Taiwan is offering visa waivers and setting up overseas investment offices across a swathe of countries to its south, the latest moves to deepen a rebalancing of economic relations away from political foe China.

Officials in Taipei hope to foster more tourism, trade and higher education links with 18 countries covering most of South and Southeast Asia plus Australia and New Zealand. Stronger ties in theory would reduce the role of China, which is Taiwan’s top trading partner now, as the two sides struggle over political differences.

In the latest phase of Taiwan’s effort, called the New Southbound Policy, Philippine citizens may visit Taiwan visa-free for 14 days during a trial period that starts next month and ends in July. Taiwan offered waivers to citizens of Brunei and Thailand in August 2016. Those efforts complement new investment offices, growth in the number of university students in Taiwan and more Taiwanese development aid.

“The purpose of the New Southbound Policy is for us to hold a more advantageous position in international society,” Taiwan President Tsai Ing-wen said in a National Day speech earlier this month. “I also want to use this opportunity to tell our friends from around the world that faced with a rapidly changing Asia-Pacific region. Taiwan is ready to play a more important role in shaping regional prosperity and stability.”

Shaky relations with China

Tsai announced the New Southbound Policy after taking office in May 2016 to rebalance relations for Taiwan’s $529 billion economy.

Taiwanese business people traditionally choose China for investment because of its relatively low costs, skilled workforce and cultural links. More than 93,000 Taiwanese businesses invested in China between 1988 and 2016, according to the American think tank Council on Foreign Relations.

But China claims sovereignty over Taiwan despite the island’s democratic self-rule, causing enough friction to stop dialogue under Tsai’s presidency.

How the New Southbound Policy works

Taiwan’s economic affairs ministry has established investment offices in Indonesia, Myanmar, Thailand, Vietnam and the Philippines to help investors find projects in those countries based on local needs.

The Taiwan government is offering as well credit guarantees for smaller businesses headed to Southeast Asia, where aid from Taipei will help pay for infrastructure and other major projects in those countries. The visa waivers facilitate travel to Taiwan, another boon to the economy.

Taiwan’s trade with the 18 countries covered by the policy had risen 20 percent this year compared to last, Tsai said in her speech without giving an exact time frame.

Tourist arrivals from New Southbound countries are rising as the headcount from China decreases, official data show. The number of postsecondary students in Taiwan from New Southbound Policy countries went up 10 percent over the six months to March from a year earlier, while the number of non-degree university students from China has eased since mid-2016.

Taiwan’s Investment Commission last year approved 252 applications for projects intended for China last year, down 21.5 percent from 2015.

But China remains Taiwan’s top trading partner thanks to a thriving consumer market and the maturity of its supply chain for the likes of tech and machinery. Imports and exports totaled $117.9 billion in 2016.

Feedback from South and Southeast Asia

Indonesia has been a bright spot for finding new investment projects, especially in agriculture, an economic affairs official in Taipei said earlier in the year. Thailand had already approved 274 Taiwanese investment applications, worth $1.39 billion, from 2010 to 2015.

About 3,500 Taiwanese investors had invested in Vietnam as early as 2011 because costs were rising in China while Vietnam was offering incentives to lure foreign capital.

The restart in May of Taiwanese-owned Formosa Plastics Group’s Vietnam steel plant could draw a “cluster” of related Taiwanese firms, said Liang Kuo-yuan, president of Taipei-based think tank Polaris Research Institute in Taipei. Factory work had stopped over a suspected toxic leak that killed fish.

The Philippines, an investment-thirsty Southeast Asian archipelago, is actively looking for Taiwanese companies, said Jonathan Ravelas, chief market strategist with Banco de Oro UniBank in Metro Manila. Taiwanese electronics firms consider the country an export manufacturing base, he said, while healthcare firms may find partners such as hospitals. The growing consumer base lures others.

“We’re seeing entrepreneurs from Taiwan looking into the Philippines, given that it’s a very big retail market,” Ravelas said.

But one Southeast Asian country, Cambodia, may fear angering China by veering too close to Taiwan. Beijing forbids its allies from establishing formal ties with Taipei. In February Cambodian Prime Minister Hun Sen declared a ban on raising the Taiwan flag. Two years earlier the government forbid Taiwan from establishing an informal trade office.

Still early days

Similar go-south policies fell flat under former Taiwan president Lee Teng-hui in 1993 and his successor, Chen Shui-bian, after 2000. China in those years was cheaper, with less competition from local companies, in turn drawing Taiwanese investors.

Today’s policy will struggle as Taiwan faces competition in the 18 target counties from other foreign investment sources, Liang said. Competitors include China, India, Japan and South Korea. China and India were less competitive before 2000. Taiwan lacks a material advantage, he said.

“The biggest problem is that Southeast Asia is not a blue ocean market,” Liang said. “There are too many competitors, so Taiwan can’t just use its point of view to go compete in that market. Taiwan after all has what strength?”
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The sloping vineyards of New York’s Finger Lakes region known for producing golden-hued rieslings and chardonnays also are offering a splash of orange wine.

The color comes not from citrus fruit, but by fermenting white wine grapes with their skins on before pressing – a practice that mirrors the way red wines are made. Lighter than reds and earthier than whites, orange wines have created a buzz in trendier quarters. And winemakers reviving the ancient practice like how the “skin-fermented” wines introduce more complex flavors to the bottle.  

“Pretty outgoing characteristics. Very spicy, peppery.  A lot of tea flavors, too, come through,” winemaker Vinny Aliperti said, taking a break from harvest duties at Atwater Estate Vineyards on Seneca Lake. “They’re more thoughtful wines. They’re more meditative.”

Atwater is among a few wineries encircling these glacier-carved lakes that have added orange to their mix of whites and reds. The practice dates back thousands of years, when winemakers in the Caucasus, a region located at the border of Europe and Asia, would ferment wine in buried clay jars. It has been revitalized in recent decades by vintners in Italy, California and elsewhere looking to connect wine to its roots or to conjure new tastes from the grapes. Or both. Clay jars are optional.

Aliperti has been experimenting with skin fermenting for years, first by blending a bit into traditional chardonnays to change up the flavor and more recently with full-on orange wines. This fall, he fermented Vignoles grapes with their skins in a stainless steel vat for a couple of weeks before pressing and then aging them in oak barrels.

Orange wines account for “far less than 1 percent” of what is handled by Southern Glazer’s Wine & Spirits, the nation’s largest distributor with about a quarter of the market, according to Eric Hemer, senior vice president and corporate director of wine education.

Hemer expects orange wines to remain a niche variety due to small-scale production, higher retail prices _ up to $200 for a premium bottle – and the nature of the wine.

“It’s not a wine that’s going to appeal to the novice consumer or the mainstream wine drinker,” Hemer said. “It really takes a little bit more of, I think, a sophisticated palate.”

The wines have caught on in recent years among connoisseurs who like the depth of flavors, sommeliers who can regale customers with tales of ancient techniques and drinkers looking for something different. Christopher Nicolson, managing winemaker at Red Hook Winery in Brooklyn, said the wines hit their “crest of hipness” a couple of years ago, though they remain popular.

“I think they’re viewed by these younger drinkers as, ‘Oh, this is something new and fresh. And they’re breaking the rules of these Van Dyke-wearing, monocled … fusty old wine appreciators,’” Nicolson said.

It’s not for everyone. The rich flavors can come at the expense of the light, fruity feel that some white wine drinkers crave. And first-time drinkers can be thrown by seeing an orange chardonnay in their glasses.

“Actually I wasn’t sure because of the color, but it has a really nice flavor,” said Debbie Morris, of Chandler, Arizona, who tried a sip recently at Atwater’s tasting room. “I’m not a chardonnay person normally, but I would drink this.”
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A bakery in a low-income area of Johannesburg slashed prices of its popular bread, with unexpected results. What started as a way to help feed the community became a recipe for success as the bakery has a lot more business than ever. VOA’s Arash Arabasadi reports.

((NARRATOR))
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President Donald Trump is considering nominating Federal Reserve Governor Jerome Powell and Stanford University economist John Taylor for the central bank’s top two jobs, in an apparent bid to reassure markets and appease conservatives hungry for change.

Under that scenario, either Powell or Taylor would take the reins from Fed Chair Janet Yellen when her term expires in early February, and the other would fill the vice chair position left vacant when Stanley Fischer retired this month.

“That is something that is under consideration, but he hasn’t ruled out a number of options. He’ll have an announcement on that soon, in the coming days,” White House spokeswoman Sarah Sanders told reporters Friday.

​Powell a centrist

Making Powell, a soft-spoken centrist who has supported Yellen’s gradual approach to raising interest rates, the next Fed chief would provide the continuity in monetary policy that investors crave.

The addition of Taylor, who has backed an overhaul of the Fed and embraced a more rigid rule-oriented monetary policy, would be a feather in the cap of conservative Republicans who feel that monetary policy has been too loose under Yellen, who was named as Fed chair by Democratic President Barack Obama and has led the central bank since February 2014.

“I think Powell might be the safer pick insofar as we know what we’re getting,” said Michael Feroli, chief U.S. economist at J.P. Morgan Chase. “He’s a guy who obviously knows the Fed culture, how the (policy-setting) committee operates, so for some of those soft skills we know he would be effective.”

Powell has embraced the Yellen Fed’s monetary policy, keeping the faith that a tighter job market will eventually push wages higher and end a lengthy period of worryingly low inflation.

Taylor has spent the last two decades refining and advocating wider use of a rule that lays out where interest rates ought to be, given certain conditions of inflation and the broader economy. His rule implies that rates should be higher than they are now.

​Yellen’s defense

Yellen, speaking at an economic conference in Washington Friday evening, mounted a strong defense of the tools the Fed has used to fight the sharp economic downturn triggered by the financial crisis and said there was a risk of another crisis in which those “unconventional policies” may be needed again.

Yellen, who Trump has indicated could still be named to another term as Fed chair, was not asked about the Fed job and did not offer any comment on the selection process.

Taylor inflexible?

Although Taylor is highly regarded within the Fed, his rule-based rate-setting position has spurred criticism that he would handcuff U.S. monetary policy.

Taylor pushed back at a meeting at the Boston Fed on Saturday, saying he favored a flexible implementation of policy rules and did not want to tie the Fed’s hands or suggest that he was motivated by a distrust of policymakers.

“I think that’s completely incorrect,” he said. “I trust policymakers; (rules) are an effort to make policy better.”

Some analysts suggest that fears that Taylor would bring an inflexible monetary policy with him to the Fed, as some Republicans in Congress hope, are likely exaggerated.

“There is some scope for disappointment if people think putting Taylor in will just lead to mechanical-based policy,” Feroli said.

Cleveland Fed President Loretta Mester, speaking with reporters Friday, seemed to agree.

“Even if you pick a rule, the rule itself would need to be modified given the structure of the economy,” she said. “But I do think being systematic, looking at the kinds of information we look at systematically over time, articulating our strategy for policy and being less discretionary is a good idea.”

Confusing signal

At the same time, there are concerns that the combination of Powell and Taylor atop the world’s most powerful central bank could send a confusing signal to markets.

It is unclear whether Trump, who has criticized Yellen’s stewardship but also said on several occasions that he preferred rates to stay low, wants to dramatically alter the Fed’s direction.

Although he appears to be tilting to Powell and Taylor, in addition to Yellen the Republican president has interviewed his top economic adviser Gary Cohn and former Fed Governor Kevin Warsh for the Fed chief position.
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Turkey’s banking regulator urged the public on Saturday to ignore rumors about financial institutions, in an apparent dismissal of a report that some Turkish banks face billions of dollars of U.S. fines over alleged violations of Iran sanctions.

“It has been brought to the public’s attention that stories, that are rumors in nature, about our banks are not based on documents or facts, and should not be heeded,” the BDDK banking regulator said in a statement, adding that Turkey’s banks were functioning well.

The Haberturk newspaper on Saturday reported that six banks potentially face substantial fines, citing senior banking sources. It did not name the banks. One bank faces a penalty in excess of $5 billion, while the rest of the fines will be lower, it said.

Asked to comment, a spokesman for the U.S. Treasury, which is responsible for U.S. sanctions regimes, said only: “Treasury doesn’t telegraph intentions or prospective actions.”

Two senior Turkish economy officials told Reuters Turkey has not received any notice from Washington about such penalties, adding that U.S. regulators would normally inform the finance ministry’s financial crimes investigation board.

U.S. authorities have hit global banks with billions of dollars in fines over violations of sanctions with Iran and other countries in recent years.

The administration of U.S. President Donald Trump last week adopted a harsh new approach to Iran by refusing to certify its compliance with a nuclear deal struck with the United States and five other powers including Britain, France and Germany under his predecessor Barack Obama.

Trump argues the deal was too lenient and has effectively left its fate up to the U.S. Congress, which might try to modify it or bring back U.S. sanctions previously imposed on Iran.

Last week, the U.S. Treasury Under Secretary for Terrorism and Financial Intelligence Sigal Mandelker said Trump’s strategy involved placing additional sanctions on Tehran and that Washington had been “engaging our allies and partners” with the aim of denying funds to Iran’s Revolutionary Guard Corps.

The Haberturk report comes as relations between Washington and Ankara, which are NATO allies, have been strained by a series of diplomatic rows, prompting both countries to cut back issuing visas to each other’s citizens.

U.S. prosecutors last month charged a former Turkish economy minister and the ex-head of a state-owned bank with conspiring to violate Iran sanctions by illegally moving hundreds of millions of dollars through the U.S. financial system on Tehran’s behalf.

President Erdogan has dismissed the charges as politically motivated, and tantamount to an attack on the Turkish Republic.

The charges stem from the case against Reza Zarrab, a wealthy Turkish-Iranian gold trader who was arrested in the United States over sanctions evasion last year. Erdogan has said U.S. authorities had “ulterior motives” in charging Zarrab, who has pleaded not guilty.
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Hong Kong’s last remaining stock market floor traders are taking their final orders as the exchange prepares to shut its trading hall.

The bourse’s operator, Hong Kong Exchanges & Clearing, says it will close the trading hall by the end of the month and turn the space into a showcase for the city’s financial markets.

Yip Wing-keung, a trading manager at brokerage Christfund Securities, donned his red trading jacket for the last time Friday, his final day on the floor. He and the other few floor traders left have been moving out ahead of the closure.

Computerized trading

The shutdown marks the end of an era for the stock market, which symbolized the city’s ascent as an Asian finance hub. Activity on the floor, one of a few such venues left worldwide, dwindled as stock dealing became fully computerized.

“I feel sadness and regret,” said Yip, who has been a floor trader since the hall was opened in 1986 after four previous exchanges were merged. “Hong Kong is one of the world’s financial centers, but if we don’t have the stock market trading hall, it will be a little sorrowful. This is my own individual reflection.”

Yip said the floor traders resisted the closure. They sent a protest letter to the government but it was in vain.

“We wrote it but were overruled,” he said. “We can’t stop the times from changing.”

Peers disappearing, too

Hong Kong’s stock exchange, Asia’s third biggest by volume, follows other global peers like Tokyo, Singapore and London that have eliminated their trading floors.

In the U.S., floor traders at the New York Stock Exchange still provide the backdrop for financial TV news reports and bell-ringing ceremonies. But Chicago and New York commodity futures trading pits, where traders used old-fashioned “open outcry” techniques, have shut in recent years as volume fell to 1 percent of the total.

Hong Kong Exchanges stopped updating stats for floor trading in 2014, when it accounted for less than 1 percent of monthly turnover.

From 900 desks to 62

In the 1980s and 1990s the hall housed more than 900 trading desks. The exchange’s most recent count showed only 62 dealing desks were leased, with about 30 traders showing up on an average day. On a visit to the hall this week, only about seven traders could be seen.

Back in its heyday, floor trading was computer-assisted but dealers still needed to talk to each other to complete transactions, either by phone or in person, depending on how far away they sat from each other, Yip said.

“If they were too far you had to use the internal phone line, but if you couldn’t get through, you had to run over to them,” he said. “So you saw lots of people running back and forth.”

These days, Yip just punches orders into his computer.

“Now it’s more comfortable” but relationships with other traders are not as good as they used to be, Yip said.

He doesn’t look forward to returning to his head office.

“It won’t be so free,” he said.
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A California judge on Friday threw out a $417 million verdict against Johnson & Johnson in a lawsuit by a woman who claimed she developed ovarian cancer after using its talc-based products like Johnson’s Baby Powder for feminine hygiene.

The ruling by Los Angeles Superior Court Judge Maren Nelson marked the latest setback facing women and family members who accuse J&J of not adequately warning consumers about the cancer risks of its talc-based products.

The decision followed a jury’s decision in August to hit J&J with the largest verdict to date in the litigation, awarding California resident Eva Echeverria $70 million in compensatory damages and $347 million in punitive damages.

New trial

Nelson on Friday reversed the jury verdict and granted J&J’s request for a new trial. Nelson said the August trial was underpinned by errors and insufficient evidence on both sides, culminating in excessive damages.

Mark Robinson, who represented the woman in her lawsuit, in a statement said he would file an appeal immediately.

“We will continue to fight on behalf of all women who have been impacted by this dangerous product,” he said.

J&J in a statement said it was pleased with the verdict, adding that it will continue to defend itself in additional trials.

The judge added that there also had been misconduct of the jury during the trial.

J&J said declarations by two jurors after the trial showed that three members of the 12-person jury who voted against finding the company liable were improperly excluded from determining damages.

Nearly 5,000 plaintiffs

J&J says it faces lawsuits by 4,800 plaintiffs nationally asserting talc-related claims. Many of those cases are in California, where Echeverria’s case was the first to go to trial, and in Missouri, where J&J has faced five trials.

The Missouri litigation led to four verdicts against J&J in which juries issued verdicts totaling $307 million. The company has won one trial.

But the Missouri cases, which have largely been brought by out-of-state plaintiffs, have faced jurisdictional questions after the Supreme Court issued a ruling in June that limited where personal injury lawsuits could be filed.

On Tuesday, a Missouri appellate court threw out a $72 million verdict by a jury in February 2016 to the family of a deceased Alabama woman after ruling the case should not have been tried in St. Louis.
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Running 1,300 kilometers over the world’s highest mountain pass, the “Friendship,” or Karakoram, Highway is evidence of China’s willingness to spend big as a contributor to global development.

Costing tens of billions of dollars, the road links western China with Pakistan, part of Beijing’s “One Belt One Road” Initiative, which seeks to rekindle ancient Silk Road trade routes linking China with Europe and Africa and is a central tenet of President Xi Jinping’s leadership, said professor Steve Tsang of London’s School of Oriental and African Studies. 

“The government is committed to do whatever it can to make sure that it is successful,” Tsang said. “So a lot more money and resources will be put into it to support that.”

But figures show that since the Karakoram Highway was built, Pakistani exports to China have fallen while imports have increased, raising concern China’s new Silk Road could become a one-way street. 

WATCH: China to Spend Billions More on ‘One Belt’ Initiative, but Campaigners Want Focus on Poverty

​Address poverty

Stephen Gelb of the Overseas Development Institute says Beijing should focus its investments on global development goals.

“At the moment there’s a lot of focus on infrastructure and particularly transport, pipelines, that sort of thing, which don’t directly address poverty,” Gelb said. “And in fact there’s been in some cases some controversy about the social and environmental impacts. But I think the focus should be to address development, including poverty and related issues.”

Gliding above the choking traffic of the Ethiopian capital, Addis Ababa, the Chinese-funded tramway system opened last year at a cost of half a billion dollars. Beijing says investments like this will boost African economies, thereby alleviating poverty.

Gelb says it is also part of China’s plan to become a dominant force on the global stage.

“It was affirmed in Xi Jinping’s speech (this week to China’s Communist Party Congress),” he said, “China’s very much about these days rules-based global governance, multilateralism, globalization.” 

Visiting India this week, U.S. Secretary of State Rex Tillerson accused China of not always playing by those rules.

“China, while rising alongside India, has done so less responsibly, at times undermining the international, rules-based order,” Tillerson said.

Paying the piper

Recipient countries have welcomed Chinese investment, which sometimes comes with fewer conditions than Western aid, such as demands for democratic reform. But Tsang warns there could be a sting in the tail.

“The real issue will come when some of those countries, particularly in central Asia, have to pay back some of the loans that were acquired in the Belt and Road Initiative,” Tsang said. “And most of those countries will have problems paying back those loans.”

For now, Chinese investment continues to expand. Development campaigners say Beijing’s focus should be not only on ports and pipelines but on tackling poverty.
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