich nations to fulfill their pledges to boost the level of vaccines going to poor countries as well as a discussion among the G-20 countries over a just-announced global agreement for a 15% minimum tax on corporate profits. Once the agreement is reviewed by G-20 finance officials, it is expected to be endorsed at a leaders’ summit of G-20 countries in Rome. 

 
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Hunger and food insecurity across the United States have dropped measurably over the past six months, but the need remains far above pre-pandemic levels. And specialists in hunger issues warn that the situation for millions of families remains extremely fragile. 

An Associated Press review of bulk distribution numbers from hundreds of food banks across the country revealed a clear downward trend in the amount of food handed out across the country, starting in the spring as the COVID-19 vaccine rollout took hold and closed sectors of the economy began to reopen. 

“It’s come down, but it’s still elevated,” said Katie Fitzgerald, CEO of Feeding America, a nonprofit organization that coordinates the efforts of more than 200 food banks across the country and that provided the AP with the national distribution numbers. She warned that despite the recent decreases, the amount of food being distributed by Feeding America’s partner food banks remained more than 55% above pre-pandemic levels. “We’re worried (food insecurity) could increase all over again if too many shoes drop,” she said. 

Those potential setbacks include the advance of the delta variant of the coronavirus, which has already delayed planned returns to the office for millions of employees and which could threaten school closures and other shutdowns as the nation enters the winter flu season. Other obstacles include the gradual expiration of several COVID-19-specific protections such as the eviction moratorium and expanded unemployment benefits. 

All told, families facing food insecurity find themselves still dependent on outside assistance and extremely vulnerable to unforeseen difficulties. 

“There are people going back to work, but it’s slow going and God forbid you should need a car repair or something,” said Carmen Cumberland, president of Community Harvest Food Bank in Fort Wayne, Indiana. 

Nationally, the food banks that work with Feeding America saw a 31% increase in the amount of food distributed in the first quarter of 2021 compared with the first quarter of 2020, just before the global pandemic reached America. 

When the nationwide closures of offices and schools began in March 2020, the impact was immediate. Feeding America-affiliated food banks distributed 1.1 billion pounds of food in the first quarter on 2020; in the second quarter, the number jumped 42% to more than 1.6 billion pounds. The third quarter saw a smaller 5% increase up to nearly 1.7 billion pounds of food. While distributions declined from the end of 2020 to the first quarter of 2021, recent data suggests that the decline has leveled off. 

The national data is mirrored in the experiences of individual food banks across the country. At the Alameda County Community Food Bank in Oakland, California, the level of community need spiked in winter and early spring of this year. In February 2021, the organization set a record with 5 million pounds of food distributed. That record stood for one month as March 2021 saw 6 million pounds distributed. 

After the March peak, the numbers started dropping steadily — down to 4.6 million pounds in August 2021. But that’s still compared with 2.7 million pounds in June 2019. 

“The recovery is going to be very, very long and steep for families who are typically reliant on food banks,” said Michael Altfest, the food bank’s director of community engagement. Altfest said the coronavirus pandemic was an additional trauma for families already suffering from food insecurity, and it introduced a whole new category of client who had never used food banks before but had been pushed over the financial edge by the pandemic. Both categories are projected to remain in need of assistance well into next year. 

“Things are not getting any easier here for low- and moderate-income households, and we don’t expect it to for a while,” Altfest said. 

Just how long the elevated level of need will last is a matter of debate, with the most conservative estimates projecting it will last well into next summer. Some are predicting that the country’s food banks may never return to normal. 

Parallel government food assistance programs like Supplemental Nutrition Assistance Program (SNAP) benefits, commonly known as food stamps, also saw a pandemic-fueled spike in usage. The Department of Agriculture, which administers SNAP, reports that the number of SNAP users increased by 7 million between 2019 and 2021. In August, President Joe Biden instituted a permanent 25% boost in SNAP benefits, starting this month. 

But the SNAP program doesn’t come close to covering every family in need. Many of the clients who depend on food banks for their nutrition are either ineligible for SNAP benefits, intimidated by the bureaucratic paperwork or fearful of applying due to their immigration status. That leaves food banks as the primary source of aid for millions of hungry people. 

Secretary of Agriculture Tom Vilsack told the AP that at the peak of the pandemic, 14% of American adults were receiving SNAP benefits. That number is now down around 8%, but the need remains highly elevated, and nonprofit charitable options like food banks serve a vital role in papering over the remaining holes in millions of family budgets, he said. 

“We just need to understand what this pandemic has done in terms of significant disruption of what was probably a pretty fragile system to begin with,” said Vilsack, who also filled the same Cabinet post under former President Barack Obama. “It has exposed the fragility of the system, which makes programs like SNAP, programs like summer feeding programs, school feeding programs, food bank assistance ever more important.” 

Vilsack said the Biden administration has moved to strengthen the national food bank infrastructure by devoting $1 billion in June to help fund refrigerated trucks and warehouses that will allow food banks to store and provide more fresh fruits, vegetables and dairy products. 

Now the country’s food bank network is busy trying to project the level of need going forward, factoring in multiple influences — positive and negative. Theoretically, the boosted Child Tax Credit payments, which started in July, are meant to alleviate the monthly burden for lower-income and middle-class families by providing money to use as the families see fit. But food bank executives and researchers estimate that it could take six to 12 months to see a real impact on food security as families initially devote those funds to issues like rent or car repairs. 

And the end of the nationwide eviction moratorium looms as a major pressure point that could push vulnerable families back into crisis. 

The Biden administration allowed the federal moratorium to expire in late August, and Congress did not extend it. While the federal government now focuses on pumping money into rental assistance programs, the national moratorium has devolved into a patchwork of localized moratoriums, in places like Washington, D.C., Boston and New York state — all expiring on different schedules. 

At the southeast Washington drive-through food pantry, volunteers there have developed friendships with some of the regulars, including Rob and Devereaux Simms. A retired bus driver and a school aide, both in their 70s, they consider themselves solidly middle class and had never used food stamps. But when the pandemic hit and two of their children were laid off, “things started running short,” Devereaux Simms said. 

Now, with three grandchildren living at home, they’re fixtures at the Wednesday drive-through. They even make a point of taking home extra supply boxes to distribute to needy neighbors and recently took small gifts for the volunteers. 

“God’s been good to us,” Devereaux Simms said, “and you should never be too proud to accept help.” 

 
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