Brazil is home to the largest rainforest on Earth. It has miles of sandy, deserted beaches, and stunning flat-topped mountains. It invented samba and a devilish little drink called the caipirinha. It has massive reserves for native peoples and charming colonial towns built by the Portuguese.

Despite the seeming abundance of riches for travelers, it has a tourism problem. Because while you may have heard about the Amazon or the stunning beaches of Rio de Janeiro, you have probably also heard that Brazil has high crime, was swept by a Zika outbreak and that its politicians have concocted the largest graft scheme in Latin American history.

Most likely you’ve never visited Brazil. Only 6.6 million foreigners did last year, according to the Ministry of Tourism. That’s about half the number that go to the tiny city-state of Singapore, and this in a continent-sized country that the World Economic Forum ranks No. 1 in natural resources and No. 8 in cultural resources. Oh, and that hosted the 2016 Summer Olympics.

“The highest gap between potential in tourism in the world and what’s been realized so far is Brazil,” said Vinicius Lummertz, the president of Embratur, Brazil’s tourism board. “We have [everything] from Xingu [an indigenous reserve] and Indians to Oktoberfest in Santa Catarina.”

High hopes

In the face of a deep and protracted recession, the government is now hoping to change all that with several measures that aim to nearly double the number of foreign visitors in the next five years. But hoteliers, travel bloggers and others who work in tourism say there are many obstacles. 

The government plan includes a law to allow 100 percent foreign ownership of airlines, with the aim of increasing flight routes and driving down the cost of travel. Another plank will allow Americans, Canadians, Japanese and Australians — all of whom need visas to visit Brazil — to apply for visas online, instead of at a consulate.

Cheaper flights and a smoother visa process will address some tourist complaints about Brazil, but Alison McGowan says the plan ignores the most glaring problem: Nobody knows how great Brazil is in the first place.

“People don’t even get as far as [applying for a visa],” said McGowan, the CEO of hiddenpousadasbrazil.com, a guide to inns, boutique hotels and B&B’s in Brazil. “They haven’t got people wanting to go to Brazil yet.”

McGowan and other tourism professionals say the government lacks a coherent campaign to promote Brazil abroad — the real country, not just the cliches of Carnival and soccer great Pele.

Part of the government’s plan is to beef up Embratur. Officials there said they hoped that would lead to a doubling of investment in promotion. Last year, Embratur had a $16 million budget — which the agency said was much less than what other South American countries spend.

McGowan and others said Brazil is particularly bad at reaching modern global travelers who research trips and make reservations online. McGowan called the country’s main tourism portal for foreigners, visitbrasil.com, “a disgrace.”

Taxes, crime, pollution

Lummertz, the president of Embratur, says the government’s plan will help promote Brazil abroad. But he says that the nation’s tourist blues go beyond that. Latin America’s largest nation is still struggling to overcome decades of isolation and remains the most closed of the so-called BRICS economies, he says.

That has repercussions for tourism: High import taxes and other hangovers from isolation make the country expensive for travelers and reduce the quality of goods and services. Few Brazilians speak English, partly because they are unlikely to come across global travelers here.

It’s impossible, of course, to gloss over Brazil’s real problems. It has one of the highest homicide rates in the world. Rio’s bay is polluted. And Zika is a risk. But the government and Embratur need a counter-narrative for tourists.

“What is the world capital of pickpockets? It’s Barcelona,” said Ricardo Freire, who founded the Brazilian travel blog viajenaviagem.com. “But [the residents] don’t tell you not to come there.”

The drawbacks of Brazil also need to be put in context. Tourists are not likely to be visiting tough urban neighborhoods where most crime happens, notes Emmanuel Rengade, the owner of the luxury, ecological hotels Pousada Picinguaba and Fazenda Catucaba. In the countryside, Rengade says he doesn’t even lock his door.

As for Zika, a mosquito-borne disease that has been linked to a rare birth defect, cases this year have fallen dramatically, and the government declared the emergency over this month. Rio’s bay might be polluted, but the country has more unspoiled nature to visit than any one person could hope to see in a lifetime.

And contrary to Brazil’s messy image, Ben Feetham says: “Everything seems to work.” Feetham, who is a reviewer for i-escape.com, a site that curates a selection of boutique hotels and inns, honeymooned in Brazil in April and said he had none of the usual stress about airport transfers or bus connections.

All of the fuss over reputation and promotion ignores the No. 1 thing tourists like best about Brazil in surveys: the people, known for being easygoing and welcoming. 

“Anybody who goes to Brazil comes back loving it,” said Pauline Frommer, the co-publisher of the Frommer’s guidebooks and frommers.com. “The key is getting people there.”
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Germany and France pledged Monday to seek ways to strengthen the 19-nation eurozone, with harmonizing corporate taxes among the possible measures they will mull over in the coming weeks.

 

German Finance Minister Wolfgang Schaeuble and new French counterpart Bruno Le Maire said they are setting up a panel to produce proposals for a bilateral summit in July.

 

“We’ve been talking for years about progress in the integration of the eurozone, but things aren’t advancing quickly enough or far enough,” Le Maire said. “We are determined to get things moving faster and further, in a very concrete way.”

 

Germany and France could either propose a joint corporate tax system of their own or concentrate on pushing efforts for a harmonized assessment of corporate taxes at the European Union level, Schaeuble said.

 

“Both are ambitious,” he conceded, noting that wider tax harmonization is difficult because it would require consensus among EU leaders.

 

Le Maire said there needs to be better coordination of economic policy. He said investment will also be considered. He stressed France’s willingness to consider deeper reforms such as creating a finance minister for the 19-nation eurozone or a “European monetary fund,” an idea that Schaeuble has periodically backed.

 

He offered assurances that “France will respect its European obligations in terms of [budget] deficit reduction.”

 

The latest German-French drive to strengthen the EU’s economic coherence come as Britain, the bloc’s No. 2 economy after Germany, prepares to leave the EU.

 

“We see in Brexit an opportunity for our financial companies to be more attractive than they were before,” Le Maire said. “Our role is to create wealth for our country, to create jobs for our country. With Brexit, there is this opportunity, and we expect to seize this opportunity.”

 

New French Foreign Minister Jean-Yves Le Drian, also making his first trip to Berlin since President Emmanuel Macron’s new government was appointed last week, met separately with his German counterpart Sigmar Gabriel.

 

Le Drian promised to keep up Franco-German diplomatic efforts to resolve the conflict in eastern Ukraine that has cost almost 10,000 deaths since fighting broke out in 2014 between Russia-backed separatists and the government.

 

“France and Germany are not Europe, but without France and Germany, Europe won’t be able to move forward,” Gabriel said. “We want to use this historic window of opportunity that opened up with the election in France.”

 
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Boeing Co said on Sunday it had signed several defense and commercial deals with Saudi Arabia including for the sale of military and passenger aircraft during a visit by U.S. President Donald Trump to the kingdom.

The announcement is the latest in tens of billions of dollars in deals signed between U.S. and Saudi firms since Trump arrived in Riyadh on Saturday.

Boeing said Saudi Arabia has agreed to buy Chinook helicopters, associated support services and guided weapons systems, and intends to purchase P-8 surveillance aircraft.

The total value of the deals or how many aircraft Saudi Arabia intends to buy was not given in the statement announcing the agreements.

A Boeing spokesman declined to comment beyond the statement.

The U.S State Department announced in December plans to sell Saudi Arabia CH-47F Chinook cargo helicopters and related equipment, training and support worth $3.51 billion.

Saudi Arabia is seeking closer defense and commercial ties with the United States under Trump, as it seeks to develop its economy beyond oil and leads a coalition that is fighting a war in Yemen.

“These announcements reaffirm our commitment to the economic growth, prosperity and national security of both Saudi Arabia and the United States, helping to create or sustain thousands of jobs in our two countries,” said Boeing Chief Executive Dennis Muilenburg.

Boeing also said it would negotiate the sale of up to 16 widebody airplanes to Saudi Gulf Airlines which is based in the country’s east in Dammam.

Boeing did not say which aircraft it was negotiating to sell to the privately-owned commercial airline. Saudi Gulf, which started operations last year, could not immediately be reached for comment.

Boeing will also establish a joint venture with Saudi Arabia to provide “sustainment services for a wide range of military platforms,” the statement said, whilst a separate joint venture would “provide support for both military and commercial helicopters.”
…

The European Commissioner for Economic and Financial Affairs, Pierre Moscovici, said on Sunday he was confident an agreement between Athens and its creditors could be found at a meeting of euro zone finance ministers on Monday in Brussels.

Athens needs funds to repay 7.5 billion euros ($8.4 billion) of debt maturing in July.

“We are very close to an overall agreement,” Moscovici told France Inter radio.

“Greece has assumed its responsibilities,” he said, referring to measures on pension cuts, tax hikes and reforms adopted on Thursday by the Greek Parliament.

“I now wish that we, the partners of Greece, also take our responsibilities,” he said.

Moscovici said his optimism over a deal was partly linked to the fact Germany was now aware of the need to find a structural solution to Greece’s problems.

Greek Prime Minister Alexis Tsipras and German Chancellor Angela Merkel agreed during a call on Wednesday that a deal was “feasible” by Monday.
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The world’s largest private equity fund, backed by Japan’s Softbank Group and Saudi Arabia’s main sovereign wealth fund, said Saturday that it had raised over $93 billion to invest in technology sectors such as artificial intelligence and robotics.

“The next stage of the Information Revolution is under way, and building the businesses that will make this possible will require unprecedented large-scale, long-term investment,” the Softbank Vision Fund said in a statement.

Japanese billionaire Masayoshi Son, chairman of Softbank, a telecommunications and tech investment group, revealed plans for the fund last October, and since then it has obtained commitments from some of the world’s most deep-pocketed investors.

In addition to Softbank and Saudi Arabia’s Public Investment Fund, the new fund’s investors include Abu Dhabi’s Mubadala Investment, which has committed $15 billion, Apple Inc., Qualcomm, Taiwan’s Foxconn Technology and Japan’s Sharp Corp.

The new fund made its announcement during the visit of President Donald Trump to Riyadh and the signing of tens of billions of dollars’ worth of business deals between U.S. and Saudi companies. Son was also in Riyadh on Saturday.

After meeting with Trump last December, Son pledged $50 billion of investment in the United States that would create 50,000 jobs, a promise Trump claimed was a direct result of his election win.

Saudi tech access

The fund may also serve the interests of Saudi Arabia by helping Riyadh obtain access to foreign technology. Low oil prices have severely damaged the Saudi economy, and policymakers are trying to diversify into new industries.

The PIF signaled an interest in the tech sector last year by investing $3.5 billion in U.S. ride-hailing firm Uber.

Saturday’s statement did not say how much the PIF had committed to the fund, but previously it had said it would invest up to $45 billion over five years. Softbank is investing $28 billion.

The new fund said it would seek to buy minority and majority interests in both private and public companies, from emerging businesses to established, multibillion-dollar firms. It expects to obtain preferred access to long-term investment opportunities worth $100 million or more.

Other sectors in which the fund may invest include mobile computing, communications infrastructure, computational biology, consumer internet businesses and financial technology. The fund aims for $100 billion of committed capital and expects to complete its money-raising in six months, it added.
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About 3 million Americans will enter the job pool this year as graduation ceremonies get underway at various colleges and universities across the United States. With unemployment at a 10-year low, 2017 is shaping up to be a good year for new grads. But as Mil Arcega reports, success for many will depend on a desire to keep learning and a willingness to go where the jobs are.
…

About three million American university graduates will enter the job market this year. And with unemployment currently at a 10-year low, it’s a good time to be graduating, says Nicole Smith, chief economist at Georgetown University’s Center on Education and the Workforce (CEW).

“We are at one of the lowest unemployment rates we’ve had since May of 2007, so what that means for the graduating class of 2017 is that the likelihood of getting a job is really, really good,” she said.

The U.S. Labor Department says unemployment for those with a four-year bachelor’s degree or higher is 2.5 percent, compared to the overall jobless rate of 4.5 percent. For those with a high school diploma or less, the average unemployment rate is 6.8 percent.

Demand for graduates with associate, bachelor’s and master’s degrees is particularly strong in the STEM fields of science, technology, engineering and mathematics, according to the latest survey by the National Association of Colleges and Employers.

However, Smith says, a four-year degree is not necessary to compete in today’s economy.

“There are about 28 million jobs or so in the U.S. economy that are good-paying jobs; that are high-skilled jobs for people without a B.A,” she said.

While higher learning can give new workers the upper hand, Smith says almost a third of students with bachelor’s degrees are under-unemployed.

“So we have to do this cakewalk, this tightrope walk, to understand exactly what the market demands,” she said.

Options without college degree

A survey of the hottest employment sectors in 2017 shows some of the fastest-growing fields don’t require a four-year degree, according to Bankrate.com senior analyst Mark Hamrick.

“You don’t have to have a college degree for some of those technical jobs, where, let’s say, a kind of therapy might be involved — physical or occupational therapy,” he said.

Health care and service-oriented jobs aimed at the needs of a graying population are bound to remain strong as baby boomers — those born between 1946 to 1964 — continue to retire. But, Hamrick says, some skills are harder to learn in school.

“One of the skills which has been in strong demand really involves people skills — closing the deal, sales … business strategy; charting the course for a viable enterprise, that’s something that’s needed,” he said.

What is clear is that jobs that fueled the economy three or four decades ago are not the same jobs driving the economy today. In the 1970s, manufacturing accounted for nearly two of every five jobs; today, those manufacturing jobs account for fewer than one in 10.   

“The types of manufacturing jobs that remain are jobs that are really high-skill, high-tech, high-demand manufacturing jobs. So those jobs require a lot more skills than their predecessors did,” Smith said.

Life-long learning key

Today’s job market also differs from the past because rapid technological and societal change demands a commitment to life-long learning, which means that getting a degree is just the beginning, according to Smith.  

“Each year, there’s a new … version of technology that we must use,” she said. “So what the students need to be aware of is that they will need to come back to re-up their certification, to re-up their skills.”

Participating in today’s economy also means older and newer workers must be willing to move where the jobs are. Demand for workers is greatest where local economies are dynamic and where populations are growing, says Bankrate.com’s Hamrick. That means the exodus toward bigger cities on the East and West coasts will continue. 

“That’s a process that’s accelerating,” Hamrick said. “It’s not slowing down, and so having the right skills, going where the jobs are located — those are the keys to obtaining and maintaining employment.”

The most recent jobs report shows the U.S. economy added 211,000 jobs in April, and unemployment fell to 4.4 percent. That’s a sharp contrast to the dark days that followed the 2008 financial crisis, when the U.S. economy was losing 800,000 jobs a month and unemployment peaked at 10 percent. 
…

A sizable majority of rural Americans backed Donald Trump’s presidential bid, drawn to his calls to slash environmental rules, strengthen law enforcement and replace the federal health care law.

But last month, many of them struck a sour note after White House aides signaled that Trump would deliver on another signature vow by edging toward abandoning the North American Free Trade Agreement.

Farm Country suddenly went on red alert.

Trump’s message that NAFTA was a job-killing disaster had never resonated much in rural America. NAFTA had widened access to Mexican and Canadian markets, boosting U.S. farm exports and benefiting many farmers.

“Mr. President, America’s corn farmers helped elect you,” Wesley Spurlock of the National Corn Growers Association warned in a statement. “Withdrawing from NAFTA would be disastrous for American agriculture.”

Within hours, Trump softened his stance. He wouldn’t actually dump NAFTA, he said. He’d first try to forge a more advantageous deal with Mexico and Canada – a move that formally began Thursday when his top trade negotiator, Robert Lighthizer, announced the administration’s intent to renegotiate NAFTA.

Farmers have been relieved that NAFTA has survived so far. Yet many remain nervous about where Trump’s trade policy will lead.

As a candidate, Trump defined his “America First” stance as a means to fight unfair foreign competition. He blamed unjust deals for swelling U.S. trade gaps and stealing factory jobs.

But NAFTA and other deals have been good for American farmers, who stand to lose if Trump ditches the pact or ignites a trade war. The United States has enjoyed a trade surplus in farm products since at least 1967, government data show. Last year, farm exports exceeded imports by $20.5 billion.

“You don’t start off trade negotiations … by picking fights with your trade partners that are completely unnecessary,” says Aaron Lehman, a fifth-generation Iowa farmer who produces corn, soybeans, oats and hay.

Many farmers worry that Trump’s policies will jeopardize their exports just as they face weaker crop and livestock prices.

“It comes up pretty quickly in conversation,” says Blake Hurst, a corn and soybean farmer in northwestern Missouri’s Atchison County.

That county’s voters backed Trump more than 3-to-1 in the election but now feel “it would be better if the rhetoric (on trade) was a little less strident,” says Hurst, president of the Missouri Farm Bureau.

Trump’s main argument against NAFTA and other pacts was that they exposed American workers to unequal competition with low-wage workers in countries like Mexico and China.

NAFTA did lead some American manufacturers to move factories and jobs to Mexico. But since it took effect in 1994 and eased tariffs, annual farm exports to Mexico have jumped nearly five-fold to about $18 billion. Mexico is the No. 3 market for U.S. agriculture, notably corn, soybeans and pork.

“The trade agreements that we’ve had have been very beneficial,” says Stephen Censky, CEO of the American Soybean Association. “We need to take care not to blow the significant gains that agriculture has won.”

The U.S. has run a surplus in farm trade with Mexico for 20 of the 23 years since NAFTA took effect. Still, the surpluses with Mexico became deficits in 2015 and 2016 as global livestock and grain prices plummeted and shrank the value of American exports, notes Joseph Glauber of the International Food Policy Research Institute.

Mexico has begun to seek alternatives to U.S. food because, as its agriculture secretary, Jose Calzada Rovirosa, said in March, Trump’s remarks on trade “have injected uncertainty” into the agriculture business.

Once word had surfaced that Trump was considering pulling out of NAFTA, Sonny Perdue, two days into his job as the president’s agriculture secretary, hastened to the White House with a map showing areas that would be hurt most by a pullout, overlapped with many that voted for Trump.

“I tried to demonstrate to him that in the agricultural market, sometimes words like ‘withdraw’ or ‘terminate’ can have a major impact on markets,” Perdue said in an interview with The Associated Press. “I think the president made a very wise decision for the benefit of many agricultural producers across the country” by choosing to remain in NAFTA.

Trump delivered another disappointment for U.S. farm groups in January by fulfilling a pledge to abandon the Trans-Pacific Partnership, which the Obama administration negotiated with 11 Asia-Pacific countries. Trump argued that the pact would cost Americans jobs by pitting them against low-wage Asian labor.

But the deal would have given U.S. farmers broader access to Japan’s notoriously impregnable market and easier entry into fast-growing Vietnam. Philip Seng of the U.S. Meat Export Federation notes that the U.S. withdrawal from TPP left Australia with a competitive advantage because it had already negotiated lower tariffs in Japan.

Trump has also threatened to impose tariffs on Chinese and Mexican imports, thereby raising fears that those trading partners would retaliate with their own sanctions.

Farmers know they’re frequently the first casualties of trade wars. Many recall a 2009 trade rift in which China responded to U.S. tire tariffs by imposing tariffs on U.S. chicken parts. And Mexico slapped tariffs on U.S. goods ranging from ham to onions to Christmas trees in 2009 to protest a ban on Mexican trucks crossing the border.

The White House declined to comment on farmers’ fears that Trump’s trade policy stands to hurt them. But officials say they’ve sought to ease concerns, by, for example, having Agriculture Secretary Perdue announce a new undersecretary to oversee trade and foreign agricultural affairs.

Many farmers are still hopeful about the Trump administration. Some, for example, applaud his plans to slash environmental rules that they say inflate the cost of running a farm. Some also hold out hope that the author of “The Art of the Deal” will negotiate ways to improve NAFTA.

One such way might involve Canada. NAFTA let Canada shield its dairy farmers from foreign competition behind tariffs and regulations but left at least one exception – an American ultra-filtered milk used in cheese. When Canadian farmers complained about the cheaper imports, Canada changed its policy and effectively priced ultra-filtered American milk out of the market.

“Canada has made business for our dairy farmers in Wisconsin and other border states very difficult,” Trump tweeted last month. “We will not stand for this. Watch!”

Some U.S. cattle producers would also like a renegotiated NAFTA to give them something the current version doesn’t: The right to label their product “Made in America.” In 2015, the World Trade Organization struck down the United States’ country-of-origin labeling rules as unfair to Mexico and Canada.

Many still worry that Trump’s planned overhaul of American trade policy is built to revive manufacturing and that farming remains an afterthought.

“So much of the conversation in the campaign had been in Detroit or in Indiana” and focused on manufacturing jobs,” said Kathy Baylis, an economist at the University of Illinois. The importance of American farm exports “never made it into the rhetoric.”

 
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An OPEC panel reviewing scenarios for next week’s policy-setting meeting is looking at the option of deepening and extending an OPEC-led deal to reduce oil output, OPEC sources said Friday.

OPEC’s national representatives — officials representing the 13 member countries, plus officials from OPEC’s Vienna secretariat — met Wednesday and Thursday to discuss the market.

The two-day meeting, called the Economic Commission Board, was scheduled to finish Thursday but will conclude later Friday, two OPEC sources said.

“We have not agreed on final scenarios,” said one of the sources.

A second source said a deeper supply cut was an option depending on estimated growth in supply from non-OPEC and U.S. shale oil.

The meeting precedes a policy-setting gathering of OPEC and non-OPEC oil ministers May 25 to decide whether to extend their deal to reduce output beyond June 30.

The Organization of the Petroleum Exporting Countries, Russia and other producers originally agreed to cut production by 1.8 million barrels per day (bpd) for six months from Jan. 1 to support the market.

Oil prices, trading around $53 a barrel, have gained support from reduced output, but high inventories and rising supply from producers outside the deal have limited the rally, pressing the case for extending the deal.
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The Greek Parliament approved another round of tough economic cuts and austerity measures Thursday to assure itself another installment payment of European bailout funds.

Greece may have again faced bankruptcy in July without the payment.

More cuts for pensioners

All 153 lawmakers in Prime Minister Alexis Tsipras’ leftist coalition voted for the cuts; all 128 opposition members voted no.

More than 10,000 Greeks weary of the nation’s economic problems, including elderly pensioners facing more cuts, marched outside Parliament against the measures.

Several dozen young marchers wearing masks broke away from the crowd to throw gasoline bombs at police, who responded with tear gas.

Greece desperately needs about $8 billion of bailout money from its eurozone lenders in order to make a scheduled debt payment.

Tax hikes part of deal

In exchange, the government agreed to EU demands for more austerity measures, including tax hikes and programs aimed at easing poverty.

With Thursday’s vote, Greek officials hope they can renegotiate payment terms on the nation’s massive debt payment — nearly 180 percent of Greece’s gross domestic product. The International Monetary Fund calls this number unsustainable.

Greece has been relying on international bailouts since 2010, when the outgoing conservative government badly underreported the country’s debt.
…

U.S. Treasury Secretary Steven Mnuchin says the nation’s economic growth can rise to 3 percent annually if taxes and regulations are cut.

The Treasury secretary spoke Thursday to a Senate committee in his first congressional testimony since he was confirmed in the new job. Mnuchin’s boss, Donald Trump, says tax and regulatory reform will boost the economy, and he made the promise of such changes a key part of his campaign for president.

Recently, annual economic growth has been at 2 percent or lower, and most economists say that is due to a large number of retirements by aging workers and meager productivity growth.

Trump’s efforts to change taxes have been moving slowly in Congress, where they face strong opposition from Democrats, and skepticism from some of his Republican allies who worry that cutting taxes will make government debt problems worse.
…

U.S. President Donald Trump’s administration says it has notified Congress it intends to renegotiate the North American Free Trade Agreement with Canada and Mexico.

In a letter sent Thursday to congressional leaders, U.S. Trade Representative Robert Lighthizer said the administration plans 90 days of consultations with lawmakers over how to rewrite the agreement followed by negotiations with Canada and Mexico that could begin after August 16.

Renegotiation of NAFTA was a key promise of Trump’s during his presidential campaign, when he frequently called the treaty a “disaster.”

Lighthizer told reporters NAFTA has helped strengthen the U.S. agriculture, investment services and energy sectors, but it has hurt U.S. factories and resulted in well-paying manufacturing jobs being sent to Mexico.

Lighthizer said in the letter that NAFTA needs to be updated to more effectively address matters involving digital trade, intellectual property rights and labor and environmental standards.

At a news conference Thursday at the State Department with Mexican officials and Secretary of State Rex Tillerson and other U.S. officials, Mexican Foreign Minister Luis Videgaray said Mexico “welcomes” the renegotiation of NAFTA.

“We understand that this is a 25-year-old agreement when it was negotiated,” Videgaray said. “The world has changed. We’ve learned a lot and we can make it better.”

Commerce Department Secretary Wilbur Ross said in a statement, “Since the signing of NAFTA, we have seen our manufacturing industry decimated, factories shuttered, and countless workers left jobless.  President Trump is going to change that.”

VOA State Department correspondent Nike Ching contributed to this report
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Call them the unrecovered — a handful of states where job markets, nine years later, are still struggling back to where they were before the recession.

That’s true in Mississippi, where job numbers and the overall size of the economy remain below 2008 levels. Unlike states that have long since sprinted ahead, Mississippi is struggling with slow economic growth and slipping population in a place that’s rarely at peak economic health.

Miguel Brown, despite family ties to his hometown near the Alabama border, is working on oil rigs off the shore of Texas, chasing higher wages.

“It’s rough,” said the 49-year-old Brown. “There’s not a whole lot of jobs in Meridian, especially that pay anything.”

Not only Mississippi, but also Alabama, Michigan, New Mexico and West Virginia are still short of pre-recession job levels by multiple measures. That contrasts with states including Colorado, North Dakota, Texas and Utah, where employment numbers have soared. Nationwide, job numbers surpassed pre-recession peaks in the middle of 2014, about the same time Mississippi was saddled with the nation’s highest unemployment rate.

Emilia Istrate, who produces a yearly report on how local economies are faring for the National Association of Counties, said the recovery has been widespread but “uneven.”

“It explains why so many Americans don’t feel the national economic numbers. It’s because they live in one of these places that is still in recovery or struggling,” Istrate said.

Mississippi numbers

Growth has long lagged in Mississippi, and jobless rates are high even in good times. The unemployment rate fell to 5 percent in March, the lowest since the U.S. Labor Department began the current system of measurement in 1976. But at the same time that the Magnolia State’s unemployment rate was at a record low, it tied for the ninth highest among the states.

Mississippi suffers from a cluster of ills that make it an economic laggard. Only 53 percent of Mississippi adults were working in 2016, the second lowest share of any state. Mississippi’s economy depends on slow-growth sectors, including government employment. While nearly 30 percent of Americans older than 25 have a bachelor’s degree or higher, only 21 percent of Mississippians do.

The overall size of Mississippi’s economy was smaller in 2016 than it was in 2008, and people are beginning to vote with their feet: The state’s population has fallen in the last two years.

“I think the population is falling because of the economy,” said state economist Darrin Webb. “People have had to go where the jobs are.”

Education options

That doesn’t mean things haven’t improved for many people. Economists have long advised that a better-educated, more productive workforce could eventually spur growth. The state’s community colleges last year began offering not only adult education classes to high school dropouts, but also free training leading to career certification.

Kathryn Winfield, 37, was one of the first graduates.

Returning to the labor force after two years spent caring for her dying father, she earned her high school equivalency degree and became a certified nursing assistant. After nearly a decade making the minimum wage of $7.25 an hour working as a cashier, Winfield is now making more than $13 an hour helping care for nursing home patients. She said the additional pay allows her to better provide for her three kids.

In some ways, Mississippi’s economy has healed from the scars of the recession. Archie McDonnell Jr., the CEO of Citizens National Bank, said loan demand has rebounded above prerecession highs at Meridian’s largest financial institution, and the bank’s profits have more than tripled from their bottom in 2011.

“People just decided, the recession’s over, I’ve got to get back to running my business and investing and doing things,” McDonnell said.

McDonnell said he’s hopeful about investment in Meridian, noting a $50 million museum being built downtown, an investor seeking to redevelop a derelict 16-story art-deco skyscraper into a hotel, and new ownership at the city’s mall.

The number of Mississippians who report being employed could top the precession high when April data is released Friday. But employer payrolls, another way to measure employment, leveled off last year and remains about 1 percent below where they were before Mississippi’s economy headed south in early 2008.

It is not just the number of jobs, but what they pay. Workers made an average of $669 a week in Meridian and surrounding Lauderdale County in late 2016, compared to $739 statewide and $1,027 nationwide. 

Good wages are the reason that Brown says he has left his hometown of Meridian.

“These are my roots,” Brown said. “Meridian will always be home, without a doubt, but you’ve got to make ends meet and you can’t do it here.”
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The Koch Brothers’ political network is preparing to spend millions of dollars to ensure their vision for tax reform isn’t lost in the increasing chaos consuming President Donald Trump’s administration.

The network’s leading organizations, Americans for Prosperity and Freedom Partners, on Thursday released a set of general preferences for major changes to the tax code. While explicitly stating their opposition to new border-adjustment or value-added taxes, there were few specifics in a document that was designed to inject a new sense of urgency into the stalled tax debate.

 

“Now is the time. We’ve got to unite around these principles,” network spokesman James Davis said. “The White House hopefully will see this as a jolt to support them in driving this forward.”

 

Beyond Thursday’s release, Davis said the network backed by billionaire industrialists Charles and David Koch is launching a multimillion-dollar campaign through the summer to ensure their conservative tax plan is not forgotten. The campaign will include digital ads and town hall meetings across the country, along with phone banks and direct mail.

 

The Koch push reflects broader concerns from the nation’s business community that Trump’s promise to overhaul the tax code may fall victim to his mounting political challenges. The stock market on Wednesday suffered its largest single-day loss of the Trump presidency. That was before the Justice Department appointed a special counsel to investigate allegations that Trump’s campaign collaborated with Russia to sway the 2016 election.

 

Late last month, Trump released a one-page proposal that included massive tax cuts for businesses and a bigger standard tax deduction for middle-income families, lower investment taxes for the wealthy and an end to the federal estate tax for the superrich. It’s largely in line with the Koch network’s preference, which calls for lower rates, fewer brackets and the elimination of “special loopholes” and deductions.

 

There were modest signs Wednesday that the Trump administration was trying to spark new momentum for its tax plan.

 

Treasury Secretary Steven Mnuchin and other administration officials met with Republican and Democratic members of the Senate Finance Committee in what Democrats described afterward as an opening conversation in the tax debate.

 

Even under the best of political circumstances, tax reform is difficult. Congress hasn’t overhauled the tax code in more than three decades.

 

“If we don’t start making the case to the American people and showing them how this improves their lives now, it becomes increasingly more and more difficult, particularly as we move closer to the election,” Davis said.

 

 

 
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Death is inevitable, but it doesn’t have to be bad for the environment. 

 

Caskets made of paper and wicker coffins on display at a recent Hong Kong funeral industry trade highlighted a trend toward “green burials” in an industry booming as Asia’s population rapidly ages.

 

Chinese businessman Alex Sun’s company, Shandong Ecoffin International, makes wicker and seagrass coffins, which first became popular in the West and are now catching on in Asia. Basket-weaving dates to the Tang Dynasty (618-907 AD) in northeast China’s Shandong province, where Sun’s factory uses fast-growing willow reeds to make caskets that are an eco-friendly alternative to wood. 

 

“Eco funerals are a global trend,” Sun said. “European customers already know about this product, while Asian customers are also interested in it and would love to learn more,” he said. Interest is especially high in the Philippines, Malaysia and Vietnam as well as mainland China, he said. 

Mood is light at funeral expo

The mood was bright, not funereal, as coffin makers, morticians, funeral home operators and entrepreneurs converged on Hong Kong this week for the Asia Funeral and Cemetery Expo & Conference, a trade fair held every other year.

 

Participants were pitching caskets for pets, Italian hearses, German cremators with high-tech filters and Japanese mobile embalming units. From China, Truthkobo Jewelry offered pendants made with ashes from deceased relatives or pets while Shenyang Roundfin was looking for international distributors for its autopsy tables, morgue fridges and body bags. 

 

Aging populations

The death industry is a lucrative market: Asia’s aging population is projected to hit 923 million by midcentury, according to the Asian Development Bank, putting the region on track to become the oldest in the world. 

 

The region’s funeral services market has been growing steadily and is now worth about $62.6 billion a year, with China accounting for nearly half of that, according to data from market research firm Euromonitor. 

 

“This is a very promising industry in China,” said Gloria Chuang, marketing director at Yu Fu Xiang Memorial Group, a Chinese funeral services company. 

 

But she said the industry in China needs to expand and modernize. Most funeral home operators are family-run outfits selling one-size-fits all services. They’re not transparent about prices and other information for services and products like coffins and urns, she said. 

 

That’s partly because, as in many places, talk of death is taboo. 

 

“Our culture dictates that Chinese people are very sensitive to talk about matters of death. Therefore this industry has become a very closed one,” she said. 

Elaborate funerals

 

Under Mao Zedong, who ruled China until his death in 1976, elaborate funerals, like many other customs, were officially condemned as feudal superstition fell out of favor, though they persisted in many rural areas. Such rituals have seen a revival in recent years as the economy boomed, as the newly rich use lavish funeral rites to show off their social status and the accumulation of wealth. 

 

In 2013, the government banned Communist Party members from holding extravagant funerals for family members, seeking to curb waste, corruption and pomp. 

At the expo

On the Hong Kong show floor, the Luen Hing Coffin Co.’s paper casket looked deceptively like a traditional one. It costs more because of a specialized manufacturing process for its honeycomb paper construction, but burns twice as fast as wood in a crematorium, saving funeral operators time and money, said General Manager Carol Chan. 

 

On display at Yu Fu Xiang’s booth were custom-designed cremation urns adorned with faces of the deceased and an ornate “elite longevity costume” resembling robes worn by Chinese emperors. Chuang said attitudes are changing and demand is growing for more personalized service as the children of the older generation become wealthier and more tech savvy.

Cultural sensitivities regarding death are starting to ease, making it more acceptable to talk about preparing for the afterlife, she said at one of the fair’s seminars. 

 

Other speakers said that despite lingering resistance, there’s growing interest in online memorials that let family members upload pictures to the cloud and pay respects using their smartphones. 

Investors interested

 

The prospect of a lucrative investment opportunity even drew investors from outside the industry to the fair. 

 

Piyanuch Wattanasiritananwong and a friend came from Thailand, where they run a property business, after hearing about the show from a contact. 

 

“We want to know what opportunities there are in this industry because everybody dies,” she said. 

 

She pondered the possibility of starting a coffin business based on recycling — an elaborate outer shell is removed and re-used while the plain inner box is cremated with the body. 

 

“I don’t want people to spend a lot of money but still have a nice farewell,” she said.
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U.S. stocks, the dollar, and government bonds were down in Wednesday’s trading amid investor worries about controversial actions and comments from President Donald Trump. The major U.S. stock indexes fell 1.8 percent or more, and the Dow Jones Industrial Average was off 372 points.

The faltering markets follow Trump’s firing of the FBI chief, his reported sharing of secrets with top Russian officials, and allegations that the president may have tried to block an investigation into actions by a top aide who was fired.

Following Trump’s election, the dollar rose and stocks climbed to a series of record highs as investors bet that Trump’s promises to cut taxes and regulations would boost economic growth and corporate profits.

Investors may be having second thoughts, though, after legislative efforts to repeal and replace a health care law stalled, and the tax cut agenda is tangled in political bickering.

Even Trump’s Republican allies say calls for congressional and other investigations of the administration’s actions are a distraction for lawmakers trying to move his agenda forward against determined opposition from Democrats.
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Greek seamen and journalists walked off the job Tuesday, a day before a nationwide general strike to protest new austerity measures the government is legislating for in return for more bailout funds.

The seamen’s union announced Tuesday afternoon they would extend their strike, originally planned to last 48 hours, for a further two days, leaving ferries servicing Greece’s islands tied up in port until midnight Friday night.

 

The Panhellenic Seamen’s Federation said it was asking “for the understanding and full support of both the traveling public and all Greek workers,” adding that the new measures would lead seamen “to poverty and destitution.”

 

Journalists were holding a 24-hour strike Tuesday, pulling news broadcasts off the air from 6 a.m. (0300 GMT). News websites were not being updated, and no Wednesday newspapers would be printed. Public bus company employees were also holding work stoppages during the day.

 

Wednesday’s general strike is expected to affect services across the country, from schools and hospitals to public transport. Air traffic controllers have declared participation with a four-hour work stoppage, leading to the rescheduling of 99 flights and the cancellation of a further nine by Greece’s Aegean and Olympic Air. Another airline, Sky Express, announced the rescheduling of 41 domestic flights between Athens and the Greek islands.

 

Protest marches have been scheduled for central Athens in the morning.

 

Workers are protesting a new deal with Greece’s international creditors that impose a raft of new tax hikes and spending cuts beyond the end of the country’s third bailout in 2018. The measures, which are to be voted on in parliament at midnight Thursday, will include additional pension cuts in 2019 and higher income tax in 2020.

 

Without the agreement with its creditors, Greece faced the prospect of running out of cash to service its debts this summer, which could have seen it have another brush with bankruptcy.

 

Greece is currently in its third international bailout, which is due to end in mid-2018. It has been dependent on rescue loans from its creditors — mainly other European countries that use the euro, and the International Monetary Fund — since its first bailout in 2010.

 

In return for the funds, successive governments have had to impose repeated waves of reforms, which have included tax hikes and salary and pension cuts. While the country’s finances have improved under the bailouts and the strict supervision they imposed, the belt-tightening has led to spiraling poverty and unemployment rates.

 

Although the jobless rate has been falling from a high of above 27 percent, it still hovers at around 23 percent.
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American industry expanded production last month at the fastest pace in more than three years as manufacturers and mines recovered from a March downturn.

 

The Federal Reserve said Tuesday that industrial production at U.S. factories, mines and utilities shot up 1 percent in April from March, biggest gain since February 2014 and the third straight monthly gain. The increase was more than twice what economists had expected.

 

Factory production rose 1 percent after declining 0.4 percent in March. Mine production increased 1.2 percent after falling 0.4 percent in March. And utility output rose 0.7 percent after surging 8.2 percent in March.

 

Factory production has risen three of four months this year. Manufacturing has recovered from a rough patch in late 2015 and early 2016 caused by cutbacks in the energy industry and a strong dollar, which makes U.S. goods costlier in foreign markets.

 

The overall U.S. economy grew at a lackluster 0.7 percent annual pace from January through March. But economists expect growth to pick up the rest of the year as consumers ramp up spending.

 

A healthy job market bolsters consumer confidence. Employers last month added 211,000 jobs and unemployment fell to 4.4 percent, lowest in a decade.

 

 
…

The new U.S.-China trade deal, which includes 10 initial agreements on agricultural trade, financial services, investment and energy, is drawing mixed reviews.

The agreement is being panned by some as a poor deal for the United States that does not address fundamental issues concerning the Chinese market. But others say the agreement represents incremental progress.

Robert Atkinson, president of the Information Technology and Innovation Foundation, argued the deal has failed to address issues facing advanced industries that are critical to the U.S. economic future.

 

In a statement, he said the plan, which opens up Chinese markets for mostly commodity-based and finance industries, has in return given, “China free rein to use its massive foreign reserves to buy up American companies in advanced industries.”

Atkinson urged the Trump administration’s simple focus on the trade deficit be shifted to two-way trade and demand real changes in Chinese policies related to America’s advanced, knowledge and technology-based industries.

Deal means nothing

 

Derek Scissors, a resident scholar at the American Enterprise Institute, argued that the deal, by itself, means almost nothing since the increase in market access that China now promises has been promised before.

 

“Even if they are fully implemented, [the increase in market access] can be easily undone,” Scissors wrote in an emailed reply to VOA, adding that he doesn’t foresee the U.S. trade deficit with China being reduced this year.

Scissors urged the United States to prioritize its negotiations with China on reduction of subsidies to Chinese state-owned enterprise, which he believes will improve foreign firms’ market access in China.

 

“It should also prioritize reducing Chinese complicity in theft of intellectual property [IP]. The IP goal should be accompanied by the threat of sanctions,” Scissors said, adding both steps would allow the emergence of the American competitive edge.

Incremental progress

Agreeing that it isn’t a major deal, Christopher Balding, a professor at Peking University HSBC Business School, however, said the agreement is a step forward for the Trump administration.

“If the agreement is actually implemented, it would represent, I think, a solid step forward for U.S. market access to China. And it needs to be viewed in that context, though, that it is one step further from where we were before,” Balding told VOA, disagreeing that President Trump got played or out-maneuvered.

Balding agreed China has employed what others called a “delay-and-diversion’ strategy and waited for years to honor its commitments, some of which dated back to China’s accession to the World Trade Organization in 2000.

 

Yet, the diplomatic reality is that, as an advanced economy, the United States doesn’t have a lot of leverage over China to open its market, the professor added.

 

However, China now appears to respond to embarrassment, triggered by Trump’s earlier angry tweets, which the professor said may provide some unconventional leverage in pushing China.

 

“If the Trump administration keeps public pressure on China, I do think it would be very likely that you could see additional incremental progress in various specific markets or industries,” Balding added.

 

While it’s urgent for the United States to demand full market access in China, C.Y. Huang, a partner of FCC Partners, warned U.S. companies are losing their edge in competing with their fast-growing Chinese rivals.

 

“China is no longer afraid of opening up its market and competition from the United States. Many U.S. companies can hardly compete with their Chinese counterparts in China,” Huang told VOA.

Gigantic steps

Washington heralded last week’s deal as “a Herculean accomplishment.”

 

According to U.S. Commerce Secretary Wilbur Ross, China will open its market to U.S. beef by mid-July while, in return the United States will issue a proposed rule to allow Chinese cooked poultry to enter U.S. markets by the same deadline.

 

Beijing will also allow U.S.-owned firms in China to provide credit rating and electronic payment services, the latter of which is already dominated by China’s UnionPay.

Ross said the deal, part of the 100-day plan after the meeting between U.S. President Donald Trump and Chinese President Xi Jinping last month, aims to reduce the U.S. trade deficit with China, which reached $347 billion last year.

“This is more than has been done in the whole history of U.S.-China relations on trade,” Ross told a news briefing at the White House, adding the deal takes three “gigantic” step to chip away at the country’s crippling trade deficit.
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Cybersecurity experts warn that hundreds of thousands of computer users across the globe remain vulnerable following a large-scale virus attack in recent days. The so-called ‘ransomware’ virus struck governments and companies around the world, as Henry Ridgwell reports from London.
…

Chinese President Xi Jinping says countries participating in the two-day Belt and Road Forum have agreed to an action plan with a list of 270 goals

Speaking at the end of the forum, China’s leader said the 30 heads of state who attended the summit in Beijing and nearby Yanqi Lake signed a communiqué to promote an open global economy, rebalance globalization, and deepen trade liberalization. 

Xi’s Belt and Road development initiative focuses on connectivity and cooperation among countries primarily China and the rest of Eurasia.  It includes the land-based “Silk Road Economic Belt” and the oceangoing “Maritime Silk Road”. 

The strategy underlines China’s push to take a bigger role in global affairs.  Xi stressed China would not base cooperation on ideology or use the Belt and Road to pursue a political agenda, allaying concerns of critics who have highlighted the massive project’s possible geopolitical impact.

“We have every reason to have full confidence in the prospects for the Belt and Road initiative,” Xi said.  “At the same time, the Belt and Road initiative is an expansive project and the road ahead is very long and cooperation is key.” 

Expansive Belt and Road 

Although many of the more than 100 countries and organizations participating in the summit welcome China’s efforts to boost trade and to play a bigger role in global affairs, participation in the forum was mixed.  Some countries sent representatives, but have yet to officially back the project.

The forum included representatives from the United States and North Korea. 

Countries such as the United States and Germany have emphasized the need for transparency and a level playing field. 

“Germany as a country has not asked to be a part of the initiative, but German companies have asked to be part of it,” said Brigitte Zypries, German Minister for Economic Affairs and Energy, who attended the forum.  “It is obviously relevant to know what is going to be built and the procedures to take part in this building are the same for every company and every country.” 

“The Belt and Road Initiative originates from China, but it belongs to the world,” Xi said, in remarks before the leaders’ summit Monday.  “The Belt and Road construction spans different regions, development phases and civilizations.  It is an open and inclusive cooperation platform.” 

Sunday, Xi outlined his vision for the plan and pledged to use development to fight a wide range of problems from terrorism to poverty.  Xi’s plan involves the creation of six economic corridors that would link China to 65 countries.  The participation of those countries would account for 60 percent of the world’s population and 30 percent of global GDP. 

An estimated $900 billion would be spent on connectivity projects across land and sea, making the Belt and Road initiative the most expensive development plan in history, several times larger than the U.S. Marshall Plan that was used to rebuild Europe after World War II. 

China has offered to shoulder a big slice of the responsibility, pledging $124 billion, which is double of what the World Bank lent in 2016.  Analysts said Beijing can easily bear the burden.  China has foreign exchange reserves exceeding $3 trillion.  Last year, Chinese companies invested $170 billion in overseas projects. 

Empire building 

Xi offered to establish 50 scientific laboratories with participating countries, train 5,000 foreign scientists and invited 500 foreign research groups to visit China.   The plan will also launch 100 “happy home” projects, 100 poverty alleviation projects and 100 health care and rehabilitation projects in countries along the Belt and Road, he said.  

But based on how the project has been outlined, China appears to be trying its hand at a new form of economic colonization, said Mohan Malik, a professor at the Institute of Asian Security in Hawaii. 

“China is in an empire-building mode: an empire of exclusive economic enclaves that would create a Sino-centric unipolar Asia,” Malik said in an emailed response.  “Chinese officials, in jest, talk of buying off smaller countries instead of invading them.” 

Malik adds that with its slowing economy, China risks “imperial overreach” with such a massive venture. 

David Kelly, director of research at the private China Policy consultants said if successful the outcome could be a positive thing, but the Belt and Road is swiftly becoming a measure of China’s global standing. 

“But if it doesn’t work, if it runs into problems, if it’s impractical, if it’s too costly, if it falls over, it will cost China’s standing in the world.  And that is what worries people because it is essentially an educated bet, an educated gamble,” Kelly said.
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Anheuser-Busch is upgrading its U.S. breweries and plans to build two new distribution centers as it adapts to an increasingly fragmented beer market.

The maker of Budweiser, Corona, Stella Artois says the upgrades and new distribution centers in Los Angeles and Columbus, Ohio, will allow it to store a greater variety of products and get them to customers faster. The measures are part of the $500 million that the company said Monday it will invest in its U.S. operations this year, marking an increase compared with recent years. It’s a portion of the $3.7 billion in global capital expenditures that the Belgian company had already budgeted for 2017.

Anheuser-Busch has struggled to boost sales volumes as craft beers grow increasingly popular in an already crowded marketplace. In 2016, total volume at Anheuser-Busch declined 2 percent, including a 1.6 percent volume decline in North America.

The same thing is happening with non-alcoholic drinks. PepsiCo CEO Indra Nooyi has said the industry is becoming more “niche,” and that PepsiCo needs to learn how to thrive amid that growing complexity.

The investment announced Monday by Anheuser-Busch includes upgrades to breweries in Fort Collins, Colorado, and St. Louis, Missouri. The company did not say how many new jobs it expects this year’s U.S. investments to create. It has added around 2,500 jobs since 2013, the company said. Anheuser-Busch employs more than 17,000 people in the U.S.

In 2015, Anheuser-Busch had said it expects to invest $1.5 billion from that year to 2018. The Monday announcement was an update, with the company saying it is spending $2 billion from this year through 2020.
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Dubai plans to develop a 6.3 billion dirham ($1.7 billion) tourist resort on two man-made islands it will build on either side of the Burj Al Arab, its luxury sail-shaped hotel.

It is the latest development planned by the emirate as it aims to attract 20 million visitors a year by 2020 when Dubai will host the World Expo 2020 exhibition.

Spanning 4 million square feet, Marsa Al Arab will be made up of two islands, one dedicated to entertainment and family tourism and the other featuring luxury villas and a private marina, state news agency WAM reported Monday.

Dubai is already one of the world’s most visited cities, although its hotels, shopping malls and state-owned airline, Emirates, have been buffeted by a strong U.S. dollar which has made the emirate pricier for many overseas visitors. The United Arab Emirates pegs its dirham to the dollar.

Around 4.6 million tourists visited Dubai during the first quarter, up by 11 percent compared to the same period of last year, according to Dubai Tourism data.

Marsa Al Arab will feature 140 villas, a marine and water park, and a theatre with capacity for 1,700 people to host Cirque du Soleil, local media reported. Work on the project will break ground in June and be completed by late 2020, WAM said.

The agency did not mention how the project would be funded.

Dubai is working on several big projects due for completion in the next few years and being funded by debt.

It is building the World Expo 2020 exhibition site, an extension to Dubai’s Metro system and Al Maktoum International Airport, a new airport being developed on the edge of Dubai, which will serve up to 146 million passengers by 2025.

Marsa Al Arab will add 2.2 km (1.4 miles) of beach to the emirate’s coastline, WAM said.

Dubai’s most famous artificial island, Palm Jumeriah, is home to several hotels, villas and apartments. But other islands it planned to develop were stalled or scaled back after the emirate’s 2009 debt crisis.

Palm Jebel Ali, which began construction in 2002, has yet to be completed, while plans for Palm Deira have been reworked to create a scaled-down project called Deira Islands.

Another man-made archipelago, The World, a 300-island chain laid out in the shape of the world’s continents, has only been partially developed.
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Historic rivals China and Vietnam are working on substantive agreements that could cover trade, investment and maritime resource sharing despite a bitter sovereignty dispute that had snarled relations less than a year ago.

The Communist neighbors are inching toward new trade and investment ties that analysts say would help shore up overall relations. Some believe the two might later approach stickier topics such as joint use of disputed waters or humane treatment of each other’s fishermen. The two countries still contest sovereignty over tracts of the vast, resource-rich South China Sea east of Vietnam and southwest of Hong Kong.

Prospects of some kind of agreement came into focus during Vietnamese President Tran Dai Quang’s visit to China, which ends Monday. He suggested the two sides work on complementing each other’s trade and investment advantages with a view toward improving overall relations, state media from Hanoi said.

“President Quang is in China, and China promised a lot,” said Yun Sun, senior associate with the East Asia Program under Washington-based think tank the Stimson Center. “From an economic point of view, it is certainly practical and beneficial for Vietnam to have some sort of deal, but then again I think this still relatively early to tell.”

In a meeting with Quang Thursday, Chinese President Xi Jinping called for more cross-border economic cooperation zones and joint infrastructure building, according to  China’s official Xinhua News Agency reported. China pledged to “mitigate” its trade deficit with Vietnam and increase direct investment, Sun said.

“Talking probably does help lower tensions and improve the odds of things happening,” said Alaistair Chan, an economist covering China for Moody’s Analytics.

The Vietnamese president suggested China finalize rules on opening the Chinese market for farm products, dairy and seafood, media outlet vietnamnet.vn said. He also called on China to make more “preferential loans” and urged a working group to develop renewable energy investment projects that play on China’s strengths and demand in Vietnam, the Vietnamese news report said.

On Friday companies from both countries signed agreements on milk distribution, tourism and rice processing.

China is the largest trade partner of Vietnam, with imports and exports worth about $72 billion last year. Vietnam also calls China one of the top 10 investors in the country.

But both countries are likely to hedge on letting outsiders invest in infrastructure, a possible source of direct investment, Chan said. “If they can get there purely on trade and stay away from investment, a touchy subject in both countries, I think that’s probably where they can get their quickest gain,” he said.

China and Vietnam stepped up dialogue after July 2016, when a world arbitration court ruled that Beijing lacked a legal basis to claim more than 90 percent of the sea, a boon to rival claimants in Southeast Asia: Vietnam, Brunei, Malaysia and the Philippines. China responded to the ruling by seeking one-on-one dialogue with each country. Vietnam was one of the most hostile toward China before the court ruling.

Beijing and Hanoi dispute sovereignty over much of the 3.5 million-square-kilometer sea, including two chains of tiny islets. Beijing’s go-ahead for a Chinese oil rig in contested waters set off a clash in 2014. The two countries also still face distrust fanned by centuries of political rivalry as well as a border war in 1979.

Both countries stake their fast-growing economies on export manufacturing. Vietnamese companies resent China for using their larger production scales to sell goods in bulk at relatively low prices.

Relations got a lift in September when the Chinese premier and Vietnamese prime minister agreed to manage maritime differences. Vietnamese Communist Party General Secretary Nguyen Phu Trong visited China in January to help smooth relations.

Another boost came as China emerged last year as the top single-country source of tourism for Vietnam. About 2.2 million Chinese visited Vietnam from January to October. Chinese tourists have reshaped the economies of Hong Kong and Taiwan over the past decade.

Agreements on managing disputed tracts of the South China Sea may come later if the two sides keep getting along, experts say.

Vietnam and China have agreed to an “informal” median line in the tract of sea where their claims overlap, said Carl Thayer, Southeast Asia-specialized emeritus professor of politics at The University of New South Wales in Australia. They might eventually work on expanding joint exploration for oil under the seabed and a way to ensure “humane” treatment of fishermen, he said.

“It’s to stop the ramming, boarding, seizing fish catches and radio equipment and in the old days taking them hostages for money,” Thayer said. Under a human treatment agreement, he said, “If you find them, you report them to the other side and return them rather than bash them up and take everything.”
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