When US national investments succeed and fail

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Key new technologies sectors that were born in the US are now located abroad. & nbsp,

After 2000, the US trade balance for technology items changed from a deficit to an increasing shortage due to the production migration. Concerns about the US’s reliance on foreign sources for corporate products have been raised due to both a significant trade deficit and the risk to national security. & nbsp,

In effect, the US government has provided greater financial support for corporate technical industries, such as the CHIPS and Science Act of 2022, which pledges US$ 52.7 billion to support the domestic semiconductor manufacturing sector. & nbsp,

Although it is too early to evaluate its effectiveness, there have been earlier initiatives to support strategic different sectors that have both succeeded and failed. Their teachings ought to be taken away. & nbsp,

The silicon and light industries’ long-term support, which began in the 1970s, was the biggest success. The Defense Advanced Research Projects Agency( DARPA ) of the US Defense Department was then in charge of laying the groundwork for the modern electronic world in chips, lasers, and communications technologies in collaboration with industrial organizations. & nbsp,

However, smaller, more prior initiatives to support new industries, including clean energy, have notable failures. Solar panels were created by numerous startups in the early 2000s using & nbsp, Invented in US.

One of these new businesses, Solyndra & nbsp, built its goods on cutting-edge thin film technology, which was ultimately unworkable for business. It was given a$ 525 million federal loan to help with solar panel production, but it fell short and shut down in 2011.

installation of the circular thermal module design used by Solyndra prior to the company’s demise. Featured image: Solyndra

In the US, solar panels supply is currently very low. The majority of them are produced in China using a silicon technology that is completely different from Solyndra. This industry is worth$ 30 billion annually, with much of it being exported to the US. Rates have drastically decreased as a result, and no American organization can thrive with foreign businesses. & nbsp,

An attempt to manufacture batteries for electric vehicles in the US was another loss. With a novel lithium-ion technology, & nbsp, A123 was born out of the Massachusetts Institute of Technology( MIT ) in the early 2000s and entered the market for rechargeable consumer electronic batteries, which was dominated by Asian producers like LG.

A123, on the other hand, concentrated on large systems, specifically on batteries for electric vehicles( EVs ), which were expected to eventually grow into a sizable market, presuming the availability of useful and reasonably priced rechargeable batteries. & nbsp,

The business entered into supply agreements with EV-focused businesses like General Motors ( GM ), but it continued to concentrate on the materials side of battery technology and delegated system integration to its partners. Because it affected its customers’ EV capabilities, this was a significant strategic mistake.

Tesla, which collaborated with well-known Eastern cell manufacturers’ battery technology, was noticeably absent from its client list. Its proprietary system technology made it possible for it to produce and market early electric vehicles( EVs ). Fisker, a significant A123 business, filed for bankruptcy in the interim, and the business was unable to produce profitable products. & nbsp,

A123 was undoubtedly a clear achievement at first. The business raised almost a billion dollars through an initial public offering( IPO ), including$ 250 million from the US government as part of the Federal Recovery Act of 2009. & nbsp,

Despite investing in high-quality development services, the company continued to lose money on the goods it sold. A123 declared bankruptcy in 2012 after failing to raise enough money to continue operating due to ongoing costs. & nbsp, It was eventually purchased by a significant manufacturer of Chinese automotive parts. & nbsp,

A123 Systems R & amp, D Laboratory’s NHR 9200 battery test systems. Photo: Facebook

These are all blatant examples of industrial policy intended to support different sectors and all involved public financing supplementing personal funds.

While the other two industries failed, the silicon company’s expansion was a large success. The most gifted individuals in the world were drawn to the semiconductor system. & nbsp,

Its performance was attributable to maintaining lucrative activities in business, education, and research facilities with wise US federal funding, primarily managed through DARPA, to address pressing issues and make the findings widely accessible to spur manufacturing. & nbsp,

Venture capital, public markets, and business funds were drawn to the good opportunities presented by the technology in order to meet capital needs. Good ideas could be turned into fantastic new items with the help of all the necessary components. & nbsp,

The two unsuccessful products had significantly fewer resources. With limited resources, the innumerable companies focused primarily on creating innovative new methods for building solar panels. A complete reworking of the components and techniques to reduce costs through clever vertical integration was ultimately successful in creating China’s low-cost, high-performance solar panels industry.

To design and construct for businesses, billions of dollars were needed. In China, the necessary cash was available. The difference is that this level of industry building was always included in the program here. China’s choice program was extensive and clever after deciding to build the solar panels industry. & nbsp,

The choice in Solyndra, on the other hand, was an innovative strategy that ultimately failed with limited financing. & nbsp,

The solar panels industry in China has expanded by leaps and bounds. Supplied picture

The power course is subject to the same criticism. A123 was essentially the only company attempting to establish a home EV power supplier in the US. There were no viable businesses to offer options, so it was unclear what techniques or tactics it used to achieve. Additionally, there was no concept development relative to DARPA. & nbsp,

My opinion: Two things are necessary to repeat the success of the transistor company’s development with government support.

The ability to capture and asset the highest levels of technologies and business skill by combining business, academia, and government is the first requirement. Also, don’t overlook the part DARPA played in directing technology progress.

Technologist, engineer, poet, and long-time private equity investor Henry Kressel. & nbsp,

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‘Glimmer of hope’ for Sri Lanka amid ‘encouraging factors’, says foreign minister

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Sri Lanka’s central bank forecast the economy will shrink by 2 per cent this year but expand by 3.3 per cent in 2024. The prediction is more optimistic than the IMF’s, which pegged contraction this year at about 3 per cent and growth of 1.5 per cent next year.

TOURISM KEY TO RECOVERY

Tourism is “central” to Sri Lanka’s recovery, said Mr Sabry, calling it “one of the lowest hanging fruits”.

While numbers have come down “drastically” since the highs of about 2.4 million tourists in 2018, he said, there has been a “continuous inflow” of tourists in the last eight months.

While Sri Lanka’s tourism industry has been affected by Russia’s invasion of Ukraine, given that both Russians and Ukrainians have been among its top 10 tourist arrivals, Russian tourists have continued to visit the island nation, he said.

Mr Sabri also highlighted the strong support from countries like India, Germany and France. He added that he also looks forward to tourists from China and Japan.

“Tourism seems to be good (by) all indications … and most of the travel agencies, as well as sites and promoting agencies, have identified Sri Lanka as one of the very good markets for the coming few months,” he said.

COMPLETING THE DEBT STRUCTURING PROCESS

Mr Sabry also expressed optimism on his country’s road to debt restructuring. Sri Lanka is on track to complete the debt restructuring process in time for the first review in September, said the foreign minister.

“We have introduced price-sensitive, cost-reflective pricing in so many areas. SOE (state-owned enterprise) reforms are on the cards and tax reforms have come into play,” he said.

“There is a sense of stability in the country, and we have eliminated all sorts of queues and the shortages.”

Sri Lanka owes about US$17 billion in foreign debt, including to India and China. Both countries have agreed to restructure their loans, which prompted the IMF to extend Colombo a lifeline of US$3 billion.

In return, Sri Lanka has promised to restructure state-owned enterprises and privatise the national airline. It has also introduced higher taxes to pay for essentials like food and fuel.

“We are confident, just like we managed to secure the debt restructuring assurances from our friends and the creditors, we should be able to restructure it because that’s good for everybody. Without debt restructuring, our debts are not going to be sustainable,” he said.

Mr Sabry said that a lack of debt sustainability will not be good for investment or creditors, adding that the shorter the discussions on restructuring go on for, the better for all parties.

“I know some tough negotiations (are) around the corner, but so far the signs are encouraging from our friends, both bilateral and otherwise,” he said.

He added that he expects the island nation to achieve sustainable debt by 2027.

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Maybe the US isn’t in decline after all

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Xi Jinping, the president of China, views the United States as a country in decline. Most Americans agree as well. Therefore, it should come as no surprise that a current The Economist covers drama has garnered so much attention. Because The Economist presents a hill of evidence to the contrary in four meticulously reported pages.

The editors claim that worry about America’s decrease” obscures a spectacular triumph tale — one of enduring but underrated outperformance.” The richest, most effective, and most creative big economy in the world still belongs to America. It is leaving its competitors further in the dirt along an amazing number of dimensions.

Experts are energised by this challenge to conventional intellect. Two op-ed writings have been published by The New York Times in a row. One, written by liberal columnist David Brooks, concurs with The Economist and states that British capitalism” has proven superior to all real-world alternatives” despite all of its flaws.

The other, written by the forward-thinking economist Paul Krugman, issues a warning:” The statistics aren’t as accurate as they appear, and the gross domestic product can’m capture all of America’s darkness.”

Whether you agree or disagree with The Economist’s assessment, the following evidence is strong:

  • The US’s gross domestic product accounted for 25 % of the global GDP in 1990. The US still produces 25 % of the global economy, despite China’s rise.
  • The US share is increasing in comparison to its rivals in the G-7, which includes Japan and Germany. The US now accounts for 51 % of G-7 GDP, up from 43 % in 1990, when purchasing power is taken into account.
  • In 1990, American income per person was 24 % higher than that of Western Europe. Nowadays, it is 30 % higher.
  • Labor productivity( output per hour worked ) increased by 67 % in the US, 55 % in Europe, and 51 % in Japan between 1990 and 2022.
  • Over the past ten years, US research and development spending has increased to 3.5 % of GDP, far outpacing that of the majority of nations.
  • In the Organization for Economic Cooperation and Development, America spends 37 % more on education per student than the 23 other wealthy nations. Only Singapore has a higher percentage of Americans who have completed secondary education.
Photo: Reuters / Brian Snyder
Photo: Brian Snyder, Reuters, Asia Times paperwork

And this is just a small sample. The newspapers cites additional data, such as statistics demonstrating that Americans are more mobile, launch more businesses, and have much more robust and extensive commercial markets. The highly productive agriculture and food system of the United States is not mentioned in the newspapers.

The Economist acknowledges that there are drawbacks, particularly profits disparity. The” ultra – rich ,” who according to the magazine have” doed extremely well ,” accounted for a large portion of the growth in US income per capita. Americans have a five-year shorter life expectancy than people in some wealthy nations at the age of 77, in part because they receive subpar medical care.

The Economist also points out that” a trucker in Oklahoma can earn more than a doctor in Portugal ,” despite the fact that the US has the G-7’s most unequal income distribution.

Leaders typically receive praise for having good economies, but The Economist indirectly criticizes both Biden and Trump, warning that their shift to corporatism and industrial policy runs the risk of undermining America’s advantages.

Lower life spans and income inequality are two of the drawbacks Krugman emphasizes. He queries,” Do we charge that the wealthy can afford larger and more luxurious superyachts?” Krauman already contends that while Europe’s economic performance is inferior to that of the US, their standard of living is higher. They have a better work-life compromise thanks to their extended vacations.

However, Krugman ignores the many other factors on which The Economist places a high value on the American market by focusing only on GDP’s restrictions.

Additionally, there is a wider balance between American and European capitalism than just holiday. The conflict between economic vitality and financial stability, according to Brooks, is what it is. He claims that American capitalism” has always leaned toward pizzaz.”

The US economy continues to surpass, despite the fact that this rock has diminished as US social investing has increased.

Both Times experts concur that American nation is a disaster on one point. ” We’ve lived through a wretched political era ,” to use Brooks’ words. The economic structure is eroding in countless way. Without a doubt, this tearing contributes to the perception that America is in collapse that so many people have.

Same emotions existed in the 1980s, when Japan was expanding. It was obvious that those emotions had been exaggerated by the middle of the 1990s.

Did the past be repeated? The problems we face today, both domestically and externally, may be more severe. However, The Economist has offered a new and beneficial viewpoint by highlighting America’s ongoing abilities.

Former longtime Wall Street Journal Asia correspondent and editor Urban Lehner is editor emeritus of DTN/The Progressive Farmer. 

This article, originally published on April 2 by the latter news organization and now republished by Asia Times with permission, is © Copyright 2023 DTN/The Progressive Farmer. All rights reserved. Follow Urban Lehner on Twitter: @urbanize

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US envoy worries about China anti-spy law overreach

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The top United States diplomat to China has asked Beijing to clarify the newly-amended Counterespionage Law, which he says could make illegal some ordinary duties of American business people, academics and journalists in the country.

The standing committee of the National People’s Congress (NPC) on April 26 passed an amendment to strengthen China’s anti-spy law. The amended law will take effect on July 1.

The definition of offenders will be expanded from people who “join or accept tasks from” an espionage organization to those who “take refuge in” it. The coverage will also be widened from “state secrets and intelligence” to “other documents, data, materials and items related to national security and interests.”

“This is a law that could potentially make illegal in China the kind of mundane activities that businesses would have to do,” US Ambassador to China Nicholas Burns said Tuesday during a webinar organized by The Stimson Center, a Washington-based think tank. “We need to know more about it so we are asking questions here in Beijing.”

US Ambassador to China Nicholas Burns. Photo: Department of State

Burns said American firms have to do due diligence before they can agree to major investment deals, while they also need to have full access to economic data to make projections.

“The law could possibly imperil academic research. Professors and journalists could get caught up on this. But what we know so far is not positive,” he said.

In March, five Chinese staff of the Mintz Group, a US due diligence firm, were arrested in Beijing. 

Bain & Company, a Boston-based management consulting company, said last week that Chinese police had questioned its staff in Shanghai and seized some computers and smartphones during an operation three weeks ago. 

“We are very concerned about this. We have made our concerns known,” Burns said. “We think American businesses here ought to be free of intimidation from the government. And the rule of law should prevail.” Businesses should not be targeted simply on account of “political differences and competitive differences in the US-China relationship.”

He said the US hopes that American business people, journalists and academics can feel safe when doing their duties in China.

“Companies of all countries are welcome to have economic and trade cooperation in China,” Mao Ning, a spokesperson of the Chinese foreign ministry, had said last Friday. “We are committed to fostering a market-oriented, law-based and world-class business environment. China is a law-based country. All companies in China must operate in accordance with the law.” 

Mao said then that she could not comment on the Bain case due to a lack of information.

Investors feel unwelcome

The Wall Street Journal reported on Sunday that the Chinese authorities have in recent months restricted or outright cut off overseas access to various databases involving corporate-registration information, patents, procurement documents, academic journals and official statistical yearbooks.

The US Chamber of Commerce said in a statement on April 28 that the amendment of China’s anti-spy law is “a matter of serious concern for the investor community and likely is as well for their local business partners in China.”  

It said foreign investment will not feel welcomed in an environment where risk cannot be properly assessed and legal uncertainties are on the rise.

“We are closely monitoring the heightened official scrutiny of US professional services and due diligence firms in China,” it said. “The services these firms provide are fundamental to establishing investor confidence in any market, including China.”

Global investors pulled a net US$3.17 billion from Chinese stocks through Hong Kong’s Stock Connect during the five trading days last week, the Wall Street Journal reported on April 28, citing an analysis from Exante Data. 

China eyes new money

After the then-US House speaker, Nancy Pelosi, defied Beijing’s warning and visited Taiwan last August, the Chinese government cut off all communication channels with the US for several months. The two sides resumed dialogues over Taiwan, Ukraine, climate change and trade matters after US President Joe Biden and Chinese President Xi Jinping met in Bali last November.

However, US-China tensions increased again after a Chinese “spy balloon” appeared in North American airspace in late January. Beijing was also disappointed by falling orders and slowing investments from the West.

US sailors fish the collapsed Chinese balloon out of the Atlantic off South Carolina. Photo: US Navy

In the first quarter, China’s exports to the European Union fell 7.1% year-on-year while exports to the US dropped 17%, according to the dollar-denominated figures released by the General Administration of Customs on April 13. The decline was largely offset by the increase in exports to ASEAN countries, Africa and Russia. 

If denominated in US dollars, the year-on-year growth of China’s foreign direct investment (FDI) was only 0.5% in the first quarter, significantly down from 32% in the same period of last year. 

The Politburo of the Chinese Communist Party’s Central Committee said China will put attracting foreign investment in a higher priority in order to boost economic growth and domestic demands. 

“At present, our country’s economy continues to improve but the endogenous driving force is still not strong enough while domestic demand remains insufficient,” the politburo said in a statement after a meeting chaired by General Secretary Xi Jinping this past Friday. “China’s economic transformation and upgrading is facing new obstacles while the promotion of high-quality development still needs to overcome many difficulties and challenges.”

“Attracting foreign investment should be placed in a more important position, and foreign trade and investment should be stabilized,” it said. “It is necessary to help qualified free trade pilot zones and ports meet the requirements of international high-standard economic and trade rules so that they can carry out reform and opening up.”

The Shanghai government said it will optimize its financial services and encourage foreign investors’s participation in China’s financial markets, which will support the fundraising activities of Chinese technology, trade and shipping firms. 

Media reports said last month that Biden will soon sign an executive order that will restrict US companies and private equity and venture capital funds from investing in China’s microchips, artificial intelligence, quantum computing, biotechnology and clean energy projects and firms.

Read: More US firms looking elsewhere: AmCham China

Follow Jeff Pao on Twitter at @jeffpao3

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FA Sustainable Finance Forum: Top Five Takeaways

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In terms of sustainable development goals (SDG), business and investment have long and difficult journeys ahead.  Sobering figures from a draft report published by the United Nations (UN) last month reveal that at the end of 2022, just 12% of the SDGs were on track to meet their 2030 targets.

“It’s time to sound the alarm,” the report warned.

“At the mid-way point on our way to 2030, the SDGs are in deep trouble. A preliminary assessment of the roughly 140 targets with data show only about 12% are on track.”

“Close to half, though showing progress, are moderately or severely off track and some 30% have either seen no movement or have regressed below the 2015 baseline.”

The audience at FinanceAsia’s recent Sustainable Finance Asia Forum on April 18 heard that although there is plenty of road to make up on the journey to net zero, so too is there substantial opportunity. 

ESG imperatives are changing the way institutional investors approach decision-making, develop sustainable products and operate within new regulatory frameworks.

While the over-arching message of the forum underlined that sustainable goals and driving yield are not inimical, how exactly institutions approach sustainable finance will shape the future.

The following are FA’s top five takeaways from a forum focussed on these frameworks.

***

1. Creativity is key

While sufficient capital may be out there to bootstrap transitional finance in Asia – a region that is bearing the physical brunt of climate change – getting it where it needs to go in emerging markets (EMs) is not working at the scale and speed necessary to effect change.

Emily Woodland, head of sustainable and transition solutions for APAC at BlackRock, told a forum panel exploring the state of play of Asia’s SDG commitments that, as well as climate and transition risks, investors also face the common-or-garden risks that come from operating in EMs.

“There are the general risks of operating in these markets as well – that’s everything from legal, to political, to regulatory to currency considerations,” she said. 

“Where finance can help develop new approaches, is around alleviating risks to attract more private capital into these innovation markets, and this is where elements like blended finance come into play.”

To make emerging market projects bankable, de-risking tools are urgently needed.

“That means guarantees, insurance, first loss arrangements, technical assistance which can help bring these projects from being marginally bankable into the bankable space, offering the opportunity to set up a whole ecosystem in a particular market.”

2. Regulation drives change

As investment in sustainable development goals moves from the fringe to the mainstream, institutions are bringing with them experience and learnings that are accompanied by policy, regulation and clear frameworks from regional governments.

Institutions are being asked to lead mainstream investment in the space as increasingly, investment in ESG becomes a viable funding choice.

“The next phase, which is the forever phase, will be when sustainability becomes mandatory rather than just a choice,” Andrew Pidden, Global head of sustainable investments at DWS Group told the forum.

“In the future, you will not be able to make an investment that has not been subject to due diligence with a view to doing no harm – or at least to doing a lot less harm than it is going to supply.”

“People may think this is never going to happen, but people thought this phase (of ESG investment becoming mainstream) was never going to happen 10 or 15 years ago.”

3. China is an ESG bond behemoth

Make no mistake, China is an ESG debt giant. Assets in China’s ESG funds have doubled since 2021, lifted by Beijing’s growing emphasis on poverty alleviation, renewable power and energy security.

According to Zixiao (Alex) Cui, managing director CCX Green Finance International, in 2022, green bond issuance volume alone totalled about RMB 800 billion ($115.72 billion), marking a 44% increase year-on-year (YoY). In the first quarter of 2023, there were 113 green bond issuances worth almost RMB 20 billion.

“Actually, this number decreased compared to last year because right now in the mainland, the interest rate for lending loans from banks is very low so there’s really not much incentive to issue bonds,” he told the audience during a panel on the latest developments in Chinese ESG bonds and cross-border opportunities.

“But over the long term, I think we are on target to achieve a number no less than last year.”

At the heart of this momentum is China’s increasingly ESG positive regulation.

“Policy making is very critical because in the mainland, we have a top-down governance model mechanism which has proven effective in terms of scaling up the market – especially on the supply side.”

4. Greenwashing depends on your definition

When is greenwashing – the overstating of a company’s or product’s green credentials – technically measurable, and when is it a matter of opinion?

Gabriel Wilson-Otto, head of sustainable investing strategy at Fidelity International, told a panel addressing greenwashing and ESG hypocrisy issues, that these transparency and greenwashing concerns are often problems of definition.

“There is a bit of a disconnect between how these terms are used by different stakeholders in different scenarios,” he says.

On one side, is the argument around whether an organisation is doing what it says it is, which involves questions of transparency and taxonomy.

“In the other camp there’s the question of whether the organisation is doing what’s expected of it. And this is where it can get incredibly vague,” he explained.

Problems arise when interests and values begin to overlap.

“Should you, for instance, be investing in a tobacco company that’s aligned to a good decarbonisation objective? Should you pursue high ESG scores across the entire portfolio?” he queried.

“Depending on where you are in the world, you can get very different expectations from different stakeholders around what the answer to these sub-questions should be.”

5. Climate is overtaking compliance as a risk

While increased ESG regulation means that companies must take compliance more seriously, this is not the only driver. According to Penelope Shen, partner at  Stephenson Harwood, there is a growing understanding that climate risks are real.

“The rural economic forum global risk survey shows that the top three risks are all related to financial failure directly attributable to climate risk and bio-diversity loss,” she highlighted during a panel called ‘ESG as a component of investment DNA and beyond?’

“In fact, if you look at the top 10 risks, eight of them are climate related.”

The prominence of climate as a risk factor has consistently ranked top of the survey over the past 10 years, she explained.

“Other more socially related factors such as cost of living and erosion of social cohesion and societal polarisation are also risks that have consistently ranked highly,” she noted.

What’s your view on the outlook for green, social and sustainable debt in 2023? We invite investors and issuers across APAC to have your say in the 6th annual Sustainable Finance Poll by FinanceAsia and ANZ.

¬ Haymarket Media Limited. All rights reserved.

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Citi appoints new Malaysia CEO

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Citi has appointed Vikram Singh as new CEO of its Malaysian business, effective from May.

A spokesperson for the bank told FinanceAsia that Singh had already relocated to Kuala Lumpur for the new role, which will see him prioritise growth across the market franchise.

In his new capacity, Singh reports to Amol Gupte, head of South Asia and the Asean region, and takes responsibility for the full suite of the bank’s activities in Malaysia. This includes oversight of the performance of Citi’s Solutions Centres in Kuala Lumpur and Penang, which support its wider banking operations in over fifty countries.

Singh has served across a number of Citi’s core divisions to date. He started his career with the bank 24 years ago working across its India-based business, in posts located in Mumbai, Bengaluru and New Delhi. Most recently, he was head of Asia Pacific Regional Account Management, managing coverage of global subsidiary clients operating in the region, from Singapore. 

A release shared with media pointed to Singh’s particular expertise leading the bank’s Corporate and Investment Banking effort in the Philippines over a period of five years, during which he devised robust business strategies that went on to achieve double-digit revenue growth.

“Vikram’s long career and experience with the firm will be invaluable in leading the next stage of growth in a market that also supports many of our global businesses and functions,” Gupte said in the announcement.

Citi established a presence in Malaysia 64 years ago. In January 2022, the bank announced plans to sell its consumer franchise in four Asean markets including Malaysia, to United Overseas Bank (UOB). The deal finalised in November 2022, bringing the bank regulatory capital benefits of approximately $1 billion. 

Offering an update on the bank’s performance in the market following the divestiture, the spokesperson told FA, “We continue to see good client activity across our institutional businesses.” He noted “good growth and client work”.

Elaborating on the current opportunities that Malaysia presents, the contact pointed to varied growth avenues across investment and corporate banking, as well as within the bank’s trade and treasury business, such as hedging.

“Across our institutional businesses from Banking, Markets and Services, we see opportunities to support both local and multinational corporate (MNC) clients further.”

The spokesperson added that the bank has recruitment plans around Singh’s appointment to support client-led growth. 

¬ Haymarket Media Limited. All rights reserved.

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US Fed weighs mixed signals in next crucial rate call

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Is the Federal Reserve finished raising interest rates now that inflation has decreased and the US market has cooled? After all, the central bank’s goal when it started jacking up prices more than a year later was to gradually lower the direction of prices without crashing the economy.

According to data released on April 27, 2023, the gross domestic product— the most comprehensive indicator of an economy’s output — expanded at a rate of just 1.1 % annually in the first quarter, down from 2.6 % during the last three months of 2022. Additionally, the most recent customer premium data from March indicates that inflation is slowing to 5 % annually, which is the lowest level in about a year.

However, the Fed hasn’t most finished raising rates just yet, which is bad news for consumers and businesses who are tired of skyrocketing borrowing costs. When the Fed meets for a two-day meet that ends May 3, 2023, commercial businesses are forecasting another quarter-point increase. Additionally, there might be additional changes in the future.

But this does bring up another crucial question: Is the Fed getting close to creating the” soft landing” it’s been hoping for with all the recent, frequently contradictory data and narratives about inflation, bank failures, and layoffs in the tech sector?

The market oscillates between zigzags.

The GDP facts offers some hints to the solution despite being a mixed bag.

Ultimately, the most recent GDP figures point to a good economic slowdown in the future, which is largely attributable to an increase in inventories, meaning that rather than ordering new goods, businesses are relying more on items that are already in storage.

Companies appear to be more likely to sell what is already available than to purchase different goods, probably in anticipation of a decline in consumption. Additionally, business investment fell 12.5 % during the quarter.

Consumer spending, which makes up about two-thirds of GDP, increased at a healthy 3.7 % rate at the same time that investment in machinery like computers and robotics increased by 11.2 %. However, this category is quite volatile and could easily change in the coming quarters.

A decline, such as a decrease in new purchases for manufactured goods, is also indicated by some data. This, along with the decrease in stock in the GDP report, may imply that companies are bracing themselves for a decline in consumer demand for goods and services.

Job openings have been declining when we consider the labor market, despite the fact that job growth has been strong( 334, 000 over the past six months ). According to the Bureau of Labor Statistics, holes decreased to about 9.9 million as of February 2022 from a peak of around 12 million.

Is the price of prices high or low?

We can also see opposing figures in terms of prices.

Since its peak in June 2022 at 9.1 %, the headline consumer price index has in fact been steadily declining. The Fed’s preferred solution of inflation, the primary preferred eating index, has nevertheless remained obstinately elevated.

The index, which excludes volatile food and energy prices, was up 4.6 % in March from a year earlier and has barely budged in months, according to the most recent data, released on April 28, 2023.

a grocery store in Washington, DC, selling fruits and vegetables. AFP portrait by Brendan Smialowski

However, wages increased at an annual 5.1 % in the first quarter, also in line with data released on April 28. Income, when rising, can have a significant upward thrust on price. Even though it’s down from its 5.7 % peak in the second quarter of 2022, wage growth is still moving at the fastest rate in at least 20 years.

More excursions are coming.

What does all of this mean for the Fed’s interest rate policy, then?

The market chances strongly favor another 0.25 amount stage increase, making it the 10th straight increase since March 2022, when the next meeting is scheduled to start on May 3.

The central bank is probably not finished raising rates because the inflation rate is still well above the Fed’s target of about 2 %, along with continued job growth and a low unemployment rate. I concur with the competition conflict pricing for a quarter-point increase for the meeting in May. Future content will direct any rate increases that come after that.

The good news is that, in my opinion, the higher price changes have historically occurred.

landing gently, or at least slowly

That brings us full circle to the crucial query: How near is the Fed to implementing a soft landing in which the US business is able to control inflation without erupting?

Unfortunately, it’s also soon to tell. Political and international functions, such as potential impasse on debt ceiling deals or further escalation of the Ukraine combat, you turn things upside down. Work businesses can be very unstable. Having said that, a development or mild recession is what we are anticipating.

What makes them different? A growth recession indicates a poor economy, but not enough to cause unemployment to rise drastically. This is preferable to an even mild recession that results in multiple quarterly GDP declines and significantly higher unemployment.

Simply put, we are unsure of which is more plausible. However, I believe that a severe downturn has been avoided, barring any fatal and unexpected events.

Christopher Decker, Professor of Economics, University of Nebraska Omaha

Under a Creative Commons license, this article is republished from The Conversation. Read the original publication.

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US tech war opens fire on China’s cloud computing

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In: Asia

US Commerce Secretary Gina Raimondo stated that she and the Biden administration would not be portrayed as bad on China in response to Republican senators’ pressure to censure Chinese cloud computing business:

She told the Senate Appropriations Committee,” I’ve put more than 200 Chinese businesses on the institution list during my tenure, and we’re constantly looking into new threats. If and when we decide that companies should be added to the list, I won’t bother.”

Eight Republican senators, including Senator Bill Hagerty( R-TN ), a ranking member of the Senate Banking Subcommittee on National Security and International Trade and Finance, wrote to Raimondo, Treasury Secretary Janet Yellen, and Secretary of State Antony Blinken on April 25 requesting that they take decisive action against Chinese cloud service providers like Baidu and Tencent, as well as Alibaba Cloud and Huawei Cloud.

According to” Open-source information ,” Huawei Cloud and PRC-based cloud computing services are directly undermining the interests of the US and our allies and partners in terms of national security and economic security. They are also increasingly interacting with foreign entities, some of which are sanctioned. & nbsp, We implore you to take decisive action against these companies through sanctions, export restrictions, investment bans, and further research into PRC cloud computing service companies.

The following payment is listed on Senator Hagerty’s site:

” The example we give in the text demonstrate the viability of China’s military-civil integration strategy.” It does make sense to refuse US exports of these nations given China’s laws, which require every Chinese citizen and company to participate in regional security or intelligence work, according to Hagerty. & nbsp,” Yet businesses like Alibaba Cloud that are not on the Entity List now have access to US technology, imports, and even activities here in the United States.”

Do you recognize that the PRC cloud service providers operating in the United States pose a danger to our national and our financial security, given the scope of China’s military legal fusion strategy and regional security-related laws? Hagerty questioned.

According to Secretary Raimondo,” I’m in wide agreement with you.”

Gina Raimondo, secretary of commerce. Asia Times images

The email continues by citing specific but well-known instances of the companies’ play with China’s military, security, and intelligence services, such as satellite imagery and regional monitoring. They do, however, mainly serve financial markets, much like US military legal fusion company Boeing.

For instance,” military civil fusion” is not a sinister Chinese plot; rather, it is based on common practice. Boeing declared in February that it had been” selected by the US Air Force as the prime contractor for the country’s intercontinental ballistic missile ( ICBM ) guidance subsystems support.” Over the course of 16 years, the contract could be worth up to$ 1.6 billion.

Alibaba Cloud is the biggest cloud service provider in China and the fourth-largest in the world. It offers services to the banking, e-commerce, logistics, and many industries around the world in the areas of repository, storage, data analytics, networking, application, security, etc.

The employment website indeed.com currently lists 30 positions at Alibaba in Sunnyvale, California, including software engineer, photonics expert, research scientist, and business manager, with annual pay ranging from$ 110,000 to$ 240,000.

According to Crunchbase, US technology providers have eliminated more than 135, 000 projects so far this year. Senator Hagerty and his associates likely want to do away with internships at Alibaba as well as the modern know-how they stand for.

The level of knowledge is very deep. For instance, a Ph.D. is required for applicants for the placement of optics professional. have in the construction, development, and production of golden optics chips for visual interconnects, as well as a d. degree in electrical engineering, applied science, or another related field.

Although Huawei Cloud is basically roughly half as big as Alibaba Cloud, it has been developing quickly. Huawei Cloud, as reported on its website, has received a number of qualifications and awards since being added to the Entity List in August 2020, including:

The initial cloud service provider in Asia-Pacific to receive PCI 3DS accreditation for regional transactions account information security as of August 2020.

The second cloud service provider to achieve information security management Standard 27799 certification in September 2020.

The British Standards Institution has awarded both the CSA STAR 2021 Gold Certification and the ISO / IEC 27034 application security standard certification.

Forrester Research has named him a president in predictive analytics and machine learning as of November 2020.

For its GaussDB registry products, which assist businesses in migrating data to the sky, Gartner has included it in its Magic Quadrant for Cloud Database Management Systems for December 2020.

One of the best four and the fastest-growing cloud service provider in Latin America, Canalys named it in March 2021.

May 2021- No. Ranked 1 in the IDC market for commercial cloud infrastructure in China.

Ranked No. December 2021 IDC ranks machine learning at number one in China’s public cloud system market.

More than 1,000 public staff, clientele, and business experts attended the Huawei Cloud Summit Middle East and Africa in Dubai in March 2022.

The meeting looked at how cloud computing can help with public services, financing, carriers, media, e-commerce, and gaming.

The second Huawei Cloud Indonesia Summit was held in Jakarta in September 2022 to discuss the electronic economy with local business leaders and scholars, business partners, and the internet.

With more than 60 products to be launched in areas like e-commerce, shorter video platforms, online gambling security, and finance, Indonesia became a new area for Huawei Cloud in November.

In order to create good town ideas, Huawei Cloud and BCB Blockchain of Singapore joined forces in November 2020.

The Huawei Cloud Accelerator, a system intended to support the growth of start-ups with the aid of venture entrepreneurs, was unveiled in September 2022 at the summit held by the Huang Cloud Global Startup Founders Summit. This program aims to empower businesses in Shenzhen.

According to the company, Huawei Cloud is now used by more than 800 public clouds in China. The bank’s” One City, One Cloud” approach has been put into practice in over 150 settlements, and it also powers over 300 financial institutions, including six major institutions.

E-commerce, financing, power, manufacturing, medicine, and gaming are a few other user industries. Huawei Cloud is present outside of China in the Asia-Pacific, Middle East, Africa, Latin America, and Europe. Being on the Entity List does not appear to be a serious issue, aside from not being able to work in the US.

May US politicians be able to punish some Chinese cloud service providers for their actions? Maybe. Even as they forced Oracle to cut its ties with Huawei, they may compel US businesses like Salesforce, IBM, VMware, and Fortinet to do the same with Alibaba Cloud.

Huawei created its own ERP application as a result, which it unveiled in April. If Alibaba Cloud were added to the Entity List, which is overseen by the Bureau of Industry and Security ( BIS ) of the Commerce Department, something similar would likely occur.

Being placed on the list can be a significant issue, but it also motivates the targeted business to exert more effort. It may be referred to as the BIS Certificate of Quality in the Global South and some regions of the world where US sanctions are truly recognized.

@ ScottFo83517667 is the author’s Twitter account.

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Voters urged to help map national development

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In: South-East Asia

SONGKHLA: Prime Minister Prayut Chan-o-cha yesterday called on voters in this southern province, especially the young generation, to join him in mapping the direction of national development.

In a campaign speech in Muang district, Gen Prayut, the United Thai Nation Party’s No 1 prime ministerial candidate, told supporters that the May 14 general election is possibly the nation’s most important election.

He said Thailand must change for the better and asked young voters to help him shape development. He also thanked people in Songkhla for their support.

Gen Prayut also introduced UTN leader Pirapan Salirathavi­bhaga, who is the party’s No 2 prime ministerial candidate, and UTN candidate Jua Ratchasi to supporters.

After the speech, Gen Prayut toured several markets in Muang to solicit support for the UTN’s MP candidates in the district.

On Saturday evening, thousands of people turned up for the UTN’s first rally in Phatthalung, which was held in the province’s Muang district.

There, he told party supporters that every policy proposal could be implemented if the UTN wins the election, gains control of the House and leads the next government.

He touted support for a double-track rail system for every region, a new motorway project to connect the Andaman coast with the Gulf of Thailand and amendments to outdated laws.

He also said several development schemes under his government could not be completed due to insufficient funds, a problem made worse by the Covid-19 pandemic. “These policies we want to push can’t proceed if the party has too few seats,” he said. “There are several issues that I have to finish, and I’m here asking for your votes and support for the UTN.”

Gen Prayut spent the weekend campaigning in Trang, Phatthalung and Songkhla provinces, known to be traditional strongholds of the Democrat Party, and wrapped up his tour with a rally in Songkhla’s Hat Yai district yesterday.

There are 60 constituency seats up for grabs in the South, compared with 50 in the previous election in 2019. The UTN aims to capture 20 seats in the region, which was split among the Democrats, the Palang Pracharath Party, the Bhumjaithai Party, the Prachachart Party and the Action Coalition for Thailand Party in the last polls.

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Consensus on need to support farmers

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In: South-East Asia

An 11-party conference on agriculture and food protection was reportedly agreed upon, and there is widespread political commitment on the significance of sustainable farming, food safety and security, as well as the need to combat poverty among farmers.

Several policies were put forth at the party, including support for organic gardening, technological development, modernizing the business to meet international standards, and addressing land ownership disparity.

The National Farmers Council, Biodiversity, Sustainable Agriculture, and Food Sovereignty Action Thailand( the BioThai Foundation ), Chulalongkorn University’s Social Research Institute, as well as their companions, organized it.

The government’s subsidy programs should be revised, according to Decharut Sukkumnoed, director of the Move Forward Party ( MFP ) Think Forward Centre, as they haven’t been successful in enhancing farmers’ standard of living.

To replace aging farmers and improve agricultural product manufacturing, the plantation sector needs to be restructured and a new workforce of small farmers, he said.

In four years, the MFP has pledged to distribute Sor Por Kor land to impoverished farmers and may raise the property rights bank from 300 million ringgit to 10 billion.

In the meantime, the Bhumjaithai Party would increase organic farming areas by 20 % over the course of four years while halving the use of chemical fertilizer.

According to Supachai Jaisamut, the secretary of Bhumjaithai, taxation measures on hazardous chemicals may be taken into consideration to prevent their use as well as a moratorium on and commercialization of chemical-laden goods.

According to him, the club also intends to boost nutrition security standards, promote clean markets across the country, and give the organic farming industry financial support.

Alongkorn Ponlaboot, a deputy president in the Democratic Party, stated that the group’s 26-point agricultural policy has been developed to boost farmers’ incomes and support Thailand, which has the ability to dominate food exports.

According to him, the occasion intends to advance sustainable farming by expanding inorganic farming areas and preserving wildlife.

According to the Chartthaipattana Party, its agricultural strategy is based on the New-Theory Agriculture theory, and it will set aside more money to support business development.

According to club manager Nikorn Chamnong, the nation has placed an excessive amount of emphasis on the transportation sector, harming the agricultural sector.

The Chartpattanakla Party’s deputy president, Atavit Suwanpakdee, floated a plan to create an international cheese nutrition company called Fonterra that is owned by 10,500 farmers in New Zealand and their families.

The party, according to him, will also encourage the use of modern management to assist farmers in managing their farms more effectively.

The Palang Pracharath Party will work to lower costs, increase productivity, and encourage exports while Pheu Thai plans to issue property deeds totaling 50 million ray to persuade grain farmers to switch to wheat and soy beans.

While the Prachachart Party may push for a law to restrict investor property rights, the Thai Sang Thai Party wants to set off 150 billion ringgit for research and development.

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