Category Archives: Business

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Afghanistan’s Poverty Rate Rises as Economy Suffers

Afghanistan’s poverty rate has worsened sharply over the past five years as the economy has stalled and the Taliban insurgency has spread, with more than half the population living on less than a dollar a day, a survey published on Monday showed.

The Afghanistan Living Conditions Survey (ALCS), a joint study by the European Union and Afghanistan’s Central Statistics Organization, showed the national poverty rate rising to 55 percent in 2016-17 from 38 percent in 2011-12.

“The high poverty rates represent the combined effect of stagnating economic growth, increasing demographic pressures, and a deteriorating security situation,” Shubham Chaudhuri, World Bank director for Afghanistan, said in a commentary about the survey.

The report underlines the problems facing the Western-backed government in Kabul which needs economic growth to help replace foreign aid and to provide jobs for its fast-growing population.

As international forces have withdrawn and the billions of dollars in foreign aid that once poured in have dried up, Afghanistan’s battered agricultural economy has struggled.

More than a decade and a half after a U.S.-led campaign toppled the Taliban in 2001, the poverty line was defined as an income of 70 afghanis, or about one U.S. dollar, per person a day.

The ALCS report comes at a time when 20 of Afghanistan’s 34 provinces are suffering from serious drought and international aid agencies are seeking millions of dollars to help them.

Food insecurity has risen from 30.1 percent to 44.6 percent in five years, meaning many more people are forced to sell their land, take their children out of school to work or depend on food aid, the survey found.

Chaudhuri said the survey was the first estimate of the economic situation since Afghan forces took over security responsibilities in 2014 from international troops.

“In recent years, as population growth outstripped economic growth, an increase in poverty was inevitable,” he said on the World Bank blog site.

The survey found that 50 percent of the population is younger than 15.

This month, President Ashraf Ghani’s government said it had listed job creation among its priorities and aimed at creating 2.1 million jobs within three years.

However, according to the IMF, the economy is set to grow at 2.5-3 percent in 2017-18, too slowly to stop unemployment from rising.

The needs to produce some 400,000 new jobs a year to keep pace with population growth and tens of thousands of qualified people struggle to find work in cities, and farmers were unable to earn a sustainable livelihood due to the drought.

Officials at the European Union said the ALCS report was based on data collected from 21,000 households over 12 months.

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Afghanistan’s Poverty Rate Rises as Economy Suffers

Afghanistan’s poverty rate has worsened sharply over the past five years as the economy has stalled and the Taliban insurgency has spread, with more than half the population living on less than a dollar a day, a survey published on Monday showed.

The Afghanistan Living Conditions Survey (ALCS), a joint study by the European Union and Afghanistan’s Central Statistics Organization, showed the national poverty rate rising to 55 percent in 2016-17 from 38 percent in 2011-12.

“The high poverty rates represent the combined effect of stagnating economic growth, increasing demographic pressures, and a deteriorating security situation,” Shubham Chaudhuri, World Bank director for Afghanistan, said in a commentary about the survey.

The report underlines the problems facing the Western-backed government in Kabul which needs economic growth to help replace foreign aid and to provide jobs for its fast-growing population.

As international forces have withdrawn and the billions of dollars in foreign aid that once poured in have dried up, Afghanistan’s battered agricultural economy has struggled.

More than a decade and a half after a U.S.-led campaign toppled the Taliban in 2001, the poverty line was defined as an income of 70 afghanis, or about one U.S. dollar, per person a day.

The ALCS report comes at a time when 20 of Afghanistan’s 34 provinces are suffering from serious drought and international aid agencies are seeking millions of dollars to help them.

Food insecurity has risen from 30.1 percent to 44.6 percent in five years, meaning many more people are forced to sell their land, take their children out of school to work or depend on food aid, the survey found.

Chaudhuri said the survey was the first estimate of the economic situation since Afghan forces took over security responsibilities in 2014 from international troops.

“In recent years, as population growth outstripped economic growth, an increase in poverty was inevitable,” he said on the World Bank blog site.

The survey found that 50 percent of the population is younger than 15.

This month, President Ashraf Ghani’s government said it had listed job creation among its priorities and aimed at creating 2.1 million jobs within three years.

However, according to the IMF, the economy is set to grow at 2.5-3 percent in 2017-18, too slowly to stop unemployment from rising.

The needs to produce some 400,000 new jobs a year to keep pace with population growth and tens of thousands of qualified people struggle to find work in cities, and farmers were unable to earn a sustainable livelihood due to the drought.

Officials at the European Union said the ALCS report was based on data collected from 21,000 households over 12 months.

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US Trade Delegation to Brief Trump After Talks in China

The U.S. and China ended the second day of high level talks Friday aimed at avoiding a possible trade war.

The U.S. delegation, headed by Treasury Secretary Steven Mnuchin, will brief President Donald Trump Saturday and “seek his decision on next steps,” the White House said in a statement, adding that the administration had “consensus” for “immediate attention” to change the U.S.-China trade and investment relationship.

“We will be meeting tomorrow to determine the results, but it is hard for China in that they have become very spoiled with U.S. trade wins!” Trump said in a Twitter post late Friday.

“Both sides recognize there are still big differences on some issues and that they need to continue to step up their work to make progress,” China said in a statement released by Xinhua state news agency.

An editorial Saturday by China’s ruling Communist Party newspaper, the People’s Daily, however, said that “in the face of the U.S.’s fierce offensive of protectionism, China resolutely defends its national interest,” adding that Beijing “will never trade away its core interests and rejects the U.S.’s demand for an exorbitant price.”

The announcement followed comments by Mnuchin earlier in the day that the two sides were having “very good conversations.”

Trump has threatened to levy new tariffs on $150 billion of Chinese imports while Beijing shot back with a list of $50 billion in targeted U.S. goods.

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US Trade Delegation to Brief Trump After Talks in China

The U.S. and China ended the second day of high level talks Friday aimed at avoiding a possible trade war.

The U.S. delegation, headed by Treasury Secretary Steven Mnuchin, will brief President Donald Trump Saturday and “seek his decision on next steps,” the White House said in a statement, adding that the administration had “consensus” for “immediate attention” to change the U.S.-China trade and investment relationship.

“We will be meeting tomorrow to determine the results, but it is hard for China in that they have become very spoiled with U.S. trade wins!” Trump said in a Twitter post late Friday.

“Both sides recognize there are still big differences on some issues and that they need to continue to step up their work to make progress,” China said in a statement released by Xinhua state news agency.

An editorial Saturday by China’s ruling Communist Party newspaper, the People’s Daily, however, said that “in the face of the U.S.’s fierce offensive of protectionism, China resolutely defends its national interest,” adding that Beijing “will never trade away its core interests and rejects the U.S.’s demand for an exorbitant price.”

The announcement followed comments by Mnuchin earlier in the day that the two sides were having “very good conversations.”

Trump has threatened to levy new tariffs on $150 billion of Chinese imports while Beijing shot back with a list of $50 billion in targeted U.S. goods.

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Trump Demands China Slash Trade Surplus, Tariffs

The Trump administration has drawn a hard line in trade talks with China, demanding a $200 billion cut in the Chinese trade surplus with the United States, sharply lower tariffs and advanced technology subsidies, people familiar with the talks said Friday.

The lengthy list of demands was presented to Beijing before the start of talks Thursday and Friday between top-level Trump administration officials and their Chinese counterparts to try to avert a damaging trade war between the world’s two largest economies.

A White House statement did not mention specific demands, but said the U.S. delegation “held frank discussions with Chinese officials on rebalancing the United States-China bilateral economic relationship, improving China’s protection of intellectual property, and identifying policies that unfairly enforce technology transfers.”

The statement gave no indication that U.S. President Donald Trump would back off on his threat to impose tariffs on up to $150 billion in Chinese goods over allegations of intellectual property theft.

​Trump, delegation to meet Saturday

The delegation was returning to Washington to brief Trump and “seek his decision on next steps,” the White House said, adding that the administration had “consensus” for “immediate attention” to change the U.S-China trade and investment relationship.

Trump said he would meet with the delegation Saturday.

China’s state-run Xinhua news agency described the talks as “constructive, candid and efficient” but with disagreements that remain “relatively big.”

Tariff threats have roiled stock markets in recent weeks, but the inconclusive outcome of the Beijing talks did little to stop a rally in U.S. shares prompted by jobs data that eased fears of faster Federal Reserve rate hikes. Stocks in Shanghai ended 0.5 percent lower while they fell 1.3 percent in Hong Kong.

Trump told reporters in Washington that he was determined to bring fairness to U.S.-China trade.

“We will be doing something one way or the other with respect to what’s happening in China,” Trump said. He added that he had “great respect” for China’s President Xi Jinping. “That’s why we’re being so nice, because we have a great relationship.”

​Intellectual property

China during the meetings asked that the United States ease crushing sanctions on Chinese telecom equipment maker ZTE Corp, people with knowledge of the matter said.

Washington’s demand for a $200 billion cut from China’s U.S. goods trade surplus doubles Trump’s previous request for a $100 billion cut. China had a record U.S. goods trade surplus of $375 billion in 2017.

Trump has also demanded “reciprocity” between U.S. and Chinese tariffs, frequently complaining about China’s 25 percent car tariff while the U.S. equivalent is 2.5 percent.

The U.S. team, led by U.S. Treasury Secretary Steven Mnuchin, demanded that China lower tariffs to levels no higher than those imposed by the United States, two people familiar with the demands said. The delegation also asked China to halt subsidies for advanced technology linked to its “Made in China 2025,” the sources said.

At the heart of the dispute are U.S. allegations that Chinese joint venture requirements and other policies force American companies to turn over their intellectual property, costing them billions of dollars annually and giving China’s state enterprises an edge in the race to develop new industries crucial to future growth.

China denies such coercion. Its 2025 industrial plan seeks to upgrade China’s manufacturing sector to more advanced products, including information technology, semiconductors and aircraft.

“I think the U.S. is asking for the impossible. Reducing the deficit by $200 billion by 2020 is quite an unrealistic demand, but it may also be a negotiation tactic to start high first,” said Tommy Xie, economist at OCBC Bank in Singapore.

Beijing offers

China offered to increase U.S. imports and lower tariffs on some goods, including cars, according to the sources.

But Beijing asked the United States to treat Chinese investment equally under national security reviews, refrain from new restrictions on investments and halt a proposal to impose 25 percent tariffs under its “Section 301” intellectual property probe.

China also offered to reconsider anti-dumping duties on U.S. sorghum, according to a proposal it submitted.

Xinhua said there had been exchanges of opinion on intellectual property protections, expanding U.S. exports and bilateral services trade. It gave no indication of what actions might be taken but said the two sides committed to resolve their trade disputes through dialogue.

U.S. negotiators agreed to bring up the ZTE sanctions with Trump after new representations from the Chinese side, Xinhua said. ZTE was hit last month with a seven-year ban on American companies’ selling components and software to it after the U.S. Commerce Department found ZTE failed to comply with an agreement to settle breached U.S. sanctions on Iran.

“My impression was that (the talks) didn’t go well given the rhetoric,” said Kevin Lai, senior economist at Daiwa Capital markets in Hong Kong. “I think the divide is still very big.”

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US Adds Modest 164,000 Jobs; Unemployment Down

U.S. employers stepped up hiring modestly in April, and the unemployment rate fell to 3.9 percent, evidence of the economy’s resilience amid the recent stock market chaos and anxieties about a possible trade war.

Job growth amounted to a decent 164,000 last month, up from an upwardly revised 135,000 in March. The unemployment rate fell after having held at 4.1 percent for the prior six months largely because fewer people were searching for jobs.

The overall unemployment rate is now the lowest since December 2000. The rate for African-Americans — 6.6 percent — is the lowest on record since 1972.

Many employers say it’s difficult to find qualified workers. But they have yet to significantly bump up pay in most industries. Average hourly earnings rose 2.6 percent from a year ago.

The pace of hiring has yet to be disrupted by dramatic global market swings, a recent pickup in inflation and the risk that the tariffs being pushed by President Donald Trump could provoke a trade war.

Much of the economy’s strength, for the moment, comes from the healthy job market. The increase in people earning paychecks has bolstered demand for housing, even though fewer properties are being listed for sale. Consumer confidence has improved over the past year. And more people are shopping, with retail sales having picked up in March after three monthly declines.

Workers in the private sector during the first three months of 2018 enjoyed their sharpest average income growth in 11 years, the Labor Department said last week in a separate report on compensation. That pay growth suggests that some of the momentum from the slow but steady recovery from the 2008 financial crisis is spreading to more people after it had disproportionately benefited the nation’s wealthiest areas and highest earners.

The monthly jobs reports have shown pay raises inching up. At the same time, employers have become less and less likely to shed workers. The four-week moving average for people applying for first-time unemployment benefits has reached its lowest level since 1973.

The trend reflects a decline in mass layoffs. Many companies expect the economy to keep expanding, especially after a dose of stimulus from tax cuts signed into law by Trump that have also increased the federal budget deficit.

Inflation has shown signs of accelerating slightly, eroding some of the potential wage growth. Consumer prices rose at a year-over-year pace of 2.4 percent in March, the sharpest annual increase in 12 months. The Federal Reserve has an annual inflation target of 2 percent, and investors expect the Fed to raise rates at least twice more this year, after an earlier rate hike in March, to keep inflation from climbing too far above that target.

The home market, a critical component of the U.S. economy, has been a beneficiary of the steady job growth. The National Association of Realtors said that homes sold at a solid annual pace of 5.6 million in March, even though the number of houses for sale has plunged. As a result, average home prices are rising at more than twice the pace of wages.

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