India’s cabinet on Monday backed proposals to reserve 10 percent of government jobs for Indians outside the higher income brackets, a plan the main opposition party suggested was an attempt by the government to lure back voters as an election nears.

The initiative is expected to mainly benefit the upper echelons of India’s centuries-old Hindu caste system, which has traditionally been a core voter base for Prime Minister Narendra Modi’s Hindu nationalist Bharatiya Janata Party.

Modi must call a national election by May and was dealt a setback in December when the BJP lost power to the opposition Congress party in three states, its biggest defeat since he took office in 2014.

Two BJP sources said the quota plan would benefit people from other religions not covered by existing affirmative action — the reason why lower caste Hindus and India’s indigenous tribes were excluded from it.

According to the government bill, the recipients must also be classed as “economically weak,” which the sources said was defined as anyone with annual income below 800,000 rupees ($11,500) and owning fewer than five acres of land.

In 2017, the average income in India was $1,939.60, according to the World Bank.

The states the BJP lost included Rajasthan, one of four — the others being Maharashtra, Gujarat and Haryana — in which upper caste land-owning farming communities have held large protests in recent years demanding quotas for government jobs.

More broadly, Modi has been criticized for failing to deliver jobs for young people and better conditions for farmers.

“The … Modi government has suddenly woken up to the woes of [the] economically poor, facing imminent defeat in the 2019 elections,” Congress spokesman Randeep Singh Surjewala said of the quota plan.

“Creating reservations in jobs may just prove to be one more ‘Jumla’ [gimmick] for the purpose of election promises.”

Ashwini Kumar Choubey, junior health minister and a BJP member, welcomed the proposal, calling it “historic.”

Caste system

Hindus, who account for about four-fifths of India’s 1.3 billion people, were traditionally grouped into thousands of castes, whose membership is determined by birth.

The lower castes have faced various forms of discrimination including segregation and social boycotts.

There have been attempts to reduce caste-related inequality, and the country has had many lower caste leaders, including current president Ram Nath Kovind.

But introducing quotas for lower castes has always been a contentious issue and has led to violent protests, though India’s income levels and expenditure patterns remain largely linked to caste.

The government is expected to submit the quota bill to the lower house of parliament on Tuesday. Modi’s BJP has a majority there, but not in the upper house.
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A U.S. trade delegation has arrived in Beijing.

The group is in China to hold two days of talks, beginning Monday, focusing on how best to carry out an agreement reached by U.S. President Donald Trump and Chinese President Xi Jinping to postpone new tariff hikes.

On December 1, the two leaders agreed to complete talks about technology, intellectual property and cyber theft issues within 90 days, and hold off on new tariffs in the meantime.

U.S. officials have said that if the talks fail to produce a satisfactory agreement Washington will increase tariffs on $200 billion of Chinese goods from 10 percent to 25 percent.

 
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A surge in U.S. job creation and some reassuring words from the head of the U.S. central bank sent U.S. stocks soaring Friday.  

The Labor Department reported a net gain of 312,000 jobs in December, far more than economists predicted. The unemployment rate, however, rose slightly, to 3.9 percent.

Many analysts said the rising unemployment rate was probably good news because rising wages prompted many jobless people to start looking for work.

People are not counted as officially unemployed unless they have searched for work in the past four weeks. In December, the labor force expanded by a healthy 419,000 people as wages rose 3.2 percent over the past year.

PNC Bank Chief Economist Gus Faucher said the data meant worries about a possible recession were probably “overblown.” Worried investors have sent stocks mostly downward in recent months in a series of drastic gains and losses driven in part by concern that the U.S. central bank might raise interest rates too quickly and choke off growth.

Federal Reserve Chair Jerome Powell said Friday that Fed officials were “listening carefully” to markets that were weighing the impact of “concerns on global growth and trade negotiations.”

Dec Mullarkey of Sun Life Investment Management wrote that “markets were reassured” because the Fed made it clear it was not on course to automatically raise rates and would “dynamically adjust as new data and trends emerge.”

By the close of trading, the Dow advanced more than 700 points, as the major U.S. indexes rose more than three percent.  
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Marriott International Inc said Friday that fewer than 383 million customer records were stolen in a massive cyberattack disclosed last month, down from its initial estimate that up to 500 million guests were affected.

The hotel operator also said that some 25.55 million passport numbers were stolen in the attack on the Starwood Hotels reservation system, 5.25 million of which were stored in plain text. Another 8.6 million encrypted payment cards were also taken in the attack, it said.

Marriott previously confirmed that passport numbers and payment cards were taken, but not said how many.

The company disclosed on Nov. 30 that it had discovered its Starwood hotels reservation database had been hacked over a four-year period in one of the largest breaches in history.

At least five U.S. states and the UK’s Information Commissioner’s Office are investigating the attack.

Marriott also said that it had completed an effort to phase out the Starwood reservations database that it acquired in September 2016 with its $13.6 billion purchase of Starwood. The hack began in 2014, a year before Marriott offered to buy Starwood.
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It sounds like a Hollywood caper: A group of investors and officials convince European banks to loan a total of $2 billion to a resource-rich African nation trying to rebuild after a bruising civil war.  

The money promptly disappears, and then this caper turns tragic.  The government doesn’t learn of the loans until three years after they happen. It defaults on the loans, and that triggers an economic crisis: the currency tumbles, prices rise, hospitals run out of basic supplies and key roads go unrepaired.  Thousands of people contract cholera – an easily preventable and treatable illness that is often caused by a breakdown of health services.

This isn’t Hollywood. This, allegedly, is Mozambique, according to an indictment that has resulted in the arrests of at least four figures in recent days, including a former finance minister.  The men are now awaiting extradition to the U.S. for their role in defrauding U.S. investors when seeking the loans.

VOA obtained a redacted copy of the indictment, issued by the U.S. District Court’s Eastern District of New York.  It accuses the four, plus another man who has not been arrested and two others who were not named, of “creat(ing) the maritime projects as fronts to raise money to enrich themselves and intentionally divert(ing) portions of the loan proceeds to pay at least $200 million in bribes and kickbacks to themselves, Mozambican government officials and others.”

Last week, South African officials arrested Mozambique’s former finance minister, Manuel Chang, on an Interpol warrant as he transited through the country.  

This, says analyst Alex Vines of the Chatham House think tank, is a very big deal. This matter has been investigated by both an independent firm and also by the British government, and until now, nothing has come of it.

“So it looked as if nothing would happen about these many millions, probably billions, of U.S. dollars that were (un)accounted for,” Vines told VOA. “So the indictment that has occurred from the U.S. District Court, Eastern District of New York, for key characters involved in this loan scandal, is very very significant and is a game-changer, I think.”

The reaction: Public vs Party?

That’s certainly the case in Mozambique, where commentator Fernando Lima notes the public has largely applauded the arrests, while the ruling Frelimo party has been silent.

“There is a sentiment of huge enthusiasm and joy, which causes a lot of irritation on the other side, meaning people related to the Frelimo party,” he told VOA  “…It caused this huge, huge embarrassment for the current government. And up to now, which is also very, very surprising, no Mozambican authorities have said anything related to the arrest of Mr. Chang. Neither the government, neither Frelimo party, neither the attorney general’s office, or our parliament.”

Vines says it’s unclear how President Filipe Nyusi – who was defense minister at the time of the secret loans – will come out of this scandal, but he says there may be a bright side for investors who are eager to put money into the nation, which will start exporting natural gas in 2023.

“The International Monetary Fund, IMF, and bilateral donors to Mozambique had suspended lending to Mozambique, or direct government lending, should I say,” he said. “They do want to move on, and so again, I think this might help clear things up so that longer term, the relationship of Mozambique with some of its international creditors and international partners can be improved.”

Rudi Krause, the South African lawyer representing the former finance minister, Manuel Chang, says they’ll fight the U.S. extradition request.

Krause said attorneys had not been given a full copy of the indictment by South African officials at the time of Chang’s arrest and so could not comment on the allegations.

VOA was unable to reach Krause after receiving the U.S. copy of the indictment, for further comment.

Chang will appear in a South African court on January 8. But the court of public opinion will also have its chance to weigh in, when Mozambique goes to the polls in October.

 
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Asian markets rebounded Friday on hopes that upcoming trade talks between the U.S. and China will calm a trade dispute that has rattled global markets.

After a global sell-off triggered by Apple’s warning of lower revenues, Hong Kong’s Hang Seng Index climbed 2.2 percent to 25, 626.03 and the Shanghai Composite Index jumped 2.1 percent to 2, 514.87. The Nikkei 225 Index, however, fell 2.3 percent to close at 19,561.40.

European shares also recouped earlier losses, with Germany’s DAX Performance Index and France’s CAC 40 Index closing nearly 1 percent higher.

Stock markets across the globe dropped Thursday after tech giant Apple said sales of its devices had fallen sharply in China last month, perhaps signaling a broader slowing in the world economy.

Apple has blamed U.S. President Donald Trump’s trade dispute with China for its shrinking outlook, but the U.S. leader tweeted his defense Thursday, claiming,  “The United States Treasury has taken in MANY billions of dollars from the Tariffs we are charging China and other countries that have not treated us fairly. In the meantime we are doing well in various Trade Negotiations currently going on. At some point this had to be done!” 

Friday China’s government said a U.S. trade delegation will visit Beijing next week for two days of talks on carrying out an agreement reached by Trump and Chinese President Xi Jinping to postpone new tariff hikes.

On December 1 the two leaders agreed to complete talks about technology, intellectual property and cyber theft issues within 90 days, and hold off on new tariffs in the meantime.  U.S. officials have said that if the talks fail to produce a satisfactory agreement Washington will increase tariffs on $200 billion of Chinese goods from 10 percent to 25 percent.

Apple chief executive Tim Cook blamed the company’s sales shortfall on the trade battle President Donald Trump is waging against China.

“While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in Greater China,” Cook wrote.

Kevin Hassett, chairman of the White House Council of Economic Advisers, said the contentious U.S.-China relations will force other U.S. companies to cut their sales estimates in China.

“It’s not going to be just Apple,” Hassett told CNN. “There are a heck of a lot of U.S. companies that have sales in China that are going to be watching their earnings being downgraded next year until we get a deal with China.”

He said slowing consumer demand in China gives Trump an edge in ongoing trade negotiations.

“That puts a lot of pressure on China to make a deal,” he said. “If we have a successful negotiation with China then Apple’s sales and everybody else’s sales will recover.”

The U.S. economy remains strong, with the country’s 3.7 percent jobless rate at a nearly five-decade low. But economists say the U.S. economy could be slowing and uncertainty in global economic fortunes has led to volatile daily swings in stock indexes in recent weeks.

In 2018, U.S. stock indexes suffered their worst year in a decade, with most of the losses recorded in December. The Dow was off 5.6 percent for the year, with the broader Standard & Poor’s index of 500 stocks down 6.2 percent.

 
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American envoys are due in Beijing for talks Monday in a tariff battle over Chinese technology ambitions that threatens to hobble global economic growth.

The two days of meetings are aimed at carrying out the Dec. 1 truce by Presidents Donald Trump and Xi Jinping that postponed additional tariff hikes, the Ministry of Commerce announced Friday. It said the American delegation will be led by a deputy U.S. trade representative, Jeffrey D. Gerrish, but gave no other details of the agenda or participants.

The American Embassy in Beijing didn’t immediately respond to a request for confirmation and additional details.

The talks are going ahead despite tension over the arrest of a Chinese tech executive in Canada on U.S. charges related to possible violations of trade sanctions on Iran.

The two governments express interest in a settlement but give no indication their stances have shifted.

They hope to have “positive and constructive discussions,” said a Chinese foreign ministry spokesman, Lu Kang.

The clash reflects American anxiety about China’s emergence as a competitor in telecoms, solar power and other technologies and complaints by Washington, Europe and other trading partners that Beijing’s tactics violate its market-opening obligations.

Trump wants Beijing to roll back initiatives including “Made in China 2025,” which calls for state-led creation of champions in robotics, artificial intelligence and other fields. American officials worry those might erode U.S. industrial leadership.

China’s leaders have offered to narrow its politically sensitive trade surplus with the United States by purchasing more soybeans, natural gas and other American exports. But they reject pressure to scrap technology initiatives they see as a path to prosperity and global influence.

Both governments face economic pressure to reach a settlement.

Chinese economic growth fell to a post-global crisis of 6.5 percent in the quarter ending in September. Auto sales tumbled 16 percent in November over a year earlier and weak real estate sales are forcing developers to cut prices.

Third-quarter U.S. growth was 3.4 percent and unemployment is at a five-decade low. But surveys show consumer confidence is weakening due to concern growth will moderate this year.

Beijing has tried in vain to recruit France, Germany, South Korea and other governments as allies against Trump. They criticize his tactics but echo U.S. complaints about Chinese industrial policy and market barriers.

The European Union filed its own challenged in the World Trade Organization in June against Chinese regulations the 28-nation trade bloc said hamper the ability of foreign companies to protect and profit from their own technology.

Washington has imposed punitive tariffs of up to 25 percent on $250 billion of Chinese goods. Beijing responded by imposing penalties on $110 billion of American goods, slowing down customs clearance for U.S. companies and suspending issuance of licenses in finance and other industries.

Trump and Xi agreed to a 90-day postponement of more tariff hikes due to take effect Jan. 1. But economists say that is too little time to resolve the sprawling disputes that bedevil U.S.-Chinese relations.

The decision to hold this week’s talks at a deputy minister level reflects the need to work out technical details before higher-level officials make “hard political decisions on major issues,” said Tu Xinquan, director of the China Institute for World Trade Organization Studies at the University of International Business and Economics in Beijing.

The dispute has rattled companies and financial markets that worry it will drag on global economic growth that is showing signs of declining.

For their part, Chinese officials are unhappy with U.S. curbs on exports of “dual use” technology with possible military applications. They complain China’s companies are treated unfairly in national security reviews of proposed corporate acquisitions, though almost all deals are approved unchanged.

Chinese exports to the United States held up through late 2018 despite Trump’s tariff hikes. But that was due partly to exporters rushing to beat new duties — a trend that is fading.

Some manufacturers that serve the United States have shifted production to other countries.

The investment bank UBS said Friday that 37 percent of 200 manufacturers surveyed said they have shifted out of China over the past 12 months. It said the threat of U.S. tariff hikes was the “dominating factor” for nearly half, while others moved due to higher costs or tighter environmental regulation.

Another 33 percent of companies said they plan to move out of China in the next six to 12 months, according to the UBS report.

Despite the December truce, “most firms expect trade war to escalate,” the report said.

 
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Asian markets Friday continued the global sell-off triggered by Apple’s warning of lower revenues and futures indicators predict a sharply lower opening for U.S. markets.

The Tokyo market dropped 3 percent in morning trading, and markets in Shanghai, Sydney, Seoul and Taipei were also down.

Stock markets across the globe dropped Thursday after tech giant Apple said sales of its devices had fallen sharply in China last month, perhaps signaling a broader slowing in the world economy.

Apple has blamed U.S. President Donald Trump’s trade dispute with China for its shrinking outlook, but the U.S. leader tweeted his defense Thursday, claiming, “The United States Treasury has taken in MANY billions of dollars from the Tariffs we are charging China and other countries that have not treated us fairly. In the meantime we are doing well in various Trade Negotiations currently going on. At some point this had to be done!”

US-China trade talks

On Friday China’s government said a U.S. trade delegation will visit Beijing next week for two days of talks on carrying out an agreement reached by Trump and Chinese President Xi Jinping to postpone new tariff hikes.

On Dec. 1 the two leaders agreed to complete talks about technology, intellectual property and cyber theft issues within 90 days, and hold off on new tariffs in the meantime. U.S. officials have said that if the talks fail to produce a satisfactory agreement Washington will increase tariffs on $200 billion of Chinese goods from 10 percent to 25 percent.

Apple chief executive Tim Cook blamed the company’s sales shortfall on the trade battle President Donald Trump is waging against China.

“While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in Greater China,” Cook wrote.

Not just Apple

Kevin Hassett, chairman of the White House Council of Economic Advisers, said the contentious U.S.-China relations will force other U.S. companies to cut their sales estimates in China.

“It’s not going to be just Apple,” Hassett told CNN. “There are a heck of a lot of U.S. companies that have sales in China that are going to be watching their earnings being downgraded next year until we get a deal with China.”

He said slowing consumer demand in China gives Trump an edge in ongoing trade negotiations.

“That puts a lot of pressure on China to make a deal,” he said. “If we have a successful negotiation with China then Apple’s sales and everybody else’s sales will recover.”

The U.S. economy remains strong, with the country’s 3.7 percent jobless rate at a nearly five-decade low. But economists say the U.S. economy could be slowing and uncertainty in global economic fortunes has led to volatile daily swings in stock indexes in recent weeks.

In 2018, U.S. stock indexes suffered their worst year in a decade, with most of the losses recorded in December. The Dow was off 5.6 percent for the year, with the broader Standard & Poor’s index of 500 stocks down 6.2 percent.
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