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A Malawi Magistrate’s Court in the capital, Lilongwe, has sentenced a Chinese national, described by some as one of the biggest African wildlife trafficking kingpins, to 32 years in prison after convicting him on three wildlife crimes. The court, however, said the sentences will run concurrently for 14 years and then there is a plan to deport him. But the convict is looking to appeal the sentence.

Judge Justice Violet Chipao on Tuesday sentenced Lin Yunhua to 14 years in prison for trading in rhino horn, 14 years for possession of rhino horn and an additional six years for money laundering. Justice Chipao however said the sentences will run concurrently, meaning that Lin will serve a total of 14 years. 

Lin, a Chinese national and the leader of wildlife trafficking syndicate Lin-Zhang gang — named after the husband-and-wife leaders — has been operating out of Malawi for at least a decade. Malawi’s authorities arrested him in August 2019 following a three-month manhunt. 

Prosecution lawyer, Andy Kaonga says Lin would face another punishment after completing the sentence. 

“Once he serves the sentence, our colleagues at the DPP [Director of Public Prosecution] office will probably take it to the minister of homeland security and then start the process of his deportation because the court has recommended that he should be deported from the country,” he said.  

The sentencing of Lin brings the number of wildlife trafficking syndicate members sent to prison to 14. These include four Malawian and 10 Chinese nationals, including Lin’s wife currently serving an 11-year prison term. Lin’s daughter was also arrested in December 2020 for alleged money laundering offences. Her trial is ongoing. 

Brighton Kumchedwa, Malawi’s director of the Department of National Parks & Wildlife, warned that the crackdown on members of the Lin-Zhang gang should send a message to other wildlife trafficking syndicates. 

“We are now starting to deal with the sponsors, the king pins. My message to these syndicates is ‘they should watch out; Malawi is not a playing ground. We eventually will get to them. So, they better stop,” he said.

Kumchedwa says the crackdown is a result of new strategies the government put in place toward combating wildlife crimes. 

“From 2015 thereabout we changed completely the game of handling wildlife crimes. So, we used [our] own intelligence combined with police intelligence. We also used sniffer dogs in the process. So, it’s different strategies that have seen us going this far,” he said. 

Mary Rice is the executive director of the London-based Environmental Investigation Agency (EIA), an organization campaigning against environmental crimes and abuse. Speaking to VOA via a messaging app from London, Rice says the crackdown shows Malawi’s commitment to bring high-level wildlife criminals to justice,

“It was not an easy road. But the tenacity and resilience of the investigators, the lawyers and the judge who made some very, very interesting comments in the sentencing, they are all to be applauded for their work. We know there have been many, many obstacles along the way. So, I think it’s a great result,” she said.

Defense lawyer Chrispine Ndalama told VOA Tuesday his client is considering appealing against the sentence. 

“Of course, over the phone, the client indicated that he would want to appeal but I will have to look at the judgment first, to see and understand the reasoning of the court so that I can advise my client properly as to whether we need to appeal or not,” he said.

Ndalama says he expected the court to give Lin a lesser sentence because he pleaded guilty to charges of possession of wildlife products. 

The court has given the defense 30 days to appeal the sentence. 
…

Australia is under growing international pressure to commit to net-zero carbon emissions by 2050, but the policy is fiercely dividing its center-right government.

Australia is one of the world’s major exporters of coal and gas. Coal is mined in every state. Most exports go to countries in Asia, including China, Japan and South Korea. 

In 2020, exports were worth about $39 billion. Trade has almost doubled in the past decade. But China’s informal import restrictions on Australian coal saw the value of exports fall sharply, although prices have started to recover. Coal also generates about 70% of Australia’s electricity. Coal-fired power makes it the most carbon polluting nation per capita in the world. 

Prime Minister Scott Morrison is planning to eventually shift his country’s reliance on coal and gas in favor of clean energy technologies, a shift from his time as a treasurer in 2017. In support of the mining industry, then-treasurer Morrison brought a piece of coal to Parliament to argue the need to continue producing coal in a famous scene. 

“This is coal,” he said. “Don’t be afraid. Don’t be scared. It’s coal that has delivered prosperity to Australian businesses and has ensured that Australian industry has been able to remain competitive on a global market.” 

Clean energy is still an issue that deeply divides his center-right governing coalition. 

Some members of the National Party — the junior alliance partner — are adamant that Australia’s coal industry is too valuable to lose and insist it will thrive for decades. Many regional communities depend on it. There is also disagreement about committing to a target of reaching net-zero emissions by 2050. The prime minister said he wants to achieve net zero emissions “as soon as possible” but has not outlined any measures to do so. 

But government lawmaker Trent Zimmerman said Australia must join the global push to reduce emissions.

“We need both the target and the plan that matches it,” Zimmerman said. “It is very hard to divorce the two and obviously much of the international community has moved in that direction. In fact, eighty percent of global emissions or thereabouts are covered by pledges that relate to reaching net-zero. So, it is important for Australia that we are part of that because it is the right thing to do.”

Morrison has said he is yet to decide whether he will attend the Glasgow Climate Change Conference, also known as COP26, in November. He told a newspaper that he wanted to oversee Australia’s eventual emergence from COVID-19 lockdowns. His critics insist he is “too embarrassed” by his government’s climate change policies to attend the summit in the Scottish capital. 

Opinion polls by the Australia Institute, an independent public policy think tank based in Canberra, have shown that most Australians want stronger measures to curb emissions. A United Nations climate change report recently warned that global warming will inflict more severe and frequent droughts, storms, heatwaves and bushfires in Australia.

However, those surveys reported by the Sydney Morning Herald newspaper also revealed support for the coal industry. Less than half of Australians believe that coal power should be phased out within a decade. Australia’s addiction to fossil fuels might be hard to give up, according to the survey. 
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The World Bank is predicting slower economic growth for developing nations in the East Asia and Pacific regions due to the COVID-19 pandemic.

A report issued by the bank Tuesday said while China’s economy is expected to grow by 8.5% in 2021, the rest of the region will only expand by 2.5%, down from its April forecast of 4.4%. 

Manuela Ferro, the World Bank’s vice president for East Asia and Pacific, says the region’s economic recovery from the pandemic “faces a reversal of fortune.” 

The report says the persistence of COVD-19 will likely hurt growth and increase inequality throughout the region.

The bank is urging governments to enhance testing and tracing to contain the spread of the virus, increase regional production of vaccines and strengthen their health systems. 

The Manila-based Asian Development Bank issued a separate report last week predicting the region’s developing economies will likely grow at a slower-than-expected pace in 2021 due to lingering COVID-19 outbreaks and the slow pace of vaccination efforts. 

The ADB also predicted that economies in Southeast Asia would grow by just 3.1% this year. It also had predicted 4.4% growth back in its economic outlook back in April. 
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Botswana is set to emerge this week from an 18-month state of emergency that will remove the president’s emergency powers and end pandemic restrictions on trade and gatherings. While many shops, bars, and restaurants want to get back to normal, some in Botswana’s alcohol industry say it’s too soon to lift restrictions on night spots.

The minister of trade and industry, Kgafela Mmusi, says the end of the edict, set for this Thursday, means businesses can revert to normal trading hours. This includes the reopening of nightspots. 

That should be welcome news to Botswana’s alcohol industry, which employs around 50,000 people, including those who work at bars, breweries and distributors. 

But Botswana Beverages Association president Peter Noke warns some establishments might not be ready to reopen. 

Those that do will likely have restrictions, including a ban on dancing.

He said they have requested that dance floors be converted into seating areas.

“There should be sufficient spacing between the tables and there will be no dancing,” he said. “If one wishes to dance, they can only do so while seated.”

Music promoter Zain Aftermath says the decision to eliminate the dance floor is ill-advised. 

“How are you going to open clubs and then say people should not dance? It doesn’t make sense. I wouldn’t leave my house to go to a nightclub, pay and buy alcohol so that I can sit on a chair. It is going to affect attendance in a huge way,” he said.

Workers’ union leader Johannes Tshukudu welcomes the reopening as entertainment industry workers have been mostly out of work since March of last year. But he too, urges caution. 

“We don’t expect full capacity at the beginning, we may decide to have half capacity at the venues so that at least so that we use that as an observation element. We don’t want to see this thing [opening of night clubs] as a trap by the government to justify reintroducing the state of emergency,” he said.

Minister Kgafela says the government will keep an eye on nightspots to ensure compliance with the rules. 
…

Thousands of farmers in India blocked highways and rail tracks on Monday to give renewed momentum to their months-long demand for scrapping agricultural laws that have triggered the country’s longest farm protest and presented a political challenge to Prime Minister Narendra Modi. 

The nationwide protest, or “bharat bandh,” was held on the first anniversary of the passage of the laws that the government says will modernize the agricultural sector, but which farmers fear will spell an existential threat to their livelihoods.

The legislation allows farmers to do business outside government-run wholesale markets where they have sold their crops for decades at guaranteed prices.

But farmers fear that opening up sales of farm produce to the corporate sector will end an era of assured prices for crops like rice and wheat. They say farmers in states such as Bihar where the system has been scrapped are already in distress and get a lower price for their crop. 

Defiant farmers have camped on highways on the outskirts of New Delhi since November amid the persisting stalemate — the government has often said it is open to a dialogue but will not repeal the laws.

On Monday, thousands of farmers waving flags converged outside key roads leading to the Indian capital choking traffic. A farmer from Haryana, Sunil Kumar, who was among the protestors, said the stir demonstrated the farmers’ determination to continue their struggle has not ended.

Life was also disrupted in the northern states of Punjab and Haryana, lush rice and wheat growing states, that have been at the forefront of the protest.

The farmers stir also reverberated in the south of the country — they held protests in the southern cities of Chennai and Bengaluru and Kerala state. In some places they squatted on rail tracks.

Ahead of Monday’s protest, Rakesh Tikait, one of the farm leaders spearheading the stir, said that they are ready to protest for ten years, but will not allow the “black legislation” to be passed.

Several opposition parties including the Congress Party have supported the farmers’ demands. In a tweet, senior leader Rahul Gandhi called the government “exploitative” and extended support to farmers using hashtag #Istandwithfarmers. 

The government maintains the laws will improve farm incomes and agricultural productivity. Prime Minister Narendra Modi called them a “watershed moment” for Indian agriculture when they were passed last year.

India’s agriculture has not kept pace with its economy shrinking to just 15% of gross domestic product over the decades. But nearly two thirds of the country, or some 800 million people, depend on agriculture for their livelihood as the country has not been able to generate enough non-farm-based jobs. 

“The protest is a reflection of the compound anger they carry at the neglect of agriculture, especially farmers’ incomes which have become so low over the decades,” says agriculture economist Devinder Sharma. “The government believes that facilitating corporate entry would pull agriculture out of the crisis but that will not help because a majority of the farmers are small.”

The bulk of Indian farmers own plots of less than one hectare and fear that the laws will make them vulnerable to corporates that will drive down prices and force them to sell their land.

With the stalemate showing no signs of a resolution, the political impact of the farmers stir will be tested early next year when elections in India’s most populous state, Uttar Pradesh, are held.

Farmers from the state that adjoins New Delhi are among those who have been at the forefront of the ten-month old agitation. They held a mammoth rally earlier this month and say they will step up protests across the state ahead of the polls to show that the government is pursuing what they call anti-farmer policies. 
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Up to 90% of British fuel stations ran dry across major English cities on Monday after panic buying deepened a supply chain crisis triggered by a shortage of truckers that retailers are warning could batter the world’s fifth-largest economy. 

A dire post-Brexit shortage of truck drivers emerging after the COVID-19 pandemic has sown chaos through British supply chains in everything from food to fuel, raising the specter of disruptions and price rises in the run up to Christmas. 

Just days after Prime Minister Boris Johnson’s government spent millions of pounds to avert a food shortage due to a spike in prices for natural gas, the biggest cost in fertilizer production, ministers asked people to refrain from panic buying. 

But lines of dozens of cars snaked back from gasoline stations across the country on Sunday, swallowing up supplies and forcing many gas stations to simply close. Pumps across British cities were either closed or had signs saying fuel was unavailable on Monday, Reuters reporters said. 

The Petrol Retailers Association (PRA), which represents independent fuel retailers which now account for 65% of all UK forecourts, said members had reported that 50% to 90% of pumps were dry in some areas. 

“We are unfortunately seeing panic buying of fuel in many areas of the country,” Gordon Balmer, executive director of the PRA, who worked for BP for 30 years, told Reuters. 

“We need some calm,” Balmer said. “Please don’t panic buy: if people drain the network then it becomes a self-fulfilling prophecy.” 

Britain is considering calling in the army to ensure fuel supplies reach consumers, according to The Times and Financial Times. 

Environment Secretary George Eustice said there was no shortage of fuel and urged people to refrain from panic buying. 

Haulers, gas stations and retailers warned that there were no quick fixes, however, as the shortfall of truck drivers – estimated to be around 100,000 – was so acute, and because transporting fuel demands additional training and licensing. 

Supply chain crunch 

Britain’s retail industry warned the government on Friday that unless it moves to alleviate an acute shortage of truckers in the next 10 days significant disruption was inevitable in the run-up to Christmas.

For months, supermarkets, processors and farmers have warned that a shortage of heavy goods vehicle (HGV) drivers was straining supply chains to breaking point – making it harder to get goods onto shelves.

Aldi UK CEO Giles Hurley said that while his discount supermarket chain was in a good position, nobody could guarantee there would not be inflation in the market around Christmas. 

BP said on Sunday that nearly a third of its British petrol stations had run out of the two main grades of fuel as panic buying forced the government to suspend competition laws and allow firms to work together to ease shortages. 

Business Secretary Kwasi Kwarteng said the suspension would allow firms to share information and coordinate their response. 

“This step will allow government to work constructively with fuel producers, suppliers, haulers and retailers to ensure that disruption is minimized as far as possible,” the business department said in a statement. 

The government on Sunday announced a plan to issue temporary visas for 5,000 foreign truck drivers. Around 25,000 truckers returned to Europe before Brexit and Britain was unable to test 40,000 drivers during COVID-19 lockdowns.
…

Malaysia’s Prime Minister Ismail Sabri Yaakob on Monday presented a new five-year economic plan, boosting infrastructure spending and committing to a carbon tax under climate change goals as the country looks to chart its way out of a pandemic-induced slump. 

Launching the 12th Malaysia Plan in parliament, Ismail Sabri said the country’s financial position was expected to improve in 2023, with the economy targeted to grow 4.5%-5.5% per annum in the next five years. 

Malaysia posted average annual growth of 2.7% between 2016-2020, dragged down by a 5.6% contraction last year due to the outbreak of COVID-19, the premier said. 

Gross national income per capita rose to $10,150 in 2020, about 20% lower than the level required to become a high-income country. Malaysia now expects to reach that target by 2025, Ismail Sabri said. 

“The 12th Malaysia Plan is a comprehensive development plan that will introduce a number of reforms to ensure sustainable economic growth and more equal distribution of opportunities and results,” Ismail Sabri said. 

Malaysia’s export-driven economy has taken a hit from the pandemic. The central bank slashed its full-year growth forecast to 3.0%-4.0% from 6-7.5% last month – the second cut this year. 

The government will spend $95.53 billion on existing and new development projects between 2021 and 2025, compared with $62 billion in the 11th Malaysia plan, Ismail Sabri said. 

These include new highways and rail networks linking rural areas with urban and industrial hubs, more affordable housing, as well as improvements in health, education, and broadband connectivity. 

Malaysia also aims to become a carbon neutral country by 2050, Ismail Sabri said, adding that economic instruments such as carbon pricing and a carbon tax will be introduced. 

The government also pledged to stop building coal-fired power stations, as it continues its efforts to reduce greenhouse gas emissions intensity of GDP by 45% in 2030, the premier said. 

Other promises included plans to reduce the country’s dependence on foreign labor, provide support to small and medium-sized businesses, and turn Malaysia into a regional investment hub. 
…

Democrats pushed a $3.5 trillion, 10-year bill strengthening social safety net and climate programs through the House Budget Committee on Saturday, but one Democrat opposed the measure in an illustration of the challenges party leaders face in winning the near unanimity they’ll need to carry the sprawling package through Congress. 

The Democratic-dominated panel, meeting virtually, approved the measure on a near party-line vote, 20-17. Passage marked a necessary but minor step for Democrats by edging the bill closer to debate by the full House. Under budget rules, the committee wasn’t allowed to significantly amend the 2,465-page measure, the product of 13 other House committees. 

The more important work has been happening in an opaque procession of mostly unannounced phone calls, meetings and other bargaining sessions among party leaders and rank-and-file lawmakers. President Joe Biden, House Speaker Nancy Pelosi, D-Calif., and Senate Majority Leader Chuck Schumer, D-N.Y., have led a behind-the-scenes hunt for compromises to resolve internal divisions and, they hope, allow approval of the mammoth bill soon. 

Pelosi told fellow Democrats in a letter Saturday that they must pass the social and environment bill this week, along with a separate infrastructure bill and a third measure preventing a government shutdown on Friday. 

“The next few days will be a time of intensity,” she wrote.

Political vulnerability

Moderate Rep. Scott Peters, D-Calif., joined all 16 Republicans on the Budget Committee in opposing the legislation. His objections included one that troubles many Democrats: a reluctance to support a bill with provisions that would later be dropped by the Senate.

Many Democrats don’t want to become politically vulnerable by backing language that might be controversial back home, only to see it not become law. That preference for voting only on a social and environment bill that’s already a House-Senate compromise could complicate Pelosi’s effort for a House vote this week. 

Peters was among three Democrats who earlier this month voted against a plan favored by most in his party to lower pharmaceutical costs by letting Medicare negotiate for the prescription drugs it buys.

Party leaders have tried for weeks to resolve differences among Democrats over the package’s final price tag, which seems sure to shrink. There are also disputes over which initiatives should be reshaped, among them expanded Medicare, tax breaks for children and health care, a push toward cleaner energy, and higher levies on the rich and corporations. 

Democrats’ wafer-thin majorities in the House and Senate mean compromise is mandatory. Before the measure the Budget panel approved Saturday even reaches the House floor, it is expected to be changed to reflect whatever House-Senate accords have been reached, and additional revisions are likely. 

‘Decades of disinvestment’

The overall bill embodies the crux of Biden’s top domestic goals. Budget panel Chairman John Yarmuth, D-Ky., cited “decades of disinvestment” on needs like health care, education, child care and the environment as the rationale for the legislation. 

“The futures of millions of Americans and their families are at stake. We can no longer afford the costs of neglect and inaction. The time to act is now,” Yarmuth said. 

Republicans say the proposal is unneeded, unaffordable amid accumulated federal debt exceeding $28 trillion and reflects Democrats’ drive to insert government into people’s lives. Its tax boosts will cost jobs and include credits for buying electric vehicles, purchases often made by people with comfortable incomes, they said. 

“This bill is a disaster for working-class families,” said Rep. Jason Smith of Missouri, the committee’s top Republican. “It’s a big giveaway to the wealthy, it’s a laundry list of agenda items pulled right out of the Bernie Sanders socialist playbook.”

The unusual weekend session occurred as top Democrats amp up efforts to end increasingly bitter disputes between the party’s centrist and progressive wings that threaten to undermine Biden’s agenda.

 A collapse of the measure at his own party’s hands would be a wounding preview to the coming election year, in which House and Senate control are at stake.

Infrastructure bill

To nail down moderates’ support for an earlier budget blueprint, Pelosi promised to begin House consideration by Monday of another pillar of Biden’s domestic plans: a $1 trillion collection of roadway and other infrastructure projects. Pelosi reaffirmed this week that the infrastructure debate would begin Monday.

But many moderates who consider the infrastructure bill their top goal also want to cut the $3.5 trillion social and environment package and trim or reshape some of its programs. Sens. Joe Manchin, D-W.Va., and Kyrsten Sinema, D-Ariz., have been among the most visible centrists demanding a smaller price tag. 

In response, progressives — their top priority is the $3.5 trillion measure — are threatening to vote against the infrastructure bill if it comes up for a vote first. Their opposition seems likely to be enough to scuttle it, and Pelosi hasn’t definitively said when a vote on final passage of the infrastructure measure will occur.

With each portion of the party threatening to upend the other’s most cherished goal — a political disaster in the making for Democrats — top Democrats are using the moment to accelerate talks on the massive social and climate legislation. Compromise is a requirement, because the party can lose no votes in the Senate and a maximum of three in the House to succeed in the narrowly split Congress.
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A top executive of Chinese communications giant Huawei Technologies has resolved criminal charges against her as part of a deal with the U.S. Justice Department that could pave the way for her to return to China. 

The deal with Meng Wanzhou, Huawei’s chief financial officer and the daughter of the company’s founder, was disclosed in federal court in Brooklyn on Friday. It calls for the Justice Department to dismiss the case next December, or four years after her arrest, if she complies with certain conditions. 

The deal, known as a deferred prosecution agreement, resolves a yearslong legal and geopolitical tussle that involved not only the U.S. and China but also Canada, where Meng has remained since her arrest there in December 2018. Meng appeared via videoconference at Friday’s hearing. 

The deal was reached as President Joe Biden and Chinese counterpart Xi Jinping have sought to minimize signs of public tension, even as the world’s two dominant economies are at odds on issues as diverse as cybersecurity, climate change, human rights, and trade and tariffs. 

A spokesperson for Huawei declined to comment, and a spokesman for the Justice Department in Washington did not respond to an email seeking comment. 

Charges unsealed in 2019

Under then-President Donald Trump, the Justice Department unsealed criminal charges in 2019, just before a crucial two-day round of trade talks between the U.S. and China, that accused Huawei of stealing trade secrets. The charges also alleged that Meng had committed fraud by misleading banks about the company’s business dealings in Iran. 

The indictment accuses Huawei of using a Hong Kong shell company called Skycom to sell equipment to Iran in violation of U.S. sanctions. 

Meng fought the Justice Department’s extradition request, and her lawyers called the case against her flawed. Last month, a Canadian judge didn’t rule on whether Meng should be extradited to the U.S. after a Canadian Justice Department lawyer wrapped up his case saying there was enough evidence to show she was dishonest and deserved to stand trial in the U.S. 

Huawei is the biggest global supplier of network gear for phone and internet companies, and some analysts say Chinese companies have flouted international rules and norms amid allegations of technology theft. The company represents China’s progress in becoming a technological power and has been a subject of U.S. security and law enforcement concerns. 

It has repeatedly denied the U.S. government’s allegations and the security concerns about its products. 
…

China Evergrande inched closer on Friday to the potential default that investors fear as an interest deadline expired without any announcement from the property giant whose mountain of debt has spooked world markets.

The company owes $305 billion, has run short of cash and investors are worried a collapse could pose systemic risks to China’s financial system and reverberate around the world.

A deadline for paying $83.5 million in bond interest passed without remark from Evergrande or any sign of bondholders being paid. The firm is now in uncharted waters and enters a 30-day grace period. It will default if that passes without payment.

“These are periods of eerie silence as no-one wants to take massive risks at this stage,” said Howe Chung Wan, head of Asia fixed income at Principal Global Investors in Singapore.

“There’s no precedent to this at the size of Evergrande … we have to see in the next 10 days or so, before China goes into holiday, how this is going to play out.”

China’s central bank again injected cash into the banking system on Friday, seen as a signal of support for markets. But authorities have been silent on Evergrande’s predicament and China’s state media has offered no clues on a rescue package.

Evergrande appointed financial advisers and warned of default last week, and world markets fell heavily on Monday amid fears of contagion, though they have since stabilized.

The conundrum for policymakers is how fiercely they can impose financial discipline without fueling social unrest, since an ugly collapse at Evergrande could crush a property market which accounts for 40% of Chinese household wealth.

Protests by disgruntled suppliers, home buyers and investors last week illustrated discontent that could spiral in the event a default sparks crises at other developers.

Evergrande has promised to prioritize such investors and resolved one coupon payment on a domestic bond this week. But it has said nothing about the offshore interest payment that was due on Thursday or a $47.5 million payment due next week.

Bondholders are starting to think it might be a month or so before things become clearer and markets have already assumed they will take a large haircut.

“Current market pricing estimates that investors in Evergrande’s dollar bonds are likely to recover very little,” said Jennifer James, a portfolio manager and lead emerging markets analyst at Janus Henderson Investors.

“The likeliest outcome is that the company will engage with creditors to come up with a restructuring agreement,” she said, warning that if such a deal is mismanaged “the loss of confidence could have contagion effects.”

Play for time

Global markets have begun to recover after Evergrande’s plight sparked a sharp selloff, trading on the basis that the crisis can be contained.

Only some $20 billion of Evergrande’s debts are owed offshore. Yet the risks at home are considerable because of the risks to China’s property sector, a vast store of wealth.

“Housing sales and investments could inevitably slow further – this would knock nearly 1 percentage point off GDP growth,” analysts at Societe Generale said in a note.

“The longer policymakers wait before acting, the higher the hard-landing risk.”

So far there have been few signs of official intervention.

The People’s Bank of China’s $42 billion cash injection this week is the largest weekly sum since January and has helped put a floor under stocks.

Bloomberg Law also reported that regulators had asked Evergrande to avoid a near-term default, citing unnamed people familiar with the matter.

However The Wall Street Journal said, citing unnamed officials, that authorities had asked local governments to prepare for Evergrande’s downfall.

“Given the deliberate pace of Chinese policy making, the authorities may well choose to play for time,” said Wei-Liang Chang, a macro strategist at DBS Bank in Singapore.

He said they could extend liquidity assistance through the grace period on Evergrande’s coupon payments, given it had no dollar bond maturities looming until March 2022.

Evergrande’s shares handed back some Thursday gains on Friday and fell 6%, while stock of its electric-vehicle unit dropped 18% to a four-year low. Its bonds fell slightly on Friday and its offshore bonds with imminent payments due last traded around 30 cents on the dollar. 

 
…

Japan’s widening wealth gap has emerged as a key issue in a ruling party leadership contest that will decide who becomes the next prime minister, with candidates forced to reassess the legacy of former premier Shinzo Abe’s “Abenomics” policies.

Under Abenomics, a mix of expansionary fiscal and monetary policies and a growth strategy deployed by Abe in 2013, share prices and corporate profits boomed, but a government survey published earlier this year showed households hardly benefited.

Mindful of the flaws of Abenomics, frontrunners in the Liberal Democratic Party’s leadership race –- vaccination minister Taro Kono and former foreign minister Fumio Kishida — have pledged to focus more on boosting household wealth.

“What’s important is to deliver the benefits of economic growth to a wider population,” Kishida said Thursday. “We must create a virtual cycle of growth and distribution.”

But the candidates are thin on details over how to do this with Japan’s economic policy tool-kit depleted by years of massive monetary and fiscal stimulus.

Kono calls for rewarding companies that boost wages with a cut in corporate tax, while Kishida wants to expand Japan’s middle class with targeted payouts to low-income households.

The winner of the LDP leadership vote on Sept. 29 is assured of becoming Japan’s next prime minister because of the party’s parliamentary majority. Two women – Sanae Takaichi, 60, a former internal affairs minister, and Seiko Noda, 61, a former minister for gender equality – are the other candidates in a four-way race.

Parliament is expected to convene on Oct. 4 to vote in a successor to Prime Minister Yoshihide Suga, who announced his decision to quit less than a year after taking over from Abe.

A government survey, conducted once every five years and released in February, has drawn increasing attention to trends in inequality during Abe’s time.

Shigeto Nagai, head of Japan economics at Oxford Economics, said the survey revealed “the stark failure of Abenomics to boost household wealth through asset price growth.”

Average wealth among households fell by 3.5% from 2014 to 2019 with only the top 10% wealthiest enjoying an increase, according to survey conducted once every five years.

Japanese households’ traditional aversion to risk meant they did not benefit from the stock market rally, with the balance of their financial assets down 8.1% in the five years from 2014, the survey showed.

“We think the new premier will need to consider the failures of Abenomics and recognize the myth that reflation policies relying on aggressive monetary easing will not solve all Japan’s problems without tackling endemic structural issues,” Nagai said.

Bank of Japan Governor Haruhiko Kuroda defended Abenomics and said the pandemic, not slow wage growth, was mainly to blame for sluggish consumption.

“Unlike in the United States and Europe, Japanese firms protected jobs even when the pandemic hit,” Kuroda said when asked why the trickle-down to households has been weak.

“Wage growth has been fairly modest, but that’s not the main reason consumption is weak,” he told a briefing Wednesday.

“As the pandemic subsides, consumption will likely strengthen.” 

 
…

Chinese officials are bracing for a potential financial crisis as giant real estate conglomerate China Evergrande Group appears to be unable to make good on bond payments due on Thursday. 

According to the Wall Street Journal, the central government has instructed local officials across the country to begin “getting ready for the possible storm,” if the firm is unable to come to an agreement with creditors. Evergrande is currently carrying a staggering load of more than $300 billion in debts and other liabilities. 

The central government in China is concerned about civil unrest because of both the size and the nature of Evergrande. The company has more than 800 construction projects spread across every province in the country, employing thousands of Chinese workers and engaging with an untold number of suppliers.

Many of the projects are housing units for which individual buyers paid large sums of money in advance. In some cases, construction has already been halted because the company has been unable to pay suppliers.

In addition to angry homeowners, the company is facing complaints from individual investors who have placed money in the company’s publicly traded shares. Since July of 2020, the company’s share price has plummeted by 91%, to about 34 cents a share today. 

Actual default may be postponed 

Evergrande had two major bond payments due Thursday. One, denominated in U.S. dollars, was for $83.5 million. The agreement with creditors gives the company a 30-day grace period before it is officially considered to be in default. However, failure to make payment on the due date will be seen as a very bad sign by the financial markets. 

The second bond payment was denominated in Chinese renminbi, and the company announced Wednesday that the debt had been “resolved through off-exchange negotiations” — though what exactly that means and how much the company actually paid is not clear. 

In addition to its real estate holdings, Evergrande has a wide array of subsidiaries, including an electric vehicle manufacturer, a soccer team, two theme parks, and a life insurance company, among other things. The company has been trying to sell off some of those assets to help pay its debts, but so far it does not appear to have been successful in raising enough cash to satisfy its creditors. 

The company’s chairman, Hui Ka Yan, has been striving to instill confidence in the company. In a memo to employees this week, he praised the company’s workforce as “an invincible army that is loyal and bears hardship without complaint.”

Hui added, “I firmly believe that Evergrande people’s spirit of never admitting defeat, and becoming stronger when the going gets tough, is our source of strength in overcoming all difficulties!” He promised that the company would emerge from its “darkest hour.” 

Government intervention possible 

Signals from the Chinese government about its intentions toward Evergrande have been mixed. In recent weeks, the government has not suggested that it intends to help the company. On Wednesday, the government issued a vaguely worded statement urging the company to “avoid near-term default” on its dollar-denominated bonds. 

Many experts believe the Chinese government will step in if it appears that Evergrande is facing collapse — deeming it too big to fail. However, that does not mean that all stakeholders in the company will be made whole. Most likely to be hurt are those holding the company’s U.S. dollar-denominated debt, who will face a “haircut” — meaning that they will be forced to accept payments of less than they are owed by the massive company. 

“It’s unlikely that the Chinese government will allow chaos to ensue,” said Doug Barry, a spokesman for the U.S.-China Business Council. “They have plenty of money to cover the losses, though foreign bond holders may receive a sizable haircut.” 

Major restructuring possible 

Experts expect that the Chinese government eventually will organize a major restructuring of the company. That would involve selling off large parts of Evergrande to other Chinese companies — probably state-owned firms. Those transactions would likely be facilitated by funding from state-owned banks. 

The goal, experts say, would be to avoid the collapse of housing projects that the company has already sold to Chinese buyers, and the related loss of construction jobs and related economic activity that would entail. 

“The government may help in restructuring Evergrande with shareholders and bondholders taking a big hit,” said Robert Dekle, a professor of economics at the University of Southern California. “This is overall good for China, reducing over-borrowing and moral hazard in the future.” 

A positive change 

Although a restructuring of Evergrande would be painful — especially for its investors — it could have important positive implications for the future of the Chinese economy. The country is currently dotted with thousands of “zombie” companies that have been kept solvent only by continued infusions of cash from state-owned banks. By refusing to bail out Evergrande’s bondholders and investors, the Chinese government may be signaling that in the future, companies will be expected to stand — or fall — on their own. 

“Longer term, China needs to get its financial house in order, especially throwing light on the shadow economy where even more debt bombs and zombie companies may lurk,” said Barry, of the U.S.-China Business Council. “Odds are good that the government will get on top of things without serious damage to the domestic or global economy. It’s a sobering reminder of the role China plays and the need for more transparency and fewer shadows and casino activities.” 

Global contagion seen as unlikely 

Evergrande’s troubles have caused investors in other high-yield Chinese debt to become cautious, demanding much higher interest rates to compensate for the perception of increased risk. 

However, experts believe that the fallout from the company’s troubles will have limited impact outside of China.

“Apparently there are other Chinese property developers in trouble,” said Dekle, the USC economist. “But the fact that Chinese authorities have allowed the firm to reach near bankruptcy suggests that the fallout will be self contained.” 

Voice of America Mandarin Service reporter Mo Yu contributed to this story. 

 
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First-time claims for U.S. unemployment compensation unexpectedly increased again last week but remained near the low point during the 18-month coronavirus pandemic, the Labor Department reported Thursday.

A total of 351,000 jobless workers filed for assistance, up 16,000 from the revised figure of the week before, the second straight week the figure moved higher. The increase was at odds with projections of economists, who had predicted a declining number.

Still, the claims figures for the last month have been on the whole the lowest since the pandemic swept through the U.S. in March 2020, although they remain above the 218,000 average in 2019.

The jobless claims total has fallen steadily but unevenly since topping 900,000 in early January. Filings for unemployment compensation have often been seen as a current reading of the country’s economic health, but other statistics also are relevant barometers.

Even as the U.S. said last month that its world-leading economy grew at an annualized rate of 6.6% in the April-to-June period, it added only a disappointing 235,000 more jobs in August, a figure economists said was partly reflective of the surging Delta variant of the coronavirus inhibiting job growth.

The number of new jobs was down sharply from the more than 2 million combined figure added in June and July. The unemployment rate dipped to 5.2%, which is still nearly two percentage points higher than before the pandemic started in March 2020.

About 8.7 million workers remain unemployed in the U.S. There are nearly 11 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.

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, on Wednesday signaled that in November it could start reversing its pandemic stimulus programs and next year could begin to increase its benchmark interest rate.

How fast the U.S. economy will continue to grow is unclear.

For months, the national government had sent an extra $300 a week in unemployment compensation, on top of often less generous state aid, to jobless workers. But that extra assistance ended earlier this month, with about 7.5 million jobless workers affected by the cutoff in extra funding.

The delta variant of the coronavirus also poses a new threat to the economy.  

Political disputes have erupted in numerous states between conservative Republican governors who have resisted imposing mandatory face mask and vaccination rules in their states at schools and businesses, although some education and municipal leaders are advocating tougher rules to try to prevent the spread of the Delta variant.

U.S. President Joe 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.

In recent weeks, about 150,000 new cases have been identified each day in the U.S. and more than 2,000 people are dying from COVID-19 every day.    

More than 66% of U.S. adults now have been fully vaccinated against the coronavirus, and overall, 54.9% of the U.S. population of 332 million have completed their shots, according to the Centers for Disease Control and Prevention.

 
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Europe is being buffeted by unprecedented recovery-related energy price spikes, prompting rising alarm about whether families will be able to remain warm as the northern hemisphere’s winter approaches.

Politicians are also anxious about the electoral repercussions and how spiking prices will fuel further inflation.

The price jumps in natural gas are due largely to a surge in demand in Asia and low supplies of in Europe, which has seen an astonishing 280% increase in wholesale gas prices. Electricity prices are also soaring because natural gas is used across the continent to generate a substantial percentage of its electricity.

Moscow’s decision to refrain from boosting natural gas shipments via Ukrainian pipelines is worsening the crunch and adding to claims that Russia is using the energy needs of its European neighbors to hold them to ransom.

Some European politicians are accusing the Kremlin of deliberately worsening Europe’s energy crisis as a tactic to pressure the European Union into speeding up certification of the just completed Nord Stream 2 gas pipeline, which bypasses Ukraine and runs from Russia to Germany under the Baltic Sea.

The International Energy Agency has called on Russia to boost gas exports. “The IEA believes that Russia could do more to increase gas availability to Europe and ensure storage is filled to adequate levels in preparation for the coming winter heating season,” it said in a statement.

U.S. officials have also called on Moscow to increase gas exports. “The reality is there are pipelines with enough capacity through Ukraine to supply Europe. Russia has consistently said it has enough gas supply to be able to do so, so if that is true, then they should, and they should do it quickly through Ukraine,” Amos Hochstein, senior adviser for energy security at the US Department of State, told Bloomberg TV this week.

Europe scrambles 

Some members of the European Parliament want the European Commission to investigate Russia’s majority state-owned energy company Gazprom. “We call on the European Commission to urgently open an investigation into possible deliberate market manipulation by Gazprom and potential violation of EU competition rules,” a group of lawmakers said in a letter.

Moscow aside, Europe would still be faced with an energy price crunch, one that has raised the specter of factories and businesses having to reduce production and prompting warnings of food shortages.

In Britain, ministers have been holding emergency talks with industry representatives about surging wholesale gas and electricity prices, which have been blamed on higher global demand, maintenance issues and lower than expected solar and wind energy output.

Seven British natural gas suppliers have gone bust in the past six weeks, a consequence of wholesale gas prices surging by more than 70% in August alone. There are fears another three suppliers may declare bankruptcy. Suppliers are unable to pass on to customers the full increases because of government-imposed price caps on what consumers can be charged.

Nonetheless, British consumers will face price hikes this winter running into several hundreds of dollars per household. British officials are considering offering some of Britain’s biggest energy retail companies state-backed loans to help them ride out the price tempest.

But there is a reluctance to use taxpayers’ money, and midweek, Britain’s business secretary, Kwasi Kwarteng, told a parliamentary panel that the energy industry must first “look to itself” for solutions.

Few observers believe Boris Johnson’s ruling Conservative government will stay its hand. It has already intervened and extended emergency state support to avert a shortage of poultry and meat triggered by the soaring gas prices. This week ministers agreed to subsidize a major US company, CF Industries, paying it to reopen one of its two fertilizer plants in Britain which also produce as a byproduct carbon dioxide, vital for the country’s food industry.

CF Industries closed both plants, which supply 60% of the CO2 needed to stun animals for slaughter and used to extend the shelf life of packaged fresh, chilled and baked goods. It is also used to produce carbonated drinks and to keep stored beer fresh. The closure of the plants prompted dire warnings from Britain’s supermarkets of looming shortages.

Even with the emergency intervention running into hundreds of millions of dollars of public money, British ministers warned Wednesday that food producers need to prepare themselves for a 400% rise in carbon dioxide pricing.

State intervention

Other European governments are also considering how to intervene in energy markets to keep homes warm and lit, and factories running through the winter. They also fear domestic political fallout from sharp jumps in household costs and are considering billions of dollars in aid. EU energy ministers will meet this week to discuss national responses amid concerns that the energy crisis will severely disrupt the bloc’s post-pandemic recovery.

In Spain and Portugal, average wholesale electricity prices are triple the level of half a year ago at $206 per megawatt-hour. Spain’s government plans to cut taxes on utility bills.

Norway this week offered some relief by announcing that its state-owned energy company will boost the production of natural gas from two North Sea fields.

In Italy, ministers have warned of electricity prices jumping by 40% in the final quarter of 2021 and – like their southern European neighbors – are drafting emergency plans to soften the price blow for consumers. Some officials say $5.27 billion is being earmarked to support households with their costs, on top of a $1.17 billion the government has already spent to cushion consumers and businesses from the rising costs of energy imports. Italy imports two-thirds of its energy needs.

Last week, ecological transition minister Roberto Cingolani prompted an outcry from climate action groups when he said carbon taxes have contributed to the higher energy costs for households and businesses. Carbon pricing and taxes are employed to try to dis-incentivize the use of fossil fuels. Faced with rising criticism, Cingolani later stressed the need to “accelerate with the installation of renewables, so that we unhook ourselves as soon as possible from the cost of gas.”

Information from Reuters and Ansa was used in this report
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As cryptocurrencies come under increasing scrutiny from regulators across the world, in Lebanon they are providing a lifeline for people trying to survive a paralyzed banking system and tanking economy. Jacob Russell reports from Beirut.   

Camera: Jacob Russell

 
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Changes to the main U.S. flood insurance program will raise rates for 77% of policyholders, according to a new study issued on Tuesday, although property owners in some poorer neighborhoods will see premiums decrease. 

The study by the QuoteWizard unit of financial services provider LendingTree, Inc. reviewed price changes due for the roughly 5 million participants in the National Flood Insurance Program, set up in 1968. 

Under the new “Risk Rating 2.0” system from the U.S. Federal Emergency Management Agency (FEMA) taking effect October 1, new premiums will be based on a property’s value, risk of flooding and other factors, rather than simply on a home’s elevation. 

Meant to account for climate-change-driven shifts like increasing flood frequency, the new plans also will make the program more equitable, said Nick VinZant, QuoteWizard senior research analyst. 

“Now the smaller, lower-value homes and neighborhoods aren’t going to be funding the mansions anymore,” VinZant said in an interview. 

With the weather impact of climate change worsening, flooding losses are expected to rise.

Recent storms, including Hurricane Ida, have caused massive flooding from Louisiana and Tennessee to New York City. FEMA said it aimed to “equitably distribute premiums across all policyholders” with the changes. Of the roughly 5 million policyholders in the program, 3.3 million will see monthly payments rise up to $10, and 3,199 will see an increase of $100 or more per month, VinZant said.

Meanwhile, 196,000 people will see their monthly premiums fall $100 or more, he added. 

FEMA representatives did not immediately comment on the study. As of April, its flood insurance program provided $1.3 trillion in coverage but has been losing money. 

The proposed changes have drawn concerns in the U.S. Congress, including from representatives from Louisiana and Texas, who have asked FEMA to delay the new rates to avoid higher bills for some policyholders. 
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Fast-food giant McDonald’s said Tuesday it would phase out plastic toys from its signature Happy Meals by 2025. 

“Starting now, and phased in across the globe by the end of 2025, our ambition is that every toy sold in a Happy Meal will be sustainable, made from more renewable, recycled, or certified materials like bio-based and plant-derived materials and certified fiber,” the company said in a statement. 

McDonald’s said that this process had already begun in Britain and Ireland, and that all its Happy Meal toys in France were already made sustainably. 

The signature meal for children typically contains a plastic toy, often an action figure. But the new plan means that figurines may be made of cardboard for the child to assemble.

McDonald’s, which has been serving Happy Meals since 1979, said that its new plan to make toys out of renewable materials will reduce fossil fuel-based plastic in its toys by 90%. 

But a large part of McDonald’s packaging remains plastic, the company acknowledges, saying that it has “set goals” for all its packaging to be from “renewable, recycled, or certified sources” by 2025. 

 
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