YCLOAK

The top U.S. diplomat has granted an exception to certain U.S. sanctions that will allow the India-led development of a port in Iran as part of a new transportation corridor designed to boost Afghanistan’s economy, a State Department spokesman said Tuesday.

The exception granted by Secretary of State Mike Pompeo to U.S. sanctions reimposed on Iran on Monday also will permit the construction of a railway line from Chabahar port to Afghanistan, and for shipments to the war-torn country of non-sanctionable goods, like food and medicines, the spokesman said.

In addition, Afghanistan will be allowed to continue importing Iranian petroleum products, the spokesman said.

“These activities are vital for the ongoing support of Afghanistan’s growth and humanitarian relief,” the spokesman said in a statement emailed to Reuters.

The sanctions reimposed on Iran’s oil exports — its main revenue source — and financial sector were triggered by U.S. President Donald Trump’s May 8 decision to abandon the 2015 international deal designed to block Tehran’s development of nuclear weapons.

Trump denounced the deal, which lifted sanctions on Iran in return for limits on its nuclear program. He argued that it would not prevent Tehran from developing weapons and failed to address other activities, such as its ballistic missile program and support for extremist groups.

The sanctions, however, threatened India’s ability to obtain financing for the development of Chabahar, which could potentially open the way for millions of dollars of trade for land-locked Afghanistan and end its dependence on Pakistan’s port of Karachi.

Building Afghanistan’s economy also could reduce Kabul’s dependence on foreign aid and put a major dent in the illicit opium trade, the main revenue source of the Taliban insurgency.

The sanctions exception granted to the Chabahar project aims to further U.S. ties with Afghanistan and India “as we execute a policy of maximum pressure to change the Iranian regime’s destabilizing policies in the region and beyond,” the State Department spokesman said.
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China is set to overtake France as the world’s top tourist destination by 2030 as a growing middle class in Asia looks to spend more on travel, according to experts at market research group Euromonitor International. 

In a report published Tuesday at an industry conference in London, Euromonitor said it was predicting that 1.4 billion trips would be taken in 2018, up 5 percent from last year. Stronger growth in many major economies means industry receipts will rise by an estimated 11 percent. 

By 2030, international arrivals are expected to have risen by another billion, corresponding to around $2.6 trillion in receipts. China is expected to have overtaken France by then to become the world’s No. 1 destination. 

Much of the sustained boom in travel and tourism, which has outpaced growth in the global economy for eight years, is centered in the Asia-Pacific region, where trips are expected to grow by 10 percent this year. The region has benefited from rapidly growing economies as well as an expanding middle class that seeks to spend disposable income on leisure. 

Euromonitor’s senior travel analyst, Wouter Geerts, said the gradual process of loosening visa restrictions has made traveling in the region easier, with 80 percent of arrivals in Asia originating from the region. He also said sporting events would most likely further boost the region, with Tokyo hosting the 2020 Summer Olympic Games and Beijing the 2022 winter event. 

“Tourism is a key pillar of the Chinese economy, and much investment has been made to improve infrastructure and standards, in addition to tourism-friendly policies and initiatives,” he said. 

Egypt doing well

Other bright spots in the forecast are countries like Egypt, Tunisia and Turkey, which have seen sharp falls in tourist numbers over the past few years linked to security concerns. 

Egypt, in particular, appears to be doing well, following a long period of decline largely linked to the political upheaval since a popular uprising in 2011 and the downing of a Russian passenger plane over Egypt’s Sinai Peninsula in 2015 by an affiliate of the Islamic State group, killing 224 people. 

Though Egypt’s bookings were up 134 percent in 2017-18 from the year before, according to Euromonitor, the industry is still short of where it was in 2010. Egyptian government figures show 8 million tourists visited the country last year, well down from the 14 million recorded in 2010. 

Europe is also proving resilient and growing strongly despite economic and political turmoil in some countries and a slew of extremist attacks in recent years. 

One source of uncertainty for the outlook centers on Brexit. A “no-deal” Brexit, which would see Britain crashing out of the European Union in March, would see millions opt to stay at home — an estimated 5 million in 2022 — rather than book overseas holidays, the report says. That would have a ripple effect across many destinations, notably in Spain, where U.K. travelers account for around a fifth of the tourist-related revenues. 

Euromonitor also warned that the U.S. tourism industry could face a hit if the trade tensions between the U.S. and China escalate. 
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Amazon isn’t commenting on reports that it plans to split its new headquarters between facilities in two cities rather than choosing just one.

The New York Times, citing unnamed people familiar with the decision-making process, said the company is nearing deals to locate in Queens in New York City and in the Crystal City area of Arlington, Va., outside Washington, D.C. The Wall Street Journal, which also reported the plan to split the headquarters between two cities, says Dallas is still a possibility as well.

Spokesman Adam Sedo said Amazon, which will also keep its original headquarters in Seattle, would not comment on “rumors and speculation.”

Amazon’s decision to set up another headquarters set off an intense competition to win the company and its promise of 50,000 new jobs. Some locations sought to stand out with stunts, but Amazon emphasized it wanted incentives like tax breaks and grants. It also wanted a city with more than 1 million people, an airport within 45 minutes, direct access to mass transit and room to expand.

The company received 238 proposals before narrowing the list to 20 in January.

The unexpected decision to evenly divide the 50,000 jobs between two cities will allow the company to recruit enough talent and also relieve pressures from demand for housing and transportation, the Wall Street Journal reported.

The New York Times said Amazon executives met last month with New York Gov. Andrew Cuomo and the state had offered possibly hundreds of millions of dollars’ worth of subsidies. They also met with New York City Mayor Bill de Blasio, it said.

“I’ll change my name to Amazon Cuomo if that’s what it takes,” the report cited Cuomo as saying.

Amazon has said it could spend more than $5 billion on the new headquarters over the next 17 years, about matching the size of its current home in Seattle, which has 33 buildings, 23 restaurants and 40,000 employees.

Amazon founder and CEO Jeff Bezos has said the new headquarters will be “a full equal” to its current home.

Amazon already employs 600,000 people. That’s expected to increase as it builds more warehouses across the country to keep up with online orders. The company recently announced that it would pay all its workers at least $15 an hour, but the employees at its second headquarters will be paid a lot more — Amazon says they’ll make an average of more than $100,000 a year.
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Nigerian trade unions and the government agreed to a new minimum wage proposal on Tuesday, in an attempt to avert a planned nationwide strike following threats to shutdown Africa’s biggest economy, a union official said.

Unions, which have been discussing with the government a new minimum wage proposal, had planned to commence a strike on Tuesday.

Nigerian Labor Congress (NLC) General Secretary Peter Ozo-Eson said a committee set up with the government was recommending 30,000 naira as the new monthly minimum wage, after a series of meetings, up from the current minimum of 18,000 naira.

He said the proposal, which was negotiated by senior government officials including Labor Minister Chris Ngige, would be recommended to President Muhammadu Buhari on Tuesday.

“Following … the signing of the final report recommending 30,000 naira as the recommended new national minimum wage … the strike called to commence tomorrow has been suspended,” Ozo-Eson said.

“We all need to stand ready in a state of full mobilization in case future action becomes necessary to push for the timely enactment and implementation of the new minimum wage.”

Nigeria’s main unions launched a strike in September after the wage talks broke down. Unions initially wanted the monthly minimum wage raised to about 50,000 naira ($164). But the government, which is facing dwindling revenues due to lower oil prices, declined the proposal.

Unions later suspended strikes on their fourth day, saying the government had agreed to hold talks to discuss raising the minimum wage.

Buhari had vowed to review the wage due to a fuel price hike and currency devaluation in the last two years aimed at countering the effects of a global oil price plunge that hit the country hard. Nigeria is Africa’s biggest crude producer.

Buhari plans to stand for a second term at an election next February and his economic record will come under scrutiny, given previous pledges to raise living standards, tackle corruption and improve security.
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When Han Siyuan first decided to apply for a job as a pilot cadet in 2008, she was up against 400 female classmates in China on tests measuring everything from their command of English to the length of their legs.

Eventually, she became the only woman from her university that Shanghai-based Spring Airlines picked for training that year. She is now a captain for the Chinese budget carrier, but it has not become much easier for the women who have come after her.

Han is one of just 713 women in China who, at the end of 2017, held a license to fly civilian aircraft, compared with 55,052 men. Of Spring Airlines’ 800 pilots, only six are women.

“I’ve gotten used to living in a man’s world,” she said.

China’s proportion of female pilots — at 1.3 percent — is one of the world’s lowest, which analysts and pilots attribute to social perceptions and male-centric hiring practices by Chinese airlines.

But Chinese airlines are struggling with an acute pilot shortage amid surging travel demand, and female pilots are drawing attention to the gender imbalance.

Chinese carriers will need 128,000 new pilots over the next two decades, according to forecasts by planemaker Boeing, and the shortfall has so far prompted airlines to aggressively hire foreign captains and Chinese regulators to relax physical entry requirements for cadets.

“The mission is to start cutting down the thorns that cover this road, to make it easier for those who come after us,” said Chen Jingxian, a Shanghai-based lawyer who learned to fly in the United States and is among those urging change.

‘Token Efforts’

Such issues are not confined to China; the proportion of female pilots in South Korea and Japan, where such jobs do not conform to widespread gender stereotypes, is also less than 3 percent.

But it is a sharp contrast to the situation in India, which, like China, has a fast-growing aviation market. But thanks to aggressive recruiting and support such as day care, India has the world’s highest proportion of female commercial pilots, at 12 percent.

China’s airlines only hire cadets directly from universities or the military. They often limit recruitment drives to male applicants and very rarely take in female cohorts.

In addition, unlike in other markets, such as the United States, China does not allow people to convert private flying licenses to commercial certificates for flying airliners.

Li Haipeng, deputy director of the Civil Aviation Management Institute of China’s general aviation department, said many airlines were also dissuaded to hire women by generous maternity leave policies. That has been further aggravated by Beijing’s move in 2015 to change the one-child policy, he added.

“Male pilots do not have the issue of not being able to fly for two years after giving birth, and after the introduction of the second-child policy, airlines are not willing to recruit and train a pilot only to have her not being able to fly for about five years,” he said.

He said Air China, China Eastern Airlines and China Southern Airlines had all made some effort to recruit female pilots, adding “nearly all other companies do not.”

China Eastern  and China Southern declined to comment while Air China did not respond to Reuters’ requests for comment.

Pilots said that hiring decisions were usually left to individual airlines and did not appear to be driven by the country’s regulator, the Civil Aviation Administration of China, whose recruitment requirements do not mention gender.

Xiamen Airlines, a China Southern subsidiary, told Reuters it offers up to 540 days of maternity leave. It started recruiting female pilots in 2008, and paused for a few years in between before resuming last year. Out of its 2,700 pilots, 18 are women while another 18 are in training.

“Allowing more women to become pilots is undoubtedly a good way to supplement (an airline’s) flying capability,” a spokesman for the carrier said.

Persuasion and Publicity

The strongest calls for change are coming mostly from Chinese female pilots, thanks to a slew of returnees who learned how to fly while living abroad in countries like the United States.

In March, the China Airline Pilots Association (ChALPA) established a female branch at an event attended by pilots from the People’s Liberation Army Air Force and local airlines, according to media reports.

Chen, the lawyer who also serves as a vice president of the ChALPA’s women’s branch, said she and others have been trying to spread the word by speaking about the issue at air shows in China.

Eventually, she said, the organization hopes to persuade Chinese airlines to adjust their recruitment and maternity policies.

Another key obstacle to tackle, she added, was the inability of general aviation pilots to shift to the commercial sector.

“It’s a systemic issue,” she said. “We hope that change can happen in three to five years, but this is not something that is up to us.”

Others like Han, who in recent months has appeared in Spring Airlines promotional videos, said she hoped the growing publicity would help to raise awareness.

“I can’t personally give people opportunities,” she said.

“But I hope that (the publicity) can slowly help open the door for companies or for girls with dreams to fly.”
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Foreign governments and businesses were hoping Chinese President Xi Jinping would use the opening of China’s first international import expo to make specific announcements about reforms for trade and investment.  But that did not happen, and some saw the measures Xi rolled out Monday as falling short of expectations.

 

“We were waiting today for President Xi to inform the world about the reform that will take place in the coming days, but what we wanted to hear, (such as) the complete steps on implementing the reform and a clear timetable did not appear,” said Carlo Diego D’Andrea, vice president and Shanghai Chapter chairman of the European Chamber of Commerce in China.

 

In his speech, President Xi said China would relax barriers to access in areas such as financial services, agriculture, mining and education and boost the consumption of imported goods as well as lower tariffs.  He also said China would create a better business environment with a sound regulatory system, including bolstering punitive measures for violations of intellectual property rights.

 

On the issue of protection of intellectual property rights, Xi admitted China has room to improve, but he also followed up by saying those who complain about Chinese commercial practices should not hold a flashlight that only exposes others and not themselves.

 

Xi did not mention the United States directly or President Donald Trump’s tariffs, but some of his remarks appeared to be directed towards Washington.

 

As trade frictions with the United States continue, Xi pledged to boost imports and said China would import as much as $30 trillion in goods and $10 trillion in services during the next 15 years.  Last year, China imported $1.84 trillion in goods and $458 billion in services.

 

“China will lower tariffs, make customs clearance more convenient, reduce institutional costs in the import sector, and accelerate the development of new business models,” Xi said.

 

Although the China International Import Expo was planned well before trade tensions with the United States began to peak, some believe Beijing is using its hosting of the exhibition as an attempt to shift the country’s growing buying power elsewhere.

 

China’s middle class is nearly as large as the entire population of the United States.

Thousands of foreign companies are participating in the expo.  Some countries, such as Kenya, even have national pavilions at the event to help attract interest in their products and to boost ties.  Kenya’s President Uhuru Kenyatta was among several leaders who spoke at the opening ceremony Monday in addition to Xi.

 

Kenyatta was optimistic about trade opportunities with Beijing.  The Kenyan president noted how China is his nation’s biggest trading partner, with trade growing from $471 million in 2007 to $4 billion in 2017.

 

“This trade, however, was skewed heavily in favor of China,” Kenyatta said, noting concerns similar to those coming out of Washington.  “It is important therefore to correct the trade imbalance and enable a fairer share of trade.”

 

Xi voiced support for CIIE host city Shanghai as a center for technology and innovation, noting that it would continue to take the lead going forward.

 

China wants Shanghai to be one of the world’s leading global financial centers by 2020 and Xi expressed his support for the Shanghai stock indexes’ technology and innovation bourse that was launched in 2015, but has had lackluster appeal.

 

Tang Xuan, an assistant to the chairman of Nanliv Nano Technology, which is based in Shanghai, hoped the comments would give the index a boost.

 

“With Chairman Xi’s support, the high-tech innovation stock index may likely become more open and more active in future, which will perhaps spell good news for companies like ours and provide a stepping stone for us before we list on the main bourse,” Tang said.

 

But analysts say boosting confidence and growing the country’s attractiveness for investment will take more than just soundbites or massive trade shows.

 

Despite all of its proclaimed allegiance to openness and progress during the past four decades, China remains one of the world’s most protectionist economies.  The Organization for Economic Cooperation and Development ranks China 59 out of 62 countries in terms of openness for foreign direct investment.

 

D’Andrea said the expo will definitely help many countries reduce their trade deficits with China, but it will not address the country’s internal reform deficit.

 

“At the moment, the lack of internal reform, plus the external pressure made by the Trump administration and the trade dispute behind the U.S. and China may put on hold further investment from European countries into Chinese markets,” D’Andrea said.
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European Union and Japanese plans to form the world’s largest free trade area cleared a significant hurdle Monday when EU lawmakers specializing in trade backed a deal that could enter force next year.

The European Parliament’s international trade committee voted 25 in favor to 10 against to clear the deal for a final vote in the parliament’s full chamber set for December 13.

An agreement would bind two economies accounting for about a third of global gross domestic product and also signal their rejection of protectionism.

Both have faced trade tensions with Washington and remain subject to U.S. tariffs imposed by President Donald Trump on imports of steel and aluminum.

Japan had been part of the 12-nation Trans-Pacific Partnership that Trump rejected on his first day in office, turning Tokyo’s focus to other potential partners – such as the European Union.

The EU has also sought other partners after freezing TTIP (Transatlantic Trade and Investment Partnership) negotiations with the United States in 2016. It concluded an updated trade deal with Mexico earlier this year.

Both have since agreed to start trade talks with Washington.

The EU-Japan agreement will remove EU tariffs of 10 percent on Japanese cars and 3 percent for most car parts. It would also scrap Japanese duties of some 30 percent on EU cheese and 15 percent on wines, and open access to public tenders in Japan.

It will also open up services markets, in particular financial services, telecoms, e-commerce and transport.

The EU is mindful of protests against and criticism of the EU-Canada Comprehensive Economic and Trade Agreement (CETA) in 2016, which culminated in a region of Belgium threatening to destroy the deal. It finally entered force in 2017.

Critics say the EU-Japan agreement will give too much power to multinationals and could undermine environmental and labor standards, the latter because they say Japanese employees face tougher conditions and less adequate union representation.

Belgium’s regions have given their backing.

Both Brussels and Tokyo want the agreement to enter force early in 2019, before Britain leaves the EU at the end of March.

If it does, it could apply automatically to Britain during a transition period until the end of 2020 and offer comfort to the many Japanese car makers serving the EU from British bases.
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Chinese President Xi Jinping promised on Monday to lower tariffs, broaden market access and import more from overseas at the start of a trade expo designed to demonstrate goodwill amid mounting frictions with the United States and others.

The Nov. 5-10 China International Import Expo, or CIIE, brings thousands of foreign companies together with Chinese buyers in a bid to demonstrate the importing potential of the world’s second-biggest economy.

In a speech that largely echoed previous promises, Xi said China would accelerate opening of the education, telecommunications and cultural sectors, while protecting foreign companies’ interests and punishing violations of intellectual property rights.

He also said he expects China to import $30 trillion worth of goods and $10 trillion worth of services in the next 15 years. Last year, Xi estimated that China would import $24 trillion worth of goods over the coming 15 years.

“CIIE is a major initiative by China to proactively open up its market to the world,” Xi said.

U.S. President Donald Trump has railed against China for what he sees as intellectual property theft, entry barriers to U.S. business and a gaping trade deficit.

Foreign business groups, too, have grown weary of Chinese reform promises, and while opposing Trump’s tariffs, have longed warned that China would invite retaliation if it didn’t match the openness of its trading partners.

Xi said the expo showed China’s desire to support global free trade, adding – without mentioning the United States – that countries must oppose protectionism.

He said “multilateralism and the free trade system is under attack, factors of instability and uncertainty are numerous, and risks and obstacles are increasing.”

“With the deepening development today of economic globalisation, ‘the weak falling prey to the strong’ and ‘winner takes all’ are dead-end alleys,” he said.

Louis Kuijs, head of Asia economics at Oxford Economics, said the speech was meaningful, if short on fresh initiatives.

“I don’t think that there were necessarily path-breaking new reforms announced by him today, but I guess I would take this as a confirmation that China is very keen to be seen as continuing to open up further and committing to that stance,” he said.

China imported $1.84 trillion of goods in 2017, up 16 percent, or $255 billion, from a year earlier. Of that total, China imported about $130 billion of goods from the United States. The Chinese government’s top diplomat, State Councillor Wang Yi, said in March that China would import $8 trillion of goods in the next five years.

Focus on G20

Expectations had been low that Xi would announce bold new policies of the kind that many foreign governments and businesses have been seeking.

The European Union, which shares U.S. concerns over China’s trade practices if not Trump’s tariff strategy to address them, on Thursday called on China to take concrete steps to further open its market to foreign firms and provide a level playing field, adding that it would not sign up to any political statement at the forum.

With little in the way of fresh policies from Xi on Monday, all eyes now turn to an expected meeting between him and Trump at the G20 summit in Argentina at the end of the month.

“It seems like what (Xi) is actually doing is saving up all of his goodies to trade away with Trump as opposed to doing anything unilateral,” said Scott Kennedy, a Chinese economic expert at the Center for Strategic and International Studies. “Now everything is focused on the G20.”

Trump has said that if a deal is not made with China, he could impose tariffs on another $267 billion of Chinese imports into the United States.

On Monday, Trump said China wants to make a deal. “If we can make the right deal, a deal that’s fair, we’ll do that.

Otherwise we won’t do it,” he told supporters on a conference call.

In a sign the trade row is starting to bite, export orders to the United States recorded during China’s biggest trade show, the Canton Fair in October, dropped 30.3 percent from a year earlier by value, the fair’s organizer China Foreign Trade Center said.

Presidents or prime ministers from 17 countries were set to attend the expo, ranging from Russia and Pakistan to the Cook Islands, though none from major Western nations. Government ministers from several other countries were also coming, but no senior U.S. officials were set to attend.

Swiss President Alain Berset did not make the trip to China, despite being announced as among attendees by China’s foreign ministry last week. The Swiss government said in a statement to Reuters on Sunday that his visit had never been confirmed.

Some Western diplomats and businesses have been quietly critical of the expo, arguing it is window dressing to what they see as Beijing’s long-standing trade abuses.

Exhibitors from around 140 countries and regions will be on hand, including 404 from Japan, the most of any country. From the United States, some 136 exhibitors will attend, including Google, Dell, Ford and General Electric.

A handful of countries are being represented by a single exhibitor selling one product.

For Iraq, it’s crude oil. Iran, saffron. Jamaica will be marketing its famed blue mountain coffee and Chad is selling bauxite. Tiny São Tomé is selling package holidays.
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With the economy strong, wages rising and unemployment at a near-five-decade low, the Federal Reserve remains on track to keep raising interest rates – just not this week.

After the Fed’s latest policy meeting, it’s expected to signal a healthy outlook for the economy but to hold off on any further credit tightening, most likely until December. A rate hike in December would mark the fourth this year.

Further rate increases are expected in 2019, though just how many is a subject of speculation. On the eve of Congress’ midterm elections, the U.S. economy remains vigorous even in its 10th year of expansion – the second-longest such stretch on record.

In deciding how fast or slowly to keep raising rates, the Fed will be monitoring the pace of growth, the job market’s strength and gauges of inflation for clues to how the economy may evolve in the coming months. The brisk pace of economic growth – a 3.5 percent annual rate in the July-September quarter, after a 4.2 percent rate in the previous quarter – has raised the risk that inflation could begin accelerating.

In its most recent forecast, the Fed projected that it would raise rates three additional times in 2019. Some economists, though, foresee only two hikes. Others expect economic growth to remain solid and the job market strong and that the Fed will decide that four rate increases will be justified next year to guard against high inflation. At 3.7 percent, the unemployment rate is already at its lowest level since 1969.

“The Fed is going to have to continue raising rates next year because the unemployment rate is going to keep falling to close to 3 percent, well beyond full employment,” said Mark Zandi, chief economist at Moody’s Analytics. “There is nothing but green lights for more rate hikes straight ahead.”

On Friday, the government reported that the economy added a sizable 250,000 jobs in October and that average pay rose 3.1 percent over the previous 12 months – the sharpest year-over-year gain in nearly a decade. That’s welcome news for workers. But it’s a trend that may raise concern that accelerating wages will help fuel undesirably high inflation.

Chairman Jerome Powell has stressed that the Fed is determined to follow a middle-of-the-road approach: Keep gradually nudging up rates to control inflation but avoid tightening too aggressively and perhaps triggering a recession.

“They are walking a tightrope,” said Diane Swonk, chief economist at Grant Thornton.

The Fed has raised rates three times this year, lifting its benchmark rate to a range – 2 percent to 2.25 percent – that is still low by historical standards. Most economists think the statement the Fed will issue Thursday after its policy meeting ends will hint of another imminent increase, likely in December.

The Fed’s policymakers have stressed, and most economists agree, that these small quarter-point increases amount to a gradual pace of credit tightening. But President Donald Trump has sharply disagreed, and since the stock market started tumbling last month, he has attacked the Fed’s rate hikes as well as Powell’s leadership. Trump’s public criticism has aroused concern that he is intruding on the central bank’s long-respected political independence and its need to operate free of outside pressure.

At the same time, the nervousness among stock investors reflects the reality that the Fed’s steady march toward higher rates is removing a key factor that has underpinned the bull market in stocks: The richer returns that investors could achieve in stocks than in bonds or savings accounts.

Fed critics had charged that the central bank was creating a bubble in stocks that would eventually pop with disastrous results. Trump, who has often invoked high stock prices as evidence that his economic policies are succeeding, has made clear his disagreement. He has called the Fed, with its string of rate increases, “my biggest threat.”

Powell, who was Trump’s hand-picked choice to lead the Fed, has avoided responding directly. The chairman has instead expressed determination to pursue the Fed’s mandate of maximizing employment and stabilizing prices without regard to political considerations.

To that end, Swonk, like Zandi, suggests that the Fed will raise rates four times next year because she thinks the economy will slow only slightly. Other analysts foresee a more significant slowdown as the tariffs Trump has imposed on many imports begins to depress growth.

“The economic outlook will not be strengthening next year; it will be weakening, not only in the U.S. but also globally,” said Sung Won Sohn, chief economist at SS Economics.

Sohn said he thinks the Fed may decide to tighten credit only once or twice in 2019.

David Jones, the author of books about the Fed, said he thinks that after December, the central bank will raise rates twice more in 2019 and then stop. Jones said he bases that forecast on his belief that the Fed won’t want to lift rates above what it sees as the “neutral” level. This is the point at which the Fed’s key rate is thought to neither stimulate the economy nor restrain it.

The median assessment of Fed officials has pegged the neutral rate at 3 percent. One more rate increase this year and two more in 2019 would leave the Fed’s benchmark rate at a range of 2.75 percent to 3 percent.

“I think Powell is determined to get to neutral and then see how the economy performs,” Jones said.
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China has agreed to carry out bilateral trade with Pakistan in the Chinese yuan instead of the U.S. dollar to help ease the South Asian ally’s financial and economic woes.

The unprecedented Chinese concession, officials and economists said, would go a long way in addressing Islamabad’s massive 87-percent trade deficit with Beijing and reducing pressure on Pakistan’s depleting foreign currency reserves.

“The agreement is part of practical steps being taken [by China] to support our [foreign] currency [reserves],” said Pakistani Information Minister Fawad Chaudhry.

He told reporters in Islamabad the “historic” deal was concluded along with more than a dozen others during Pakistani Prime Minister Imran Khan’s four-day official visit to Beijing, which ended Monday.

The annual trade volume between the two countries is about $15 billion, of which Chinese exports to Pakistan are estimated at around $13 billion.

Pakistan’s foreign exchange reserves have lately fallen to less than $8 billion and the country urgently needs about $12 billion to service foreign debts and pay for imports.

The central State Bank of Pakistan has already declared Yuan as an approved foreign exchange for all purposes in the country.

Information Minister Chaudhry said the Chinese government separately has also offered an economic package to Pakistan, and its details will be announced Tuesday when Khan’s delegation returns home.

Reports said the proposed package includes $3 billion in Chinese grants and loans, while another $3 billion will be given for investment under the China-Pakistan Economic Corridor (CPEC) infrastructure building project, a centerpiece of Beijing’s global Belt and Road Initiative (BRI).

The Chinese financial relief is being negotiated amid U.S.-led criticism and skepticism that unfair loans under CPEC are contributing to Pakistan’s balance of payments crisis.

China and Pakistan reject the criticism as baseless and part of propaganda against both CPEC andBRI.

Khan’s nascent government last month secured a financial package of more than $6 billion from Pakistan’s staunch ally Saudi Arabia. Under the deal, Saudis will lend $3 billion and would allow Islamabad to import oil worth more than $3 billion on deferred payments over the next three years.

Officials say the United Arab Emirates is also considering economic relief to Pakistan similar to what Saudi Arabia has pledged.

Prime Minister Khan has said the funds being secured from the three friendly countries will enable Pakistan not to seek a major bailout package from the International Monetary Fund (IMF) to meet the country’s immediately liabilities.

An IMF team is due to arrive in Islamabad later this week to open formal talks with the Pakistani government on the subject.
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