Category Archives: Business

economy and business news

US Treasury Secretary Weighs China Trip for Trade Talk

U.S. Treasury Secretary Steven Mnuchin said Saturday that he was contemplating a visit to China for discussions on issues that have global leaders concerned about a potentially damaging trade war.

“I am not going to make any comment on timing, nor do I have anything confirmed, but a trip is under consideration,” Mnuchin said at a Washington news conference during the International Monetary Fund and World Bank spring meetings.

Mnuchin said he discussed the possible trip and potential trade opportunities with the new head of China’s central bank.

Tensions have escalated between the U.S. and China over Beijing’s attempts to challenge America’s technological prowess, raising the prospects of a trade war that could hinder global economic growth. 

Mnuchin said he had spoken with a number of his counterparts who have been forced to deal with U.S. President Donald Trump’s “America First” trade policies, including U.S. tariffs on foreign aluminum and steel and on up to $150 billion in Chinese goods. Some of the leaders, he said, were focused on exemptions from the tariffs.

He said he emphasized that the U.S. was not trying to construct protectionist trade barriers with the tariffs. Instead, he said, “we are looking for reciprocal treatment.”

Mnuchin also said he wanted the IMF to do more to address what the Trump administration believes are unfair trade practices. He also called on the World Bank to redirect low-interest loans from China to more impoverished countries. 

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China: No Military Aim of Corridor Project With Pakistan

China has strongly refuted suggestions its multibillion-dollar economic corridor now under construction with Pakistan has “hidden” military designs as well.  

Beijing has pledged to invest about $63 billion in Pakistan by 2030 to develop ports, highways, motorways, railways, airports, power plants and other infrastructure in the neighboring country, traditionally a strong ally.

 

The Chinese have also expanded and operationalized the Pakistani deep water port of Gwadar on the Arabian Sea, which is at the heart of the massive bilateral cooperation, known as the China-Pakistan Economic Corridor, or CPEC. The strategically located port is currently being operated by a Chinese state-run company .

China has positioned CPEC as the flagship project of its $1-trillion global Belt and Road Initiative, or BRI, championed by President Xi Jinping.

“I want to make it very clear, BRI initiative and with CPEC under it, it’s purely a commercial development project. We don’t have any kind of military or strategic design for that,” said Yao Jing, Chinese ambassador to Islamabad. He made the remarks in an exclusive interview with VOA.

Within five years of finalizing and launching CPEC, Jing said that 22 “early harvest” projects out of the 43 total projects under CPEC have been completed or are under construction, with a total investment of around $19 billion, the largest influx of foreign investment in Pakistan’s 70-year-old history. The projects have already brought 60,000 local jobs and effectively addressed the country’s once crippling energy crisis.

 

Power plants built under the joint venture, officials say, will have added more than 10,000 megawatts of electricity to the national grid by June, leading to a surplus of power.

While speaking to VOA, the Chinese diplomat urged the United States and India to “come to the CPEC project” and “witness the progress on the ground” for themselves, saying it will enable them overcome misunderstandings vis-a-vis CPEC.

“There are some kind of doubts that may be there are some things hidden in it. I think that when you have an objective lens to look at this project and to come to the ground to find this progress on the ground then you may have a better understanding of what we are doing here,” said Jing.

The Chinese envoy was responding to concerns expressed in Washington and New Delhi that Beijing could try to turn Gwadar into a military port in the future to try to dominate the Indian Ocean.

Jing explained that a state-to-state defense-related cooperation has for decades existed between the two allied nations and China through “normal channels” is determined to contribute to “military and strategic ability’ of Pakistan.

“We don’t want to make the CPEC as such a kind of platform,” the ambassador emphasized.

However, he added, it is “natural and understandable” that the project’s massive size and design has raised doubts and suspicions” about its aims.   

The skepticism about Chinese intentions stems from, among other things, a massive airport being built in Gwadar, with a landing strip of 12-kilometers. China has given nearly $300 million to Pakistan for the construction of the airport.

“Basically, it is for China and Pakistan to make this project a successful economic project, then we can make it clear our intention here,” Jing said.

India is also opposed to CPEC because a portion of the project is located on territory that is claimed by both New Delhi and Islamabad. But Pakistan and China both dismiss the objections as politically-motivated.

CPEC aims to link the landlocked western Chinese region of Xinjiang to Gwadar, allowing ships carrying China’s oil imports and other goods from the Persian Gulf to use a much shorter and secure route and avoid the existing troubled route through the Strait of Malacca.

There are currently up to 10,000 Chinese nationals working on CPEC-related projects in Pakistan. Ambassador Jing said that 21 new mega-projects, including the establishment of Special Economic Zones across the country, are ready to be launched in the next stage with particular emphasis on encouraging private engagement.

In the next five to seven years, officials estimate, CPEC will have created employment for half-a-million Pakistanis. The country’s troubled economy, lately impacted by insecurity and energy crisis, has grown 5.4 percent in the previous financial year, the fastest rate in a decade, and officials forecast the expected growth in the year ending June 2018 will be six percent.

Pakistan’s deepening cooperation with China comes as the country’s diplomatic relations with the U.S. continue to deteriorate. Washington complains that Islamabad is not doing enough to eliminate terrorist groups using the country’s soil for attacks against neighboring countries, including Afghanistan.

While U.S. economic assistance has significantly reduced in recent years, the Trump administration also suspended military assistance to Pakistan in January and linked its restoration to decisive actions against terrorist groups.

 

Pakistan strongly rejects the allegations and says it is being scapegoated for the U.S.-led coalition’s failures in ending the war in Afghanistan. .

China is also worried about the spread of regional terrorism in the wake of a low-level Muslim separatist insurgency in its troubled Xinjiang border region. But Beijing has steadfastly supported Islamabad’s counterterrorism efforts and dismisses U.S. criticism of them.

China’s arms exports to Pakistan have in recent years exponentially increased while exports of military hardware from the country’s traditionally largest supplier, the U.S., have reportedly declined to just $21-million in 2017 from $1-billion.

“China will never leave Pakistan. I shall say we have confidence in the future of Pakistan,” said Chinese Ambassador Jing, when asked whether terrorism-related concerns might also push Beijing away from Islamabad.

China’s investment under CPEC has also encouraged hundreds of private Chinese companies and thousands of Chinese nationals to arrive in Pakistan to look for business opportunities and buy property. The influx of the foreigners has raised alarms among local businesses and sparked worries that the Chinese labor force will take away local jobs.

Jing stressed that China and Pakistan are working together to promote mutual people-to-people connectivity through enhanced education and cultural linkages to improve mutual understanding.

Ambassador Jing says there are eight Chinese universities working to promote Pakistan’s official Urdu language while 12 Pakistan-study centers are working to promote mutual understanding between the two countries. There are 22,000 Pakistanis seeking education in China.

Pakistani officials say currently, about 25,000 students are learning Chinese language in 19 universities and four Confucius Institutes affiliated with the Chinese Ministry of Education.

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France: EU Needs Full Exemption from US Tariffs

The European Union needs to be exempted from steel and aluminum tariffs announced by the United States in order to work with Washington on trade with China, France’s Finance Minister Bruno Le Maire said Friday.

“We are close allies between the EU and the United States. We cannot live with full confidence with the risk of being hit by those measures and by those new tariffs. We cannot live with a kind of sword of Damocles hanging over our heads,” Le Maire told a press conference during the International Monetary Fund and World Bank spring meetings. 

“If we want to move forward … if we want to address the issue of trade, an issue of the new relationship with China, because we both want to engage China in a new multilateral order, we must first of all get rid of that threat,” he said.

U.S. President Donald Trump announced a 25 percent tariff on steel imports and 10 percent tariff on aluminum imports last month to counter what he has described as unfair international competition.

Le Maire said the EU’s exemption from the tariffs should be “full and permanent.”

The EU is seeking compensation from the United States for the tariffs through the World Trade Organization. Brussels has called for consultations with Washington as soon as possible and is drawing up a list of duties to be slapped on U.S. products.

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France: EU Needs Full Exemption from US Tariffs

The European Union needs to be exempted from steel and aluminum tariffs announced by the United States in order to work with Washington on trade with China, France’s Finance Minister Bruno Le Maire said Friday.

“We are close allies between the EU and the United States. We cannot live with full confidence with the risk of being hit by those measures and by those new tariffs. We cannot live with a kind of sword of Damocles hanging over our heads,” Le Maire told a press conference during the International Monetary Fund and World Bank spring meetings. 

“If we want to move forward … if we want to address the issue of trade, an issue of the new relationship with China, because we both want to engage China in a new multilateral order, we must first of all get rid of that threat,” he said.

U.S. President Donald Trump announced a 25 percent tariff on steel imports and 10 percent tariff on aluminum imports last month to counter what he has described as unfair international competition.

Le Maire said the EU’s exemption from the tariffs should be “full and permanent.”

The EU is seeking compensation from the United States for the tariffs through the World Trade Organization. Brussels has called for consultations with Washington as soon as possible and is drawing up a list of duties to be slapped on U.S. products.

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DOJ Investigates: Did AT&T, Verizon Make it Hard to Switch?

The Justice Department has opened an antitrust investigation into whether AT&T, Verizon and a standards-setting group worked together to stop consumers from easily switching wireless carriers.

 

The companies confirmed the inquiry in separate statements late Friday in response to a report in The New York Times. 

 

The U.S. government is looking into whether AT&T, Verizon and telecommunications standards organization GSMA worked together to suppress a technology that lets people remotely switch wireless companies without having to insert a new SIM card into their phones. 

 

The Times, citing six anonymous people familiar with the inquiry, reported that the investigation was opened after at least one device maker and one other wireless company filed complaints.

Verizon, AT&T respond 

Verizon, which is based in New York, derided the accusations on the issue as “much ado about nothing” in its statement. It framed its efforts as part of attempt to “provide a better experience for the consumer.” 

 

Dallas-based AT&T also depicted its activity as part of a push to improve wireless service for consumers and said it had already responded to the government’s request for information. The company said it “will continue to work proactively within GSMA, including with those who might disagree with the proposed standards, to move this issue forward.”

 

GMSA and the Justice Department declined to comment.

Merger trial

 

News of the probe emerge during a trial of the Justice Department’s case seeking to block AT&T’s proposed $85 billion merger with Time Warner over antitrust concerns. That battle centers mostly on the future of cable TV and digital video streaming.

 

Verizon and AT&T are the two leading wireless carriers, with a combined market share of about 70 percent.

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DOJ Investigates: Did AT&T, Verizon Make it Hard to Switch?

The Justice Department has opened an antitrust investigation into whether AT&T, Verizon and a standards-setting group worked together to stop consumers from easily switching wireless carriers.

 

The companies confirmed the inquiry in separate statements late Friday in response to a report in The New York Times. 

 

The U.S. government is looking into whether AT&T, Verizon and telecommunications standards organization GSMA worked together to suppress a technology that lets people remotely switch wireless companies without having to insert a new SIM card into their phones. 

 

The Times, citing six anonymous people familiar with the inquiry, reported that the investigation was opened after at least one device maker and one other wireless company filed complaints.

Verizon, AT&T respond 

Verizon, which is based in New York, derided the accusations on the issue as “much ado about nothing” in its statement. It framed its efforts as part of attempt to “provide a better experience for the consumer.” 

 

Dallas-based AT&T also depicted its activity as part of a push to improve wireless service for consumers and said it had already responded to the government’s request for information. The company said it “will continue to work proactively within GSMA, including with those who might disagree with the proposed standards, to move this issue forward.”

 

GMSA and the Justice Department declined to comment.

Merger trial

 

News of the probe emerge during a trial of the Justice Department’s case seeking to block AT&T’s proposed $85 billion merger with Time Warner over antitrust concerns. That battle centers mostly on the future of cable TV and digital video streaming.

 

Verizon and AT&T are the two leading wireless carriers, with a combined market share of about 70 percent.

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Report: Sanctions-Hit Russian Firms Seek $1.6B in Liquidity

Russian companies hit by U.S. sanctions, including aluminum giant Rusal, have asked for 100 billion rubles ($1.6 billion) in liquidity support from the government, Finance Minister Anton Siluanov was quoted by the Interfax news agency as saying Friday.

The United States on April 6 imposed sanctions against several Russian entities and individuals, including Rusal and its major shareholder, Oleg Deripaska, to punish Moscow for its suspected meddling in the 2016 U.S. election and other alleged “malign activity.”

Rusal, the world’s second-biggest aluminum producer, has been particularly hard hit as the sanctions have caused concern among some customers, suppliers and creditors that they could be blacklisted, too, through association with the company.

“Temporary nationalization” is an option for some sanctions-hit companies, but not Rusal, Siluanov was quoted as saying. He did not name the companies he was referring to.

A Kremlin spokesman had said Thursday that temporary nationalization was an option for helping Rusal.

According to another news agency, RIA, Rusal has requested only government support with liquidity and with demand for aluminum so far, Siluanov said.

RIA quoted the minister as saying the government was not considering state purchases of aluminum for now.

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Report: Sanctions-Hit Russian Firms Seek $1.6B in Liquidity

Russian companies hit by U.S. sanctions, including aluminum giant Rusal, have asked for 100 billion rubles ($1.6 billion) in liquidity support from the government, Finance Minister Anton Siluanov was quoted by the Interfax news agency as saying Friday.

The United States on April 6 imposed sanctions against several Russian entities and individuals, including Rusal and its major shareholder, Oleg Deripaska, to punish Moscow for its suspected meddling in the 2016 U.S. election and other alleged “malign activity.”

Rusal, the world’s second-biggest aluminum producer, has been particularly hard hit as the sanctions have caused concern among some customers, suppliers and creditors that they could be blacklisted, too, through association with the company.

“Temporary nationalization” is an option for some sanctions-hit companies, but not Rusal, Siluanov was quoted as saying. He did not name the companies he was referring to.

A Kremlin spokesman had said Thursday that temporary nationalization was an option for helping Rusal.

According to another news agency, RIA, Rusal has requested only government support with liquidity and with demand for aluminum so far, Siluanov said.

RIA quoted the minister as saying the government was not considering state purchases of aluminum for now.

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Reports: $1B Fine for Wells Fargo for Illegal Sales

U.S. news reports say Wells Fargo will be fined as much as $1 billion for illegally selling customers car insurance policies they did not want or need, and for charging unnecessary fees in connection with mortgages.

This would be the largest fine ever imposed by federal bank regulators and the Consumer Financial Protection Bureau.

The fine is part of a settlement regulators negotiated with the bank.

Wells Fargo and federal officials have not commented on the reports.

The San Francisco-based lender admitted selling the unwanted insurance policies to hundreds of thousands of car loan customers. In many cases, the borrowers could not afford both the insurance and car payments and their cars were repossessed.

Many U.S. banks have enjoyed looser federal regulations under President Donald Trump’s pro-business administration.

But Trump denied reports that Wells Fargo would not be punished, tweeting in December that fines and penalties against the bank would, if anything, be substantially increased.

“I will cut regs but make penalties severe when caught cheating,” he wrote.

Wells Fargo previously paid a $185 million fine for opening bank and credit card accounts in its customers’ names without telling them.

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US-China Trade Row Threatens Global Confidence: IMF’s Lagarde

The biggest danger from the U.S.-China trade dispute is the threat to global confidence and investment, International Monetary Fund Managing Director Christine Lagarde said on Thursday.

The IMF chief said the tariffs threatened by the world’s two largest economies would have a modest direct impact on the global economy but could produce uncertainty that choked off investment, one of the key drivers of rising global growth.

“The actual impact on growth is not very substantial, when you measure in terms of GDP,” Lagarde said of the tariffs, adding that the “erosion of confidence” would be worse.

“When investors do not know under what terms they will be trading, when they don’t know how to organize their supply chain, they are reluctant to invest,” she told a news conference in Washington where world financial leaders gathered for the start of the IMF and World Bank spring meetings.

In its World Economic Outlook released on Tuesday, the IMF cited 2016 research showing that tariffs or other barriers leading to a 10 percent increase in import prices in all countries would lower global output by about 1.75 percent after five years and by close to 2 percent in the long term.

In Beijing, China’s Foreign Ministry warned that the Trump administration’s tariff threats and other measures to try to force trade concessions from Beijing was a “miscalculated step” and would have little effect on Chinese industries.

In the latest escalations in the trade row, Washington said this week that it had banned U.S. companies from selling parts to Chinese telecom equipment maker ZTE for seven years, while China on Tuesday announced hefty anti-dumping tariffs on imports of U.S. sorghum and measures on synthetic rubber imports from the United States, European Union and Singapore.

The U.S. Trade Representative’s office also is planning to soon release a second list of Chinese imports targeted for an additional $100 billion of U.S. tariffs, tripling the amount of Chinese goods under a tariff threat.

Lagarde said the trade tensions would be a major topic of discussion among finance ministers and central bank governors at the IMF and World Bank meetings.

“My suspicion is that there will be many bilateral discussions to be had between the various parties involved,” Lagarde said, adding that the issue would also be discussed in larger sessions involving the Fund’s 189 member countries.

“Investment and trade are two key engines that are finally picking up. We don’t want to damage that,” Lagarde said.

If the tariffs go into effect, the hit to business confidence would be worldwide because supply chains are globally interconnected, she added.

 

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