Category Archives: Business

economy and business news

World Trade Body Warns US-China Tensions May Dent Business

The World Trade Organization predicts continued trade growth this year, though it warns that tensions and “tit-for-tat” retaliatory measures, notably between the U.S. and China, could compromise those projections.

WTO Director-General Roberto Azevedo laid out the trade body’s predictions at a news conference Thursday amid concerns about a trade war over U.S. President Donald Trump’s planned tariffs on Chinese and other goods and Beijing’s retaliation.

 

As it stands, the forecast is for 4.4 percent growth in merchandise trade volumes in 2018, easing to 4 percent next year. That’s down from 4.7 percent in 2017.

 

The WTO is pointing to “broadly positive signs” in world trade but says they face headwinds from “a rising tide of anti-trade sentiment and the increased willingness of governments to employ restrictive trade measures.”

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Solar Surge Threatens Hydro Future on Mekong 

Thousands of megawatts of wind and solar energy contracts in the Mekong region of Southeast Asia have been signed, seriously challenging the financial viability of major hydropower projects on the river, an energy expert told a water conference last week.

Buoyed by a recent Thai government decision to delay a power purchase deal with a major mainstream Mekong dam, clean-energy proponents and economists told the third Mekong River Commission summit that the regional energy market was on the cusp of a technological revolution.

Brian Eyler, director of the Southeast Asia Program at the Stimson Center, a nonprofit in Washington dedicated to enhancing global peace and security, said 6,000 megawatts’ worth of wind and solar contracts had been signed in Cambodia, Vietnam, Thailand and Laos in the last six months.

He said that in January 2017, he and his colleagues had suggested that more solar and wind energy projects be incorporated into Cambodia’s power development plan, the prospect of which had been “basically off the table” at the time. “In a year’s time, Cambodia has entirely restructured its energy sector” to emphasize solar projects in the country, “and if Cambodia’s doing it, you can bet that the other countries are doing it as well.”

Two gigawatts of wind and solar projects were announced in Vietnam in February and March alone according to a spreadsheet provided by the Stimson Center.

Hyunjung Lee, senior energy economist at the Asian Development Bank’s Southeast Asia Energy Division, said technologies such as wind and solar power were “going to hit the region very significantly, in my view.”

“The atmosphere in the region has been changed,” she said, even in just the past year. “We see a lot of development can happen in solar and wind in the region,” though more integrated approaches were needed.

Lee said the ADB was working to set up a Regional Power Coordination Center that would mimic a highly successful project in southern Africa to create an efficient, integrated regional market.

Impact on river system

A six-year Mekong River Commission Council study on development plans for the Mekong, which was the focus of the summit, suggested catastrophic impacts upon the health of the river system if all planned hydropower dams — 11 mainstream projects and more than 100 on tributaries — were built.

In a January report, the International Renewable Energy Agency found that the cost of electricity generated by solar facilities that supply utilities had fallen by 73 percent from 2010 to 2017, and the cost was forecast to be cut in half again by 2020. 

At that price trajectory, the cost of solar power would fall below that of hydropower by 2020, long before many planned Mekong dams go online.

Global solar capacity grew 32 percent, adding 94 gigawatts in 2017, while renewables across the board increased by 8.3 percent, the IREA survey of 15,000 data points found. Renewables and solar grew faster in Asia than anywhere else in the world, while the amount of hydropower commissioned across the globe was the lowest in a decade.

Wang Wenling, an assistant professor at Yunnan University’s Institute of International Rivers and Eco-Security, said she had just seen firsthand how far the price of solar technology had plummeted on a recent trip to North Carolina in the United States.

“I was super surprised how their solar power production cost per unit is actually cheaper than hydropower. I don’t know how they make it — it’s almost impossible for me — but their cost is only about 15 percent of the cost in China,” she said.

“So I think we have a lot of alternatives and it needs to be considered,” she said.

Some participants, particularly from Laos and Cambodia, remained skeptical of the technology.

“I think we need some more figures,” said a Cambodian member of the audience, raising concerns about stability. “We also think about some figure for the comparison between the occupation of the land of hydropower with solar energy.”

Attractive idea for Cambodia

Jake Brunner, program coordinator for the International Union for Conservation of Nature, said the figures for solar were particularly attractive in Cambodia, where land remained relatively cheap, while energy demand was high in neighboring southern Vietnam.

“We calculated that if you took one 10,000-hectare economic land concession in Cambodia, for example, and you made some very conservative assumptions, you could generate about 3 gigawatts, which is pretty close to Cambodia’s entire national consumption,” he said.

Land is a particularly sensitive issue in Cambodia, where rights group Licadho says more than half a million people have been affected by land conflicts.

Gregory Thomas, executive director of the Natural Heritage Institute, told the summit his organization had researched a solar photo-voltaic alternative for Cambodia that didn’t require any land at all.

Instead of building the massive planned Sambor dam on the Mekong, a “no dam alternative” study commissioned by the Cambodian government had recommended placing solar cells on the existing reservoir of the Lower Sesan II dam in Stung Treng.

“The advantage of integrating solar arrays on a hydropower reservoir that already exists is that you can use the unoccupied space on the reservoir without any land use conflicts whatsoever,” he said. “And, of course, the reservoir storage acts as a battery, essentially, to backstop the intermittent nature of the solar generation.”

Such a project could be cost-competitive and go online much more quickly than a hydropower dam, with 100 megwatts deployable in year, he said.

Floating solar projects are being developed around the world, including in China, where an enormous 150-megawatt installation on a lake that used to be a deserted coal mine is expected to go online in May, powering 15,000 homes.

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Solar Surge Threatens Hydro Future on Mekong 

Thousands of megawatts of wind and solar energy contracts in the Mekong region of Southeast Asia have been signed, seriously challenging the financial viability of major hydropower projects on the river, an energy expert told a water conference last week.

Buoyed by a recent Thai government decision to delay a power purchase deal with a major mainstream Mekong dam, clean-energy proponents and economists told the third Mekong River Commission summit that the regional energy market was on the cusp of a technological revolution.

Brian Eyler, director of the Southeast Asia Program at the Stimson Center, a nonprofit in Washington dedicated to enhancing global peace and security, said 6,000 megawatts’ worth of wind and solar contracts had been signed in Cambodia, Vietnam, Thailand and Laos in the last six months.

He said that in January 2017, he and his colleagues had suggested that more solar and wind energy projects be incorporated into Cambodia’s power development plan, the prospect of which had been “basically off the table” at the time. “In a year’s time, Cambodia has entirely restructured its energy sector” to emphasize solar projects in the country, “and if Cambodia’s doing it, you can bet that the other countries are doing it as well.”

Two gigawatts of wind and solar projects were announced in Vietnam in February and March alone according to a spreadsheet provided by the Stimson Center.

Hyunjung Lee, senior energy economist at the Asian Development Bank’s Southeast Asia Energy Division, said technologies such as wind and solar power were “going to hit the region very significantly, in my view.”

“The atmosphere in the region has been changed,” she said, even in just the past year. “We see a lot of development can happen in solar and wind in the region,” though more integrated approaches were needed.

Lee said the ADB was working to set up a Regional Power Coordination Center that would mimic a highly successful project in southern Africa to create an efficient, integrated regional market.

Impact on river system

A six-year Mekong River Commission Council study on development plans for the Mekong, which was the focus of the summit, suggested catastrophic impacts upon the health of the river system if all planned hydropower dams — 11 mainstream projects and more than 100 on tributaries — were built.

In a January report, the International Renewable Energy Agency found that the cost of electricity generated by solar facilities that supply utilities had fallen by 73 percent from 2010 to 2017, and the cost was forecast to be cut in half again by 2020. 

At that price trajectory, the cost of solar power would fall below that of hydropower by 2020, long before many planned Mekong dams go online.

Global solar capacity grew 32 percent, adding 94 gigawatts in 2017, while renewables across the board increased by 8.3 percent, the IREA survey of 15,000 data points found. Renewables and solar grew faster in Asia than anywhere else in the world, while the amount of hydropower commissioned across the globe was the lowest in a decade.

Wang Wenling, an assistant professor at Yunnan University’s Institute of International Rivers and Eco-Security, said she had just seen firsthand how far the price of solar technology had plummeted on a recent trip to North Carolina in the United States.

“I was super surprised how their solar power production cost per unit is actually cheaper than hydropower. I don’t know how they make it — it’s almost impossible for me — but their cost is only about 15 percent of the cost in China,” she said.

“So I think we have a lot of alternatives and it needs to be considered,” she said.

Some participants, particularly from Laos and Cambodia, remained skeptical of the technology.

“I think we need some more figures,” said a Cambodian member of the audience, raising concerns about stability. “We also think about some figure for the comparison between the occupation of the land of hydropower with solar energy.”

Attractive idea for Cambodia

Jake Brunner, program coordinator for the International Union for Conservation of Nature, said the figures for solar were particularly attractive in Cambodia, where land remained relatively cheap, while energy demand was high in neighboring southern Vietnam.

“We calculated that if you took one 10,000-hectare economic land concession in Cambodia, for example, and you made some very conservative assumptions, you could generate about 3 gigawatts, which is pretty close to Cambodia’s entire national consumption,” he said.

Land is a particularly sensitive issue in Cambodia, where rights group Licadho says more than half a million people have been affected by land conflicts.

Gregory Thomas, executive director of the Natural Heritage Institute, told the summit his organization had researched a solar photo-voltaic alternative for Cambodia that didn’t require any land at all.

Instead of building the massive planned Sambor dam on the Mekong, a “no dam alternative” study commissioned by the Cambodian government had recommended placing solar cells on the existing reservoir of the Lower Sesan II dam in Stung Treng.

“The advantage of integrating solar arrays on a hydropower reservoir that already exists is that you can use the unoccupied space on the reservoir without any land use conflicts whatsoever,” he said. “And, of course, the reservoir storage acts as a battery, essentially, to backstop the intermittent nature of the solar generation.”

Such a project could be cost-competitive and go online much more quickly than a hydropower dam, with 100 megwatts deployable in year, he said.

Floating solar projects are being developed around the world, including in China, where an enormous 150-megawatt installation on a lake that used to be a deserted coal mine is expected to go online in May, powering 15,000 homes.

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Farmers Fret Over Trump’s Trade Tactics

Since 1980 when he began farming in Illinois, Brent Scholl’s mornings have consisted of a similar routine … waking early to head out to one of several buildings to check in on hundreds of his pigs.

“Every eight weeks, we get 1,100 pigs delivered to us,” Scholl told VOA while tending to a feeding system for his hogs, which he raises for several months before sending them to market. “In a year’s time, we sell over 6,000 pigs.”

It’s a costly and labor intensive – but sometimes profitable – process, which Scholl attributes to increased foreign demand for pork.

“Every fourth hog of mine goes overseas somewhere,” he said. “So that’s 25 to 28 percent of what I am making coming from foreign dollars.”

Foreign dollars at risk if China’s proposed 25 percent tariff on U.S. pork products – a response to U.S. tariffs on Chinese aluminum and steel – is implemented later this year. 

“If that all goes away it’s a losing business,” Scholl said.

Small profit margin

The increasing trade tension between the United States and China has rattled farmers in the American heartland, where many of the products on which China seeks to impose a tariff are produced. Many farmers like Scholl are increasingly wary about how tariffs will impact their income. 

“I heard one say that the difference between losing money and making money at this point is exports, and so if he doesn’t have as many exports as he did last year, he’s going to lose money,” explained Tamara Nelsen, Senior Director of Commodities for the Illinois Farm Bureau, who added that after several years of declining farm income due largely to increased input costs, tariffs will only take away more money from a farmer’s dwindling bottom line. 

“Even though China’s tariff might only be 25 percent, the market might get nervous enough on a given day to have it be a greater discount than that. That just makes it hard for a farmer to make money.” 

And it’s not just for profits from pork. 

Brent Scholl also farms soybeans, and China’s threat to impose a tariff on that commodity has already cost Scholl money. 

“Yesterday, the market went down over 50 cents,” he noted.

Domestic politics

Scholl is concerned China will look elsewhere to obtain cheaper commodities, limiting a key market for U.S. products. He feels there is only one person to blame for his uncertain financial outlook.

“Right now, I would say our president,” he said.

A president Scholl voted for in the 2016 election, despite Trump’s tough talk on trade agreements.

Talking with reporters before a recent Cabinet meeting at the White House, Trump addressed farmers’ concerns with his trade policies.

“If we do a deal with China, if during the course of a negotiation they want to hit the farmers because they think that hits me, I wouldn’t say that’s nice,” said Trump. “But I tell you, our farmers are great patriots. These are great patriots. They understand that they’re doing this for the country. And we’ll make it up to them. And in the end, they’re going to be much stronger than they are right now.”

With the U.S. withdrawal from the Trans Pacific Partnership agreement, or TPP, last year, and more recently the re-negotiation of the North American Free Trade Agreement, also known as NAFTA, compounded with potential Chinese tariffs on the key products Scholl raises, it’s a challenging time for U.S. farmers. Scholl admits he has some buyer’s remorse for supporting Trump.

“I thought he was the lesser of two evils,” he told VOA. “I don’t know what I’m thinking right now.”

Scholl is holding out hope President Trump’s trade tactics will work in protecting American jobs and ultimately realizing better trade deals. 

If not, Scholl says it could influence his decision at the ballot box in the next presidential election.

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Farmers Fret Over Trump’s Trade Tactics

Since 1980 when he began farming in Illinois, Brent Scholl’s mornings have consisted of a similar routine … waking early to head out to one of several buildings to check in on hundreds of his pigs.

“Every eight weeks, we get 1,100 pigs delivered to us,” Scholl told VOA while tending to a feeding system for his hogs, which he raises for several months before sending them to market. “In a year’s time, we sell over 6,000 pigs.”

It’s a costly and labor intensive – but sometimes profitable – process, which Scholl attributes to increased foreign demand for pork.

“Every fourth hog of mine goes overseas somewhere,” he said. “So that’s 25 to 28 percent of what I am making coming from foreign dollars.”

Foreign dollars at risk if China’s proposed 25 percent tariff on U.S. pork products – a response to U.S. tariffs on Chinese aluminum and steel – is implemented later this year. 

“If that all goes away it’s a losing business,” Scholl said.

Small profit margin

The increasing trade tension between the United States and China has rattled farmers in the American heartland, where many of the products on which China seeks to impose a tariff are produced. Many farmers like Scholl are increasingly wary about how tariffs will impact their income. 

“I heard one say that the difference between losing money and making money at this point is exports, and so if he doesn’t have as many exports as he did last year, he’s going to lose money,” explained Tamara Nelsen, Senior Director of Commodities for the Illinois Farm Bureau, who added that after several years of declining farm income due largely to increased input costs, tariffs will only take away more money from a farmer’s dwindling bottom line. 

“Even though China’s tariff might only be 25 percent, the market might get nervous enough on a given day to have it be a greater discount than that. That just makes it hard for a farmer to make money.” 

And it’s not just for profits from pork. 

Brent Scholl also farms soybeans, and China’s threat to impose a tariff on that commodity has already cost Scholl money. 

“Yesterday, the market went down over 50 cents,” he noted.

Domestic politics

Scholl is concerned China will look elsewhere to obtain cheaper commodities, limiting a key market for U.S. products. He feels there is only one person to blame for his uncertain financial outlook.

“Right now, I would say our president,” he said.

A president Scholl voted for in the 2016 election, despite Trump’s tough talk on trade agreements.

Talking with reporters before a recent Cabinet meeting at the White House, Trump addressed farmers’ concerns with his trade policies.

“If we do a deal with China, if during the course of a negotiation they want to hit the farmers because they think that hits me, I wouldn’t say that’s nice,” said Trump. “But I tell you, our farmers are great patriots. These are great patriots. They understand that they’re doing this for the country. And we’ll make it up to them. And in the end, they’re going to be much stronger than they are right now.”

With the U.S. withdrawal from the Trans Pacific Partnership agreement, or TPP, last year, and more recently the re-negotiation of the North American Free Trade Agreement, also known as NAFTA, compounded with potential Chinese tariffs on the key products Scholl raises, it’s a challenging time for U.S. farmers. Scholl admits he has some buyer’s remorse for supporting Trump.

“I thought he was the lesser of two evils,” he told VOA. “I don’t know what I’m thinking right now.”

Scholl is holding out hope President Trump’s trade tactics will work in protecting American jobs and ultimately realizing better trade deals. 

If not, Scholl says it could influence his decision at the ballot box in the next presidential election.

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Farmers Fret Over Trump’s Trade Tactics

The increasing trade tensions between the United States and China has rattled farmers in the American heartland, the place where many of the products on which China seeks to impose a tariff are produced.  As VOA’s Kane Farabaugh reports, those farmers, once supportive of President Trump, are increasingly wary about his stance on global trade, and ultimately, how it will impact their bottom line.

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Farmers Fret Over Trump’s Trade Tactics

The increasing trade tensions between the United States and China has rattled farmers in the American heartland, the place where many of the products on which China seeks to impose a tariff are produced.  As VOA’s Kane Farabaugh reports, those farmers, once supportive of President Trump, are increasingly wary about his stance on global trade, and ultimately, how it will impact their bottom line.

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IMF Chief Warns Global Trade in Danger

The head of the International Monetary Fund is warning that the global trading system is in danger of being “torn apart.”  

In a speech prepared for delivery in Hong Kong Wednesday, Christine Lagarde urged nations to “steer clear of protectionism.”  That may be a reference to Washington’s recent moves to slap large tariffs on imported steel and other products.  China responded by raising tariffs on U.S.-made products, beginning a cycle that some experts warn could escalate further into a trade war.

Lagarde says the benefits of trade far outweigh the costs and has credited unfettered global trade for drastically reducing the number of people around the world living in extreme poverty.  Lagarde and other experts say everyone loses in trade wars, particularly the 800 million people around the world who, the World Bank says, remain mired in poverty.

While Lagarde’s comments implied criticism of the Trump administration, she also urged nations, presumably including China, to do a better job of protecting intellectual property. President Trump and many foreign businesses operating in China have complained that they are pressured to turn over technology secrets to Chinese partner companies in exchange for access to the huge Chinese market.  She also urged economic reforms, including ending policies that unfairly favor state-owned enterprises.

Lagarde says the global economy is experiencing a strong upswing, and says now is the time for nations to make economic reforms such as opening up the service sector in developing economies, and doing more to use digital technology to improve the the delivery of government public services. She warns that economic reform is more urgent now because of the growing uncertainties arising from trade tensions, uncertain geopolitics and rising fiscal and financial risks.

Lagarde’s speech comes ahead of next week’s meetings of the International Monetary Fund and World Bank in Washington, where top economic and financial leaders and experts from around the world will gather to seek solutions to problems in banking, trade, deficits and many other topics.

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IMF Chief Warns Global Trade in Danger

The head of the International Monetary Fund is warning that the global trading system is in danger of being “torn apart.”  

In a speech prepared for delivery in Hong Kong Wednesday, Christine Lagarde urged nations to “steer clear of protectionism.”  That may be a reference to Washington’s recent moves to slap large tariffs on imported steel and other products.  China responded by raising tariffs on U.S.-made products, beginning a cycle that some experts warn could escalate further into a trade war.

Lagarde says the benefits of trade far outweigh the costs and has credited unfettered global trade for drastically reducing the number of people around the world living in extreme poverty.  Lagarde and other experts say everyone loses in trade wars, particularly the 800 million people around the world who, the World Bank says, remain mired in poverty.

While Lagarde’s comments implied criticism of the Trump administration, she also urged nations, presumably including China, to do a better job of protecting intellectual property. President Trump and many foreign businesses operating in China have complained that they are pressured to turn over technology secrets to Chinese partner companies in exchange for access to the huge Chinese market.  She also urged economic reforms, including ending policies that unfairly favor state-owned enterprises.

Lagarde says the global economy is experiencing a strong upswing, and says now is the time for nations to make economic reforms such as opening up the service sector in developing economies, and doing more to use digital technology to improve the the delivery of government public services. She warns that economic reform is more urgent now because of the growing uncertainties arising from trade tensions, uncertain geopolitics and rising fiscal and financial risks.

Lagarde’s speech comes ahead of next week’s meetings of the International Monetary Fund and World Bank in Washington, where top economic and financial leaders and experts from around the world will gather to seek solutions to problems in banking, trade, deficits and many other topics.

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Gazprom Says Gas Transit via Ukraine to Europe May Fall to 10-15 bcm per Year

Future Russian gas transit flows through Ukraine to Europe may be between 10 and 15 billion cubic metres per year, Alexei Miller, head of Russian gas giant Gazprom, said on Tuesday, which is a significant decline from current levels.

Miller issued his comments after German Chancellor Angela Merkel said that the planned new Nord Stream 2 pipeline between Russia and Germany could not go ahead without clarity on Ukraine’s role as a transit route for gas.

“We have never raised an issue about abandoning the Ukrainian transit. However, the Russian resource base has been moving northward and there won’t be the same resources in the central gas transportation corridor as it was in the past,” Miller said in a statement.

“That’s why a certain transit could still be in place, in the amount of 10-15 bcm per year, but the Ukrainian side has to explain the viability of the new transit contract,” he said.

He did not give a time frame for when the transit could be 10-15 bcm a year.

Ukraine has been a key route for carrying Russian gas to Europe where it supplies around a third of gas needs, but Moscow and Kiev have clashed frequently over energy.

Last year, the transit amounted to more than 93 bcm, while Gazprom’s total exports to Europe and Turkey reached an all-time high of 194 bcm.

Last year, Ukraine earned around $3 billion in Russian gas transit fees.

Gazprom said last month it would terminate its gas contracts with Ukraine after it lost a court case, escalating a dispute which had left Ukraine struggling to stay warm and which the European Union said could threaten gas flows to Europe.

A Stockholm arbitration court ordered Gazprom in February to pay more than $2.5 billion to Ukrainian energy firm Naftogaz – a ruling meant to conclude a long legal battle that has run alongside Ukraine’s broader political stand-off with Russia.

Gazprom wants to bypass Ukraine as an export route and plans to build two more undersea gas pipelines to Europe: TurkStream to Turkey and Nord Stream 2 to Germany.

Eastern European and Baltic states fear Nord Stream 2, planned to run through the Baltic Sea, could increase reliance on Russian gas and undermine Ukraine’s role as a gas transit route.

The plans for the pipelines were given new impetus after relations between Moscow and Kiev plunged as Russia-leaning president Viktor Yanukovich fled Ukraine in 2014 following street protests and a pro-Moscow revolt subsequently flared in eastern Ukraine.

The current deal between Russia and Ukraine on gas purchases and transit expires at the end of 2019 and Kiev has been worrying about losing its transfer fees for shipping the Russian gas westwards to Europe.

 

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