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Electric-car maker Tesla Inc. TSLA -1.91% has reached an agreement to set up its own manufacturing facility in Shanghai, according to people briefed on the plan, a move that could help the company gain traction in China’s fast-growing EV market.
The deal with Shanghai’s government will allow the Silicon Valley auto maker to build a wholly owned factory in the city’s free-trade zone, these people said. This arrangement, the first of its kind for a foreign auto maker, could enable Tesla to slash production costs, but it would still likely incur China’s 25% import tariff.
Tesla is currently working with the Shanghai government about details of the deal’s announcement, such as timing, one of these people said. The effort comes as President Donald Trump, who has been critical of China’s trade policies, prepares to visit Beijing early next month.
A Tesla spokesman didn’t have a comment beyond reiterating the company’s previous statement in June that it planned to “clearly define” production plans in China by year’s end. The Shanghai government didn’t reply to a request for comment.
China’s electric-vehicle market—already the world’s largest—is primed for growth. The Chinese government is targeting seven million EV sales a year by 2025, up from 351,000 last year, and in September it ordered all auto makers already operating in China to start producing EVs by 2019. Officials have also said they are working on a plan to ban gasoline cars.
China had previously circulated a proposal that would allow electric-car makers into the country without local partners if they were to locate in the so-called free-trade zones. The government set up the country’s first such zone in Shanghai in 2013, and has since approved 10 more around the country.
Until now, foreign auto makers have built cars in China through joint ventures with local manufacturers. That allows them to avoid the 25% tariff on autos, but also forces them to split profits, and potentially share technology, with the local partner—something that has tripped up Tesla’s previous efforts to expand there.
Under current rules, the cars Tesla builds in the free-trade zone would still count as imports and incur the tariff. Auto analysts in Shanghai doubt the Chinese government has any incentive to give Tesla special treatment.
“Government regulators examine every deal and try not to set a precedent,” said Bill Russo, chief executive of Automobility, a Shanghai-based consultancy, and a former Chrysler executive. “Whatever deal Tesla gets, others will want it too.”
A plant in Shanghai’s free-trade zone still has clear benefits, Mr. Russo said. It would give Tesla a base from which to export to the region, while offering proximity to the Chinese supply chain, thereby lowering production costs and the sale price of Tesla cars sold there. Today, a Tesla costs roughly 50% more in China than it does in the U.S.
Manufacturing in Shanghai would also put Tesla in good standing with the Chinese government, said Michael Dunne, an auto-industry consultant who spent years in Asia. Having Tesla cars built on Chinese soil would please Beijing officials, he said, which “in turn, will give Tesla goodwill leverage to negotiate better China market-access terms in the future.”
The auto maker reported more than $1 billion in revenue in China for 2016 on sales of roughly 11,000 imported vehicles, representing about 15% of total revenue. Sales in China were up from about $319 million in 2015.
In June, Tesla revealed it was in talks with the Shanghai government about the possibility of opening a factory and reiterated that it aims to define its China production plans by year’s end. A month earlier, Chief Executive Elon Musk cryptically had told analysts that a change in China rules would be “good timing.”
Mr. Musk has said Tesla could cut prices in China by one-third by reducing shipping costs and avoiding import duties.
Mr. Musk has previously signaled a desire to expand manufacturing capabilities in China and Europe. The company, which manufactures its vehicles in Fremont, Calif., does final assembly at a facility in Tilburg, Netherlands, for the European market.
Fremont is currently under pressure to expand manufacturing capacity to meet Mr. Musk’s ambitious goals of making 10,000 Model 3 sedans a week by the end of next year. The Model 3, priced starting at $35,000, is part of his vision for expanding the auto maker beyond selling luxury niche vehicles.
While the cost of introducing the new vehicle has left the auto maker with little cash to spare, investors’ enthusiasm for Mr. Musk’s vision has helped push shares of the company up more than 50% this year so far, propelling Tesla’s market value to rival General Motors Co.’s .
Chinese internet company Tencent Holdings Ltd. acquired a 5% stake in Tesla in March, giving Mr. Musk a powerful ally in China....
YANGON — The Industrial and Commercial Bank of China (ICBC) has been helping Myanmar in development of the country's banking and monetary services by nurturing skilled banking personnel, He Biqing, general manager of ICBC's Yangon branch, has said.
Speaking here at the opening of the "Belt and Road, Golden Myanmar" Financial Services Summit, he said that being one of the world's largest banks, ICBC would like to assist Myanmar with its work skill and profession for the development of the country's banking and monetary sector as 80 percent of the bank staff are from Myanmar.
The meeting took place at a time when Myanmar is experiencing an economic reform and ICBC would like to discuss and exchange the experiences with its Myanmar counterparts, he added.
Noting that economic and trade undertakings between Myanmar and China have been continuously increasing, Myanmar Minister of Commerce Than Myint expressed recognition of China as Myanmar's largest foreign investor which has always supported the country's reform, inviting more investment from China for the development of its banking and monetary sector.
Chinese Ambassador Hong Liang said there exists many economic opportunities with Myanmar, and he recalled State Counselor Aung San Suu Kyi attended the Belt and Road Forum for International Cooperation held in China in May, expressing the hope for further enhancement of "Paukphaw" (fraternal) friendship between the two countries.
Two of Central Asia's rarest species, Przewalski's Horse and the Gobi Bear, should be protected with stricter conservation measures, experts said ahead of an international conference in Manila.
The numbers of these two species is dwindling, prompting the government of Mongolia to ask for them to be given the highest protection status at the conference, organizers of the Convention on Migratory Species (CMS) said in a press statement on Sunday.
The meeting is taking place from Monday in the Philippine capital, organized by the country's environment ministry as well as other partners including the United Nations Environment Program.
The rapid demise of the reddish-brown Przewalski's Horse, which used to roam the vast plains of western Mongolia and northern China, has been largely due to severe winters.
There are only about 45 remaining Gobi Bears, a small bear regarded as a national treasure by Mongolians. They are found only in the extreme hot or cold environment of the Gobi Desert and there are none in captivity, the organizers said.
‘Conserving these species requires coordinated planning across borders with a commitment to eliminate barriers to migration, protect habitat from degradation and fight poaching and illegal trade,’ the statement said.
Ulaanbaatar /MONTSAME/ The Asian Development Bank (ADB) and the Government of Mongolia signed two technical assistance (TA) agreements totaling $1.6 million to support the preparation of the country’s health and education sector master plans on October 20.
The Ministry of Finance’s Director General Dorjsembed Batsengee, and ADB Country Director Yolanda Fernandez Lommen signed the agreements at a ceremony in Ulaanbaatar. Additional co-signatories and witnesses included First Secretary Hiroshi Fukasawa of the Embassy of Japan in Mongolia, the Ministry of Education, Culture, Science and Sports’ State Secretary J. Bolormaa and the Ministry of Health’s Director General D. Tumurtogoo.
“The projects will help the Government of Mongolia develop a long-term plan for the health and education sectors to realize the goals established in Mongolia’s Sustainable Development Vision 2030,” said Ms. Fernandez Lommen. “Ensuring all major stakeholders are engaged in the development of new health and education sector master plans is one of the key objectives of the projects. The projects are consistent with ADB’s 2017-2020 Mongolia country partnership strategy, which aims to help the government provide better social services.”
The two projects are financed by the Government of Japan through the Japan Fund for Poverty Reduction (JFPR), which has supported 50 projects focused on poverty alleviation, livelihood improvement, and environmental protection in Mongolia over the past 18 years.
The TA on the health sector will assess previous master plan and major sector reforms, define core strategies in priority areas, establish a stakeholder’s consultation and coordination mechanism, and develop a midterm expenditure framework, financial, and investment plans.
Under the project, the Institutional and Human Resource Capacity Building Program will provide formal and on-the-job training to help officials at the Ministry of Health and local governments improve policy planning and implementation coordination.
The education sector TA, meanwhile, will help the Ministry of Education, Culture, Science, and Sports and associated institutions manage and coordinate the process of developing, implementing, and monitoring an education sector master plan.
The TA will draw on in-depth education sector studies in Mongolia and reviews of international experience and lessons. Stakeholders and development partners will jointly review and discuss progress in the sector and identify priority policy and reform actions, physical investments, and institutional capacity development.
ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, ADB is celebrating 50 years of development partnership in the region. It is owned by 67 members—48 from the region. In 2016, ADB assistance totaled $31.7 billion, including $14 billion in co-financing....
NEW YORK (Reuters) - JPMorgan Chase & Co has partnered with data analytics start-up Mosaic Smart Data to help its fixed-income sales and trading business become more profitable.The bank, whose fixed-income trading revenue slumped last quarter, has signed a multi-year deal to use Mosaic Smart Data’s technology division globally, the companies said in a joint statement released on Sunday.
The London-based start-up has developed technology that aggregates and analyzes vast amounts of data from the fixed-income trading division of investment banks to help them make more informed decisions and gain a competitive edge.
That includes helping traders decide which clients to focus on in a given day or enabling management to assess which trader, or trading desk has been performing better.
The partnership underscores the growing demand by banks for technology that can help them gain greater insight from the large quantity of data they produce and store.
“One of the key things the banks are starting to realize is that some of their biggest competitive advantages are locked within their data,” said Matthew Hodgson, Mosaic Smart Data’s founder and chief executive.
Banks are seeking solutions to deal with a liquidity crunch in fixed-income markets. Stricter capital requirements imposed after the 2008 financial crisis have made it more expensive for banks to act as market makers in corporate bonds, leading their fixed-income divisions to slump.
JP Morgan’s fixed-income markets revenue fell 27 percent in the three months ended in September, compared with the same period last year.
Troy Rohrbaugh, global head of macro at JPMorgan, said in a statement that Mosaic Smart Data’s technology could make the bank’s teams “quickly make better informed decisions.”
Mosaic Smart Data is the first company to complete JPMorgan’s “In-Residence” program for fintech start-ups, which was launched in 2016. The program gives young fintech companies support in helping commercialize their products and services.
Hodgson said the idea for the company came from his own experience heading trading at large banks.
“The problem banks face is how do you run your business and understand everything in real time, whether it is research or inventory, and be able to anticipate rather than react to client needs,” he said.
While Phoenix-based Freeport McMoRan remains at loggerheads with the Indonesian government over selling a majority stake in its Grasberg mine in the remote Papua province, Rio Tinto is reported to be seeking an out sooner rather than later.
Bloomberg reports Melbourne-based Rio has held talks with a number of Indonesian groups about exiting its interest in the Grasberg mine which this year is on track to produce more than 450,000 tonnes of copper (compared to Rio's target of around 470,000 tonnes in 2017 across its operations) and a staggering 1.6m ounces of gold.
Rio’s deal with Freeport was struck in 1995 and entitles Rio to a 40% share of production when certain output levels are hit. But as a result of strikes and other disruptions and as the open pit at Grasberg nears the end of its life, Rio hasn’t seen any benefit since 2014.
Apart from building smelters in the Asian nation, Freeport has committed to spending $1 billion per year for the next five years to move operations underground with block-cave mining set to commence in early 2019. After 2021 Rio gets the 40% share on all production, but in an interview with Bloomberg last month Rio CEO Jean-Sebastien Jacques said for the company to commit to any spending in Indonesia “an investment would need to prove more valuable than competing opportunities”.
Indonesia has also told Freeport, which under the divestment framework retains operational control until 2041, that it would prefer that the joint venture with Rio be concluded ahead of the stake stale, something Freeport has rejected.
Freeport has been mining at Grasberg since the early 1970s and currently owns just over 90% of the local subsidiary PT-FI operating the mine. Freeport has been in negotiations to sell down its stake for the better part of a decade, but talks have repeatedly broken down over valuation.
Last year, Freeport offered a 10.6% stake in PT-FI that valued Grasberg at $16.2 billion. Jakarta’s counter offer was $630 million. The government is arguing that Grasberg's reserves belong to the state and not the mine operator. Freeport estimates Grasberg's underground reserves currently being developed at 11.8m tonnes of copper and 24m ounces of gold.
Britain's five biggest business lobby groups are calling for an urgent Brexit transition deal, or they warn the UK risks losing jobs and investment.
In a joint letter being sent to Brexit Secretary David Davis, the groups, including the Institute of Directors and CBI, will say time is running out.
Sources told the BBC the letter is still in draft form, but will be sent in the next day or two.
A government spokesman said the talks were "making real, tangible progress".
The other lobby groups backing the letter are the British Chambers of Commerce, the Federation of Small Businesses, and the EEF manufacturing body.
Together they represent companies employing millions of workers.
There has been a growing anxiety among businesses at what they see as a lack of progress in the Brexit negotiations.
One of the five groups told the BBC it was felt a joint letter would "emphasise our wish for a deal and clarity".
They say it is important that the Brexit transition period matches as closely as possible current trading arrangements with the EU.
Theresa May has suggested a period of about two years, with the UK and EU trading on broadly similar terms to now and payments to Brussels to meet Britain's budget commitments.
But although EU negotiators have agreed to start preliminary work on a future relationship, they still want more concessions on the UK's so-called "divorce payment" before starting talks on trade and transition.
Sky News and the Guardian reported they had seen the draft letter, which says an agreement on a transition "is needed as soon as possible, as companies are preparing to make serious decisions at the start of 2018, which will have consequences for jobs and investment in the UK".
The letter reportedly adds: "It is vital that companies only have to undertake one adjustment as a result of the UK's withdrawal, not two - and that businesses, the UK government and authorities in the EU have enough time to make the changes needed to deliver Brexit successfully."
The BBC understands that the business groups want the contents of the letter to remain private.
Concern about the loss of UK jobs and investment was underlined last week when the boss of investment banking giant Goldman Sachs, Lloyd Blankfein, tweeted that he will be "spending a lot more time" in Frankfurt.
Goldman, which employs about 6,000 people in London, is building up its presence in the German financial city ahead of Brexit.
Earlier this month, the deputy governor of the Bank of England, Sam Woods, warned that the UK and the EU must agree a transition deal by Christmas or companies would start triggering contingency plans.
And in a survey released on Monday, the EEF said that Brexit uncertainty was holding back the plans of manufacturing firms to invest in new plant and machinery.
The EEF said the outlook for investment among its members was "finely balanced", with 51% intending to spend more in the next two years. For the rest, uncertainty over the UK's exit from the EU was holding back planned spending.
Mr Davis is due to travel to Paris for Brexit talks on Monday after France appeared to emerge as the most hardline EU member state when it comes to the divorce bill.
The prime minister is also due to update the Commons on Monday on the progress made during last week's summit of EU leaders in Brussels.
It is thought that Mrs May will say that negotiations are "deeply technical", but she has not forgotten that the lives of millions of people are at the heart of the process.
A spokesman for the Department for Exiting the European Union said the prime minister proposed a strictly time-limited implementation period in her Florence speech and had been clear that agreeing this principle early in the process would minimise unnecessary disruption to businesses.
He said: "We are making real and tangible progress in a number of vital areas in negotiations. However, many of the issues that remain are linked to the discussions we need to have on our future relationship.
"That is why we are pleased that the EU has now agreed to start internal preparatory discussions on the framework for transitional arrangements as well as our future partnership."
While true that Mongolia’s economy is heavily dependent on fluctuating coal and copper prices, it is also true that the country’s political parties increasingly influence economic outcomes.
According to The Asia Foundation’s annual survey on perceptions of corruption in Mongolia, in 2010, political parties ranked fifth on a list of the 16 most corrupt entities. By 2017, political parties had reached second place, just behind the Land Affairs Authority.
The findings point to a worrying trend: as the amount of money needed to win an election increases, political parties are looking to “secret, private” donors, giving rise to questions of transparency and fairness in the electoral process. Economists argue that if this pattern continues, it will negatively affect Mongolia’s investment patterns and economic performance.
27 years after the revolution that would lead the Mongolia to a democratic form of government, the country faces social and economic issues that have yet to be resolved. Mongolia’s current poverty issues are mostly connected to its climate and natural disasters such as severe snow storms over the winter and droughts during the summer. The characteristic nomadic way of living is slowly fading because of how animals, as well as their owners, are gravely affected by such climate conditions.
As a country whose economy relies on agriculture and cattle raising, such natural impacts destroy Mongolia’s economy from the root. Thus, Mongolia’s poverty is higher in the rural areas than in major cities.
The Red Cross has been successfully helping Mongolia’s population during the “dzud,” a natural disaster seen only in Mongolia that is distinguished by its severe low temperatures. 2010 was the culminating point, when eight million animals were killed by the natural phenomenon.
By working hand in hand with families within the affected communities, the Red Cross has provided supplies, shelter, physical and emotional support throughout 17 different provinces across Mongolia.
But the different ways of how to help people in Mongolia encompass more than the effects of extreme weather, and therefore have to be tackled with a variety of concepts and strategies.
The United Nations has been working with Mongolia and its citizens to develop an integrated national system as well as macroeconomic plans, which were previously lacking. These strategies have decreased unemployment and reduced poverty due to their economic impact in the country.
The organization People in Need have been working with the country of Mongolia for decades. The NGO ensures access to healthcare for habitants in remote locations, distributes food around the country and helps rebuild rural areas after harsh weather events, among other forms of aid.
How to help people in Mongolia is a question with a simple answer. Creating and spreading awareness is key, and the companies mentioned above and many more are successfully doing this every day. There is hope for Mongolia.
ULAN BATOR, Oct. 19 (Xinhua) -- Nearly one in three Mongolians were living in poverty in 2016, according to a report released on Thursday.
The report, titled "Poverty Situation -- 2016" and released by Mongolia's National Statistical Office and the World Bank, found that the poverty rate increased by eight percentage points from that of 2014 to hit 29.6 percent.
It means that nearly a million Mongolians out of a population of 3 million were living in poverty.
Mongolia's economic growth has been slowing in recent years. Growth was 7.9 percent in 2014 but fell to 1.2 percent last year.