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Global Economy Squeezed by Worsening Slowdown in China

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A woman walks by an advertisement billboard for a new shopping mall which is under construction in Beijing, China Tuesday, Jan. 20, 2015. China's economic growth slowed to 7.4 percent last year, the weakest expansion in more than two decades. The numbers released Tuesday are still miles ahead of growth rates in major industrialized economies, but represent a sharp decline from double digit growth in previous years. That adds to pressure on the country's communist leaders as they try to prevent a sharper slowdown in 2015 while overhauling the economy. (AP Photo/Andy Wong)

A woman walks by an advertisement billboard for a new shopping mall which is under construction in Beijing, China Tuesday, Jan. 20, 2015. China’s economic growth slowed to 7.4 percent last year, the weakest expansion in more than two decades. (AP Photo/Andy Wong)

BY KELVIN CHAN, AP Business Writers
PAUL WISEMAN, AP Business Writers

HONG KONG (AP) — The global economy, slowed by stagnation in Europe and Japan, is being further hampered by China’s decelerating growth.

The Chinese economy grew 7.4 percent in 2014, its weakest performance in nearly a quarter-century. And its growth is forecast to slow even more over the next two years.

The figures released Tuesday remain, by just about any measure, impressive. China continues to grow at more than twice the pace of the overall world and about three times as fast as the U.S. economy. Yet its growth rate marks a sharp drop from China’s sizzling double-digit expansion in previous years.

And given its size, China has an outsize effect on the world. China’s share of the global economy climbed from 4.5 percent in 2000 to an estimated 11.3 percent last year, according to the World Bank.

“China is the second-largest economy in the world,” said Paul Sheard, chief global economist at Standard & Poor’s Ratings Services. “So when it slows, the rest of the world is impacted.”

On Tuesday, the International Monetary Fund downgraded its forecast for the global economy for this year and next and pointed to China’s slowing economy as a key factor. The IMF said China’s growth would weaken to 6.8 percent this year and 6.3 percent in 2016. China’s slowdown will dent growth in countries it imports from, especially in Asia, the report said.

China’s 2014 expansion was its slowest since 1990, when growth tumbled to 3.8 percent — a result of economic sanctions imposed on China after its violent crackdown on the Tiananmen Square protests. Last year’s 7.4 percent growth undershot Beijing’s target of 7.5 percent, its first miss since 1998, according to analysts.

Economists expect the slowdown to deepen, clouding the outlook for the world economy as China transitions away from an era of supercharged but unsustainable growth that fueled demand for everything from Australian iron ore to European luxury goods.

Few think the Chinese slowdown will do much direct damage to the strengthening economy of the United States. The United States is enjoying sustained improvement, with healthy job growth, falling oil prices, rising auto sales, low interest rates and an easing of government cutbacks fueling steady expansion.

The pain will be more intense in countries such as Australia and Malaysia that rely heavily on the Chinese market, said Nariman Behravesh, chief economist at IHS.

“Those most hurt will be the commodity-exporting countries in Africa and Latin America and China’s neighbors,” Behravesh said.

Chinese businesses are bracing for a more painful year.

“Competition will be even more difficult,” said Han Yi, a sales manager at Tianjin Yihsin Packing Plastic Co., which employs 700 people making plastic cups and cookie packaging in Tianjin, about an hour southeast of Beijing.

Han complained that sales in 2014 dipped about 5 percent from the year before and the company had to improve product quality and reliability to compete for new clients. Even then, it was able to win only one new account from a rapidly expanding customer.

“The situation would be much worse if we could not win this new client,” he said.

China’s slowdown is partly intentional: Beijing wants to move the country away from super-fast growth based on often-wasteful investment in factories and real estate to sturdier but slower growth based on spending by Chinese consumers.

The slowdown “is by and large a good thing,” S&P’s Sheard said. “China was growing at an unsustainably fast pace.”

But the transition, already difficult because consumers have never been the driving force behind China’s growth, has been buffeted by a range of problems. They include a slumping property market and uneven exports.

Some analysts expect China to gradually provide economic stimulus this year to prevent growth from fading too fast. But they don’t expect a major spending splurge. Debt is already at worrying levels after the government engineered a credit-fueled response to the 2008 global crisis.

“Credit risks will likely continue to prevent policymakers from using monetary policy too aggressively in order to shore up growth,” said Julian Evans-Pritchard of Capital Economics, who forecasts 7 percent growth in China this year.

Consumption should receive a boost from the slump in global oil prices. But it’s unlikely to fully offset the slowdown of investment in areas already suffering from overcapacity such as property and heavy industry, he said.

Chinese officials have tried to lower expectations by saying growth below the official target would be acceptable.

President Xi Jinping said last year that the economy has entered a “new normal.” But a surprise interest rate cut by policymakers in November indicated they were worried about a spike in job losses.

Growth in the fourth quarter of last year was 7.3 percent, unchanged from the previous quarter, which was the slowest quarterly expansion in five years. China’s economy grew 7.7 percent in 2013.

Staff at the Wanjiang Xiufang garment company in Dongguan, southern Guangdong province, said they were battling competition from an increasing number of rival factories even as consumer spending on the women’s and children’s clothing they make weakened.

Average profit on a hoodie, for example, fell to 8 yuan ($1.29) last year, down from 10 yuan ($1.60 previously, said Lin Rongguang.

“We need to produce new products with better quality but a lower price,” Lin said. “I know it will decrease our profit, but we have to survive first,” he said.

___

Wiseman reported from Washington. AP researcher Fu Ting contributed.

Copyright 2015 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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Bay Area

Port of Oakland Aims to Help Agriculture Producers Export Products More Quickly

“The Port — along with our federal and state partners — is ready to do everything we can to help provide room and relief to help our agricultural customers,” said Port of Oakland Executive Director Danny Wan in a statement. The yard is just one step the Port is taking to help agriculture exporters who have had fewer containers in Oakland with which to export their products.

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The Port of Oakland and the Oakland skyline in the late 2010s. (Photo courtesy the Port of Oakland/Kelly Patrick Dugan)
The Port of Oakland and the Oakland skyline in the late 2010s. (Photo courtesy the Port of Oakland/Kelly Patrick Dugan)

By Keith Burbank, Bay City News

The flow of agricultural exports may improve at the Port of Oakland after it sets aside quick-access space for containers, assists exporters, and if more cargo carriers restore service to Oakland, port officials said Monday.

Twenty-five acres will be used to operate an off-terminal, paved yard to store containers for rapid pick-up following their removal from chassis.

The yard, which may open in March, will allow trucks to turn around more quickly than is currently possible in the terminal. Agricultural exporters will also get help using the yard from state and federal agencies.

“The Port — along with our federal and state partners — is ready to do everything we can to help provide room and relief to help our agricultural customers,” said Port of Oakland Executive Director Danny Wan in a statement.

The yard is just one step the Port is taking to help agriculture exporters who have had fewer containers in Oakland with which to export their products.

But it’s not entirely clear the yard will make a huge difference unless more ships stop at the Port to pick up the exports.

“We need the shipping companies to immediately restore the export lines from Oakland to Southeast Asia and the Indian subcontinent,” Port of Oakland Maritime Director Bryan Brandes said.

Port officials have restored one key route to Tokyo and China. Also, four carriers have recently made Oakland their first stop en route from Asia. But that may not be enough to relieve the shortage of export containers in Oakland.

An import surge in the U.S. has ships waiting to offload cargo in Southern California. When they do, they offload cargo that would typically come to Oakland and then turn around and immediately go back to Asia.

The containers that could be used for exports never make it to Oakland.

Port cargo volume is typically 50% imports and 50% exports so usually enough containers exist at the Port.

Many agricultural exporters and meat producers prefer to ship their products through Oakland because it’s closer than other ports.

The container shortage has been a problem for a year. The problem recently prompted a meeting between farm producers, transportation executives and Port officials and resulted in the steps the Port is now taking.

A solution is important because the state’s agricultural export industry is worth billions of dollars.

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Bay Area

California Goes on Offensive as Omicron Variant Threat Grows 

“CA’s large-scale testing and early detection systems have found the Omicron COVID-19 variant in California,” Gov. Gavin Newsom tweeted Dec. 1. “We should assume that it’s in other states as well. There’s no reason to panic — but we should remain vigilant. That means get vaccinated. Get boosted. Wear a mask indoors.”

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In California, the Omicron variant was first detected in San Francisco on December 1.
In California, the Omicron variant was first detected in San Francisco on December 1.

By Aldon Thomas Stiles | California Black Media

Three days after Thanksgiving, Gov. Gavin Newsom went online to address the new COVID-19 Omicron variant, a version of the virus with at least 50 mutations, according to the World Health Organization.

Twenty-six of those mutations have never been detected before, scientists say.

“California is monitoring the new variant,” Newsom tweeted. “We will continue to be guided by data and science. Right now, the best way we know to protect yourself is to get vaccinated and get your booster. Go today. Don’t wait.”

The variant was first identified by a South African scientist and has since surfaced in several other Southern African and European nations and has now been detected in at least 16 states in the United States, including California.

In California, the Omicron variant was first detected in San Francisco on December 1.

Since then, Alameda County public health officials have confirmed five new cases with mild symptoms. All of them were people who attended a wedding in Wisconsin where they likely contracted the virus.

Newsom responded to the news with a tweet last Wednesday.

“CA’s large-scale testing and early detection systems have found the Omicron COVID-19 variant in California,” Newsom tweeted Dec. 1. “We should assume that it’s in other states as well. There’s no reason to panic — but we should remain vigilant. That means get vaccinated. Get boosted. Wear a mask indoors.”

Assemblymember Akilah Weber (D-San Diego), a board-certified obstetrician/gynecologist, said the state has taken several steps to protect Californians and contain the variant, including “doubling down on COVID-19 vaccination and booster efforts to ensure that all Californians have access to safe, effective and free vaccines.”

Weber was speaking at a briefing organized for Black media on December 3. She said the California Department of Health is monitoring the presence of the variant throughout California and is partnering with the federal Centers of Disease Control and Prevention (CDC) to support local public health departments and health care providers across the state.

“The state is also preparing to increase COVID-19 testing at airports across California for U.S. citizens and legal residents returning from South Africa, Botswana, Zimbabwe, Namibia, Lesotho, Eswatini, Mozambique and Malawi,” she said. “These countries are where higher rates of Omicron have been observed and may shift over time.”

Last week, President Joe Biden also pushed for vaccines and boosters in preparation for this new variant on Twitter.

“As we move forward, we will continue to be guided by what the science and my medical team advises. For now, the best way to strengthen your protection if you’re already vaccinated is to get a booster shot, immediately,” Biden tweeted.

In a controversial move, Biden has issued a travel ban from eight African countries where the higher numbers of the variant have been reported.

“The WHO has identified a new COVID variant which is spreading through Southern Africa. As a precautionary measure, until we have more information, I am ordering air travel restrictions from South Africa and seven other countries,” Biden tweeted.

This United States’ response has been met with some criticism from South African President Cyril Ramaphosa.

“We call upon all those countries that have imposed travel bans on our country and our southern African sister countries to immediately and urgently reverse their decisions,” Ramaphosa said, arguing that the variant may have been detected in those countries, but there is no proof that it originated there.

California Black Media’s coverage of COVID-19 is supported by the California Health Care Foundation.

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Commentary

COMMENTARY: Muslims in France Face Worsening Climate of Hate Under Leadership of President Macron

For France, which colonized Algeria for more than a century, the idea that people from the former colonies should live the life they want seems unbearable. Many white French people seem to have a fear that those from the former colonies may want to treat the descendants of the European French in the same way that the colonial masters treated us. Assuming always the worst for its Muslim citizens says a lot about the country and its beliefs.

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A demonstration in France by Muslims protesting their treatment under President Macron in 2020.
A demonstration in France by Muslims protesting their treatment under President Macron in 2020.

By Larbi Ben Krima

Editor’s Note: We are accustomed to hearing travel advisories telling us to avoid countries in the midst of civil war or government repression. Last month a Muslim civil rights organization warned Muslims not to travel to a country that many consider to be the birthplace of liberty. The author of this article, a French citizen, explains how France has become an oppressive place for Muslims.

I was born and raised in France to an Algerian family. I, like millions of other French citizens, heard about colonization and the mistreatment it created. There was some progress made, and now, piece by piece, that is being erased.

One year ago, in October 2020, French President Macron decided to launch his 2022 re-election campaign with a speech targeting Muslim people. He used terrorism as an excuse. Everybody in France knew it was really about politics, although the citizens of the world did not know that.

Macron’s government followed up by dissolving organizations that had criticized his Islamophobic government.

Schools, humanitarian NGO’s, mosques, publishing offices, and civil right movements with Muslim participants have been shut down by a government looking for Far Right votes in the next election.

France is still pretending to fight for rights around the world, but these rights are never really applied to its Muslim citizens, who are always seen as a Fifth Column and who always have to prove that they are French enough.

Every Muslim act is seen as a danger to the country. It seems that Muslim prayers threaten the French republic; Muslim food is seen as a challenge to the religion of other French people; and Muslim clothes are seen as an attempt to change France’s way of life. Most religions have special foods, and prayers and clothing. Having these customs should not be made so difficult for us after all these years. What’s the big deal?

For France, which colonized Algeria for more than a century, the idea that people from the former colonies should live the life they want seems unbearable. Many white French people seem to have a fear that those from the former colonies may want to treat the descendants of the European French in the same way that the colonial masters treated us. Assuming always the worst for its Muslim citizens says a lot about the country and its beliefs.

That may explain why this country, which refuses to take accountability for its colonial past, can’t accept the kids who are born and raised here.

Quoting the world-famous psychiatrist and political philosopher Frantz Fanon, “It should not be said that such and such a country is racist, but there are no lynchings or extermination camps there. The truth is, all of this and something more is on the horizon.”

We can say that racism runs deep in France’s institutions and politics, cheered on by the media, with applause from a substantial group who likes what they are hearing.

This is a country where an openly racist media pundit has growing support in his campaign for president, just as Donald Trump did.

France, which always despised the USA, has now became one of the United States of Islamophobia, along with China and India.

A former great country, known for its ideals, France has used its former glory around the world. Recently, the world has come to know what a very small country France has actually become a country that should stop preaching to others what it obviously refuses to apply to itself.

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