Dark, dirty and slow, Zimbabwe’s trains, like much else in the impoverished southern African country, have seen better days.

Once the preferred mode of transport for most Zimbabweans, the state-run rail service mirrors the decline in the country’s economic fortunes during the last two decades under the leadership of former President Robert Mugabe.

Gilbert Mthinzima Ndlovu, a veteran of Zimbabwe’s 1970s independence war and a security guard at the National Railways of Zimbabwe (NRZ) for 35 years, yearns for the old days when trains were full and arrived on time.

“Times are different now as we have few passengers,” the off-duty Ndlovu told Reuters as he rested in a badly lit first class cabin during the journey from the capital Harare to his home in Bulawayo, Zimbabwe’s second city.

Now the 10-hour journey can take 16 hours, he said.

Not surprising, then, that many Zimbabweans prefer to make the 440 km (273 mile) journey by bus or public taxi in around five hours than have to endure a cold overnight train ride – even if at $10 the train ride costs only half as much.

The train carriages often lack lighting and water, and the toilets are filthy. The signalling and information systems are often vandalized and some tracks overgrown with grass and weeds because they have not been used in years.

NRZ is now trying to improve its fortunes.

Last year South African logistics group Transnet won a $400 million joint bid to recapitalize NRZ and fix some of the problems, including acquiring and refurbishing carriages.

But for now passengers have to make do with a broken train service.

“Today you can’t even buy food from the train and all the coaches are filthy, with no water and the lights are not working,” said one passenger who declined to give his name.
…

Last month, Patrick Ho, a former Hong Kong official fighting foreign bribery charges in New York, thought he had finally received a break.

In a dramatic move in the high-profile bribery case, prosecutors on Sept. 14 dropped all criminal charges against Cheikh Gadio, a former Senegalese foreign minister they had accused of helping Ho bribe African officials.

Arguing that the government’s move undermined its case against Ho, Ho’s lawyers urged a federal judge in New York to release their client from a federal jail. 

But the presiding judge, Loretta Preska, wasn’t buying it. She dismissed the motion, Ho’s fifth unsuccessful request for bail. And prosecutors said Gadio has agreed to cooperate, expressing confidence that his testimony against Ho will strengthen their case. 

“(Far) from weakening the case, Gadio’s testimony will provide substantial evidence of the defendant’s guilt,” prosecutors wrote in a court filing. 

Left largely unnoticed in the U.S., the corruption case against Ho has sent shockwaves across Asia, putting the spotlight on an open secret in global business circles — rampant bribery of foreign governments by Chinese companies seeking business deals around the world.    

China has largely ignored the problem, according to China experts.  While the government of President Xi Jinping has launched a much-publicized domestic anticorruption campaign, experts say Chinese authorities have yet to bring a single foreign bribery case against a Chinese company or executive.  

Ho has denied any wrongdoing.  

Ho, 69, and Gadio, 62 were arrested in New York last November and charged as part of a conspiracy to bribe African officials on behalf of CEFC China Energy, a Shanghai-based energy conglomerate with ties to the country’s military. 

At the time, Ho headed China Energy Fund Committee, a Virginia and Hong Kong-based NGO funded by CEFC China Energy, while Gadio ran a business consulting firm when he was a member of Senegal’s parliament. 

In one of two bribery schemes, prosecutors alleged that Ho and Gadio met on the sidelines of the United Nations in late 2014 to engage in a conspiracy to pay a $2 million cash bribe to Idriss Deby, the president of Chad.The payment was offered in exchange for helping CEFC Energy’s entry into Chad’s rich energy sector, according to prosecutors. 

Gadio allegedly introduced Ho to Deby and served as a middleman during discussions between the Chinese executives and Chadian officials. The complaint did not make clear whether any payment was made to Deby, but it did say that Gadio received $400,000 for his services. 

In the second scheme, Ho allegedly paid a bribe of $500,000 to Sam Kutesa, the Ugandan foreign minister, in 2016 in exchange for Kutesa’s help in helping CEFC Energy gain business contracts in Uganda’s financial and energy sectors, according to the criminal complaint.The bribe was paid after Kutesa finished his one-year term as president of the U.N. General Assembly and returned to Uganda. 

While the charges against Gadio were never presented to a grand jury, Ho was indicted on multiple counts of foreign bribery and money laundering. 

Ho pleaded not guilty.  

Timothy Belevetz, a former federal prosecutor now a partner at the Holland & Knight law firm, said bribery cases under the foreign bribery law known as the Foreign Corrupt Practices Act rarely go to trial.

“This is an opportunity for law to be made,” Belevetz said. 

FCPA was passed in 1977 in response to disclosures that U.S. companies were bribing foreign officials to secure business deals. The law has since been amended, giving the Justice Department and the Securities and Exchange Commission broad jurisdiction over foreign companies that have subsidiaries in the United States or trade on U.S. stock exchanges. 

In recent years, the Justice Department, working with international law enforcement agencies, has brought a growing number of corruption cases against foreign companies and executives paying bribes to foreign government officials.

While the Justice Department has previously charged U.S. and European companies with paying bribes to Chinese officials, never before has it tried the representative of a Chinese company on charges of bribing foreign officials in exchange for business contracts.

At the heart of the Ho bribery case is the question of whether any payment promised or made to the African officials was a bribe, as prosecutors call it, or a charitable donation, as defense lawyers put it. 

As Ho’s Nov. 5 trial approaches, prosecutors have revealed how Gadio’s testimony, as well as evidence of Ho’s business dealings with Iran and alleged arms sales to African nations, will help their case at trial.

In a recent court filing, prosecutors wrote that Gadio will testify that Ho handed $2 million in cash, hidden in a gift box, to Deby, and only after Deby “refused to accept this obvious bribe” did Ho draft a letter pledging $2 million to “charitable causes” in Chad. 

Gadio will also tell a jury that Ho never asked him about the status of the donation, indicating Ho had no “interest in doing charitable works in Chad.”

“This expected testimony considerably strengthens the government’s proof beyond the already-strong case reflected in the detailed Complaint,” prosecutors wrote. 

Prosecutors have also indicated in recent days that they intend to introduce evidence of Ho’s involvement in other corrupt actions.

In a court filing last week, prosecutors disclosed they have evidence that shows Ho had offered a bribe to John Ashe, a diplomat from Antigua and Barbuda who served as president of the U.N. General Assembly the year before Kutesa held the post. (Ashe was implicated in another corruption case involving a Chinese national but he died in 2016 before the case went to trial). 

Prosecutors also plan to introduce evidence of Ho’s interest in doing business with Iran while the country was under U.S. sanctions, and brokering arms sales to Libya and Qatar. 

In an October 2014 email, one of several cited in court documents, Ho suggested that CEFC China serve as a “middleman” to help Iran access funds it kept in a Chinese bank under U.S. sanctions to pay a Hong Kong bank for precious metals.

The complaint had hinted at Ho’s willingness to help Chad procure weapons from China, but new government filings allege that Ho’s interest in arms dealing extended beyond Chad. 

In March 2015, according to an intercepted email, Ho asked an unidentified intermediary to send him a list of weapons and military equipment requested by Libya so that “we can execute that right away.”

A month later, Ho emailed the intermediary. “Qatar needs toys quite urgently. Their chief is coming to China, and we hope to give them a piece of good news.”

Prosecutors say they want to introduce the emails as background evidence “to show the development and nature of the relationship” between Ho and Gadio. 

Belevetz said that as with other white-collar criminal cases, the case against Ho will turn more on documents such as emails and wire transfer records than testimonies of witnesses. 

In white-collar cases, “you often have a paper trail that shows what was said,” Belevetz said.

Edward Kim, one of Ho’s lead attorneys, declined to comment.

Sean Hecker, Gadio’s lawyer, said in a statement to VOA, “Dr. Gadio looks forward to continuing to cooperate with U.S. authorities before returning to Senegal to continue his service to the Senegalese people and the important pursuit of establishing peace and security across the Sahel Region.”
…

Ireland’s finance minister boosted budget day spending for the second year in a row as the government warned of economic “carnage” if neighboring Britain crashes out of the European Union without a divorce deal.

Having already pre-committed 2.6 billion euros ($2.99 billion) on increased public sector and planned infrastructure spending for next year, Paschal Donohoe, in Tuesday’s annual budget speech, almost doubled the remaining pot to 1.5 billion euros to dish out on further tax cuts and spending increases.

The state’s fiscal watchdog warned ahead of the budget that the booming economy did not need such additional stimulus.

But with an election potentially looming and the fast-growing economy exacerbating deficits in areas such as housing, a scrapping of a reduced VAT rate for the hospitality sector mostly funded the extra 700 million euro of spending.

That allowed the government to keep giving workers a small annual tax break it has promised to continue in future budgets, reverse welfare cuts imposed during a series of austerity budgets a decade ago, and boost infrastructure spending. 

“The shared progress we have made is real. However the risks and challenges that we now face are equally real,” Donohoe told parliament in a speech that went long past the allotted hour as he reeled off measure after measure but also struck a tone of caution with 25 different mentions of Brexit.

Donohoe said the government’s “central case” was that Britain and the European Union would reached a Brexit deal in the coming weeks, but the possibility of a no deal had influenced the financial decisions made.

Foreign Minister Simon Coveney warned of “carnage” if Britain crashed left without a deal, though he said that would mostly be felt by Britain, with Ireland likely to benefit from “huge solidarity” from fellow EU member states.

A further round of “Brexit-proofing” measures, which have had mixed results to date, were announced in the budget, including a 300 million euro loan scheme for small and medium sized businesses and the agriculture and food sectors to invest in future growth.

Balanced budget 

Donohoe said the best preparation for Brexit was responsible budgeting and he intended to balance the state’s books for the first time in more than a decade next year, an improvement on the tiny deficit originally planned but still not the surplus the central bank says should already be running.

The state’s independent fiscal watchdog, set up in response to the years of reckless spending that left the exchequer massively exposed when the 2008 financial crisis hit, voiced concerns over the “not very good budgetary practice” of recent years.

It is particularly worried by successive years of spending coming in over budget, which it fears will happen again next year.

Hotel and restaurant owners were unhappy at their return to the standard 13.5 percent VAT from the 9 percent rate introduced in 2011 to boost the then struggling sector. In a report in July, Ireland’s finance department said the lower rate had become a “significant deadweight.”

“#Budget19 will be known as an election budget paid for by the tourism industry,” Adrian Cummins, head of the Restaurants Association of Ireland, tweeted.

Ireland’s betting tax was also doubled to 2 percent, hitting the country’s largest operator, Paddy Power Betfair, which said it would have cost it 20 million pounds  ($26 million) this year. Its shares closed down 5 percent.

Donohoe outlined his planned “exit tax” for firms that move assets or migrate their tax residence from Ireland, setting it in line with the corporate tax rate of 12.5 percent but surprising business by introducing it immediately and not by 2020 when Ireland was obliged to come in line with EU rules.

A company would be liable to pay the exit tax on gains built up in Ireland from any asset — such as intellectual property — it planned to move out of the scope of the Irish tax authorities. The measure is part of a new EU Anti-Tax Avoidance Directive.

The budget will be the last before the next parliamentary election if Prime Minister Leo Varadkar’s Fine Gael-led minority government cannot agree an extension to its “confidence and supply” deal with the largest opposition party, Fianna Fail.

They agreed to open talks on Tuesday but while Varadkar said he wanted to complete the review and potential renewal by the end of the month, Fianna Fail leader Micheal Martin saw talks lasting until until Christmas.
…

Foreign companies have been flocking to Vietnam.

Earlier this year, one of the world’s biggest private equity firms Warburg Pincus added banking and logistics to its Vietnam portfolio, pushing its total investment into the country over the $1 billion mark.

Auto players like JAC Motors of China, as well as Kamaz, the largest truck maker in Russia, have recently turned to Vietnam. The Southeast Asian country is seeing money pour in from all over the globe, whether it’s Indonesia’s Gojek in ride-hailing, or Qatar’s Ooredoo in telecommunications. 

With a trade war rippling across the Pacific and fears of interest rate contagion in emerging markets, much of Asia looks bleak. So why is the economy in communist Vietnam such a bright spot?

Stability is key

Gross domestic product is forecast to expand 7 percent this year. The currency and inflation are stable. Growth is expected in exports, manufacturing, foreign direct investment, and other indicators that show Vietnam outpacing rivals in the 10-member Association of Southeast Asian Nations.

“Vietnam is likely to remain the fastest-growing ASEAN economy in 2018 and 2019, as in 2017,” said Chidu Narayanan, Asia economist at Standard Chartered Bank. “We remain positive on Vietnam’s growth medium term on strong manufacturing activity, as FDI inflows to electronics manufacturing remain strong.”

The bank predicts a current account surplus of 3.7 percent of GDP for 2018, meaning Vietnam takes in more money through trade and investment than it sends abroad. That includes an increase in income from services, such as IT outsourcing.

To explain why the country of 100 million people is outperforming peers, it helps to look at factors like trade, consumer spending, and politics.

On the surface, Vietnam’s communist system would not sound like an appeal for investors. But many actually cite the political stability, albeit through one-party government, as a reason to come here. And in reality most businesses operate in a free market, with some state controls. 

Political stability contributes to economic stability, and it helped Vietnam weather a leadership transition that in other countries could spell volatility. Stock markets were not rattled when the president, Tran Dai Quang, died suddenly of illness last month while in office. He will be succeeded by Communist Party chief Nguyen Phu Trong, a man known for maintaining the status quo.

“There will be no major change in Vietnam’s economic strategy or political system as a result of the passing of President Tran Dai Quang,” said Carl Thayer, emeritus politics professor, the University of New South Wales at the Australian Defence Force Academy.

Vietnam likes trade deals

That economic strategy has been characterized by trade deals with as many countries as possible. Through ASEAN, Vietnam has trade pacts with Australia, New Zealand, China, India, Japan, and South Korea. It also signed the Trans-Pacific Partnership, as well as separate agreements with Russia and the European Union.

This could be part of the reason that investor optimism jumped 6 percentage points between the first and second quarters of 2018, according to a European Chamber of Commerce in Vietnam survey released Oct. 3.

“These results show once again that European companies and investors remain confident in Vietnam,” chamber co-chair Nicolas Audier said. “On the cusp of this historic [EU-Vietnam free trade] deal, which would boost trade and investment on both sides, we hope this positive message from EuroCham and its members will inspire the government to continue opening its markets to foreign investment.”

Also drawing in businesses are Vietnamese shoppers. Consumer confidence was higher in Vietnam than in Thailand, Malaysia and Singapore, market researcher Nielsen reported in March. As citizens’ incomes rise, their spending attracts brands in all manner of products.

Spanish fashion retailer Zara has opened outlets here, while Apple in September appointed its first premium reseller in the country, EDigi, authorized to do official repairs of iPhones and Macs. Vingroup, a conglomerate founded by Vietnam’s richest man, launched a line of cars this month with some promotional juice from soccer star David Beckham.

No economy is perfect

It’s not all coming up roses, of course. Economists say Vietnam needs to keep an eye on borrowing: consumers are using more credit cards, the government is close to its debt ceiling, and banks have more non-performing loans than desired. The real estate sector is also cooling, and the country wants to avoid any of the flak that comes from the trade war between the U.S. and China.

That trade war has made investors bearish on Asia’s biggest economy. Elsewhere in the region, Indonesia is fighting to hold the value of its currency, as investors abscond to take advantage of higher U.S. interest rates.

Philippine inflation is approaching 7 percent, the highest in nearly a decade. In Myanmar, the economic potential that once seemed sky-high is now taking a back seat as that state allows ethnic violence and jails journalists.

Vietnam is not far away but has been spared many of those problems for now. 
…

Malaysia may introduce new taxes and sell assets such as land to pay down debt, Prime Minister Mahathir Mohamad said on Tuesday, as his administration struggles with liabilities of around 1 trillion ringgit ($240.67 billion).

Mahathir, who unexpectedly won a general election in May, has blamed the previous administration of Najib Razak for taking the country into such heavy debt, including that of the 1MDB state fund, which is the subject of corruption and money laundering investigations in Malaysia and other countries.

The government is also looking for new sources of revenue to make up the shortfall it is expected to face after scrapping an unpopular goods and services tax just weeks after the Mahathir-led Alliance of Hope coalition was elected to government.

“We may have to devise new taxes in order to have the money to pay our debts,” Mahathir told an investor conference.

“The other thing we can do is to sell our assets. Land is one of them… Beyond that we may have to sell some of our valuable assets in order to raise funds to pay the debts.”

He did not identify or elaborate on what these assets would be.

Last month, Finance Minister Lim Guan Eng said Malaysia will consider a combination of new debt issuance and asset sales to meet its short-term financing needs.

($1 = 4.1550 ringgit)
…

Netflix has chosen New Mexico as the site of a new U.S. production hub and is in final negotiations to buy an existing multimillion-dollar studio complex on the edge of the state’s largest city, government and corporate leaders announced Monday.

 

It’s the company’s first purchase of such a property, and upcoming production work in Albuquerque and at other spots around New Mexico is forecast to result in $1 billion in spending over the next decade.

 

More than $14 million in state and local economic development funding is being tapped to bring Netflix to New Mexico. Republican Gov. Susana Martinez and Albuquerque Mayor Tim Keller, a Democrat, touted the investment and said lengthy efforts to put New Mexico on the movie-making map are paying off.

“This is awesome,” the governor told dozens of people gathered inside a cavernous sound stage at ABQ Studios. “This massive investment will have a huge impact of course on New Mexico and continue our efforts to grow and diversify the economy.”

 

Martinez acknowledged the state’s reliance on federal funding and oil and gas development, saying more needs to be done to encourage diverse ventures such as Netflix as the private sector is the backbone of the American economy.

 

Keller said the city has laid the groundwork to make sure the film industry is part of its economic development plan. He called landing Netflix a “transformative victory” for the city.

Netflix projects produced in New Mexico include the Emmy Award-winning limited series “Godless” and “Longmire.” Company officials said previous experience working in the state inspired them to jump at the opportunity to establish a new production hub in Albuquerque.

 

Netflix earlier this year announced it was establishing its first European production hub in Spain. That operation is expected to help the online video entertainment platform expand its Spanish-language content.

 

It also has a production hub in Los Angeles and it’s possible the company’s footprint will continue to expand, given the amount of content the online entertainment provider is aiming to create.

 

“We will look at each place on its merits — the same kind of decision-making that went into the impending purchase of this studio,” said Ty Warren, Netflix’s vice president for physical production. “The combination of great crews, existing infrastructure, financial incentives — it was all part of it.”

 

Netflix has about 130 million subscribers worldwide.

 

Officials did not release details about the sales price of the studio complex in New Mexico. The property includes several sound stages, production offices, mill space and a back lot.

 

Martinez, whose second and final term ends this year, initially talked about trying to rein in New Mexico’s film incentive program and an annual $50 million cap was instituted.

 

As the state dug its way out of the recession, she said it was important to avoid cuts to critical programs such as education, health care and public infrastructure. She was criticized by many who thought the cap would stifle the growth of the film industry.

 

In 2013, she signed the “Breaking Bad bill,” named after the Emmy-winning TV drama that filmed primarily in Albuquerque during its five seasons. The legislation enhanced incentives for television productions.

 

Martinez said the industry has since marked three consecutive record-breaking years in New Mexico and it is lining up to be another monumental year.

 

The industry has drawn more in-state direct spending from film and TV productions each year since 2014, topping out at $505 million last fiscal year, according to the state film office.
…

American Airlines is telling employees to think twice before rebooking stranded customers on rival airlines, and regular economy-class passengers are the most likely to suffer when there are long delays or canceled flights.

A new policy at American directs airport agents not to rebook economy passengers on competing airlines — with no stated limit on how long they must wait for a seat on another American flight. A manager can make exceptions in a few cases, such as people flying to a wedding or funeral and those who would be stranded overnight with no hotel room.

Agents can still put economy passengers on American’s international partner airlines, but that won’t help customers flying within the U.S.

By contrast, American told agents in late September to help the airline’s best customers get to their destinations quickly, even if it means putting them on Delta or United.

Elite-level members of American’s frequent-flyer program and people who bought a first-class or business-class ticket can be booked on another airline if they face a delay of at least five hours — and even sooner for the highest level of elite customers.

The policy highlights the growing divide between airlines’ best customers and everyone else. It also shows how, for many travelers, flying on the biggest airlines is becoming more like taking a discount airline, with cramped planes, fewer perks and more extra fees.

Many of the largest and oldest airlines have agreements to put passengers on one another’s flights when there are long delays or cancellations. American, Delta Air Lines and United Airlines all have alliances with other global carriers and so-called interline agreements with each other. Airlines pay for such transfers, but at discounted fares.

Often, however, low-cost competitors including Southwest, JetBlue, Spirit and Frontier lack those deals. Their passengers are at greater risk of being stranded for a long time if the airline encounters a mechanical breakdown, a computer outage or bad weather.

Even though few travelers know about airline alliances and even fewer have heard of interline agreements, those rebooking options can make the big airlines much better than their smaller brethren when things go wrong.

Airlines have been putting displaced customers on other carriers for decades, but American, the world’s biggest airline, never had a written policy.

Some of American’s key airports including Dallas-Fort Worth and Chicago O’Hare see frequent long delays and cancellations because of storms. In July, American and regional affiliate American Eagle canceled 5,422 flights, according to the most recent government figures. That was the second highest rate in the industry behind Frontier Airlines, and compared with 2,394 cancellations at United and United Express and 1,154 at Delta and Delta Connection. The lopsided numbers suggest that American could be spending more than Delta and United to accommodate stranded passengers.

American Airlines spokesman Ross Feinstein said managers will have authority to make exceptions on a case-by-case basis. He said Delta and United have similar rules.

American made its instructions to agents available to The Associated Press. Delta made a portion of its guidelines available, and they do not appear biased against transferring economy passengers to another carrier. Delta spokesman Morgan Durrant said agents are told to try to rebook customers on partner airlines, but they can send anyone, including economy passengers, to American or United.

United Airlines declined to provide its guidelines to the AP, but spokeswoman Maddie King described restrictions that were updated last year and seem similar to American’s. She said economy customers can be placed on a non-partner airline like American or Delta if they would otherwise be stranded overnight and the delay was United’s fault. She said if the passenger is going to a big event like a wedding, “our employees are always empowered to make the right decision for our customers.”

The new American policy was first reported by Gary Leff on his blog, View from the Wing. In an interview, he said the ability to be transferred to another airline has always been one of the big advantages of traveling on those large carriers instead of a budget airline. This will narrow that gap, he said.

“We are going to have to wait and see what it looks like in practice. It comes down to how individual employees take this new policy,” Leff said. As for customers who need help getting to their destination on time, “You’ve got to convince someone to do it for you,” he said.

None of the three leading U.S. airlines would say how often they pay to put a passenger on another carrier’s flight, so it is unclear how many people will be affected.

“It may be the kind of thing that customers don’t notice until they need it,” Leff said.
…

The Royal Swedish Academy of Sciences has awarded this year’s Nobel Prize for economics to Yale University’s William Nordhaus and New York University’s Paul Romer.

The Academy said Nordhaus and Romer “have designed methods for addressing some of our time’s most basic and pressing questions about how we create long-term sustained and sustainable economic growth.”

Nordhaus was awarded the prize “for integrating climate change into long-run macroeconomic analysis”.  In the 1990s, he created a model describing how the economy and the climate affect each other on the global stage, according to the Academy.

Romer was recognized “for integrating technological innovations into long-run macroeconomic analysis.”  The Academy said Romer’s research is the first to model how market conditions and economic decisions affect creation of new technologies.

Nordhaus, who earned his Ph.D. from the Massachusetts Institute of Technology in 1967, and Romer, who earned his Ph.D. from the University of Chicago in 1983 will split the the $1.01 million prize.

The economics prize is the last of the Nobel prizes to be awarded this year.  

The Nobel Peace Prize was awarded Friday to  Nadia Murad, a Yazidi human rights activist and survivor of sexual slavery by Islamic State in Iraq, and Denis Mukwege, a gynecologist treating victims of sexual violence in the Democratic Republic of Congo.

Last year’s Nobel Prize for economics was awarded to American Richarld Thaler for his research on how human irrationality affects economic theory.

 
…

For the first time, researchers have been able to track the amount of Chinese investment in Australia.  From the purchase of large cattle properties to residential real estate, the scope of Chinese money has led to fraught discussions about the scale of foreign influence in Australia. The results of the research may have some surprises for some Australians who have been wary of China’s influence and the size of Chinese investments in their country.

The comprehensive new database shows how much Chinese investors are pouring into Australia. Between 2013 and 2017 the figure was more than $28 billion (U.S. dollars).Most of the money was spent on mining projects and real estate, although increasingly larger amounts are being invested by the Chinese in tourism in Australia.

Academics from the Australian National University say this is proof that Chinese investment is maturing and becoming more sophisticated.

Working with business representatives and the Australian government, researchers are for the first time charting the real value of Chinese investment.The flow of money from China has been politically sensitive, with concerns that valuable Australian farmland and real estate have become foreign-owned.

Professor Peter Drysdale, researcher at the Australian National University, says his work will help to foster a more accurate debate about China’s role.

“Getting an accurate picture of what is going on is half the battle in having a sensible public discussion,” said Drysdale. “Making it possible to have a better informed discussion about what Chinese investment actually does in Australia and what its effect is on the Australian economy.”

The database was compiled by painstaking analysis of thousands of transactions from sources such as the Foreign Investment Review Board and the Australian Bureau of Statistics.

The research highlighted that Chinese investment in Australia was at its highest in 2016, at $10.5 billion, but dropped to $6.2 billion in 2017.

While the report does not offer explanations for the sharp fall, bilateral business relations between Beijing and Canberra have been under increasing pressure because of diplomatic friction over alleged Chinese meddling in Australia’s domestic politics and the media.

Despite the tensions, China remains Australia’s most valuable trading partner.

 
…

Last-minute changes to a new North American trade deal sank U.S. hopes of making Canada and Mexico allow higher-value shipments to the countries by online retailers, such as Amazon.com, a top Mexican official said on Friday.

The revised pact was set to double the value of goods that could be imported without customs duties or taxes from the United States through shipping companies to Mexico.

But Canada’s adoption of a more restrictive threshold during its efforts last month to salvage a trilateral deal prompted Mexican negotiators to follow Canada’s lead, Economy Minister Ildefonso Guajardo said on Friday.

The final version of the trade agreement will insulate retailers in both countries from facing greater competition from e-commerce companies like Amazon.com Inc and eBay Inc.

“It was the solution liked much more by Mexican businesses,” Guajardo told local television.

The change was came so last-minute that it was not written into the agreement published last weekend.

The new deal, called the United States-Mexico-Canada Agreement (USMCA), was meant by U.S. President Donald Trump to create more jobs in the United States. Trump had been highly critical of the prior NAFTA agreement since before he ran for president.

U.S. negotiators originally pushed Mexico and Canada to raise import limits to the U.S. level of $800 from current thresholds of $50 and C$20, respectively.

Traditional retailers in Mexico opposed such a big hike, fearing online companies would sell cheap imports from Asia through the United States. Even so, Mexico initially agreed in August to raise the threshold on customs duties and taxes to $100 in its bilateral deal with the United States.

Guajardo said that Canada, after Mexico had finished negotiations, set its sales tax exemption at just C$40, about $30, and put a ceiling of C$150, about $117, on custom duties exemptions.

The Retail Council of Canada said the deal will protect retailers against a “massive change in the competitive landscape.”

Mexico decided to follow suit, Guajardo said, favoring local clothing, footwear and textile industries, as well as the finance ministry that collects duties and taxes.

Mexican negotiators lowered the sales tax exemption back to the $50 level, while raising the customs duties limit to $117, matching Canada, Guajardo said.

“Mexico offered a deal where it really didn’t concede anything,” said Adrian Correa, a senior lawyer at FedEx Corp.

Mike Dabbs, eBay’s government relations director for the Americas, said separate tax and custom duty thresholds could create confusion.

“That does not help the experience for small businesses and consumers,” he said.
…

U.S. job growth slowed sharply in September likely as Hurricane Florence depressed restaurant and retail payrolls, but the unemployment rate fell to near a 49-year low of 3.7 percent, pointing to a further tightening in labor market conditions.

The Labor Department’s closely watched monthly employment report on Friday also showed a steady rise in wages, suggesting moderate inflation pressures, which could ease concerns about the economy overheating and keep the Federal Reserve on a path of gradual interest rate increases.

Nonfarm payrolls increased by 134,000 jobs last month, the fewest in a year, as the retail and leisure and hospitality sectors shed employment. Data for July and August were revised to show 87,000 more jobs added than previously reported.

The economy needs to create roughly 120,000 jobs per month to keep up with growth in the working-age population.

“The weaker gain in payrolls in September may partly reflect some hit from Hurricane Florence,” said Michael Pearce, senior U.S. economist at Capital Economics in New York. “There is little in this report to stop the Fed continuing to raise interest rates gradually.”

Economists polled by Reuters had forecast payrolls increasing by 185,000 jobs in September and the unemployment rate falling one-tenth of a percentage point to 3.8 percent.

Fed Chairman Jerome Powell said on Tuesday that the economy’s outlook was “remarkably positive” and he believed it was on the cusp of a “historically rare” era of ultra-low unemployment and tame inflation.

The U.S. central bank raised rates last week for the third time this year and removed the reference in its post-meeting statement to monetary policy remaining “accommodative.”

The Labor Department said it was possible that Hurricane Florence, which lashed South and North Carolina in mid-September, could have affected employment in some industries. It said it was impossible to quantify the net effect on employment.

Payrolls are calculated from a survey of employers, which treats any worker who was not paid for any part of the pay period that includes the 12th of the month as unemployed. The average workweek was unchanged at 34.5 hours in September. The smaller survey of households from which the jobless rate is derived regards persons as employed regardless of whether they missed work during the reference week and were unpaid as result. It showed 299,000 people reported staying at home in September because of bad weather. About 1.5 million employees worked part-time because of the weather last month.

U.S. stock index futures briefly turned positive after the data before reversing course. The dollar was trading lower against a basket of currencies while U.S. Treasury yields were higher.

Diminishing slack

The drop of two-tenths of a percentage point in the unemployment rate from 3.9 percent in August pushed it to levels last seen in December 1969 and matched the Fed’s forecast of 3.7 percent by the end of this year.

Average hourly earnings increased 0.3 percent in September after a similar rise in August.

With September’s increase below the 0.5 percent gain notched during the same period last year, the annual rise in wages fell to 2.8 percent from 2.9 percent in August, which was the biggest advance in more than nine years.

Wage growth remains sufficient to keep inflation around the Fed’s 2 percent target. As more slack is squeezed out of the labor market, economists expect annual wage growth to hit 3 percent.

Last month, employment in the leisure and hospitality sector fell by 17,000 jobs, the first drop since September 2017. Retail payrolls dropped by 20,000 jobs in September. Manufacturing payrolls increased by 18,000 in September after rising by 5,000 in August.

Construction companies hired 23,000 more workers last month after increasing payrolls by 26,000 jobs in August. Professional and business services employment increased by 54,000 jobs last month and government payrolls rose 13,000.

While surveys have shown manufacturers growing more concerned about an escalating trade war between the United States and China, it does not appear to have affected hiring. In fact, the Fed’s latest survey of national business conditions reflected concerns about labor shortages that are extending into non-skilled occupations as much as about tariffs.

Washington last month slapped tariffs on $200 billion worth of Chinese goods, with Beijing retaliating with duties on $60 billion worth of U.S. products. The United States and China had already imposed tariffs on $50 billion worth of each other’s goods. The trilateral trade agreement between the United States, Canada and Mexico was salvaged in an 11th-hour deal on Sunday.

Despite the Trump administration’s protectionist trade policy, the trade deficit continues to deteriorate. The trade gap increased 6.4 percent to a six-month high of $53.2 billion in August, the Commerce Department reported on Friday. The politically sensitive goods trade deficit with China surged 4.7 percent to a record high of $38.6 billion.

 
…

Russian President Vladimir Putin on Wednesday strongly defended a prospective Russia-Germany natural gas pipeline as economically feasible and voiced hope that European Union nations will be able to resist U.S. pressure to thwart the project.

U.S. officials have warned that Washington could impose sanctions on the undersea Nord Stream 2 pipeline. The U.S. and some EU nations oppose it, warning it would increase Europe’s energy dependence on Russia. The U.S. is also interested in selling more of its liquefied natural gas in Europe.

Speaking Wednesday after talks with Austrian Chancellor Sebastian Kurz in St. Petersburg, Putin noted that Bulgaria caved in to pressure and dumped the Russian South Stream pipeline.

He added that he hopes that “Europe as a whole won’t look like Bulgaria and won’t demonstrate its weakness and inability to protect its interests.”

“Russia always has been and will remain the most reliable supplier,” Putin said, adding that the Russian gas supplied via pipelines is significantly cheaper than U.S. liquefied gas. “Supplies come directly from Yamal in Siberia. There are no transit risks.”

It would be “silly and wasteful” if Europe opts for a more expensive option, hurting its consumers and its global competitiveness, Putin charged.

Ukraine, which has served as the main transit route for Russian gas supplies to Europe, has strongly opposed the Russian pipeline, fearing that it would leave its pipeline empty. The two ex-Soviet neighbors have been locked in a bitter tug-of-war after Russia’s 2014 annexation of Ukraine’s Crimean Peninsula.

Kurz spoke in support of Nord Stream 2 but also emphasized the importance to continue supplies via Ukraine.

“It’s very important that Ukraine’s interests as a key transit country be upheld,” he said.

Putin has previously pledged to consider the continuation of gas supplies via Ukraine if it settles a commercial dispute with Russia over previous gas supplies.
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Seven-year-old Ryan drew millions of views reviewing toys on YouTube. Now, he’s become a toy himself.

Walmart is selling action figures in his likeness, putty with his face on the packaging and other toys under the Ryan’s World brand. It’s a bet that kids, who are spending more time tapping tablets, will recognize Ryan from YouTube and want the toys he’s hawking.

The new line may also help Walmart lure former Toys R Us shoppers, as many chains make a play for those customers ahead of the holiday shopping season.

The first-grader, who’s been making YouTube videos for three years, has become a major influencer in the toy industry. The clips typically show him unboxing a toy, playing with it and then waving goodbye to viewers. His most watched video, in which Ryan hunts for large plastic eggs, has more than 1.5 billion views.

Toys featured in the videos can see a spike in sales, says Jim Silver, editor of toy review site TTPM.com. “Ryan is a celebrity,” he said. “Kids watch his videos. He’s entertaining.”

So much so that toymakers have paid Ryan and his parents to feature their products. Forbes magazine estimated that the Ryan ToysReview YouTube channel brought in $11 million last year, but his parents, Shion and Loann, declined to confirm that number or give any financial details about Ryan’s deals. They also do not give their last name or say where they live for privacy and safety reasons.

Ryan’s path from reviewer to tiny toy mogul started last year when his parents signed with Pocket.watch, a two-year-old company that works with several YouTube personalities to get their names on clothing, books and other products. Ryan is the first with a product line because of his large audience, Pocket.watch says.

Last month, Walmart started selling Ryan’s World bright-colored slime for $4, 5-inch Ryan action figures for $9 and french fry-shaped squishy toys for $18. The retailer is the exclusive seller of some of the line, including T-shirts and stuffed animals.

Whether kids will want them “all comes down to the toy,” says Silver, adding that hits are made on the playground, where youngsters show off their toys and tell others about it.

What Ryan does have is a built-in audience. A video of him searching the aisles of Walmart for Ryan’s World toys has nearly 10 million views in a month, and his YouTube page has more than 16 million subscribers. Anne Marie Kehoe, who oversees Walmart’s toy department, says a couple of thousand people showed up to a recent appearance at an Arkansas store just to see a kid “jumping around and acting crazy.”

Ryan, in a phone interview, says a lot of those people wanted his picture. He then left the phone call to play.

His parents, who stayed on the line, say Ryan spends about 90 minutes a week recording YouTube videos. They say he helped with the creation of some of the toys, like when he asked for an evil twin version of himself for a figurine.

“I’m always amazed at the point of view Ryan has,” said his dad, Shion.

Chris Williams, Pocket.watch’s founder and CEO, sees Ryan as a franchise, like how “Nickelodeon looks at SpongeBob.”

But unlike a cartoon sponge, Ryan will grow up. Williams says he expects the products to evolve with Ryan’s taste. And Ryan’s parents agree, saying they’re prepared to follow his interests as he gets older, like to video games.

“We can change,” Shion said.
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China’s hopes of negotiating a free trade pact with Canada or Mexico were dealt a sharp setback by a provision deep in the new U.S.-Mexico-Canada trade agreement that aims to forbid such deals with “non-market” countries, trade experts said on Tuesday.

The provision specifies that if one of the current North American Free Trade Agreement partners enters a free trade deal with a “non-market” country such as China, the others can quit in six months and form their own bilateral trade pact.

The clause, which has stirred controversy in Canada, fits in with U.S. President Donald Trump’s efforts to isolate China economically and prevent Chinese companies from using Canada or Mexico as a “back door” to ship products tariff-free to the United States.

The United States and China are locked in a spiraling trade war that has seen them level increasingly severe rounds of tariffs on each other’s imports.

Under the clause, the countries in the updated NAFTA, renamed the U.S.-Mexico-Canada Agreement (USMCA), must notify the others three months before entering into such negotiations.

Derek Scissors, a China scholar at the American Enterprise Institute in Washington, said the provision gave the Trump administration an effective veto over any China trade deal by Canada or Mexico.

If repeated in other U.S. negotiations with the European Union and Japan, it could help isolate Beijing in the global trading system.

“For both Canada and Mexico, we have a reason to think an FTA with China is a possibility. It’s not imminent, but this is a very elegant way of dealing with that,” Scissors said.

“There’s no China deal that’s worth losing a ratified USMCA,” Scissors added.

After months of bashing its Western allies on trade, the Trump administration is now trying to recruit them to join the United States in pressuring China to shift its trade, subsidy and intellectual property practices to a more-market driven focus.

Beijing has demanded that the World Trade Organization recognize it as a “market economy” since its WTO accession agreement expired in December 2016, a move that would severely limit Western trade defenses against cheap Chinese goods.

But the United States and European Union are challenging the declaration, arguing that Chinese state subsidies fueling excess industrial capacity, the exclusion of foreign competitors and other practices are signs it is still a non-market economy.

Canadian Sovereignty Questioned

Canadian Prime Minister Justin Trudeau’s Liberal government, seeking to diversify Canada’s export base, held exploratory talks with China on trade in 2016, but a launch of formal negotiations has failed to materialize.

Tracey Ramsey, a legislator for Canada’s left-leaning New Democrats, said in the House of Commons on Tuesday that the clause was “astonishing” and a “severe restriction on Canadian independence.”

“Part of Canada’s concessions in this deal was to include language that holds Canada hostage to the Americans if we decide to trade with another country,” Ramsey said. “Why did the Liberal (Party) give the go-ahead for the U.S. to pull us into their trade wars?”

Canadian Finance Minister Bill Morneau downplayed the provision, arguing it was not significantly different from NAFTA’s clause that allows any member to leave the pact in six months’ time for any reason.

“It is largely the same. It recognizes though that the non-market economy is of significant importance as we move forward. But I don’t think it’s going to make a material difference in our activities,” Morneau told a business audience.

Mexico’s business community sided with the Trump administration in endorsing the pact.

“We are associating ourselves with countries that promote market freedom and that promote free trade in the world, free trade under equal circumstances,” said Juan Pablo Castañon, head of the Consejo Coordinador Empresarial (CCE), which represented Mexico’s private sector during the NAFTA trade talks.
…

Mexico and Canada on Tuesday urged their governments to resolve a tariff dispute with the United States before signing a new trilateral trade deal that was unveiled this week.

In late May, the Trump administration announced tariffs of 25 percent on steel imports and 10 percent on aluminum imports, prompting quick retaliation from top trading partners including Canada and Mexico.

Late on Sunday, the United States and Canada reached a deal to overhaul the North American Free Trade Agreement (NAFTA), complementing an accord the Trump administration brokered with Mexico, the third member of NAFTA, in late August.

Mexican steel producers association Canacero welcomed the new trade pact, called the United States-Mexico-Canada Agreement (USMCA), but said it viewed “with concern” the ongoing steel dispute and the “serious situation” it created for the industry.

U.S. President Donald Trump said on Tuesday that U.S. steel and aluminum tariffs would remain in place for Canada and Mexico until they “can do something different like quotas, perhaps.”

In a statement, Canacero said it supported efforts to find a solution to the impasse before the leaders of Mexico, the United States and Canada signed USMCA, which officials say could happen at a G20 summit at the end of November.

If no solution can be found, Mexico should put tariffs on U.S. steel to level the playing field, Canacero said.

Mexico has already slapped tariffs on U.S. pork, bourbon, motor boats and other products. Canada has levied tariffs on a range of U.S. imports, including steel and aluminum.

Joseph Galimberti, president of the Canadian Steel Producers Association, said he expected Canada’s government to continue to support the industry after the USMCA breakthrough.

“There is clearly an opportunity to constructively engage the United States between the achievement of a deal in principle and the ratification or signature of that deal,” he said.

Canada is the top exporter of steel and aluminum to the United States. The United Steelworkers of Canada adopted a less conciliatory tone after the new trade deal was announced, calling it a “sell-out” for Canadian workers.

Mexican officials have said they hope the steel and aluminum dispute can be resolved before USMCA is signed.

Since the tariff row broke out, Mexican steel exports to the United States had fallen 30 percent on average, Canacero said.
…

Palu, the Indonesian city devastated by an earthquake, tsunamis and mudslides, has strived to transform itself into a major trading hub, but the city’s buildings and other infrastructure were no match for the triple whammy that has left more than 1,200 people dead. 

The disasters that struck late Friday left the city’s port in ruins, its lone gantry crane atilt in the water. Its airport terminal was a sea of shattered glass and broken ceiling panels. A seven-story, 4-year-old hotel lay flat on its side. Its biggest bridge disintegrated, its picturesque yellow arches mangled in the mud. 

Ringed by coconut, coffee and cocoa farms, over the past two decades Palu has acquired modern shopping malls, hotels and other amenities to suit its ambitions. Poverty has fallen from nearly a third of its 380,000 residents to under one in 10, local officials say. 

A national blueprint calls for developing Palu as part of the “Sulawesi Economic Corridors” — a plan to attract investment and build up trade and commerce in a region that has remained somewhat isolated since the days of the ancient spice trade.  

Given how seismically active the area is — the Palu-Koro fault runs right through the city — it’s been a race against the odds. Historical records show the area has been hit by tsunamis — triggered by powerfully destructive earthquakes — at least seven times in the past two centuries. 

It’s unclear what standards were required, or enforced, in the construction of Palu’s modern buildings.

It’s an issue for all of Indonesia, an archipelago that sits square on the Pacific Ring of Fire. 

Teddy Boen, an expert on earthquake-resistant engineering who has consulted with foreign governments and international organizations, has been researching the problem for a half-century.

“From 50 years ago until today, there is similar damage. Somebody is not doing their job,” he said in a phone interview. “The codes are complete. The manuals are complete. The political will is not there.” 

The collapse of a mezzanine floor inside the Jakarta Stock Exchange in January that injured dozens of people underscores the extent of the problem, even in Indonesia’s capital.

After a tsunami in 2004 killed 230,000 people in Indonesia and elsewhere across Asia, it became apparent that in many communities, sturdy mosques and other strong buildings dating back to colonial times were the only structures still standing while newer structures often crumbled. 

In Palu, the Arkam Babu Rahman “floating mosque” on the city’s waterfront was pushed off-kilter by Friday’s tsunamis, while its worship halls remained intact. But a bigger, 20-year-old structure topped by a heavy dome was gutted as the debris-laden water swept through. 

Few of the buildings in Palu’s suburbs of Petobo, Biromaru and Bala Roa could withstand the sideways mudslide that engulfed those communities in expanses of oozing quicksand.  

Indonesia’s disaster agency spokesman Sutopo Purwo Nugroho said the soil there had liquefied and that authorities believed hundreds of people may have been buried in the mud. In Bala Roa, the ground violently heaved up and then sank in places, trapping many people under their wrecked homes. 

Traditional homes with thatched or tin roofs cannot withstand tsunamis or storm surges from typhoons but pose much less of a risk of severe damage even if they do collapse in an earthquake. Many homes built recently are hybrids, combining traditional styles with unreinforced masonry and tile roofs too heavy for the structures when they are shaken by quakes. 

The rush to rebuild after a disaster involves cutting corners, rather than fortifying buildings to prevent future calamities.

“Now, they say, build back better, build back better, but they do the same thing again,” Boen said. “The earthquake comes, they made the same mistakes and people get killed again.”
…

Tesla announced record quarterly car production numbers on Tuesday but warned it was facing major problems with selling cars in China due to new tariffs that will force it to accelerate investment in its factory in Shanghai.

The California-based electric carmaker, emerging from several months of turmoil around its Chief Executive Elon Musk, confirmed numbers leaked to an industry news site on Monday that showed it produced roughly 80,000 cars in the third quarter.

Deliveries reached a record 83,500, above Wall Street estimates of 80,000 and including almost 56,000 of the Model 3 sedan whose ramp-up is widely seen as crucial to the company’s drive to become profitable.

That overshadowed concerns expressed by the company over a 40 percent tariff being charged by China for the import of its cars, which it said was blocking sales in the world’s biggest electric car market. Shares gained 0.5 percent at the open.

“Yes it sounds like the tariff comments could haircut some of their profit plans but the production ramp is very impressive and it should continue to move higher,” analyst Chaim Siegel of Elazar Advisors said.

“The company’s at an inflection point for units and profit.”

Tesla did say that it had missed its weekly Model 3 production target on Tuesday and outlined a series of barriers it faced due to the worsening of President Donald Trump’s trade war with China.

The electric car maker said it was speeding up construction of its Shanghai factory as it seeks to combat a huge competitive disadvantage against other producers and even other imported cars, which it said are carrying a lower 15 percent tariff.

“Tesla is now operating at a 55 percent to 60 percent cost disadvantage compared to the exact same car locally produced in China,” the company said.

Musk in July landed a deal with Chinese authorities to build a new auto plant in Shanghai, its first factory outside the United States, that would double the size of the electric car maker’s global manufacturing.

The company flagged the tariff issue in August but said only that it was likely to have “some” impact on Chinese volumes and would not heavily affect global vehicle deliveries.

“With production stabilized, delivery and outbound vehicle logistics were our main challenges during Q3,” the company said on Tuesday. “We made many improvements to these processes throughout the quarter, and plan to make further improvements in Q4 so that we can scale successfully.”

Tesla produced over 5,300 Model 3 cars in the last week of September, falling short of its target of 6,000.

Overall in the third quarter the company produced 53,239 of the cars in the third quarter, in line with its target of 50,000 to 55,000 Model 3s, and delivered 55,840 of the vehicles to customers.

Tesla first met a long-held target of 5,000 vehicles per week at the end of June after a series of production bottlenecks and delays. Since then the company has been striving to sustain and increase that level.
…

Iran’s currency unexpectedly rallied Tuesday after weeks of depreciation linked to renewed American sanctions, sending Iranians rushing to exchange shops to cash in.

In the Iranian capital, money exchange shops offered 135,000 rials for one U.S. dollar at one point, drawing crowds of onlookers and those wanting to trade. Only the day before, the rial was selling at 170,000 to the dollar, with prices recently going as high as 190,000 to the dollar.

The currency plunged after President Donald Trump moved to restore tough U.S. sanctions after withdrawing from Tehran’s nuclear accord with world powers in May. U.S. sanctions targeting the country’s vital oil industry are set to take effect in early November, which will likely ramp up pressure on the economy.

Prices edged up to over 140,000 to the dollar later Tuesday, fueling suspicions among some Iranians.

“It does not make any sense at all that from four o’clock in the afternoon until the day after suddenly the price of the dollar plummets by 30 to 40 percent. It is not natural,” said Ruhollah Nikravesh, a dollar seller on the streets of Tehran. “It can be either the trick of the government or dealers who seek to collect the people’s dollar savings. There is no management in this.”

Analysts offered various explanations for the rally, including a new policy allowing the Central Bank to intervene more strongly to support the rial and providing for the import of more foreign currency from abroad.

There is also hope in Iran that Europe will be able to shield the country from further U.S. sanctions, including those targeting the oil industry.

Rising oil prices also have some more hopeful about the Iranian economy. Benchmark Brent crude now trades near $85 a barrel, and some analysts believe it could reach $100 a barrel by the end of the year.

Iranian state TV showed people gathering late Monday in the market to sell their dollars. Many had sought hard currencies like the U.S. dollar and the euro amid the rial’s slide, sending its value even lower. A year ago, the rial traded around 39,000 to $1.

Police also have cracked down on some illegal money changers in the streets and online.

“Managers of more than 15 websites that were announcing prices and caused irregularity in the economic situation were summoned or detained,” Tehran police chief Hossein Rahimi told state TV on Tuesday.

Seeking outside investors

In another effort to shore up the currency, the president’s office said Tuesday that Iran will offer five-year residency permits to foreigners if they invest $250,000 in the country.

A prominent Iranian entrepreneur, Pedaram Soltani, saw the Central Bank’s hand in the sudden rally.

“We should wait to see increase in prices of foreign currencies again, the Central Bank should allow that supply and demand decide the price,” he wrote on Twitter.

Iran’s hardline Kayhan newspaper said court cases targeting corrupt traders also helped strengthen the country’s economy. Meanwhile, Iran’s parliament is considering a law to counter money laundering and terror financing that may encourage foreign investment and ease some international sanctions.

Iran’s financial trouble has been fanned by Trump’s decision to pull America from the nuclear deal in May. Under the accord, which the United Nations says Iran still complies with, Tehran limit its enrichment of uranium in exchange for the lifting of some economic sanctions.

The rial’s rally could also partially be due to speculators realizing “the bubble has burst a little bit,” said Esfandyar Batmanghelidj, the founder of the Iranian economic website Bourse & Bazaar.

Others who sought the safety of the U.S. dollar likely want to cash in before the rial strengthens too much, he said.

“It’s possible that in a week or two weeks, some other bit of news will come out and restart the whole process, but it’s certainly a reprieve for the government right now,” Batmanghelidj said.

The restoration of sanctions on the oil industry next month could spark another exodus from the rial.

“It’s largely sort of a herd mentality, kind of an emotional response,” Batmanghelidj said. “That will continue to be a risk because people are susceptible to bad news.”

 
…

One of Australia’s biggest power companies says it will close a major coal-fired power station as it invests in renewable sources despite pressure from the government in Canberra to keep it open.

“Run down, dangerous and expensive” is how an Australian newspaper described the Liddell power plant, adding that it was “the perfect symbol of the decline of the coal industry.”

The facility was completed in 1973 with an expected lifespan of 25 years, but it continues to generate power in a country that relies on coal to generate more than 60 percent of its electricity.

The Australian government wants the plant to stay open for a few more years because of fears of power cuts and concerns about the potentially fragile state of the nation’s energy sector. Two years ago wild storms damaged transmission cables, causing a black-out across the entire state of South Australia. Ministers are also worried about the political implications of household power bills that have soared in recent years.

But energy giant AGL plans to decommission the facility in the New South Wales Hunter Valley in 2022 as it concentrates its commercial interests on renewable sources of energy, including solar and wind. The company insists its decision is economic, and not ideological.

Brett Redman, interim chief executive of energy company AGL says that despite pleas from the government the Liddell power station will close as scheduled in four years’ time.

“Our strategy to exit heavy carbon-emitting facilities over the long term is unchanged,” he said. “We continue in an operational sense to review our plans but there is no change at this point to the Liddell exit date. I have spoken to and I have met personally Angus Taylor, the new energy minister. I found that to be a very comfortable meeting where he understandably is very worried about power price on behalf of Australia’s consumers.”

Australia remains heavily reliant on fossil fuels not only for domestic power generation, but also for economic reasons. It exports billions of dollars worth of coking coal, currently a key ingredient in the making of steel, and thermal coal, which is used for heat and power generation. Much is sold to China, and into Southeast Asia.

Conservationists argue, however, that the coal industry is waning and that Australia should be vigorously pursuing alternative renewable sources. Despite Canberra’s continued enthusiasm for coal, which in Australia is cheap and plentiful, Australia’s energy mix is changing. There has been an increase in small-scale solar power generation, mostly through domestic rooftop panels and more consumption of natural gas.

 
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General Electric ousted its CEO, took a $23 billion charge and said it would fall short of profit forecasts this year, further signs that the century-old industrial conglomerate is struggling to turn around its vastly shrunken business.

 

H. Lawrence Culp Jr. will take over immediately as chairman and CEO from John Flannery, who had been on the job for just over a year. Flannery began a restructuring of GE in August 2017, when he replaced Jeffrey Immelt, whose efforts to create a higher-tech version of GE proved unsuccessful.

 

However, in Flannery’s short time, GE’s value has dipped below $100 billion and shares are down more than 35 percent this year, following a 45 percent decline in 2017.

 

The company was booted from the Dow Jones Industrial Average this summer and, last month, shares tumbled to a nine-year low after revealing a flaw in its marquee gas turbines, which caused the metal blades to weaken and forced the shutdown of a pair of power plants where they were in use.

GE warned Monday that it will miss its profit forecasts this year and it’s taking a $23 billion charge related to its power business.

 

The 55-year-old Culp was CEO and president of Danaher Corp. from 2000 to 2014. During that time, Danaher’s market capitalization and revenues grew five-fold. He’s already a member of GE’s board.

 

It’s a track record that GE appears to need after a series of notable changes under Flannery failed to gain momentum immediately, although some analysts wonder whether Culp’s history of accomplishments will be enough to reverse the direction of the company.

 

The challenges GE faces — including the power sector’s cyclical, structural and operational challenges — are not easily or quickly fixable, but “GE should be commended for selecting a credible, seasoned GE outsider as chairman/CEO who is likely to more candidly and quickly identify how bad things may be and what needs to be done about it,” said Gautam Khanna, an analyst at Cowen Inc., in a note to investors.

 

Investors will want Culp to “clean house, and fast,” said Scott Davis, founding partner of Melius Research, in a research note where he compared GE’s recent history to a slow but fatal train wreck.

 

“If I’m a GE employee today, I’m happy for the turnaround, but expectations are about to get a whole lot higher…GE employees will either step up or will be replaced,” Davis said.

 

Flannery faced a titanic task in redirecting General Electric, which was founded in 1892 in Schenectady, New York.

 

Just six months after taking over as CEO, Flannery said the company would be forced to pay $15 billion to make up for the miscalculations of an insurance subsidiary. While Wall Street was aware of the issues at GE’s North American Life & Health, the size of the hit caught many off guard.

 

Flannery on the same day said that GE might take the radical step of splitting up the main company’s three main components — aviation, health care and power — into separate businesses.

 

In June GE said it would spin off its health-care business and sell its interest in Baker Hughes, a massive oil services company. It’s been selling off assets and trying to sharpen its focus since the recession, when it’s finance division was hammered.

 

“GE still has too much debt and plenty to fix, but at least we have an outsider with an accelerated mandate to fix it,” Davis said.

 

Flannery vowed to give GE more of a high-tech and industrial focus by honing in on aviation, power and renewable energy — businesses with big growth potential. The shift is historic for a company that defined the phrase “household name.”

 

GE traces its roots to Thomas Edison and the invention of the light bulb, and the company grew with the American economy. At the start of the global financial crisis in 2008, it was one of the nation’s biggest lenders, its appliances were sold by the millions to homeowners around the world and it oversaw a multinational media powerhouse including NBC television.

 

But the economic crises revealed how unwieldy General Electric had become, with broad exposure damage during economic downturns.

 

Shares of General Electric Co., based in Boston, surged 11 percent in midday trading.

 

Massachusetts Gov. Charlie Baker, who helped lure GE to Boston from Connecticut in 2016 with incentives like state grants and property tax relief, said he’s not too concerned about GE’s latest travails. He noted that the company is still worth about $100 billion and has what he called a “huge footprint” in Massachusetts in health care, green technology, and renewable energy.

 

He said the state “did not write a big check to GE based on job projections or anything like that.”
…