US Retailers Pull Products From Companies Linked to Rights Abuses in China

Three U.S. retail giants have pulled products made by tech surveillance specialists Lorex and Ezviz, following revelations by the tech press that the companies are linked to human rights abuses in China’s Xinjiang region, home to Uyghurs and other Muslim minority groups.

According to reports from American online news outlet TechCrunch and video surveillance news site IPMV, big-box retailers Best Buy, Home Depot and Lowe’s terminated contracts with Lorex and Ezviz after the two news outlets questioned their partnerships.

In an email statement to VOA Mandarin, Home Depot said it has stopped selling products from both Lorex and Ezviz. “We committed to upholding the highest standards of ethical sourcing and we immediately stopped selling these products when this was brought to our attention,” said the statement, which is also on the company website.

Best Buy told TechCrunch that it was “discontinuing its relationship” with both Lorex and Ezviz. Lowe’s did not respond to a request from VOA Mandarin for comments, but a recent search shows neither Lorex nor Ezviz surveillance products are available on its website.

Lorex is a subsidiary of Dahua Technology. Ezviz is a brand of video surveillance cameras owned by Hikvision. Dahua and Hikvision were added to the U.S. government’s economic blacklist in 2019 for supplying Beijing with technology it uses to surveil ethnic groups.

Yet because the 2019 sanction covered only sales to the U.S. federal government, Lorex and Ezviz remained free to sell to private-sector buyers.

The proliferation of Chinese companies in the surveillance equipment sector reflects Beijing’s growing reliance on advanced technological tools to monitor the lives of its citizens in Xinjiang and to expand an already extensive surveillance infrastructure throughout China.

According to Human Rights Watch, the Xinjiang Bureau of Public Security uses what it calls the Integrated Joint Operations Platform, a system that gathers data on residents through iris scanners, digital cameras with face recognition, DNA samples and cellphone data.

In the China section of its 2020 Country Reports on Human Rights Practices, the U.S. State Department said that Hikvision and other tech companies are related to the development of a “Uyghur alarm” based on a face-scanning camera system.

The report said the Chinese government is conducting significant human rights abuses against Uyghurs, including “mass detention of more than one million Uyghurs and other members of predominantly Muslim minority groups in extrajudicial internment camps and an additional two million subjected to daytime-only ‘re-education’ training.”

China, which contends that Uyghurs hold extremist and separatist ideas, denies the allegations, saying that Xinjiang’s camps are “re-education” facilities aimed at combating terrorism.  

 

 


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Pandemic Worsens Prospect of Global Labor Recovery

New figures from the U.N.’s International Labor Organization indicate the global labor market has been slow to bounce back from the COVID-19 pandemic, with the economies of lower-income countries faring worse than those of the wealthier countries.

Early this year, ILO economists had anticipated a fragile, but steady recovery in the global job market. However, they acknowledge this relative optimism now has faded due to new waves of the pandemic and slower than expected economic recovery.

Based on its findings, the U.N. agency now projects the number of global hours worked this year will be 4.3% below pre-pandemic levels. This is the equivalent to a loss of 125 million full time jobs.

ILO Director-General Guy Ryder says more worrying still is what he sees as the two-speed recovery between higher and lower-income countries.

“This is reflected in the fact that the higher income countries, with more resources managed to recover in 2021 at least to some extent, whilst lower income countries continue to suffer very severely from the pandemic…The pandemic has exacerbated inequalities between countries, as well as within them,” he expressed.

Ryder blames this growing divergence on differences in the roll-out of COVID-19 vaccinations and fiscal stimulus packages. He says the pace of each nation’s recovery depends heavily on its ability to vaccinate its population and it will also depend on the ability of countries to provide a financial cushion to protect workers and businesses from the economic impact of the pandemic.

“In low and middle-income countries, fiscal constraints and slow vaccination progress are expected to continue to hinder progress. And without concrete financial and technical support, the great divergence between developed and developing countries will persist,” he insists.

The ILO reports the prospects for labor market recovery for the rest of the year remain weak and uncertain. Ryder says no country or region will get out of this crisis alone. He says the only sustainable path out of this health and socio-economic dilemma is for all nations to work together.


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US Holiday Sales Could Hit Record Levels

U.S. holiday sales could rise over 10% this year, a trade body said on Wednesday, as major consumer goods makers and retailers work to prevent supply chain disruptions from leaving shelves empty of in-demand toys and games. 

The National Retail Federation (NRF) forecast sales to increase between 8.5% and 10.5%, to between $843.4 billion and $859 billion, during November and December, compared with a previous high of $777.3 billion last year. 

Rising income and household savings have never been stronger and would help people pay more for goods at a time when companies have raised prices to deal with inflation, the NRF said. It added there is exceptional demand for holiday products this year, although a survey last week showed customers were worried about availability. 

“If retailers can keep merchandise on the shelves and merchandise arrives before Christmas, it could be a stellar holiday sales season,” NRF Chief Economist Jack Kleinhenz said. 

NRF also said the arrival of international travelers to the United States amid relaxed COVID-19 restrictions would further drive sales higher. 

“That’s going to give a jolt to the retail side, because there is a high correlation between international travelers and tourism in the U.S., and retail sales,” NRF President Matthew Shay told reporters. 

Several retailers had also begun their holiday selling as early as September, warning their customers their favorite items could sell out or delivery could take longer than usual. 

“There may be some categories in which there will be some shortages or which consumers will need to do some switching or trading … they won’t go home empty-handed,” Shay said. 

Amazon.com, Inc. has secured more shipping storage, while Levi Strauss & Co and Crocs Inc. have been redirecting their goods to come in through East Coast ports, away from the congested West Coast. 

 


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COP26 Climate Summit: What’s At Stake For Planet Earth?

Global pledges to cut greenhouse gas emissions are just a fraction of what’s needed to prevent catastrophic global warming. That’s the warning from the United Nations, ahead of the critical COP26 Climate Summit in Glasgow, Britain next week – where world leaders will try to agree on further action to combat global warming. Henry Ridgwell looks at what is at stake ahead of the meeting.


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US to Reopen Air Borders for Fully Vaccinated Visitors

The United States will soon reopen its air borders for fully vaccinated foreign visitors who have one of three approved COVID-19 vaccines or who can present a negative COVID-19 test within 24 hours of travel, the White House announced Monday. 

The new rules take effect Nov. 8, and “only limited exceptions” will be allowed, senior Biden administration officials said during a background briefing with reporters. Those include vaccine exemptions for travelers from about 50 countries with exceptionally low vaccination rates, which include some of the world’s poorest nations, many of those in Africa. Children under the age of 18 are also exempt from the vaccine requirement at this time, but will still have to present a negative test.

Accepted vaccines only include the three approved by the U.S. Food and Drug Administration:: Moderna, Pfizer and Johnson & Johnson.

 

Exemptions will include “certain COVID-19 vaccine clinical trial participants, those with medical contraindications to the vaccines, and those who need to travel for emergency or humanitarian reasons,” the White House said. Additionally, those who are granted an exception must agree to be vaccinated in the U.S. if they intend to stay for more than 60 days.

“The new system also includes enhanced testing requirements, strengthening contact tracing, as well as masking,”a senior administration official said. ”These are strict safety protocols that follow the science and public health to enhance the safety of Americans here at home, and the safety of international air travel.” 

In 2019, nearly 80 million international visitors came to the U.S., according to data from the U.S. Travel Association. That figure cratered in early 2020, when the pandemic hit and the administration of former President Donald Trump imposed restrictions that barred tens of thousands of travelers from most of the world.

Unvaccinated air passengers — including unvaccinated U.S. citizens and lawful permanent residents — will now need to provide a negative test within one day of departure. Children under two years old will not need to test, and accommodations will be allowed for people who have documented their recovery from the virus within the last 90 days.

 


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UK Plans $8 Billion Package to Boost Health Service Capacity

British finance minister Rishi Sunak’s budget this week will include an extra $8.1 billion of spending for the health service over the next few years to drive down waiting lists, the finance ministry said on Sunday.   

The sum comes on top of an $11 billion package announced in September to tackle backlogs built up over the COVID-19 pandemic, the finance ministry said.   

The spending is aimed at increasing what is termed elective activity in the National Health Service (NHS) — such as scans and non-emergency procedures — by 30% by the 2024/25 financial year. 

The increase comprises $3.2 billion for testing services, $2.9 billion to improve the technology behind the health service, and $2 billion to increase bed capacity.   

“This is a game-changing investment in the NHS to make sure we have the right buildings, equipment and systems to get patients the help they need and make sure the NHS is fit for the future,” Sunak said in a statement. 

Sunak is expected to set fairly tight limits for most areas of day-to-day public spending in his budget on Wednesday, which will seek to lower public debt after a record surge in borrowing during the pandemic. 


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Is There a Constitutional Right to Food? Mainers to Decide 

Depending on whom you ask, Maine’s proposed “right to food” constitutional amendment would simply put people in charge of how and what they eat — or would endanger animals and food supplies, and turn urban neighborhoods into cattle pastures. 

For supporters, the language is short and to the point, ensuring the right to grow vegetables and raise livestock in an era when corporatization threatens local ownership of the food supply, a constitutional experiment that has never been tried in any state. 

For opponents and skeptics, it’s deceptively vague, representing a threat to food safety and animal welfare, and could embolden residents to raise cows in their backyards in cities like Portland and Bangor. 

In the Nov. 2 election, voters will be asked if they favor an amendment to the Maine Constitution “to declare that all individuals have a natural, inherent and unalienable right to grow, raise, harvest, produce and consume the food of their own choosing for their own nourishment, sustenance, bodily health and well-being.” 

The proposal is essentially “the 2nd Amendment of food,” said Republican Rep. Billy Bob Faulkingham, who proposed the amendment, likening it to the U.S. constitutional amendment that assures the right to bear arms.

He says it’s a common-sense amendment that would make sure the government can’t stop people from doing things like saving and exchanging seeds, as long as they don’t violate public or property rights. 

“There’s a lot of disturbing trends in the food category, with the power and control that corporations are taking over our food,” said Faulkingham, who is also a commercial lobster fisherman. “We want to protect people’s ability to grow gardens, grow and raise their own food.” 

Faulkingham and others said the amendment is a response to growing corporate ownership of the food supply. They see the amendment as a way to wrest control of food from big landowners and giant retailers. 

But Julie Ann Smith, executive director of the Maine Farm Bureau, the largest farmers advocacy organization in the state, argued the language of the amendment is so broad that it could make the food supply less safe.

That’s a problem in a state where potatoes, blueberries, maple syrup and dairy products are all key pieces of the economy, she said. The amendment could empower residents to buy and consume food that isn’t subject to inspections, proper refrigeration and other safety checks, Smith worried.

“We think it’s very dangerous to have the words ‘to consume the food of your own choosing.’ That is so broad and dangerous,” Smith said. “It has the potential to cause serious problems in food safety, animal welfare.” 

Smith said the farm bureau is also concerned that the amendment could override local ordinances that prevent residents from raising livestock anywhere they choose.

Supporters of the proposal, including Faulkingham, said that local rules would still be enforced, and that the amendment would not mean you could do things like raise chickens anywhere you want or fish commercially without a license. 

The amendment proposal is an outgrowth of the right-to-food movement, sometimes called the food sovereignty movement, which has expanded in recent years in Maine and states around the U.S. and Canada. 

The movement comprises a patchwork of small farmers, raw milk enthusiasts, libertarians, back-to-the-land advocates, anti-corporatists and others who want to ensure local control of food systems. 

Maine enacted a food sovereignty law, the nation’s first of its kind, in 2017. The law allows local governments to OK small food producers selling directly to customers on site. The law was especially popular with sellers of raw milk, which can be legally sold in Maine but is more restricted in many other states.

The nationwide food sovereignty movement has yielded similar laws in states including Wyoming, Colorado, Montana and North Dakota, and pushes for the same elsewhere. 

The amendment is likely to find support among Maine’s self-sufficient, practical Yankee set, said Mark Brewer, a political scientist with the University of Maine.

However, Brewer agreed with criticism that the amendment is so vague that it’s unclear what it would actually do. 

“I’d be more interested in how it could play out in the courts,” Brewer said. “If you want to raise cattle within the city limits when city laws say you can’t, but the Constitution says you can. Then what happens?” 

For Heather Retberg, a farmer in the small town of Penobscot, the concerns about cows turning up in cities are a silly distraction from the real goal of the proposal.

Retberg, who has a 100-acre farm with cows, pigs, chicken and goats, said the proposal is “an antidote to corporate control of our food supply” and a chance for rural communities to become self-sufficient when it comes to what food they grow and eat. 

It’s also a chance to tackle the problem of the state’s “food deserts,” where residents don’t have enough access to healthy food, Retberg said. 

 

 


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Biden Trying to Finalize Social Safety Net Spending Plan

U.S. President Joe Biden is meeting Sunday with two key senators at his home in Delaware to try to complete details of a pared-down social safety net and climate control spending plan set for introduction in Congress as soon as Monday. 

Biden is hosting Senate Democratic leader Chuck Schumer, along with Senator Joe Manchin of West Virginia, one of two pivotal lawmakers who has called for sharp cutbacks in the president’s original $3.5 trillion plan proposing the biggest expansion of government benefits to American families in five decades. 

With the 100-member Senate equally split between Republicans and Democrats, the policy agreement and votes of Manchin and Senator Kyrsten Sinema of Arizona, the two most moderate members of the Democratic caucus, are key to passage of the legislation, along with the tie-breaking vote of Vice President Kamala Harris. Currently, no Republicans support the legislation. 

Biden has expressed hope that he can reach agreement this week on what he has acknowledged will be a more limited spending plan of about $2 trillion or less, with some provisions, such as two tuition-free years of community college, jettisoned from the final package and others, such as paid worker leave and dental insurance for older Americans, trimmed or delayed.

House Speaker Nancy Pelosi, the leader of the Democratic-controlled House of Representatives, told CNN’s “State of the Union” show, that 90% of the measure “is agreed to” and that it is being written Sunday, with final details yet to be worked out. She said it will be introduced on Monday. 

“We’re pretty much there now,” she said. 

Pelosi said that despite the likelihood that the original Biden spending proposal will be roughly cut in half, it will be “bigger than anything we’ve ever done in terms of helping families,” with extended tax credits for all but the wealthiest parents and universal pre-kindergarten schooling for three- and four-year-old children. 

As details of the social safety net plan are finalized, the House leader said her plan is for the chamber to vote later this week on a bipartisan trillion-dollar infrastructure measure already approved by the Senate to fix the country’s deteriorating roads and bridges and expand broadband internet service throughout the United States. 

“I’m optimistic we can do that,” she said. 

The infrastructure spending plan drew the support of 19 Republicans in the Senate, along with that of all 50 Democrats, but progressive Democrats in the House blocked its passage there until agreement could be reached on the social safety net legislation. 

Biden had proposed raising taxes on corporations and wealthy individuals earning more than $400,000 a year to pay for his social safety net measure, but Sinema has balked at both. That has left the White House and Democrats supporting the Biden spending plan to scramble to find other ways to pay for it. 

Pelosi said, “We have an array” of other ways to pay for the measure, including a so-called “wealth tax” targeting the estimated 700 U.S. billionaires. “We’re going to fully pay for the bill.” 

Treasury Secretary Janet Yellen told CNN the legislation would take aim at “exceptionally wealthy individuals” and likely tax their unrealized capital gains that now are only taxed when they sell assets. She said tax payment enforcement would also be ramped up to collect more revenue. 


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New US Justice Department Initiative to Combat ‘Redlining’

U.S. Attorney General Merrick Garland announced Friday new measures to fight discriminatory lending practices. 

The Justice Department’s new Combating Redlining Initiative will redirect federal resources to investigating fair lending concerns, according to the agency. It will draw on existing department authorities under the Fair Housing Act and the Equal Credit Opportunity Act to prevent creditors from discriminating on the basis of race, religion, age and sex. 

“Today, we are committing ourselves to addressing modern-day redlining by making far more robust use of our fair lending authorities,” Garland said. 

Redlining is the denial of credit services or mortgage loans to communities and individuals based on race and national origin. Garland characterized the initiative as the furthest-reaching effort to combat redlining in the Justice Department’s history. 

The department will work with the Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency to target illegal practices and file and prosecute fair lending lawsuits, according to Garland. “The initiative represents the department’s most aggressive and coordinated effort to address redlining,” he said.

“Lending discrimination runs counter to fundamental promises of our economic system,” Garland said. “When people are denied credit simply because of their race or national origin, their ability to share in our nation’s prosperity is all but eliminated.” 

 


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As Pandemic Empties Offices, Record Number of Buildings Converted to Apartments

The practice of converting office buildings into apartments is at an all-time high in the United States, according to a recent report. Of the nearly 32,000 apartments created through adaptive reuse since the start of the decade, 41% are in converted office buildings, according to the RentCafe analysis.

“Existing buildings already have a lot of embodied energy that has gone into creating them, and as long as we can get them a new lease on life, then that can be a very sustainable thing to do,” says Strachan Forgan, an architect and principal at Solomon Cordwell Buenz. “And so, conversion to residential can really increase the life span of the building.” 

Inflection point

Whether the pandemic, and the increasing numbers of people working from home, will accelerate the office-to-apartment conversion rate remains to be seen. 

While there is a strong recovery in certain property markets, such as multifamily, industrial and retail, the office and hotel property markets have not bounced back as quickly, according to the National Association of Realtors (NAR).

The real estate organization says continuing COVID-19 concerns and the rise of the delta variant have slowed the return of workers to the office, while also grounding travel for business and pleasure. In addition, office rents have declined.

“We’re at an inflection point, potentially,” says Forgan, whose firm has converted a San Francisco high-rise office building into apartments and is working on a similar project in Hawaii. “Generally, employers have not made radical changes in the amount of space that they need … but that could be coming as workers return to the office. We may find that some of them don’t want to return to the office, and that will generally lead to lower demand for office space.” 

‘Exception rather than the rule’ 

Transforming old buildings is a sustainable way to add new housing, especially since most of the infrastructure, including roads and public transportation, is often already in place.

And converting, rather than building from the ground up, can simplify the approval process. 

“It’s maybe faster or easier to get a conversion project approved, particularly in markets, such as California, where it’s very hard to get new projects entitled,” Forgan says. “It’s just not always a slam-dunk, because there are some other things about the building that can be impediments to conversion.” 

Those impediments are the reason why office-to-apartment projects tend to be the exception rather than the rule, Forgan says.

“Zoning and permitting are probably two of the biggest costs,” says Doug Ressler, manager of business intelligence at Yardi-Matrix, which provided some of the data for the RentCafe report. “Zoning and permitting are different for every area in the country; most have been started from local ordinances and things like that and built up. So, how do you get through that? Because some areas will not allow for multifamily (housing) in a given place; they’re single-family only.” 

And then there’s the floor plate — the distance from the elevator to the facade, where the windows are — to consider. When the floor plate’s too large, it’s hard to design apartments that get enough natural light. 

“Typically, the building systems are at the end of their life, as well, so, you have to replace all of the mechanical, electrical and plumbing systems,” Forgan says, adding that it’s rare to get an entire office building free of tenants. “If there’s multiple tenants in a building, it’s difficult to get a large block of space that you can convert without moving tenants around or moving them out of the building.” 

Historic office buildings are often good candidates for conversion due to their smaller floor plates, he says. 

An NAR survey of its commercial members found that 84% of respondents are using the same amount of office space as before the pandemic, but 11% reported a decrease in office space. 

“People are really reassessing whether the workers are going to return to these office spaces. And potentially, there’s a lot of office space, therefore, that could be available for conversion,” Forgan says. “I don’t think the office market has really reacted to that yet, because it’s really an unknown.” 

Retail conversions 

NAR reports that retail spaces, led by shopping malls, are continuing to recover. But the big box department stores that lost out to online shopping might be getting a new lease on life by facilitating the delivery of internet purchases. 

“Some of that can be reconverted to e-commerce warehousing for industrial purposes,” Ressler says, “or they can be reconverted into fulfillment centers, because the main thrust for fulfillment centers — whether it’s Amazon, Google, fill in the blank — is how close of proximity do I have to the people that use my product?” 

Neighborhood retail centers known as strip malls are also bouncing back, according to NAR. Part of that recovery might be attributable to strip mall owners exploring new options when it comes to tenants. 

“Retail strip centers right now are being very quickly reconfigured, especially for medical offices and urgent care,” Ressler says. “If you have a large (hospital) provider that says, ‘I’m going to reduce my costs … I’m going to create this urgent care center in this strip mall that has offices that are sitting vacant, I can do that. I can repurpose it.’”


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US Deficit Hits $2.77 Trillion in Fiscal Year 2021

The U.S. government recorded its second largest budget deficit on record in fiscal year 2021, but it was down somewhat from 2020. 

This year’s deficit was $2.77 trillion compared to $3.13 trillion last year, with both years reflecting massive government spending in response to the COVID-19 pandemic. 

The Biden administration said the lower number was due to a recovering economy leading to increased tax revenues. 

“Today’s joint budget statement is further evidence that America’s economy is in the midst of a recovery,” Treasury Secretary Janet Yellen said in a statement issued with the acting head of the Office of Management and Budget, Shalanda Young. 

Before the fiscal 2020 record deficit, the previous record was $1.4 trillion in 2009 as the Obama administration spent heavily to try to lift the country out of the recession caused by the 2008 financial crisis. 

Some information in this report comes from Reuters and The Associated Press. 

 


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China’s Troubled Property Behemoth Averts Default for Now

China Evergrande Group appeared to have averted default with a last-minute bond coupon payment, a source said Friday, buying it another week to wrestle with a debt crisis looming over the world’s second-biggest economy.

The property developer sent $83.5 million to a Citibank trustee account Thursday, the person with knowledge of the matter told Reuters, enabling it to pay interest on a U.S. dollar bond due by Saturday.

That brought relief for investors and regulators worried about fallout for global markets and added to reassurances from Chinese officials that creditors would be protected.

Still, the world’s most indebted property firm – with more than $300 billion in liabilities – needs to make payments on a string of other bonds, with the next major deadline to avoid default on October 29.

Wiith little known about its ability to pay and property sales tumbling 30% in the last 12 months, there is deep skepticism over Evergrande’s capacity to ride out the crisis.

The company, once China’s top-selling property developer, did not respond to a request for comment. Citibank declined to comment.

Evergrande’s woes have snowballed for months, and its dwindling resources set against its vast liabilities have wiped out 80% of its value.

Founded in Guangzhou in 1996, the developer epitomized a freewheeling era of borrowing and building. But that business model has been scuttled by hundreds of new rules designed to curb developers’ debt frenzy and promote affordable housing.

Evergrande Chairman Hui Ka Yan was quoted Friday by the state-backed Securities Times as saying the developer would reduce its property sales to about $31 billion (200 billion yuan) a year to overhaul its business.

 

‘Bit of a relief’

It was not clear how cash-strapped Evergrande was able to raise funds to pay the bondholders or whether any had already received the money. Evergrande next needs to find $47.5 million by October 29 next and has nearly $338 million in other offshore coupon payments coming up in November and December.

“While obviously a positive, the coupon payment does not address the overall concerns about Evergrande’s sustained liquidity through the first maturity in Q2 2022 and beyond,” said John Han, a partner at law firm Kobre & Kim in Hong Kong.

“This only shows that the company is not yet ready for the house to come down completely through a massive cascade of cross defaults. Time is needed for what is planned next.”

If it fails to make next week’s payment, or any other final deadlines in coming weeks, defaults would be triggered on all $19 billion of its bonds in international capital markets.

That would be the second biggest emerging market corporate default after Venezuela’s state-owned oil firm.

News of the fund transfer came a day after financial information provider REDD said Evergrande had secured more time to pay a defaulted bond it guaranteed, issued by Jumbo Fortune Enterprises.

“They seem to be avoiding short-term default and it’s a bit of a relief that they have managed to find liquidity,” said a Hong Kong-based debt restructuring lawyer representing some bondholders.

“This payment might be a way for them to get some sort of buy-in with stakeholders before the heavy work needed on the restructuring.”

Evergrande missed coupon payments totaling nearly $280 million on its dollar bonds on Sept. 23, Sept. 29 and October 11, beginning 30-day grace periods for each.

Market moves

Evergrande’s dollar bond prices surged on Friday morning after news of the transfer, with its April 2022 and 2023 notes jumping more than 10%, data from Duration Finance showed, though they still traded at deeply distressed levels of less than a quarter of face value.

Those gains evaporated on Friday afternoon in Asia, however, pushing several of the company’s other bonds down more than 6%. Evergrande’s shares rose as much as 7.8% before closing up 4.3%, but still finished a shortened week down 8.8%.

Evergrande’s woes have reverberated across the $5 trillion Chinese property sector, which accounts for a quarter of the economy by some metrics, with a string of default announcements, rating downgrades and slumping corporate bonds.

Chinese property companies could now be locked out of offshore debt markets until early next year.

Still, Friday’s news helped the Hang Seng mainland properties index rise 3.3%.

In mainland markets, the CSI300 Real Estate index finished up 2.4%, and an index tracking the broader property sector added 2%.

Safety first

Asked whether it would step in to help its rival ease its liquidity crisis, the chairman of China’s third-biggest developer, China Vanke Co Ltd, said developers needed to ensure their own safety first.

“Everyone feels the chill as ‘winter’ arrives for the sector,” Chairman Yu Liang told a company forum on Friday. Any prospect of Evergrande’s demise raises questions over more than 1,300 real estate projects it has in some 280 cities. Bank exposure to developers is also extensive.

A leaked 2020 document, branded a fake by Evergrande but taken seriously by analysts, showed the company’s liabilities extended to more than 128 banks and over 121 non-banking Institutions.

“Given that we have little clarity on how bank financing is going for stalled real estate projects, but we know that project pre-sales are down a lot, the onshore business is unlikely to be supplying cash to Evergrande near-term,” said Quiddity’s Lundy.


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Source: China Evergrande Readies Funds for Interest Payment, Set to Avert Default

China Evergrande Group has supplied funds to pay interest on a U.S. dollar bond, a person with direct knowledge of the matter told Reuters on Friday, days before a deadline that would have seen the developer plunge into formal default.

The person said Evergrande remitted $83.5 million to a trustee account at Citibank on Thursday – as earlier reported on Friday by state-backed Securities Times – allowing it to pay all bondholders before the payment grace period ends on Oct. 23.

News of the remittance will likely bring relief to investors and regulators worried about a default’s wider fallout in global financial markets, adding to reassurance from Chinese officials who have said creditors’ interests would be protected.

Still, the developer will need to make payments on a string of other bonds.

“They seem to be avoiding short-term default and it’s a bit of a relief that they have managed to find liquidity,” said a Hong Kong-based debt restructuring lawyer representing some bondholders.

“But still, Evergrande does need to restructure its debt.

This payment might be a way for them to get some sort of buy-in with stakeholders before the heavy work needed on the restructuring.”

Evergrande did not respond to Reuters’ request for comment.

Citibank declined to comment. The person with knowledge of the matter was not authorized to speak with the media and so declined to be identified.

The remittance comes a day after financial information provider REDD on Thursday said Evergrande had secured more time to pay a defaulted bond it guaranteed, issued by Jumbo Fortune Enterprises.

“This is a positive surprise,” said James Wong, portfolio manager at GaoTeng Global Asset Management, who had expected a default.

The news would boost bondholders’ confidence, he said, as “there are many coupon payments due ahead. If Evergrande pays this time, I don’t see why it won’t pay the next time.”

Evergrande missed coupon payments totaling nearly $280 million on its dollar bonds on Sept. 23, Sept. 29 and Oct. 11, beginning 30-day grace periods for each.

Subsequent non-payment would result in formal default and trigger cross-default provisions for its other dollar bonds. Evergrande’s next payment deadline is Oct. 29 with the expiration of the 30-day grace period on its Sept. 29 coupon.

Temporary relief

Evergrande’s dollar bond prices surged on Friday, with its April 2022 and 2023 notes jumping more than 10%, data from Duration Finance showed, though they still traded at deeply distressed levels of around a quarter of their face value.

Its shares rose as much as 7.8%, a day after trade resumed following a more than two-week halt pending the announcement of a stake sale in its property management unit, which was scrapped this week.

Evergrande’s woes have reverberated across the $5 trillion Chinese property sector, which accounts for a quarter of the economy by some metrics, with a string of default announcements, rating downgrades and slumping corporate bonds.

In the latest such move, Fitch Ratings on Thursday cut Sinic Holdings (Group) Co Ltd’s long-term foreign currency issuer default rating to “restricted default” from “C” as the developer failed to repay its $250 million notes due Oct. 18. 

Still, Evergrande news helped the Hang Seng mainland properties index surge more than 4% versus a gain of 0.25% in the broader Hang Seng index.

In mainland markets, the CSI300 Real Estate index jumped as much as 6.5%, and an index tracking the broader property sector was eyeing its biggest gain in nearly two months.

Freewheeling

Evergrande’s woes had been snowballing for months. Dwindling resources set against more than $300 billion of liabilities had wiped out 80% of its value.

Founded in Guangzhou in 1996, the developer epitomized a freewheeling era of borrowing and building. But that business model has been scuttled by hundreds of new rules designed to curb developers’ debt frenzy and promote affordable housing.

Analysts said any prospect of demise would raise questions over what would happen to the more than 1,300 real estate projects Evergrande has ongoing in over 280 cities, and any impact the wider property sector.

Bank exposure to developers is also extensive. A leaked 2020 document, branded a fake by Evergrande but taken seriously by analysts, showed the company’s liabilities extending to more than 128 banks and over 121 non-banking institutions.

“Given that we have little clarity on how bank financing is going for stalled real estate projects, but we know that project pre-sales are down a lot, the onshore business is unlikely to be supplying cash to Evergrande near-term,” said analyst Travis Lundy at Quiddity Advisors in Hong Kong.


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US Regulators Unveil Blueprint to Tackle Financial Climate Risks

Climate change is an “emerging threat” to U.S. financial stability that regulators should address in their everyday work, a top U.S. regulatory panel said Thursday, a first for the United States, which has lagged other wealthy countries on tackling financial climate risks. 

The Financial Stability Oversight Council (FSOC) issued a 133-page report that could lead to new rules and stricter oversight for Wall Street. It provided a road map for integrating climate risk management into the financial regulatory system. 

That includes filling in data gaps, pushing for climate-related disclosures by companies, beefing up climate expertise at agencies, and building tools to better model and forecast financial risks, such as scenario analysis. 

The FSOC comprises heads of the top financial agencies and is chaired by Treasury Secretary Janet Yellen. Created following the 2007-09 financial crisis, its role is to identify and address vulnerabilities in the U.S. financial system. 

The report is part of President Joe Biden’s plan to aggressively tackle climate change and comes ahead of his trip to Glasgow, Scotland, for a United Nations climate summit. 

“It’s a critical first step forward to the threat of addressing climate change, but will by no means be the end of this work,” Yellen said of the report. 

With Biden’s climate agenda stalling in a divided Congress, the report will signal to the world that the United States is serious about tackling climate risks, adding to the global debate on the issue. 

“This is the first time that all of the banking and financial regulators will come out in one document and talk about what they can do on climate change,” said Todd Phillips, director of financial regulation at the Center for American Progress, a liberal think tank. 

Climate change could upend the financial system, because physical threats such as rising sea levels, as well as policies and carbon-neutral technologies aimed at slowing global warming, could destroy trillions of dollars of assets, risk experts say. 

In a 2020 report, the Commodity Futures Trading Commission (CFTC) cited data estimating that $1 trillion to $4 trillion of global wealth tied to fossil fuel assets could ultimately be lost. With a record $51 billion pouring into U.S. sustainable funds in 2020, investors are pushing for better information on risks companies face from climate change. 

U.S. regulators have done little to date to tackle climate risks, and the United States lags its peers on the issue. Biden, a Democrat, has said he wants every government agency to begin incorporating climate risk into its agenda. 

The report also calls for the FSOC to create two new internal committees. One would consist of regulatory staff who will frequently report on efforts to police climate risks. The second will be an advisory committee of outside experts, including from academia, nonprofits and the private sector. 

The lack of recommendations for tough new rules frustrated some progressives and environmental groups, who are anxious for bold steps from Washington to address what Biden himself has called an existential crisis. 

Steven Rothstein, managing director of Ceres Accelerator for Sustainable Capital Markets, a climate advocacy group, said it was good regulators identified climate change as an undeniable risk, but more needs to come quickly. 

“With a very small window to prevent the next climate disaster, each agency must now provide specific timelines when they plan to put in place measures to protect the safety and soundness of our financial system, our institutions, our savings and our communities,” he said in a statement.


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In Colombia, Blinken Announces Deal to Curb Amazon Deforestation

After a day of high-level talks in Colombia, U.S. Secretary of State Antony Blinken announced on Thursday a regional partnership to address deforestation in the Amazon rainforest.

“We’ll give much-needed financial assistance to help manage protected areas and Indigenous territories, and we’ll help scale up low-carbon agricultural practices to farmers throughout the Amazon,” he said in the capital, Bogota, after touring its botanical gardens.

“This new regional partnership will help prevent up to 19 million metric tons of carbon dioxide from entering the atmosphere while capturing another 52,000 metric tons of carbon, and we estimate it will save — save — more than 45,000 hectares of forest,” Blinken added.

The Amazon spans eight countries in South America, including Brazil, Colombia, Ecuador and Peru. The Amazon and other rainforests are crucial because they take in carbon dioxide and produce about one-fifth of the world’s oxygen. About a third of Colombia is in the Amazon.

Colombian President Ivan Duque has ambitious climate goals, including zero deforestation by 2030. Blinken observed in his remarks that Duque won an International Conservation Award this year from the International Conservation Caucus Foundation.

UN conference

Blinken’s announcement came a little more than a week before the United Nations Climate Change Conference, known as COP26, opens in Glasgow, Scotland, where about 100 world leaders will discuss climate change and how to combat it.

In Glasgow, “the entire planet is hoping for important announcements — actions,” he said.

The secretary was wrapping up a trip to Ecuador and Colombia that focused on discussing migration policy and upholding democracy.

“The core focus of this trip for me, my first trip to South America as secretary of state, is how we make democracies deliver for our people,” Blinken said minutes before the talks began. “That is our common challenge. It’s our common responsibility. And that’s true in our countries and it’s true across the hemisphere.”

Blinken said many common issues would be discussed during the U.S.-Colombia High-Level Dialogue, including COVID-19, the climate crisis and migration.

“We know that one way we can deliver is by working closely with our partners and allies on the biggest challenges we face, and that’s exactly what the United States and Colombia are doing,” Blinken said.

Blinken told reporters Wednesday after meeting with Duque that the two countries have many areas of potential cooperation, including cloud computing, health technology and agriculture.

The United States is asking countries in the Western Hemisphere to step up pledges to tackle the immediate challenges of irregular migration as it expands eligibility for legal migration to the United States.

Migration ministerial

Blinken held talks Wednesday with more than a dozen officials from Latin America at a regional migration ministerial in Bogota. Homeland Security Secretary Alejandro Mayorkas joined the gathering virtually.

The United States discussed options, including assisting with voluntary returns to their home countries for migrants who do not have valid asylum claims.

Duque confirmed that his government had received resources from the U.S. to tackle what he called ”the most complicated migration crisis in the world”: the Venezuelan migration crisis.

In a speech earlier Wednesday in Ecuador, Blinken outlined several challenges that democracies face in the Western Hemisphere, including corruption, civilian security, and the economic and social well-being of the people.

He said he was optimistic they could be overcome and noted that the survival of a democracy driven by ordinary people was vital to the shared future of the region.​

VOA’s Nike Ching contributed to this report. Some information came from The Associated Press, Agence France-Presse and Reuters.


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Warming Temperatures Could Spark Conflicts in Global Hot Spots, Reports Say 

More than just altering the environment, climate change is threatening to permanently and dangerously reshape the global security landscape, according to a series of new assessments by U.S. military, intelligence and security officials.

The reports, ordered earlier this year by U.S. President Joe Biden as part of an effort to better confront the impact of climate change, warn no country will be spared, and that some parts of the world already may be reaching a tipping point.

“As climate change converges with other drivers — especially geostrategic competition, emerging technology and global-demographic trends — it is reshaping the risk landscape,” the Department of Homeland Security said in its climate change strategic framework, released Thursday.

“The corrosive impact of these trends will make nations increasingly vulnerable to domestic instability, with sweeping implications for regional and border security and core national security interests,” it added.

Preparing for calamities

Defense officials said they are already being forced to prepare for worst-case scenarios, from mass migration events to shifts in the balance of power in key regions to the possibility some countries could collapse outright, spawning “instability across the globe.”

“Competitive advantage in the future will go to those who can fight and win in this rapidly changing strategic and physical environment,” Defense Secretary Lloyd Austin said.

The Pentagon’s risk assessment warned climate change is likely to spark instability in at least four regions – the Middle East and South Asia, Africa, Europe, and Central and South America – with three of them likely to see increased demand for humanitarian aid.

The U.S. intelligence community’s National Intelligence Estimate on climate change is even more dire, pointing to looming disaster for key countries in South and East Asia, and in Central America.

And where existing governments are unable to meet the challenges of climate change, insurgents and terrorists appear poised to exploit the situation.

“We assess that most of the countries where al-Qaida or ISIS have a presence are highly vulnerable to climate change,” the intelligence estimate warned.

Countries in Central Africa, already confronting rising terror threats, also may find themselves overwhelmed.

“Under-resourced and ill-equipped militaries will face severe strains when they are called upon to respond to more natural disasters in their own and neighboring countries,” the assessment said.

In Central America, prolonged dry spells and excessive rains could force 30% of the working population to flee.

No country spared

U.S. intelligence officials also warn that even countries with the most resources could find themselves at odds, predicting intense competition between the U.S. and China over key mineral and clean energy technologies by 2040.

“The United States and others … are in a relatively better position than other countries to deal with the major costs and dislocation of forecasted change, in part because they have greater resources to adapt, but will nonetheless require difficult adjustments,” according to the estimate.

“Adjusting to such changes will often be wrenching, and populations will feel negative effects in their daily lives,” it said. “The impacts will be massive even if the worst human costs can be avoided.”


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