<ul class="summary-list"><li>Chinese officials say a Trump reelection in November works for <keyword id="1334" type="COUNTRY" weightage="60" keywordseo="China">China</keyword> because he is "destroying US alliances," <a href="https://www.bloomberg.com/news/articles/2020-06-15/china-warms-to-idea-of-four-more-years-of-trump-presidency">Bloomberg reported</a>. </li><li>By going it alone, the US has less power to keep China in check, the officials said.</li><li>A former Chinese trade negotiator told Bloomberg: "If Biden is elected, I think this could be more dangerous for China, because he will work with allies to target China, whereas Trump is destroying US alliances."</li><li>Trump has alienated longtime allies France, Germany, Canada, and the UK over the last year. </li><li>Another official said the impact of widespread <a href="https://www.businessinsider.com/china-says-us-enjoy-protests-after-criticizing-hong-kong-protests-2020-6">Black Lives Matter protests</a> and the <a href="https://www.businessinsider.com/trump-stop-coronavirus-testing-right-now-have-very-few-cases-2020-6">coronavirus outbreak</a> may weaken the US irrevocably from the inside out.</li></ul><p>Chinese officials are keen for President <keyword id="6354484" type="PERSON" weightage="60" keywordseo="Donald-Trump">Donald Trump</keyword> to <a href="https://www.businessinsider.com/trump-would-be-very-bad-thing-country-if-lost-election-2020-6">win the November presidential election</a> because he will continue "destroying US alliances," which could strengthen China's position in the world.</p><p>Nine current and former Chinese official told <a href="https://www.bloomberg.com/news/articles/2020-06-15/china-warms-to-idea-of-four-more-years-of-trump-presidency">Bloomberg</a> that the US is more dangerous to China when it unites with its traditional allies — which could happen if Democratic frontrunner <a href="https://www.businessinsider.com/biden-narrows-vp-atlanta-mayor-four-black-women-in-race-2020-6">Joe Biden becomes president.</a></p><p>In the last 12 months alone, Trump has <a href="https://www.businessinsider.com/boris-johnson-cancels-visit-donald-trump-slammed-phone-down-apoplectic-2020-2">clashed with the UK</a> and <a href="https://www.businessinsider.com/huawei-how-allies-are-reacting-to-us-calls-to-avoid-the-tech-firm-2019-2">Canada</a> over 5G contracts planned for Huawei, exchanged <a href="https://www.businessinsider.com/macron-trump-withdraw-syria-without-telling-nato-economist-2019-11">barbs with French President Emmanuel Macron</a>, withdrawn funding <a href="https://www.businessinsider.com/trump-says-hes-terminating-us-relationship-with-world-health-organization-2020-5">from the World Health Organization</a>, and shown little interest <a href="https://www.businessinsider.com/18-photos-show-trump-humiliation-sulking-after-nato-incidents-2019-12">in continuing the NATO alliance</a>.</p><p>On Monday, <a href="https://www.businessinsider.com/pulling-us-troops-out-of-germany-a-posible-russia-win-2020-6">Trump pulled 10,000 US troops</a> from their NATO stations in Germany.</p><p>In the eyes of Chinese officials, Trump's actions are most welcome, according to Bloomberg.</p><p>"If Biden is elected, I think this could be more dangerous for China, because he will work with allies to target China, whereas Trump is destroying US alliances," Zhou Xiaoming, a former Chinese trade negotiator and former deputy representative in Geneva, told the outlet.</p><p><a href="https://www.bloomberg.com/news/articles/2020-06-15/china-warms-to-idea-of-four-more-years-of-trump-presidency"><div type="image" title="Democratic presidential candidate, former Vice President Joe Biden speaks about the economy during an event in Dover, Del., Friday, June 5, 2020. (AP Photo/Susan Walsh)" height="1894" width="3788" msid="76403788" hostid="261"></div></a><br /><br />Four current officials agreed with Zhou's logic, Bloomberg reported.</p><p>However, Zhou said little will change between the US and China even if Biden is elected, and that relations between the two countries will continue to slide. </p><p>"I don't think the election will change the relationship in a fundamental way. The deep feeling in the US is that the US should contain China," Zhou said. "Whether Trump wins, or Joe goes to Washington, things will get worse."</p><p>Throughout his presidential campaign Biden has heavily targeted China, particularly over its early handling of the <a href="https://www.businessinsider.com/joe-biden-ad-china-trump-coronavirus-racist-xenophobic-2020-4">coronavirus outbreak</a> and actions in Hong Kong and <a href="https://edition.cnn.com/videos/politics/2019/12/20/pbs-newshour-politico-democratic-debate-biden-china-vpx.cnn">Xinjiang</a>, where Uighur Muslims are heavily surveilled and imprisoned.</p><p><div type="image" title="Xi Jinping" height="512" width="1024" msid="76403794" hostid="261"></div></p><p>However, Wang Huiyao, an adviser to China's cabinet, told Bloomberg a Biden administration would still have its advantages.</p><p>"He supports working on topics like climate change, WTO reform and TPP," Wang said, referring to the World Trade Organization and the Trans-Pacific Partnership, both of which Trump has publicly criticized. "There are areas where we can cooperate."</p><p>Wang also said that Trump "has destroyed a lot of goodwill" by his aggressive tactics in <a href="https://www.businessinsider.com/trade-war-cut-trillion-stocks-market-value-us-federal-reserve-2020-5">the US-China trade war.</a></p><p>"At the start of the trade war, there were a lot of people who were pro-US, but they are now sympathetic to the hard-liners."</p><p><div type="image" title="Boris Johnson Donald Trump" height="900" width="1200" msid="76403799" hostid="261"></div></p><p>Gao Zhikai, a former Chinese diplomat and interpreter for former national leader Deng Xiaoping, told Bloomberg that domestic US issues — namely the <keyword id="1754604" type="PERSON" weightage="60" keywordseo="coronavirus">coronavirus</keyword> pandemic and protests over police brutality — are weakening the US, too.</p><p>"The US as we know it may no longer exist," Deng said.</p><p>On Monday, former Australian leader Malcolm Turnbull <a href="https://www.businessinsider.com/trump-and-johnson-reacted-too-slow-covid-malcolm-turnbull-says-2020-6">told Insider's Adam Payne</a> that the US "has less influence today than it did before Mr. Trump was president."</p><p>There may be one other, more personal reason that Chinese officials want to see Biden in the Oval Office, according to Bloomberg.</p><p>A number of Chinese officials who are currently engaged in trade talks with their US counterparts want Biden to win "simply so they can spend more time with their families," Bloomberg wrote, paraphrasing an unnamed source.</p><p>The source said the Chinese trade team often "shows up to work looking exhausted," Bloomberg said.</p>

Chinese officials want Trump to win reelection because he is 'destroying US alliances' and won't unite to fight Beijing

<p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>Reuters</span></p><p class="caption">A trunk ornament holding a U.S. flag is pictured during an Independence Day parade in Ridgefield Park, New Jersey July 4, 2013.</p></div><p></p></div></div></p><ul><li><strong>The Trump administration has achieved very little, and we have no reason to think that's going to change.</strong></li><li><strong>From China's rise to healthcare inflation and infrastructure at home - there are serious challenges to US economic dominance and little being done about them. </strong></li><li><strong>Investors are looking past all this, at their own peril. </strong></li></ul><p>The ugliest truth about America's future can be summed up in four words: <strong>There is no plan.</strong></p><p><span>Americans know this, but we haven't really taken it seriously. In 2017, Democrats live in hopes that the meager policy arguments and "plans" Republicans put out into the ether never make it out of Congress. Republicans are the ones putting out these thin arguments and watching them wilt, much to their embarrassment. Most everyone else just wants the President to stop tweeting. <br /><br />We're all living in the moment, waiting for it to pass.</span></p><p>But the problem with that short-termism is that having no plan means we are stagnating as a nation. </p><ul><li>We do not have a real plan for health care, and costs continue to gobble up American wages.</li><li>We do not have a plan for dealing with globalization and economic change, but that change continues to shape our economy.</li><li>We don't have a plan to update our decrepit infrastructure.</li><li>The one plan we did have - the Federal Reserve's post-financial crisis program - is about to be unwound, marking the end <span>of the last clear, executable plan to bolster America's economy. </span></li></ul><p>There's been a question floating <a href="https://twitter.com/tracyalloway/status/910082376151310336">around Wall Street since Trump was elected.</a> Why does hard economic data show that our economic situation is deteriorating, while the soft data shows that we all feel like everything is doing fine?</p><p>It's because the data is looking at our reality, and when we think about the economy, we don't feel like doing the same. Call us optimistic, but some Americans mistakenly think that certain tweaks alone - tax reform here, getting rid of Obamacare there - can bring prosperity. But we're too far gone for that, we need what George H.W. Bush in 1987 derisively called<a href="http://content.time.com/time/magazine/article/0,9171,963342-2,00.html"> "the vision thing".</a> </p><p><span>When you choose to look at the future - an exercise that we as a nation have chosen to avoid for the last 30-some years - you realize that we've come to a point where our complacency has consequences. We've come to the point where we desperately need a plan. <br /><br />And there is no plan.</span></p><h2>You can't fight China's plan with no plan</h2><p>I could illustrate this in a bunch of ways, but - for now - I choose our economic relationship with the world.</p><p><span>Earlier this month I was in the ballroom at The Pierre Hotel in New York with hundreds of Wall Street suits listening to lectures and watching how this plan vacuum is bubbling up to bother even the richest Americans.</span></p><p>On stage were <span>Jim Breyer, the billionaire CEO of Breyer Capital - a California venture capital firm that invested in companies like Facebook early - and Tom Siebel, founder of software company C3 IoT. They were talking about future things: investing in technology, artificial intelligence, economic warfare.</span></p><p><span>Now of course, when you talk about that kind of thing in 2017, you have to talk about China - the world's number 2 economy nipping at America's heels.</span></p><p>"We are not actually going into China," <span>said Siebel. Here's what else he said (emphasis is mine). <br /><br />"</span>We are visited by a Chinese company every week, by State Grid, South China Grid, we were visited this week, by China Mobile and so we're kind of swarmed by the Chinese... it is probably a third of the market opportunity globally as it relates to this space. But basically, what's going on in China, due to the mandates of the 12th and 13th five-year plan, and I know this is politically incorrect, but I don't offer political correctness, is <strong>a massive, state-sanctioned intellectual property theft."</strong></p><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>Delivering Alpha</span></p><p class="caption">Jim Breyer, Founder and Chief Executive Officer, Breyer Capital; and Thomas M. Siebel, Chairman and Chief Executive Officer, C3 IoT)</p></div><p></p></div></div></p><p>Breyer didn't disagree, he merely added that the Chinese government's investment in achieving its goals in the technology space has led to some amazing investments for his firm. That, plus the country's massive population, is what has made investing in China a must-do for US multinational corporations for years now.</p><p>"<span>It is only accelerating," Breyer said, "and so for consumer internet applications both in the urban areas and now the rapidly modernizing rural areas, it's such an enormous financial opportunity that from an investment standpoint, when I think where are the great opportunities where we can generate tremendous alpha, it is in Chinese deep technology companies that are focused on the Chinese market."</span></p><p>But as Siebel responded: "T<span>hese are not mutually exclusive statements. I am certain that is true."</span></p><p><span>And there it is, the double-edged sword - damned if you do in China, damned if you don't.</span></p><p><span>China has a plan to overtake America, and American business has only helped it. Conversely, our government doesn't have a plan for China. The promise of China's massive market has been too tantalizing an opportunity for businesses to pass up, so they've set up joint ventures in China, opened offices, and subjected themselves to all of the invasions and surveillance of China's Big Brother state. </span></p><p><span>Now they're upset that their ideas are being stolen. But what did they expect? They knew where they were going. They just didn't have a plan for how to protect themselves once they got there.</span></p><h2>Bullying is not a policy. It is also not a plan</h2><p><span>Of course, we can't blame this entirely on American business. The government should take some of the blame as well. Until earlier this month, the Treasury's Committee on Foreign Investment (CIFIUS) - the body that determines whether or not an American company can sell itself to a foreign company - was barely active. </span></p><p><span>Earlier this month, though, CIFIUS blocked the sale of Lattice Semiconductor, a California-based company, <a href="http://www.marketwatch.com/story/cfius-blocks-sale-of-lattice-semiconductor-to-canyon-bridge-fund-2017-09-13-16911918">to a Chinese hedge fund.</a> </span><span>This is just barely a good start to filtering what we sell to our competitor-nation, where the state and business are often interchangeable. But that's basically where the good things end when it comes to Trump administration ideas for dealing with China and globalization in general.</span></p><p><span><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><p class="source"><span>Thomson Reuters</span></p><p class="caption">Robert Lighthizer</p></div><p></p></div></div>US trade representative Robert Lighthizer, a throwback to the Regan era before the World Trade Organization (WTO) existed, is pretty angry about this. </span><span>Earlier this month he called China's threat "<a href="https://www.usnews.com/news/articles/2017-09-18/lighthizer-china-represents-unprecedented-trade-threat">unprecedented</a>," and this summer the White House initiated a hyper-aggressive, pre-WTO style investigation into China's IP threat. If the country is found to be stealing US intellectual property, the government could work around the WTO and slap tariffs on China unilaterally in about a year. That would shock the world, and it could also start a trade war.</span></p><p>This is a one-off, not a China strategy or plan. Even if it was, it wouldn't be a good plan.</p><p>But that's what our trade policy - so, ostensibly, our globalization policy - is right now - a series of grandstands on the world stage. <br /><br />We're picking apart NAFTA and grandstanding <a href="http://www.businessinsider.com/wilbur-ross-cnbc-interview-rules-of-origin-2017-9">over auto parts.</a> We're picking fights with <a href="http://www.businessinsider.com/bombardier-calls-boeing-trade-lawsuit-pure-hypocrisy-2017-9">Canadians over airplanes</a> (another thing that could start a trade war in a year). We're heckling our friends in the <a href="http://www.businessinsider.com/r-germany-urges-eu-to-file-wto-complaint-against-us-in-steel-row-2017-3">EU over steel</a>. We're pretending we're above the WTO because we can throw our might around in trade negotiations - that is, except for when we're talking about China. Lighthizer, during that same discussion, mentioned that working with the WTO is fine in that case.</p><p>What that tells you, is that we can't bully the number 2 economy in the world. And we'll only use institutions meant to put countries on equal footing when we can't bully. This smacks horribly of a country so clumsily playing defense, that offense is beyond its grasp.</p><p>Another example of this from Lighthizer's talk. The United States needs to nominate two judges to the WTO's appellate body for dispute settlement - often called "the crown jewel of the international system." Right now it has three, the minimum number it needs to operate. </p><p>Lighthizer has objected to nominating judges for some procedural reasons, but the reality is, as he said in his talk, he longs for the days before the WTO. Back then we had the General Agreement on Tariffs and Trade (GATT) and things were more chaotic - disputes were settled through diplomacy, not a fixed set of rules and impartial judgment. It meant that the strongest country often won.</p><p>And that's what Lighthizer likes, and so he's willing to just let the WTO languish where he can, creating chaos.</p><p>This isn't a way to prosperity, it's a way to start a fight. None of this will permanently bring jobs back to America. None of this will prepare our workforce for the jobs of the future. None of this will encourage American businesses to invest more in meaningful strategies for the future rather than stock buybacks. </p><h2>No Plan-istan</h2><p>A few months ago I texted a Wall Street source - one of those billionaire types that could live everywhere and nowhere if he wanted to - and asked him if this China IP issue worried him.</p><p>And shocker. From somewhere in South Beach he told me that the consequences of that would be a year and a half away - and so, of course, he wasn't worried.</p><p>You see, that's how the stock market works. It is, as ever, <span>a marker of how people in the present think of the future, and not the future itself. This has exposed a staggering </span><span>disconnect between the high stock prices and what people <em>think</em> of the market's eerie march ever higher. </span></p><p>"<span>I have absolutely no idea. I cannot for the life of me understand why the market keeps going up," billionaire businessman Michael Bloomberg told CBS in an interview this week. "Our economy has some real challenges. The infrastructure's falling apart. We're destroying jobs with technology. We are keeping the best and the brightest from around the world [from] coming to America to create new jobs and create new businesses. All of those things would give you pause to worry about the future."</span></p><p>They would, of course, but only if you allow them to.</p><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>Bryan Bedder/Getty Images</span></p><p class="caption">Michael Bloomberg</p></div><p></p></div></div> </p><p><span>But no one wants to be worried, it's better to think short term if you're looking for a reason to buy. A week before Bloomberg voiced his concern there was worry at Delivering Alpha.</span></p><p>"I'm not happy when I think of what's coming," said Michael Trotsky, Chief Investment Officer of the Massachusetts Pension Reserves Investment Management. "Returns have been good but risks have increased... debt on [corporate] balance sheets rising."</p><p><span>Healthcare costs will continue to gobble up 1/6th of the economy because we have no plan to rein them in. </span>Tax breaks will help margins, but that's hardly innovation. It's even less a plan. It's certainly not a strategy. Regulatory reform is a blip. It's not going to create the jobs of the future or build new industries. Without that the middle class' purchasing power will continue to shrink, and so will our economy. None of this is a plan. It's not a strategy. It's a short-term stock play at best. </p><p>But that's all we can stomach right now, so the market is rallying. </p><p>We are not futurists, we are melancholy historians, constantly looking back at a greatness that once was instead of figuring out ways to dominate the future. We're all running. The rich to their tax havens and the poor to their populism. Trump and his band of swamp things and Goldman guys would rather talk about returning to the 1980s than what will happen in the 2020s. CNBC talking heads compare everything in the stock market to 2007, to 1999, to 1987, to whatever keeps them looking backward instead of forward.</p><p>Forward is too hard. We have no plan.</p>        <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/major-changes-apple-ios-iphone-11-2017-6">Here are all the major changes coming to your iPhone September 19</a></h3>        <div>                    </div>    </div>

The ugly truth about America's economy in just four words

<p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>Sean Gallup/Getty Images</span></p><p class="caption">German Chancellor Angela Merkel and British Prime Minister Theresa May arrive to give statements to the media prior to talks at the Chancellery on July 5, 2018 in Berlin, Germany.</p></div><p></p></div></div></p><ul><li><strong>Theresa May's government agreed Friday on a proposal for the UK's relationship with the EU after Brexit.</strong></li><li><strong>The UK would follow EU rules on goods to ensure "frictionless" trade, and EU courts would have some oversight on certain subjects.</strong></li><li><strong>But experts have already questioned whether the EU will accept the proposal.</strong></li></ul><p><br />Theresa May's government has, at very long last, agreed upon a comprehensive plan for Brexit.</p><p>After a crunch cabinet summit at Chequers in the English countryside, the British government finally announced on Friday the outline for its intended relationship with the European Union, ranging from the jurisdiction of the European Court of Justice to fisheries policy.</p><p>But, experts have warned, the EU may still reject the plan altogether - and the government acknowledges that it needs to speed up negotiations and prepare for the possibility of "no deal."</p><p>The Cabinet, it said in a statement, reached "a substantial evolution in our proposals for the UK's future relationship with the EU," and plans to publish a White Paper outlining its new proposal next week. The key points include:</p><ul><li>The UK will follow EU rules on goods, ensuring "that the UK and the EU have frictionless access to each other's markets for goods, including agricultural, food and fisheries products."</li><li>The UK will leave the Common Agricultural Policy and Common Fisheries Policy.</li><li>Britain will have an independent trade policy, including its own seat at the World Trade Organisation (WTO).</li><li>EU courts would have some degree of oversight in the UK on certain subjects. "UK courts would pay due regard to the CJEU's jurisprudence where the UK had chosen to apply a common rulebook to ensure consistent interpretation," the statement said.</li><li>The UK will stop paying into the EU budget.</li><li>The EU and UK will "maintain operational capabilities on internal security."</li></ul><p>However, experts have already cast doubt on whether the EU will accept this proposal. <a href="https://www.thetimes.co.uk/edition/news/the-first-coherent-brexit-plan-that-theresa-may-has-produced-the-eu-will-never-agree-to-it-lz7xtkmxb">The Times got its hands on an early draft of the plan and asked Centre for European Reform research fellow Sam Lowe to analyse it</a>.</p><p>His conclusion? Europe is unlikely to bite. "Allowing the UK such a relationship could cause problems for the EU vis-À-vis its external relationships with Switzerland and the EEA countries; and it could also empower Eurosceptic sentiment in manufacturing-heavy parts of the EU, such as France and Germany," he wrote. "If the EU doesn't want to grant the UK a special deal, it won't."</p>       <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/north-korean-defector-calls-out-kim-jong-un-terrorist-singapore-summit-2018-6">North Korean defector: Kim Jong Un 'is a terrorist'</a></h3>        <div>                    </div>    </div>

Theresa May's government has finally agreed a plan for Brexit - but the EU may still reject it

<p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><p class="source"><span>NFU</span></p><p class="caption">Minette Batters, deputy president of the National Farmers Union</p></div><p></p></div></div>LONDON - Failure to secure full access to the single market after Brexit could be "absolutely disastrous" for agriculture, according to Britain's biggest farming union.</p><p>Prime minister Theresa May <a href="http://uk.businessinsider.com/theresa-may-brexit-speech-leaving-single-market-immigration-control-2017-1">confirmed in a speech on Tuesday morning that she would pursue a "hard Brexit"</a>, shorthand for pulling Britain out of the EU free-trade area in order to gain full control over immigration from the EU.</p><p>Minette Batters, deputy president of the National Farmers Union (NFU), told BI ahead of the speech last week that she was "alarmed" by May's plans.</p><p>She said: "We're a large economy, we import a vast amount from the European Union, and they are our closest trading customer. I cannot quite see, and I am alarmed to see, why the prime minister is turning her back on the single market."</p><p>"To not have access to the single market - certainly for some sectors, the sheep sector for example - would be absolutely disastrous. We'd be trading at 51% World Trade Organisation (WTO) tariffs, and we'd be priced out of the marketplace immediately," she added.</p><p><a href="http://www.nfuonline.com/news/latest-news/nfu-council-responds-to-pms-brexit-speech/">Seventy-two percent of Britain's agricultural exports go to the EU</a>, and some sectors are almost entirely dependent on trade with the rest of Europe. Of £300 million <keyword id="6354868" type="COUNTRY" weightage="60" keywordseo="UK">UK</keyword> lamb exports last year, £290 million came from sales to Europe, while 78% of wheat and barley exports went to the EU.</p><p>WTO tariffs would apply if the UK failed to negotiate any sort of deal with the EU by the time it exits the union.</p><p>May said on Tuesday that the UK will likely seek a transition deal with the bloc until a UK-EU free trade deal has been struck, meaning that an immediate switch to punitive WTO tariffs is unlikely. But an NFU statement released yesterday said that "<a href="http://www.nfuonline.com/news/latest-news/nfu-council-responds-to-pms-brexit-speech/">these kinds of deals normally take years to conclude and do not cover all products</a>."</p><p>The NFU Council backed a resolution to remain in the European Union in the run-up to the June referendum, although it says Brexit could herald positive opportunities for the sector.</p><p>Another issue facing the sector is the potential labour shortages if the government presses ahead with plans to curb immigration after Brexit. Batters dismissed a suggestion by agriculture minister Andrea Leadsom that the gap could be plugged by youth apprenticeship schemes. Leadsom <a href="http://www.fwi.co.uk/news/young-brits-could-solve-farm-labour-shortage-says-leadsom.htm">suggested in October</a> that young Britons could start doing the seasonal jobs in food production usually performed by seasonal EU workers.</p><p>Batters said that the proposal "doesn't even touch the sides of [the problem]." She said: "We already have a thousand on-farm apprenticeships. For seasonal picking, apprenticeships aren't suitable anyway, because they would not form part of an apprenticeship scheme.</p><p>"We're living with an ongoing retail price war; food has never been cheaper, and the supply chain is under enormous price pressure anyway. That has to be all factored in, and the government has to realise that. You cannot say that apprenticeships would do it. You would need massive cultural reform within your education sector which signposts people to these jobs that EU workers have been doing."</p><p>The government appears to moving towards a compromise, however. The NFU welcomed May's acknowledgement on Tuesday that "access to a reliable workforce from overseas is vital for many British industries," and <a href="http://www.nfuonline.com/news/latest-news/comment-immigration-minister-hints-at-post-brexit-saws/">believes the government may favour a seasonal agricultural workers scheme after Brexit</a>, similar to the system already in place.</p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/uk-farmers-protest-milk-prices-cow-supermarket-trolley-challenge-2015-8">It's gotten so bad for dairy farmers in the UK, they're parading cows through the supermarket</a></h3>        <div>            <div>        <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="5pcXZ4djplRLcJ9DieUQIOXdF0VRND-r" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div>        </div>        </div>            </div>

No access to EU single market could be 'absolutely disastrous' for farmers

<p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><p class="source"><span>Reuters/Kevin Lamarque</span></p><p class="caption">Former Trump adviser Steve Bannon  listens as U.S. President Donald Trump meets with members of his Cabinet at the White House in Washington, U.S.</p></div><p></p></div></div>If there's anything we've learned in the last week or so it's that losing Steve Bannon didn't seem to mean anything for the Trump administration.</p><p>The most dangerous parts of the former White House adviser's anti-globalist agenda still live on, and Americans should get ready to pay for that soon.</p><p>That's because Trump has shown a willingness to shake off his other staff members and continue on with two very crucial, very Bannon parts of his agenda - on trade and on immigration.</p><p>It's unclear whether or not Bannon was making policy headway outside of these two areas. Trump went with "his generals" - not Bannon - on Afghanistan. And, when it comes to issues like infrastructure or drug prices - two things Bannon was interested in - there's been no progress at all.</p><p>But recent reports of the president's intransigence with China, and his continued NAFTA bashing, indicate that he's going to Bannon pretty hard on trade. As for immigration, Trump's pardoning of Joe Arpaio also shows that he's willing to keep taking the hardline. If he does the same thing with funding for his wall next month, Americans may find themselves wondering if Steve Bannon really ever left.</p><h2>On trade</h2><p>Perhaps you've read the story about President Trump <a href="https://www.axios.com/exclusive-trump-vents-in-oval-office-i-want-tariffs-bring-me-some-tariffs-2478121273.html">demanding that his staff bring him tariffs to sign.</a></p><p>That happened during White House Chief of Staff Gen. John Kelly's first week, while Bannon was still at the White House. But since then Trump's tone on trade hasn't changed. <em>The very day Bannon left</em>, Trump fired the first shot in a trade war with China by signing off on a Section 301 investigation into China's theft of US intellectual property.</p><p>China is especially angry about this because any tariffs that could follow the investigation (which is expected to take nine months to a year) would be unilateral. That is to say, the White House wouldn't need Congress or the World Trade Organization (WTO) to put them in place. It is the absence of the latter's involvement that has riled China. <br /><br />Because of the WTO, the US hasn't used Section 301 in 15 years. Even our friends and ally nations were complaining that it was too aggressive.</p><p>And then there was Trump's speech in Arizona where he mentioned over and over again that he might throw out the North American Free Trade Agreement (NAFTA).  Now, Trump can't do that without Congressional approval, but his language isn't making negotiations easier. Last weekend Trump was bashing the trade deal so hard on Twitter that the Mexican government was forced to announce that it would not negotiate <a href="http://www.latimes.com/world/mexico-americas/la-fg-mexico-nafta-20170827-story.html">NAFTA via social media.</a></p><p>Trump's own advisers, like Commerce Secretary Wilbur Ross <a href="https://www.cnbc.com/2017/06/19/commerce-sec-wilbur-ross-says-nafta-renegotiation-may-take-until-next-year.html">have warned that this is a delicate situation </a>because of the timing. Mexico will hold elections next year, and if anti-Trump politicians win the day a tenuous situation could worsen. </p><p>Trump has proven himself intransigent, and his team less than competent, and securing these trade deals. <a href="https://www.ft.com/content/1980fd1c-8c3b-11e7-a352-e46f43c5825d">The Financial Times</a> reported that Trump rejected a deal from China that would've seen the country cut its steel output by 100 million tonnes. Meanwhile, the Treasury's trade talks with China all but collapsed, as Secretary Mnuchin was unable to get all sides on the same page.</p><p>Bannon probably loved all that.</p><h2>On immigration</h2><p>In pardoning Arizona Sheriff Joe Arpaio for obstruction of justice, Trump showed that he still has not only Bannon's flare for causing controversy but also Bannon's willingness to flout the GOP and the rule of law to take a stand against immigration.</p><p>I won't get into all the ghastly things Arpaio allegedly did here. The Phoenix New Times offers a pretty solid roundup <a href="https://twitter.com/phoenixnewtimes/status/901263384087334914">here.</a></p><p>What I will say is that Trump is clearly willing to go to bat for this aspect of his agenda in a way he hasn't for say, tax reform or repealing Obamacare. If that is the case, he may make funding for a border wall an issue next month as Congress tries to <a href="http://www.businessinsider.com/hurricane-harvey-congress-relief-bill-debt-ceiling-budget-2017-8">work out the budget, raise the debt ceiling</a>, figure out some kind of tax cut and hopefully help people in Texas and Louisiana whose lives have been destroyed by Hurricane Harvey.</p><p>In other words: Trump would be throwing another wrench onto a legislative agenda already jammed full of wrenches.</p><p>It was going to be a delicate dance without Harvey. The <a href="http://www.businessinsider.com/debt-ceiling-tbills-markets-2017-8">bond market is puking</a> over the prospect of a fight over raising the debt ceiling, and up and down Wall Street analysts have all but given up on tax reform. Adding paying for a wall to the budget fight is something this GOP Congress and President can hardly afford, but in Arizona last week Trump said he was willing to shut down the government to do it.</p><p>Bannon probably liked that too.</p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/how-to-watch-solar-eclipse-without-special-glasses-tips-tricks-2017-8">Here's the best way to watch the solar eclipse if you don't have special glasses</a></h3>        <div>                    </div>    </div>

Trump's already proven he doesn't need Steve Bannon to do Steve Bannon

<p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><p class="source"><span>REUTERS/Carlos Barria</span></p><p class="caption">President Donald Trump holds a news conference at the White House in Washington, U.S., February 16, 2017.</p></div><p></p></div></div>Donald Trump has inherited an economy that is in much better shape than his predecessor did eight years ago. Yet President Trump also has ambitious plans for his first 100 days in office.  Just how much can he achieve and what will be the likely impact on capital markets?</p><p>The 'first 100 days' is a term frequently used in US politics to measure the initial accomplishments of a new president. It dates back to 1933 when Franklin D. Roosevelt used the term to describe the first 100 days of the 73<sup>rd</sup>US Congress. Roosevelt's objectives were not very different from Trump's - both men came to power with a pledge to make the US great again. </p><p>Roosevelt's attempts to address the Great Depression resulted in 15 new bills being passed during his '100 days'. These collectively formed the foundation of his 'New Deal' and included the abandonment of the Gold Standard and the implementation of the Glass-Steagall Act, separating the banking and securities industries.</p><p>"Donald Trump's Contract with the American Voter" is a blueprint the President drew up in October cataloging his plans for his first 100 days. Among others, repealing and replacing the Affordable Care Act, withdrawing from the Trans-Pacific Partnership and canceling many of Obama's executive actions feature. However, as Ronald Reagan was quick to acknowledge when taking office, it is not as easy as it was in Roosevelt's day to pass swathes of new legislation. Trump is going to have to pick his spots and use his political capital wisely.</p><p>Repealing Obamacare appears a high, if not top, priority, and one with the broad support in the Republican-controlled Congress. However, repealing is the easy bit, replacing is anything but. The non-partisan Congressional Budget Office estimates that 18 million people could lose insurance when the Affordable Care Act is shelved. No alternative enjoys a clear consensus of support, not even within the Republican Party. Consequently, replacing Obamacare will take effort and compromise, potentially deflecting Washington's attention from the other ambitions of the 45<sup>th</sup> President. </p><p>Another feature of the Trump agenda is a USD 1 trillion infrastructure commitment over the next decade. However, those expecting an immediate growth boost from infrastructure spending are likely to be disappointed.</p><p>There is no existing mechanism to implement such a plan on that scale. Options include block grants to states or the establishment of an infrastructure bank, both of which require legislation.</p><p>The President has also promised tax reform. But exactly what form this will take is the subject of debate, even among Republicans. Some, including the President, see an avenue via lower corporate income taxes to introduce border tax adjustment, a protectionist measure which appears unlikely to be compliant with WTO rules. Others are hoping for initiatives to promote the repatriation of foreign earnings of US companies, or even pushing for reforms that lead to a simplification of the entire tax code. Competing visions, not to mention competing interest groups, are likely to make the passage of tax measures more difficult and drawn out that many anticipate.</p><p>Unsurprisingly, therefore, the market's enthusiasm for 'Trumponomics' began to fade prior to the inauguration. Hopes for fiscal stimulus and a reform-led growth impulse have not fully receded, but have at least been tempered by recognition of the constraints that face virtually every incoming administration.</p><p><div class="KonaFilter image-container display-table float_right float_left"><div><div class="image on-image"><p class="source"><span>Wikimedia</span></p><p class="caption">Franklin Delano Roosevelt</p></div><p></p></div></div>Our view is that the trends which began to emerge in the second-half of 2016, even before the US election result, are likely to persist, albeit in a relatively gradual fashion. US and global growth continue to improve as the global economy demonstrates resilience. Inflation appears to have bottomed in the US, Japan and much of Europe. China continues to grow steadily, even if its imbalances remain unaddressed. Recessions are giving way to improved growth prospects in Russia and Brazil.</p><p>Economic fundamentals ought to result in modestly rising global bond yields and higher equity valuations. This suggests a shift to smaller fixed income allocations and shorter duration positions, while value and cyclical stocks are likely to outperform defensives and dividend plays.</p><p>Various shocks are imaginable, but the focus in 2017 is likely to be on politics. Will populism in the US and the UK be transmitted to Europe via elections in the Netherlands, France or Germany this year?  More importantly, will this lead to policies that weaken growth and unnerve investors?</p><p>In 1933, Roosevelt's first 100 days defined his presidency. His aim, to paraphrase, was to use the levers of government to fight the fear of fear itself. Will the first 100 days of the Trump administration similarly lay the foundations for stronger growth by focusing on reform, investment and shared global purpose? Or, conversely, will Trump's policies lead to the erection of barriers to trade and fuel international division?</p><p>In sum, Roosevelt's first 100 days helped ensure that the Great Depression would not undermine the political fabric. Today, the question most investors are asking is precisely the opposite.</p><p>With global growth on the mend, many now wonder whether politics (of populism) will trump economics.</p><p><strong><a href="https://www.gam.com/larry-hatheway/en/biography/" target="_blank" data-saferedirecturl="https://www.google.com/url?hl=en&amp;q=https://www.gam.com/larry-hatheway/en/biography/&amp;source=gmail&amp;ust=1487439582690000&amp;usg=AFQjCNHEbJYKPK71JrE0as3ILM8b7lbExQ">Larry Hatheway</a> is chief economist at <a href="https://www.gam.com/en/global/" target="_blank" data-saferedirecturl="https://www.google.com/url?hl=en&amp;q=https://www.gam.com/en/global/&amp;source=gmail&amp;ust=1487439582690000&amp;usg=AFQjCNF4t5noJBsQCkaPW1FpWFStO44C-g">GAM</a>, a fund manager with $122 billion in assets under management. </strong></p><p><em>The information in this document is given for information purposes only and does not qualify as investment advice. Opinions and assessments contained in this document may change and reflect the point of view of GAM in the current economic environment. No liability shall be accepted for the accuracy and completeness of the information. Past performance is no indicator </em>for<em> the current or future development.</em></p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/best-worst-place-raise-family-city-states-cities-live-2017-2">Animated map shows the best and worst states to raise your family</a></h3>        <div>            <div>        <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="83NWZlOTE62q0tRgp5aUgHFP4ziFKtGd" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div>        </div>        </div>            </div>

$100 BILLION FUND: Trump could undermine 'the political fabric' of America

<ul><li>India's former telecom regulator Pradip Baijal has explained how India has had trouble managing its spectrum roll out for next-gen communications technology over the last few decades.</li><li>The latest in this telecom - 5G - is also facing similar hurdles in India, with the government yet to finalise guidelines and announce auction of airwaves.</li><li>He also explained how different use-cases of 5G are relevant and important to India - from the point of view of consumers as well as the industry.</li></ul>India always had problems in dealing with spectrum.<br /><br />We wasted valuable wireless spectrum for fixed line services in 1995, unlike any other country, after the erroneous decision that expensive mobile phones were not for the poor Indians. The decision was reversed in 2004, but led to a lot of inspired criticism by mobile incumbents.<br /><br />Earlier, the government approved a Convergence Bill in 2001, for more efficient use of spectrum, but was not approved. The government/regulator, therefore, approved a Unified Access License in 2004, reduction in interconnect charges and tariff forbearance. But, it took inefficiently long to bring in these changes (it had to be done in stages, by many regulatory efforts).<br /><br />Unified License reduced tariffs 50 times, but increased government revenues. Mobile numbers growth immediately increased 10 times, and gradually 200 times, three times ever the leader, China. 3G spectrum auctions were efficient later, though delayed, and showed the huge loss in 2G allocation and crony capitalism involved, the basis of the CAG report. The allocations led to litigation and differing and controversial judgments by the Supreme Court/CBI Court, the issue still remaining open, but this was one of the issues on which the UPA lost heavily to NDA, in the ultimate court of elections in 2014.<br /><br />4G auctions were conducted efficiently, even though they were delayed, and now we have come to 5G auction issues, with an ET news item commenting, "India is set to miss the '5G bus' following the lack of preparedness, unavailability of sufficient spectrum, absence of encouraging use cases, and uncertainty around radio waves sale for the next generation of telecom services." This is despite India appointing A.J. Paulraj (winner of the Marconi Prize) Committee to give the recommendations to the steps required. They gave the report in mid-2018, and despite giving the schedule, we have not moved fast. In the past, Prime Minister Modi-led government maintained that it "won't afford to miss 5G bus" like in the case of 2G, 3G, and 4G technologies that were deployed in India way later than many countries, thus losing the many early user advantages.<br /><br /><strong>5G and India<br /><br /></strong>Before we discuss, let us understand the nature of use of 5G. For a layman, 5G is just next generation wireless infrastructure which will provide them voice and data services. However, it will impact much more due to its bit-level intelligence characteristics. 5G will provide an array of network intelligence which will get translated into precise and demand-led resource allocation.<br /><br />1G came in 1980s and provided basic voice services, 2G in 1990s and enabled voice and SMS services due to its digital standards, 3G came in 2000s and introduced data services along with voice and SMS that enabled multimedia services. 4G pure IP network, came in 2010s, and enabled the application services and partially merged the telecom and information technology which gave boom to platform services.<br /><br />The architecture of 5G is designed to handle the connection of billions of devices including industrial machines with seamlessness and reliable data transfer with much faster speed. 5G is not only about high speed boost but it is about the intelligence at the bit level and low latency which will make it the foundational tech for multiple new tech., including self-driven cars, AR &amp; VR, telemedicine, robotic surgery, powering future smart cities, IoT, m2m, AI and manufacturing. 5G will change the future war fighting too due to increased situational awareness to increase the command and control of the battlefield. Once these networks come, 2G and 3G networks can be abolished, like in other countries for better overall spectrum utilization. We have not started.<br /><br /><strong>Industrial revolutions and change</strong><br /><br />It has been shown that industrial revolutions change the world. Hirschman had said that these revolutions occur every 70 years. This was proved in IR 1.0, 2.0 and 3.0. The US and the West's GDP went up five to six times in IR 1.0 &amp; 2.0, while India and China went down 10 times (colonial loot was also the reason).<br /><br /><strong>Growth reversal with IR 3.0</strong><br /><br />But IR 3.0 changed the world with the technology being on a connected net and with globalization, available to the Third World (right from the beginning). Of course, the US helped China a lot post 1980, in technology dispersal, and helping China with accelerated WTO membership in 2001. This led to China growing eight times and India 2.5 times in a few years.<br /><br /><strong>IR 4.0 and 5.0<br /><br /></strong>The world is now moving to the fourth and the fifth industrial revolutions in quick succession. Providentially, these revolutions are also happening on the same wire or wireless lines as in IR 3.0, and we have bright Indian minds working in the digital sector like Nadella, Pichai, Arvind Kuar, Banga, Tata, Kohli, Nilekani, Narayana Murthy, Patni, Soota, Premji, and millions of others located in Silicon Valleys around the world. The most exciting additions to the list are Mukesh Ambani, Sunil Mittal and Kumar Mangalam Birla. They have kept the mobile sector alive despite crony capitalism, and given the appropriate ambience, should do very well now. Through them, and despite Covid, the world has shown confidence in the Indian economy.<br /><br />China should do well because of enormous investment, past technology thefts, uninhibited US support till 2015, and R&amp;D. The fifth IR will happen with IT getting connected to human minds (AI and beyond). IR 5.0 having reached the human mind, perhaps cannot move beyond, and the 6th IR has to be in another area, maybe the planets, as visualized by Jeff Bezos. Again, India is well-placed. Creating an appropriate environment is the key.<br /><br /><strong>Role of private sector<br /><br /></strong>It may also be recalled that the 2G rollout had created strong private sector companies and from 10 per cent private network, it had gone to 80 per cent (though the public sector had grown too). Later, despite crony capitalism, they had survived, and are today, India's main hope to take us forward. With 5G networks being more powerful, they will surely impact GDP growth much more than the earlier generation networks and move the country towards Namo's $5 trillion economy in 2024.<br /><br />Fiscal pressure on the government - we can ill-afford to ignore: We are today also hit by Covid, huge bank NPAs, financial crisis, fiscal deficits and fall in investments. 5G rollout is an opportunity for huge network (and downstream) investments by existing private sector companies and their networks all over the country, without putting any fiscal deficit pressure on the government. I had, therefore, anticipated in my China book and articles, that the present is 'providence' for India, like it was 'providence' for China in the 80s with an imaginary 'cold war'.<br /><br /><strong>Pricing issues</strong><br /><br />A word about pricing here - our entire 2G revolution came after tariff forbearance, and liberal availability, connectivity and regulatory reforms. Obviously, once 5G revolutions get moving, the disruptions would be higher. Indian economy/GDP did well during IR 3.0, its DNA being more IT-centric, demonstrated by high growth in these sectors during some periods of IR 3.0, when regulations were right (2004 to 2010), particularly vis-a-vis China, and also the Indian minds being more IT-centric, demonstrated by the success of IT (software) and mobile revolutions.<br /><br /><strong>World digital economy</strong><br /><br />In 2019, the world celebrated the first full year when more than half of the world (51.2 per cent, or 3.9 billion people) had begun to participate in the global digital economy by logging onto the internet, from almost zero a couple of years back. The world is turning fully digital, and networks converging very fast. China has touched 840 million subscriber base and will be 1 billion at the end of 2020, with superior speed, whereas India has only touched 600 million broadband subscribers.<br /><br />The world will thus transform itself to a form that during IR 4.0 and 5.0 the versatile 4 and 5G networks will be more valuable than all other infrastructure, like roads, rail and air transportation systems etc. Looking at the future, China has created companies which are leading in 5G, AI, quantum computing and other digital products and shaping up the digital behaviour of the people because they are deploying networks faster and learning by doing it.<br /><br />China is also leading in the standardization and patents of the digital ecosystem, manufacture of equipment etc. In contrast, the Indian 5G process is yet to commence (allocation of spectrum and installation of 5G equipment), though we have done extremely well despite late start in the past. India can grow in IR 4.0 given its human capital pool, the start in the use of algorithm prowess and an established IT hub, only if we install 4G and 5G systems adequately. But expensive and presently unviable (for India, since IR 4.0 and 5.0 industries and services have not started) 5G systems are likely to come in slow. Also, the spectrum and equipment prices are anticipated to be high. Unless both spectrum and equipment prices are low and heavily backloaded, I do not see India coming out of the jigsaw puzzle, and not falling back severely in the digital war. And if we miss India's turnaround moment, India's vast market and trained manpower will be used by advanced countries to develop 5G / IR4.0 and 5.0 networks fast. The Paulraj Committee recommended that 5G will mature between 2019 and 2024. India should take lead and become an innovator in 5G applications.<br /><br />(Pradip Baijal is former Secretary, Disinvestment and former Chairman, TRAI. This article is in continuation of his book, Containing the China Onslaught, published by Quadrant, and available on amazon.in and walmart, and further to a review of China's growth in Defensive Offence)<br /><br />    <div type="Youtube" id="gFmRP3whXmU" title="Pradip Baijal Explains History  of China's Economic Rise." thumbUrl="https://i.ytimg.com/vi/gFmRP3whXmU/mqdefault.jpg"></div>

India's former telecom regulator shows how much India is lagging behind in the 5G pursuit

Subsidies are bad economics. The bill for subsidies to the Indian government is to the tune of approximately 2.5% of its <keyword id="35050" type="CITY" weightage="20" keywordseo="gdp">GDP</keyword> and will continue to grow unless proper care is taken.<br />
<br /> India’s Prime Minister <keyword id="6354477" type="PERSON" weightage="20" keywordseo="Narendra-Modi">Narendra Modi</keyword> had made it clear right from the start that his paramount concern is for the common man but the subsidy sector of the national economy has to be trimmed. However, he also stressed that the aim of the subsidy reforms will be to remove corruption, ensure subsidies reach the people directly and really improve lives.<br />
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Playing it right politically, PM Modi emphasises that subsidy should really benefit and improve the lives of the beneficiaries. This left him sufficient room to introduce cutting down of subsidies without much political upheaval.<br />
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India has approximately 50% of its population dependent on agriculture and the majority is farmers with small land holdings. About 30% of its population lives below the poverty line.<br />
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Major subsidies are food, energy and power and fertilizers. A vast majority depend on the subsidies to just survive and or to improve their living standards.<br />
<br /> Modi knows there is no question of doing away with subsidies and he had underlined this point at the <keyword id="42981" type="CITY" weightage="20" keywordseo="G20">G20</keyword> meet and at WTO. He had refused to cut down on food buffer stocking and subsidies as per WTO guidelines.<br />
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He has rightly pointed out that the power subsidy was to drive pumps to draw water and unless the farmer can be assured of a proper supply of water this subsidy cannot be withdrawn likewise the fertilizer subsidy.<br />
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<strong>Direct Cash Transfer Benefit</strong><br /> Economist Lord Meghnad Desai says, “Modi government should introduce direct cash transfer schemes to keep a check on subsidies”. Modi has cleverly utilised the previous <keyword id="26374" type="ORGANIZATION" weightage="20" keywordseo="UPA-government">UPA government</keyword>’s “Aadhar” (Unique Personal Identification scheme) to link the subsidies with and ensure that by direct cash transfers, the subsidies go to the actual beneficiaries. This should remove corruption of the middlemen.<br />
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<strong>Subsidy removal and cuts</strong><br />
Modi used the tremendous political goodwill his government has earned at the hustings and has done away with the diesel and petrol subsidies, linking their prices to the international markets. The Government has made a huge saving of almost 25 % in fuel subsidies.<br />
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The Government is subsidising LPG cooking gas by almost 50% of its cost and the subsidy bill was around Rs 1,905 crores in 2013-14. PM Modi has once again batted for the people and the LPG subsidy will be selectively limited and high income earners will be removed from the subsidy list.<br />
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Fertilizer subsidy is the second largest after food and more than Rs 73, 000 crores (approx. US $ 13 billion) were spent on it last year. India’s expenditure for imported fertilizers was approximately US $ 710 million two years back.<br />
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Similarly fertilizer subsidies especially on urea will be reviewed and measures implemented to prevent wastage of this subsidy. Recent studies indicate wastage of about Rs 8,500 crores (about US $ 1.52 billion).<br />
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<strong>Effect of subsidy cuts and benefits</strong><br /> Slowly and methodically trimming the subsidies will result in savings that can be more productively diverted to infrastructure development and capital expenditure for boosting production in line with the Prime Minister Modi’s ambitious program of ‘Make in India’. This is what the <keyword id="6355261" type="POSITION" weightage="20" keywordseo="Finance-minister">Finance Minister</keyword> will be budgeting in 2015.<br />
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With emphasis on production and sustained annual growth estimates indicate that the Government will have to pump in about US $ 800 billion if it wants to maintain the targeted annual growth of 7%.<br />
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The Government is also expected to develop new infrastructure facilities in transport in roads, rail lines, and ports as well as irrigation facilities close to US $50 billion in the coming year.<br />
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If Egyptian President Abdel Fattah el-Sisi without an overwhelming majority government can drastically cut fuel and food subsidies, Modi, taking into account his overwhelming majority government and public goodwill, should take bolder steps to prune and remove subsidies wherever possible for good fiscal growth.<br />
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It is perhaps not fair to compare India with its vast geographical and cultural diversity with smaller countries. PM Modi is taking gradual, but concrete steps to cut subsidies without any loss to the beneficiaries.<br />
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Modi bats well on the subsidy wicket

STRATFOR: Here's what's going to happen in the third-quarter of 2017

<p class="source"><span><a href="http://www.apimages.com/OneUp.aspx?st=k&amp;kw=CHina%20exports&amp;showact=results&amp;sort=date&amp;intv=None&amp;sh=10&amp;kwstyle=and&amp;adte=1341929114&amp;pagez=60&amp;cfasstyle=AND&amp;rids=7d346523cbe849a39600eee9f578e085&amp;dbm=PY2012&amp;page=1&amp;xslt=1&amp;mediatype=Photo">AP Images</a></span></p>The global business landscape has improved over the past year, and business leaders are growing more confident about opportunities overseas. With growth exceeding forecasts and Chinese demand finally stabilizing, 2017 promises to be the first year in living memory that no major economy falls into recession.<p>The JPMorgan Global Confidence Index is nearing a three-year high, and the <a href="https://commercial.jpmorganchase.com/pages/commercial-banking/executive-connect/business-leaders-outlook-2017?source=co/BLO/byline/0617/jpm">2017 JPMorgan Chase Business Leaders Outlook report</a>-which provides a snapshot of the current business environment according to executives from midsized companies-shows that optimism about the global economy has tripled over the past year. Seventy-six percent of these executives expect the new administration will have a positive impact on their businesses.</p><p>Despite this rise in global business optimism, the report reveals a complex mix of attitudes toward global trade-the opportunities found in rapidly growing overseas markets are enticing, while new risks to international supply chains have emerged.</p><h2><strong>A Cautious Approach</strong></h2><p>Executives' rising optimism has been tempered by political uncertainties. The Brexit referendum and the emergence of Euroskeptic political parties across Europe have raised concerns about the long-term future of the European Union. No comprehensive global trade deal has been negotiated since the creation of the WTO in 1994, leaving large swathes of international commerce dependent on an increasingly outdated legal framework.</p><p>In the US, the Trump administration has pulled out of the Trans-Pacific Partnership and is taking a hard look at trade treaties such as NAFTA-with the president recently deciding not to terminate the agreement in favor of attempting a negotiation. The president is also evaluating tariffs on a wide range of goods imported from China, Japan, Mexico, Canada and Germany-a move that could spark trade conflicts with America's largest trading partners.</p><p>Many companies that depend on international trade are growing nervous about the potential risks associated with changes to US trade policy. According to the report, 30 percent of midsized company executives are concerned about how changes in trade policy may affect their businesses. If the administration imposes tariffs and dismantles trade agreements, companies may lose some of the important benefits of international trade.</p><p>As midsized businesses become more integrated into the global economy, they are more sensitive to risks. According to the report, the surge in optimism about global conditions was not accompanied by an increase in the number of businesses planning to expand overseas in the coming year.</p><h2><strong>Ripple Effects</strong></h2><p>In an age of tightly interconnected global supply chains, changes to trade policy could create unintended consequences. For example, a tariff on goods manufactured in China would inevitably affect the nations that supply the raw materials, components and intellectual property that go into Chinese products. For every dollar of goods exported to the US from China, JPMorgan economists estimate that only 60 cents of value actually originates in China.</p><p>Consider a tablet PC made in China. The device might be assembled in a Guangzhou plant, with a screen manufactured in Korea. Its memory chips could be imported from a Taiwanese semiconductor foundry, the processor designed in Austin, and it will almost certainly run an operating system licensed from Silicon Valley. Before it ships, the tablet will be preloaded with apps developed by startups across the US and Canada.</p><p>Since US exports are dominated by manufactured goods, services and intellectual property, the impact of tariffs would be felt acutely by American businesses. Eighty-five percent of the value of US exports is sourced domestically, giving American manufacturers a high degree of exposure to any retaliatory tariffs.</p><h2><strong>Seeking New Markets</strong></h2><p>The Business Leaders Outlook report indicates that most businesses planning to expand overseas are not searching for cheap imports; rather, a full 74 percent of respondents report that they are seeking access to rapidly growing consumer markets, and for good reason-according to the World Bank, close to 95 percent of the world's buying population lives outside the US.</p><p>In recent years, exports have driven 46 percent of American GDP growth, and every $1 billion in new export activity creates approximately 6,000 new American jobs. Businesses are seeing opportunities in the vast consumer class that is emerging overseas, particularly in Asia, and they are laying the groundwork to tap into this growing market and establish closer relationships with suppliers.</p><p>Not every recent political development is related to trade-the promise of corporate tax reform could level the playing field and allow shareholders to repatriate profits trapped overseas. A cross-border tax proposal could reduce the tax burden on exports, making American goods more competitive abroad.</p><p>Despite the risk of trade conflict, the new administration's cabinet is led by business veterans who understand the complexities of international commerce. Likewise, companies that monitor the administration's proposed policy changes and prepare strategically for every outcome should be poised to succeed in the new international business landscape.</p><p><em>Morgan McGrath is Head of International Commercial Banking at JPMorgan</em></p><p class="tagline">Get the latest JPM stock price<a href="http://markets.businessinsider.com/stock/JPM-Quote"> here.</a></p>            <h3>NOW WATCH: <a href="http://www.businessinsider.com/explosion-ariana-grande-concert-manchester-arena-concert-suicide-bomber-terror-attack-2017-5">This is the aftermath of a bomb explosion at the Ariana Grande concert in Manchester</a></h3>                                    Please enable Javascript to watch this video

US companies are moving in on a booming global market - but trade policy could make it more difficult

The last thing America needs to negotiate is more trade deals

<p><div class="KonaFilter image-container float_right"><div class="image on-image"><p class="source"><span><a href="http://www.bloomberg.com/video/jeffrey-saut-dan-haugh-on-strategy-market-outlook-TGXd3cSyStmAvmbFCHzrzw.html">Bloomberg TV</a></span></p><p class="caption">Jeff Saut</p></div><p></p></div>"Year-end letters are difficult to write because there is always a tendency to discuss the year gone by or, worse, attempt to forecast the coming year," said <a href="http://www.raymondjames.com/inv_strat.htm">Raymond James' Jeff Saut earlier this week</a>.</p>
<p>But perhaps begrudgingly, Saut offered his forecast anyway.</p>
<p>He warms into it by first reminding us of the various psychological hurdles in recent years:</p>
<p style="padding-left: 30px;">Speaking to the news backdrop, consider this. For the past two years the markets have been confronted with numerous issues. The debt downgrade, the fiscal cliff, the sequester, the government shutdown, Dodd-Frank, rumors China would implode, the call that interest rates would skyrocket, Europe's debt crisis, a potential U.S. debt default, Fukushima, the Arab Spring, Iran, North Korea, Iran, Egypt, Syria, etc., yet the equity markets traded higher. In contrast, except for Obamacare, this year could be relatively, news-wise, trouble free. Moreover, bond yields have already risen and are unlikely to move much higher in the short/intermediate term, tapering has been announced, GDP and earnings guidance has been raised, there is more political cooperation (budget deal, Yellen, WTO deal, EU bank accord, bailouts over, Mexico reform, etc.), the American Industrial Renaissance is alive and well, our oil independence is almost assured, and the central banks remain accommodative. To this accommodative point, it has been proven that quantitative easing lifts stock prices; and despite the taper announcement, the Fed's balance sheet should still expand by some $435 billion in the new year (front-end loaded).</p>
<p style="padding-left: 30px;">...there has been a very tight correlation (R<sup>2</sup>) between the expansion of the Fed's balance sheet and stock prices since 2009. If the Fed expands its balance sheet by another 12% over the coming year, <strong>it is conceivable the SPX could increase by another 12%</strong>. That would also be consistent with the S&amp;P's bottom-up, operating, earnings estimate increase of ~13% year-over-year ($122.11e vs. $107.40e).</p>
<p>And it's not just about Fed balance sheet expansion. Saut sees plenty of bullish fundamentals driving stocks higher.</p>
<p style="padding-left: 30px;">Plainly, the U.S. macro uncertainty is falling with the budget deficit falling to a six-year low. That glide path should extend into 2014 with the CBO projecting a further drop in 2015 to a deficit of only 2.1% of GDP. Accordingly, I think a lot of things could indeed go right in 2014. The slowdown in housing, due to the increase in mortgage rates, should reverse now that mortgage rates have stabilized. A recent data point would be Lennar's (LEN/$39.55/Strong Buy) admission - best month of the quarter was November in terms of sales and pricing. The capital equipment cycle (cap ex) should strengthen in 2014. In talks with companies' senior management teams, they are telling me "We have put off investments in cap ex as long as we can because 'things' are just plain wearing out." Furthermore, credit conditions are improving, loan demand is slowly picking up, M&amp;A activity is increasing, dividends and buybacks are on the rise, profits are decent, inflation is contained, money is rotating out of most bond funds and (at the margin) into equity funds (given the amount of money that has flowed into bonds since 2008, this rotation has a lot further to go), the bad performance figures for 2008 are about to disappear from asset managers' five-year track records, and the list goes on. All of this should make for interesting discussions in the new year when financial advisors meet with their clients to talk about future asset allocations. Unsurprisingly, most investors remain underinvested in equities...</p>
<p>Saut thinks it's possible we go straight up without a meaningful sell-off for a while.</p>
<p style="padding-left: 30px;"><strong>As we begin 2014, I think the rally extends without much of a pullback. In fact, my sense is we could travel into the 1900 - 2000 zone on the SPX before succumbing to any meaningful correction</strong>. Right now the inflation-adjusted all-time high for the SPX is around 2060, but I doubt if we can make it there before getting some kind of "hiccup." Currently, the SPX is better by 31.3% YTD and up about 40% from the June 2012 low without any meaningful correction. The historical median drawdown following such a rally is between 6% and 7% over the next three months and between 10% and 12% sometime during the next 12 months.</p>
<p>And since it's <a href="http://www.businessinsider.com/category/profit-margins">one of the hottest debates in the market these days</a>, Saut offered his position on record high profit margins.</p>
<p style="padding-left: 30px;">Price/Earnings (P/E) multiple expansion has contributed heavily to the upward path of the equity markets over the past few years and there has been a lot written about that. In 2014 it is doubtful P/Es will expand very much because of the tapering announcement and fears interest rates will rise. Yet even if the SPX just trades at its current P/E multiple (17x), it suggests an SPX price target of 2076 by the end of 2014 if the earnings estimates are anywhere close to the mark. Of course that brings about cries that elevated profit margins cannot remain where they are, and therefore must revert to their historic mean hurting earnings, an argument from the negative nabobs we have heard since 2010; and <strong>I just don't believe it. Many companies are moving their IT needs to the "cloud," which saves a huge amount of money permitting margins to stay wide. Then there is the change in the composition of goods produced in this country that has moved from low margined goods to higher margined goods like jet engines. Or, how about the accounting term "income from affiliates," which means a parent company has a minority stake in another company that brings in income but doesn't record revenues associated with that stake, suggesting 100% margins. So, no, I do not buy the margin compression in 2014 argument</strong>.</p>
<p>So overall, he's bullish.</p>
<p>Read his whole outlook at <a href="http://www.raymondjames.com/inv_strat.htm">RaymondJames.com</a>.</p>

JEFF SAUT: I Don't Buy The Profit Margin Compression Argument, I Think The S&P 500 Can Go To 2,000

<p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><p class="source"><span><a href="https://www.bloomberg.com/news/videos/2015-04-24/letting-greece-go-is-just-too-dangerous-shvets">Bloomberg screengrab</a></span></p><p class="caption">Viktor Shvets</p></div><p></p></div></div>Viktor Shvets is Macquarie's head of global equity strategy and Asia-Pacific equity strategy.</p><p>We recently spoke with him about Donald Trump and the wave of populism that's spreading around the world and what role technology has played. </p><p>This is part one of a series.</p><p><em>This interview was lightly edited for clarity.</em></p><p><strong>Jonathan Garber:</strong> What does history say about the implications of a Donald Trump presidency for the global economy?</p><p><strong>Viktor Shvets:</strong> You've probably seen the paper that we've written on populism, and what does it actually mean. For different people, it means clearly different things, but the essence of populism, whether it's the left wing or the right wing, is that they tend to use the power of the state very aggressively to fulfill whatever objectives they want to achieve. Populism sits easily with both extreme left and right who claim to represent ordinary people in their struggle to restore their right to be heard as an expression of "pure will of the people."</p><p>In the case of left wing, it could be a redistribution of wealth ("billionaires corrupting our system"). It could be nationalization of businesses. In the case of right wing, policies could be different (such as nationalistic undertones, "build that wall"), but the answers are still the same, "we are prepared to use the state aggressively to achieve what we think is right." Whether it's Theresa May in the UK or Donald Trump in the US, or a number of other presidents and prime ministers that have appeared over the last couple of years, most of them had a populist tilt. Given that dislocated electorate is suspicious that it might be a victim of a "bait and switch," it tends to gravitate to extremes, and this pulls conventional politics to either the extreme right or left.</p><p>Essentially, what politics is doing is responding to cries for help. In other words, people are suffering, and the politics have to respond. It's as simple as that. Now, why are people rebelling? Primarily because productivity growth rates have been very low globally, in some cases for decades. In the case of the United States, total factor productivity has not really grown since the<span> </span>mid-1970s<span>. </span></p><p>Just increasing fiscal spending doesn't necessarily increase productivity. What does increase productivity is the ability to combine labor and capital in a way that generates incremental output compared to the inputs. Because productivity rates remained low for an extended period, society theoretically should have been getting paid less, but society's insistence on continuing wealth creation and uninterrupted growth implied that politics needed to respond and the only answer was deregulation and leveraging. We had a deregulation of capital markets, deregulation of labor markets, deregulation of product markets. The purpose was to give people the freedom to try to make money through greater flexibility, asset prices, and leveraging rather than through conventional wages and earnings.</p><p>Since 1980s, we all started to leverage. As productivity stagnated and leverage increased, income and wealth inequality started to rise. That's been the case for decades. That's not anything new, but there eventually comes a time when populace starts to believe that the system is not functioning properly. That started to happen not just five or 10 years ago, it actually has been going on for decades. The dysfunctionality of Washington is a reflection of a dysfunctional society. Politics is simply a mirror. The way I look at it whether it's Brexit, Theresa May, Beppe Grillo, Le Pen, or Donald Trump, it is a response to people's crying for help.</p><p>The question then becomes of course why productivity growth rates have been so limited for such an extended period of time. This is a fertile area for debate but to my mind, there are two reasons why that is the case. Number one is technology, and number two is overleveraging and overcapacity that we have created, as our preferred policy responses.</p><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span><a href="https://www.youtube.com/watch?v=dx9GFpKCAz0">YouTube/iPhone-Fan</a></span></p><p class="caption">Robots in a Tesla factory.</p></div><p></p></div></div></p><p>If you think of technology, most people assume that technology increases productivity, but in fact, when you are in the middle of industrial revolution, productivity actually falls, because parts of the economy become hyper-competitive, and over time these more productive segments slowly (one cut at a time) kill the rest of the economy. The jobs change. Labor markets change. How one is getting employed changes. The new jobs are not necessarily the same as the previous jobs and neither are they as productive. Compensation levels are not necessarily the same. The titles, the career path changes. What you end up with is actually lower productivity. For example, because of Amazon, two million Walmart employees today will have a lower productivity even though they work very hard. The same happened to equity and the fixed income traders, for example, over the last decade or two. They might be working very hard, but they're not as productive anymore, partially because of a technological shift.</p><p>Eventually, history tells us that everything would line up, but it takes years and decades. That's why the 19th century and 20th century were the centuries of revolutions and wars as they were going through similar processes as what we are going through right now. To me, technology is the biggest part of the answer why productivity rates had been lagging. It is structural in nature and therefore it probably would take decades for productivity to accelerate.</p><p>In the meantime, the political and societal response remains to encourage leveraging and bringing future consumption forward. That's why real estate became an asset class rather than being just a utility or a home where you happen to reside. As we continue to leverage higher, creating more and more instruments from every piece of asset claim, gradually the private sector starts to lose confidence. The loss of private sector confidence started to happen not just in the last five or 10 years but had been an ongoing process since the late-1990s for most economies. As the private sector loses confidence, the velocity of money declines and the public sector feels that it is their responsibility to ensure that aggregate demand is maintained, whether it's through proactive and aggressive monetary or fiscal policies. However, the more proactive the public sector becomes, the lower visibility the private sector has and it becomes a vicious cycle. There is no longer visibility of demand and neither are there any genuine prices, ranging from cost of capital and money to commodities. That's what we've been living through over the last couple of decades.</p><p>At what stage should the government step back, or should it ever step back, as the nature of economies change? I think that's what populists are confronting. Are we at a point that the conventional private sector will never genuinely come back, and therefore the public sector should become more and more aggressive, whether it's using the bully pulpit in order to force companies to do what otherwise they will not be doing, sponsoring infrastructure or other investment, changing regulatory structures, nationalizing industries or nationalizing capital markets, dominating the bond market and other trading the way central banks have been doing for the last decade? At what stage should the government step out? Maybe they shouldn't. Maybe they should just keep going.</p><p>The answer to this question depends on whether the conventional private sector recovers. If the private sector never recovers (or at least it takes years or decades until a new private sector emerges) then there is no way out, and so the public sector will have to become more and more aggressive. We have been arguing for the last five or six years that we are residing in a period similar to the years prior to the introduction of FDR's New Deal in 1934. Public sectors in most countries remained dominant from the 1930s until the late 1970s, or until Ronald Reagan and Margaret Thatcher. The state was the decider. The public sector was deciding what will happen, how it will happen, how capital will be allocated.</p><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>AP</span></p><p class="caption">This photo was taken moments before U.S. President Franklin D. Roosevelt began his historic fireside chat to the American people on March 12, 1933. </p></div><p></p></div></div></p><p>I think we're living through a very similar stage, and governments are somewhat reluctantly embracing more and more of those ideas. The pendulum is definitely swinging far more towards the public sector and this could go on for decades. As I said, because labor markets are disintegrating, most of the professions are becoming unrecognizable, compensation levels have been stagnating, and even if compensation rises you're not confident of its durability and most people no longer have employment progression paths the way they used to back in the 50s, 60s, 70s, even in the 80s. We are dealing with deep secular changes.</p><p>Politics responds accordingly by saying, "We can protect you. We can help you." That's why one of the first statements made by Theresa May as a prime minister, "I don't care whether you're Google, Amazon, or Starbucks, you're a citizen of this country." She also said, "If you're a citizen of the world, you're a citizen of nowhere." It is hard to envisage Bill Clinton or Tony Blair or even David Cameron expressing the same views. The same applies to Donald Trump's "America First."</p><p>Deglobalization trends have been strengthening since the collapse of the Doha accord in 2008. People, nations, states, and politics are now arguing that at the very least we need to slow down the pace of globalization and somehow compensate its losers. These are extremely treacherous times. We have been arguing for several years that we're now residing in the era of declining returns on humans and declining returns on capital. The value of conventional labor inputs is declining every day. We're also in the world of declining return on capital, simply because we have too much of it; the global economy is drowning in capital. When people say, "I don't have capital," my answer is that you just happen to be on the wrong street. If you cross the street to the other side, you will find plenty of capital. We have at least five to ten times as much financial instruments as the value of the underlying global economy. This is more than we've ever had in terms of capital.</p><p>As a result of declining return on humans and capital, both are rebelling. The response by politics is de-globalization. In other words, trying to protect domestic businesses, domestic employment, and support local demand. It becomes a zero-sum game. We entered it a while ago. The WTO is showing that over the last five, six years, about 20 instances every month occurring around the world where countries have been introducing various anti-trade measures. Sometimes it's tariffs, but most of the time it's anti-dumping duties, it's aggressive usage of local licensing laws, aggressive usage of local taxation laws. Sometimes it's certificates of origin or health checks. There are various ways that governments have been trying to slow down the pace of globalization.</p><p>Technology is driving globalization and deflation. Technology is driving unlimited scale, but it clashes against borders, frontiers, nations, and people who are trying to defend themselves. Politics is asking for reflation, not deflation. It's like two boxers. Sometimes one wins, sometimes the other wins, and that's why we keep gravitating between reflation and deflation; reflation and back to deflation.</p><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>Mark Wallheiser / Stringer</span></p><p class="caption">Donald Trump in Alabama.</p></div><p></p></div></div></p><p><strong>Garber:</strong> Trump wants to prevent jobs and manufacturing from leaving the US for places like China and Mexico. Is that what he should be worried about, or should it be the robots?</p><p><strong>Shvets:</strong> Populists get elected because people are afraid. The next question is to say, "By commanding Carrier air conditioners to keep operations in Indiana, does that preclude management of that factory from automating it, and those jobs will be gone anyway?" Of course it does not preclude it, that's probably exactly what will happen. If Ford or GM decide, "Okay, we're not going to do certain things," it implies some other segments in the economy are going to suffer. You've got one winner in Ford, but there are other sectors that as a result of this are going to lose. Similarly, when Toyota says, "We're going to spend money," they probably would have invested anyway. The way I basically describe it, the private sector bends and tries to accommodate politics, but they very seldom break. The only time they break is when the government nationalizes the industries, and the only other time private sector breaks is when the public sector underwrites private sector liabilities.</p><p>In other words, if the public sector says, "You know what? I will underwrite your margins on this highway or this project." Fine. Or, "I underwrite your pricing and liability, but I will try to hide it in some off-balance sheet vehicle, so perhaps it's not going to get reflected in the public sector liability of the United States." If the public sector is prepared to underwrite the risk, the private sector will participate. If the public sector nationalizes the private sector, then the public sector can do whatever they want. Otherwise, the private sector accommodates politics as much as possible but very seldom does it break. The private sector delivers notionally whatever politics want them to deliver, but in reality, it doesn't actually make that much difference, and if it does make a difference in one sector (like automotive), it usually comes at the expense of another sector. Generally speaking, it's not something that's been proven in the past as delivering results, very similar to the way Ronald Reagan was bullying the automotive industry back in the 1980s.</p><p>All I'm saying, whenever you act, there is an opposite reaction somewhere else, either within the United States or outside of the United States. That's a zero-sum game rather than growing the entire global pie. From my perspective, it makes political sense, because people usually look at everything as zero-sum, even though economics doesn't work like that. If you have an administration which is basically deal-makers, you could satisfy politics by making deals but at the end of the day, you probably won't achieve much. Having said that, if the incoming administration embarks on meaningful structural reform (such as re-writing taxation code, easing the regulatory burden, increasing investment in a research part of R&amp;D and reducing the degree of public sector interference), then clearly that would be highly advantageous. In other words, less cutting taxes for the highest earners and less bully pulpit and far more structural reform.</p><p>In terms of technological shifts, there is nothing that can be done about technology. One of the best quotes was from Boris Johnson when he was Mayor of London, and when people were clamoring for Uber to be outlawed. He basically said, "I cannot uninvent inventions. I can do many things, but uninventing inventions is not one of those things I can do." At the end of the day, technology is going to win, but what politics is trying to do is to create much more socially acceptable outcomes in the short to medium term. People and politics are basically de-globalizing as much as possible, which is opposite to the way the world functioned from the late 1970s until about five or ten years ago. It's going very much back to the 1930s, 40s, 50s, 60s, and 70s, rather than the conventional views of the last 30 to 40 years.</p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/tech-finance-coinbase-buy-sell-trade-bitcoin-app-coinbase-2017-1">Here's how to use one of the many apps to buy and trade bitcoin</a></h3>        <div>            <div>        <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="8xa3Z1ODE6jmPca8bIn4JsdTak2saJbY" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div>        </div>        </div>            </div>

One of the top strategists in the world explains the wave of populism that's sweeping the globe and the role technology has played

<p><span style="line-height: 1.5em;"><div class="image-container float_right" style="width:400px"><div class="image"></div><p class="source">AP</p></div>As President <keyword id="15962" type="PERSON" weightage="60" keywordseo="Barack-Obama">Barack Obama</keyword> heads to Asheville, N.C., Wednesday to push the themes outlined in his <keyword id="97538" type="ENTERTAINMENT" weightage="60" keywordseo="State-of-the-Union">State of the Union</keyword> address, the <keyword id="6356037" type="ORGANIZATION" weightage="60" keywordseo="white-house">White House</keyword> has unveiled a four-step plan it claims would make the U.S. a "magnet for jobs" by investing in <keyword id="6362048" type="ORGANIZATION" weightage="60" keywordseo="Manufacturing">manufacturing</keyword>.</span></p>
<p>The White House's plan follows four general guidelines: Investing in American-made technologies; ending tax breaks for companies that ship jobs overseas; new partnerships to bring jobs back to America and encourage companies to hire in America; and opening global markets to American-made goods.</p>
<p>Obama will outline the plan during his speech in Asheville, where he will visit the Linamar Factory, which produces <span>heavy-duty engine and driveline components.</span></p>
<p><span>In his State of the Union Tuesday, Obama outlined proposals to revitalize American manufacturing and bring jobs back to the country, including plans to launch manufacturing hubs, that would leverage public-private partnerships to boost technologies and capabilities</span><span style="line-height: 1.5em;">. Obama said he would begin the initiative with an executive order to launch three additional hubs, and <span>called on Congress to invest $1 billion to create a network of 15 of these hubs. </span></span></p>
<p><em><span style="line-height: 1.5em;">Here's Obama's full manufacturing plan, via the White House:</span></em></p>
<h2 align="center"><em><strong><span style="text-decoration: underline;">The President’s Commitment to Revitalize American Manufacturing and Bring Jobs Back</span></strong></em></h2>
<p><em>In his State of the Union, the President outlined a comprehensive agenda to attract more jobs to our shores. As part of this effort, he is committed to investing in U.S. manufacturing:</em></p>
<div>
<h3><em><strong>Partnering with businesses and communities to invest in American-made technologies and American workers</strong></em></h3>
</div>
<ul>
<li><em><strong>Transforming communities across the country into global centers of advanced manufacturing:</strong> To support investment in U.S. manufacturers’ competitiveness and accelerate innovation in manufacturing, the President is proposing a one-time, $1 billion investment to launch a network of 15 manufacturing innovation institutes across the country. Leveraging the strengths of a particular region, each institute will bring together companies, universities and community colleges, and government to co-invest in the development of world-leading manufacturing technologies and capabilities that U.S.-based manufacturers can apply in production. In August 2012, the Administration launched a pilot institute in Youngstown, Ohio with a $45 million funding commitment from five Federal agencies, led by the Department of Defense. The winning partnership of firms and universities from Ohio, Pennsylvania, and West Virginia was one of twelve teams that applied.<strong>Creating a Community College to Career Fund</strong><strong>:</strong> Co-administered by the Department of Labor and the Department of Education, this Fund will help forge new partnerships between community colleges and businesses to train two million workers for good-paying jobs in high-growth and high-demand industries, including advanced manufacturing. These investments will give more community colleges the resources they need to become community career centers where people learn skills that local manufacturers are looking for now, and ensure that employers can find the skilled workers they need and workers are gaining credentials to build strong careers.</em>
<ul>
<li><span style="text-decoration: underline;">While the President will continue to push Congress to act on his broader proposal, he will take executive action to launch three new manufacturing innovation institutes in 2013</span>: To build on the success of a pilot institute, the President announced a plan to launch three new manufacturing innovation institutes this year, a co-investment between Federal agencies, led by the Departments of Defense and Energy, and the private sector, with an initial focus on manufacturing technologies that also address critical national security and energy needs.</li>
</ul>
</li>
</ul>
<div>
<h3><em><strong>Ending Tax Breaks to Ship Jobs Overseas and Making the U.S. more competitive</strong></em></h3>
<ul>
<li><em><strong>Making the U.S. more competitive for manufacturing by reforming our tax code: </strong>To encourage innovation and investment in the U.S. as part of the President’s broader commitment to business tax reform, the President is proposing to lower tax rates for manufacturers to 25 percent, expand and make permanent the research and development tax credit, put in place an “offshoring tax” that would set a minimum tax on offshore earnings to prevent a race to the bottom in corporate tax rates, and extend and enhance key incentives to invest in U.S. clean energy through a permanent, refundable production tax credit and a reauthorization of the Advanced Energy Manufacturing Tax Credit that provides an incentive for clean energy manufacturing at home.</em></li>
</ul>
</div>
<ul>
<li><em><strong>Strengthening manufacturing supply chains through the Manufacturing Extension Partnership</strong><strong>:</strong> The Department of Commerce’s Manufacturing Extension Partnership (MEP) provides a range of business services to small manufacturers and is enhancing the program to help companies focus on technology transition which requires deep supply chain expertise. The President’s Budget will propose a $25 million increase to launch Manufacturing Technology Acceleration Centers (MTACs), which will be industry-specific centers that can serve as a coordination point within key supply chains. The Administration is also announcing plans to pilot two new centers in 2013 using existing resources.</em></li>
</ul>
<h3><em><strong>Bringing Jobs Back</strong></em></h3>
<ul>
<li><em><strong>Investing in manufacturing communities and bringing jobs back:</strong> Today, we are better positioned to attract new manufacturing investment in the U.S. and bring jobs back. But some communities are still hard-hit by the recession, particularly after closure of factories in places like Detroit, Michigan and Rochester, New York. The President is announcing new steps to partner with and help strengthen communities, including:<strong>Creating a Community College to Career Fund</strong><strong>:</strong> Co-administered by the Department of Labor and the Department of Education, this Fund will help forge new partnerships between community colleges and businesses to train two million workers for good-paying jobs in high-growth and high-demand industries, including advanced manufacturing. These investments will give more community colleges the resources they need to become community career centers where people learn skills that local manufacturers are looking for now, and ensure that employers can find the skilled workers they need and workers are gaining credentials to build strong careers.</em>
<ul>
<li><span style="text-decoration: underline;">Launching an “Investing in Manufacturing Communities Partnership”</span>: The President is directing Federal agencies to provide coordinated assistance to manufacturing communities through a new partnership designed to strengthen communities’ ability to attract investment. To support the Partnership, the President’s Budget will propose $113 million to provide targeted financial assistance for about five manufacturing communities while leveraging non-Federal funds on a 2 to 1 matching basis to co-invest in state of the art infrastructure projects and research facilities. These efforts will aim to attract manufacturers and their supply chain of local parts innovators, producers, and distributors, creating new jobs and strengthening the local economy. In addition, the Partnership, through multiple Federal agencies, will provide technical support to redevelop manufacturing communities that have had major plant closings, in partnership with local leaders, workers, and businesses.</li>
<li><span style="text-decoration: underline;">Expanding Federal efforts to attract investment to the U.S.</span>: In 2011, the President launched SelectUSA at the Department of Commerce, creating the first Federal effort to actively attract business investment in the United States. To help our governors and mayors compete with foreign countries, the President will propose in his Budget to significantly expand SelectUSA. The Administration will host a SelectUSA Investment Summit this year, matching businesses from around the world with local leaders to attract jobs and investment to our shores.</li>
<li><span style="text-decoration: underline;">Proposing a Manufacturing Communities Tax Credit</span>: The President is proposing incentives for communities facing concentrated job losses – particularly hard-hit manufacturing communities – to help attract new investment and jobs. The incentives will help prevent the downward spiral that can occur following mass layoff events.</li>
</ul>
</li>
</ul>
<div>
<h3><em><strong>Leveling the playing field and opening markets for American-made products</strong></em></h3>
</div>
<ul>
<li><em><strong>Boosting U.S. exports:</strong> The President is committed to doubling American exports and has taken steps to expand market access for American-made products through trade agreements with South Korea, Columbia, and Panama. To boost exports, the President will launch talks on a comprehensive trade agreement with the European Union with the goal of promoting free and fair trade across the Atlantic to support millions of good-paying American jobs, and will complete the Trans-Pacific Partnership.</em></li>
<li><em><strong>Strengthening our capabilities to enforce trade laws and support American workers: </strong>The President has aggressively enforced trade rules to ensure that American workers are competing on a level playing field with firms from around the world, doubling the rate of WTO challenges against China compared to the previous Administration, and applying the “Section 421” against China to address a surge in Chinese tires. Last year, the President launched an Interagency Trade Enforcement Center (ITEC) with resources devoted exclusively to ensuring our trading partners are playing by the rules, and he is calling for dedicated funds beyond existing resources to provide the support needed by ITEC to ensure American workers are competing on a level playing field .</em></li>
<li><em><strong>Ensuring U.S. leadership in clean energy and advanced vehicle manufacturing: </strong>Building on the President’s historic investments in clean energy and the fuel efficiency standards put in place through 2025, the Obama Administration has proposed a comprehensive approach to advanced vehicle manufacturing, including incentives for consumers and businesses to lower the cost of advanced vehicles, investments in partnership with communities to address the local barriers to deployment of advanced vehicles at critical mass, and increased investments in advanced vehicle technologies through the Department of Energy’s EV Everywhere grand challenge. The President will also continue to call on Congress to reauthorize the successful and oversubscribed 48C Advanced Energy Manufacturing Tax Credit.  </em></li>
<li><em><strong>Supporting innovative, advanced manufacturing technologies through increased Federal R&amp;D: </strong>The President’s Budget will propose increases in key advanced manufacturing R&amp;D programs across Federal agencies. Investments include supporting innovative manufacturing processes that dramatically reduce energy use and strengthening investments in platform technologies like nano-manufacturing, bio-manufacturing, robotics through the National Robotics Initiative, advanced materials through the Materials Genome Initiative, and defense technologies to fundamentally change the way we build things and dramatically reduce the time from design to production.</em></li>
</ul>
<p><span style="line-height: 1.5em;"><span><br /></span></span></p>

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