A decision by the United States to investigate China’s trade practices is a unilateralist “baring of fangs” that will hurt both sides, China’s state news agency Xinhua said Tuesday.

U.S. President Donald Trump on Monday authorized an inquiry into China’s alleged theft of intellectual property that administration officials said could have cost the United States as much as $600 billion.

U.S. Trade Representative Robert Lighthizer will have a year to look into whether to launch a formal investigation of China’s trade policies on intellectual property, which the White House and U.S. industry lobby groups say are harming U.S. businesses and jobs.

“While it is still too soon to say that the United States intends a showdown with China on trade, it is no exaggeration that the latest baring of fangs on Washington’s part against China, like all the other unilateral moves by Washington, will hurt not only China, but the United States itself in the long run,” Xinhua said.

Xinhua said while Chinese exporters could be the first to suffer from trade sanctions, the pain would soon spread to U.S. industries and households, adding that China was willing to resolve any disputes between the two sides through dialogue. 

The investigation is likely to cast a shadow over U.S. relations with China, its largest trading partner, just as Trump is asking Beijing to put more pressure on North Korea to give up its nuclear program.

Ken Jarrett, president of the American Chamber of Commerce in Shanghai, said in a statement Tuesday that trade and North Korea should not be linked, and said the investigation was a sign of growing U.S. discontent with Chinese trade practices.

“The president’s executive order reflects building frustration with Chinese trade and market entry policies, particularly those that pressure American companies to part with technologies and intellectual property in exchange for market access,” he said. “Chinese companies operating in the United States do not face this pressure.”

“We support actions that recognize the importance of U.S.-China commercial ties but which also encourage progress toward a more equitable trading relationship,” he said.
…

The former head of Mexico’s state-owned oil company, a key campaign adviser to President Enrique Pena Nieto, has denied accusations that he took bribes from Brazilian construction company Odebrecht.

 

Emilio Lozoya said Sunday via Twitter that he was never corrupt and suggested the allegations were made by executives seeking to reduce their own sentences in Brazil.

 

His lawyer Javier Coello Trejo said on Radio Formula on Monday that “we will prove that Emilio Lozoya did not receive a single cent of those supposed $10 million that they paid as a bribe.”

 

The Brazilian newspaper O Globo said Sunday it had obtained statements made by former Odebrecht’s director in Mexico Luis Alberto de Meneses Weyll to investigators. De Meneses Weyll said that from 2012 to 2014, Odebrecht paid Lozoya $10 million to win a contract for work on a refinery in central Mexico. Lozoya left Pemex last year.

 

Mexican investigative media collaborative Quinto Elemento Lab and anti-corruption nonprofit Mexicans Against Corruption and Impunity also reported they have prosecution documents detailing payments to offshore accounts allegedly linked to Lozoya. The authenticity of the documents could not be immediately confirmed.

 

Mexico’s Attorney General’s Office said in a statement that it did not have all of the information from Brazilian investigators, but would pursue the case to its ultimate consequences.

 

It noted that Odebrecht and another company, Braskem, had pleaded guilty in federal court in New York in December 2016 to paying bribes in a number of countries, including $10,500,000 to Pemex officials.

 

The Attorney General’s Office said it had already taken statements from a number of Pemex executives as part of its own investigation. Coello, Lozoya’s lawyer, said that his client had offered to give a statement, but the agency had still not scheduled him to come in.

 

When the alleged payments began in 2012, Lozoya was an adviser to Pena Nieto’s campaign and a leader of the Institutional Revolutionary Party.
…

The chief executive of one of the world’s largest pharmaceutical companies resigned on Monday from a business panel led by Donald Trump, citing a need for leadership countering bigotry in a strong rebuke to the U.S. president over his response to a violent white-nationalist rally in Virginia.

The departure of Merck & Co Inc CEO Kenneth Frazier from the president’s American Manufacturing Council added to a storm of criticism of Trump over his handling of Saturday’s violence in Charlottesville, in which a woman was killed when a man drove his car into a group of counter-protesters.

Democrats and Republicans have attacked the Republican president for waiting too long to address the violence, and for saying “many sides” were involved rather than explicitly condemning white-supremacist marchers widely seen as sparking the melee.

A 20-year-old man said to have harbored Nazi sympathies as a teenager was facing charges he plowed his car into protesters opposing the white nationalists, killing Heather Heyer and injuring 19 people. The accused, James Alex Fields, was denied bail at an initial court hearing on Monday.

Merck’s Frazier, who is black, did not name Trump or criticize him directly in a statement posted on the drug company’s Twitter account, but the rebuke was implicit.

“America’s leaders must honor our fundamental values by clearly rejecting expressions of hatred, bigotry and group supremacy,” said Frazier.

Trump immediately hit back, but made no reference to Frazier’s comments on values, instead revisiting a longstanding gripe about expensive medicines. Now he had left the panel, Frazier would have more time to focus on lowering “ripoff” drug prices, Trump said in a Twitter post.

The outrage over Trump’s reaction to the Charlottesville violence added to a litany of problems for the president.

Opponents have attacked him for his explosive rhetoric toward North Korea and he is publicly fuming with fellow Republicans in Congress over their failure to notch up any major legislative wins during his first six months in office.

Trump was specifically taken to task for comments on Saturday in which he denounced what he called “this egregious display of hatred, bigotry and violence on many sides.”

Under pressure to take an unequivocal stand against right-wing extremists who occupy a loyal segment of Trump’s political base, the administration sought to sharpen its message on Sunday.

The White House issued a statement insisting Trump was condemning “all forms of violence, bigotry and hatred, and of course that includes white supremacists, KKK (Ku Klux Klan), neo-Nazi, and all extremist groups.” Vice President Mike Pence also denounced such groups on Sunday.

Trump’s attorney general, Jeff Sessions, tried to defend the president over his reaction, appearing on a series of morning television talk shows on Monday.

Asked about the president’s words and lack of direct condemnation of white nationalist groups, Sessions defended Trump’s statement and said he expected him to address the incident again later on Monday.

Speaking to ABC News, Sessions also said the attack on counter-protesters “does meet the definition of domestic terrorism.”

Trump was scheduled to meet with Sessions and Federal Bureau of Investigation Director Christopher Wray on Monday morning to discuss the Charlottesville incident, the White House said in a statement.

International responses were muted. Asked about Trump’s reaction to the violence, a spokesman for British Prime Minister Theresa May said that what the president said was a “matter for him.”

“We are very clear … We condemn racism, hatred and violence,” he added. “We condemn the far right.”

Court hearing by video

Authorities said Heyer, 32, was killed when Fields’ car slammed into a crowd of anti-racism activists confronting neo-Nazis and KKK sympathizers, capping a day of bloody street brawls between the two sides in the Virginia college town.

Fields appeared in Charlottesville General District Court by video link from Albemarle-Charlottesville Regional Jail. He was being held there on a second-degree murder charge, three counts of malicious wounding and a single count of leaving the scene of a fatal accident. The next court date was set for Aug. 25.

The U.S. Justice Department was pressing its own federal investigation of the incident as a hate crime.

“We’re bringing the full weight of the federal government to bear on investigating and prosecuting that individual,” Pence told NBC News in an interview that aired on Monday.

More than 30 people were injured in separate incidents, and two state police officers died in the crash of their helicopter after assisting in efforts to quell the unrest.

The disturbances began when white nationalists converged to protest against plans to remove a statue of Confederate General Robert E. Lee, the commander of rebel forces during the U.S. Civil War.

The Charlottesville disturbances prompted vigils and protests from Miami to Seattle on Sunday, including some targeting other Confederate statues. Such monuments have periodically been flashpoints in the United States, viewed by many Americans as symbols of racism because of the Confederate defense of slavery in the Civil War.

In Atlanta, protesters spray-painted a statue of a Confederate soldier, and in Seattle, three people were arrested in a confrontation between protesters supporting Trump and counter-protesters, local media reported.

The web hosting company GoDaddy Inc said on Sunday it had given the neo-Nazi white supremacist website the Daily Stormer 24 hours to move its domain to another provider after the site posted an article denigrating Heyer. The Daily Stormer is associated with the alt-right movement.

Derek Weimer, a history teacher at Fields’ high school in Kentucky, told Cincinnati television station WCPO-TV he recalled Fields harboring “some very radical views on race” as a student and was “very infatuated with the Nazis, with Adolf Hitler.”

Fields reported for basic military training in August 2015 but was “released from active duty due to a failure to meet training standards in December of 2015,” the Army said.
…

Tourists haven’t been deterred from visiting the tropical island of Guam even though the U.S. territory has been the target of threats from North Korea during a week of angry words exchanged by Pyongyang and Washington.

Chiho Tsuchiya of Japan heard the news, but she decided to come anyway with her husband and two children. “I feel Japan and Korea also can get danger from North Korea, so staying home is the same,” said the 40-year-old.

Won Hyung-jin, an official from Modetour, a large South Korean travel agency, said several customers called with concerns, but they weren’t worried enough to pay cancellation fees for their trips.

“It seems North Korea racks up tension once or twice every year, and travelers have become insensitive about it,” Won said. His company has sent about 5,000 travelers to Guam a month this year, mostly on package tours.

The U.S. territory has a population of 160,000, but it attracted 1.5 million visitors last year. One-third of Guam’s jobs are in the tourism industry.

Guam is a key outpost for the U.S. military, which uses it as a base for bombers and submarines.

The island’s sandy beaches and aquamarine waters make it a popular getaway for travelers from Japan and South Korea. Guam is only about three hours by plane from major cities in both countries.

The number of South Korean travelers in particular has been growing lately because five low-cost airlines started flying to Guam from South Korea, said Antonio Muna, the vice president of Guam Visitors Bureau. This helped boost arrival figures to a 20-year high in July, Muna said.

The threats came in a week in which longstanding tensions between the countries risked abruptly boiling over. New United Nations sanctions condemning the North’s rapidly developing nuclear program drew fresh ire and threats from Pyongyang. President Donald Trump responded by vowing to rain down “fire and fury” if challenged. The North then threatened to lob missiles near Guam.

Kenji Kikuchi, 39, arrived from Japan last week and planned to leave Tuesday as scheduled. He was aware of the threat from reading the local newspaper and was a little worried. But he said North Korea’s missiles would fall in the water not on Guam. His 8-year-old son and 4-year-old daughter weren’t concerned.

“They talk about it, but they don’t care about it. So they like the sea and the pool,” he said. 

The Guam Visitors Bureau has heard reports of cancellations, but Muna said it doesn’t yet have any concrete figures on how many took place. Officials are still expecting a strong August, Muna said.

“Japan and Korea make over 90 percent of our arrivals. And they’re much closer to North Korea than Guam is,” Muna said.

The agency has been relaying assurances from the governor and defense officials that Guam is protected and safe, he said.

Trump told Guam’s Republican governor the global attention would send more tourists to the island.

“You’re going to go up like tenfold with the expenditure of no money,” he told Gov. Eddie Calvo in a telephone conversation Calvo posted Sunday on Facebook. Trump said he’d been watching scenes of Guam on the news, and “it just looks like a beautiful place.”

At a news conference Monday, Calvo said that Guam is in a “normal state of readiness and it’s business as usual.”

There is “no change in security threat levels.”

He told the reporters that “we are defended and will be protected.”
…

U.S. President Donald Trump ordered his trade office Monday to investigate whether China is stealing American intellectual property, but Beijing warned in advance that both countries would end up losers in a trade war.

Trump took a break from his working vacation at his golf resort in New Jersey to return to Washington to sign an executive order directing U.S. Trade Representative Robert Lighthizer to investigate the alleged Chinese theft of American technology and intellectual property.  Trump wants trade officials to look at Chinese practices that force American companies to divulge their proprietary intellectual information in order to do business in China.

“We will defend our workers…protect our innovations,” Trump said.

He described the investigation as “one big move. This is just the beginning.”

If the United States pursues the case, it could eventually ask the World Trade Organization to impose penalties on China or seek some other remedy.

Analysts says the investigation could heighten tensions between the United States and China and lead to a trade war between the world’s two biggest economies.

Trump has praised Chinese President Xi Jinping for recently voting with the United States at the U.N. Security Council to impose new sanctions on North Korea for its test missile launches and nuclear weapons development. Beijing announced Monday it is banning imports of coal, iron ore, seafood and other products from North Korea to comply with the new sanctions aimed at cutting Pyongyang’s export income by $1 billion annually.

But Trump has often complained about the chronic U.S. trade deficit with China, $347 billion in 2016 and mounting at a similar pace this year. The United States imports an array of consumer goods from China, with many of U.S. consumers’ favorite technology devices manufactured in China, such as Apple’s iPhones.

Meanwhile, major U.S. companies are reporting higher earnings in recent weeks, in part because of their Chinese operations. Caterpillar, a U.S. manufacturer of heavy construction machinery, said it expects the demand for its products to remain strong in China through the rest of the year.

Before Trump’s directive to Lighthizer, China warned against his action.

“There is no future and no winner in a trade war and both sides will be the losers,” said Chinese Foreign Ministry spokeswoman Hua Chunying. “As we have emphasized for many times, the nature of China-U.S. trade relations is mutual benefit and win-win.

“Considering the importance of the China-U.S. relations,” she said, “China is willing to make joint efforts with the United States to keep trade and economic relations on sustained, healthy and stable development on the basis of mutual respect, equality and mutual benefit.”
…

There is a new addition to Africa’s busiest air transport hub, O.R. Tambo International Airport near Johannesburg: the continent’s first airport-based brewery. Airport Craft Brewers is a reflection of South Africa’s burgeoning independent beer sector, with growing numbers of beer drinkers not satisfied with industrial, mass-produced beverages.

The hectic international arrivals terminal at the O.R. Tambo airport. Not far from here, businessmen in smart suits lean on a marble bar counter, sipping black and copper-colored beers.

A tall man in his 40s, in a white lab coat, zips between big, shiny, silver tanks, monitoring the temperature of his latest brew.

Phumelelo Marali learned to make beer from one of South Africa’s master brewers, Lex Mitchell.

“He always said to me that, ‘Phumi, it will take you two years to be exact, to learn how to brew beer,’ which is now in a [proper] brew house. It took me six months. But it took me about four years to understand the technicality behind it,” said Marali.

Marali prefers brewing, and drinking, sweeter beers, like his dark malt porter.

“Roasted kind of toffee notes, that is what you get from a porter; chocolaty, and some people in their nose, they pick up coffee,” he said.

He also makes blonde lager, German-style wheat beer, and Irish red ale.

The brewery owners decided to make all the beer at the airport so customers could see the process firsthand and to ensure a “fresher” taste. The brewery turns out about 20,000 liters a week.

Marali says it is great to be one of South Africa’s few black beer brewers, and to be at the forefront of the country’s craft beer revolution.

 

A decade ago, there were six craft beer makers in South Africa. Now, there are about 200, with the artisanal sector having captured almost one-percent of the nation’s massive beer market.

The sector remains dominated by South African Breweries, one of the world’s biggest brewers and part of the multinational beer behemoth, Anheuser-Busch InBev. But economic analysts say craft brewers like Marali are successfully carving out a niche in the local South African market.

 

The airport supplies a constant flow of customers.

Most of his clients though, are South Africans, like James Nkuma, holding a golden beverage in the bar area.

“It is a blonde [lager]. I love, I love it; I enjoy each and every second of it. It is an easy to drink beer. It is light, not hard like I need to drink and drink and get drunk; no,” he said.

Marali’s also training the next generation of young brewers, like Sibusiso Khumalo.

“Calculations, what you have to put in, the right recipe; the temperatures. The whole process takes one month,” said Khumalo.

But as Marali says “good things come to those who wait.”
…

A Chinese state newspaper warned Monday that President Donald Trump “could trigger a trade war” if he goes ahead with plans to launch an investigation into whether China is stealing U.S. technology.

In a commentary by a researcher at a Commerce Ministry think tank, the China Daily said Trump’s possible decision to launch an investigation, which an official says he will announce Monday, could “intensify tensions,” especially over intellectual property.

The official told reporters Saturday the president would order his trade office to look into whether to launch an investigation under Section 301 of the Trade Act of 1974 of possible Chinese theft of U.S. technology and intellectual property.

The Chinese government has yet to comment on the announcement.

A decision to use the Trade Act to rebalance trade with China “could trigger a trade war,” said the commentary under the name of researcher Mei Xinyu of the ministry’s International Trade and Economic Cooperation Institute.

“And the inquiry the U.S. administration has ordered into China’s trade policies, if carried out, could intensify tensions, especially on intellectual property rights.”

The commentary gave no indication of how Beijing might respond but Chinese law gives regulators broad discretion over what foreign companies can do in China.

If an investigation begins, Washington could seek remedies either through the World Trade Organization or outside of it.

Previous U.S. actions directed at China under the 1974 law had little effect, said the China Daily. It noted China has grown to become the biggest exporter and has the world’s largest foreign exchange reserves.

“The use of Section 301 by the U.S. will not have much impact on China’s progress toward stronger economic development and a better future,” said the newspaper.
…

Beside rows of rusting shipping containers, a decorative wrought iron fence surrounds Taquería Mi Pueblo, one of the first family-run Mexican restaurants in southwest Detroit, Michigan.

Its owner, Jalisco-native José de Jesús López, surveys the trees he planted and his ornamental roosters.

“Everything was abandoned, a dump over there,” he said, walking down Dix Street. When he first arrived as an undocumented immigrant in 1981, López recalls a drug-addict-infested lot and overrun lawn.

“Mexicantown,” as the area is affectionately and marketably called today, is one of Metro Detroit’s most vibrant dining scenes for locals and tourists — and a model for other immigrant neighborhoods.

Landing destination

Like López, many foreigners stumbled upon Detroit, viewing the city as an economically viable “second landing destination” — friendly to immigrants, but with cheaper housing and commercial space than traditional immigrant hubs like New York and San Francisco.

Through the 2008 recession and recovery, native-born residents fled. But immigrants kept coming, starting new businesses, hiring local residents and making their neighborhoods a safer place for children.

A June study by Global Detroit and New American Economy reveals that the city’s immigrant population grew by 12.1 percent between 2010 and 2014, at a time when the city’s overall population declined by 4.2 percent. Though the four-year increase in immigrants amounts to merely 4,137 individuals, the study claims the effects have been widely felt.

Watch: Beleaguered Detroit Relying on Immigrants to Revitalize City

“Immigrants are leading in the city’s recovery,” said Steve Tobocman, director of Global Detroit, “particularly in its neighborhoods like Mexicantown, in Banglatown, where new residents are moving in and helping to stabilize working-class communities by fixing up homes, opening up businesses, and creating more consumers.”

Depopulation, Tobocman adds, remains Detroit’s biggest challenge moving forward, while immigrants are “our best hope to rebuilding,” especially on the neighborhood level.

No ‘magic bullet’

According to Americas Society/Council of the Americas (AS/COA) and Fiscal Policy Institute, more than one-third of Detroit-area “Main Street” business owners were immigrants as of 2013.

But data measuring their economic contributions can be misleading, says Stanley Renshon, CUNY professor of political science.

“Any economic activity is grabbed by economists as positive,” Renshon told VOA. “Yes, you increase the overall financial numbers of the country, but the people who benefit most from that are the immigrants themselves, and that’s fine. We want them to prosper, but don’t tell me that what you’re doing is saving the country or the city or the town.”

Detroit’s ongoing struggles, including a long history of political corruption and one of the highest murder rates in the country, can’t be solved by new immigrants, he added.

Hurting American workers?

Last week, White House senior adviser for policy Stephen Miller announced the administration’s support for an immigration bill that would cut legal immigration by half.

Their premise that less-skilled immigrants take away work opportunities from native-born Americans is an “America first” message intended to resonate with President Donald Trump’s base in depressed rust belt towns like Detroit.

“How is it fair, or right or proper that if, say, you open up a new business in Detroit, that the unemployed workers of Detroit are going to have to compete against an endless flow of unskilled workers for the exact same jobs?” asked Miller during a White House press briefing Aug. 2.

Global Detroit’s Tobocman says Trump’s proposed policies won’t produce any new jobs and may cost the Michigan economy hundreds of millions of dollars.

“[Trump’s actions would choke] off a critical supply of talent, of investment, and of global connections that are critical to the future of Michigan, to us being a mobility capital for the world,” Tobocman said.

Detroit suffered an unemployment rate of 28.4 percent during the great recession, but had rebounded to 7.8 percent in June.

Banglatown

Following the likes of Mexicantown, Metro Detroit’s second-most populous foreign-born community, from Bangladesh, hopes to follow suit and create a cultural tourist destination of its own: Banglatown.

“You will hardly find any vacant spot right now,” said Ehsan Taqbeem, founder of Bangladeshi-American Public Affairs Committee (BAPAC), driving his Jeep Grand Cherokee past South Asian restaurants, fabric and fish shops in Detroit and neighboring Hamtramck.

“The value of the homes have gone up since [the recession], businesses have been thriving, and traffic has gone up tremendously,” he said.

Unlike Mexicantown, Banglatown is a concept still in its early stages. There are no traditional rickshaws carrying tourists down Conant Avenue — at least not yet.

But Taqbeem, who runs an automotive retrofitting service, along with other local business owners, sees the benefit of being a branded community in a global-minded city.

Mahabub Chowdhury, part-owner of Aladdin Sweets & Cafe, found success in nourishing his neighborhood and patrons, a majority of whom are non-Bangladeshis. One regular customer, whom he describes as a nice “American white person,” calls him directly.

“Sometimes his car is broken, and he calls us, ‘Can you pick me up from my house?’ And we go to his house and bring him to our restaurant,” Chowdhury said.

‘​Believing in Detroit’

In Mexicantown, Lopez’s eyes well as he recalls his early days on a Jalisco ranch, before finding eventual success in Detroit.

“My main dream was to be able to buy a truck for my dad,” Lopez said. “I worked all my life, and when I had the money, I didn’t have my father anymore.”

Now an American citizen, López, a father of four, says he accomplished the American Dream by creating something that will outlive him and provide for the community long after he has passed.

What Detroit still needs, he said, is more people to call it home. 

“That’s happening little by little,” Lopez said. “The greatest changes won’t happen overnight.”

“They happen slowly, and that’s part of believing in oneself, believing in Detroit,” he said.

 
…

Detroit, Michigan, knows hardship and recovery. One of the hardest hit areas in the country during the Great Recession, the Midwestern Rust Belt city has since found an ingredient to its economic revitalization through empowerment of its immigrant communities. But not everyone is convinced that the solution is viable or helps anyone beyond the immigrants themselves. Ramon Taylor has more.
…

U.S. stock market indexes posted gains in Friday’s trading, a change in direction after several down days amid tensions between President Donald Trump and North Korea.

In New York, the Standard & Poor’s 500 index and the Dow Jones industrial average each advanced about one-tenth of a percentage point, while the Nasdaq composite index rose almost eight-tenths of a percentage point. Earlier, stocks in Paris and London were off 1 percent, while Hong Kong stocks fell 2 percent and Korean shares slid nearly as much.

Global stock prices had been falling for several days, losing nearly $1 trillion in value during angry exchanges between the U.S. and North Korea, which continued Friday.

Investors have reason for concern, according to Rajiv Biswas, Asia-Pacific chief economist of IHS Markit. He said the economic consequences of even a conventional conflict would most likely be “horrific” and “devastate” the South Korean economy, hurting that nation’s trading partners, particularly Japan.  

In an email exchange with VOA, Biswas called the possibility that North Korea could actually use nuclear weapons a “nightmare but still low probability scenario” and noted there had been prior incidents of rising tensions on the peninsula.  

A similar view came from Brad McMillan, chief investment officer for Commonwealth Financial Network, who wrote, “All parties, including the North Koreans, have substantial incentives to once again cut a deal rather than fight. Based on past crises, there will be a great deal of theater, only to end in some kind of deal.”

He wrote that military action was “unlikely” in the short term, suggesting “worry is overdone at the moment.” But he wrote that military action “is actually very possible in the medium term.”  

McMillan wrote that such a conflict could have “dramatic and substantial” impact on many economies because South Korea “is a major trading and manufacturing hub.” That means “disruption there would break supply chains around the world” and might last “for months or years.”  

He wrote that rising uncertainty would prompt money to move out of stocks and into less risky investments, which would drive down stock market prices: “Clearly, there are real reasons to try to avoid a war.”
…

Rising tensions between the United States and North Korea brought a wave of falling stock prices recently as worried investors moved money out of equities and into the perceived safety of gold, Swiss currency and similar products. At one point, this change of investment strategy cut $1 trillion from the value of global stock markets.

For some perspective on these concerns, VOA’s Jim Randle spoke with IHS Markit’s Rajiv Biswas in Singapore. IHS Markit employs thousands of financial, data, and other experts who track economic issues worldwide. Biswas is the company’s chief economist for APEC. His comments here were edited for brevity and clarity.

Randle: Why do rising nuclear tensions prompt falling stock prices?

Biswas: In the nightmare, but still low-probability scenario in which North Korea were to succeed in using nuclear weapons against South Korea, the devastation of the Korean peninsula would be catastrophic. Global financial markets would also suffer a tremendous shock in the short term, with massive flight to safe haven assets such as gold, USD and CHF. The humanitarian crisis and economic reconstruction of the Korean peninsula after such a nuclear conflict would require large-scale international cooperation led by China, the U.S. and EU, and would likely take over a decade to rebuild the economy.

Even a conventional war would result in considerable destruction to the South Korean economy… and likely result in tremendous casualties in both South and North Korea. The economic consequences … would likely be horrific, and … also result in a temporary shock to global financial markets. The greatest vulnerability would be for the South Korean financial markets and Korean won. Other regional East Asian financial markets would also be vulnerable, particularly Japanese financial markets, with risks of disruption to Northeast Asian regional trade and investment flows and manufacturing supply chains.

The South Korean economy accounts for around 1.9% of world GDP, and a severe drop in South Korean GDP … would have negative effects on key trade partners. Japan is also concerned that North Korea could launch missiles at Japanese targets, particularly… U.S. military bases in Japan. The reconstruction and rebuilding of South Korea’s economy after a major conflict would likely take many years, with significant international support needed to help South Korea with the reconstruction task.

Randle: Why do worried investors seek gold, oil, and Swiss currency?

Biswas: If international investors fear that the probability of a military conflict on the Korean peninsula is rising, they will likely reduce their exposure to global growth assets, such as Asian equities and Asian currencies…  as they fear that the world economy and Asian countries near North Korea could suffer economic dislocation and trade disruption in the event of a conflict.

In times of geopolitical crisis, the traditional safe haven assets for global investors are gold, U.S. dollars, U.S. Treasuries and Swiss francs, as these are very stable, internationally traded liquid assets. These safe haven assets tend to rise in value when investors fear that geopolitical crises could weaken global growth prospects as investors switch their investments out of global equities and emerging market currencies into the safe haven assets.

Randle: Are U.S. stocks ripe for a fall? 

Biswas: While geopolitical risks due to escalating tensions on the Korean peninsula have been reflected in some modest declines in some international equity markets in recent days, there has been many previous episodes of rising military tensions on the Korean peninsula. Global investors have previously shown considerable resilience to earlier bouts of geopolitical tensions on the Korean peninsula, such as North Korea’s sinking of the South Korean navy warship Cheonan and the North Korean artillery shelling of South Korea’s Yeonpyeong Island in 2010

During 2017 to date, the U.S. equity market has been driven by a wide range of positive factors, including sustained U.S. economic growth momentum, planned corporate tax cuts by the Trump administration, moderate inflation pressures and positive U.S. corporate earnings growth prospects, so geopolitical risks from North Korea are not the only factor impacting on the U.S. equity market outlook.

Randle: Even if actual hostilities don’t break out, could these nuke worries be enough, in theory, to spark a sharp drop in financial markets? 

Biswas: “The canary in the coal mine that will signal rising international financial markets’ risk aversion [worry] is likely to be South Korean asset classes. The South Korean stock market and the Korean won are likely to be most vulnerable to declines in response to rising international investor concerns that military tensions are escalating further. One measure of financial risk are the South Korean sovereign credit default swap (CDS) spreads, with IHS Markit data indicating that South Korean CDS spreads widened in July following North Korea’s ICBM tests, and spiked up further this week following North Korea’s threat to attack Guam. So far, these widening spreads only signal a moderate increase in financial markets perceptions of geopolitical risks on the Korean peninsula, but a sharp further widening of the South Korean sovereign CDS spread would be a clear signal of rising investor anxiety.”
…

Israel has been known as the land of milk and honey since Biblical times – but the land of single malt whiskey? One appropriately named distillery is trying to turn Israel into a whiskey powerhouse.

Smooth, honey-brown whiskey is not the first thing that comes to mind when most people think of Israel. However, at the Milk and Honey Distillery, rows of casks proudly stamped “Tel Aviv” hold liters of the stuff.

The country’s first whiskey distillery is preparing to release Israel’s first single malt whiskey.

 

“It’s a young whiskey,” said Eitan Attir, the distillery’s CEO.

 

Attir says the brew is aged for three years and two months in virgin oak and old bourbon barrels at the company’s renovated former bakery in a rugged industrial area of south Tel Aviv.

 

“It’s complex for its age,” he said. “The taste feels like more than three years, more like seven or eight and again the story is much more important in this case. This is the first ever single malt whiskey that any distillery has released from Israel.”

 

Although wine has been produced in the Holy Land for millennia, and modern Israeli wines have gained international renown in recent years, whiskey production is new to the country.

 

Milk and Honey was founded in 2013 and began distilling small experimental batches of whiskey a year later. One hundred bottles from their first cask of Single Malt are set to be sold at an online auction starting August 11.

 

Whiskey is universally acceptable for religious Jews to consume, Attir says, and Milk and Honey’s drink is “ultra-kosher.”

 

“We don’t work on Saturday, we don’t work on Yom Kippur or Passover,” he said. “And we want to symbolize our being Jewish or Israeli and then we called it the Milk and Honey Distillery.”  

 

Warmer climate more amenable

The single malt was made in Israel from start to finish, according to the company’s website, though the ingredients, barrels and equipment were imported from the U.S., U.K. and elsewhere. The warmer climate in Israel allows for a speedier aging process in the barrel than whiskey made in colder climates, according to Ran Latovicz, an Israeli whiskey connoisseur and bar owner.  

 

“In colder climates like Scotland or Ireland, whiskey usually ages for about seven to 10 to 12 years before it’s even bottled because [it is] just the way, you know, it gets to its full potential,” he said.

 

The distillery believes it is well positioned to ride a wave of growing international interest in new world whiskeys, like rising stars from Taiwan or India, and hopes this initial offering whets the appetites of aficionados everywhere.

“There’s a huge demand nowadays for whiskey from other places around the world – new world whiskey. There’s more than 70 countries now with a minimum of one distillery and one of them is Israel,” Attir said.

 

Gal Kalkshtein, Milk and Honey’s founder and owner, said he hopes that once the whiskey starts getting shipped abroad in 2019, it will create a buzz for Israeli whiskies.

 

“We want to be recognized for our quality, not the gimmick,” he said.
…

Four U.S. Senate Republicans from oil-refining states Thursday urged the Trump administration not to block oil shipments from Venezuela as part of U.S. sanctions against the country, saying it could raise costs for U.S. fuel consumers.

The United States sanctioned President Nicolas Maduro and other Venezuelan officials after Maduro established a constituent assembly run by his Socialist Party loyalists and cracked down on widespread opposition. It has not placed sanctions on the OPEC member’s oil industry.

Four senators

Senators John Cornyn of Texas, Bill Cassidy of Louisiana, and Thad Cochran and Roger Wicker of Mississippi said in the letter, which was seen by Reuters, that unilaterally blocking oil exports could harm the U.S. economy and the Venezuelan people.

The United States imports about 740,000 barrels per day of oil from Venezuela.

The White House did not respond to a request for comment on the letter, which was addressed to President Donald Trump.

“We believe it is critical to consider the role the U.S. energy industry and refining sector play in our economic and national security interest,” the senators wrote. “Blockading imports could inflict great harm on this industry and burden U.S. taxpayers with the cost.”

Effects on Venezuela

The senators said sanctions on shipments of Venezuelan oil to the United States could also increase the likelihood of a disorderly default by Venezuela, given the oil business is its main source of revenue. Creditors could then seize Venezuelan oil assets and cut off the government’s remaining sources of financing.

They also noted that such sanctions could expand the interests of China and Russia in Venezuela’s oil business. Both countries have invested in Venezuela for years.

Sources have said the United States could use heavy crude from its Strategic Petroleum Reserve held in caverns along the Gulf Coast, to relieve any short-term supply pressure if Venezuela’s shipments were blocked. Nearly 680 million barrels of oil are in reserve.

A drilling boom in the United States has allowed the government to store more oil than it needs to meet international spare supply agreements. 
…

Arctic fjords that hid Soviet nuclear-powered submarines during the Cold War are now being used as a weapon in the sanctions war with Europe – to rear fish that Russia can no longer import.

Three years ago, Russia banned food imports from the West in response to a series of Western sanctions that aimed to punish Moscow for its role in the Ukraine crisis, including its annexation of the Crimean peninsula.

Trout and salmon, grown specially for Russia’s vast market at farms in Norway next door, were among the first victims of the sanctions war.

Moscow’s ban on the largest exporter of red fish to Russia led to a sharp hike in prices, while also offering lucrative prospects for Russian fish farmers.

In the Murmansk region in Russia’s northwest, where the rocky coastline of the Ura Bay still features deserted Soviet-era bases and top secret berths for today’s submarine fleet, huge fish farming cages are now becoming part of the landscape.

Thousands of adult trout and salmon swarm inside the open-sea cages as workers toss in generous portions of high-calorie feed.

The cages belong to Russian Aquaculture which farms salmon and trout in the Barents Sea off Murmansk and in Russia’s northern Karelia region.

When they mature, the fish are loaded onto special ships and, still alive, are brought to a Murmansk factory for processing.

Here the fish are either deep frozen or turned into filets and steaks.

Russian Aquaculture reared fish before the Ukraine crisis but under a different name. Once the sanctions were introduced, it increased production to fill the gap in the market previously occupied by Norwegian imports.

The company’s drive to increase output hit difficulties in 2015 when many of its fish succumbed to diseases. It says it has now overcome those problems, and is pushing hard again to produce more fish.

Over the next five to 10 years, Russian Aquaculture aims to ramp up its output to produce 25,000-30,000 tons of fish per year. In the first half of this year, the company produced 8,400 tons of fish.
…

Venezuelan homemaker Carmen Rondon lives in the country with the world’s largest oil reserves, but has spent weeks cooking with firewood due to a chronic shortage of home cooking gas – leaving her hoarse from breathing smoke.

Finding domestic gas cylinders has become increasingly difficult, a problem that oil industry analysts attribute to slumping oil output in the OPEC nation – which is struggling under an unraveling socialist economy.

State oil company PDVSA says the problem is due to difficulties in distributing tanks amid four months of anti-government protests in which its trucks have been attacked.

“I’ve spent three weeks cooking with wood and sometimes the food does not even soften properly, I can’t stand it anymore,” said Rondon, as she lined up to buy a cylinder under the scorching sun in the city of San Felix in southern Venezuela.

More than 100 people were ahead of her in line.

Nine out of 10 Venezuelan homes rely on cylinders for home gas usage, with only 10 percent receiving it via pipelines, according to official figures. The government launched a plan 12 years ago to bring some 5 million  households onto the natural gas network but was unable to follow through.

Venezuela’s socialist economy has been in free-fall since the oil price collapse in 2014, creating shortages of everything from diapers to cancer medication and spurring inflation to triple-digit levels.

President Nicolas Maduro says he is the victim of an “economic war” by the opposition, and says violent street protests are part of an effort to overthrow him.

With oil output near 25-year lows, PDVSA has been forced to import liquid petroleum gas, or LPG, which is used to fill natural gas cylinders. Venezuela imported 26,370 barrels per day of LPG in the first half of 2017, according to data seen by Reuters.

PDVSA did not respond to a request for comment.

Long lines to buy cylinders have spurred protests.

Demonstrators in May burned 22 PDVSA trucks in a single day in response to the shortages.

The company says it is now distributing gas cylinders at night and before daybreak due to such protests, which also include roadblocks that prevent free movement of vehicles.

“It’s not fair that a country with so much oil is going through this,” complained Maria Echeverria, a 44-year-old homemaker, who started waiting at dawn to buy a gas cylinder in San Cristobal, near the border with neighboring Colombia.
…

Talks between African and U.S. officials to review the African Growth and Opportunity Act (AGOA) free-trade deal ended Thursday with no decision and a feeling on all sides that it has achieved little since it was set up.

President Donald Trump’s top trade negotiator, Robert E. Lighthizer, and other U.S. officials have been in the tiny West African nation of Togo over the past two days to discuss the Clinton-era trade pact with sub-Saharan Africa.

Trump’s “America First” campaign has seen him withdraw from the Trans-Pacific Partnership, threaten to tear up the North American Free Trade Agreement and seek to renegotiate the U.S.-South Korea free-trade deal. But his administration has said little about Africa, and had not previously mentioned the 2000 AGOA trade agreement.

It is not clear whether the U.S. wants to change the deal before it expires in 2025 or extend it. No decision was made on either count.

AGOA allows tariff-free access for thousands of goods from 38 African nations to U.S. markets.

“The number of countries benefiting from AGOA is very limited, as is the number of sectors,” Peter Barlerin, deputy assistant secretary in the U.S. State Department’s Bureau of African Affairs, said at the forum Wednesday. “We will see if the situation improves in the coming years, but it is also up to the beneficiary countries to enhance their business climate.”

‘Constraints’ on some

Bernadette Legzim-Balouki, Togo’s trade minister, who presided over the meeting, was equally lukewarm on AGOA.

“Not all the countries eligible have benefited from the law,” she said. “We are trying to examine the constraints that prevent some African countries from profiting.”

Legzim-Balouki added that the United States and the nations eligible for AGOA had agreed on some loose aims, including: development of a better plan to take full advantage of the pact; bilateral talks between the U.S. and each eligible country; development of a mechanism to protect African producers from price volatility.

The U.S. trade deficit with the AGOA countries shrank to about $7.9 billion last year from a peak of $64 billion in 2008, as U.S. shale oil production increases have lessened the need for oil imports from major exporters Nigeria and Angola.

“AGOA is an excellent opportunity but we aren’t making the most of it, mainly due to a lack of knowledge about it,” Beninois agribusinessman Sylvain Adewoussi told Reuters.
…

Croatia revoked on Thursday its decision to raise import fees on some farm products by 220 percent, avoiding a trade war with its Balkan neighbors who had threatened to hit back with counter-measures.

European Union-member Croatia last month raised its fees for phytosanitary controls — agricultural checks for pests and viruses on fruits and vegetables — at its borders to 2,000 kuna ($317.52) from 90 kuna, citing compliance with EU standards and protection of its consumers.

EU candidates Serbia, Macedonia and Montenegro, as well as fellow EU aspirant Bosnia, have called on Croatia to withdraw its decision, saying otherwise each of them would take counter-measures it considered adequate to protect its economic interests.

Serbia, which is the only country in the region that operates a trade surplus with its neighbor, has already stepped up phytosanitary controls on all organic produce from Croatia and said it would increase them further.

Croatia’s agriculture ministry said in a statement on Thursday that it cut the import fee for a shipment of one brand of fruits and vegetables to 90 kuna, and that the decision will become effective on Friday.

The ministry also agreed with neighboring countries that agricultural inspections on their borders will go back to normal routine as of Friday, while all other pending issues will be analyzed and discussed, it said in the statement.

Most countries in the region import more than they export to Croatia, except for Serbia. Serbia’s exports to Croatia in 2016 reached 116 million euros ($136.04 million) versus imports worth 79 million euros.

Neighboring countries welcomed Croatia’s move.

“Bringing the prices back at the previous level will contribute to the relaxation of relations among the countries of the region,” said Serbian Prime Minister Ana Brnabic.

($1 = 0.8527 euros)

($1 = 6.2989 kuna)
…

Egypt’s official statistics agency says the country’s inflation rate has jumped to 33 percent in July – up from 29.8 percent in June.

The announcement comes as Egyptians struggle in the face of steep price hikes as part of the government’s economic reform plan.

 

The Central Agency for Public Mobilization and Statistics made the announcement Thursday.

 

Economists believe the hike is driven by an increase in fuel prices. They expect inflation to remain above 30 percent over the next two months, especially after an increase in electricity, transportation and drinking water prices.

 

Egypt raised fuel prices in June by 55 percent for the commonly used 80-octane gasoline and diesel. It also doubled the price of the butane gas canisters, used in the majority of Egyptian households for cooking.
…

China urged the U.S. government Thursday to act “prudently” to avoid damaging economic relations between the two countries, in a strongly worded response to Washington’s preliminary decision to place anti-dumping duties on Chinese aluminum foil.

In a statement posted on the Ministry of Commerce’s Wechat account, the government said the United States had ignored cooperation offered by Beijing and Chinese companies in making its ruling this week.

The statement, attributed to Wang Hejun, head of the Commerce Ministry’s trade remedy and investigation bureau, was more strongly worded than typical responses to trade disputes with the United States.

The statement said there were no grounds to accuse China’s aluminum producers of benefiting from subsidies.

 
…

The exchange of threats and harsh rhetoric between North Korea and Donald Trump has rattled many investors. Stock prices fell in Asia, Europe and the United States, while demand rose for safe-haven investments like gold.

Key stock indexes in Hong Kong, Germany, and France were down by one percent or more. U.S. stocks were down as much as four-tenths of a percent in Wednesday’s mid-day trading. Before Tuesday’s angry exchange of words, U.S. stocks had been setting a series of record highs.

Demand for gold, a traditional way of protecting assets in troubled times, pushed up the price for the precious metal by about one percent in Wednesday’s trading. Oil prices also posted gains.

South Korea is home to more than 50 million people and major companies like Samsung and Hyundai. World Bank data show South Korea has a $1.4 trillion economy, which is nearly two percent of global economic activity.
…

A U.S. proposal for Mexico and Canada to vastly raise the value of online purchases that can be imported duty-free from stores like Amazon.com and eBay is emerging as a flashpoint in an upcoming renegotiation of the NAFTA trade deal.

Vulnerable industries like footwear, textiles and bricks and mortar retail in Mexico and Canada are pushing back hard against the proposal by the U.S. trade representative to raise Mexican and Canadian duty-free import limits for e-commerce to the U.S. level of $800, from current thresholds of $50 and C$20, respectively.

For the Mexicans, the main worry is that such a move could open a back door for cheap imports from Asia and beyond. For Canadian retailers, the fear is that e-commerce companies will undercut their prices.

The U.S. plan was unveiled in July as part of the Trump administration’s goals to renegotiate the 25-year-old treaty.

While Mexico and Canada are still formulating their responses, Mexico City is leaning strongly against the proposal in its current form, and Ottawa may not be far behind.

The proposed $800 level “opens a completely unnecessary door” to imports from outside the NAFTA trading bloc, Mexican Economy Minister Ildefonso Guajardo said on Thursday on the sidelines of a NAFTA-related event, calling it “a very sensitive topic.”

The growing controversy over how to account for a burgeoning regional e-commerce sector dominated by the United States highlights a rare area where the Trump administration is pushing to liberalize trade rules rather than tightening them.

Much of Trump’s criticism of NAFTA stems from his belief it has decimated U.S. manufacturing as companies shifted production to Mexican factories with cheaper labor, creating a U.S. trade deficit with Mexico worth more than $60 billion.

Top priority

But Mexican and Canadian business leaders fear the rule change could make their industries vulnerable, arguing that unless online retailers can show products are made in North America, they should not be exempted from duties levied on other imports.

“We can’t open the door to inputs from outside the region coming in tax-free when we’re talking about the need to reduce the deficit and create jobs,” said Moises Kalach, who fronts the international negotiating arm of Mexico’s CCE business lobby. “It goes completely against that.”

Guajardo said Mexico’s retail group the National Self-service and Department Store Association, which includes powerful members such as Wal-Mart de Mexico , had visited him last week to express concerns about the proposal.

He said the group’s representative brought to the meeting a $250 jacket bought on the internet as evidence that violations to the existing limit were already threatening members’ businesses.

“Suppose there was an $800 free limit. Can you imagine how many shirts Vietnam could send to Mexico in a packet below that price? They could easily flood us with packets of 100,” he said, while recognizing the need to smooth customs processes.

Complicating efforts to agree on a common set of rules is a tangle of diverging regulations on tax and how the restrictions on imports differ in the region depending on whether they enter by air, sea or land.

Amazon.com Inc. and eBay Inc. declined to comment for this story.

eBay has previously said it supports an increase to Canada’s low-value customs “de minimis” threshold for ecommerce to promote seamless access to the global marketplace.

Increasing the threshold “absolutely” is eBay’s top priority in the NAFTA renegotiation, a person familiar with the matter said.

Canadian opposition is being led by retailers, whose industry association said it was concerned about “the behavioral shift that would inevitably result if shoppers can buy a far wider range and higher value of goods tax-free and duty-free.”

The Retail Council of Canada said in a submission to the government that clothes, books, toys, sporting goods and consumer electronics would be among the items most affected, and expressed confidence Ottawa would fend off such requests.

Not from other nations

“eBay in particular has lead this charge to three different finance ministers in a row — Jim Flaherty, Joe Oliver, and Bill Morneau — and in each case they have failed,” said Karl Littler, a spokesman for the Retail Council of Canada.

“The U.S. raised this quite frequently in the TPP [Trans-Pacific-Partnership trade] round and they also failed to secure this concession,” he added.

There have been hints from Canada’s government about a compromise under which a higher limit would exempt products ordered from e-commerce from duties but not sales taxes.

“When it comes to waiving duties and taxes, we need to carefully consider the impact that would have on Canadians and on Canadian businesses,” said Chloe Luciani-Girouard, a spokeswoman for Morneau.

Mexican firms could accept a higher import limit for goods produced in the NAFTA region — but not from other nations, said Alejandro Gomez Tamez, executive president of the Chamber of Commerce for the footwear industry in the central Mexican state of Guanajuato, a hub of textile manufacturing.

“When a product comes in, even if it’s packaged and sent from the United States, if it’s from a third country, it should pay duties,” he said.
…

Dozens of glistening pools in a small village on Croatia’s Adriatic coast stand testament to its annual salt harvests from seawater, which use a method largely unchanged for centuries.

The salt works facility in Ston, which says it is the oldest in Europe, consists of 58 pools and covers about 430,000 square meters where the waters of the Adriatic are allowed to seep in and then evaporate, leaving salt behind.

The first of two salt harvests this year kicked off on Tuesday, with around 35 tourists, friends and family of workers raking salt across the pans into gleaming white piles, before transferring to a nearby warehouse by wooden carts.

They expect to harvest some 200 tons of salt in the harvest, with most of it used for industrial purposes while the rest is sold in local markets for use in cooking.
…

Tesla said on Monday it would raise about $1.5 billion through its first-ever offering of junk bonds as the U.S. luxury electric carmaker seeks fresh sources of cash to ramp up production of its new Model 3 sedan.

The move to issue junk bonds — lower-quality investments that offer higher yields — represents a bet by Tesla Chief Executive Elon Musk that bond investors will be as hungry as stock investors to back the company on expectations that its Model 3 will be a hit.

Tesla shares are up 67 percent this year, pushing the company’s market value to about $60 billion, above that of top U.S. automakers General Motors and Ford Motor Co., even though Tesla has yet to make an annual profit.

“Bond investors, who typically don’t love companies that don’t make money, will be far more forgiving when it comes to Tesla,” said bond expert Robbie Goffin, managing director of FTI Consulting, citing the company’s stellar stock market value.

Automaker draws a ‘B-‘ 

Tesla was to start pitching potential investors on Monday, IFR reported, citing lead bankers on the deal.

So far, Tesla has been raising money to pay its bills with a combination of equity offerings and convertible bonds, which eventually convert into shares. In March, the company raised $1.4 billion through a convertible debt offering.

Following the announcement, Standard & Poor’s reaffirmed its negative outlook for the automaker and assigned a “B-” rating for the bond issue — deep into junk credit territory. S&P also maintained its “B-” long-term corporate credit rating on Tesla.

“We could lower our ratings on Tesla if execution issues related to the Model 3 launch later this year or the ongoing expansion of its Models S and X production lead to significant cost overruns,” S&P said in a statement on the bonds.

Rating outlook is stable

Moody’s assigned a junk “B3” rating to the bond issue and said the company’s rating outlook was stable.

The rating agency said the overall company’s “B2” rating was supported by the fact that if Tesla ends up in serious financial trouble, its brand name, products and physical assets would be of “considerable value” to other automakers.

The automaker’s debt load increased significantly last year when it bought solar panel maker SolarCity.

CFRA equity analyst Efraim Levy said the bonds provide Tesla with funds “at least into mid-2018.”

“There is a risk they could still run out of money,” he said. “Then you’d go back to the equity markets and hope it’s not too late” to raise more money.

Burning cash

The latest effective yield on single-B rated bonds maturing in seven to eight years, the class for a Tesla issue, is around 5.5 percent, according to Bank of America/Merrill Lynch Fixed Income Index data.

Tesla’s bond will price later this week after several days of meetings with credit investors, who will weigh factors including the absence of a borrowing history, its lack of profit and its high cash-burn rate against its growth potential and its attractiveness as an environmentally friendly “green” issuer.

Ultimately, the depth of investor interest will determine the bond’s interest rate.

Tesla is counting on the Model 3, its least pricey car, to become a profitable, high-volume manufacturer of electric cars.

Tesla said last week that it had 455,000 net pre-orders for the Model 3, which has a $35,000 base price, and that the sedan was averaging 1,800 reservations per day since it launched late last month.

At the launch, Musk, however, warned that Tesla would face months of “manufacturing hell” as it increases production of the sedan.

Tesla had over $3 billion in cash on hand at the end of the June quarter, compared with $4 billion on March 31.

The company has said it expects capital expenditures of $2 billion in the second half of this year to boost production at its Fremont, California assembly plant and a battery plant in Reno, Nevada.

Tesla’s cash burn has prompted short-sellers like Greenlight Capital’s David Einhorn to bet against the Palo Alto, California company.

Goldman Sachs, Morgan Stanley, Barclays, Bank of America Merrill Lynch, Citigroup, Deutsche Bank and RBC are the book-runners on the bond offering, IFR reported.

Shares of Tesla closed down 0.5 percent at $355.17 on Monday.

 
…

For Jisi Lazuo, the torch festival in her village in southwest China should be a celebration involving colorful ethnic clothes and eating freshly slaughtered pig.

Instead, it’s a time of stress.

“In my heart I always get worried when the torch festival comes along,” said Jisi, 37, who supports a family of two grandparents and four children.

“Traditional clothes are quite expensive, but for my own kids I can only buy whatever I can get,” she said.

Jisi belongs to the isolated Yi ethnic community. They have a distinct language and culture, and are among the poorest in China.

Most live in Liangshan, a mountainous district in the southwestern province of Sichuan and one of 14 areas of “concentrated poverty” identified by the central government.

Average incomes in Liangshan are just 27 percent of the national average, official data shows.

An ambitious poverty reduction campaign is seeking to change this, ensuring by 2020 that no one is living in poverty — defined by the government as less than 2,300 yuan a year.

China has lifted hundreds of millions of its citizens out of poverty over the past few decades, but doing the same for groups like the Yi poses a different set of challenges.

“A lot of that poverty is not as easily accessible for the government,” said Ben Westmore, a senior economist at the Organization for Economic Co-operation and Development (OECD).

“It’s people who live in mountainous areas who are not very well connected, or they’re more dispersed at the provincial level across the prefectures,” he said.

From road building to subsidies, the central government has spent large amounts of money on poverty relief in places like Liangshan.

In 2016, the Liangshan government distributed 940 million yuan ($139 million) in basic income assistance for the poorest in the region, according to the government website.

Officials in charge of Liangshan’s anti-poverty campaign declined to comment on the programs. The State Council poverty alleviation office in Beijing also declined to comment.

While many Yi welcome the state’s help, some question whether cash handouts are sustainable.

“Just giving out money is useless because one day the money will eventually run out,” said Emu Zhiji, one of the few people in his village to receive a university education.

Emu said he hopes to become a sports teacher, something that would be impossible for many Yi. Thirty percent are illiterate, compared to 4 percent nationally, and many do not speak Mandarin, the main language in China. As a result, they have limited options for earning a living beyond farming.

The government has tried to improve access to education for the Yi, but it struggles to recruit teachers to work in such a remote area. Many students battle to keep up with lessons taught in Mandarin.

Emu said more needs to be done to allow the Yi to develop within their own culture if they are to alleviate the poverty and a dependency on government programs.

“If we had better jobs we’d be able to feed and clothe ourselves on our own, but for that we need to be able to use our own language,” he said.
…