Month: February 2019

Taiwan Concerns Mean China Defense Budget Likely to Defy Slowing Economy

A slowing economy is unlikely to crimp China’s 2019 defense budget rise, as Beijing earmarks more spending for modernization and big-ticket items like stealth jets, and focuses on Taiwan after a stern new year’s speech from President Xi Jinping.

The defense spending figure is closely watched worldwide for clues to China’s strategic intentions as it develops new military capabilities, including aircraft carriers and anti-satellite missiles.

In 2018, China unveiled its largest defense spending increase in three years, setting an 8.1 percent growth target for the year, fueling an ambitious military upgrade program and making its neighbors nervous.

The 2019 number should be revealed at the March 5 opening of the annual session of China’s largely rubber-stamp parliament, although in 2017 it was initially not announced, prompting renewed concerns about transparency.

China plans to set a lower economic growth target of 6-6.5 percent in 2019 compared with last year’s target of around 6.5 percent, policy sources have told Reuters. The government will also announced the economic growth target on March 5. 

However, the defense budget increase could well surpass that.

Influential state-run tabloid the Global Times, which takes a strongly nationalistic line, this month cited an unidentified military expert as saying “a stable 8-9 percent increase from 2018 would be a reasonable prediction.”

China still has a long way to go to catch Western forces because the number of advanced weapons now in its arsenal, such as the J-20 stealth fighter, remain limited, the paper said.

Xie Yue, a professor of political science at Tongji University in Shanghai and a security expert, said with a weakening economy there would naturally be an expectation for a slower increase in military spending.

“It should go down, as the defense budget is connected to economic growth, but certainly factors will probably mean it will still go up, like the South China Sea and Taiwan issues,” Xie said.

Xi’s January speech threatening to attack Taiwan should it not accept Chinese rule has shot the issue back up the agenda for China’s military thinkers, especially as the island gears up for presidential elections next year.

“The Taiwan question can’t keep being put off, passed down through the generations,” retired Chinese Major General Luo Yuan, one of the country’s most prominent and widely read military commentators, wrote on his blog last month. “Our generation must complete our historic mission.”

‘Itching for a fight’

One source with ties to China’s military said the armed forces were itching for a fight over self-ruled Taiwan, claimed by China as its sacred territory, especially after Xi’s speech.

“Every day, they’re like ‘fight, fight, fight,'” said the source, who regularly meets senior officers.

Taiwan President Tsai Ing-wen has repeatedly warned of the threat from China, and vowed to defend the island and its democratic way of life. The United States has said it is closely watching Chinese intentions towards Taiwan.

“Even with just a broom, I would fight against China,” Taiwan Premier Su Tseng-chang told parliament last week. “You would pay a price if you want to annex Taiwan.”

The United States again sent two Navy ships through the Taiwan Strait on Monday as the U.S. military increased the frequency of movement through the strategic waterway despite opposition from China.

China’s Defense Ministry did not respond to a request for comment on this year’s military budget. China routinely says spending is for defensive purposes only, comparatively small and that critics just want to keep the country down.

“What people are scared of is China getting strong,” said Xu Guangyu, a senior consultant at the China Arm Control and Disarmament Association and another former senior Chinese officer, dismissing concerns about defense spending.

U.S. President Donald Trump has backed plans to request $750 billion from Congress for defense spending in 2019. That compares with the 1.11 trillion yuan ($165.40 billion) China set for its military budget in 2018.

China provides no breakdown of its defense budget, leading neighbors and other military powers to complain that Beijing’s lack of transparency has added to regional tension. China says it is fully transparent and no threat.

Diplomats and many foreign experts say China’s defense numbers probably underestimate true military spending for the People’s Liberation Army, the world’s largest armed forces, which also runs the country’s space program.

Another Ceasefire: Can the US and China End Their Trade War?

Relief swept across world financial markets Monday after President Donald Trump pushed back a March 2 deadline in a trade dispute with China.

 

But the respite might not last.

 

The world’s two biggest economies have squared off over Beijing’s aggressive campaign to turn Chinese companies into world leaders in advanced industries such as robotics and electric vehicles. Both sides have said they’ve made progress but haven’t provided much detail.

 

“Popping the champagne today would be premature,” Gregory Daco, chief U.S. economist at Oxford Economics, wrote in a research note.

 

Daco added that vast differences between the two countries “will prevent a significant de-escalation of trade tensions between the two giants.”

 

In the United States, business groups and lawmakers fear that Trump will settle for a deal that doesn’t require China to change its sharp-elbowed business practices.

 

A look at the dispute:

 

What Are the U.S. and CHINA Fighting About?

 

The United States accuses China of deploying predatory tactics in a headlong push to challenge American technological dominance. These, the U.S. says, include: outright theft of trade secrets, forcing foreign companies to hand over technology as the price of access to the Chinese market, and unfairly subsidizing Chinese tech companies and using regulations to hobble their foreign competitors.

 

The accusations elevate the standoff from a typical trade dispute to a battle over whether the United States or China dominates the industries of the future, the outcome of which has implications for national security.

 

Trump is also obsessed with America’s massive trade deficit with China, $336 billion in 2017 and likely higher last year.

 

Critics complain that the administration has been inconsistent about what it wants — sometimes demanding sweeping changes in Chinese economic policy, sometimes seeming willing to settle for China just buying more American stuff to narrow the trade deficit.

 

Robert Daly, director of the Kissinger Institute on China and the United States at the Wilson Center think tank, said he would be disappointed if the Trump administration settles only for more exports to China and vague promises to make structural reforms. “The Trump administration could have had that in week one,” Daly said.

 

What’s Happened So Far?

 

In July, the Trump administration gradually began slapping import taxes on Chinese goods to pressure Beijing into changing its policies. It now has imposed 10 percent tariffs on $200 billion in Chinese imports and 25 percent tariffs on another $50 billion.

 

Twice, Trump has pushed back plans to raise the tariffs on the $200 billion to 25 percent. He extended a Jan. 1 deadline by three months after meeting Chinese President Xi Jinping in Buenos Aires Dec. 1. And on Sunday, following meetings last week between U.S. and Chinese negotiators, he delayed indefinitely the tariff hike that was scheduled to kick in at 12:01 EST March 2.

 

The U.S. is also restricting Chinese investment in high-tech American industries and U.S. exports of sensitive technology to China.

 

Meanwhile, the Chinese have punched back by slapping import taxes on $110 billion in U.S. goods, focusing on soybeans and agricultural products in a direct shot at Trump supporters in the American farm belt.

 

Forecasters at the World Bank, the International Monetary Fund and the Organization for Economic Cooperation and Development have all downgraded their forecasts for the global economy, citing the heightened trade tensions.

 

Are U.S. and Chinese Negotiators Making Headway?

 

They say they are but haven’t provided many particulars. Trump tweeted Sunday that negotiators had made “substantial progress” on issues including protection of intellectual property, coerced tech transfer, currency manipulation and U.S. access to the Chinese farm and services markets among “many other issues.” China’s official Xinhua news agency echoed that assessment.

 

Trump has said he would likely have to meet one-on-one with Xi — probably late next month at Trump’s Mar-a-Lago resort in Florida — to resolve the thorniest issues.

 

What Happens Next?

 

Trump sees the stock market as a measure of the success of his economic policies. Investors’ view is clear: When U.S.-China negotiations go well, American stocks rise. When talks falter, they drop.

 

So the question is whether Trump, having taken U.S.-China economic relations to the brink, has the patience to hold out in the face of likely stock-market volatility for an enforceable deal that requires China to change its behavior. Or whether he’ll agree to more exports and promises of change.

 

“If the U.S. has already achieved quite a bit, and we are just clarifying the details of substantial Chinese concessions, then that’s not a huge concern,” said Scott Kennedy, a China expert at the Center for Strategic and International Studies. “But if the U.S. has come away with very little in terms of binding commitments (after dropping the tariff deadline), then the chance of getting more in the coming weeks could be quite low.”

 

Daly at the Wilson Center faulted the administration for not imposing a new deadline. “They are expert at the use of time and delay until conditions have changed and leverage has been lost, to get a better outcome,” he said.

 

Trump has also alarmed Canada and critics by suggesting the U.S. might drop criminal charges against Chinese telecommunications giant Huawei and its chief financial officer, Meng Wanzhou, in a quest to cut a deal. The U.S. has charged Huawei with lying about violating sanctions against Iran and with stealing trade secrets. Canada arrested Meng Dec. 1 at America’s request and is weighing whether to extradite her to the United States. China arrested two Canadians in apparent retaliation.

 

Former Canadian Ambassador to China David Mulroney tweeted Monday that “it’s now the US that has to hang tough, and not sell out its integrity in Huawei case for a trade deal with China.”

Scientists: Evidence for Man-Made Global Warming Hits ‘Gold Standard’

Evidence for man-made global warming has reached a “gold standard” level of certainty, adding pressure for cuts in greenhouse gases to limit rising temperatures, scientists said Monday.

“Humanity cannot afford to ignore such clear signals,” the U.S.-led team wrote in the journal Nature Climate Change of satellite measurements of rising temperatures over the past 40 years.

They said confidence that human activities were raising the heat at the Earth’s surface had reached a “five-sigma” level, a statistical gauge meaning there is only a one-in-a-million chance that the signal would appear if there was no warming.

Such a “gold standard” was applied in 2012, for instance, to confirm the discovery of the Higgs boson subatomic particle, a basic building block of the universe.

Benjamin Santer, lead author of Monday’s study at the Lawrence Livermore National Laboratory in California, said he hoped the findings would win over skeptics and spur action.

“The narrative out there that scientists don’t know the cause of climate change is wrong,” he told Reuters. “We do.”

Mainstream scientists say the burning of fossil fuels is causing more floods, droughts, heat waves and rising sea levels.

U.S. President Donald Trump has often cast doubt on global warming and plans to pull out of the 197-nation Paris climate agreement which seeks to end the fossil fuel era this century by shifting to cleaner energies such as wind and solar power.

Sixty-two percent of Americans polled in 2018 believed that climate change has a human cause, up from 47 percent in 2013, according to the Yale Program on Climate Change Communication.

Satellite data

Monday’s findings, by researchers in the United States, Canada and Scotland, said evidence for global warming reached the five sigma level by 2005 in two of three sets of satellite data widely used by researchers, and in 2016 in the third.

Professor John Christy, of the University of Alabama in Huntsville which runs the third set of data, said there were still many gaps in understanding climate change. His data show a slower pace of warming than the other two sets.

“You may see a certain fingerprint that indicates human influence, but that the actual intensity of the influence is minor [as our satellite data indicate],” he told Reuters.

Separately in 2013, the United Nations’ Intergovernmental Panel on Climate Change (IPCC) concluded that it is “extremely likely,” or at least 95 percent probable, that human activities have been the main cause of climate change since the 1950s.

‘Virtually certain’

Peter Stott of the British Met Office, who was among the scientists drawing that conclusion and was not involved in Monday’s study, said he would favor raising the probability one notch to “virtually certain,” or 99-100 percent.

“The alternative explanation of natural factors dominating has got even less likely,” he told Reuters.

The last four years have been the hottest since records began in the 19th century.

The IPCC will next publish a formal assessment of the probabilities in 2021.

“I would be reluctant to raise to 99-100 percent, but there is no doubt there is more evidence of change in the global signals over a wider suite of ocean indices and atmospheric indices,” said Professor Nathan Bindoff, a climate scientist at the University of Tasmania.

Green Climate Fund Names France’s Glemarec as New Chief

The $8 billion Green Climate Fund, set up to help developing nations tackle global warming, named Yannick Glemarec of France as its new executive director Monday after his predecessor quit.

Former leader Howard Bamsey of Australia stepped down in July after what the fund described as a “difficult” board meeting marred by disputes between rich and poor nations about how to select projects in developing nations.

“Yannick Glemarec brings 30 years of experience in climate change, development, finance and their inter-relationships,” the fund said in a statement. He has previously had senior jobs at U.N. Women and the U.N. Development Program.

The fund, set up in South Korea in 2014, is trying to help developing nations to cut their greenhouse gas emissions and adapt their economies to extremes such as floods, droughts, downpours and rising sea levels.

It has been plagued by internal disputes and U.S. President Donald Trump denounced it as a waste of taxpayer dollars. He halted U.S. contributions as part of his decision to leave the 2015 Paris climate agreement.

Trump’s decision cut the fund to $8 billion from $10 billion originally pledged. The United States under President Barack Obama promised a total of $3 billion but had provided just $1 billion by the time Trump took office.

The fund has a portfolio of 93 projects in developing nations worth about $4.6 billion. It had been led by interim chief Javier Manzanares of Spain since Bamsey quit.

UAE Says its First Astronaut Going Into Space in September

The first astronaut from the United Arab Emirates will blast off into space on Sept. 25 on a trip to the International Space Station, authorities announced Monday.

Either military pilot Hazza al-Mansoori or engineer Sultan al-Neyadi will be the first Emirati in space, part of an ambitious space program for this Gulf Arab nation home to the world’s tallest building and the busiest airport for international travel.

But the two men, selected from over 4,000 applicants, say they aren’t worried after the recent failure of another Russian rocket carrying astronauts to the space station.

“After the incident we were more confident with the preparedness of the mission,” al-Mansoori told The Associated Press. “In case of any failure there is equipment onboard the rocket to ensure the safety of the crew, which made us more confident that the system works with a high level of adequacy.”

That incident happened Oct. 11, which saw a Soyuz-FG rocket carrying U.S. astronaut Nick Hague and Russian cosmonaut Alexei Ovchinin fail shortly after launch due to a damaged sensor. The two men landed safely in Kazakhstan.

“The astronauts who were involved will go into space soon,” al-Neyadi said. “This shows how safe the Soyuz is, that astronauts are able to survive in case of any accident.”

Both men have undergone intensive training at the Star City space center outside of Moscow, which included pressure chamber tests, centrifuge tests, parabolic flight training, and winter survival training. Parabolic flights allow astronauts to train for being weightless in space.

“Since I’m a pilot, I was able to withstand a gravitational force of 9-G,” al-Mansoori said. “Now I must train in this sort of gravitational force, 0-G, the lack of gravity.”

Al-Neyadi said the biggest challenge he faced was not a physical one.

“The most difficult thing perhaps was learning Russian, since it’s the only language which we will use to communicate with the crew onboard the vessel,” he told the AP. “It was also the language they used while training at the center in Russia.”

The Russian Soyuz spacecraft is currently the only vehicle that can ferry crews to the International Space Station after the U.S. space shuttle fleet retired.

Organizers had said they’d announce the name of the astronaut going Monday. They didn’t, without offering an explanation. It remains unclear when authorities will choose the first astronaut to go in September.

The first astronaut will travel in September with the Russian space mission aboard Soyuz MS-15 and spend eight days at the International Space Station. The selected astronaut will return onboard the Soyuz MS-12 and then be replaced by the second astronaut.

The UAE has a fledgling space program with big ambitions. It launched its first locally made satellite, KhalifaSat, in October from Japan. It also wants to launch a probe to Mars in 2020.

The UAE also says it wants to colonize Mars by 2117, with a fully functioning city of 600,000.

Though the men will be over 400 kilometers (250 miles) above the Earth’s surface while on their trip, the Emirati astronauts will have a taste of home when they travel closer to the stars. Russia’s state-owned RIA Novosti news agency quoted an unnamed industry source saying that UAE space travelers have been offered a menu of Arab dishes to select from when they go into space. The men have chosen maqloubeh, a one-pot rice dish, salona, a lamb stew, and the standard hummus, the agency reported.

Afghanistan Begins Exports To India Through Iranian Port

Afghanistan has started shipping goods to India for the first time through a newly developed Iranian seaport in a bid to improve exports and reduce reliance on routes through its uneasy neighbor, Pakistan.

Afghan President Ashraf Ghani traveled Sunday to the western border city of Zaranj to see off the inaugural convoy of 23 trucks loaded with 570 tons of cargo to the Chabahar port in neighboring Iran. The consignment is destined for the Indian port city of Mumbai. 

For decades, landlocked Afghanistan has mostly relied on Pakistani land and seaports for international trade. But mutual tensions have in recent years significantly reduced Afghan trade and transit activities through Pakistan. 

Addressing the nationally televised ceremony, Ghani credited a “healthy cooperation between India, Iran and Afghanistan” for achieving the milestone. He said the new export route will help improve economic growth in his war-shattered country, saying “Afghanistan is not landlocked anymore.”

New Delhi has financed and developed Iran’s Chabahar Port to enable Kabul get direct and easy sea trade access.

India took operational control of a portion of the Iranian port late last year for 18 months and plans to send cargo ships from its ports of Mumbai, Kandla and Mundra every two weeks, according Indian media reports. 

The United States last year waived certain anti-Iran sanctions to allow development of Chabahar to support efforts aimed at stabilizing Afghanistan. The waiver has enable India, Iran and Afghanistan to continue their work to establish a new transit and transport corridor linking the three countries to help improve Afghan economy and allow the war-ravaged country to import food and medicines.

India successfully shipped 1.1 million tons of wheat to Afghanistan through Chabahar Port in 2017. That year, New Delhi also launched an air corridor with Kabul for bilateral trade. 

Indian ambassador to Afghanistan, Vinay Kumar, while addressing Sunday’s ceremony in Zaranj said the air corridor has since helped increased Afghan exports to his country by 40 percent. 

China also opened an air corridor with Afghanistan in November and has since imported thousands of tons of Afghan pine nuts, bringing much-need foreign exchange to Kabul. Afghanistan is the largest producer of pine nuts in the world, with an annual output of about 23,000 tons. The increase in exports to China has led to an unusual rise in in prices of pine nuts in Afghanistan, say local traders and consumers.

Pakistan allows Afghanistan to use its seaports for international trade under a bilateral trade and transit agreement. It also allows use of overland routes for Afghan exports to India. However, Islamabad wants improvement in ties with New Delhi before it will allow Indian exports via the same routes back to Afghanistan. 

WHO: Pregnant Women Exposed to Ebola Should Get Vaccine

An independent advisory body convened by the World Health Organization (WHO) recommends pregnant women and breastfeeding women in eastern Democratic Republic of Congo be vaccinated against the deadly Ebola virus.  Latest WHO figures put the number of Ebola cases in the DRC at 853, including 521 deaths since the beginning of the outbreak in August.

More than 80,000 people so far have been vaccinated against Ebola in the African country’s conflict-ridden North Kivu and Ituri provinces during the current outbreak.  The vaccine is still in its experimental stage. But since 2015 it has been given to thousands of people in Africa, Europe and the United States.  

The studies of the efficacy of the vaccine are not conclusive.  However, they indicate the serum is safe and protects people against Ebola.  On the basis of accumulated evidence, the group of immunization experts recommends continued ring vaccination for Ebola in DRC.

Ring vaccination is a strategy that prevents the spread of the disease by vaccinating only those likely to be infected with the virus.  WHO  spokesman, Tarek Jasarevic says the experts advise pregnant women at high risk of infection and death from Ebola should be given the vaccination.

“So, this aim, this vaccinating of women would protect them, provide them with more protection.  But we also know that if we use this ring vaccination that women who are in the community that is vaccinated then have a low risk.  So, it is really between risk and benefits and we hope that the use of the vaccine in pregnant women will generate some data for the future,” Jasarevic said.

The group of experts advise the vaccine be given to pregnant women in their second or third trimester as well as to breastfeeding women and babies under one year old.  

The experts also recommend that one or more of three other new experimental Ebola vaccines be tested in areas neighboring the affected regions.  They say pregnant and breastfeeding women should be included in these trials.

The WHO says all vaccinated pregnant women will be closely monitored until the birth of their babies to see if there are any adverse effects.

 

US-China Trade Talks Extended as March Deadline Approaches

The United States and China are discussing a meeting between their two leaders soon to finalize a trade agreement. To move things forward, the latest round of trade talks between senior officials is being extended into the weekend. As Nike Ching reports, experts say world’s two largest economies must bridge wide gaps as they seek common ground before new U.S. tariffs are set to start.

Your Flight’s Seat-Back Screen May Be Watching You

Now there is one more place where cameras could be watching you — from 30,000 feet.

Newer seat-back entertainment systems on some airplanes operated by American Airlines and Singapore Airlines have cameras, and it’s likely they are also on planes used by other carriers.

American and Singapore both said Friday that they have never activated the cameras and have no plans to use them.

However, companies that make the entertainment systems are installing cameras to offer future options such as seat-to-seat video conferencing, according to an American Airlines spokesman.

A passenger on a Singapore flight posted a photo of the seat-back display last week, and the tweet was shared several hundred times and drew media notice. Buzzfeed first reported that the cameras are also on some American planes.

Cameras standard features

The airlines stressed that they didn’t add the cameras — manufacturers embedded them in the entertainment systems. American’s systems are made by Panasonic, while Singapore uses Panasonic and Thales, according to airline representatives. Neither Panasonic nor Thales responded immediately for comment.

As they shrink, cameras are being built into more devices, including laptops and smartphones. The presence of cameras in aircraft entertainment systems was known in aviation circles at least two years ago, although not among the traveling public.

Seth Miller, a journalist who wrote about the issue in 2017, thinks that equipment makers didn’t consider the privacy implications. There were already cameras on planes, although not so intrusive, and the companies assumed that passengers would trade their images for convenience, as they do with facial-recognition technology at immigration checkpoints, he said.

“Now they’re facing blowback from a small but vocal group questioning the value of the system that isn’t even active,” Miller said.

American Airlines spokesman Ross Feinstein said cameras are in “premium economy” seats on 82 Boeing 777 and Airbus A330-200 jets. American has nearly 1,000 planes.

“Cameras are a standard feature on many in-flight entertainment systems used by multiple airlines,” he said.

Singapore spokesman James Boyd said cameras are on 84 Airbus A350s, Airbus A380s and Boeing 777s and 787s. The carrier has 117 planes.

Cameras not turned on

While the airlines say they have no plans to use the cameras, a Twitter user named Vitaly Kamluk, who snapped the photo of the camera on his Singapore flight, suggested that just to be sure the carriers should slap stickers over the lenses.

“The cameras are probably not used now,” he tweeted. “But if they are wired, operational, bundled with mic, it’s a matter of one smart hack to use them on 84+ aircrafts and spy on passengers.”

Virgin Galactic Takes Crew of 3 to Altitude of 55 Miles

Virgin Galactic’s spacecraft reached an altitude of more than 55 miles (88.5 kilometers) on Friday, carrying for the first time a passenger in addition to its two pilots.

SpaceShipTwo, built by British billionaire Richard Branson to carry tourists into space, launched from California’s Mojave desert and flew to an altitude of 55.87 miles (89.9 kms), the company said. 

The US definition of space is anything over an altitude of 50 miles. The Virgin craft made it past that for the first time in December, reaching an altitude of 50.9 miles.

Branson announced with great fanfare at the time that it was the first time since NASA ended its space shuttle program in 2011 that an American vessel had carried humans into space.

However, the Virgin craft still has not crossed the internationally accepted boundary between Earth’s outer atmosphere and space, known as the Karman Line, which is set at an altitude of 62 miles (100 kms).  

“SpaceShipTwo, welcome back to space,” wrote Virgin Galactic as it Tweeted updates throughout the event, without sending out any live footage.

The spacecraft travelled at a speed of Mach 3, or three times the speed of sound in its ascent, and landed without incident at the Mojave spaceport.

It is designed to carry six passengers, but test flights are years behind schedule in large part because of an accident that killed a test pilot in 2014.

Branson told AFP earlier this month that he hoped the test flights would be far enough ahead by July that he would be able to join a flight.

For the first time Friday, the flight carried a passenger, Virgin Galactic’s Beth Moses, who will be in charge of training the company’s future space tourists. 

To take off from the ground, SpaceShipTwo is carried by another larger plane, WhiteKnightTwo, which resembles a combination of two airplanes attached by their wing tips. 

When it is high enough, it releases the spaceship which then fires up its own rocket engine and ascends for roughly a minute into space.

At the apogee, its passengers float in zero-gravity for several minutes. It then descends and glides back to the landing strip.

Branson’s main rival is Blue Origin, created by billionaire Amazon founder Jeff Bezos.

Bezos told an audience in New York this week that his New Shepard suborbital vehicle would start flying people later this year and to a greater altitude than SpaceShipTwo. 

“One of the issues that Virgin Galactic will have to address, eventually, is that they are not flying above the Karman Line, not yet,” Bezos said, quoted by Space News. 

New Shepard has already flown above the Karman Line, but not with people on board. 

US-China Trade Hopes Lift Stocks

Stocks rose in major markets around the world Friday on bets of progress in trade talks between China and the United States, while crude futures hit their highest level in more than three months supported by ongoing supply cuts. 

U.S. President Donald Trump said Friday that there was a very good chance the United States would strike a deal with China to end their trade war and that he was inclined to extend his March 1 deadline to reach an agreement. 

U.S. and Chinese negotiators meeting in Washington made progress and will extend this week’s round of negotiations by two days, he said.  

Main stock indexes on Wall Street rose as the optimistic trade talk more than offset signs of slower growth in both U.S. earnings and the economy, with the S&P 500 posting a fourth consecutive week of gains. 

The Dow Jones industrial average rose 181.18 points, or 0.7 percent, to 26,031.81; the S&P 500 gained 17.79 points, or 0.64 percent, to 2,792.67; and the Nasdaq Composite added 67.84 points, or 0.91 percent, to 7,527.55. The Dow rose for the ninth consecutive week.

Overnight, shares in Asia were buoyed by a late rally in Chinese shares, with the main blue-chip index rising more than 2 percent to a near seven-month high. 

Emerging market stocks rose 0.73 percent after touching the highest level since August. MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.7 percent higher, while Japan’s Nikkei lost 0.18 percent. 

Trade talks and a growing number of policy U-turns by global central banks have propped up equities in recent weeks, although this week saw the first outflows from emerging market debt and equity funds since October 2018, Bank of America Merrill Lynch strategists said, citing EPFR data. 

Crude rising 

Oil prices touched their highest level in more than three months, supported by OPEC supply cuts as well as the trade developments. New record U.S. oil supply, however, limited gains in post-settle trade. 

U.S. crude rose 0.37 percent to $57.17 per barrel and Brent was last at $67.00, down 0.1 percent on the day. 

In currencies, the U.S. dollar was little changed against a basket of peers. The dollar index fell 0.05 percent, with the euro down 0.03 percent to $1.1331. The Japanese yen strengthened 0.03 percent versus the greenback at 110.68 per dollar. Sterling was last trading at $1.3053, up 0.03 percent on the day. 

The Australian dollar recovered a day after falling more than 1 percent after Reuters reported the Chinese port of Dalian had barred imports of Australian coal indefinitely. China said Friday that imports would continue, but customs has stepped up checks on foreign cargoes. 

Separate comments by Reserve Bank of Australia Gov. Philip Lowe that a rate increase may be appropriate next year also helped to boost the Aussie dollar. 

The Aussie dollar recently gained 0.56 percent versus the greenback at 0.7128. 

Despite gains on risky assets, safe-haven U.S. Treasuries also gained in price. Benchmark 10-year notes last rose 10/32 in price to yield 2.6536 percent, from 2.688 percent late on Thursday. 

The 30-year bond last rose 18/32 in price to yield 3.0159 percent, from 3.045 percent late Thursday. 

Spot gold added 0.4 percent to $1,328.20 an ounce. U.S. gold futures gained 0.21 percent to $1,330.60 an ounce. 

Copper rose 1.52 percent to $6,477.00 a metric ton. 

US Senators Begin Probe of Rising Insulin Prices

Two U.S. senators launched an investigation into rising insulin prices on Friday, sending letters to the three leading manufacturers seeking answers as to why the nearly 100-year-old drug’s cost has rapidly risen, causing patients and taxpayers to spend millions of dollars a year.

Republican Sen. Chuck Grassley of Iowa, chairman of the Senate Finance Committee, and Sen. Ron Wyden of Oregon, the committee’s top Democrat, sent letters to the heads of Eli Lilly and Co., Novo Nordisk A/S and Sanofi SA, the longtime leading manufacturers of insulin. 

The senators pointed to similar, large insulin price increases at all three companies. Eli Lilly’s Humalog, for instance, rose from $35 to $234 per dose between 2001 and 2015, a 585 percent increase, they wrote. Insulin has been available since the early 20th century. 

The senators asked for information on the process used to determine list prices and the process used to determine net prices after negotiations with pharmacy benefits managers (PBMs) and health insurance plans. Their letters also asked for information about the cost of research and development, production, revenues and gross margins from insulin sales. 

“These hardships can lead to serious medical complications that are entirely preventable and completely unacceptable for the world’s wealthiest country,” the senators wrote in similarly worded letters. 

‘Increasingly severe hardships’

“We are concerned that the substantial increases in the price of insulin over the past several years will continue their upward drive and pose increasingly severe hardships not only on patients that require access to the drug in order to stay alive but also on the taxpayer,” they wrote. 

While Democratic lawmakers have launched several drug price investigations, this is one of the first bipartisan inquiries. 

The Senate Finance Committee has the power to subpoena drugmakers. 

The letters came just days before the same committee is scheduled to hold a hearing with seven pharmaceutical company executives, the latest congressional hearing on rising drug prices. 

U.S. lawmakers have intensified scrutiny on prescription medicine costs as the issue consistently polls as a top voter concern. In January, top Democrats on the House Energy and Commerce Committee also wrote to the three insulin manufacturers asking for information on why their prices have rapidly risen. 

About 1.2 million Americans have type 1 diabetes, requiring daily insulin. Type 2 diabetes, which affects nearly 30 million Americans, according to the American Diabetes Association, is treated with a variety of other medicines. But those patients may also eventually become dependent on insulin. 

NASA Clears SpaceX Test Flight to International Space Station

NASA gave its final go-ahead Friday to billionaire entrepreneur Elon Musk’s SpaceX company to conduct its first unmanned test flight of a newly designed crew capsule to the International Space Station on March 2.

NASA has awarded SpaceX $2.6 billion and Boeing Co $4.2 billion to build rocket and capsule launch systems to return astronauts to the orbiting research laboratory from U.S. soil for the first time since America’s space shuttle program ended in 2011.

Trump Administration Denying, Delaying More Foreign Skilled-worker Requests

The Trump administration is denying and delaying more skilled-worker visa petitions than at any time since at least 2015, in keeping with its promise to increase scrutiny of foreign workers, according to data the government released on Friday.

U.S. officials say they have made reforms that prioritize American workers, cut down on fraud and streamline the immigration process. But lawyers who help employers apply for the visas say the agency is rejecting legitimate applications and tying up requests in bureaucratic red tape.

The data provided by U.S. Citizenship and Immigration Services (USCIS), the agency that adjudicates the visas, extends to the 2015 fiscal year, encompassing the last two years of the Obama administration and the first two years of the Trump administration.

New policies for H-1B visas

Republican President Donald Trump campaigned in 2016 on restricting immigration, and early in his presidency issued an executive order directing the Department of Homeland Security, which oversees USCIS, to tighten its policies on H-1B visas. The visas are intended for foreign workers who generally have bachelor’s degrees or higher to work in the United States, often in the technology, healthcare and education sectors.

In the 2018 fiscal year, which ended on Sept. 30, the government issued “initial denials” to over 61,000 H-1B applications. In that time, the government issued decisions on over 396,000 applications.

That is more than double the number of such denials over the prior year, even as the total number of applications the government completed dropped by about 2 percent between 2017 and 2018.

And denials look set to increase even further this year. In the first quarter of the 2019 fiscal year, the government issued initial denials to nearly 25,000 H-1B applications, a 50 percent increase over the same period last year.

Approval rate drops

The majority of petitions are still being approved, but the approval rate is dropping. In 2015, the approval rate was 96 percent, compared with 85 percent last year.

“USCIS has made a series of reforms designed to protect U.S. workers, increase our confidence in the eligibility of those who receive benefits, cut down on frivolous petitions, and improve the integrity and efficiency of the immigration petition process,” said Jessica Collins, a USCIS spokeswoman.

The government data also show that the administration is issuing far more “requests for evidence” in response to H-1B applications. Such requests, or RFEs as they are known, often challenge the basis of the original petitions and require employers and attorneys to submit additional paperwork.

Receiving an RFE from the government can add several months and thousands of dollars in legal fees to the cost of applying for a visa, attorneys say.

Screening questioned

The number of completed H-1B petitions that drew an RFE reached over 150,000 last year, compared with 86,000 in 2017, a 75 percent increase.

Ron Hira, a professor at Howard University and critic of the H-1B program, said the data suggests USCIS is giving employers a fair opportunity to justify their petitions through the RFE process.

“It also makes one question whether the Obama administration was doing an adequate job in ensuring the integrity and accountability of the H-1B program,” Hira wrote in an email. He also noted that large tech companies, such as Microsoft Corp, Amazon, Alphabet Inc’s Google and Facebook Inc, enjoyed H-1B approval rates last year of 98 percent or 99 percent, according to USCIS, while firms that have been criticized for using H-1B workers to replace Americans saw their petitions approved at far lower rates.

But immigration attorneys say many of the denials and RFEs are violating the laws and regulations governing the program. Some companies are successfully challenging the denials in federal court. Entegris Professional Solutions, a Minnesota company, sued USCIS in December over the rejection of an H-1B application for one of its employees.

This month, USCIS reopened the case and granted the petition, said Matthew Webster, one of Entegris’ attorneys on the case.

NY Governor Orders Probe Into Facebook Data Access From iOS Apps

New York Governor Andrew Cuomo on Friday ordered two state agencies to investigate a media report that Facebook Inc may be accessing far more personal information from smartphone users, including health and other sensitive data, than had previously been known.

The directive to New York’s Department of State and Department of Financial Services came after The Wall Street Journal said testing showed that Facebook collected personal information from other apps on users’ smartphones within seconds of them entering it.

The WSJ reported that several apps share sensitive user data including weight, blood pressure and ovulation status with Facebook. The report said that the company can access data in some cases even when the user is not signed into Facebook or does not have a Facebook account.

In a statement Cuomo called the practice an “outrageous abuse of privacy.” He also called on the relevant federal regulators to become involved.

Facebook did not immediately respond to a Reuters request for comment.

Shares in Facebook took a short-lived hit after the Wall Street Journal report was published, but closed up 1.2 percent.

In late January Cuomo along with New York Attorney General Letitia James announced an investigation into Apple Inc’s failure to warn consumers about a FaceTime bug that had let iPhones users listen to conversations of others who have not yet accepted a video call.

Facebook is facing a slew of lawsuits and regulatory inquiries over privacy issues, including a U.S. Federal Trade Commission investigation into disclosures that Facebook inappropriately shared information belonging to 87 million users with British political consulting firm Cambridge Analytica.

New York’s financial services department does not traditionally supervise social media companies directly, but has waded into digital privacy in the financial sector and could have oversight of some app providers that send user data to Facebook.

In March, it is slated to implement the country’s first cybersecurity rules governing state-regulated financial institutions such as banks, insurers and credit monitors.

Last month, DFS said life insurers could use social media posts in underwriting policies, so long as they did not discriminate based on race, color, national origin, sexual orientation or other protected classes.

Trump to Bar Abortion Referrals by Family Planning Clinics

The Trump administration said Friday that it would bar taxpayer-funded family planning clinics from referring women for abortions, a move certain to be challenged in court by abortion rights supporters.

The final rule released Friday by the Health and Human Services Department pleased religious conservatives, a key building block of President Donald Trump’s political base.

The administration plan also would prohibit federally funded family planning clinics from being housed in the same location as abortion providers.

Planned Parenthood has said the administration appears to be targeting them, and calls the policy a “gag rule.”

The regulation was published Friday on an HHS website . It’s not official until it appears in the Federal Register and the department said there could be “minor editorial changes.” A department official confirmed it was the final version.

Known as Title X, the family-planning program serves about 4 million women annually through independent clinics, many operated by Planned Parenthood affiliates, which serve about 1.6 million women. The grant program costs taxpayers about $260 million annually.

Abortion is a legal medical procedure, but federal laws prohibit the use of taxpayer funds to pay for abortions except in cases of rape, incest, or to save the life of the woman.

Abortion opponents praised the administration’s move.

“We are celebrating the newly finalized Title X rules that will redirect some taxpayer resources away from abortion vendors,” Kristan Hawkins, president of Students for Life of America, said in a statement. Although federal family planning funds by law cannot be used to pay for abortions, religious conservatives have long argued that the program indirectly subsidizes Planned Parenthood.

A group representing family planning clinics decried the administration’s decision.

“This rule intentionally strikes at the heart of the patient-provider relationship, inserting political ideology into a family planning visit, which will frustrate and ultimately discourage patients from seeking the health care they need,” Clare Coleman, head of the National Family Planning & Reproductive Health Association, said in a statement. 

NY Gov. Cuomo Deems Losing 2nd Amazon HQ ‘Greatest Tragedy’

Gov. Andrew Cuomo says Amazon’s backing out of a deal to put one of its second headquarters in New York City is the “greatest tragedy” he has seen since he’s been in government.

Cuomo said Friday on public radio station WAMC that losing the Amazon deal makes him sick to his stomach. Cuomo’s public comments were his first on the topic since his office issued a statement February 14, the day the Seattle-based internet retailer announced it was backing out of an agreement to redevelop a site in Queens.

Cuomo again blamed fellow Democrats who control the state Senate. They include Sen. Michael Gianaris, who represents the Long Island City neighborhood where Amazon wanted to base 25,000 jobs.

Emails requesting comment were sent to the offices of Gianaris and the Senate majority.

Kraft Heinz Announces $15.4 Billion Write-Down

Analysts say a $15.4 billion write-down for food giant Kraft Heinz reflects changing consumer taste for fresh food products over processed ones.

The company said Thursday the decrease in value of some of its major brands resulted in a net loss of $12.6 billion.

Kraft Heinz also announced Thursday the Securities and Exchange Commission had subpoenaed it late last year because of its procurement procedures.

At the end of the business day Thursday, the company saw its stock drop about 20 percent.

“We expect to take a step backwards in 2019,” Chief Financial Officer David Knopf said in a post earnings conference call. He promised “consistent profit growth” for 2020.

Kraft Heinz is the home of such iconic brands as Velveeta Cheese, Heinz ketchup brands, Oscar Mayer hotdogs and Cheez Whiz.

LA Showcases Quake Alert System

California is earthquake country, and residents of Los Angeles can now get some critical warning, when conditions are right, after a quake has started and seismic waves are heading their way.

The long-delayed system, called ShakeAlertLA, is the first of its kind in the United States.

Earthquake alert systems like this save lives, said Jeff Gorell, deputy Los Angeles mayor for public safety, as he demonstrated the application on his smartphone. 

“When an earthquake starts, the first waves that go out are called P-waves,” he said. They serve as a warning and “are not the damaging, destructive waves” that will follow. 

The alert system, which relies on data from seismic sensors throughout the region, could offer up to 90 seconds of warning for quakes of magnitude 5 or larger.

Even a few seconds can make a difference, said Los Angeles Mayor Eric Garcetti, as he rolled out the ShakeAlertLA smartphone app in January. Alerts let people know to drop, cover and hold on, as they are instructed to do in earthquakes.

Mexico City system

An alert system is in place in Mexico City that let residents brace for a mild shaker in early February after an earthquake struck Chiapas to the south. The quake was barely felt in the capital, but residents were ready.

The system doesn’t always help, however, and it did not with the magnitude 7.1 earthquake on Sept. 19, 2017, that killed hundreds in and around the Mexican capital. The quake’s epicenter was too close to offer warning.

Distance to epicenter crucial

Alert systems work when there’s enough distance between the earthquake’s epicenter and a center of population, said Thomas Heaton, professor of engineering seismology at the California Institute of Technology (Caltech).

“So, if you can recognize that an earthquake has started … you can give some area that’s about to be shaken strongly a heads up that says, ‘There’s an ongoing earthquake, and oh, by the way, it’s headed in your direction.’”

California is riddled with geological fault lines that periodically rupture. The largest, the San Andreas Fault, can give rise to massive temblors, including the San Francisco quake in 1906, which may have killed 3,000, according to later estimates.

A section of the same fault shifted in 1989, causing a magnitude 6.9 earthquake that killed more than 60 in Oakland and nearby communities. Smaller fault lines can also cause large temblors, including a previously unknown fault beneath the Northridge section of Los Angeles, where a magnitude 6.7 quake killed more than 60 people in 1994.

The ShakeAlertLA app offers users critical information after a temblor has started, said Deputy Mayor Gorell, “just enough so that they can digest it and then react to it, without overwhelming them with information or frightening them,” he said.

Advanced alert systems are also in place in Japan, and while the systems have limitations, authorities there say they have saved lives.

Los Angeles officials say preparing for earthquakes requires work on many fronts, including encouraging residents to prepare disaster plans and stock emergency supplies.

Preparations also require upgrades to old buildings. Los Angeles now has nearly 13,000 so-called soft-story buildings, with wide windows or doors on lower floors that need bracing. These buildings are vulnerable to damage or collapse if struck by seismic waves of a certain type or intensity.

Nearly 1,700 buildings have been upgraded to modern earthquake standards, and another 3,500 have been issued permits for retrofitting. It’s a race against time, officials say, because massive shakers rock the region periodically. The last big quake in Southern California, in 1857, reached magnitude 7.9, and could have killed thousands in a modern city.

The alert app can help, said Heaton, who noted that when the ground “starts to shake, you have no idea whether it’s going to get bigger, or whether it will stay small. Usually it stays small,” he said, “but you don’t know.”

Heaton said the system will give you an indication of what to expect, and also let emergency workers know where to send help after a quake has struck.

ShakeAlertLA is being rolled out in phases in the U.S. West coast states of California, Oregon and Washington, which are all vulnerable to earthquakes.

Japanese Spacecraft Touches Down on Asteroid to Get Samples

A Japanese spacecraft touched down on a distant asteroid Friday on a mission to collect material that could provide clues to the origin of the solar system and life on Earth. 

 

Workers at the Japan Aerospace Exploration Agency control center applauded Friday as a signal sent from space indicated the Hayabusa2 spacecraft had touched down.  

During the touchdown, Hayabusa2 is programmed to extend a pipe and shoot a pinball-like object into the asteroid to blow up material from beneath the surface. If that succeeds, the craft would then collect samples to eventually be sent back to Earth. Three such touchdowns are planned.  

  

Japanese Education Minister Masahiko Shibayama said the space agency had concluded from its data after the first touchdown that the steps to collect samples were performed successfully.  

JAXA, as the Japanese space agency is known, has likened the touchdown attempts to trying to land on a baseball mound from the spacecraft’s operating location of 20 kilometers (12 miles) above the asteroid. 

 

The asteroid, named Ryugu after an undersea palace in a Japanese folktale, is about 900 meters (3,000 feet) in diameter and 280 million kilometers (170 million miles) from Earth. 

Analysts: Insurance Can’t Offset Risks of Climate Change

From homeowners facing higher flood insurance premiums to investors putting money into coal-fired power plants, financial risks related to climate change are growing, analysts say. 

But working out how a switch to lower-carbon train travel could affect an airline or what an insurance firm should do to weather more flood claims is neither clear nor simple, they say. 

Help may be at hand, however, from guides published Friday to assess financial risks from the physical threats of climate change, as well as the risks and opportunities of a global transition away from fossil fuels. 

“What is the exposure financial institutions have to natural catastrophes? I don’t think that question traditionally has been asked,” said Greg Lowe, global head of resilience and sustainability for Aon, a London-based insurance and risk firm. 

Traditional ideas may fall short

For disasters, “there’s always been an assumption we have insurance for that,” said Lowe, whose firm contributed to the reports by ClimateWise, an initiative of the University of Cambridge Institute for Sustainability Leadership that aims to better disclose and respond to climate-related insurance risks. 

With those risks growing — particularly as heat-trapping emissions continue to rise — traditional methods of dealing with them may not be enough as the world tracks toward 2 degrees Celsius or more of global warming, the twin reports warn. 

“If indeed people think we’re headed on that path [past 2 C], it’s going to be a hugely difficult task for the financial system to manage,” Lowe predicted. 

Over the next 30 years, the risks from heat waves, storm surges and floods will increase substantially because of warming already underway, the physical threats report noted. 

In Britain, that could lead to higher flood insurance premiums and people more often made homeless by floods, as well as greater investment by cities and towns in flood defenses. 

That homeowners understand changing flood risks and will respond adequately to them “is probably a generous assumption,” Lowe said. 

But even for those who do grasp the shift, simply boosting insurance coverage is unlikely to be an answer, he said. 

“I don’t think buying more insurance is a politically or financially sustainable thing to do,” he said. “Even with insurance, this is still a tremendous hardship on people if they are out of their homes.” 

Who foots the bill?

Rather, there should be honest discussions about who foots the bill for the growing risk and damage, he said. 

“Someone is going to pay for this. How that gets distributed through the financial system is the question,” he added. 

The new reports aim to demonstrate that it is possible to start taking a more precise look at the risks and their financial impacts, and to give experts tools to do that, said Bronwyn Claire, senior program manager for ClimateWise. 

For instance, they could explore how changes in transport demand between trains and planes, or a carbon tax that is influencing fuel prices, might affect an airport in Germany. 

The guides could also help investors spot opportunities, she added.