Archives for May 2021

Business group warns China boycotts spooking investors

BEIJING (AP) — An American business group warned Tuesday that government-instigated consumer boycotts of foreign shoe, clothing and other brands in China are making companies less willing to invest.

That is adding to anxiety over Beijing’s plan for a list of “unreliable entities” that might be punished for actions deemed to run counter to Chinese interests, the American Chamber of Commerce in China said in an annual report on business conditions.

The report reflects growing unease among American and other foreign companies about the impact of economic and strategic tensions between Beijing and their home countries.

Brands including Swedish retailer H&M, Adidas and Nike have been targeted by demands online for consumer boycotts. That came after state media criticized them for expressing concern about reports of possible forced labor by ethnic minorities in the Xinjiang region of China’s northwest.

The American Chamber said 78% of companies that responded to its survey cited “rising tensions” between Beijing and Washington as their top concern.

Beijing announced plans for its “unreliable entities” list in 2019 after then-President Donald Trump blocked access to U.S. components and technology for Chinese tech giant Huawei Technologies Ltd. Officials have yet to say which companies might be on the list or disclose the criteria for being included.

Concern about the list is “aggravated by consumer boycotts instigated by official organizations and through Chinese media,” the Chamber said. It said one in five companies expressed concern, while 7% said it was decreasing their willingness to invest.

Despite that, half the companies surveyed said China’s investment environment is improving, while 38% said it stayed the same. The Chamber said only 12% reported conditions had deteriorated, the lowest level since 2015.

The Chamber noted that 27% of information and computer technology companies said investment conditions were deteriorating, the highest level of any industry. That finding comes at a time when the ruling Communist Party is using subsidies, market barriers and informal pressure on companies to try to develop its own high-tech industries.

Asian stocks mixed after Wall St falls on inflation fears

BEIJING (AP) — Asian stock markets retreated Wednesday as investors looked ahead to U.S. data they worry will show inflation is picking up.

Shanghai, Tokyo and Southeast Asian markets declined. Hong Kong advanced.

Overnight, Wall Street’s benchmark S&P 500 index lost 0.9% amid concern inflation might accelerate, hampering an economic recovery and dragging on share prices.

More U.S. inflation were due out Wednesday. Investor concern is increasing following a price rise for industrial materials including copper and crude oil.

“Asian equities traded sideways following a lackluster session on Wall Street, where risk sentiment prevailed amid inflationary concerns,” Anderson Alves of ActivTrades said in a report. This week’s data are “essential for investors worldwide as U.S. markets are the primary benchmark for risk assets globally.”

The Shanghai Composite Index lost less than 0.1% to 3,439.57 while the Nikkei 225 in Tokyo fell 0.6% to 28,439.52. The Hang Seng in Hong Kong advanced 0.5% to 28,016.71.

The Kospi in Seoul tumbled 1.6% to 3,158.78 and the S&P-ASX 200 in Sydney sank 0.6% to 7,056.30. New Zealand and Southeast Asian markets also declined.

On Wall Street, banks and energy companies led a broad pullback Tuesday.

The S&P 500 fell to 4,152.19. The Dow Jones Industrial Average sank 1.4% in its worst day since February. The Nasdaq composite lost 0.1% to 13,389.43.

Commodity prices have been rising, particularly for industrial metals such as copper and platinum, as well as for energy commodities like gasoline and crude oil.

Big technology companies were among the biggest decliners for a second day. Tech stocks get most of their valuation from future profits that might be less valuable if they are eroded by inflation.

Investors have worried about inflation since bond yields spiked earlier this year, though yields have mostly stabilized since then. The yield on the 10-year Treasury held steady Tuesday at 1.61%.

The Federal Reserve has said the U.S. economy will be allowed to “run hot” to ensure a recovery is established. Despite that, investors worry rising prices might pressure central banks to pull back stimulus and raise near-zero interest rates.

In energy markets, benchmark U.S. crude lost 17 cents to $65.11 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 36 cents on Tuesday to $65.28. Brent crude, used to price international oils, sank 21 cents to $68.34 per barrel in London. It rose 23 cents the previous session to $68.55.

The dollar gained to 108.85 yen from Tuesday’s 108.65. The euro fell to $1.2126 from $1.2152.

China adds few babies, loses workers as its 1.4B people age

BEIJING (AP) — The number of working-age people in China fell over the past decade as its aging population barely grew, a census showed Tuesday, complicating Chinese leaders’ efforts to create a more prosperous and influential nation.

The total population rose to 1.411 billion people last year, up 72 million from 2010, according to the once-a-decade census. Slow growth fell closer to zero as fewer couples had children.

That adds to challenges for Chinese leaders who want to create a richer society and increase its global influence by developing technology industries and self-sustaining economic growth based on consumer spending.

The ruling Communist Party has enforced birth limits since 1980 to restrain population growth but worries the workforce is shrinking. It has eased birth limits, but couples are put off by high costs, cramped housing and job discrimination against mothers.

The population of potential workers aged 15 to 59 fell to 894 million last year, the National Bureau of Statistics reported. That would be down 5% from a 2011 peak of 925 million. The percentage of children in the population edged up compared with 2010, but the group aged 60 and older grew faster.

Changes in birth limits and other policies “promoted a rebound in the birth population,” the bureau director, Ning Jizhe, said at a news conference.

However, Ning said 12 million babies were born last year, which would be down 18% from 2019’s 14.6 million.

China, along with Thailand and some other developing Asian countries that are aging fast, faces what economists call the challenge of whether it can grow rich before it grows old. Some warn China faces a “demographic time bomb.”

The potential shortage of workers needed to generate economic activity and tax revenue comes as President Xi Jinping’s government boosts spending on its military and efforts to create global competitors in electric cars and other technologies.

Reflecting the issue’s sensitivity, the statistics agency took the unusual step last month of announcing the population grew in 2020 but gave no total. That looked like an effort to calm companies and investors after The Financial Times reported the census might have found a surprise decline.

“We are more concerned about the fast decline in the proportion of the working age population compared to the total population,” said Lu Jiehua, a professor of population studies at Peking University.

The working-age population will fall from three-quarters of the total in 2011 to just above half by 2050, according to Lu.

“If the population gets too old, it will be impossible to solve the problem through immigration,” said Lu. “It needs to be dealt with at an early stage.”

Couples who want a child face daunting challenges.

Many share crowded apartments with their parents. Child care is expensive and maternity leave short. Most single mothers are excluded from medical insurance and social welfare payments.

Some women worry giving birth could hurt their careers.

“When you have a kid, you take pregnancy leave, but will you still have this position after you take the leave?” said He Yiwei, who is returning from the United States after obtaining a master’s degree. “Relative to men, when it comes to work, women have to sacrifice more.”

Japan, Germany and some other rich countries face the same challenge of supporting aging populations with fewer workers. But they can draw on investments in factories, technology and foreign assets. By contrast, China is a middle-income country with labor-intensive farming and manufacturing.

The decline in the working-age population “will place a cap on China’s potential economic growth,” said Yue Su of the Economist Intelligence Unit in a report. That is a “powerful incentive to introduce productivity-enhancing reforms.”

The International Monetary Fund is forecasting Chinese economic growth of 8.4% this year following a rebound from the coronavirus pandemic. The Communist Party wants to double output per person from 2020 levels by 2035, which would require annual growth of about 4.7%.

The numbers reported Thursday reflect a gain of 11.8 million people, or 0.8%, over the official estimate for 2019, when the government says the population edged above 1.4 billion for the first time.

The working-age population fell to 63.3% of the total from 70.1% a decade ago. The group up to age 14 expanded by 1.3 percentage points to 17.9%. Those 60 and older — a group of 264 million people who on their own would be the world’s fourth-biggest country — rose 5.4 percentage points to 18.7% of the population.

“Labor resources are still abundant,” said Ning of the statistics agency.

The party took its biggest step in 2015 when rules that limited many couples to having only one child were eased to allow two.

However, China’s birth rate, paralleling trends in South Korea, Thailand and other Asian economies, already was falling before the one-child rule. The average number of children per mother tumbled from above six in the 1960s to below three by 1980, according to the World Bank.

Demographers say official birth limits concealed what would have been a further fall in the number of children per family.

The one-child limit, enforced with threats of fines or loss of jobs, led to abuses including forced abortions. A preference for sons led parents to kill baby girls, prompting warnings millions of men might be unable to find a wife, fueling social tension.

Thursday’s data showed China has 105.7 million men and boys for every 100 women and girls, or about 33 million more males.

The ruling party says the policy averted shortages of food and water by preventing as many as 400 million potential births. But demographers say if China followed Asian trends, the number of additional babies without controls might have been as low as a few million.

After limits were eased in 2015, many couples with one child had a second but total births fell because fewer had any at all.

Some researchers say China’s population already is shrinking.

Yi Fuxian, a senior scientist in obstetrics and gynecology at the University of Wisconsin-Madison, says the population started to fall in 2018. His book “Big Country With An Empty Nest” argued against the one-child limit.

“China’s economic, social, educational, tech, defense and foreign policies are built on the foundation of wrong numbers,” said Yi.

Chinese regulators talk about raising the official retirement age of 55 to increase the pool of workers.

Female professionals welcome a chance to stay in satisfying careers. But others resent being forced to work more years. And keeping workers on the job, unable to help look after children, might discourage their daughters from having more.

The latest data put China closer to be overtaken by India as the most populous country, which is expected to happen by 2025.

India’s population last year was estimated by the U.N. Department of Economic and Social Affairs at 1.38 billion, or 1.5% behind China. The agency says India should grow by 0.9% annually through 2025.

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Wu reported from Taipei. AP researcher Yu Bing and video producer Liu Zheng in Beijing contributed to this report.

42 killed in Colombia protests, human rights agency says

BOGOTA, Colombia (AP) — Forty-two people have died during anti-government protests that began two weeks ago amid discontent fueled by growing poverty and inequality during the pandemic, Colombia’s human rights ombudsman said Tuesday.

The government agency added that 168 people had been reported missing during the protests, which were set to continue Wednesday. On May 5, the human rights ombudsman said 24 people had been killed in the protests and 89 were missing.

The new figures from the ombudsman are similar to those recorded by Temblores, a non-governmental group that tracks police violence. Temblores said Tuesday that 40 people had been killed during the protests in incidents related to police violence while one policeman was stabbed to death while trying to stop a riot.

Colombian police have been widely accused of using excessive force to break up demonstrations and riots that started April 28 after the government attempted to increase taxes in what it said was an effort to reduce its deficit and raise funds for health care and social services.

The government withdrew its $6.7 billion tax plan May 2 and the finance minister resigned the following day, but protests have continued across the country. Demonstrators are now pressing demands that include reforming the police, implementing a basic income plan for 10 million people and providing free tuition at public universities.

Colombia’s economy contracted 7% last year and millions of people were left without work by restrictions related to the pandemic. That increased frustration with the government, which had failed to meet demands made during a previous wave of protests in 2019.

On Monday night, the government’s peace commissioner, Miguel Ceballos, said President Ivan Duque’s administration was willing to sit down with protest leaders to negotiate on some of their demands. Ceballos asked the United Nations and the Roman Catholic Church to mediate the talks.

The protest leaders met with government officials earlier Monday and said that basic conditions for negotiations, such as security guarantees for protesters, had not been met. Protest leaders are expected to respond to the government’s new offer later this week.

The protests are being staged as coronavirus infections reach record levels in Colombia, where more than 78,000 people have died from COVID-19, the disease that can be caused by the virus. Over the past week Colombia has averaged more than 15,000 new infections a day. The current rate of infections is five times greater than at the beginning of March.

Meituan’s stock price plunges after CEO posts Chinese poem

SINGAPORE (AP) — Shares in Meituan, China’s largest food delivery platform, have tumbled after its CEO posted —and then deleted — an ancient poem in a move widely seen as possible criticism of the Chinese government.

Authorities are investigating the company over allegations of anti-monopolistic behavior, part of a wider crackdown on technology companies.

Meituan’s stock price lost 5.3% on Tuesday and plunged as much as 9.8% on Monday after its CEO Wang Xing posted the classical Tang dynasty poem, which criticized Emperor Qin Shi Huang for silencing his critics by burning books.

Wang’s post was seen as a veiled comparison of the ruthless ancient emperor and China’s current authoritarian government. Investors worried over how Chinese authorities might react have been selling their holdings of Meituan’s stock.

Wang posted the classical poem, “The Book Burning Pit” by Tang dynasty poet Zhang Jie to the social media platform Fanfou, according to Chinese media reports. He later deleted the post, saying it was meant to refer to fierce competition in the e-commerce industry, where the most dangerous competitors are often unexpected.

The Qin emperor is revered as the founder of a modern, unified China but considered a brutal and ruthless ruler who killed scholars who dared to defy him.

Under President Xi Jinping, China has imposed ever tighter controls in an already repressive political landscape and on the Chinese media. The ruling Communist Party has scant tolerance for public dissent.

The internet sector has come under intense scrutiny in recent months as Beijing expressed concern over the growing influence of companies like e-commerce giant Alibaba and others.

Regulators ordered Alibaba to pay a record $2.8 billion fine for abusing its market position and quashed plans for a massive initial public offering by its affiliate Ant Group.

Other technology companies including gaming giant Tencent and search engine giant Baidu were fined for failing to disclose investments and acquisitions. Regulators also have summoned companies to warn them against anti-competitive behavior.

Alibaba troubles surfaced after its founder Jack Ma publicly accused financial regulators of being behind-the-times at a conference in November.

Alibaba’s stock price has fallen nearly 17% since regulators announced in late December that they were investigating the company.

Archives for May 2021

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