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A Kenyan ride-hailing company has introduced electric bicycle rentals for the first time in the capital, where air pollution and motor vehicle traffic are problems. Lenny Ruvaga reports from Nairobi.
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A Sydney restaurant is using a Chinese-made, multi-lingual hospitality robot to address chronic staff shortages as Australia’s economy begins to recover from COVID-19 lockdowns and border closures. 

The robot waiter is programmed to know the layout of the tables and delivers food from the kitchen. It is also multi-lingual, programmed to communicate in English and Mandarin. The so-called BellaBot is built by the Chinese firm PuduTech. 

Each machine costs about $17,000. They can be leased for $34 per day for each device, or the equivalent of two hours’ wages for restaurant staff. The devices are in use in other Australian restaurants and imports into Australia appear to be unaffected by recent trade tensions between the two countries. 

Liarne Schai, the co-owner of the Matterhorn Restaurant in Sydney, is delighted with her new mechanical staff member. 

“Ah, love the robot. Love the robot, she makes my life a lot easier. It is like a tower that has got four trays. It will carry eight of our dinner plates in one go. She is geo-mapped to the floor (customer names, location of tables, etc.) The robot knows where all our tables are,” Schai said.  

Australia’s hospitality workforce has traditionally relied on international students. They have, however, been restricted from entering after Australia closed its borders to most foreign nationals in March 2020 in an effort to curb the spread of the coronavirus.  

Labor shortages are affecting not only hospitality in Australia, but a range of industries from construction to information technology.  

Liarne Schai says she has tried for months without success to recruit workers. 

“It is the biggest issue we have at the moment. We have been running ads for chefs, for waiters, for kitchen hands for six months and we have had zero applicants. We are offering above award wages, we are offering bonuses, we are offering everything you can think of to attract appropriate staff and I am not even getting inappropriate staff, or untrained staff. I am just getting nobody.” 

Labor shortages should ease when Australia reopens its borders to foreign nationals, but analysts expect many vacancies will remain unfilled.  

Employer groups have demanded that Australia increase its intake of migrant workers. 

Australia’s official unemployment rate stands at 5.2%.   

But with more than 700,000 Australians without a job, there are calls for the government to boost domestic training programs and wages. 
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On a recent afternoon, Tina Singh watched nearly a dozen students at a suburban Los Angeles truck-driving school backing up their practice vehicles into parking spaces. Many had never operated a manual transmission before.

“It’s an exciting time to be a truck driver right now because there’s so much demand for drivers,” said Singh, the school’s director. “Our yards are busy, and they’re very vibrant with a lot of activity.”

Business is booming at the California Truck Driving Academy amid a nationwide shortage of long-haul drivers that has led to promises of high pay and instant job offers. The Inglewood school has seen annual enrollment grow by almost 20% since last year, and has expanded to offering night classes.

“Everything in this country runs by truck at some point or another,” Singh said. “And so, you know, you need truck drivers to move goods.”

The U.S. is about 80,000 drivers short due to a convergence of factors, according to Nick Vyas, executive director of the University of Southern California’s Marshall Center for Global Supply Chain Management.

Consumer spending is 15% above where it was in February 2020, just before the pandemic paralyzed the economy. Production rose nearly 5% over the past year as U.S. factories worked to keep up with an increased demand for goods, according to the Federal Reserve. Imports have narrowed the gap.

At the same time, many U.S. workers decided to quit jobs that required frequent public contact. This created shortages of workers to unload ships, transport goods and staff retail shops.

In California, the straining supply chain is illustrated at the Ports of Los Angeles and Long Beach, where dozens of ships wait off the coast to be unloaded. The average wait is nearly 17 days, despite around-the-clock port operations beginning in October.

A lack of drivers at the ports has helped fuel the surge at the nearby California Truck Driving Academy, where instructors in reflective vests keep watch as students practice steering big rigs around a fenced-in paved lot.

“You’re kind of helping the community out, and you’re making money at the same time,” student Thierno Barry said. “It’s a win-win situation.”

Barry, 23, was happy to be behind the wheel on his first day, despite rolling over several orange safety cones.

“I feel great, especially during the pandemic,” he said.

Meanwhile, the school is facing its own shortage — of truck driving instructors.
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For weeks, governments and policymakers across the world have been suggesting the recent spikes in consumer and energy prices are transitory and rising inflation will ease, once pandemic-related chain-supply disruptions and labor shortages are resolved and the global economy reboots.

But recent figures suggest inflation may persist for some time, prompting worries about an explosive cost-of-living crisis, which could roil the domestic politics of countries and disrupt the electoral plans of incumbent parties and their leaders.

Central bankers have been saying the price increases of goods, rent, food and energy are one-offs, the consequences of economies struggling to recover from the induced coma of COVID-19 lockdowns and pandemic restrictions. But new data on inflation from around the world have exceeded forecasts, and central bankers are now being criticized for failing to act to restrain surging prices.

Bank of England stands pat

Central banks are coming under mounting pressure to raise interest rates but are nervous about acting too hastily and reversing recovery by reducing stimulus measures. The Bank of England earlier this month decided not to raise interest rates despite its governor, Andrew Bailey, earlier saying bankers “will have to act and must do so if we see a risk, particularly to medium-term inflation and to medium-term inflation expectations.”

Recent figures show inflation in Britain has now jumped to its highest level in nearly a decade, with the consumer price index climbing 4.2% in October from a year earlier. The Bank of England has an official inflation target of 2%. The bank’s decision not to raise its key rate, leaving it at 0.1%, confounded the financial markets and sent the pound plunging in value, and the inaction is still being criticized by many economic commentators.

They include Neil Wilson of Markets.com, who says the governor’s “credibility is at stake.”

Likewise, in the United States, the Federal Reserve is coming under fire over rising inflation. Earlier this week, Mohamed El-Erian, chief economic adviser at Allianz and an influential commentator, said he thought America’s central bank was losing credibility over its long-standing view that inflation is transitory.

“I think the Fed is losing credibility. I’ve argued that it is really important to re-establish a credible voice on inflation and this has massive institutional, political and social implications,” he said.

El-Erian told CNBC-TV the Federal Reserve’s inflation stance risked undermining President Joe Biden’s economic agenda, warning that policymakers should not forget that those on low incomes are the hardest hit by rising consumer prices.

In the US

The rapid increase in household living costs already is being felt by Americans.

According to a series of opinion polls conducted by the pollster YouGov for The Economist magazine, 46% of Americans said they believed the state of the economy was “getting worse,” with only 19% saying it was “getting better.”

In the U.S., the consumer price index rose 6.2% in the 12 months ending in October, the highest rate in three decades. Americans said rising wages were not keeping up with rapidly increasing prices. Fifty-six percent of the respondents to YouGov said they were having trouble affording fuel, 48% could not easily pay their rent or mortgages and 45% said they were struggling to feed their families.

Some member states of the European Union also are facing a cost-of-living crisis.

Romania reported in October an annual inflation rate of 6.5%, the highest increase in consumer prices among EU member states in southeast Europe, according to Eurostat, the EU’s statistical office. Eurozone inflation is running at 4.1%, more than double the European Central Bank’s target.

Increases seen as transitory

This week, European Central Bank President Christine Lagarde conceded that Eurozone inflation likely would remain elevated for longer than had been expected. She remained wedded to the idea that price increases were likely transitory, and she was still forecasting inflation would drop below the bank’s 2% target in the medium term.

“We still see inflation moderating in the next year, but it will take longer to decline than originally expected,” she told lawmakers at the European Parliament.

Some economists in Europe, however, question her optimism. They say the pandemic is far from over, pointing to a fourth wave prompting rising cases across much of the continent and the prospect of a return of economically damaging retractions. Germany has declared a state of emergency and Austria has announced a full lockdown to begin Monday, becoming the first European country to go back under a full lockdown and the first to make COVID-19 vaccination compulsory.

Germany’s coronavirus situation is so grave that a lockdown, including for the vaccinated, cannot be ruled out, German Health Minister Jens Spahn said Friday.

“We are in a national emergency,” he told a news conference.

The path back to normality is now again murky for Europe, and economists say the impact of a fourth wave of the coronavirus on household budgets is going to be significant — this at a time when the price of almost everything is going through the roof.
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In its annual report on the status of global trade, the World Trade Organization finds that the increasing interconnectedness of the world’s economies is a double-edged sword. 

While this globalization makes individual countries more vulnerable to short-term shocks, the WTO says, it also allows them to recover far more quickly than they would have in the past. 

The report finds, among other things, that global trade in merchandise, after plummeting sharply in the early months of the coronavirus pandemic, has already rebounded to above pre-pandemic levels. By the middle of 2022, trade volumes will have caught up with the pre-pandemic trend, meaning that the amount of goods being bought and sold internationally will be at the same level that economists would have predicted if there had been no pandemic at all. 

In a foreword to the report, WTO Director-General Dr. Ngozi Okonjo-Iweala said the global response to the COVID-19 pandemic is an example of both the challenges and the benefits of increased globalization. 

“The deep interconnections of travel, trade and financial flows that characterize our era allowed the novel coronavirus and its associated economic shocks to spread around the world in a matter of weeks. Earlier pandemics took months, even years, to go global,” she wrote.

“Yet, globalization was also at the heart of why this virus was met with vaccines in record time. Scientists were able to share ideas and technology across borders, backed by public and private funding for research and development,” she wrote. “As the new vaccines proved to be safe and effective, supply chains cutting across hundreds of sites in a dozen or more countries came together to provide the specialized inputs and capital goods needed for vaccine production on a large scale — all within a year.” 

Shortages in the US 

Scott Lincicome, a senior fellow in economic studies at the Cato Institute and a frequent writer on trade issues, told VOA that the WTO’s analysis holds up to scrutiny. 

“We’ve seen this play out during the pandemic,” Lincicome said. “Companies that were more domestically oriented really didn’t end up better off than more globally diversified companies.” 

In the United States, he said, some of the most significant shortages and price increases involved goods the United States largely produces on its own, like pickup trucks and food. 

“Pickup trucks were in higher shortage last year than sedans, and we import more sedans,” he said. “If you look at food production this year, most of our food production is domestic. But some of the biggest shortages and price hikes we’re seeing are on food.” 

Interconnectedness tied to stability 

The report also found that the more diversified a country’s trading relationships were with the rest of the world, the less likely they were to experience significant economic volatility. 

Drawing on data collected by the International Monetary Fund, the authors established that countries with high levels of trade diversification in 2008 were likely to suffer far less volatility, measured as deviation from average annual Gross Domestic Product, over the 10-year period ending in 2018. 

“Trade allows a country to diversify its sources of demand and supply, thereby reducing the country’s exposure to country-specific demand and supply shocks,” the report finds. “For example, when a country has multiple trading partners, a domestic recession or a recession in any one of its trading partners translates into a smaller demand shock for its producers than when trade is more limited.” 

‘Reshoring’ production may not be helpful 

The report also warns against the temptation of “reshoring,” that is, the effort some countries are making to become self-sufficient in key industries.

Especially in the early months of the pandemic, there were calls in many countries, including the United States, to reduce reliance on foreign suppliers for critical medical equipment, personal protective gear and vaccine components. 

In another example, former President Donald Trump placed tariffs on foreign-made steel in an effort to force the return of steel production to the United States, saying it was necessary for national security to be self-sufficient in the production of the metal.

Trump’s effort was ultimately unsuccessful, and if the report is correct, that may be reason for U.S. companies that use steel to be grateful. 

“Restricting trade and promoting national self-sufficiency almost inevitably render national economies less efficient in the long run, as such policies ultimately drive up prices of goods and services and restrict access to products, components and technologies,” the report warns. 

Lincicome said the ultimate goal of the WTO in dissuading countries from reshoring production is to maintain healthy economic ties across borders.

“The WTO is responding to a pretty significant threat from certain policymakers, whose knee-jerk response to the pandemic is to employ more protectionism,” he said. “In terms of economics, that’s a bad idea. But also, I think in terms of geopolitics, the more that countries turn inward, the more likelihood there is for there to be some sort of future tensions.” 

 
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María Ribeiro da Silva, 64, spent a hot afternoon hawking a new contraption to acquaintances and friends who passed by her small grocery store on the outskirts of São Paulo, Brazil’s largest city and home to more than 12 million people.

Everyone who passed by received the same invitation from her: “Come, come and see my stove. It’s beautiful. I made it.”

Each guest received the same explanation: “I built a real wood fire oven, with a chimney and everything. No more smoke, no more heat.”

It had been almost 50 years since Ribeiro da Silva cooked with firewood. Since she arrived in São Paulo in 1974, fleeing drought, hunger and poverty in the impoverished northeast region of Brazil, she has only cooked with gas.

“I spent my childhood using firewood. We didn’t have gas. We didn’t have the money to have a real stove. But since I arrived in Sao Paulo … wood was in the past,” she told VOA. 

But with the Brazilian economy worsening, and the devastating effects of the COVID-19 pandemic on the poorest parts of the population, firewood has become the only option for millions of families like Ribeiro da Silvas’. 

It was a slow and gradual process for Ribeiro da Silva. First, firewood was only used in extreme cases when the gas ran out and there was not enough money to replace it. But when she lost her job as a cleaner at a company in downtown São Paulo six months ago, firewood became the primary fuel to cook food.

“Now, I only use the gas stove for simple things like making coffee or heating the food I cooked on firewood. I don’t have any more money to buy gas. The price is too high. It’s impossible,” she said. 

Skyrocketing fuel prices

According to data from the Brazilian Institute of Geography and Statistics, at least 25% of the Brazilian population is using wood as their primary cooking source.

This was before the onset of the COVID-19 pandemic.

“Due to the pandemic, the Brazilian Statistical Institute stopped carrying out quarterly in-person surveys, so we don’t have data for 2020 and 2021,” said Adriana Gioda, a professor in the department of chemistry at Pontifical Catholic University of Rio de Janeiro and a leading researcher on firewood consumption by Brazilian families. 

“But since 2016, when the federal government cut subsidies for residential gas and tied the fuel price policy to the international prices, there has been a steady growth in the use of firewood to make food,” she told VOA. 

Fuel prices have been rising steadily over the past five years but have skyrocketed since President Jair Bolsonaro took office in 2019. He promised not to interfere with the country’s state oil company and allow fuel prices to follow the international market.

This year alone, the price of residential gas rose by an average of 35%. Liquefied petroleum gas is the primary fuel for food production in Brazil, and its cost is linked directly to the price of the oil barrels.

‘Back in time’ 

“In the interior of Brazil, in rural and more isolated areas, using firewood is a tradition. But what impressed us most is that the use of wood is advancing precisely in the most urban areas, in large Brazilian cities, such as Rio de Janeiro and São Paulo,” Gioda said. 

And it is rising in areas such as Jardim Marajoara, a poor neighborhood of migrants from the northeast region of Brazil on Sao Paulo’s outskirts, where Ribeiro da Silva lives. It is in these regions that the poorest and those most affected by the economic crisis are concentrated.

Juarez Viana, a bus driver who also lost his job during the pandemic, has turned to firewood to cook. He, like Ribeiro da Silva, lives in a suburb of São Paulo that is sprawling into the last green areas of the city. Once a week, he crosses the street and enters a small forest to fetch wood.

“It’s hard work, and it seems like I’ve gone back in time,” said Viana, who is also a migrant from the Brazilian northeast. At 49, he remembers cooking with wood as a child. “But it’s worth it. We do not have more money to buy gas. The price is out of control. I’ve never seen anything like this.”

“We are going back in time, going back at least half a century,” said pulmonologist Elie Fiss, a research director at Hospital Alemão Oswaldo Cruz. “Since the 1960s, we no longer saw respiratory problems related to the use of firewood for cooking. But with so many people going back to the firewood, this is a problem that will soon return to hospitals.”

 
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Marco Metzler of Switzerland gets 2,000 new followers a day on LinkedIn, all watching to see what will happen to his money. Metzler invested $50,000 last month in the offshore bonds of real estate developer China Evergrande Group to see if he would get any returns. The former Fitch Ratings analyst is not expecting much. He’s out to prove a point about China’s troubled property sector by chronicling the fate of his investment on social media. 

“I was concerned about what was going on, and from my past I’m able to read rating reports and also to see what’s going on in the world in economics, and I felt obligated to speak out to the world and to warn about that situation,” Metzler told VOA. “We didn’t invest to get the money back, so I’m fully aware this will be lost.” 

Evergrande has struggled since last year, when the Chinese government began clamping down on the country’s property sector to rein in excessive debt and cap speculation.

Towering apartment blocks today extend far into the suburbs of major Chinese cities, but many flats are unoccupied, owned instead by absentee speculators and their banks. Evergrande Group, one of China’s biggest property developers by revenue, is now selling assets and may be staring down a massive restructuring to ease debt. 

Companies or governments that invest in offshore bonds, and individuals who trade stocks listed outside mainland China and its $15.42 trillion economy, are coming to terms — albeit more quietly than Metzler — with the Chinese property crisis of 2021. These troubles are threatening bond returns, lowering some stock prices and could erode at least a quarter of the world’s second largest economy. 

“I don’t think anyone debates the importance of the real estate market on the Chinese economy,” said James Macdonald, head of the property services firm Savills Research in Shanghai, who estimates real estate at 25% to 30% of China’s economy. 

“If we do see a significant slowdown in the real estate market, it will have an impact in terms of domestic economic growth rates, and that could have a knock-on effect in terms of global economy,” Macdonald said. 

As many analysts have noted, any major economic shocks that hit China, a country closely tied to the global manufacturing supply chain, and whose massive consumer base importers and exporters rely on, are inevitably felt around the world. 

Property crisis: Evergrande and beyond 

Evergrande is a bellwether firm that is more than $300 billion in debt. Hong Kong-listed shares in Evergrande have tumbled since February, though the developer averted default in October by paying interest on an overseas bond. 

Another Chinese development giant, Kaisa Group Holdings, faces limited funding access and uncertainty over refinancing a “significant amount” of U.S.-dollar bond payments into next year “in light of ongoing capital-market volatility,” Fitch said in an e-mailed news release last month. 

Smaller property developers are likely to rattle bond markets outside China because they are “less sound” than bigger ones, said Lillian Li, a vice president-senior credit officer at the Moody’s ratings service. 

“We see that the offshore bond market has actually shown larger volatility than the domestic market in front of these regulatory crackdowns, including in the property sector,” Li said. 

The Hang Seng Properties Index in Hong Kong, where foreigners are allowed to trade shares of Chinese companies, has lost about 1.2% year to date. 

Municipal officials in some cities capped home purchase prices in September to deter speculators, further hobbling property momentum in China. The domestic property market could shrink by half a percent in 2022, Li said. Last month, prices for new as well as resale homes fell amid a fall in construction starts. 

What happens next 

Evergrande has offered its investors cash payment by installments as well as putting forth actual structures as repayment assets, the state-run China Daily news website says. 

Central government officials hope to contain property speculation and leave property for people to occupy, the official Xinhua News Agency reports. 

About $52 billion in Chinese property bonds will mature next year and $44 billion the following year, said Henry Chin, Asia Pacific research head with the real estate services firm CBRE. Other bond issuers will default, he forecasts. 

No offshore investors want the bonds now, said Liang Kuo-yuan, president of the Taipei-based Yuanta-Polaris Research Institute, though he believes Taiwanese insurers and pension funds have invested in the past. 

“Taiwan’s insurers more or less will buy high-yield and high-risk investment products, because the interest rates on policies they’ve sold in the past are too high,” Liang said. 

Evergrande was once seen as the epitome of a Chinese property mainland market, Liang added. China’s real estate sector, the world’s largest, grew briskly from 2010 to 2018, says investment bank J.P. Morgan. 

But not all is lost, some analysts say. 

Investors in private equity for distressed debt could get a lift from China’s property spillover if companies look for new ways to repay debt, said Chin of CBRE. Some stock-buying vehicles have made money, too. Shares of the TAO-Invesco China Real Estate exchange-traded fund of Chinese stocks including Evergrande, for example, has grown 65% year to date. 

But back in Switzerland, Metzler wrote on LinkedIn that Evergrande had “officially defaulted on overdue interest payments” and that his current company, DMSA, would file a bankruptcy case against the group. He calls China’s property market “a first domino” in a broader financial and economic crisis. 

“The old system needs to come down before a new system will be established,” he told VOA. 
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U.S. President Joe Biden is headed Wednesday to the country’s auto-manufacturing hub in Detroit, Michigan, to promote the sale of all-electric vehicles in the future even as motorists are facing sharply higher gasoline prices to fuel the cars they almost uniformly drive now.

Biden, on a victory lap to highlight provisions of the trillion-dollar infrastructure package he championed and signed into law on Monday, plans to visit an electric vehicle assembly plant at General Motors, the biggest U.S. car maker that says it plans to go all-electric by 2035.

The president’s infrastructure package calls for construction of $7.5 billion worth of electric vehicle charging stations across the country — perhaps a half-million chargers — but Americans have been slow to embrace the purchase of electric vehicles. Last year, only 1.7% of vehicles sold in the U.S. were battery-powered, one-third of the Chinese market, and far behind world-leading Norway, where nearly three-fourths of vehicles sold are plug-in.

Ahead of his visit to Detroit, the White House said that with Biden’s approval of the infrastructure legislation, he “has sent a clear signal to the rest of the world that America can lead this race as we choose to build these electric vehicles and batteries in the United States and advance our national security by strengthening our domestic supply chains.”

The White House said the legislation will boost the creation of high-paying, union jobs, while two key Biden advisers, Brian Deese, director of the National Economic Council, and Jake Sullivan, national security adviser, said in an opinion column in the Detroit Free Press that the infrastructure legislation will help America regain its global competitiveness. 

“Nobody knows this better than Detroit, which has been at the heart of American industrial strategy in the past and now can again,” the Biden advisers said.

But currently, many more electric vehicles are sold in Europe and China because of financial incentives for consumers and government regulations. Surveys show there are about 1.3 million electric vehicles in use in the U.S. out of a world total of 7 million, but Biden has set a goal of 50% electric vehicle sales in the U.S. by 2030.

For the moment, however, many U.S. motorists are concerned about spiraling gasoline prices they are paying at service stations, the highest since 2014. U.S. motorists are typically paying $3.30 a gallon (3.8 liters), $1.08 more than 12 months ago, pinching household budgets, along with higher food prices.

But some Republican opponents of Biden, even some who voted for the infrastructure package like Senate Republican leader Mitch McConnell, have attacked Biden for being focused with electric vehicle technology at a time when Americans are faced with higher gasoline prices and natural gas price hikes to heat their homes in the winter months ahead.

“The Biden administration doesn’t have any strategic plan to snap its fingers and turn our massive country into some green utopia overnight,” McConnell said Tuesday.

“They just want to throw boatloads of government money at things like solar panels and electric vehicles and hope it all works out,” said McConnell, one of 19 Republican senators who voted in favor of the infrastructure bill, along with 13 Republicans in the House of Representatives.

Biden wants to provide more incentives to push American motorists to buy electric vehicles, calling for a $7,500 tax credit for those who buy electric vehicles through 2026 as part of his $1.85 trillion social safety net legislation that the House is planning to vote on later this week.
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The World Health Organization says Europe is once again the epicenter of the pandemic. As Henry Ridgwell reports, the latest wave of infections is casting a shadow over recent signs that European economies were rebounding.
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Treasury Secretary Janet Yellen told Congress Tuesday that she believed she would run out of maneuvering room to avoid the nation’s first-ever default soon after December 15. 

In a letter to congressional leaders, Yellen said that she believed Treasury could be left with insufficient resources to keep financing the government beyond December 15.

Yellen’s new date is 12 days later than the December 3 date she provided in a letter to Congress on October 18, after Congress had just passed a $480 billion increase in the debt limit days before as a stopgap measure. 

As she has done in the past, Yellen urged Congress to deal with the debt limit quickly to remove the possibility of a potential default on the nation’s obligations. 

“To ensure the full faith and credit of the United States, it is critical that Congress raise or suspend the debt limit as soon as possible,” Yellen wrote to congressional leaders. 

Yellen has repeatedly warned that failure to deal with the debt limit and allowing the government to default would be catastrophic and likely push the country into a recession. 

In her letter, Yellen said that the extra time reflected more up-to-date estimates of government revenues and spending and was impacted by the infrastructure bill that President Joe Biden signed into law Monday. That legislation requires the transfer by Treasury of $118 billion by December 15 into the Highway Trust Fund. 

Yellen said that while she had a “high degree of confidence she will be able to finance the U.S. government through Dec. 15” and complete the Highway Trust Fund transfer, there are scenarios where the government will be left with insufficient resources to finance operations beyond that date, she said. 

The need to raise or suspend the debt limit is just one of the budget issues facing Congress. Lawmakers must also approve a budget by December 3, when the current stopgap funding measures run out. Failure to do that would trigger a government shutdown. 

And Democrats are aiming to approve a $1.75 trillion measure to expand the social safety net and deal with climate change threats. Speaker Nancy Pelosi has said she hopes the House can pass this measure, which Republicans oppose, this week. It must also pass the Senate. 

 
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Lawmakers on Capitol Hill are renewing a push to pass legislation that would boost U.S. competition with China, amid rising concerns about the global supply chain.     

Senate Majority Leader Chuck Schumer said Tuesday the long-stalled U.S. Innovation and Competition Act (USICA) would be added to the National Defense Authorization Act (NDAA), the massive annual defense spending bill that needs to be passed by the end of the year.   

“A generation ago we used to produce about a third of the world’s chip supply – now fewer than 12% are made in America while other countries have lapped us, particularly China. This hurts American workers, American consumers and American national security. We should pass USICA this year – and it’s a bipartisan bill – so we can strengthen domestic chip production,” Schumer said Tuesday in remarks on the Senate floor.   

The USICA passed the U.S. Senate by a 68-32 vote in June but has yet to receive a vote in the U.S. House of Representatives. If passed, the measure would provide $190 billion in funding aimed at addressing areas of competition with China, including semiconductor production, technology security and training for the U.S. workforce. The bill would also provide for automatic sanctions on Chinese companies committing intellectual theft or cyberattacks in the United States. 

Sources told Reuters this week that China is actively lobbying against the legislation, sending letters to U.S. executives urging them to lobby Congress to alter or drop those bills.   

In a statement released in June when the USICA passed the U.S. Senate, the Foreign Affairs Committee of China’s National People’s Congress (NPC), said “The bill is full of Cold War mentality and ideological prejudice … It slanders China’s development path and its domestic and foreign policies.”   

The Biden administration has expressed support for the measures. But any version of the NDAA passed in the U.S. Senate would still have to be reconciled and passed in the U.S. House before heading to the White House to be signed into law.   

Addressing U.S. competition with China is one of the few areas of broad bipartisan support on Capitol Hill, although lawmakers differ on the approach. 

Following President Biden’s virtual meeting with Chinese President Xi Jinping this week, ranking Senate Foreign Relations Committee member Senator Jim Risch said in a statement, “While President Biden used this meeting to raise concerns regarding Beijing’s unfair trade and economic practices and the importance of transparency in global health, it’s past time for concrete results from Beijing. If President Xi actually wants a cooperative relationship with the United States, then he must stop threatening Taiwan.”   

Republican Senator Marco Rubio filed dozens of amendments to the NDAA addressing U.S. competition with China this week, including measures that would strengthen the U.S. relationship with Taiwan, provide funding for analysis of Chinese economic initiatives in developing African nations and clear the way for sanctions on Chinese individuals involved in reclaiming disputed areas in the South China Sea.   

There is strong bipartisan support in the U.S. Senate for another measure that would provide U.S. support for Taiwan’s admission into the Inter-American Development Bank as a non-borrowing member.   

“Despite Beijing’s reckless and hostile tactics to deny it participation on the world stage, Taiwan has proven a formative and effective partner across the Western hemisphere,” said Senate Foreign Relations Committee Chairman Bob Menendez in a bipartisan October 27 statement supporting the legislation.   

Earlier this week, six U.S. lawmakers visited Taiwan as part of a congressional visit to the island whose status has proved to be a constant irritant in U.S.-Chinese relations. China condemned the use of an American military aircraft for the visit.
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U.S. retail sales surged in October, the Commerce Department reported Tuesday, in a signal that at least at the start of the annual holiday shopping season, consumers were not scared off by sharply increasing prices.

Retail sales increased 1.7% last month, more than twice the advance of eight-tenths of a percent in September. Sales have now increased three straight months.

Brian Deese, director of the White House’s National Economic Council, touted the favorable report, saying, “In short, families have seen an increase in real disposable income, and stores and restaurants have the supplies to drive this recovery.”

He said that the retail sales report showed “that even as we work to address the real challenge that elevated inflation from supply chain bottlenecks poses for Americans’ pocketbooks and outlook, the economy is making progress.”

With U.S. consumer price inflation at a three-decade high, it is an open question whether robust consumer spending will continue during the holiday shopping season through the end of 2021.

The government reported last week that consumer prices increased at an annualized rate of 6.2% in October, with sharply higher prices for gasoline and food affecting consumers the most.

The Commerce Department said that October spending was up 4% at online retailers, along with big gains at electronics, appliance and hardware stores. Gas price increases pushed up the sales total at service stations by 3.9% while vehicles sales revenue increased 1.8%.

Aside from higher prices, U.S. consumers are facing shortages of many items they may want to buy.  

Several dozen container ships filled with consumer goods from Asia are anchored off the U.S. Pacific coast waiting for docking and unloading at California ports, a supply chain snarl that government officials are gradually unraveling but are far from fully resolving.
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Rising inflation in the U.S. may be putting the brakes on Democrats’ effort to push President Joe Biden’s signature package of climate and social spending measures through Congress before the end of the year, even though it’s not clear that the measures would add to rising prices. 

House Democrats are pushing for a vote on the package, known as the Build Back Better Act, in an effort to move it forward in advance of the Thanksgiving recess next week. Democratic leaders had hoped to secure a vote on the bill last week, but more moderate Democrats demanded a delay until the Congressional Budget Office (CBO) could complete its analysis of the bill’s expected effects on the federal budget. 

On Monday, the CBO said that its analysis would be completed by Friday of this week, clearing the way for a vote, so long as the agency finds that the bill fully offsets its spending with increased revenues, as Democrats have promised. 

Biden expressed hope Monday during a signing ceremony for a $1.2 trillion bipartisan infrastructure package that the bill would pass.

“I’m confident that the House will pass this bill, and then we’re going to have to pass it in the Senate,” he said in remarks delivered on the White House lawn. “It is fully paid for, it will reduce the deficit over the long term, according to leading economists … and again, no one earning less than $400,000 will pay a single penny more in federal taxes. Together, with the infrastructure bill, millions of lives will change for the better.” 

However, the bill may be facing trouble in the Senate, where West Virginia Senator Joe Manchin and Arizona Senator Kyrsten Sinema, both moderate Democrats, have expressed reservations about the $1.75 trillion package because they fear it might exacerbate price increases. 

If either of them were to vote against it, the package would fail, because the Democrats control only 50 of the 100 votes in the Senate and have to count on Vice President Kamala Harris to cast the deciding vote in the case of a tie. 

Last week, after the Labor Department announced that inflation for the fiscal year ending in October had reached a 30-year high of 6.2%, Manchin tweeted out a message that many in Washington read as a warning to his fellow Democrats. 

“By all accounts, the threat posed by record inflation to the American people is not ‘transitory’ and is instead getting worse,” he wrote. “From the grocery store to the gas pump, Americans know the inflation tax is real and DC can no longer ignore the economic pain Americans feel every day.” 

However, it is far from clear that the Build Back Better agenda would be inflationary, despite Manchin’s and Sinema’s concerns or the assertions of Republicans in Congress. 

The bill would dedicate $555 billion to addressing climate change – money that would be spread out over a decade. It would also provide universal pre-K child care, paid family and medical leave, financial benefits to families with young children, and more. It would be paid for, among other things, by a 15% minimum tax on business profits. 

“Republicans are saying it’s highly inflationary in and of itself, and I don’t buy that,” Joseph E. Gagnon, a senior fellow at the Peterson Institute for International Economics, told VOA. “It’s not that big, when you think about how it’s spread out, and there are some tax increases that go along with it.” 

The White House has been touting a letter from 17 Nobel Prize-winning economists that said that the inflationary effects of the bill would be “negligible” over the medium term. However, the letter omitted the potential for near-term inflationary effects and was based on an early version of the bill in which tax increases figured much more prominently than they do in the current, smaller version. 

To some, the picture is less clear. 

“There are elements in the bill that I think should tend to relieve inflationary pressures, and there are elements in the bill that I think should tend to worsen inflationary pressures,” Marc Goldwein, senior vice president and senior policy director for the Committee for a Responsible Federal Budget, told VOA. “Analytically, I think it’s ambiguous, which is more powerful.” 

Goldwein said that he thinks the inflationary pressures might be marginally stronger but said, “I don’t think the bill is going to have a substantial effect either way. There’s a risk, because we are in a very high-inflation environment, and sometimes that last log you put in the fire is the one that causes it to spread. … But when you look at it as a whole, I don’t think it’s going to tend to push inflation up or down very much.” 

Biden has actually gone so far as to hint that the bill would help to improve the current high inflation being experienced by Americans.

Last week, for example, the president tweeted, “Congress has a tool at its disposal to lower costs for families right away: The Build Back Better Act. All we’ve got to do is pass it.” 

However, this is a bit of a two-step by the president. To the extent that the Build Back Better Act might reduce costs for American consumers, it would be doing so by having the government absorb some of the cost of things like child care and prescription drugs, not by reducing inflation in the near term. 

According to Gagnon of the Peterson Institute, “I don’t see that it would have an effect on near-term inflation.” 

 
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China’s output of coal increased to its highest level since at least March 2015 after authorities gave permission for mine expansions to boost supply and ease record prices. Chinese coal imports from Russia surged in September, but one of its traditional suppliers — Australia — remains frozen out of the lucrative trade because of diplomatic tensions.

China — the world’s leading consumer of coal — has an energy shortage triggered by strong demand from its manufacturers, industry and households. 

The government in Beijing is determined to avoid more power cuts. 

Since July, China has approved expansions at more than 150 coal mines, according to the National Development and Reform Commission. Figures from China’s National Bureau of Statistics showed domestic coal production exceeded 357 million tons in October, up from 334 million tons the previous month.

​Official customs data has also shown that China imported about 3.7 million tons of thermal coal from Russia — the main fuel for electricity generation — in September, up more than a quarter from August.

However, one of the world’s main coal producers — Australia — is noticeably absent from the list of nations shipping coal to China.

It was a prolific exporter of coal to China before an unofficial ban was imposed in late 2020 after Canberra supported calls for an international inquiry into the origins of COVID-19, the disease first detected in China. Beijing interpreted the move as criticism of its handling of the virus, and a range of trade restrictions were brought in.

China does have long term plans to slash its use of coal and fossil fuels. 

Sam Geall from China Dialogue, an environmental policy group, told the Australian Broadcasting Corp. that China’s consumption of coal will oscillate to reflect domestic political necessities. 

“There is room for hedging over the next five years that can allow kind of increased coal build up that would then need to be kind of ramped down again after 2025, and that speaks to this issue of the kind of push and pull that we see in the Chinese power sector with the recent black-outs and so on. It is difficult to just immediately, you know, turn the juggernaut around and there is a push and pull between different forces and different imperatives, including, you know, social stability, employment (and) keeping the lights on,” said Geall.

The increase in China’s coal production comes as India, supported by Beijing and other coal-dependent developing nations, brokered a last-minute amendment at the COP26 climate talks in Glasgow, Scotland. 

They managed to alter the final wording of the accord to “phase down” rather than “phase out” the use of coal. 
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Prices have gone up for a number of consumer products in the United States. President Joe Biden, whose poll numbers are slipping over concerns about how he is handling the economy, is pushing for the passage of his large social spending plan. Michelle Quinn reports.

Produced by: Mary Cieslak    
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U.S. President Joe Biden is hosting a ceremony Monday at the White House where he will sign a bipartisan $1 trillion infrastructure bill that earned final passage in Congress after months of negotiations. 

The legislation calls for massive spending across the country to address crumbling roads and bridges, improve rail service and expand public transportation. 

The White House said Monday’s signing event would include governors and mayors from both the Democratic and Republican parties, as well as leaders from labor unions and businesses.

The bill includes billions of dollars to address gaps in access to broadband internet, particularly for low-income households, rural areas and tribal communities. 

There are also programs to shore up the nation’s electricity grid, as well as its water and wastewater systems. Airports are also set to see improvements, and money is pledged for building electric vehicle charging stations and to purchase electric and hybrid school buses. 

The White House announced Sunday the selection of former New Orleans Mayor Mitch Landrieu to oversee the infrastructure plan. 

Biden and some of his Cabinet secretaries have already been holding events to highlight the benefits of the package. After signing the bill Monday, he is scheduled to head to the state of New Hampshire on Tuesday to visit a bridge listed among those badly in need of repair. On Wednesday he has an event scheduled at an electric car plant in Michigan. 

Some information for this report came from the Associated Press and Reuters. 
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The top White House economic adviser on Sunday acknowledged the pain for Americans of sharply rising consumer prices, saying that President Joe Biden remains open to the possibility of tapping the U.S. Strategic Petroleum Reserve to ease spiraling gasoline prices that motorists are paying at service stations.

“There’s no doubt inflation is high right now,” Brian Deese, director of the National Economic Council, told NBC’s “Meet the Press” show. “It’s affecting Americans’ pocketbooks. It’s affecting their outlook.”

U.S. consumer prices jumped at an annualized rate of 6.2% in October, the biggest increase since 1990, the government’s Labor Department reported last week.

Higher energy and food prices have affected consumers the most, with consumer spending accounting for 70% of the U.S. economy, the world’s biggest.

Fuel costs for motorists are up sharply over the last year, with motorists now paying $3.30 a gallon (3.8 liters), $1.08 more than a year ago, the highest average price since 2014. The cost of grocery bills has risen 5.3% over the last year, with beef prices increasing markedly, further pinching household budgets.

Deese offered no immediate solution for the higher consumer prices, but said economic forecasters expect the inflation rate to decrease in 2022.

He said “all options are on the table” to curb rising prices, including tapping the Strategic Petroleum Reserve, where the U.S. currently has 612 million barrels of oil stored in four salt caverns along the Gulf of Mexico coast. 

Some release of the reserve oil could be refined into gasoline for sale to motorists, which could in the short term ease gas prices at service station pumps. But U.S. presidents have only reluctantly tapped the reserve, instead holding it for use in the event of a possible true national emergency, such as a cutoff in Middle East and north Atlantic oil production.

The existing oil reserve is enough to replace more than half a year’s worth of U.S. crude net imports.

Deese said three things have to occur to improve U.S. economic growth and curb inflation.

”One, we have to finish the job on COVID,” he said, with more vaccinations to curb the spread of the coronavirus that causes the illness. “We have to return to a sense of economic normalcy by getting more workplaces COVID-free; getting more kids vaccinated so more parents feel comfortable going to work.”

But Biden’s mandate that 84 million U.S. workers be vaccinated at workplaces with 100 or more employees has been at least temporarily blocked by a U.S. appellate court pending further court hearings.

Secondly, Deese said, “We’ve got to address the supply chain issue” of consumer goods arriving into the U.S. from Asia, with 83 container ships currently anchored off the Pacific Coast waiting for docking and unloading.

He said the $1.2 trillion infrastructure legislation Biden is signing Monday will help ease transportation bottlenecks in the U.S., but that construction work does not occur overnight.

Lastly, he called for congressional passage of Biden’s nearly $2 trillion social safety legislation to provide more financial, educational and health care assistance to all but the wealthiest American families. The House of Representatives is planning to vote on the measure this week, but its fate in the Senate remains uncertain.

Despite the immediate inflationary pressures on American consumers and Biden’s sharply declining voter approval standing, Deese said the economy has sharply improved since Biden took office last January.

“When the president took office, we were facing an all-out economic crisis,” Deese said. “Eighteen million people were collecting unemployment benefits. Three thousand people a day were dying of COVID. And because of the actions the president has taken, we’re now seeing an economic recovery that most people didn’t think was possible then.”

“Economic growth in America is outstripping any other developed country,” Deese said. “And the unemployment rate has come down to 4.6%; that’s about two years faster than experts projected.”

But with higher consumer prices, the Democratic president’s Republican political foes are focusing on American pocketbooks as congressional elections halfway through Biden’s four-year presidential term loom in November of next year.

One Republican critic, Senator John Barrasso of Wyoming, told ABC’s “This Week” show, he would never have believed Biden would preside over the biggest increase in consumer prices in three decades.

But Barrasso blamed what he characterized as Biden’s “almost irreversibly bad” federal government spending choices, both for infrastructure and the pending social safety legislation. 

The infrastructure legislation was approved with both Republican and Democratic support, but no Republicans have voiced support for the social safety net measure, forcing Democrats to attempt to pass it with their own votes.
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