Bangkok — Ethnic and resistance forces in Myanmar have completely blocked a key trade route to China, halting cross-border commerce and further damaging Myanmar’s already struggling economy.

The Mandalay-Lashio-Muse Road is considered the most strategically important road in the country’s northern Shan State.

Formerly known as the “Burma Road,” locals commonly call it the “pearl necklace,” as it connects Myanmar’s second largest city of Mandalay with the Chinese border. The string of pearls of trade towns already captured by rebel forces include Nawnghkio, Kyaukme, Lashio, Hsenwi, Kutkai and Muse near China’s southern border of Yunan province.

Lway Yay Oo, spokeswoman for the Ta’ang National Liberation Army, or TNLA, told VOA that right now “there are battles all along the trade route.” That has increasingly been the case, she said, since the second phase of operation 1027 began several weeks ago.

The TNLA is part of the “Three Brotherhood Alliance,” along with the Arakan Army, AA and the Myanmar National Democratic Alliance Army, or MNDAA.

The first phase of the 1027 rebel offensive, which is named after the date it began, began on October 27, 2023.

The recent capture of several key towns along the trade route in a relatively short span of time has been widely seen as a potential turning point in the resistance as rebels look to cement control and further loosen the grip of junta forces the region.

The military government isn’t giving in easily, however, with intense battles along the route making trade nearly impossible.

“The TNLA and joint forces control the entire border trade route with the cities of Kutkai, Lashio, Kyaukme and Hsipaw, except for Muse,” Lway Yay Oo added. “Although we are prepared to keep businesses operating, we’ve had to stop border trade due to fierce fighting.”

Myanmar’s trade crisis deepens

The ongoing conflict and capture of key trading towns is already having an impact.

“Myanmar’s trade sector depends mostly on border trade,” said one Yangon-based businessman, who requested anonymity due to security reasons during a phone interview with VOA. “Air trade is very expensive now, and maritime trade takes a long time, so we must rely on border trade routes.”

With main trade routes closed, businesses are looking to find alternate routes.

“Trade flows are slower than they should be, and we are spending more on transportation, leading to further losses,” the man said. There is also an impact on consumers as the ripple effect of higher transportation costs, currency fluctuations and slower trade spreads to the general population.

“When these things happen, consumers also suffer,” he said, adding that right now “with demand so low, our revenue has dropped by about 50%.”

Earlier in June, the World Bank downgraded Myanmar’s economic growth forecast to just 1% for the 2024-2025 fiscal year, citing the intensifying conflict, labor shortages and a depreciating currency as key challenges. And that was just as the second phase of operation 1027 was beginning.

Impacting the junta

According to the Ministry of Commerce’s statistics, the border trade value between Myanmar and China totaled US$416.867 million in the first two months of the current financial year 2024-2025, which began on April 1.

It is a significant decline from the $640.43 million recorded during the same period last year, and a decrease of $223.564 million.

So far, for its part, Myanmar’s military rulers are playing down the impact the conflict is having.

“Despite the challenges posed by recent conflicts, we continue to facilitate trade with our neighboring countries, especially China,” a representative from Myanmar’s Ministry of Commerce said in June, according to state media. The ministry has not commented on the impact fighting has had on the economy since then.

Opposition forces disagree and say the success of the resistance has significantly weakened the junta’s ability to manage the economy, including trade.

“The revolutionary forces have grown stronger militarily and now control more territory,” said Min Zayar Oo, the NUG Deputy Minister of Planning, Finance, and Investment, in an interview with VOA.

Min Zayar Oo added that part of this is because of the junta’s mismanagement.

“Stability and clear policy are essential for business, but the military council has failed to provide this,” he said.

Commodity prices are soaring due to inflation and recent efforts by the junta, such as printing new currency notes, have only worsened the economic situation, he adds.

“Cross-border trade routes are disrupted, foreign currency is scarce, and the junta is struggling to provide basic services. The economic front, like the military front, is already collapsing,” he said.

The economic downturn is also impacting military funding, former army Major Naung Yoe told VOA in a telephone interview.

“No matter how much the junta increases the military spending budget, if the country doesn’t have foreign currency, the military spending will also be affected,” he said.

Border trade stalls, Kyat at record low

As fighting continues and trade stalls and the value of Myanmar’s currency the Kyat plummets, many business owners are hoping a resumption of stability will come soon.

“Every day that the fighting continues, our businesses suffer,” one medium-sized entrepreneur based in Yangon told VOA, who requested anonymity for security reasons. “We rely on cross-border trade, and with the current situation, it feels as though we have been cut off from the rest of the world.”

In late June, the Kyat hit a record low in foreign exchange markets, exacerbating the financial crisis faced by many in the country.

“We are struggling to keep our operations afloat,” another entrepreneur noted. “The depreciation of the kyat is making imports prohibitively expensive, and we cannot raise prices without losing customers.”

As the conflict rages on, the future of Myanmar’s economy remains uncertain, with many calling for an urgent resolution to restore stability and revive trade. “We need peace to rebuild our businesses and our country,” the Yangon based entrepreneur added. “Without it, we are all at risk.”
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Washington — Federal Reserve officials have said they’re increasingly confident that they’ve nearly tamed inflation. Now, it’s the health of the job market that’s starting to draw their concern.

With inflation cooling toward its 2% target, the pace of hiring slowing and the unemployment rate edging up, the Fed is poised to cut its benchmark interest rate next month from its 23-year high. How fast it may cut rates after that, though, will be determined mainly by whether employers keep hiring. A lower Fed benchmark rate would eventually lead to lower rates for auto loans, mortgages and other forms of consumer borrowing.

Chair Jerome Powell will likely provide some hints about how the Fed sees the economy and what its next steps may be in a high-profile speech Friday in Jackson Hole, Wyoming, at the Fed’s annual conference of central bankers. It’s a platform that Powell and his predecessors have often used to signal changes in their thinking or approach.

Powell will likely indicate that the Fed has grown more confident that inflation is headed back to the 2% target, which it has long said would be necessary before rate cuts would begin.

Economists generally agree that the Fed is getting closer to conquering high inflation, which brought financial pain to millions of households beginning three years ago as the economy rebounded from the pandemic recession. Few economists, though, think Powell or any other Fed official is prepared to declare “mission accomplished.”

“I don’t think that the Fed has to fear inflation,” said Tom Porcelli, U.S. chief economist at PGIM Fixed Income. “At this point, it’s right that the Fed is now more focused on labor versus inflation. Their policy is calibrated for inflation that is much higher than this.”

Still, how fast the Fed cuts rates in the coming months will depend on what the economic data shows. After the government reported this month that hiring in July was much less than expected and that the jobless rate reached 4.3%, the highest in three years, stock prices plunged for two days on fears that the U.S. might fall into a recession. Some economists began speculating about a half-point Fed rate cut in September and perhaps another identical cut in November.

But healthier economic reports last week, including another decline in inflation and a robust gain in retail sales, have largely dispelled those concerns. Wall Street traders now expect three quarter-point Fed cuts in September, November and December, though in December it’s nearly a coin-toss between a quarter- and a half-point cut. Mortgage rates have already started to decline in anticipation of a rate reduction.

A half-point Fed rate cut in September would become more likely if there were signs of a further slowdown in hiring, some officials have said. The next jobs report will be issued on Sept. 6, after the Jackson Hole conference but before the Fed’s next meeting in mid-September.

Raphael Bostic, president of the Fed’s Atlanta branch, said in an interview Monday with The Associated Press that “evidence of accelerating weakness in labor markets may warrant a more rapid move, either in terms of the increments of movement or the speed at which we try to get back” to a level of rates that no longer restricts the economy.

Even if hiring stays solid, the Fed is set to cut rates this year given the steady progress that’s been made on inflation, economists say. Last week, the government said consumer prices rose just 2.9% in July from a year ago, the smallest such increase in more than three years.

Bostic noted that the economy has changed from just a couple of months ago, when he was suggesting that a rate cut might not be necessary until the final three months of the year.

“I’ve got more confidence that we are likely to get to our target for inflation,” he said. “And we’ve seen labor markets weaken considerably relative to where they were” last year. “We might need to shift our policy stance sooner than I would have thought before.”

Both Bostic and Austan Goolsbee, president of the Fed’s Chicago branch, say that with inflation falling, inflation-adjusted interest rates — which are what many businesses and investors pay most attention to — are rising even as inflation has slowed. When the Fed first set its key rate at its current 5.3%, inflation — excluding volatile energy and food costs — was 4.7%. Now, it’s just 3.2%.

“Our policies are getting tighter with every moment in that type of situation,” Bostic said. “We have to be concerned” that rates are so high they could cause an economic slowdown.

Still, Bostic said that for now, the job market and the economy appear mostly healthy, and he still expects a “soft landing,” whereby inflation falls back to the Fed’s 2% target without a recession occurring.

With the economy’s outlook unclear and the Fed focusing heavily on what future data shows, there may be only so much Powell will be able to say Friday about the central bank’s next steps.

Given the Fed’s focus on how the economic data comes in, “it will be difficult for Powell to pre-commit to a particular trajectory at Jackson Hole,” Matthew Luzzetti, chief U.S. economist at Deutsche Bank, said in a research note.
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Washington — Four years after Federal Reserve Chair Jerome Powell made fighting unemployment a bigger priority during the COVID-19 pandemic, he faces a pivotal test of that commitment amid rising joblessness, mounting evidence inflation is under control, and a benchmark interest rate that is still the highest in a quarter of a century.   

High interest rates may be on the way out, with the U.S. central bank expected to deliver a first cut at its Sept. 17-18 meeting and Powell potentially providing more information about the approach to the policy easing in a speech on Friday at the Kansas City Fed’s annual conference in Jackson Hole, Wyoming.   

But with the Fed’s policy rate in the 5.25%-5.50% range for more than a year, the impact of relatively high borrowing costs on the economy may still be building and could take time to unwind even if the central bank starts cutting — a dynamic that could put hopes for a “soft landing” of controlled inflation alongside continued low unemployment at risk.   

“Powell says the labor market is normalizing,” with wage growth easing, job openings still healthy, and unemployment around what policymakers see as consistent with inflation at the central bank’s 2% target, former Chicago Fed President Charles Evans said. “That would be great if that is all there is. The history is not good.”   

Indeed, increases in the unemployment rate like those seen in recent months are typically followed by more.   

“That does not seem the situation now. But you may only be one or two poor employment reports away” from needing aggressive rate cuts to counter rising joblessness, Evans said. “The longer you wait, the actual adjustment becomes harder to make.” 

Inflation versus employment  

Evans was a key voice in reframing the Fed’s policy approach, unveiled by Powell at Jackson Hole in August 2020 as the pandemic was raging, policymakers were gathering via video feed, and the unemployment rate was 8.4%, down from 14.8% that April.   

In that context the Fed’s shift seemed logical, changing a long-standing bias towards heading off inflation at the expense of what policymakers came to view as an unnecessary cost to the job market.   

Standard monetary policymaking saw inflation and unemployment inextricably and inversely linked: Unemployment below a certain point stoked wages and prices; weak inflation signaled a moribund job market. Officials began to rethink that connection after the 2007-2009 recession, concluding they needn’t treat low unemployment as an inflation risk in itself.   

As a matter of equity for those at the job market’s margins, and to achieve the best outcomes overall, the new strategy said Fed policy would “be informed by assessments of the shortfalls of employment from its maximum level.”   

“This change may appear subtle,” Powell said in his 2020 speech to the conference. “But it reflects our view that a robust job market can be sustained without causing an outbreak of inflation.”   

A pandemic-driven inflation surge and dramatic employment recovery made that change seem irrelevant: The Fed had to raise rates to tame inflation, and until recently the pace of price increases had slowed without much apparent damage to the job market. The unemployment rate through April had been below 4% for more than two years, an unparalleled streak not seen since the 1960s. The unemployment rate since 1948 has averaged 5.7%.   

But the events of the last two years, and a coming Fed strategy review, have also triggered a wave of research into exactly what happened: why inflation fell, what role policy played in that, and how things might be done differently if inflation risks rise again.   

While the agenda for this year’s conference remains under wraps, the broad theme focuses on how monetary policy influences the economy. That bears on how officials may evaluate future choices and tradeoffs and the wisdom of tactics like preempting inflation before it starts.   

Some of that work is already emerging from Fed researchers, including top economist Michael Kiley. He has authored a paper questioning whether policy “asymmetry” — treating employment shortfalls differently than a tight labor market, for example — really helps. Another recent paper suggested policymakers who believe public inflation expectations are formed in the short-run and are volatile should react sooner and raise rates higher in response.   

The role public expectations play in driving inflation — and the policy response – was on full display in 2022. When it appeared expectations risked moving higher, the Fed pushed its tightening cycle into overdrive with 75-basis-point hikes at four consecutive meetings. Powell then used a truncated Jackson Hole speech to emphasize his commitment to fight inflation —a stark shift from his jobs-first commentary two years earlier.   

It was a key moment that put the U.S. central bank’s seriousness on display, underpinned its credibility with the public and markets, and rebuilt some of the standing that preemptive policies had lost.   

‘Too tight’ 

Powell now faces a test in the other direction. Inflation is progressing back to 2%, but the unemployment rate has risen to 4.3%, up eight-tenths of a percentage point from July 2023.   

There’s debate over what that really says about the labor market versus rising labor supply, a positive thing if new job seekers find employment.   

But it did breach a rule-of-thumb recession indicator, and while that has been downplayed given other indicators of a growing economy, it also is slightly above the 4.2% that Fed officials regard as representing full employment.   

It’s also higher than at any point in Powell’s pre-pandemic months as Fed chief: It was 4.1% and falling when he took over in February 2018.   

The “shortfall” in employment that he promised to respond to four years ago, in other words, may already be taking shape.   

While Powell will be reluctant to ever declare victory over inflation for fear of touching off exuberant overreaction, Ed Al-Hussainy, senior global rates strategist at Columbia Threadneedle Investments, said it was past time for the Fed to get in front of the risk to unemployment – preemption of a different sort.   

Al-Hussainy said the Fed had proved its ability to keep public expectations about inflation in check, an important asset, but that “also has put in motion some downside risk to employment.”   

“The policy stance today is offside — it is too tight — and that warrants acting on.” 
…

CHENNAI — A group of Indian port workers’ unions has called for a strike from Aug. 28 to demand immediate settlement of pay revisions and pension benefits, according to a note signed by its members. 

A strike by India’s port workers could exacerbate the existing congestion issues at Asian and European ports, leading to further delayed shipments, which have a global impact on trade and commerce. 

The country’s shipping ministry formed a bipartite wage negotiation committee in March 2021, and the workers submitted their demands six months later, ahead of the expiration of the previous agreement in December of that year, according to the note. 

Although the wage negotiation committee met seven times, it failed to meet the port workers’ demands, the note said. 

The workers’ group agreed to call for a strike after a meeting this month in Thoothukudi, a port city in the southern state of Tamil Nadu.  

The government and port management should consider demands such as pay scale revisions, payment of arrears and protection of exiting benefits to help avoid the strike, the workers’ group said in the note. 

India’s federal shipping ministry did not immediately respond to a Reuters request for comment. 

The annual cargo handling capacity of major Indian ports such as Chennai, Cochin and Mumbai totaled 1.62 billion metric tons, according to the shipping ministry. 

In the fiscal year to March 31, 2024, India exported goods worth $437 billion, with imports estimated at $677 billion. 

 
…

NEW YORK — Hopes for an economic soft landing are once again powering U.S. stocks higher, as encouraging data relieve recession worries following a brutal sell-off earlier this month.

The S&P 500 .SPX has rebounded more than 6% since Aug. 5, when a steep drop pushed the benchmark U.S. index to its biggest three-day slide in over two years. A rapid return to calm was also evident in the Cboe Volatility Index .VIX, or Wall Street’s “fear gauge,” which has retreated from last week’s four-year highs at a record pace.

Driving the turnaround are last week’s reports on retail sales, inflation and producer prices, which helped allay worries over an economic slowdown sparked by weaker-than-expected employment data at the start of the month. The favorable data has bolstered the case for investors looking to hop back aboard many of the trades that have worked this year, from buying Big Tech stocks to a more recent bet on small and mid-cap names that accelerated in July.

“There was a real growth scare that had emerged,” said Mona Mahajan, senior investment strategist at Edward Jones. “Since then, what we’ve seen is the economic data has actually come out in a much more positive light.”

Some of 2024’s biggest winners have staged strong rebounds since Aug. 5. Chipmaker Nvidia NVDA.O has bounced more than 20%, while the Philadelphia SE Semiconductor index .SOX has gained more than 14%. Small-cap shares, which had been strong performers in July, have also recovered from recent lows, with the Russell 2000 .RUT up nearly 5%.

Meanwhile, traders are unwinding bets that the Federal Reserve will need to deliver jumbo-sized rate cuts in September to stave off a recession.

As of late Thursday, futures tied to the Fed funds rate showed traders pricing a 25% chance that the central bank will lower rates by 50 basis points in September, down from around 85% on Aug. 5, CME FedWatch data showed. The probability of a 25 basis point cut stood at 75%, in line with expectations that the Fed will kick off an easing cycle in September.

“You can’t necessarily rule out the hard landing scenario outright, but there’s a lot of reason to believe that at this point that economic momentum is being sufficiently sustained,” said Jim Baird, chief investment officer with Plante Moran Financial Advisors.

The Fed’s plans could become clearer when Chair Jerome Powell speaks at the central bank’s annual economic policy symposium in Jackson Hole, Wyoming.

“We think a key highlight of Powell’s speech will be the acknowledgement that progress on inflation has been sufficient to allow the start of rate cuts,” economists at BNP Paribas said in a note on Thursday.

For the year, the S&P 500 is up more than 16% and is within about 2% from its July all-time closing high.

Mahajan, of Edward Jones, expects the soft-landing scenario, combined with lower interest rates, to help pave the way for more stocks to participate in the market’s rally, instead of the small number of megacaps that have led indexes higher for much of this year.

Analysts at Capital Economics believe that a U.S. economic soft landing will support the artificial intelligence fervor that helped drive markets higher.

“Our end-2024 forecast for the S&P 500 remains at 6,000, driven by a view that the AI narrative which dominated in the first half of the year will reassert itself,” they wrote. That target would be some 8% from the S&P 500’s closing level on Thursday.

The recent economic data, while reassuring, is far from an all-clear for markets heading into September, which has historically been one of the year’s more volatile periods. Investors will be closely watching Nvidia’s earnings at the end of the month, and another employment report on Sept. 6.

“There’s been a sigh of relief in the market, clearly,” said Quincy Krosby, chief global strategist at LPL Financial. “The question now is, will the next payroll report underpin what the market expects at this point in terms of the soft landing.”
…

Як зазначають у повідомленні, «атака триває щонайменше три години»
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WASHINGTON — Kamala Harris is set to unveil plans for a federal ban on food and grocery “price gouging” and assistance of up to $25,000 in down payment support for first-time homeowners – populist proposals the vice president has embraced since becoming the Democratic Party’s presidential nominee.

Harris is scheduled to outline her proposals Friday, in her first speech on the economy focusing on dealing with rising grocery and housing prices – key concerns for voters. She is set to speak in front of supporters at a rally in Raleigh, North Carolina, a battleground state that she and former President Donald Trump, the Republican nominee, are vying to win in the November presidential election.

“In her first 100 days, Vice President Harris will work to enact a plan to bring down Americans’ grocery costs and keep inflation in check,” her campaign said in a memo to reporters Wednesday.

Harris aims to ensure “big corporations can’t unfairly exploit consumers to run up excessive corporate profits,” her campaign said, and will specifically call out the “highly consolidated” meat processing industry. “The lack of competition gives these middlemen the power to drive down earnings for farmers while driving up prices for consumers.”

Speaking to reporters Thursday, Trump called Harris’ proposal “communist price controls.”

“They don’t work, they actually have the exact opposite impact and effect,” he said. But it leads to food shortages, rationing, hunger, dramatically more inflation.”

In the U.S., the Federal Reserve sets interest rates independently, and presidential policies do not have much influence on lowering prices, at least in the short term.

“It is highly unlikely that any single policy introduced by a president could have a significant enough impact to bring inflation down from its current level to the Federal Reserve’s long-term target for the economy, which is 2%,” said Andrew Lautz, associate director for the Bipartisan Policy Center’s Economic Policy Program.

Trump has said he will fight rising prices by boosting oil and gas production. While increasing energy supply could have a downward pressure on prices, and in turn on inflation, it won’t happen quickly, Lautz told VOA.

Lower inflation

While Americans are still feeling the pain, last month U.S. year-over-year inflation dipped under 3% for the first time since March 2021. Unemployment remains low, retail sales figures are upbeat, and most economists no longer warn of recession.

Still the overall health of the economy remains a key concern for voters, and a point of attack on the campaign trail.

“The only thing Kamala Harris can deliver is horrific inflation, massive crime and the death of the American dream,” Trump said.

Both candidates have also promised to slash federal taxes on tips received by workers in the service and hospitality industry.

Critics say that proposal won’t help fast food servers or other low-income workers who don’t get tips and is vulnerable to abuse.

“How can we be sure that it’s deserving working people, as opposed to opening the door to a whole bunch of other people who might treat their bonuses and performance fees like tips and exempt themselves?” said Steven Rosenthal, senior fellow at the Tax Policy Center.

Such proposals are common during presidential campaigns, Rosenthal said. “We often see a race to the bottom, with the candidates trying to outbid themselves for how many tax cuts they can promise.”

If enacted, those promises will be costly at a time when the country needs to seriously think about fiscal responsibility and deficit reduction, said Lautz.

“We are at nearly $28 trillion in federal debt held by the public,” he said. “The Congressional Budget Office estimates that’s going to increase by another $20 trillion or so over the next decade.”

Trump previously held a commanding lead among voters on key economic issues, with various polls showing Americans think they will be better off financially under Trump than President Joe Biden.

However, a survey conducted for the Financial Times and the University of Michigan’s Ross School of Business published this week found that 41% trust Trump to be better at handling the economy, while 42% believe Harris would be better – a figure up seven points from Biden’s numbers in July. 
…

Washington — Sun Lijun, a 42-year-old semiconductor engineer, says worries about the quality of air and living, childhood education and the overall economic trajectory in China are some of the reasons he and his wife first started talking about moving to Japan almost a decade ago.

In 2021, they did just that, leaving their life in China behind and relocating with their two children to Okinawa.

Moving to Japan on a business management visa was a first step to “start over and then lead another lifestyle,” he told VOA.

Largest pool of residents

Sun is not alone. He is one of hundreds of thousands of Chinese nationals who have relocated to Japan, where they are now the largest group of immigrants.

According to data from the Japanese Immigration Service Agency, at the end of last year, 821,838 Chinese nationals were living in Japan, a 13% increase from 2022. Trends of Chinese immigration follow a broader increase in the number of foreigners relocating to Japan, which reached a record high of 3,410,992 people in 2023.

With an aging population and widespread labor shortages, Japan has been rolling out immigration reforms in a bid to attract more foreign nationals to the country.

Beginning in 2019, the Japanese government pushed to loosen qualifications that previously inhibited foreigners from establishing residence in the country. Now, those applying for business management visas and residency can bypass the country’s previously strict standards for special skills, education and residence qualifications.

Chinese demand

The changes in Japanese immigration policy have come with consequences. In the case of Chinese nationals, new residents have driven up housing prices and the rate of real estate development across the country.

Daniel Cheng, president of Wan Guo Jin Liang Company, told VOA that real estate developers in Tokyo often use Chinese sales teams, and that many Chinese-owned real estate companies focus on business with Chinese living in Japan or other places overseas.

Tokyo has attracted many middle-class and wealthy Chinese immigrants, and that has pushed up the average price of newly built central city apartments by nearly 40% from 2022, to around $780,000, according to a report issued by the Tokyo-based Real Estate Economic Institute. That’s much higher than the average price in the capital’s greater metropolitan area, which is about $550,000 for an apartment.

Chin JouSen’s real estate agency, Yuzawa, focuses on the Chinese market. He said that when looking at buying property in Japan, China’s wealthy mainly focus on preserving the value of their investment, whereas middle-class families are looking for a variety of choices that allow them to minimize the cost of living.

Cheng said that Japan’s stable political environment, good medical and social insurance, and property ownership rights are a key draw for Chinese. In China, by contrast, individuals may not own land.

Water Lee, a consultant with InterDots, a company that provides immigration services to people from Hong Kong, told VOA that Hong Kongers are also among those relocating to Japan — given the changes in the political environment in the port city in recent years.

Integration into Japan

Despite the impact of the surge of new foreign residents, the rising cost of housing in Japan’s capital, and the geopolitical rivalry between Tokyo and Beijing, Chinese migrants say public sentiment in Japan toward immigrants is positive.

Chin JouSen recently founded his real estate business in Japan. He said that integrating into Japanese society is the most important thing an immigrant can do. And based on his experience, the Japanese are friendly and accepting, Chin said.

However, while most Japanese people are friendly to foreigners, Tokyo-based aromatherapy business owner Michelle Takahashi, who is originally from Taiwan, told VOA that immigrants can sometimes feel subtle differences in how they are treated.

“Japanese thinking on service work can sometimes make foreigners feel like they are being treated specially or differently. This can be a challenge for foreigners who don’t speak Japanese,” she said.

The Japanese government provides new immigrants with specialists to help them adapt to the new language and culture.

Kazuhiko Isozaki founded Beru Corporation in 2017. The company invests in unused, vacant houses, renovates them and rents them out to disadvantaged groups at low prices. He fully welcomed the influx of foreign capital, especially Chinese capital, into Japan.

“The rise in land and housing prices has a positive impact on the economy, and foreign capital helps to drive up land prices,” he said.

“As Japan’s population continues to decline and incomes within the country fall, it makes sense from an economic perspective to more effectively assist overseas capital and people in entering Japan.”

He said he hopes to engage in business helping foreigners buy real estate in Japan in the future, mainly through education and support services, to reduce the barriers for foreigners to buy houses in Japan.

A slower, happier life

As for Sun and his family, they have settled in Okinawa, Japan’s sparsely populated island south of the main island. Sun says he enjoys the climate, slower pace of life and the internationalism he has found there.

For a while, Sun operated a coin laundry before transitioning to property management. His two daughters are learning Japanese in school.

“After immigrating to Japan, my quality of life and overall happiness of my family increased significantly,” Sun said.

VOA’s Katherine Michaelson contributed to this report.
…

…

Washington — South Asia’s youth bulge is a ticking time bomb. A demographic dividend looms, but millions of young people lack the job skills to cash in, choking the region’s economic potential.

Almost half of South Asia’s population of 1.9 billion is under 24, the highest number of any region in the world. With nearly 100,000 young people entering the job market daily, the region boasts the largest youth labor force globally.

For years, experts have sounded the alarm: Many of South Asia’s youth lack the education and skills for a modern labor force. A 2019 UNICEF study warned that if nothing changes, more than half risked not finding decent jobs in 2030.

Now, International Youth Day has put the spotlight on the region’s skills-gap crisis. While some South Asian countries have made progress in recent years, UNICEF’s latest figures paint a sobering picture: Ninety-three million children and adolescents in South Asia are out of school; almost 6 in 10 can’t read by age 10; and nearly a third are not in any form of education, employment or training, known as NEET.

“We know that the region has the highest number of children and young people, but sadly at the same time, despite the opportunity that that might bring, we know that for many young people, learning and skilling is not good enough,” Mads Sorensen, UNICEF’s chief adolescent adviser for South Asia, said in an interview with VOA. “This clearly holds them back from reaching their full potential.”

The problem, Sorensen said, comes down to the quality of education: Many teachers cling to old methods, schools in many regions lack basic tools such as computers, and students are not taught the digital skills needed to thrive in the modern workplace.

“So, young people are not really acquiring those skills that we know are very much sought after by the labor market, especially the private sector,” Sorensen said.

The skill deficit extends beyond K-12 education. Higher education enrollment in South Asia has tripled in the past two decades, reaching an average of 27% in 2022, according to the World Bank. Yet the quality of college education remains uneven, with many graduates finding that their hard-earned degrees ill-prepare them for today’s job market.

Big investment but scant returns

Take Ariful Islam, a recent graduate with a business administration degree, who now helps his father in his sweets shop in the Bangladeshi capital, Dhaka. After graduating last year, he had multiple job interviews. But none yielded an offer, forcing him to settle for a position that barely covered his expenses.

Having invested nearly $13,000 on Islam’s education, his father, Akram Khan, said he had to quit his job to start a business. Islam wasn’t earning enough, so Khan needed to boost the family’s income.

“I spent so much money to educate my son, but now he is not getting a job according to his qualifications,” Khan said in an interview with VOA. “As a father, [I] will feel bad.”

Others such as Zahirul Haque, a 2022 graduate in public administration, have been locked out of coveted government jobs.

A controversial quota system favoring Liberation War veterans and their offspring, at the heart of Bangladesh’s recent turmoil, has thwarted his aspirations for public service.

After two years of fruitless government-administered exams, he reluctantly accepted a low-paying job with a local nongovernmental organization.

“It was a little disappointing,” he told VOA.

Bangladesh’s strained job market offers few prospects for young graduates such as Haque. But he said he hasn’t given up hope for a better job.

Good news, sobering news

Bangladesh, once among Asia’s poorest countries, has surged economically in recent decades and is now on track to become a middle-income country by 2026.

Collectively, South Asia is poised to be the fastest-growing emerging market this year, according to the World Bank. In a new report released on Monday, the International Labour Organization, or ILO, said South Asia’s youth unemployment rate fell to a 15-year low of 15.1% last year.

Though signaling an easing job market for young people, the unemployment rate was the highest in the Asia Pacific region, ILO said. What’s more, “too many” young women are excluded from the labor market in South Asia, with the number of women not working or learning at more than 42%, the highest in the region, the ILO said.

Sorensen said that while countries such as Bhutan, the Maldives and Sri Lanka have narrowed the skills gap in recent years, the region’s most populous nations — India, Bangladesh and Pakistan — are lagging behind.

The plight of young women is even more grim. One in four girls in South Asia are married before age 18, their education and careers squandered. Bangladesh’s underage marriage numbers have worsened in recent years, Pakistan’s remains “dire,” Sorensen said.

Pakistan lags most of the region in higher education, with 13% enrollment as of 2022. While the country boasts quality universities, many students complain about outdated curriculums.

The curriculum is “not incorporating the emerging trends of the 21st century,” said Noor Ul Huda, an English major at a public university in Islamabad.

Huda said her major is considered “less practical” than academic fields such as engineering and business, leaving her job prospects bleak.

“The job market is overwhelmingly competitive, and I think I’d have a lot of difficulty finding a job,” she said.

Not ready for jobs

Many parents pouring money into their children’s education confront the same reality: Schools fail to equip students for the job market.

Humna Saleem, a preschool teacher in Rawalpindi, worries about her son, a soon-to-be computer science graduate from a private university. Despite a hefty tuition, he had to learn coding on his own, Saleem said.

“What I observed as an adult is that he is taught a lot of theoretical knowledge, but there are practical skills that are not taught to the students,” she told VOA.

Pakistan’s classrooms, she said, remain stuck in the past, while the world has changed. Students need digital skills and “soft skills,” such as critical thinking and interpersonal communication, not just degrees, she said.

“It doesn’t matter if you are a doctor, or you’re an accountant, or you are an engineer. Whatever profession you choose for yourself, you need to have those skills,” Saleem said.

In recent years, governments in the region have stepped up efforts to close the skills gap.

In India, the Ministry of Skill Development and Entrepreneurship has partnered with UNICEF to provide youth with 21st-century skills, apprenticeships and entrepreneurial opportunities.

In Pakistan, the prime minister’s Youth Skill Development Program, launched in 2013, aims to equip youth with market-driven skills in IT, entrepreneurship, agriculture, tourism and vocational fields.

“We have to equip our youth with the skills in line with modern requirements so that they can contribute to the country’s development,” Pakistan’s education minister, Khalid Maqbool Siddiqui, said in July, according to Associated Press of Pakistan.

In Bangladesh, the National Skills Development Council, led by the prime minister, has introduced a new policy to enhance workforce skills for the modern economy.

Colleges and universities in South Asia have tried to tackle the skills gap crisis by emphasizing critical thinking, creativity, innovation and entrepreneurship. Some have also ramped up digital skills and vocational training to better prepare their graduates for the job market.

Sorensen lauded the regional efforts but said more needs to be done to build a vibrant, modern workforce in South Asia.

“We keep saying that young people are leaders of today, which they are, but they’re also more so leaders of tomorrow,” Sorensen said.

VOA’s Afghan, Bangla and Urdu services contributed to this report.
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Як пише видання з посиланням на джерел, обидві сторони не мають наміру припиняти постачання газу через станцію «Суджа» в Курській області РФ
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У Мінфіні уточнюють, що транш складається з пільгового фінансування – 2,7 млрд євро, гранту – 1,5 млрд євро (безповоротне фінансування)
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Washington — The great inflation spike of the past three years is nearly spent — and economists credit American consumers for helping slay it.

Some of America’s largest companies, from Amazon to Disney to Yum Brands, say their customers are increasingly seeking cheaper alternative products and services, searching for bargains or just avoiding items they deem too expensive. Consumers aren’t cutting back enough to cause an economic downturn. Rather, economists say, they appear to be returning to pre-pandemic norms, when most companies felt they couldn’t raise prices very much without losing business.

“While inflation is down, prices are still high, and I think consumers have gotten to the point where they’re just not accepting it,” Tom Barkin, president of the Federal Reserve Bank of Richmond, said last week at a conference of business economists. “And that’s what you want: The solution to high prices is high prices.”

A more price-sensitive consumer helps explain why inflation has appeared to be steadily falling toward the Federal Reserve’s 2% target, ending a period of painfully high prices that strained many people’s budgets and darkened their outlooks on the economy. It also assumed a central place in the presidential election, with inflation leading many Americans to turn sour on the Biden-Harris administration’s handling of the economy.

The reluctance of consumers to keep paying more has forced companies to slow their price increases — or even to cut them. The result is a cooling of inflation pressures.

Other factors have also helped tame inflation, including the healing of supply chains, which has boosted the availability of cars, trucks, meats and furniture, among other items, and the high interest rates engineered by the Fed, which slowed sales of homes, cars and appliances and other interest rate-sensitive purchases.

Still, a key question now is whether shoppers will pull back so much as to put the economy at risk. Consumer spending makes up more than two-thirds of economic activity. With evidence emerging that the job market is cooling, a drop in spending could potentially derail the economy. Such fears caused stock prices to plummet a week ago, though markets have since rebounded.

This week, the government will provide updates on both inflation and the health of the American consumer. On Wednesday, it will release the consumer price index for July. It’s expected to show that prices — excluding volatile food and energy costs — rose just 3.2% from a year earlier. That would be down from 3.3% in June and would be the lowest such year-over-year inflation figure since April 2021.

And on Thursday, the government will report last month’s retail sales, which are expected to have climbed a decent 0.3% from June. Such a gain would suggest that while Americans have become vigilant about their money, they are still willing to spend.

Many businesses have noticed.

“We’re seeing lower average selling prices … right now because customers continue to trade down on price when they can,” said Andrew Jassy, CEO of Amazon.

David Gibbs, CEO of Yum Brands, which owns Taco Bell, KFC and Pizza Hut, told investors that a more cost-conscious consumer has slowed its sales, which slipped 1% in the April-June quarter at stores open for at least a year.

“Ensuring we provide consumers affordable options,” Gibbs said, “has been an area of greater focus for us since last year.”

Other companies are cutting prices outright. Dormify, an online retailer that sells dorm supplies, is offering comforters starting at $69, down from $99 a year ago.

According to the Fed’s “Beige Book,” an anecdotal collection of business reports from around the country that is released eight times a year, companies in nearly all 12 Fed districts have described similar experiences.

“Almost every district mentioned retailers discounting items or price-sensitive consumers only purchasing essentials, trading down in quality, buying fewer items or shopping around for the best deals,” the Beige Book said last month.

Most economists say consumers are still spending enough to sustain the economy consistently. Barkin said most of the businesses in his district — which covers Virginia, West Virginia, Maryland and North and South Carolina — report that demand remains solid, at least at the right price.

“The way I’d put it is, consumers are still spending, but they’re choosing,” Barkin said.

In a speech a couple of weeks ago, Jared Bernstein, who leads the Biden administration’s Council of Economic Advisers, mentioned consumer caution as a reason why inflation is nearing the end of a “round trip” back to the Fed’s 2% target level.

Emerging from the pandemic, Bernstein noted, consumers were flush with cash after receiving several rounds of stimulus checks and having slashed their spending on in-person services. Their improved finances “gave certain firms the ability to flex a pricing power that was much less prevalent pre-pandemic.” After COVID, consumers were “less responsive to price increases,” Bernstein said.

As a result, “the old adage that the cure for high prices is high prices [was] temporarily disengaged,” Bernstein said.

So some companies raised prices even more than was needed to cover their higher input costs, thereby boosting their profits. Limited competition in some industries, Bernstein added, made it easier for companies to charge more.

Barkin noted that before the pandemic, inflation remained low as online shopping, which makes price comparisons easy, became increasingly prevalent. Major retailers also held down costs, and increased U.S. oil production brought down gas prices.

“A price increase was so rare,” Barkin said, “that if someone came to you with a 5% or 10% price increase, you almost just threw them out, like, ‘How could you possibly do it?’ ”

That changed in 2021.

“There are labor shortages, Barkin said. “Supply chain shortages. And the price increases are coming to you from everywhere. Your gardener is raising your prices, and you don’t have the capacity to do anything other than accept them.”

The economist Isabella Weber at the University of Massachusetts, Amherst, dubbed this phenomenon “sellers’ inflation” in 2023. In an influential paper, she wrote that “publicly reported supply chain bottlenecks” can “create legitimacy for price hikes” and “create acceptance on the part of consumers to pay higher prices.”

Consumers are no longer so accepting, Barkin said.

“People have a little bit more time to stop and say, ‘How do I feel about paying $9.89 for a 12-pack of Diet Coke when I used to pay $5.99?’ They don’t like it that much, and so people are making choices.”

Barkin said he expects this trend to continue to slow price increases and cool inflation.

“I’m actually pretty optimistic that over the next few months, we’re going to see good readings on the inflation side,” he said. “All the elements of inflation seem to be settling down.”
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Geneva — Global youth unemployment rates fell to 13% in 2023, a 15-year low. But a new study by the International Labor Organization warns the post-COVID economic recovery is uneven, with some regions seeing an increase in the number of out-of-work young people. 

The ILO has issued its Global Employment Trends for Youth 2024 report to coincide with International Youth Day on August 12, to raise awareness of the needs, hopes, and aspirations of young people.    

The current report reflects these issues and analyzes current and future prospects. 

The report predicts that the four-year-long improved global labor market for young people will continue its upward trend for two more years, with unemployment rates expected to fall further to 12.8% this year and next.   

This bright outlook, however, is not universal. The report notes that several regions are falling behind and not getting the benefits of the economic recovery. 

“In three regions, mainly in the Arab States, Southeast Asia and the Pacific, youth unemployment rates were higher in 2023 than in 2019 in pre-COVID-19 days,” Gilbert Houngbo, ILO director-general, told journalists in Geneva last week at a briefing ahead of the report’s publication. 

“At the same time, the recovery has not been the same for young men and young women,” he said. “Some of you may recall, before the pandemic, that young men globally experienced higher unemployment rates than young women. But by 2023, unemployment rates for young women and young men almost converged — 20.9% for young women versus 13.1% for young men. 

“This highlights the disproportionate impact of the pandemic on young women’s employment opportunities and ensures that some young women will have been left behind in the recovery process,” he said. 

Flagging another issue of concern, authors of the report point out that only six percent of the world’s youth population were unemployed in 2023, but a much larger share — 20.4% — was not in employment (individuals without a job and not seeking one), education or training. This is referred to as NEET in ILO parlance. 

The report finds that one in five young people between the ages of 15 and 24 was NEET in 2023 and two in three were female.    

The report underscores the persistent challenges facing young people in gaining decent jobs in developing countries. It highlights the glaring equality gap between rich and poor countries where “the inequalities of opportunity have gotten worse.” 

“Today, only one in four young workers in the low-income countries has a regular secure job compared to three-quarters of young workers in high income countries,” ILO chief Houngbo said. “However, two-thirds of young adults in low- and middle-income countries face education jobless matches because their qualifications do not necessarily align well with their qualifications and requirements.” 

ILO data reveals that youth unemployment rates have reached “historic lows” in North America, in areas of western Europe, and have come down substantially in Latin America in recent years. The data, however, show that youth unemployment rates remain critically high in the Arab states and North Africa. 

“In both subregions, more than one in three economically active youth were unemployed in 2023. Fewer than one in 10 women and fewer than one in three young men in the two subregions are working,” authors of the report say. 

The situation in sub-Saharan Africa is quite different where, according to the report, youth unemployment rates stand at 8.9%, “which are among the lowest in the world.” 

Sara Elder, head of ILO’s employment analyses and economic policies unit, explains, “The issue here is that young people in certain contexts do not have the luxury of being unemployed. They have to take up a job. They have to earn some income. 

“Often it is poverty driven and this is very much what we see in young people in sub-Saharan Africa,” she said, adding that the region “has a very distinct problem of decent work deficits.” 

“It is a region where three in four young people do not have access to what we deem to be a more secure form of employment and also a region where one in three persons is working in a low paid job,” she said. 

Her colleague, Mia Seppo, ILO assistant director-general for jobs and social protection, points out that most young people, around 60%, eke out a living in the agricultural sector, “and a lot of that is in employment that is informal and insecure. And, that is not necessarily reflective of young people’s aspirations.” 

“So, there actually lies the potential in terms of agri-food supply chains and in developing the agricultural sector in terms of new jobs and trying to make agriculture something that is attractive and provides more decent jobs for young people,” she said. 

Authors of the report say demographic trends, notably, the so-called African “youthquake,” means that creating enough decent jobs, “will be critical for social justice and the global economy.” 

The report calls for increased and more effective investment in boosting job creation, especially for young women. It says governments must strengthen labor market policies that target employment for disadvantaged youth, make sure that young people receive equal treatment and social protection at work, and “tackle global inequalities through improved international cooperation.” 
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New York — A week of wild market swings has investors looking ahead to inflation data, corporate earnings and presidential polls for signals that could soothe a recent outbreak of turbulence in U.S. stocks. 

Following months of placid trading, U.S. stock volatility has surged this month as a run of alarming data coincided with the unwinding of a massive, yen-fueled carry trade to deal equities their worst selloff of the year. The S&P 500 .SPX is still down around 6% from a record high set last month, even after making up ground in a series of rallies after Monday’s crushing selloff.  

At issue for many investors is the trajectory of the U.S. economy. After months of betting on an economic soft landing, investors rushed to price in the risk of a more severe downturn, following weaker-than-expected manufacturing and employment data last week.  

“Everybody is now worried about the economy,” said Bob Kalman, a portfolio manager at Miramar Capital. “We are moving away from the greed portion of the program and now the market is facing the fear of significant geopolitical risks, a hotly contested election and volatility that is not going away.”  

Though stocks have rallied in recent days, traders believe it will be a while before calm returns to markets. Indeed, the historical behavior of the Cboe Volatility Index .VIX – which saw its biggest one-day jump ever on Monday – shows that surges of volatility usually take months to dissipate.  

Known as Wall Street’s fear gauge, the index measures demand for options protection from market swings. When it closes above 35 – an elevated level that it topped on Monday – the index has taken 170 sessions on average to return to 17.6, its long-term median and a level associated with far less extreme investor anxiety, a Reuters analysis showed.  

One potential flashpoint will be when the U.S. reports consumer price data on Wednesday. Signs that inflation is dropping too steeply could bolster fears that the Federal Reserve has sent the economy into a tailspin by leaving interest rates elevated for too long, contributing to market turbulence.  

For now, futures markets are pricing in a 55% chance the central bank will bring down benchmark interest rates by 50 basis points in September, at its next policy meeting, compared with a roughly 5% chance seen a month ago.  

“Slower payroll growth reinforces that U.S. economic risks are becoming more two-sided as inflation cools and activity slows,” said Oscar Munoz, chief U.S. macro strategist at TD Securities, in a recent note.  

Corporate earnings, meanwhile, have been neither strong enough nor weak enough to give the market direction, said Charles Lemonides, head of hedge fund ValueWorks LLC.  

Overall, companies in the S&P 500 have reported second-quarter results that are 4.1% above expectations, in line with the long-term average of 4.2% above expectations, according to LSEG data.  

Walmart WMT.N and Home Depot HD.N are among companies reporting earnings next week, with their results seen as offering a snapshot on how U.S. consumers are holding up after months of elevated interest rates.  

The end of the month brings earnings from chip giant Nvidia NVDA.O, whose shares are up around 110% this year even after a recent selloff. The Fed’s annual Jackson Hole gathering, set for Aug. 22-24, will give policymakers another chance to fine tune their monetary policy message before their September meeting.  

Lemonides believes the recent volatility is a healthy correction during an otherwise strong bull market, and he initiated a position in Amazon.com AMZN.O to take advantage of its weakness.  

The U.S. presidential race is also likely to ramp up uncertainty. 

Democrat Kamala Harris leads Republican Donald Trump 42% to 37% in the race for the Nov. 5 presidential election, according to an Ipsos poll published on Thursday. Harris, the vice president, entered the race on July 21 when President Joe Biden folded his campaign following a disastrous debate performance on June 27 against Trump.  

With nearly three months until the Nov. 5 vote, investors are braced for plenty of additional twists and turns in an election year that has already been one of the most dramatic in recent memory.  

“While early events suggested a clearer picture of US Presidential and Congressional outcomes, more recent events have again thrown the outcome into doubt,” analysts at JPMorgan wrote.  

Chris Marangi, co-chief investment officer of value at Gabelli Funds, believes the election will add to market volatility. At the same time, expected rate cuts in September could boost a rotation into areas of the market that have lagged in a year that has been dominated by Big Tech, he said.  

“We expect increased volatility into the election but the underlying rotation to continue as lower rates offset economic weakness,” he said. 
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BEIJING — Chinese authorities are chasing unpaid taxes from companies and individuals dating back decades, as the government moves to plug massive budget shortfalls and address a mounting debt crisis.

More than a dozen listed Chinese companies say they were slapped with millions of dollars in back taxes in a renewed effort to fix local finances that have been wrecked by a downturn in the property market that hit sales of land leases, a main source of revenues.

Policies issued after a recent planning meeting of top Communist Party officials called for expanding local tax resources and said localities should expand their “tax management authority and improve their debt management.”

Local government debt is estimated at up to $11 trillion, including what’s owed by local government financing entities that are “off balance sheet,” or not included in official estimates. More than 300 reforms the party has outlined include promises to better monitor and manage local debt, one of the biggest risks in China’s financial system.

That will be easier said than done, and experts question how thoroughly the party will follow through on its pledges to improve the tax regime and better balance control of government revenues.

“They are not grappling with existing local debt problems, nor the constraints on fiscal capacity,” said Logan Wright of the Rhodium Group, an independent research firm. “Changing central and local revenue sharing and expenditure responsibilities is notable but they have promised this before.”

The scramble to collect long overdue taxes shows the urgency of the problems.

Chinese food and beverage conglomerate VV Food & Beverage reported in June it was hit with an 85 million yuan ($12 million) bill for taxes dating back as far as 30 years ago. Zangge Mining, based in western China, said it got two bills totaling 668 million RMB ($92 million) for taxes dating to 20 years earlier.

Local governments have long been squeezed for cash since the central government controls most tax revenue, allotting a limited amount to local governments that pay about 80% of expenditures such as salaries, social services and investments in infrastructure like roads and schools.

Pressures have been building as the economy slowed and costs piled up from “zero-COVID” policies during the pandemic.

Economists have long warned the situation is unsustainable, saying China must beef up tax collection to balance budgets in the long run.

Under leader Xi Jinping, the government has cut personal income, corporate income, and value-added taxes to curry support, boost economic growth and encourage investment — often in ways that favored the rich, tax scholars say. According to most estimates, only about 5% of Chinese pay personal income taxes, far lower than in many other countries. Government statistics show it accounts for just under 9% of total tax revenues, and China has no comprehensive nationwide property tax.

Finance Minister Li Fo’an told the official Xinhua News Agency that the latest reforms will give local governments more resources and more power over tax collection, adjusting the share of taxes they keep.

“The central government doesn’t have a lot of responsibility for spending, so it doesn’t feel the pain of cutting taxes,” said Cui Wei, a professor of Chinese and international tax policy at the University of British Columbia.

The effectiveness of the reforms will depend on how they’re implemented, said Cui, who is skeptical that authorities will carry out a proposal to increase central government spending. That “will require increasing central government staffing, and that’s an ‘organizational’ matter, not a simple spending matter,” he said.

“I wouldn’t hold my breath,” Cui said.

Sudden new tax bills have hit some businesses hard, further damaging already shaky business confidence. Ningbo Bohui Chemical Technology, in Zhejiang on China’s eastern coast, suspended most of its production after the local tax bureau demanded 500 million yuan ($69 million) in back taxes on certain chemicals. It is laying off staff and cutting pay to cope.

Experts say the arbitrary way taxes are collected, with periods of leniency followed by sudden crackdowns, is counterproductive, discouraging companies from investing or hiring precisely when they need to.

“When business owners are feeling insecure, how can there be more private investment growth in China?” said Chen Zhiwu, a finance professor at the University of Hong Kong’s business school. “An economic slowdown is inevitable.”

The State Taxation Administration has denied launching a nationwide crackdown, which might imply past enforcement was lax. Tax authorities have “always been strict about preventing and investigating illegal taxation and fee collection,” the administration said in a statement last month.

As local governments struggle to make ends meet, some are setting up joint operation centers run by local tax offices and police to chase back taxes. The AP found such centers have opened in at least 23 provinces since 2019.

Both individuals and companies are being targeted. Dozens of singers, actors, and internet celebrities were fined millions of dollars for avoiding taxes in the past few years, according to a review of government notices.

Internet livestreaming celebrity Huang Wei, better known by her pseudonym, Weiya, was fined 1.3 billion yuan ($210 million) for tax evasion in 2021. She apologized and escaped prosecution by paying up, but her social media accounts were suspended, crippling her business.

The hunt for revenue isn’t limited to taxes. In the past few years, local authorities have drawn criticism for slapping large fines on drivers and street vendors, similar to how cities like Chicago or San Francisco earn millions from parking tickets. Despite pledges by top leaders to eliminate fines as a form of revenue collection, the practice continues, with city residents complaining that Shanghai police use drones and traffic cameras to catch drivers using their mobile phones at red lights.

Outside experts and Chinese government advisers agree that structural imbalances between local and central governments must be addressed. But under Xi, China’s most authoritarian leader in decades, decision-making has grown more opaque, keeping businesses and analysts guessing, while vested interests have pushed back against major changes.

“They have a hermetically sealed process that makes it difficult for people on the outside to know what is going on,” says Martin Chorzempa, senior fellow at the Peterson Institute for International Economics.

Beijing has been reluctant to rescue struggling local governments, wary it might leave them dependent on bailouts. So, the central government has stepped in only in dire cases, otherwise leaving local governments to resolve debt issues on their own.

“In Chinese, we have a saying: You help people in desperate need, but you don’t help the poor,” said Tang Yao, an economist at Peking University. “You don’t want them to rely on soft money.”

Economists say intervention may be required this time around and that the central government has leeway to take on more debt, with a debt-to-GDP ratio of only around 25%. That’s much lower than many other major economies.

Accumulated total non-financial debt, meanwhile, is estimated at nearly triple the size of the economy, according to the National Institution for Finance and Development and still growing.

“This is a huge structural problem that needs a huge structural solution that is not forthcoming,” said Logan Wright of the Rhodium Group, an independent research firm. “There’s really no way around this. And it’s getting worse, not better.”
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NEW YORK — U.S. stocks rallied Thursday in Wall Street’s latest sharp swerve after a better-than-expected report on unemployment eased worries about a slowing economy. 

The S&P 500 jumped 2.3% for its best day since 2022 and shaved off all but 0.5% of its loss from what was a brutal start to the week. The Dow Jones Industrial Average rose 683 points, or 1.8%, and the Nasdaq composite climbed 2.9% as Nvidia and other Big Tech stocks helped lead the way. 

Treasury yields also climbed in the bond market in a signal that investors are feeling less worried about the economy after a report showed fewer U.S. workers applied for unemployment benefits last week. The number was better than economists expected. 

It was exactly a week ago that worse-than-expected data on unemployment claims helped enflame worries that the Federal Reserve has kept interest rates too high for too long in order to beat inflation. That helped send markets reeling worldwide, along with a rate hike by the Bank of Japan that sent shockwaves worldwide by scrambling a favorite trade among some hedge funds. 

At the worst of it, at least so far, the S&P 500 was down nearly 10% from its all-time high set last month. Such drops are regular occurrences on Wall Street, and corrections of 10% happen roughly every year or two. After Thursday’s jump, the index is back within about 6% of its record. 

What made this decline particularly scary was how quickly it happened. A measure of how much investors are paying to protect themselves from future drops for the S&P 500 briefly surged toward its highest level since the COVID crash of 2020. 

Still, the market’s swings look more like a “positioning-driven crash” caused by too many investors piling into similar trades and then exiting them together, rather than the start of a long-term downward market caused by a recession, according to strategists at BNP Paribas.
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З сотні найбільших оборонних компаній світу саме «Укроборонпром» зростає найшвидше, сказав Камишін
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New York — U.S. stocks are bouncing back, and calm is returning to Wall Street after Japan’s market soared earlier Tuesday to claw back much of the losses from its worst day since 1987.   

The S&P 500 was rallying by 1.6% in midday trading and on track to break a brutal three-day losing streak. It had tumbled a bit more than 6% after several weaker-than-expected reports raised worries the Federal Reserve had pressed the brakes too hard for too long on the U.S. economy through high interest rates in order to beat inflation.   

The Dow Jones Industrial Average was up 480 points, or 1.2%, as of 11 a.m. Eastern time, and the Nasdaq composite was 1.7% higher. The vast majority of stocks were climbing in a mirror opposite of the day before, from smaller companies that need U.S. households to keep spending to huge multinationals more dependent on the global economy.   

Stronger-than-expected profit reports from several big U.S. companies helped drive the market. Kenvue, the company behind Tylenol and Band-Aids, jumped 12.7% after reporting stronger profit than expected thanks in part to higher prices for its products. Uber rolled 7.9% higher after easily topping profit forecasts for the latest quarter.   

Caterpillar veered from an early loss to a gain of 3.8% after reporting stronger earnings than expected but weaker revenue.  

Several technical factors may have accelerated the recent swoon for markets, beyond weak U.S. hiring data and other dispiriting U.S. economic reports, in what strategists at Barclays called “a perfect storm” for causing extreme market moves. One is centered in Tokyo, where a favorite trade for hedge funds and other investors began unraveling last week after the Bank of Japan made borrowing more expensive by raising interest rates above virtually zero.   

That scrambled trades where investors had borrowed Japanese yen at low cost and invested it elsewhere around the world. The resulting exits from those investments may have helped accelerate the declines for markets around the world.   

Japan’s Nikkei 225 jumped 10.2% Tuesday to claw back much of its 12.4% sell-off the day before, which was its worst since the Black Monday crash of 1987. Stocks in Tokyo rebounded as the value of the Japanese yen stabilized against the U.S. dollar following several days of sharp gains.   

“The speed, the magnitude and the shock factor clearly demonstrate” how much of the moves were driven by how traders were positioned, according to the strategists at Barclays led by Stefano Pascale and Anshul Gupta. That could indicate it wasn’t just worries about the U.S. economy.   

Still, some voices along Wall Street are continuing to urge caution.   

Barry Bannister, chief equity strategist at Stifel, is warning more drops could be ahead because of a slowing U.S. economy and sticky inflation. He’s forecasting both will be worse in the second half of this year than what much of Wall Street expects, while saying a measure of how expensive the U.S. stock market is still looks “frothy” when compared with bond yields and other financial conditions.   

The stock market’s “dip is not a blip,” he warned in a report, and called it “too soon to jump back in.”   

He had been predicting a coming “correction” in U.S. stock prices for a while, including an acknowledgement in July that his initial call was early. That was a couple days before the S&P 500 set its latest all-time high and then began sinking.   

While fears are rising about a slowing U.S. economy, it is still growing, and a recession is far from a certainty. The U.S. stock market is also still up a healthy amount for the year so far, and the Federal Reserve says it has ample room to cut interest rates to help the economy if the job market weakens significantly.   

The S&P 500 has romped to dozens of all-time highs this year, in part due to a frenzy around artificial-intelligence technology, and critics have been saying that’s sent stock prices too high in many cases.   

They’ve pointed in particular to Nvidia, Apple and the other handful of Big Tech stocks in the “Magnificent Seven” that were the main reason the S&P 500 set so may records this year. Propelled in part by the mania around AI, they helped overshadow weakness across other areas of the stock market, which were struggling under the weight of high interest rates.   

A set of underwhelming profit reports recently, kicked off by Tesla and Alphabet, added to the pessimism and dragged Big Tech stocks lower. Nvidia dropped nearly 19% from the start of July through Monday on such concerns, but it rose 4.8% Tuesday and was one of the strongest forces pushing upward on the market.   

Apple, though, fell another 0.8% and was the heaviest weight on the S&P 500.   

In the bond market, Treasury yields were ticking higher to claw back some of their sharp drops since April, driven by rising expectations for coming cuts to interest rates by the Federal Reserve.   

The yield on the 10-year Treasury rose to 3.86% from 3.78% late Monday. It had briefly dropped below 3.70% during Monday when fear in the market was spiking and investors were speculating the Federal Reserve could even have to call an emergency meeting to cut interest rates quickly. 
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Bangkok — Japan’s benchmark Nikkei 225 index soared more than 10% on Tuesday, rebounding after a rollercoaster start to the week that sent markets tumbling in Europe and on Wall Street.

European markets were mostly lower, with Germany’s DAX down 0.4% at 17,277.27 and the CAC 40 in Paris 0.7% lower, at 7,098.89.

In London, the FTSE 100 shed 0.4% to 7,974.44.

Those modest declines and gains in Asia suggested a respite from the turmoil of the past two trading sessions, when the Nikkei lost a combined 18.2% and other markets also swooned. U.S. futures showed solid gains, with the contract for the S&P 500 up 0.5% and that for the Dow Jones Industrial Average gaining 0.3%.

Monday’s plunge reminiscent of a crash in 1987 that swept around the world pummeled Wall Street with more steep losses, as fears worsened about a slowing U.S. economy.

The Nikkei gained nearly 11% early Tuesday and bounced throughout the day to close up 3,217.04 points at 34,675.46 as investors snapped up bargains after the 12.4% rout of the day before.

“Calm finally appears to be returning,” Bas van Geffen of Rabobank said in a report. The Nikkei’s 10% gain didn’t make up for Monday’s loss, he said, “but at least it takes some of the ‘panic’ out of the selling.”

The dollar rose to 144.87 yen from 144.17 yen. The yen’s rebound against the dollar after the Bank of Japan raised its main interest rate on July 31 was one factor behind the recent market swings, as investors who had borrowed in yen and invested in dollar assets like U.S. stocks sold their holdings to cover the higher costs of those “carry trade” deals.

Elsewhere in Asia, South Korea’s Kospi jumped 3.3% to 2,522.15. It had careened 8.8% lower on Monday.

Hong Kong’s Hang Seng index gave up early gains to close 0.3% lower at 16,647.34. The Shanghai Composite index, largely bypassed by Monday’s drama, rose 0.2% to 2,867.28.

In Australia, the S&P/ASX 200 advanced 0.4% to 7,680.60 as the central bank kept its main interest rate unchanged. Taiwan’s Taiex was up 1.2% after plunging 8.4% the day before and the SET index in Bangkok gained 0.3%.

On Monday, the S&P 500 dropped 3% for its worst day in nearly two years. The Dow declined 2.6% and the Nasdaq composite slid 3.4%.

The global sell-off that began last week and gained momentum after a report Friday showed that American slowed their hiring in July by much more than economists expected. That and other weaker than expected data added to concern the Federal Reserve has pressed the brakes on the U.S. economy by too much for too long through high interest rates in hopes of stifling inflation.

But sentiment was helped by a report Monday by the Institute for Supply Management said growth for U.S. services businesses was a touch stronger than expected, led by the arts, entertainment and recreation sectors, along with accommodations and food services.

The U.S. economy is still growing, so a recession is far from certain. The U.S. stock market is still up a healthy amount for the year, with double-digit percentage gains for the S&P 500, the Dow and the Nasdaq.

Markets have romped to dozens of all-time highs this year, in part due to a frenzy around artificial-intelligence technology and critics have been saying prices looked too expensive.

Other worries also are weighing on the market. The Israel-Hamas war and other global hotspots could cause sharp swings for the price of oil.

Early Tuesday, U.S. benchmark crude oil was up 12 cents at $73.06 per barrel. Brent crude, the international standard, picked up 3 cents to $76.33 per barrel.

The euro fell to $1.0910 from $1.0954.
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