President Donald Trump’s “America First” policy on trade aims to reverse decades of lopsided exchange by withdrawing from international trade deals, renegotiating others and raising tariffs on foreign-made goods destined for the U.S. But, in a connected global economy, analysts warn the U.S. could find itself increasingly isolated as other countries rush forward to embrace new trade deals. Mil Arcega reports.
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Month: January 2018
Although long replaced by more efficient types of engines, steam-powered machines still have a certain appeal, and not just for museum-goers. In Britain, the country that gave us both the steam engine and the legendary off-road vehicle the Land Rover Defender, one inventor combined the two, much to the amusement of technology enthusiasts. VOA’s George Putic has more.
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Alaska’s all-Republican congressional delegation three weeks ago praised Interior Secretary Ryan Zinke after he announced nearly all federal waters off the state’s coast could be offered for petroleum lease sales.
But after hearing from critics who do not want drilling in their home waters, U.S. Sens. Lisa Murkowski and Dan Sullivan and Rep. Don Young are backtracking.
In a letter Friday to Zinke, the delegation requested that most Alaska waters from the state’s Panhandle to the Bering Strait be removed from the proposed five-year drilling plan.
Instead, they urged lease sales in only three areas: Cook Inlet, where petroleum platforms have extracted oil and natural gas for decades, and the Arctic waters of the Chukchi and Beaufort seas.
“We believe the strongest near-term offshore program in Alaska is one that focuses on the Chukchi, Beaufort and Cook Inlet,” they wrote. “Such a program will maximize agency resources and reflect the areas with the broadest support for development among Alaskans.”
Zinke announced the proposed lease sale plan Jan. 4. He said revisions could be made after public comment.
Immediate opposition
The proposal excluded only one area of Alaska: the North Aleutian Basin, home to Bristol Bay and the world’s largest run of sockeye salmon.
The proposal drew immediate opposition from governors in East and West Coast states. After Florida Gov. Rick Scott, a Republican, met with Zinke, the secretary announced that drilling would be “off the table” for waters in the eastern Gulf of Mexico and the Atlantic Ocean off Florida.
Subsistence resources
In Alaska, proposed lease sales in the Bering Sea drew strong condemnation from the Bering Sea Elders Group, an association of Alaska Native elders appointed from 39 tribes, and Kawerak Inc., a regional nonprofit organization, which said oil and gas activities pose a serious threat to marine life.
“These basins are where tribes from our region have harvested subsistence resources for millennia and where local people from our region fish and crab commercially,” Kawerak said in an announcement.
Drilling in the Beaufort and Chukchi seas, home to polar bears, walrus and ice seals that support the subsistence economies of coastal villages, is strongly opposed by environmental groups. They say the harsh climate makes spills inevitable and that cleanup of a major spill would be impossible in waters choked by or covered in sea ice.
Oil estimates
However, federal regulators say the Beaufort Sea, off Alaska’s north coast, holds an estimated 8.9 billion barrels of oil and the Chukchi, off Alaska’s northwest coast, holds an estimated 15.4 billion barrels.
Royal Dutch Shell spent $2.1 billion on Chukchi Sea leases in 2008, invested another $5 billion overall in U.S. Arctic waters, and pulled out after drilling a dry hole in 2015.
Murkowski, Sullivan and Young contend drilling in Arctic waters can be done safely. They said they strongly support the inclusion of the Beaufort and Chukchi seas for lease sales between 2019 and 2024, while at the same time urging “meaningful consultation” with communities.
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A U.S. trade commission on Friday handed an unexpected victory to Bombardier Inc. against Boeing Co., in a ruling that allows the Canadian company to sell its newest jets to U.S. airlines without heavy duties, sending Bombardier’s shares up 15 percent.
The U.S. International Trade Commission’s unanimous decision was the latest twist in U.S.-Canadian trade relations that have been complicated by disputes over tariffs on Canadian lumber and U.S. milk and President Donald Trump’s desire to renegotiate or even abandon the North American Free Trade Agreement (NAFTA).
Trump, who did not weigh in on the dispute personally, took his “America First” message to the world’s elite on Friday, telling a summit that the United States would “no longer turn a blind eye” to what he described as unfair trade practices.
The ITC commissioners voted 4-0 that Bombardier’s prices did not harm Boeing and discarded a U.S. Commerce Department recommendation to slap a near 300 percent duty on sales of the company’s 110- to 130-seat CSeries jets for five years. It did not give a reason immediately.
U.S. Commerce Secretary Wilbur Ross said in a statement that the commission’s finding “shows how robust our system of checks
and balances is.”
Boeing’s shares closed flat.
“It’s reassuring to see that facts and evidence matter,” said Chad Bown, a senior fellow at the Peterson Institute for International Economics in Washington. “This part of the trade policy process works unimpeded despite President Trump’s protectionist rhetoric.”
Removing ‘uncertainty’
The decision will also help Bombardier sell the CSeries in the United States by removing “a huge amount of uncertainty,” at a time when its Brazilian rival Embraer is bringing its new E190-E2 jet to market, a source familiar with the
Canadian plane and train maker’s thinking said.
The ITC had been expected to side with Chicago-based Boeing. The company alleged it was forced to discount its 737 narrow-bodies to compete with Bombardier, which it said used government subsidies to dump the CSeries during the 2016 sale of 75 jets at “absurdly low” prices to Delta Air Lines.
Bombardier called the trade case self-serving after Boeing revealed on December 21 that it was discussing a “potential combination” with Embraer. Boeing denied the trade case was motivated by those talks.
Boeing to look at options
The dispute may not be over. “This can still be appealed by Boeing,” Andrew Leslie, parliamentary secretary to Canadian Foreign Minister Chrystia
Freeland, told reporters in Montreal.
Boeing said it would not consider such options before seeing the ITC’s reasoning in February.
But Boeing said it was disappointed the commission did not recognize “the harm that Boeing has suffered from the billions of dollars in illegal government subsidies that the Department of Commerce found Bombardier received and used to dump aircraft in the U.S. small single-aisle airplane market.”
Bombardier, Delta and the U.S. consumer advocacy group Travelers United all called the ITC decision a victory for consumers and airlines.
The decision may end up helping Trump’s goal of boosting U.S. jobs as the CSeries jets for U.S. airlines will be built in the United States rather than Canada.
Through a venture with European planemaker Airbus SE, which has agreed to take a majority stake in the CSeries this year, Bombardier plans to assemble CSeries jets in Alabama to be sold to U.S. carriers starting in 2019.
Sweet surprise
Airbus Chief Executive Tom Enders promised to push ahead “full throttle” with the Alabama plans. “Nothing is sweeter than a surprise, a surprise victory,” he said.
The case had sparked trade tensions between the United States and its allies Canada and the United Kingdom. Ottawa last year scrapped plans to buy 18 Super Hornet fighter jets from Boeing.
The well-paid jobs associated with the CSeries are important both to Ottawa and the British government. Bombardier employs about 4,000 workers in Northern Ireland.
The British prime minister’s office said it welcomed the decision, “which is good news” for the British industry, while Canada’s innovation minister said the ITC came to the “right decision” on Bombardier.
Former ITC Chairman Dan Pearson praised the decision. “Not a single commissioner was willing to buy Boeing’s arguments,” he said. “I think ‘America First’ is a policy of the White House and the Commerce Department. But it’s not the policy of an independent agency [like the ITC].”
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Billionaire casino mogul Steve Wynn is denying allegations of sexual harassment after a report in the Wall Street Journal detailed allegations of misconduct and caused shares of his casino company to drop 10 percent Friday.
Wynn said in a statement Friday “The idea that I ever assaulted any woman is preposterous” and accused his ex-wife of being behind the accusations.
“The instigation of these accusations is the continued work of my ex-wife, Elaine Wynn, with whom I am involved in a terrible and nasty lawsuit in which she is seeking a revised divorce settlement.”
Several incidents
The Journal article detailed several incidents in which Wynn allegedly pressured staff to perform sex acts. The allegations include those from a manicurist who claims she was forced to have sex with Wynn in 2005, shortly after he opened his flagship Wynn Las Vegas. The paper said she was later paid a $7.5 million settlement.
The Journal said it contacted more than 150 people who work or had worked for Wynn while investigating the story.
“We find ourselves in a world where people can make allegations, regardless of the truth,” Wynn said, “and a person is left with the choice of weathering insulting publicity or engaging in multiyear lawsuits.”
Wynn, 75, is a towering figure in the gambling world; his company helped to revitalize Las Vegas in the 1990s. Wynn Resorts built the Golden Nugget, The Bellagio and Mirage Resorts.
Republican National Committee post
In addition to being a business mogul, Wynn is the finance chairman of the Republican National Committee and has been a large contributor to the Republican Party.
Stocks for Wynn Resorts plummeted 10.1 percent Friday after the Journal report was published. The Wynn Resorts board of directors formed a committee Friday to investigate the allegations, Reuters reported.
There has been a wave of sexual misconduct claims against celebrities, politicians and media personalities since reports surfaced last year detailing alleged harassment by movie producer Harvey Weinstein. However, this is the first time that the sexual harassment claims have centered on the CEO and founder of a major, publicly held company.
Wynn Resorts said in a statement that there has never been a complaint made about Wynn to the company’s independent hotline for reporting harassment.
“The company requires all employees to receive annual anti-harassment training and offers an independent hotline that any employee can use anonymously, without fear of retaliation,” it said.
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U.S. health officials say the flu outbreak this winter is on track to be one of the most severe in the past 15 years.
In their latest weekly report Friday, the Centers for Disease Control and Prevention (CDC) said the flu is now widespread in every U.S. state except for Hawaii. The CDC said at this rate of infection, by the end of the flu season, around 34 million people will have come down with the flu.
Officials say last week, 1 in 15 doctor visits across the country was for symptoms of flu.
Past outbreaks
Health officials say more people are seeking care for flulike illness than at any other time since the 2009 swine flu pandemic that swept the country. Apart from that outbreak, the last time the country experienced such high levels of seasonal flu was in 2003-04.
The CDC said the virus this winter has caused nearly 12,000 people to be hospitalized and killed 37 children. Officials say the death toll of children is likely to rise as pediatric deaths must first be reported to a medical examiner and can take longer to be documented.
Differences this year
The flu typically affects children and the elderly the most. However, hospitalization rates for people 50 to 64 — those who mostly fall under the baby boomer demographic — has been unusually high this season. Officials say the rate of hospitalization for baby boomers is 44.2 per 100,000 people, which is nearly triple what it was last season.
The CDC does not track adult flu deaths directly.
This year’s flu strain, mostly the H3N2 flu virus, is the same main bug from last winter, which did not have as severe an outbreak. Experts say that they are not sure why the pandemic is so bad this year and that flu seasons are notoriously hard to predict.
Dr. Dan Jernigan, director of the influenza division at the CDC, told reporters on a conference call Friday that one notable difference in this year’s flu outbreak is that the pandemic hit almost all states in the country at the same time. “We often see different parts of the country light up at different times, but there is lots of flu all at the same time” this year, he said.
Jernigan said a surge of cases in January could have been caused by children returning to school after the Christmas break and spreading the virus.
Flu peak
The flu season usually peaks in February. Influenza activity has already begun to taper off in some parts of the United States, particularly in California, which has been one of the hardest-hit states. Officials say this flu season also began early and so could end earlier.
Flu is a contagious respiratory illness that causes such symptoms as fever, cough, muscle aches, headaches and fatigue. Most people who get the flu get better within a week or two. However, some people develop serious complications caused by viral infection of the nasal passages and throat and lungs.
The CDC recommends a flu vaccine for everyone older than 6 months. However, officials say this year’s vaccine is only about 30 percent effective in preventing infection.
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Michigan State University Athletic Director Mark Hollis resigned Friday, two days after the school’s president stepped down amid a storm of criticism about how it handled the sexual assault scandal that led to the conviction of former school faculty member and USA Gymnastics physician Larry Nassar.
Nassar was sentenced Wednesday to 40 to 175 years in prison after pleading guilty of sexually abusing more than 150 female gymnasts, some as young as 6 years old, under the guise of medical treatment, for more than two decades.
Hollis disclosed his resignation to a small group of reporters on campus. When asked why he was stepping down, Hollis tearfully said, “Because I care.” Hollis also said he hoped his resignation “has a little bit, a little bit, of helping that healing process.”
More than 150 of Nassar’s victims gave emotional statements at his sentencing hearing in Lansing, Michigan. Several of the victims who addressed the court were former athletes at the university, and many victims charged the school with mishandling complaints about Nassar as far back as the late 1990s.
Nassar was also accused of molesting other young gymnasts while employed by USA Gymnastics, the sport’s U.S. governing body. Olympic gold medalists Aly Raisman, Jordyn Wieber, Simone Biles, Gabby Douglas and McKayla Maroney are among victims who said in recent months they were assaulted by Nassar during treatment. Many victims have accused USA Gymnastics of ignoring or concealing their complaints in an effort to avoid negative publicity.
University President Lou Anna Simon submitted her resignation late Wednesday, just after Nassar’s sentencing. The school’s governing board expressed support for Simon, but she eventually succumbed to pressure from students, faculty and lawmakers. There is no evidence Simon was aware Nassar was committing acts of abuse, but some of the more than 150 accusers said their complaints to the school over the years were not addressed.
University board members, who are elected in statewide votes, are also under intense scrutiny, prompting two members to say they would not seek re-election. Board member Joel Ferguson apologized this week for saying previously that some victims were ambulance chasers seeking a payday.
Michigan State had long resisted pleas for an independent investigation, but last week asked state Attorney General Bill Schuette to review the scandal.
In a Twitter post Friday, university trustee Mitch Lyons expressed regret that the school had failed to respond appropriately.
A student march and protest was scheduled for Friday evening.
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President Donald Trump has warned that the United States will no longer tolerate unfair trade practices and will always put America first in future trade deals. Giving the closing speech at the World Economic Forum in the Swiss resort of Davos on Friday, Trump lauded the performance of the U.S. economy under his leadership. The speech, however, was overshadowed by further controversy over alleged links between the president’s campaign team and Russia. Henry Ridgwell reports.
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Coincheck, a major cryptocurrency trading exchange in Tokyo, has been hacked into and has lost about $534 million worth of virtual money, national broadcaster NHK reported on Friday.
Coincheck posted on its website on Friday afternoon that it had suspended withdrawals of almost all cryptocurrencies.
The exchange has already reported the incident to the police and to Japan’s Financial Services Agency, NHK said.
In 2014, Tokyo-based Mt. Gox, which once handled 80 percent of the world’s bitcoin trades, filed for bankruptcy after losing some 850,000 bitcoins — then worth around half a billion U.S. dollars — and $28 million in cash from its bank accounts.
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A Moscow cinema has been warned after defying a government ban on showing The Death Of Stalin. (Please see related stories link for VOA story on “The Death of Stalin”) The black comedy was screened to a packed audience on January 25, and many said they didn’t find the satirical film offensive. (RFE/RL’s Russian Service)
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One in four children and teens who get their blood pressure screened at routine checkups may appear to have hypertension, but that result often doesn’t hold up in repeat tests, a U.S. study suggests.
Researchers examined data from electronic medical records for almost 755,795 children and adolescents treated at Kaiser Permanente facilities in Southern California, including 186,732 patients diagnosed with high blood pressure.
About 18 percent of kids diagnosed with mild hypertension and 51 percent of youth with more severe high blood pressure got repeat tests at the same visit when their condition was initially detected.
When the tests were repeated during the same visit, 52 percent of kids diagnosed with high blood pressure in the first assessment no longer had hypertension based on the average result from two screenings.
This means a lot of kids got falsely diagnosed with high blood pressure, said lead study author Corinna Koebnick of Kaiser Permanente Southern California.
“Repeating high blood pressure readings will avoid unnecessary follow-up visits but also to prevent the possibility that true hypertension is overlooked,” Koebnick said by email.
Among kids initially diagnosed with high blood pressure, the diagnosis was confirmed at a follow-up checkup for 2.3 percent of patients with mild hypertension and 11.3 percent of youth with more severe cases, the study also found.
One limitation of the study is that different clinicians or methods for measuring blood pressure might impact which patients were diagnosed with hypertension, the authors note. Because most clinicians didn’t follow recommendations to repeat blood pressure screenings during initial visits and schedule follow-up appointments, it’s also possible that this influenced the proportion of kids with misdiagnosed hypertension, they add.
Don’t rush
Still, the results suggest that pediatricians should repeat blood pressure tests during the same visit to verify the results and make sure children get the appropriate follow-up care if needed, the study team concludes in The Journal of Clinical Hypertension.
“If the first blood pressure reading is normal, it does not need to be repeated at that visit,” said Dr. Joyce Samuel, a researcher at the McGovern Medical School at the University of Texas Health Science Center at Houston. “However, if the first reading is high, taking a few minutes to repeat it may save considerable time, anxiety and cost in the long-run by avoiding unnecessary referrals to blood pressure specialists,” Samuel, who wasn’t involved in the study, said by email.
Initial blood pressure readings may falsely suggest hypertension if the tests are done too quickly, especially if screening happens right at the start of the visit before children have a chance to sit and relax for a few minutes, noted Dr. David Kaelber, a researcher at Case Western Reserve University and chief medical informatics officer of the MetroHealth System in Cleveland, Ohio.
If children appear to have hypertension with the first assessment using an automated blood pressure machine, doctors might get a different result when they repeat the test manually, Kaelber, who wasn’t involved in the study, said by email.
“Automated machines are known to typically generate at least slightly higher blood pressure measures than manually taken blood pressure,” Kaelber said.
Doctors should check blood pressure at each annual physical, according to recommendations from the American Academy of Pediatrics (AAP). Children who have high blood pressure should try to lower it with lifestyle changes like improving diet and exercise habits before trying medication, the AAP advises.
“I think the most important message for parents is that they should be asking about their child’s blood pressure just like they ask about their child’s height and weight,” said Dr. Joseph Flynn, a researcher at the University of Washington and Seattle Children’s Hospital who was lead author of the AAP blood pressure guidelines.
“I’m sure that many parents request their child be re-measured if they don’t believe the height or weight for some reason,” Flynn, who wasn’t involved in the study, said by email. “Similarly, if the child’s blood pressure is high, they should ask that it be repeated at the same visit if that hasn’t already happened.”
This is the Top Five Countdown! We’re punching up the five most popular songs in the Billboard Hot 100 Pop Singles chart, for the week ending Jan. 27, 2018.
Some songs crawl up the chart while others fly … this week we meet one of the latter.
Number 5: G-Eazy Featuring A$AP Rocky and Cardi B. “No Limit”
G-Eazy spends another week in fifth place with “No Limit” featuring A$AP Rocky and Cardi B. Cardi just moved past Beyonce to become the first woman to place five songs simultaneously in the Billboard Hot R & B/Hip Hop Songs chart. The only others to have done this are her fellow rappers Drake and Kendrick Lamar. Congrats, Cardi B!
Number 4: Post Malone Featuring 21 Savage “Rockstar”
Post Malone and 21 Savage take another step back this week, as “Rockstar” drops to fourth place. Post’s star burns so brightly that he made it into Forbes magazine’s list of Future Moguls Hip-Hop Class of 2018. He dropped two of the five most popular hip-hop songs of 2017.
Number 3: Bruno Mars & Cardi B. “Finesse”
Replacing Post in third place is the red-hot duo of Bruno Mars and Cardi B, with their remix of “Finesse.” This marks Bruno’s 14th trip to the Top Five in the past eight years. Bruno currently rules the Billboard Hot Tours list, as his 24K Magic World Tour zooms past $200 million in earnings.
Number 2: Camila Cabello Featuring Young Thug “Havana”
Camila Cabello and Young Thug hang on to the runner-up slot with “Havana,” but over on the Billboard Pop Albums list, it’s another story: Camila opens at No. 1 with her self-titled debut solo album. She’s the first woman to start at No. 1 with a debut full-length album in three years. Meghan Trainor last did it in January 2015 with Title.
Number 1: Ed Sheeran “Perfect”
“Perfect” is the title of our No. 1 song, as Ed Sheeran retains the Hot 100 championship for a sixth week.
On January 20, Ed announced his engagement to long-time girlfriend Cherry Seaborn. He told the Daily Star that he intends to retire from music as soon as he becomes a father.
Ed, I’m sure your fans are rooting for you, but give us a few more hits, OK?
Thanks for joining us today. We’ll see you next week with a new lineup.
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The mosquito-born Zika virus may be responsible for an increase in birth defects in U.S. states and territories even in women who had no lab evidence of Zika exposure during pregnancy, U.S. health officials said on Thursday.
Areas in which the mosquito-borne virus has been circulating, including Puerto Rico, southern Florida and part of south Texas, saw a 21 percent rise in birth defects strongly linked with Zika in the last half of 2016 compared with the first half of that year, the U.S. Centers for Disease Control and Prevention said in its weekly report on death and disease.
Researchers said it was not clear if the increase was due to local transmission of Zika alone or if there were other contributing factors.
The Zika outbreak was first detected in Brazil in 2015 and spread through the Americas. It has been linked to thousands of suspected cases of microcephaly, a rare birth defect marked by unusually small head size, eye abnormalities and nerve damage resulting in joint problems and deafness.
For the report, the CDC examined existing birth defect reporting systems in 14 U.S. states and Puerto Rico to look for birth defects possibly associated with Zika.
They divided these areas into three groups: places with local Zika transmission, places with higher levels of travel-associated Zika, and places with lower rates of travel-related Zika.
Overall, they found three cases of birth defects potentially related to Zika per 1,000 live births out of 1 million births in 2016, about the same as the prior reporting period in 2013-2014.
When they looked specifically in areas with local Zika transmission and looked only at birth defects most strongly linked with Zika, they saw an increase.
“We saw this significant 21 percent increase in the birth defects most strongly linked to Zika in parts of the U.S. that had local transmission of Zika,” Peggy Honein, an epidemiologist and chief of the CDC’s Birth Defects Branch, said in a telephone interview. “The only area where we saw this increase was in the jurisdictions that had local transmission.”
CDC researchers anticipate another increase in possible Zika-related birth defects when 2017 data are analyzed because many pregnant women exposed to Zika in late 2016 gave birth in 2017.
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Two of the largest mass vaccination campaigns against yellow fever ever seen in the world have begun in Nigeria and Brazil. Both campaigns, which are supported by the World Health Organization, aim to prevent the spread of the disease.
Nigeria plans to vaccinate more than 25 million people throughout the coming year, making this the largest yellow fever campaign in the country’s history. In preparation, the World Health Organization has trained thousands of health care workers on how to administer the vaccine.
The WHO says nearly 3,000 vaccination teams are being deployed across the states of Kogi, Kwara, Zamfara and Borno. In the case of Borno State, it says the campaign will focus on camps for internally displaced people and host communities.
WHO spokesman Tarik Jasarevic says the goal of the campaign is to reduce yellow fever transmission by achieving 90 percent coverage in those states.
“It is a part of an initiative to eliminate yellow fever epidemics,” he said. “As you know, we cannot … eradicate the yellow fever virus because it is being transmitted by mosquitoes. But, with the effective vaccine that exists for a number of years now, it can be prevented. So, mass vaccination is the best way to prevent outbreaks of yellow fever.”
The WHO reports the mass immunization campaign launched in Brazil will deliver so-called fractional doses of yellow fever to nearly 24 million people in Rio de Janeiro and Sao Paulo. Fractional dosing is a way of extending vaccine supplies so more people are protected from the spread of the disease.
A full dose of vaccine provides life-long protection against yellow fever. One-fifth of the regular dose confers immunity against the disease for at least 12 months and possibly longer. That is considered an effective short-term strategy in places where the vaccine is in short supply.
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The Chinese government recently claimed that 98 major state-run industries have turned in the best industrial and financial performance in 2017 compared to the past five years. These companies, which have assets totaling $9 trillion, produced a remarkable profit of $218 billion, an increase of 15.2 percent in profit in 2017, more than double the rate of national economic growth.
Industry experts are closely examining the report card because China’s state sector represents nearly 60 percent of the country’s industrial economy. It controls areas like natural resources, steel, energy, heavy machinery, telecommunication, defense and infrastructure sectors, where the private sector has little or no role.
The government’s claim has caused some surprise because state-owned-enterprises (SOEs) have been widely blamed for corruption and sloth, with many economists saying they are a drag on the national economy.
The New York-based Center on Foreign Relations reported this month that profits of Chinese SOEs plunged 33 percent between 2011 and 2016, while that of the country’s private-sector enterprises rose 18 percent in the same period. However, the government and state-owned banks continued funding the state sector, which drew 80 percent of industrial financing, it said.
Lagging behind private sector
Analysts said the SOEs managed to come up with a better balance sheet in 2017, with tremendous assistance from the government. But there was no real improvement in their management capabilities and market competitiveness.
“The improvement in profitability does not mean they are more efficient or more productive and they still aren’t as profitable as private companies,” said Scott Kennedy, deputy director at the Freeman Chair in China Studies at the Center for Strategic & International Studies.
One reason for the improved profits report may be the closure of dozens of coal mines and steel mills and hundreds of factories as part of an effort to overcome problems of overcapacity and chronically loss-making units. This came at a social cost as reduction in coal capacity by 27 million tons and in steel capacity by 5.95 million tons resulted in layoffs of millions of workers in mines and factories.
Another part of the improvement was achieved by sales and swaps of piled up debt at 20-30 percent of their original value, leading to massive losses for banks and financial agencies that gave the loans. Nearly $158 billion was infused into these companies, banks, stock and property markets and other sources in 2017.
Mergers also eliminated competition as two or more rival companies came together to form a stronger monopoly.
Monopoly creation
“Those survivors, they can enjoy the monopoly, that is why they can enjoy higher profit margins because of the monopolies,” CEIBS professor of finance and accounting Oliver Rui said, adding, “Usually they were competitors, now they have become one company.”
The State-owned Assets Supervision and Administration Commission, which manages the 98 enterprises owned by the central government, claimed a major success in reducing their debt burden. Its chief accountant, Shen Ying, told a recent news conference that central SOEs are confident and able to repay their debt and prevent systemic risks in 2018.
“There was no issue of bond default by central SOEs in 2017,” she said. “We will continue to push SOE reforms, in particular in their operational mechanism, methods of building a modern enterprise system, regulatory measures of State-owned assets and the cultivation of entrepreneurship in 2018.”
State owned banks were ordered to swap their unpaid loans into equity making them part owners of their customers, the SOEs. A part of the debt was converted into equity.
Jason Lee, an expert with the China Market Research Group said he expected the government to continue with the drive to reduce SOE debt by getting banks, stock and property markets to inject funds in 2018. “My estimation is that it won’t be double (compared to 2017) but probably around like 700 billion or 800 billion (Yuan), he said. An important issue is whether the government is merely rewriting the account books or state run companies are going through a major improvement in their functioning.
“Yes, that’s artificially solving the problem,” Rui said. “So, in the long run you need improve your performance through either by reducing the cost, or through enhanced efficiency or by increasing your pricing powers, you could sell your products at a higher price.”
New normal
Improvement in market prices of goods produced by the SOEs also played a key role in their improved balance sheets.
“Producer prices in China are growing and those products come mainly from SOEs and that’s the primary source for the turnaround in SOE performance, balance sheet performance,” Kennedy said.
Kennedy said the ruling Communist Party is not interested in allowing the bureaucracy-run SOEs to perform freely in terms of market dynamics.
The Communist “Party is increasing its supervision and management of SOEs. So I think, what you are seeing is a cyclical change in their financial position because of the price environment but not changes in the structural, systemic issues that make state owned enterprises less competitive and profitable than the private sector,” Kennedy said.
The government has been publicly saying that it is focusing on the quality of life in terms of better performance in welfare areas like education, health and poverty alleviation and GDP numbers are not as important any more. But privately, it is pushing the industry to achieve higher growth because it cannot afford a major economic slowdown, analysts said. In this respect, the government is forced to rely on the state sector a lot more than the private sector.
“The private sector stopped investing because there are so many critical uncertainties. So, the SOE is the major driving force behind the GDP growth,” Rui said.
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Scott Cooper’s western, Hostiles, starts at a U.S. army outpost in New Mexico, where Captain Joseph Blocker, played by Christian Bale, is ordered to escort a Cheyenne chief to his ancestral land in Montana.
Chief Yellow Hawk had been imprisoned in New Mexico for seven years for committing atrocities during the Indian Wars. Now dying of cancer, the chief is Blocker’s mortal enemy. His orders come from “back East” in Washington, D.C., in reaction to negative press reports about the treatment of Native Americans by the U.S. Army. Blocker has to obey.
Defying the order would cost Blocker his pension and reputation. With no choice, he and his unit set out to Montana along with the ailing chief and his family.
Like many Westerns, Hostiles is a journey story throwing together a group of people from different backgrounds. But the narrative emphasizes the reconciliation of two mortal enemies, Bale’s Blocker, and Chief Yellow Hawk, played by acclaimed Native American actor Wes Studi.
In an interview with VOA, Studi described the changing relationship as “not a full-blown reconciliation but simply a matter of having a common foe — not only the Comanche but the weather, the land, the robbers, or the fur traders.”
Bale offers a powerful performance as a U.S. Army captain legendary for his merciless attacks against the natives. Yet, his character is full of quiet dignity and stoic resolution.
Bale says Hostiles departs from the old Western trope of cowboys versus bad Indians.
In Cooper’s Hostiles, everyone is capable of atrocities in a fight for survival in an inhospitable landscape. The landscape is majestic, but also terrifying, desolate and threatening.
“For me, there is a horror element to this,” says Bale. “There is this kind of imprisonment that certainly, I can say, my character is feeling and at the same time, the absolute beauty of this landscape and of America, but how it could be absolutely horrific at the same time when you had so many friends die for this land.”
Some critics question Cooper’s tale, accusing it “of aggrandizing a white man’s conscience and using Yellow Hawk and his family as vehicles for Blocker’s social and spiritual awakening.”
Studi, an actor and an activist, says though such alliances between whites and Indians as the film shows did exist, they never quite bridged the deep divide between the two races.
Even today, he says, Native Americans feel displaced by losing lands to oil and mineral extraction.
“Well, they’ve always been under threat. And now I think what’s happening is that the larger American public is beginning to feel what we felt back in the day, when genocide was the practice and colonialization was actually what was practiced,” Studi says. “Now that we have these public lands that are being taken over on a local level for unspoken but we know what the reason is, I think that the American public is beginning to feel the kinds of things that we felt over the ages.”
Studi says the positive tone of the film is cathartic for audiences, but adds that Native Americans will not “forget what they endured in the hands of the whites.”
“I don’t know that there is any way or even any reason to forgive,” he says, “except for one’s own mental stability perhaps. But it’s something, I think, any native American has an idea of what history has produced for us over the years, we will hold a grudge I think, I have no problem with saying that and I think we have every right to do so.”
Asked about the message his character Chief Yellow Hawk is conveying, Studi says, “It was really a challenge to play and it also opened up thoughts about how does one perceive the world and himself at a time when it’s obvious that you are soon going to die.
“You only have a limited amount of time and what in the world goes through the mind of someone who knows this? Your thoughts go to legacy, you begin to think what it is you want to do before you die?” he says.
Studi wants Native Americans to start taking charge of their own narrative. He compares Native American filmmakers, screenwriters and actors to teenagers, who are gradually coming of age in mainstream Hollywood.
“We only have entered this market since perhaps the ’60s and that gives us 40 or 50 years of having made an effort to become a part of this industry and we’ve begun to train ourselves, began to learn what it takes to work in this industry and now we are getting to the point that we are actually talking about how to really tell our own stories and how to go about funding them and how to actually, be able to tell and sell a story to the world about who we are and it’s always gratifying to know that young people are becoming more interested in doing the same thing that we’ve been trying to achieve for a number of years,” he says.
That is, finding their own voice.
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Around the world, an area larger than all of South America has been deforested, eroded, drained or salinized. A new report says there’s money to be made restoring that land. VOA’s Steve Baragona has more.
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The U.S. economy likely maintained a brisk pace of growth in the fourth quarter, driven by an acceleration in consumer and business spending, which could set it on course to attain the Trump administration’s 3 percent annual growth target this year.
Gross domestic product probably increased at a 3.0 percent annual rate also boosted by a rebound in homebuilding investment and a pickup in government outlays, according to a Reuters poll of economists. The strong growth pace would come despite anticipated drags from trade and inventory investment.
It would follow a 3.2 percent pace of expansion in the third quarter and mark the first time since 2004 that the economy enjoyed growth of 3 percent or more for three straight quarters.
The Commerce Department will publish its advance fourth-quarter GDP estimate Friday morning.
Global rebound
The economy’s growth spurt is part of a synchronized global rebound that includes the euro zone and Asia.
It has also benefited from President Donald Trump’s promise of hefty tax cuts, which was fulfilled in December when the Republican-controlled U.S. Congress approved the largest overhaul of the tax code in 30 years.
Despite the economy’ strong performance in the last three quarters of 2017, overall growth for the year is expected to come in around 2.3 percent, because of a weak first quarter.
That would still be an acceleration from the 1.5 percent logged in 2016. Economists expect annual GDP growth will hit the government’s 3 percent target this year, spurred in part by a weak dollar, rising oil prices and strengthening global economy.
Modest boost from tax cuts
While the corporate income tax rate has been slashed to 21 percent from 35 percent and taxes for households have also been lowered, economists see only a modest boost to GDP growth as the fiscal stimulus is coming at a time when the economy is almost at full employment.
“We are encouraged by the current breadth of economic strength and … we expect the pace of U.S. real GDP to accelerate from the expansion average, increasing 3.0 percent in 2018,” said Sam Bullard, a senior economist at Wells Fargo Securities in Charlotte, North Carolina.
Fed hawks
Robust economic growth has been accompanied by record gains on the stock market and a strong labor market, with the unemployment rate falling seven-tenths of a percentage point last year to a 17-year low of 4.1 percent. Economists said this could put the Federal Reserve on a more aggressive path of interest rate increases than is being anticipated.
“I think that gives the hawks at the Fed more ammunition to say we should contemplate a more aggressive path on rates going forward,” said Scott Anderson, chief economist at Bank of the West Economics in San Francisco.
The U.S. central bank has forecast three rate hikes this year, the same number as in 2017.
Consumer spending
Consumer spending, which accounts for more than two-thirds of U.S. economic activity, is expected to have increased by as much as a 3.9 percent rate in the fourth quarter. That would be the quickest pace in three years and would follow a 2.2 percent rate of growth in the July-September quarter.
Consumer spending is likely to remain supported by rising household wealth, thanks to the stock market rally and higher house prices, tax cuts and firming wage growth as companies compete for workers and some states raise the minimum wage.
“Since the election the consumer has been exuding confidence, which is the willingness to spend money, and we see he has got even the ability to spend money too because personal income is creeping up,” said Dan North, chief economist at Euler Hermes North America in Baltimore.
“So, you have the willingness and ability to spend. We think consumption is going to pick up and drive the economy.”
Business investment in equipment is expected to have picked up from the third-quarter’s 10.8 percent growth pace. Spending on equipment is likely to be underpinned this year by the corporate income tax cuts and recent increase in crude oil prices.
Investment in homebuilding is expected to have rebounded after contracting for two straight quarters. An acceleration is expected in government spending from the July-September period’s pedestrian 0.7 percent growth pace.
Trade a drag
But trade was likely a drag on GDP growth as the burst in consumer spending was probably satiated with imports, offsetting a rise in exports, which is being driven by dollar weakness.
Economists at JPMorgan estimate that trade cut one percentage point from fourth-quarter GDP growth after adding 0.36 percentage point in the third quarter.
Inventory investment also probably subtracted from GDP growth last quarter after adding 0.79 percentage point to output in the prior period.
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