U.S. human rights and trade groups on Tuesday blasted Tesla’s New Year’s Eve announcement that it had opened a showroom in Xinjiang, the latest foreign firm caught up in tensions related to the far-western Chinese region where detention camps have drawn heavy criticism. 

The Council on American-Islamic Relations, the largest U.S. Muslim advocacy organization, said Tesla was “supporting genocide.” Similar criticism came from a U.S. trade group, the Alliance for American Manufacturing, and U.S. senator Marco Rubio. 

“Elon Musk must close Tesla’s Xinjiang showroom,” the Council on American-Islamic Relations said on its official Twitter account, referring to Tesla’s founder. 

Xinjiang has become a significant point of conflict between Western governments and China in recent years. U.N. experts and rights groups estimate more than a million people, mainly Uyghurs and members of other Muslim minorities, have been detained in camps there. 

U.S. President Joe Biden and members of the U.S. Congress have pressed companies to distance themselves from Xinjiang. On December 23, Biden signed a bill barring imports of goods made in the region.

White House spokeswoman Jen Psaki said she would not comment directly on Tesla’s action, but generally the “private sector should oppose the PRC human rights abuses and genocide in Xinjiang,” she said. “The international community, including the public and private sectors, cannot look the other way when it comes to what is taking place in Xinjiang.” 

The United States has labeled China’s treatment of ethnic Uyghurs and other Muslims in Xinjiang as genocide. The United States and a few other countries plan a diplomatic boycott of the Beijing Winter Olympics in February over the issue. 

China has rejected accusations of forced labor or any other abuses there, saying that the camps provide vocational training and that companies should respect its policies. 

Tesla, the world’s most valuable automaker, announced on December 31 that it was opening a showroom in Xinjiang’s regional capital, Urumqi.

“On the last day of 2021 we meet in Xinjiang,” Tesla said in a post on its official Weibo account. 

Other U.S. and European automakers or their Chinese partners have showrooms in Urumqi, a city of some 3 million people. German automaker Volkswagen AG has a car factory near Urumqi.

Tesla did not immediately respond to a request for comment for this story. The carmaker operates a factory in Shanghai and is ramping up production there amid surging sales in China. China has also become an export hub for Teslas headed to Europe and other markets. 

Musk last year had to smooth over relations with Chinese authorities after Teslas were banned from government properties because of concerns that data collected by the vehicles’ cameras was being transferred out of China. 

A number of foreign firms in recent months have been tripped up by tensions between the West and China over Xinjiang, as they try to balance Western pressure with China’s importance as a market and supply base. 

“There is this tension between global investors and the Chinese government. The global investors want market access. And the Chinese government says the cost of access is acquiescence,” said Michael Dunne, chief executive of Zo Zo Go, an investment adviser that works with automotive and technology companies doing business in China. 

In July, Swedish fashion retailer H&M reported a 23% drop in local currency sales in China for its March-May quarter after it was hit by a consumer boycott in March for stating publicly that it did not source products from Xinjiang. 

Last month, U.S. chipmaker Intel faced similar calls after telling its suppliers not to source products or labor from Xinjiang, prompting it to apologize for “the trouble caused to our respected Chinese customers, partners and the public.” 

Although some have been trying to reduce their supply chain exposure to the region, especially as Washington bans imports such as Xinjiang cotton and blacklists Chinese companies that it says have aided Beijing’s policy there, many foreign brands operate stores there.

 
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U.S. manufacturing activity slowed in December amid a cooling in demand for goods, but supply constraints are starting to ease and a measure of prices paid for inputs by factories fell by the most in a decade. 

The Institute for Supply Management (ISM) survey on Tuesday also suggested some improvement in labor supply, with a gauge of factory employment rising to an eight-month high. Still, Timothy Fiore, chair of the ISM manufacturing business survey committee, noted that “shortages of critical lowest-tier materials, high commodity prices and difficulties in transporting products continue to plague reliable consumption.” 

The survey does not fully capture the impact of the Omicron COVID-19 variant, which is rapidly spreading across the United States and abroad. Sky-rocketing infections could force workers to stay home and halt the tentative supply-chain progress. 

“There’s still a lot of ground to make up before supply chains fully normalize, but cooling prices and increased employment are positive signs,” said Will Compernolle, a senior economist at FHN Financial in New York. 

The ISM’s index of national factory activity fell to a reading of 58.7 last month, the lowest level since January 2021, from 61.1 in November. A reading above 50 indicates expansion in manufacturing, which accounts for 11.9% of the U.S. economy. 

Economists polled by Reuters had forecast the index would fall to 60.1. 

All of the six biggest manufacturing industries — chemical products, fabricated metal products, computer and electronic products, food, transportation equipment, and petroleum and coal products — reported moderate-to-strong growth. 

Manufacturers of fabricated metal products expressed optimism that “we have reached the top of the hill to start down a gentle slope that lets us get back to something that resembles normal.” Their counterparts in the chemical products industry said the “gut feeling says it’s getting easier to source chemical raw materials.” 

Machinery makers reported that “costs for steel seem to be coming down some.” They also noted improvements in “performance by suppliers” and “on-time deliveries.” But transportation equipment manufacturers said capacity remained “limited due to the global chip shortage.” 

The ISM survey’s measure of supplier deliveries declined to a reading of 64.9 from 72.2 in November. A reading above 50% indicates slower deliveries to factories. 

The ISM’s Fiore said transportation networks, a harbinger of future supplier delivery performance, were still performing erratically, but there are signs of improvement. 

Raw materials have been in short supply as global economies rebounded from the coronavirus pandemic. Shortages have also been exacerbated by the shift in demand to goods from services early in the pandemic. Millions of workers needed to produce and move raw materials remain sidelined. 

U.S. stocks were trading mixed, with the Dow Jones Industrial Average and the S&P 500 index having hit fresh record highs earlier in the session. The dollar was flat against a basket of currencies. U.S. Treasury prices were mostly lower. 

Price gauge falls 

The nascent signs of improvement in supply chains suggest inflation at the factory gate could soon begin to subside. The survey’s measure of prices paid by manufacturers tumbled to 68.2 last month, the lowest level since November 2020, from 82.4 in November. The 14.2-point plunge was the biggest since October 2011. 

This supports the Federal Reserve’s long-held view that the current period of high inflation is transitory. Inflation is well above the U.S. central bank’s flexible 2% target. 

“The report is consistent with our expectation that inflation will hit an inflection point probably in the first quarter of this year,” said Tim Quinlan, a senior economist at Wells Fargo in Charlotte, North Carolina. 

The ISM survey’s forward-looking new orders sub-index fell to a still-high reading of 60.4 from 61.5 in November. With customer inventories remaining depressed, the slowdown in new order growth is likely to be temporary or limited. 

Factories hired more workers, but turnover rates remained high, a trend which manufacturers said started in August. 

Indeed, a separate report from the Labor Department on Tuesday showed a record 4.5 million Americans voluntarily quit their jobs in November, which will put pressure on businesses to raise wages to attract workers. 

“Replacing those workers is proving unusually challenging,” said Julia Pollak, chief economist at ZipRecruiter. “This is the tightest labor market ever.”

There were 10.6 million job openings at the end of November. The high number of vacancies meant there was a 0.65 unemployed person per job opening, an all-time low. Before the pandemic, there were normally about 2.3 unemployed people per job opening. 

The ISM’s measure of manufacturing employment rose to an eight-month high of 54.2 from 53.3 in November. This, together with very low first-time applications for unemployment benefits, supports the view that job growth accelerated in December. 

According to a preliminary Reuters survey of economists, nonfarm payrolls likely increased by 400,000 jobs in December after rising by 210,000 in November. The Labor Department is scheduled to publish December’s employment report on Friday. 

 
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Загалом громадяни України, які отримали виплати за вакцинацію, вже витратили більше 700 мільйонів гривень, повідомили в Кабміні
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China’s economy will increasingly rely on state investment, high-tech development and domestic consumption – with less input from its past staple of export manufacturing – as it stands to overtake the United States in the coming decade, analysts predict. 

China’s GDP should grow 5.7% per year through 2025 and then 4.7% annually until 2030, British consultancy Centre for Economics and Business Research (CEBR) forecasts. Its forecast says that China, now the world’s second-largest economy, would overtake the No. 1-ranked U.S. economy by 2030. Credit insurance firm Euler Hermes made a similar forecast. 

Chinese leaders have pushed over the past decade to rely more on value-added services over traditional factory exports, state media have said.  The Sino-U.S. trade dispute and early 2020 workplace closures due to COVID-19 have added pressure on manufacturing. 

Reducing factory output in China, foreign multinationals have been expanding outside China, targeting places such as Vietnam to avoid rising wages and environmental compliance costs. By offshoring in multiple countries they hope to head off any repeat of China’s early 2020 COVID-19 lockdowns that shut down factories.

China’s economy totaled $15.92 trillion in 2020, and market research firm IHS Markit estimates that it reached $18 trillion last year on export manufacturing growth and capital for new projects. The U.S. economy reached about $23 trillion last year, the market research firm said.

State investment

The country that’s already known for fast economic growth over the past 20 years would see the state take more control over key sectors after intervening in several, including the internet, in 2021, economists expect.

“Beijing has the funds and the unfettered domestic political power to use China’s large public treasury to make strategic investments in the service of the leadership’s national and global objectives,” said Denny Roy, senior fellow at the East-West Center think tank in Honolulu.

China scored 2.98 in 2018, up from 2.45 eight years earlier and approaching about three times the world average, on the Organisation for Economic Co-operation Development policy forum’s Direct Control Over Enterprises index. 

That means the government’s direct control over enterprises “well exceeded the open economy average” and “reflects China’s increasing emphasis on the role of the state in the economy under Xi Jinping,” the think tank Atlantic Council says in its October report China Pathfinder: Annual Scorecard .

Growth in tech hardware

Chinese leaders will probably prioritize tech, especially hardware that does not require constant innovation, as a growth engine, economists say.

State intervention in the internet sector won’t hobble expansion in semiconductors and infrastructure software, said Zennon Kapron, founder and director of the Shanghai-based financial industry research firm Kapronasia.

“If the country does become self-sufficient in terms of technology and then is able to sell and export those products and services that are based on the technology, then that would be a huge bump to its economy, because [that] is a key driver certainly of the U.S. GDP now,” Kapron said.

The U.S. economy will keep growing but without spurts through 2030, Kapron predicts.

China has a “huge base of engineers,” albeit less creativity than it needs to foster the “zany ideas” that drive development of new technology, said Douglas McWilliams, founder and executive deputy chairman of CEBR.

Consumer spending

Domestic spending has driven most of China’s economic growth before 2021 as the country reduced its exposure to the world in view of the Sino-U.S. trade dispute, McKinsey & Co. says in its China consumer report 2021. Supply chains have “matured and localized, and its innovation capabilities were enhanced” in turn, McKinsey & Co says.

That trend is likely to continue despite hits to income under lockdowns during the first year of COVID-19, analysts say. China’s population exceeds that of the United States by 3.5 times, though American consumers are wealthier on average.

“In the past five years, domestic consumption has … become a more significant growth driver as China’s domestic consumer market has grown dramatically in size,” said Rajiv Biswas, Asia-Pacific chief economist with IHS Markit.

Beijing’s leadership “aims to create more than 11 million new urban jobs and expand domestic demand and effective investment,” the official Xinhua News Agency said in mid-2021. Those measures, it said, “are expected to put the economy firmly back to pre-pandemic vibrancy.”

What if China overtakes US economy?

Status as the world’s largest economy does not confer any automatic advantages over others, economists said, but countries dependent on the Chinese economy would take note.

“There is no gold medal or anything like that,” CEBR’s McWilliams told VOA. “But when you’ve got more money to spend, you do have the ability to influence things, and China will have that ability to influence things.”

China would be better placed, he said, to advance its Belt and Road Initiative, a 9-year-old effort aimed at building land and sea trade routes through Asia, Europe and Africa in the form of infrastructure projects and investments.

Officials in Beijing are already leveraging their economy in disputes with other countries, said Roy of the East-West Center. China vies with four Southeast Asian governments over maritime sovereignty, contests a group of islets with Japan and has gotten into territorial standoffs with India since 2017.

“The result of that expectation (China surpassing the United States economically) has been a bolder PRC (People’s Republic of China) foreign policy that seeks to settle regional disputes in China’s favor and to de-legitimize U.S. regional and global leadership under the assumption that China is destined to set the new rules of international relations,” Roy said. 
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У власності держави залишаться заглиблене сховище та житловий будинок, розташовані на території заводу
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На міжбанку котирування сягають 27 гривень 28–30 копійок за долар
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The United States will issue new rules and $1 billion in funding this year to support independent meat processors and ranchers as part of a plan to address a lack of “meaningful competition” in the meat sector, President Joe Biden said on Monday. 

The initiative comes amid rising concerns that a handful of big beef, pork and poultry companies have too much control over the American meat market, allowing them to dictate wholesale and retail pricing to profit at the expense of their suppliers and customers. 

“Capitalism without competition isn’t capitalism. It’s exploitation,” Biden said. “That’s what we’re seeing in meat and poultry industries now.” 

A recent White House analysis found that the top four meatpacker companies – Cargill, Tyson Foods Inc., JBS SA and National Beef Packing Co. – control between 55% and 85% of the market in the hog, cattle and chicken sectors. 

The Department of Agriculture (USDA) will spend the $1 billion from the American Rescue Plan to expand the independent meat processing sector, including funds for financing grants, guaranteed loans and worker training, said Agriculture Secretary Tom Vilsack, who was speaking at an event with Biden. 

USDA will also propose rules this year to strengthen enforcement of the Packers and Stockyards Act and to clarify the meaning of “Product of USA” meat labels, which domestic ranchers have said unfairly advantage multinational companies that raise cattle abroad and only slaughter in the United States. 

Attorney General Merrick Garland, also speaking at the event, said “too many industries have become too consolidated over time,” and that the antitrust division of the Department of Justice has been chronically underfunded. 

The Biden administration issued an executive order last year that advocated a whole of government approach to antitrust issues. 

A central concern in agriculture has been meat prices, which have risen at a time when the White House is fighting inflation. An analysis in December by the White House economic council found a 120% jump in the gross profits of four top meatpackers since the pandemic began. 

Reaction to plan

The meat industry has said the White House analysis was inaccurate and criticized the new plan. 

National Chicken Council President Mike Brown called the plan “a solution in search of a problem.” 

North American Meat Institute spokesperson Sarah Little said staffing plants remains the biggest issue for meatpackers and that the White House plan would not address it. 

“Our members of all sizes cannot operate at capacity because they struggle to employ a long-term stable workforce,” she said. “New capacity and expanded capacity created by the government will have the same problem.” 

Eric Deeble, policy director at the National Sustainable Agriculture Coalition, cheered the plan, calling it a “very positive step to ensure farmers and ranchers receive fair prices.” 

The anticipated rulemaking under the Packers and Stockyards Act “could have a significant impact,” said Peter Carstensen, emeritus professor of law at University of Wisconsin-Madison and former antitrust attorney at the Department of Justice. But he noted that investment in independent processing itself would not address market concentration. 

Austin Frerick, deputy director of the Thurman Arnold Project at Yale University, an antitrust research center, said the plan does not go far enough to tackle the power of the top meatpackers. 

“I do not believe this (plan) will meaningfully change the concentration numbers,” he said. 

 
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Global stocks began 2022 in bullish fashion, with major bourses notching records and Apple’s valuation briefly hitting $3 trillion as investors monitor the COVID-19 pandemic and looming central bank rate decisions. 

The CAC 40 index in Paris kicked off the rally with new intraday and closing records while Frankfurt’s DAX rose 0.9 percent in thin holiday trading. London and Tokyo were among global markets that were shuttered for holidays. 

On Wall Street, both the Dow and S&P 500 ended at records as indices pushed higher. 

Apple briefly climbed to $3 trillion in value, becoming the first U.S. company to hit that benchmark. The tech giant’s valuation later retreated, though its share price was 2.5 percent higher at the close. 

“Welcome to 2022, which is looking like 2021 so far for the equity market,” market analyst Patrick O’Hare at Briefing.com said. 

The market “looks as if it will keep riding the rails with the help of new inflows that are typically seen on the first trading day of a new month,” he added. 

Monday’s landmarks come on the heels of a series of all-time highs in December as markets continue to bet the latest surge in COVID-19 cases won’t derail economic growth. 

Comments from health experts characterizing the omicron variant as less lethal than earlier COVID-19 strains have boosted markets. 

A bigger question mark is the shift in monetary policy, with investors now betting that the Federal Reserve will raise interest rates later this year.

The yield on the 10-year U.S. Treasury note vaulted above 1.6 percent Monday, the latest indication of this expectation.

A note from Briefing.com said the rise in yields may also reflect “an improving perspective on the economy.” 

Oil prices

Elsewhere, oil prices finished a volatile session higher as eyes turn to the meeting of OPEC and other major producers on Tuesday. 

So far OPEC+ has resisted pressure by top oil-consuming nations, such as the United States, to more aggressively boost production.

The 23 members of OPEC+ are expected to continue to stay the course and modestly boost output at their monthly meeting to be held via videoconference. 

 
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U.S. premium electric vehicle maker Tesla said on Sunday it delivered nearly 1 million vehicles in 2021, almost twice as many as 2020, doing better than expected despite global supply challenges.

Tesla delivered more than 936,000 cars of all models in 2021, representing growth of 87.4% from the previous year. The manufacturer is thus doing much better than the objective announced last January, to increase its deliveries by 50% on average per year for several years.

The group, which chose to move its headquarters from Palo Alto (California) to Austin (Texas), sold 911,208 vehicles of its 3 and Y models, and 24,964 vehicles of its luxury S and X models.

In the fourth quarter alone, 308,600 cars were delivered, up 0.9% compared to the same quarter last year. Earlier in the year, in the second quarter, Tesla had crossed, for the first time, the threshold of 200,000 cars delivered (201,250).

Tesla has managed to sidestep the global logistics issues that have plagued the entire auto industry. Elon Musk previously said he was able to get around much of the semiconductor shortage by using new chip designs and rewriting software accordingly. 

In October, Tesla was boosted by a mega-order of 100,000 electric vehicles from the rental company Hertz, by the end of 2022. This announcement brought the automaker into the very select club of companies worth more than $1 trillion on the stock market.

The manufacturer is, however, in the crosshairs of the American road safety agency (NHTSA) for its controversial driver assistance system called “Autopilot.” 

The automaker has also agreed to update its software to prevent drivers from playing video games on the car’s system while the car is in motion, after an investigation was opened.
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