YCLOAK

Executive branch government employees in Argentina will get no pay raises this year and one out of every four “political positions” appointed by ministers will be cut, President Mauricio Macri said on Monday, deepening his austerity drive.

The clampdown on political positions, including advisers appointed by government ministers, is viewed as an attack on a patronage system that has been in place for decades.

The firings, expected to save $77 million a year, are symbolic of Macri’s drive to regain market confidence.

“Austerity has to be part of politics,” Macri said in a televised address.

He spent the first two years of his administration dismantling the trade and currency controls set up by his predecessor, Cristina Fernandez, who had expanded the role of government in the economy.

He was elected in 2015 with a mandate to free the markets and improve Argentinas business climate.

Macri, expected to seek re-election next year, denounced “the corruption and clientelism” of past administrations. Included in the measures announced on Monday, family members of ministers were banned from holding government jobs.

Macri scored a series of business-friendly legislative wins late last year after his coalition swept mid-term elections. But passage of his pension reform bill last month triggered violent protests and a decline in the president’s approval ratings.

The government wants to foster the idea that politically appointed officials share the burden of the fiscal adjustment.

“It also wants to convey the message that this administration really is different from its predecessors,” said Ignacio Labaqui, analyst for consultancy Medley Global Advisors.

Pressured by the country’s powerful labor unions, the government canceled a special session of Congress planned for February to debate Macri’s proposed labor reform.

The bill includes amnesty for companies that register workers who had been paid off the books. It aims to curb litigation by workers and would lighten social security taxes paid by employers. The private sector has long argued for more flexibility in labor regulations.

 

 
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Mozambique’s Attorney General has filed a legal complaint against officials and state-owned companies involved in securing $2 billion in loans that were not approved by parliament or disclosed publicly, her office said on Monday.

Investigations into the debt found that the deals violated Mozambique’s constitution, the AG’s office said in a statement.

The alleged infringements included failure to comply with the procedures and limits established by law in the issuance of guarantees by the state, it said.

“Thus, on January 26, the [office] submitted a complaint to the Administrative Court on the financial accountability of public managers and state-owned companies involved in the management of financing, supply and service contracts,” the statement read.

It did not name any of the managers or the companies.

The Administrative Court is responsible for ruling on the legality of public expenditure.

An independent audit of the debt showed in June last year that questions remained on how the $2 billion was used and roughly a quarter of the money remained unaccounted for.

The Attorney General also recommended among other issues a review of legislation related to state businesses and scrutiny and monitoring of projects benefiting from state guarantees.
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As the 20 shortlisted cities vying to host Amazon.com’s second North American headquarters hone their bids to attract thousands of high-paid jobs, they should also plan for rising housing costs and strains on infrastructure, experts said.

The winning city should ensure community benefits, such as support for affordable housing, new schools and beefed-up public transport are part of any deal, said academics and city planners.

“If the price to pay Amazon exceeds the resources Amazon generates that can be used to manage the stress, the winning city may also be the loser,” said Arthur Nelson, an urban planning professor at the University of Arizona.

Amazon said in September it will build a second headquarters, dubbed Amazon HQ2, that would be a full equal to its existing downtown Seattle campus.

The e-commerce giant estimates the new corporate location would generate $5 billion in real estate investment and bring in 50,000 well-paid jobs.

The list of 20 final candidates, announced on January 18, leans heavily to the eastern half of North America, and includes the cities of Atlanta, Boston, and Washington, D.C.

According to the Urban Institute, a policy think tank in Washington, D.C., there is a housing affordability crisis in the United States affecting the poorest renters, with the problem most acute in metropolitan areas.

That situation will be exacerbated in whichever city Amazon chooses to land, experts said.

“There is no city on the list that can avoid upward rents and house prices, probably pretty sharp ones,” Stockton Williams, executive vice president at the Urban Land Institute, a global network of real estate and land use experts, told the Thomson Reuters Foundation.

While the Amazon HQ2 shortlist does not include the nation’s most expensive housing market — metro San Francisco — it does include many other expensive cities like Boston, Los Angeles, New York City, Toronto, and Washington, D.C. Williams believes some are better equipped than others to

handle a potential Amazon HQ2.

Austin, Boston, Denver, Nashville, New York City, and Washington, D.C. have all shown “a sustained effort, commitment, and growing capacity” to increasing their supply of affordable housing, he said. “It’s a good start, if not enough,” he said.

One of the bidding cities, the U.S. capital Washington D.C. said it would work to ensure the rewards of hosting Amazon’s second headquarters countered any negative impacts.

“Our job is to ensure that the benefits of Amazon HQ2 significantly outweigh the costs,” said a spokeswoman for the city’s Department of Economic Development.

“If we do our job well, we will be able to leverage the benefits, such as additional revenues, to address the needs of residents, such as affordable housing.”

Bidding war

The search for a second North American headquarters after Seattle set off a frenzied competition, with some 238 initial applications, offering incentives including big tax breaks.

The largest has been on behalf of Newark, where New Jersey offered $7 billion in financial incentives for Amazon to choose the city for the new campus, which itself only promises $5 billion in direct investment.

Efforts to lure Amazon with taxpayer funds are a “big mistake,” said urbanist Richard Florida.

“An auction that pits more than 200 cities against each other in a bidding war makes no sense for anyone,” said Florida, a scholar at the Penn Institute for Urban Research.

“The company should issue an ‘Amazon Pledge’ that it will not accept any tax or financial incentives, but invest alongside cities to create better jobs, build more affordable housing, and develop better schools, transit, and other badly needed public goods, along with paying its fair share of taxes,” Florida said.

An Amazon spokesperson said the company had no comment on the proposed Amazon Pledge.

In May 2017, Amazon announced a plan to host homeless families on six floors of a new office building in Seattle in partnership with a local non-profit.

According to company surveys, about one-fifth of Amazon’s Seattle employees walk to work, while another 35 percent cycle or use public transportation.

Once the company settles on the winner, the city has the opportunity to extract concessions, said Williams of the Urban Land Institute.

“Cities do have leverage to ensure that big corporate redevelopment projects generate community benefits, in particular benefits that can offset some of the negative impact that comes along with many of the positive impacts of a company like Amazon locating in a city,” he said.

Amazon could work with a housing developer, contribute to local affordable housing funds, or support grassroots groups providing affordable housing themselves.

“I don’t see a city on this list that wouldn’t on net be better off as a result of Amazon arriving,” Williams said. Others were skeptical of Amazon’s willingness to make concessions. “It is as hard-nosed a company as America has seen,” said Nelson.
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The Secret Service is warning financial institutions about a type of cyberattack known as jackpotting.

Secret Service officials say the crime involves installing malicious software or hardware at ATMs that force the machines to release large quantities of cash on demand.

They say criminals have been able to find vulnerabilities in financial institutions that operate ATMs, typically stand-alone machines located in pharmacies, big-box retailers and drive-thrus.

The Secret Service says the criminals range from individual actors to international organized crime syndicates.

The Secret Service says authorities have recently obtained credible information about planned jackpotting attacks in the U.S. and have alerted law enforcement and financial institutions.
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Ingvar Kamprad, who founded Sweden’s IKEA furniture brand and transformed it into a worldwide business empire, has died at the age of 91.

Kamprad died Saturday of pneumonia in the southern Swedish region of Smaland where he grew up on a farm, and with some modest financial help from his father, starting selling pens, picture frames, typewriters and other goods. It was the start of what became IKEA, now with 403 stores across the globe, 190,000 employees and $47 billion in annual sales.

His brand became synonymous with the simplicity of Scandinavian design, modest pricing, flat-pack boxing and do-it-yourself assembly for consumers. It turned Kamprad into an entrepreneur with a reported net worth of $46 billion. The company name was an acronym of his initials, the name of his farm, Elmtaryd, and his town of origin, Agunnaryd.

Swedish Prime Minister Stefan Lofven said Kamprad “was a unique entrepreneur who had a big impact on Swedish business and who made home design a possibility for the many, not just the few.” King Carl XVI Gustaf called Kamprad a “true entrepreneur” who “brought Sweden out to the world.”

Kamprad’s life was not without controversy, however.

He faced sharp criticism for his ties to the Nazi youth movement in the 1940s. While Sweden was neutral during the war, its Nazi party remained active after the war. Kamprad said he stopped attending its meetings in 1948, later attributing his involvement to the “folly of youth,” and calling it “the greatest mistake of my life.”

While he eventually returned to Sweden, Kamprad fled his homeland’s high-tax structure for Denmark in 1973 and later moved to Switzerland in search of even lower taxes.

The European Commission last year launched an investigation into ways IKEA allegedly used a Dutch subsidiary to avoid taxes, with the Green Party contending the company avoided $1.2 billion in European Union taxes between 2009 and 2014. The Consortium of Investigative Journalists identified IKEA in 2014 as one of the giant multinationals that moved money to tax havens to avoid taxes.

Kamprad was known for his frugality, buying his clothes at thrift shops, driving an aging Volvo and bringing his lunch to work.
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Why has Mumbai’s largest slum, which packs some one million people in about two square kilometers, emerged as an unlikely stop for foreign tourists? The draw is not images of squalor and poverty in the heart of India’s largest city, but a place where thriving entrepreneurship and stories of hope and success break many stereotypes of a slum. Anjana Pasricha reports.
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U.S. President Donald Trump touted the continued growth of the U.S. economy on Sunday, saying it is “better than it has been in many decades.”

“Businesses are coming back to America like never before,” Trump said in a Twitter remark, a likely theme of his State of the Union address on Tuesday. “Unemployment is nearing record lows. We are on the right track!”

He said, “Chrysler, as an example, is leaving Mexico and coming back to the USA,” an exaggeration of Chrysler’s expansion plans. Fiat Chrysler, the world’s eighth biggest auto manufacturer, says it is investing $1 billion to manufacture its profitable Ram pickup trucks in the midwestern state of Michigan, shifting the production from Mexico, but at the same time is not cutting any of its vehicle manufacturing jobs in Mexico.

The U.S. jobless rate has held steady at 4.1 percent for the last three months, the lowest figure in 17 years. The U.S. economy, the world’s largest, advanced at a 2.3 percent pace last year, Trump’s first year in office, up from 1.5 percent in 2016.

The U.S. economy, however, slowed in the last three months of 2017, expanding at a 2.6 percent annual rate, down from the 3.2 percent figure in the July-to-September period.

Attack on Jay-Z

In praising the U.S. economic performance, Trump also attacked Jay-Z, after the rap musician had assailed Trump in a Saturday news talk show over the president’s recent reported vulgar descriptions of people from Haiti and Africa as he seeks to block their immigration to the United States.

“Somebody please inform Jay-Z that because of my policies, Black Unemployment has just been reported to be at the LOWEST RATE EVER RECORDED!” Trump said. The black unemployment rate in the U.S. has fallen to 6.8 percent, which is still higher than the 3.7 percent figure for whites.

Jay-Z told CNN interviewer Van Jones that economic advances for blacks do not outweigh Trump’s attacks on predominantly black countries.

“Everyone feels anger, but after the anger, it’s really hurtful because he’s looking down on a whole population of people. And he’s so misinformed because these places have beautiful people,” Jay-Z said, adding, “It’s not about money at the end of the day. Money doesn’t equate to happiness. It doesn’t. That’s missing the whole point.

“You treat people like human beings,” he said.

 

 

 

 
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In a surprise move, the U.S. Environmental Protection Agency reversed itself Friday and stopped the approval process for the proposed Pebble Mine copper and gold mine project in southwest Alaska’s Bristol Bay region.

“It is my judgment at this time that any mining projects in the region likely pose a risk to the abundant natural resources that exist there,” EPA Administrator Scott Pruitt said in a statement.

President Donald Trump has championed increased domestic mining, and the EPA’s decision to halt the Pebble Mine’s approval process comes as a surprise.

“Until we know the full extent of that risk, those natural resources and world-class fisheries deserve the utmost protection,” Pruitt said.

The Obama administration blocked the proposed mine in 2014 over environmental concerns. Last year, Pruitt reversed that decision, allowing the Canadian company behind the mine project to apply for a permit from the U.S. Army Corps of Engineers.

The Pebble Limited Partnership, comprising Canadian miners Northern Dynasty Minerals Ltd and First Quantum Minerals Ltd, is planning to mine 1.2 billion tons of material, including 287 million pounds of copper.

Environmentalists, commercial and sport fishermen, many Alaska Native tribal organizations and even some Republican politicians have all criticized the project, which would be built on land near Lake Clark National Park.

Alaska Governor Bill Walker, an independent, applauded the decision and thanked Pruitt “for listening to my input and that of thousands of Alaskans” who oppose the mine.

Pruitt indicated the mine could ultimately be approved.

“This decision neither deters nor derails the application process of Pebble Limited Partnership’s proposed project,” he said.

“The project proponents continue to enjoy the protection of due process and the right to proceed. However, their permit application must clear a high bar, because EPA believes the risk to Bristol Bay may be unacceptable,” he said.
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President Donald Trump’s “America First” policy on trade aims to reverse decades of lopsided exchange by withdrawing from international trade deals, renegotiating others and raising tariffs on foreign-made goods destined for the U.S. But, in a connected global economy, analysts warn the U.S. could find itself increasingly isolated as other countries rush forward to embrace new trade deals. Mil Arcega reports.
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Alaska’s all-Republican congressional delegation three weeks ago praised Interior Secretary Ryan Zinke after he announced nearly all federal waters off the state’s coast could be offered for petroleum lease sales.

But after hearing from critics who do not want drilling in their home waters, U.S. Sens. Lisa Murkowski and Dan Sullivan and Rep. Don Young are backtracking.

In a letter Friday to Zinke, the delegation requested that most Alaska waters from the state’s Panhandle to the Bering Strait be removed from the proposed five-year drilling plan.

Instead, they urged lease sales in only three areas: Cook Inlet, where petroleum platforms have extracted oil and natural gas for decades, and the Arctic waters of the Chukchi and Beaufort seas.

“We believe the strongest near-term offshore program in Alaska is one that focuses on the Chukchi, Beaufort and Cook Inlet,” they wrote. “Such a program will maximize agency resources and reflect the areas with the broadest support for development among Alaskans.”

Zinke announced the proposed lease sale plan Jan. 4. He said revisions could be made after public comment.

Immediate opposition

The proposal excluded only one area of Alaska: the North Aleutian Basin, home to Bristol Bay and the world’s largest run of sockeye salmon.

The proposal drew immediate opposition from governors in East and West Coast states. After Florida Gov. Rick Scott, a Republican, met with Zinke, the secretary announced that drilling would be “off the table” for waters in the eastern Gulf of Mexico and the Atlantic Ocean off Florida.

Subsistence resources

In Alaska, proposed lease sales in the Bering Sea drew strong condemnation from the Bering Sea Elders Group, an association of Alaska Native elders appointed from 39 tribes, and Kawerak Inc., a regional nonprofit organization, which said oil and gas activities pose a serious threat to marine life.

“These basins are where tribes from our region have harvested subsistence resources for millennia and where local people from our region fish and crab commercially,” Kawerak said in an announcement.

Drilling in the Beaufort and Chukchi seas, home to polar bears, walrus and ice seals that support the subsistence economies of coastal villages, is strongly opposed by environmental groups. They say the harsh climate makes spills inevitable and that cleanup of a major spill would be impossible in waters choked by or covered in sea ice.

Oil estimates

However, federal regulators say the Beaufort Sea, off Alaska’s north coast, holds an estimated 8.9 billion barrels of oil and the Chukchi, off Alaska’s northwest coast, holds an estimated 15.4 billion barrels.

Royal Dutch Shell spent $2.1 billion on Chukchi Sea leases in 2008, invested another $5 billion overall in U.S. Arctic waters, and pulled out after drilling a dry hole in 2015.

Murkowski, Sullivan and Young contend drilling in Arctic waters can be done safely. They said they strongly support the inclusion of the Beaufort and Chukchi seas for lease sales between 2019 and 2024, while at the same time urging “meaningful consultation” with communities.
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A U.S. trade commission on Friday handed an unexpected victory to Bombardier Inc. against Boeing Co., in a ruling that allows the Canadian company to sell its newest jets to U.S. airlines without heavy duties, sending Bombardier’s shares up 15 percent.

The U.S. International Trade Commission’s unanimous decision was the latest twist in U.S.-Canadian trade relations that have been complicated by disputes over tariffs on Canadian lumber and U.S. milk and President Donald Trump’s desire to renegotiate or even abandon the North American Free Trade Agreement (NAFTA).

Trump, who did not weigh in on the dispute personally, took his “America First” message to the world’s elite on Friday, telling a summit that the United States would “no longer turn a blind eye” to what he described as unfair trade practices.

The ITC commissioners voted 4-0 that Bombardier’s prices did not harm Boeing and discarded a U.S. Commerce Department recommendation to slap a near 300 percent duty on sales of the company’s 110- to 130-seat CSeries jets for five years. It did not give a reason immediately.

U.S. Commerce Secretary Wilbur Ross said in a statement that the commission’s finding “shows how robust our system of checks

and balances is.”

Boeing’s shares closed flat.

“It’s reassuring to see that facts and evidence matter,” said Chad Bown, a senior fellow at the Peterson Institute for International Economics in Washington. “This part of the trade policy process works unimpeded despite President Trump’s protectionist rhetoric.”

Removing ‘uncertainty’

The decision will also help Bombardier sell the CSeries in the United States by removing “a huge amount of uncertainty,” at a time when its Brazilian rival Embraer is bringing its new E190-E2 jet to market, a source familiar with the

Canadian plane and train maker’s thinking said.

The ITC had been expected to side with Chicago-based Boeing. The company alleged it was forced to discount its 737 narrow-bodies to compete with Bombardier, which it said used government subsidies to dump the CSeries during the 2016 sale of 75 jets at “absurdly low” prices to Delta Air Lines.

Bombardier called the trade case self-serving after Boeing revealed on December 21 that it was discussing a “potential combination” with Embraer. Boeing denied the trade case was motivated by those talks.

Boeing to look at options

The dispute may not be over. “This can still be appealed by Boeing,” Andrew Leslie, parliamentary secretary to Canadian Foreign Minister Chrystia

Freeland, told reporters in Montreal.

Boeing said it would not consider such options before seeing the ITC’s reasoning in February.

But Boeing said it was disappointed the commission did not recognize “the harm that Boeing has suffered from the billions of dollars in illegal government subsidies that the Department of Commerce found Bombardier received and used to dump aircraft in the U.S. small single-aisle airplane market.”

Bombardier, Delta and the U.S. consumer advocacy group Travelers United all called the ITC decision a victory for consumers and airlines.

The decision may end up helping Trump’s goal of boosting U.S. jobs as the CSeries jets for U.S. airlines will be built in the United States rather than Canada.

Through a venture with European planemaker Airbus SE, which has agreed to take a majority stake in the CSeries this year, Bombardier plans to assemble CSeries jets in Alabama to be sold to U.S. carriers starting in 2019.

Sweet surprise

Airbus Chief Executive Tom Enders promised to push ahead “full throttle” with the Alabama plans. “Nothing is sweeter than a surprise, a surprise victory,” he said.

The case had sparked trade tensions between the United States and its allies Canada and the United Kingdom. Ottawa last year scrapped plans to buy 18 Super Hornet fighter jets from Boeing.

The well-paid jobs associated with the CSeries are important both to Ottawa and the British government. Bombardier employs about 4,000 workers in Northern Ireland.

The British prime minister’s office said it welcomed the decision, “which is good news” for the British industry, while Canada’s innovation minister said the ITC came to the “right decision” on Bombardier.

Former ITC Chairman Dan Pearson praised the decision. “Not a single commissioner was willing to buy Boeing’s arguments,” he said. “I think ‘America First’ is a policy of the White House and the Commerce Department. But it’s not the policy of an independent agency [like the ITC].”
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President Donald Trump has warned that the United States will no longer tolerate unfair trade practices and will always put America first in future trade deals. Giving the closing speech at the World Economic Forum in the Swiss resort of Davos on Friday, Trump lauded the performance of the U.S. economy under his leadership. The speech, however, was overshadowed by further controversy over alleged links between the president’s campaign team and Russia. Henry Ridgwell reports.
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Coincheck, a major cryptocurrency trading exchange in Tokyo, has been hacked into and has lost about $534 million worth of virtual money, national broadcaster NHK reported on Friday.

Coincheck posted on its website on Friday afternoon that it had suspended withdrawals of almost all cryptocurrencies.

The exchange has already reported the incident to the police and to Japan’s Financial Services Agency, NHK said.

In 2014, Tokyo-based Mt. Gox, which once handled 80 percent of the world’s bitcoin trades, filed for bankruptcy after losing some 850,000 bitcoins — then worth around half a billion U.S. dollars — and $28 million in cash from its bank accounts.
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The Chinese government recently claimed that 98 major state-run industries have turned in the best industrial and financial performance in 2017 compared to the past five years. These companies, which have assets totaling $9 trillion, produced a remarkable profit of $218 billion, an increase of 15.2 percent in profit in 2017, more than double the rate of national economic growth.

Industry experts are closely examining the report card because China’s state sector represents nearly 60 percent of the country’s industrial economy. It controls areas like natural resources, steel, energy, heavy machinery, telecommunication, defense and infrastructure sectors, where the private sector has little or no role.

The government’s claim has caused some surprise because state-owned-enterprises (SOEs) have been widely blamed for corruption and sloth, with many economists saying they are a drag on the national economy.

The New York-based Center on Foreign Relations reported this month that profits of Chinese SOEs plunged 33 percent between 2011 and 2016, while that of the country’s private-sector enterprises rose 18 percent in the same period. However, the government and state-owned banks continued funding the state sector, which drew 80 percent of industrial financing, it said.

Lagging behind private sector

Analysts said the SOEs managed to come up with a better balance sheet in 2017, with tremendous assistance from the government. But there was no real improvement in their management capabilities and market competitiveness.

“The improvement in profitability does not mean they are more efficient or more productive and they still aren’t as profitable as private companies,” said Scott Kennedy, deputy director at the Freeman Chair in China Studies at the Center for Strategic & International Studies.

One reason for the improved profits report may be the closure of dozens of coal mines and steel mills and hundreds of factories as part of an effort to overcome problems of overcapacity and chronically loss-making units. This came at a social cost as reduction in coal capacity by 27 million tons and in steel capacity by 5.95 million tons resulted in layoffs of millions of workers in mines and factories.

Another part of the improvement was achieved by sales and swaps of piled up debt at 20-30 percent of their original value, leading to massive losses for banks and financial agencies that gave the loans. Nearly $158 billion was infused into these companies, banks, stock and property markets and other sources in 2017.

Mergers also eliminated competition as two or more rival companies came together to form a stronger monopoly.

 

Monopoly creation

“Those survivors, they can enjoy the monopoly, that is why they can enjoy higher profit margins because of the monopolies,” CEIBS professor of finance and accounting Oliver Rui said, adding, “Usually they were competitors, now they have become one company.”

 

The State-owned Assets Supervision and Administration Commission, which manages the 98 enterprises owned by the central government, claimed a major success in reducing their debt burden. Its chief accountant, Shen Ying, told a recent news conference that central SOEs are confident and able to repay their debt and prevent systemic risks in 2018.

“There was no issue of bond default by central SOEs in 2017,” she said. “We will continue to push SOE reforms, in particular in their operational mechanism, methods of building a modern enterprise system, regulatory measures of State-owned assets and the cultivation of entrepreneurship in 2018.”

State owned banks were ordered to swap their unpaid loans into equity making them part owners of their customers, the SOEs. A part of the debt was converted into equity.

Jason Lee, an expert with the China Market Research Group said he expected the government to continue with the drive to reduce SOE debt by getting banks, stock and property markets to inject funds in 2018. “My estimation is that it won’t be double (compared to 2017) but probably around like 700 billion or 800 billion (Yuan), he said. An important issue is whether the government is merely rewriting the account books or state run companies are going through a major improvement in their functioning.

 

“Yes, that’s artificially solving the problem,” Rui said. “So, in the long run you need improve your performance through either by reducing the cost, or through enhanced efficiency or by increasing your pricing powers, you could sell your products at a higher price.”

 

New normal

Improvement in market prices of goods produced by the SOEs also played a key role in their improved balance sheets.

 

“Producer prices in China are growing and those products come mainly from SOEs and that’s the primary source for the turnaround in SOE performance, balance sheet performance,” Kennedy said.

Kennedy said the ruling Communist Party is not interested in allowing the bureaucracy-run SOEs to perform freely in terms of market dynamics.

The Communist “Party is increasing its supervision and management of SOEs. So I think, what you are seeing is a cyclical change in their financial position because of the price environment but not changes in the structural, systemic issues that make state owned enterprises less competitive and profitable than  the private sector,” Kennedy said.

The government has been publicly saying that it is focusing on the quality of life in terms of better performance in welfare areas like education, health and poverty alleviation and GDP numbers are not as important any more. But privately, it is pushing the industry to achieve higher growth because it cannot afford a major economic slowdown, analysts said. In this respect, the government is forced to rely on the state sector a lot more than the private sector.

“The private sector stopped investing because there are so many critical uncertainties. So, the SOE is the major driving force behind the GDP growth,” Rui said.
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In a strong defense of his “America First” policies, U.S. President Donald Trump on Friday told a gathering of global business and political luminaries that the world would benefit from U.S. economic power and invited them to embrace his growth-oriented philosophy.

“When the United States grows, so does the world,” he said in a 15-minute speech to the closing session of the World Economic Forum in Davos, Switzerland.

“America is open for business and we are competitive once again,” he said.

As he has done throughout his political career, Trump made no apology for imposing reciprocal tariffs and tearing up trade deals and other international agreements that he sees as slowing economic growth.

WATCH: Trump Warns Rivals About Trade Practices in Davos Speech

“We cannot have free and open trade if some countries exploit the system at the expense of others. We support free trade, but it needs to be fair and it needs to be reciprocal,” he said. “Because, in the end, unfair trade undermines us all.”

The “America First” philosophy provoked criticism among many at Davos who advocate a coordinated global economic strategy. Without naming the United States, Brazilian President Michel Temer used his Davos address Wednesday to express opposition to what he saw as anti-free-trade rhetoric coming from world capitals.

WATCH: Trump Says America First Does Not Mean America Alone

“We know all too well that we live in a world where isolation trends are gaining ground. However, we also know that protectionism is not a solution,” Temer said.

His sentiments were echoed by other Davos speakers, including the leaders of India, Italy and Canada.

But in his remarks Friday, Trump stood his ground, saying Washington would “no longer turn a blind eye to unfair economic practices, including massive intellectual property theft, industrial subsidies and pervasive state-led economic planning.”

Without naming offending countries, he pledged to fight what he called “predatory behaviors” that distort global markets and harm businesses and workers.

Economists from both the left and the right had harsh words for Trump’s tilt toward protectionism.

David Williams, president of the Taxpayers Protection Alliance, a nonpartisan group in Washington that studies government’s effects on the economy, said Trump’s moves to cut taxes while imposing tariffs send a contradictory message to America’s trading partners.

“The tax cut is a signal that the country is open for business, but tariffs show we’re closed for business, so the man is giving mixed signals to the world,” Williams said.

Veronique de Rugy, a fellow at the Mercatus Institute, a free-markets-oriented research group in Washington affiliated with George Mason University in Fairfax, Virginia, called Trump’s policies of reciprocity “misguided.”

“There’s no denying that foreign companies subsidize heavily their companies, but so do we, and we shouldn’t be so worried about this because they’re hurting their own economies by doing this,” de Rugy told VOA. “We shouldn’t be following them.”

In his speech, Trump also appealed to other countries to participate more fully with the United States on shared security goals, including defeating Islamic State militants, applying maximum pressure to denuclearize the Korean Peninsula, and combating terrorism in all its forms.

“My administration is proud to have led historic efforts at the United Nations Security Council and all around the world to unite all civilized nations in our campaign of maximum pressure to denuke the Korean Peninsula,” Trump said. “We continue to call on partners to confront Iran’s support for terrorists and block Iran’s path to a nuclear weapon.”

In a brief question-and-answer session after his speech, Trump took aim at one of his favorite targets, the media. “It wasn’t until I became a politician that I realized how nasty, how mean, how vicious and how fake the press can be,” he said, drawing boos and scattered applause from the audience.

Trump also criticized the opposition Democratic Party, claiming its regulation-oriented policies would have stunted economic growth.

“Had the opposing party to me won — some of whom you backed, some of the people in the room — instead of being up almost 50 percent, the stock market … would’ve been down close to 50 percent,” Trump said. “They were going to put on massive new regulations.”

Capacity crowd

Some Davos elites were reported to have planned to boycott Trump’s speech, but journalists attending the forum said no absence was noticeable. Pool reports said the hall was filled to capacity by the time Trump took the stage.

Reporters in the room, however, noted several pointed rebukes to Trump’s policies in the hall. As the stage was being set for his speech, a large screen behind the podium showed a video that included clips of the anti-Trump Women’s March and scenes related to climate change. At one point, the narrator talked about the importance of “not building walls.”

Many Davos attendees and observers described the president’s economic stance as both chauvinist and protectionist. British scholar H.A. Hellyer, a fellow at the Royal United Services Institute in London and at the Atlantic Council in Washington, said Trump’s braggadocio does not play well in much of the world.

“If he were a little more slick about it, he’d probably have a lot more play within a place like Davos, but he doesn’t. I’m not sure he got much there, and I’m not sure how much Davos got out of him either,” Hellyer said.
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There’s money to be made planting trees, according to a new report.

Around the world, an area larger than all of South America has been deforested, eroded, drained or salinized.

Governments have pledged billions to restore hundreds of millions of hectares.

What’s missing are the businesses to make it happen.

 

WATCH: Report Sees Profit in Restoring Degraded Land

The new report, called “The Business of Planting Trees,” aims to make the case to reluctant investors that restoring the world’s 2 billion hectares of degraded land represents an untapped opportunity.

With demands on land rising and climate change closing in, the world needs every hectare to produce food, clean the air and water, and soak up greenhouse gases, experts say.

A group of 47 countries worldwide have committed to restore a Mongolia-sized chunk of degraded land by 2020. African and Latin American investors have pledged $2 billion to restoration.

“Now that the pledges are on the table, the question is, how do we convert this into action?” asked report lead author Sofia Faruqi at the World Resources Institute.

Governments and NGOs can’t do it all, she said. The task needs the private sector. And that means there needs to be profits.

The report focuses on 14 companies aiming to make money restoring land. The authors wanted business models that could make a substantial impact.

“Given the urgency of the challenge, we’re really looking for solutions that are going to be big,” Faruqi said.

​Clear-cuts to rosewood

When it comes to planting trees, the Brinkman Group is one of the biggest.

Over the last five decades, Brinkman has planted 1.4 billion trees on 1 million hectares of land. The company got its start replanting clear-cut forests in Canada.

In the 1990s, it started growing trees on previously slashed-and-burned land in Central America.

Brinkman created a diverse forest habitat with a mix of trees, including teak for furniture and flooring and rosewood for guitars. To preserve that habitat, trees would be selectively cut, not clear-cut, at harvest time.

Some species were not typically grown commercially. It took years to learn how to grow them from cuttings.

But two decades later, the work is beginning to pay off. The first harvests are beginning. Company founder Dirk Brinkman says they are making a 10 percent return on their investment.

“It’s a bit surprising for some looking at this, that this is possible,” he said. “But it takes time to prove.”

Other companies featured in the report are lowering the cost of restoration.

BioCarbon Engineering flies drones that plant trees. Drones are faster and cheaper than replanting by hand, the company says, and can reach hard-to-reach sites.

Others tap into consumer demand for forest-friendly products.

Guayakí sells canned tea made from shade-grown yerba mate. The company has planted a half-million trees in Brazil’s heavily degraded Atlantic forest to shade its cash crop.

The report includes some novel business models.

Growing demand for building materials and charcoal are driving deforestation in much of Africa.

A Kenya-based company called Komaza is “connecting the dots from smallholder farmers to the massive, booming wood markets of Africa, which the farmers wouldn’t otherwise have access to,” said company president Ayesha Wagle.

Komaza gives smallholder farmers tree seedlings to plant on unused parts of their land. When the trees mature in 10 to 12 years, Komaza buys the trees back for a guaranteed price. The company harvests, processes and sells the wood.

More than 9,000 farmers are raising more than 2 million trees for Komaza.

Risky business

The company has not yet turned a profit.

“Trees take a long time to grow,” Wagle said. “We could chop down a whole bunch of trees today and be profitable. But … the longer we wait, the more valuable they are.”

The long time to returns is one of the drawbacks for some investors, Faruqi said.

For Komaza, “there are a whole host of challenges, from rainy seasons that don’t appear, to poor roads that make it hard to truck trees to market,” Wagle said.

Land ownership is unclear in many developing countries, which can make investing in farmers and land restoration risky.

And government policy may change over the course of the investment, especially in developing countries.

When Brinkman’s company planted its tropical hardwoods, “We were promised a tax-free harvest,” he said. “Twenty years later, the bureaucracy is going, ‘No, no, we tax logging.’ And we’re going, ‘No, no, we’ve got a grandfathered agreement.’ ‘Oh, well, we don’t have a copy of that agreement anymore.’”

It took several years to straighten out the dispute.

What WRI calls the “restoration economy” is relatively new. When it comes to potential risks and rewards, “there’s not much hard data out there,” said Yale University economics professor Mushfiq Mobarak, “which is probably why investors are staying away.”

The new report may serve as a catalyst for more study, Mobarak said, but he noted that the data came from the companies themselves.

“I’m glad that the ideas are now out there,” he said. “However, I’d prefer to see a next step” of more independent research.
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North Korea shipped coal to Russia last year which was then delivered to South Korea and Japan in a likely violation of U.N. sanctions, three Western European intelligence sources said.

The U.N. Security Council banned North Korean exports of coal last Aug. 5 under sanctions intended to cut off an important source of the foreign currency Pyongyang needs to fund its nuclear weapon and long-range missile programs.

But the secretive Communist state has at least three times since then shipped coal to the Russian ports of Nakhodka and Kholmsk, where it was unloaded at docks and reloaded onto ships that took it to South Korea or Japan, the sources said.

A Western shipping source said separately that some of the cargoes reached Japan and South Korea in October last year. A U.S. security source also confirmed the coal trade via Russia and said it was continuing.

“Russia’s port of Nakhodka is becoming a transhipping hub for North Korean coal,” said one of the European security sources, who requested anonymity because of the sensitivity of international diplomacy around North Korea.

Russia’s foreign ministry did not respond to a Reuters request for comment sent on Jan 18. Russia’s mission to the United Nations informed the Security Council sanctions committee on Nov. 3 that Moscow was complying with the sanctions.

Two lawyers who specialise in sanctions law told Reuters it appeared the transactions violated U.N. sanctions.

Reuters could not independently verify whether the coal unloaded at the Russian docks was the same coal that was then shipped to South Korea and Japan. Reuters also was unable to ascertain whether the owners of the vessels that sailed from Russia to South Korea and Japan knew the origin of the coal.

The U.S. Treasury on Wednesday put the owner of one of the ships, the UAL Ji Bong 6, under sanctions for delivering North Korean coal to Kholmsk on Sept. 5.

It was unclear which companies profited from the coal shipments.

Russia urged to ‘do more’ on sanctions

North Korean coal exports were initially capped under a 2016 Security Council resolution that required countries to report monthly imports of coal from North Korea to the council’s sanctions committee within 30 days of the end of each month.

Diplomats, speaking on condition of anonymity, said Russia had not reported any imports of North Korea coal to the committee last year.

The sanctions committee told U.N. member states in November that a violation occurs when “activities or transactions proscribed by Security Council resolutions are undertaken or attempts are made to engage in proscribed transactions, whether or not the transaction has been completed.”

Asked about the shipments identified by Reuters, Matthew Oresman, a partner with law firm Pillsbury Winthrop Shaw Pittman who advises companies on sanctions, said: “Based on these facts, there appears to be a violation of the U.N. Security Council resolution by the parties involved.”

“Also those involved in arranging, financing, and carrying out the shipments could likely face U.S. sanctions,” he said.

Asked about the shipments, a U.S. State Department spokesman said: “It’s clear that Russia needs to do more. All U.N. member states, including Russia, are required to implement sanctions resolutions in good faith and we expect them all to do so.”

The White House did not immediately respond to a request for comment.

The independent panel of experts that reports to the Security Council on violations of sanctions was not immediately available for comment.

North Korea has refused to give up the development of nuclear missiles capable of hitting the United States. It has said the sanctions infringe its sovereignty and accused the United States of  wanting to isolate and stifle North Korea.

An independent panel of experts reported to the Security Council on Sept. 5 that North Korea had been “deliberately using indirect channels to export prohibited commodities, evading sanctions.”

Reuters reported last month that Russian tankers had supplied fuel to North Korea at sea and U.S.

President Donald Trump told Reuters in an interview on Jan. 17 that Russia was helping Pyongyang get supplies in violation of the sanctions.

The U.S. Treasury on Wednesday imposed sanctions on nine entities, 16 people and six North Korean ships it accused of helping the weapons programs.

Two routes

Two separate routes for the coal were identified by the Western security sources.

The first used vessels from North Korea via Nakhodka, about 85 km (53 miles) east of the Russian city of Vladivostok.

One vessel that used this route was the Palau-flagged Jian Fu which Russian port control documents show delivered 17,415 tons of coal after sailing from Nampo in North Korea on Aug. 3 and docking at berth no. 4 run by LLC Port Livadiya in Nakhodka. It left the port on Aug. 18.

The vessel had turned off its tracking transmitter from July 24 to Aug. 2, when it was in open seas, according to publicly available ship tracking data. Under maritime conventions, this is acceptable practice at the discretion of the ship’s captain, but means the vessel could not be tracked publicly.

Another ship arrived at the same berth — No. 4 — on Aug. 16, loaded 20,500 tons of coal and headed to the South Korean port of Ulsan in Aug. 24, according to Russian port control documents.

Reuters was unable to reach the operator of the Jian Fu, which was listed in shipping directories as the China-based Sunrise Ship Management. The Nakhodka-based transport agent of the Jian Fu did not respond to written and telephone requests for comment. LLC Port Livadiya did not respond to a written request for comment.

The second route took coal via Kholmsk on the Russian Pacific island of Sakhalin, north of Japan.

At least two North Korean vessels unloaded coal at a dock in Kholmsk port in August and September after arriving from the ports of Wonsan and Taean in North Korea, Russian port control data and ship tracking data showed.

The Rung Ra 2 docked in Kholmsk three times between Aug. 1 and Sept. 12, unloading a total of 15,542 tons of coal, while the Ul Ji Bong 6 unloaded a total of 10,068 tons of coal on two separate port calls — on Aug. 3 and between Sept. 1 and Sept. 8, according to the official Russian Information System for State Port Control.

The coal did not pass Russian customs because of the UN sanctions taking effect, but was then loaded at the same dock onto Chinese-operated vessels. Those vessels stated their destination in Russian port control documents as North Korea, according to a source in Sakhalin port administration who spoke on condition of anonymity.

Reuters has seen the port control documents which state the destination of the coal as North Korea. But the vessels that loaded the North Korean coal sailed instead for the ports of Pohang and Incheon in South Korea, ship tracking data showed.

The Chinese commerce ministry did not immediately respond to a request for comment.

The U.S. Treasury on Wednesday included the owner of the Ul Ji Bong 6 under sanctions for delivering North Korean coal to Kholmsk after the sanctions took effect.

It was unclear which companies profited from the coal shipments.

Asked about the shipments, a South Korean foreign ministry official said:c“Our government is monitoring any sanctions-evading activities by North Korea. We’re working closely with the international community for the implementation of the sanctions.”

The official declined to say whether the ministry was aware of the shipments reported by Reuters.

The Japanese foreign ministry did not immediately respond to a request for comment.

The European security sources said the route via Russia had developed as China, North Korea’s neighbour and lone major ally, cracked down on exports from the secretive Communist state.

“The Chinese have cracked down on coal exports from North Korea so the smuggling route has developed and Russia is the transit point for coal,” one of the European security sources said.
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Grocery shopping went a little nuts in France when a supermarket chain deeply discounted jars of Nutella.

Aficionados of the chocolate hazelnut spread jostled and fought each other when the Intermarché supermarkets offered the treat at a 70 percent discount.

“They are like animals. A woman had her hair pulled, an elderly lady took a box on her head, another had a bloody hand,” one customer told French media.

Videos posted on social media showed huge crowds gathered around pallets of Nutella, with people grabbing as many jars as they could carry.

In some stores, including in Ostricourt in northern France, police had to be called as scuffles broke out between customers.

In L’Horme, an employee told a newspaper that he saw a customer with a black eye in the crowd. “We were trying to get in between the customers, but they were pushing us,” he said.

France is the second-biggest consumer of Nutella, eating around 100 million jars per year, behind Germany.
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U.S. President Donald Trump has questioned whether peace talks between the Israelis and Palestinians will ever resume.

Trump made the remarks in a meeting with Israeli Prime Minister Benjamin Netanyahu at the World Economic Forum in Davos, Switzerland, where he accused the Palestinians of disrespecting the United States after Palestinian President Mahmoud Abbas refused to meet with U.S. Vice President Mike Pence during his recent visit to the region.

Trump threatened Thursday to cut aid to the Palestinians.

“That money is on the table and that money is not going to them unless they sit down and negotiate peace,” he told reporters. “Because I can tell you that Israel does want to make peace, and they’re going to have to want to make peace too, or we’re going to have nothing to do with it any longer.”

WATCH: Trump on Palestinians

According to State Department figures, the U.S. provided slightly more than $290 million in foreign assistance for the West Bank and Gaza Strip in 2016. Separately, Washington contributed an additional $355 million to the U.N. agency that supports Palestinian refugees, known as UNRWA. But this year, the U.S. has significantly cut its assistance to UNRWA, announcing a $60 million contribution.

Only a portion of U.S. funds go directly to the Palestinian Authority, with much of the assistance routed to nongovernmental groups and humanitarian partners working there.

By contrast, in 2016, Washington provided Israel with $3.1 billion in military aid. Under a 10-year bilateral military aid package signed under President Barack Obama in 2016, that amount will increase to $3.8 billion a year starting in 2019.

“No price tag can be put on the rights and dignity of any people,” Palestinian U.N. envoy Riyad Mansour said Thursday in New York. “They cannot be quashed by threats, intimidation or punitive action, and such attempts must be rejected by all who seek peace and justice and who truly believe in international law as the path for their realization.”

Mansour’s comments came during a U.N. Security Council meeting on the Middle East.

 

WATCH: US to Link Palestinian Aid to Peace Talks

​During the session, U.S. Ambassador Nikki Haley slammed President Abbas as lacking the courage to forge peace with Israel.

“We will not chase after a Palestinian leadership that lacks what is needed to achieve peace,” Haley said. “To get historic results, we need courageous leaders.”

​​Atlantic ties

Earlier in Davos, Trump rejected what he called “false rumors” of differences with British Prime Minister Theresa May and promised to boost trade after Britain’s EU exit.

“I look forward to the discussions that will be taking place are going to lead to tremendous increases in trade between our two countries which is great for both in terms of jobs,” he said, adding that Britain and the United States are “joined at the hip when it comes to the military.”

There is nervousness that Trump’s “America First” diplomacy is about to shake-up the global system that underpins the Davos summit. Denmark’s Prime Minister Lars Lokke Rasmussen said many Europeans are hoping for a positive message.

“I hope he will send a message, of course it will be ‘America First’, but if he could add on ‘But not alone’, or ‘But America First and we need cooperation with the rest of the world’ or whatever, that could be nice, because I think everybody needs to realize, whether you are a leader from a small or medium-sized or big countries, that you can’t achieve what you want on your own. The world is faced with a lot of challenges, which can only be solved with close international cooperation,” Rasmussen said Thursday.

​Wealth distribution questioned

The general mood in Davos is upbeat, with the IMF forecasting synchronized global growth across 2018.  But behind the many closed doors, there is talk of danger ahead.  The background report to the WEF summit is titled “Fractures, Fears and Failures,” a reflection of growing global tension, says Inderjeet Parmar, professor of international politics at City University London.

“Even though international wealth and the wealth of states and the levels of economic growth and the GDPs of states have grown, the inequality of the distribution is having large scale political effects.”

The fortunes of the world’s wealthiest 500 billionaires rose by a quarter last year, while the poorest 50 percent of the world’s population did not increase their income.

Oxfam Executive Director Winnie Byanyima, in Davos for the summit, says it’s time for action. “I’m here to tell big business and politicians that this is not natural, that it’s their actions and their policies that have caused it, and they can reverse it.”

Trump is due to give the closing speech to the conference Friday.

“President Trump will be speaking to two audiences, the ones assembled in front of him, and his voter base at home.  And I have a strong feeling that he is going to give some strong words in order to show people back home that he has gone to the belly of the beast itself, of globalization, and told them that he stands for America and the American people,” said analyst Parmar.

Davos is braced for what could be a dramatic finale Friday.

Margaret Besheer at the United Nations contributed to this report.
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U.S. and Mexican unions will formally complain to the U.S. Labor Department on Thursday that Mexico continues to violate NAFTA’s weak labor standards, a move that they hope will persuade U.S. negotiators to push for stronger rules.

The AFL-CIO told Reuters that it and Mexico’s UNT were filing the complaint with the U.S. office that oversees the labor accord attached to the North American Free Trade Agreement as U.S., Canadian, and Mexican negotiators met in Montreal to try to modernize the 1994 trade pact.

The complaint, seen by Reuters, argues that Mexico’s proposed labor law amendments to implement constitutional reforms will violate the North American Agreement on Labor Cooperation. It seeks efforts from the United States to prevent the measures from being implemented and to demand changes to bring Mexico into compliance.

“Simply by promoting this bill, which aims to undermine the constitutional reforms, the government of Mexico brazenly violates the central obligations of the NAALC – namely to ‘provide high labor standards’ and to ‘strive to improve those standards,’” the AFL-CIO and Mexico’s UNT National Workers Union said in the complaint.

 Talks to overhaul the trade deal have been dogged by U.S. threats to withdraw from the pact, but the foreign ministers of Mexico and Canada on Thursday struck an upbeat note on future negotiations.

A key complaint is that NAFTA has failed to lift chronically low Mexican wages that have steadily drawn U.S. and Canadian factories and jobs to Mexico.

The trade pact has also allowed lower health and safety standards in Mexican factories to persist, but violations of the NAFTA labor cooperation agreement are not enforceable through trade sanctions.

The U.S. Trade Representative’s office has made steep demands on automotive content to reverse job migration, but its labor proposals have disappointed unions and many Democratic Party lawmakers. The proposals stuck largely to language that Mexico and Canada previously agreed to in the Trans-Pacific Partnership, a trade deal the Trump administration has abandoned.

“What the USTR put on the table is not acceptable and won’t get the job done,” said Celeste Drake, the AFL-CIO’s trade and globalization policy specialist.

She said past complaints to the Labor Department regarding Mexico’s violation of the labor cooperation pact have not led to major change and this one may be no different, but it aims to influence the negotiations by drawing attention to Mexico’s weak record on worker rights as negotiators discuss labor issues in Montreal.

“It gives ammunition at the negotiating table to U.S. and Canadian negotiators to say, ‘Your violations on NAFTA are not in the past, they’re not over with.’”

A USTR spokeswoman could not be immediately reached for comment.

Thus far, Canada led the call for higher labor standards in the talks, including making a proposal that the United States revise its so-called right-to-work laws in many southern states that help to limit the spread of unions in manufacturing.
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Puerto Rico’s governor submitted a revised fiscal plan overnight Thursday that estimates the U.S. Caribbean territory’s economy will shrink by 11 percent and its population drop by nearly 8 percent next year.

The proposal doesn’t set aside any money to pay creditors in the next five years as the island struggles to restructure a portion of its $73 billion public debt. The original plan had set aside $800 million a year for creditors, a fraction of the roughly $35 billion due in interest and payments over the next decade.

The five-year plan also assumes Puerto Rico will receive at least $35 billion in emergency federal funds for post-hurricane recovery and another $22 billion from private insurance companies.

Some analysts view that assumption as risky given that the U.S. Treasury Department and U.S. Federal Emergency Management Agency recently told Puerto Rico officials that they are temporarily withholding billions of dollars approved by Congress last year for post-hurricane recovery because they felt the island currently had sufficient funds.

A spokesman for Gerardo Portela, director of the island’s Fiscal Agency and Financial Advisory Authority, said he was not immediately available for comment.

The plan does not call for layoffs or new taxes. Instead, Gov. Ricardo Rossello once again called for labor and tax reforms and the privatization of the island’s power company to help generate revenue and promote economic development amid an 11-year recession. He noted that nearly half of the island’s 3.3 million inhabitants lived in poverty prior to the hurricane and that Puerto Rico still faces an 11 percent unemployment rate. Nearly half a million people have fled for the U.S. mainland in the past decade in search of jobs and a more affordable cost of living.

“We must work as a government to prevent this from happening, and that’s what we’re focused on,” he said.

Rossello said an original $350 million cut to the island’s 78 municipalities will not be immediately imposed as they struggle post-hurricane. Instead, he said they will receive more money than usual in upcoming years.

Rossello also called for reducing several taxes, including an 11.5 percent sales-and-use tax to 7 percent for prepared food. More than 30 percent of power customers remain in the dark more than four months after Hurricane Maria, forcing many to spend their dwindling savings on eating out.

A federal control board overseeing Puerto Rico’s finances has to approve of the plan, which it envisions doing by Feb. 23.

“The Oversight Board views implementing structural reforms and investing in critical infrastructure as key to restoring economic growth and increasing confidence of residents and businesses,” Natalie Jaresko, the board’s executive director, said in a statement Thursday. “Our focus in certifying the revised plans will be to ensure they reflect Puerto Rico’s post-hurricane realities.”

 
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A top economic adviser and trusted aid of Chinese leader Xi Jinping has promised that reforms are coming to China this year and adds that some could even “exceed expectations.”

Speaking at a forum on the Chinese Economy at the World Economic Forum, Liu He said China would take steps to open up the banking, finance and insurance sector as well as the manufacturing and service sector and other measures.

“Many of our foreign friends have asked, you’ve made so many promises, but when will they be carried out? I can responsibly say that we will carry out these promises one after the other, the sooner, the better,” Liu said.

China has long promised to open up its markets to the world, but the slow pace of reform in some sectors and a playing field that is tilted heavily in the favor of state owned enterprises and forces players to hand over technology in exchange for market access has increasingly been the focus of criticism from foreign firms in recent years.

It was unclear from his remarks how some of that might change, but analysts note that what Liu has to say is important. Late last year, he was elevated to a seat on the 25-member politburo of the Communist Party of China. He is also widely expected to become China’s next vice premier in March with a portfolio that focuses on the economy.

He said that as China marks 40 years of opening its markets up to the world, reform measures fitting to commemorate and celebrate that occasion would be unveiled.

“The best way to celebrate is by offering up new and even deeper reforms,” Liu said. “The central government is currently reviewing what those measures will be, and I can responsibly say that some of those measures could exceed the expectations of the international community.”

In his remarks, Liu He said China would focus on continuing to open up in four areas: finance, manufacturing and services, boosting intellectual property right protection and expanding imports.

For manufacturing, that would include shipping, rail transit and equipment manufacturing and reducing restrictions on foreign investment. On imports, Liu noted that last year China reduced tariffs on 187 products, cutting the average from 17.3 percent to 7.7 percent. He said such moves would continue.

In recent years, China has come under increasing criticism from the United States and other countries over its trade practices.

Automobile tariffs are one area of concern. Imported cars currently face a 25 percent tax coming into China, while Chinese automobiles that are shipped to the United States face a 2.5 percent tax.

In his speech Liu He repeated an earlier promise to gradually lower tariffs on imported automobiles, but gave no specifics on a possible timeline.

On the campaign trail, U.S President Donald Trump promised to put more pressure on China and as Beijing continues to delay on promised reforms, trade war clouds are looming.

Earlier this week, he announced heavy tariffs on solar panels and washing machines — a strike at China’s economy that some analysts argue is just the beginning.

Trump will speak on Friday at the meetings in Davos and here in China his appearance at the gathering is being used as a way of contrasting what some argue is a sharp difference in world views between the two countries.

A state-run Xinhua news agency commentary entitled “Shared Future or America First” argued that business leaders and policy makers at the meeting were facing a choice between a “Xi style collaborative approach” or Donald Trump’s “self-centered America First policy.”

The theme of this year’s meeting in Davos is “Creating a Shared Future in a Fractured World.” Xinhua said that with Britain’s Brexit and Trump’s America First policy “the bandwagon of globalization and integration has been put into reverse.”

The communist party-backed Global Times echoed similar sentiment in a piece entitled “ Community with shared future has broader appeal.” In that article, the paper said Trump’s “America First” policy “actually brings out the charm of the Chinese proposal of a community with shared future.” Adding that, “however hard it will be to build such a community, this will garner more support than becoming a selfish power.”

The idea of a community with a shared future was put forward by China last year, when Chinese President Xi Jinping became the first head of state to attend the forum.

When he speaks on Friday, President Trump will be the first U.S. leader to speak at the meeting since former president Bill Clinton.

 
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U.S. Treasury Secretary Steven Mnuchin says the U.S is “not concerned” about the value of the dollar in the short-term.

At a press briefing at the World Economic Forum on Thursday, Mnuchin said the short-term value of the dollar is dependent on many factors in what is a very liquid market.

In the longer-term, he said, the U.S. currency’s value will be determined by the underlying strength of the U.S. economy.

On Wednesday, Mnuchin sparked a big dollar sell-off when he said the recent fall in the value of the dollar was “good” for trade. The euro, for example, spiked to a three-year high.

Mnuchin insisted Thursday that his comment on the dollar was “balanced and consistent.”
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Donald Trump arrived at the World Economic Forum in the Swiss mountain resort of Davos on Thursday, the first serving U.S. president to attend since Bill Clinton in 2000.

Analysts say many delegates are braced for a clash of competing visions for the global economy.

Trump is expected to push his agenda of “America First,” which has seen the United States put tariffs on some imports and demand the restructuring of global trade deals. Other global powers, including Europe, China and Japan, are urging a renewed commitment to global free trade.

Organizers hope the summit will help reconcile the rival visions.

“We strongly believe in dialogue and I think the fact that the president of the U.S. is here also opens up for a discussion about more equitable globalization,” said Borge Brende, president of the World Economic Forum.

 

WATCH: Davos Elite Braced For Trump’s ‘America First’ Agenda

Speech Friday

But it is Trump’s attitude toward globalization, and by extension free trade, that is generating a tangible tension ahead of his speech that will close the summit Friday.

The president signed an order Tuesday imposing steep import tariffs on washing machines and solar panels, repeating his assertion that the current trade system is bad for America.

“These executive actions uphold the principle of fair trade and demonstrate to the world that the United States will not be taken advantage of anymore,” Trump told reporters at the White House.

​Modi sets the stage

India’s Prime Minister Narendra Modi gave the opening address to the forum. His message contrasted sharply with what will likely be Trump’s.

“Forces of protectionism are raising their heads against globalization. Their intention is not only to avoid globalization themselves but also want to reverse its natural flow,” Modi told delegates Tuesday.

His sentiments were shared by many other leaders at Davos, including America’s European allies and big economies like China and Japan.

Trump’s agenda?

So how will Trump’s “America First” agenda be received?

“It’s almost setting the agenda for a confrontation of some form,” said Inderjeet Parmar, professor of international politics at City University London.

“So, I think there’s going to be some anxiety, because there is a sort of changing character of the international system, or at least changing character of America’s engagement with it. And that’s having a knock-on effect on other states, which are beginning increasingly to see that it’s going to be a bit more competitive in the international order,” Parmar said.

On the campaign trail in 2016, Trump warned against the “false song of globalism.” Trump is to arrive in the spiritual heart of that globalism Thursday, with a message many fellow guests may not want to hear.
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