S&P 500 hits all-time high on trade optimism

FILE PHOTO: Traders work on the main trading floor after the opening bell at New York Stock Exchange (NYSE) in New York, U.S. June 20, 2019. REUTERS/Brendan McDermid/File Photo

By Amy Caren Daniel and Shreyashi Sanyal

(Reuters) – The S&P 500 touched a record high for the second straight session on Friday as hopes of trade talks between Washington and Beijing were lifted by U.S. Vice President Mike Pence’s decision to defer a planned speech on China policy.

The decision was taken amid “positive signs” that trade talks with China could be back on track, the Wall Street Journal reported, citing a senior administration official.

The benchmark S&P 500 index hit an intraday high of 2,964.15 on Friday, but retreated into a tight range as rising tensions between the United States and Iran kept investors on edge.

The United States and China have said they would restart their trade talks after a lull at the Group of 20 summit in Japan next week.

“Investors are cautiously optimistic about the G20 summit. If they make progress then markets will celebrate that,” said Michael Antonelli, market strategist at Robert W. Baird in Milwaukee.

Stocks are now set to log their third straight week of gains, after posting their worst monthly performance this year in May on fears the prolonged trade war would hit global economic growth.

U.S. President Donald Trump said on Friday he aborted a military strike on Iran in response to Teheran downing a U.S. drone, but the possibility of a U.S. retaliation pushed crude prices higher and helped lift the energy sector by 0.49%. [O/R]

Traders also pointed to higher volatility during Friday’s session on account of “quadruple witching,” as investors unwind interests in futures and options contracts prior to expiration.

At 13:09 p.m. ET, the Dow Jones Industrial Average was up 45.72 points, or 0.17%, at 26,798.89 and the S&P 500 was down 0.53 points, or 0.02%, at 2,953.65.

The Nasdaq Composite was down 7.13 points, or 0.09%, at 8,044.21.

The tech-heavy index was weighed down by a 2.02% fall in PayPal Holdings Inc after the digital payments company said its chief operating officer Bill Ready would step down.

CarMax Inc rose as much as 6% to a record high after the used-vehicles retailer posted quarterly results above analysts’ expectations.

Carnival Corp fell for the second day, down 4.53%, and among the biggest decliners. Several brokerages trimmed their price targets after the cruise operator cut its 2019 profit forecast.

Declining issues outnumbered advancers for a 1.47-to-1 ratio on the NYSE and for a 1.71-to-1 ratio on the Nasdaq.

The S&P index recorded 33 new 52-week highs and two new lows, while the Nasdaq recorded 42 new highs and 49 new lows.

(Reporting by Amy Caren Daniel and Shreyashi Sanyal in Bengaluru; Editing by Sriraj Kalluvila)

Black-clad, anti-extradition protesters singing “Hallelujah to the Lord” flood streets of Hong Kong

Protesters gather outside police headquarters in Hong Kong, China June 21, 2019. REUTERS/Ann Wang

By Jessie Pang and Clare Jim

HONG KONG (Reuters) – Thousands of demonstrators blockaded police headquarters on Friday as Asia’s leading financial center braced itself for a third weekend of mass protests against an extradition bill that has plunged the Chinese-ruled city into crisis.

Groups of mostly students wearing hard hats, goggles and face masks set up roadblocks and trapped vehicles in a generally peaceful protest to demand that leader Carrie Lam, who promoted and then postponed the bill, scrap it altogether.

“Having people here is giving pressure to the government that we don’t agree with your extradition plans,” said student Edison Ng, who was protesting in sweltering heat of about 32 degrees Celsius (90F).

“It is not clear how long we will stay… To go or not to go, (the) people will decide,” he added.

The protests, which pose the greatest popular challenge to Chinese President Xi Jinping since he took power in 2012, once again forced the temporary closure of Hong Kong government offices over security concerns.

Roads that would normally be jammed with traffic near the heart of the former British colony were empty, with demonstrators reinforcing roadblocks with metal barriers.

“Never surrender,” echoed through the streets as the protesters chanted near police headquarters and called on police chief Stephen Lo to step down.

Riot police armed with helmets and shields appeared from the balcony of police headquarters but withdrew back inside after heavy chanting from the crowd. Police warned activists through loud hailers not to charge.

Thousands remained outside government buildings on Friday night, with the majority sitting peacefully and spraying each other with water to keep cool. Nearby, a large group sang “Sing Hallelujah to the Lord”, which has emerged as the unlikely anthem of the protests.

Hong Kong returned to Chinese rule in 1997, since when it has been governed under a “one country, two systems” formula that allows freedoms not enjoyed in mainland China, including a much-cherished independent judiciary.

Millions of people, fearing further erosion of those freedoms, have clogged the streets of the Asian financial center this month to rally against the bill, which would allow people to be extradited to the mainland to face trial in courts controlled by the Communist Party.

It triggered the most violent protests in decades when police fired rubber bullets and tear gas to disperse the crowds. Beijing’s squeeze sparked pro-democracy protests in 2014 that paralyzed parts of the city for 79 days.

Many accuse China of obstructing democratic reforms, interfering with elections and of being behind the disappearance of five Hong Kong-based booksellers, starting in 2015, who specialized in works critical of Chinese leaders.

Friday’s marchers demanded that the government drop all charges against those arrested in last week’s clashes, charge police with what they describe as violent action and stop referring to the protests as a riot.

A small group of demonstrators hurled eggs at police outside the headquarters to protest against police violence. Amnesty International in a statement on Friday that evidence of unlawful use of force by police during the June 12 protest was “irrefutable”.

The government in a statement late on Friday said the protests had caused much disruption and appealed to protesters to act peacefully and rationally. With regard to the bill, it said the government had put a stop to legislation on the matter.

“SINCERE AND HUMBLE ATTITUDE”

Opponents of the extradition bill fear the law could put them at the mercy of the mainland Chinese justice system which is plagued by torture, forced confessions and arbitrary detentions.

The turmoil has also raised questions over Lam’s ability to govern, two years after she was selected and pledged to “unite and move forward”.

Justice Secretary Teresa Cheng became the latest government minister to apologize over the bill.

“Regarding the controversies and disputes in society arising from the strife in the past few months, being a team member of the government, I offer my sincere apology to all people of Hong Kong,” Cheng wrote in her blog.

“We promise to adopt a most sincere and humble attitude to accept criticisms and make improvements in serving the public.”

While Lam admitted shortcomings over the bill and said she had heard the people “loud and clear”, she has rejected repeated calls to step down.

Concerns over the bill spread quickly, from democratic and human rights groups to the wider Hong Kong community, including pro-establishment business figures, some usually loath to contradict the government. Some Hong Kong tycoons have started moving personal wealth offshore.

Hong Kong’s Bar Association said in a statement that it was asking the government to withdraw the extradition bill and make a commitment that any legislation would not proceed without having a full and open consultation.

Protesters had gathered early on Friday outside government offices before marching toward police headquarters. One activist read a letter of support from a Taiwan student.

“Brave HKers, perhaps when faced with adversity, we are all fragile and small, but please do not give up defending everything that you love,” the protester read through a loud hailer to applause.

Beijing has never renounced the use of force to take over self-ruled Taiwan, which it regards as a recalcitrant, breakaway province. Many have waved Taiwan flags at recent demonstrations in Hong Kong, images certain to rile authorities in Beijing.

Taiwan, overwhelmingly opposed to a “one country, two systems” formula for itself, has voiced support for Hong Kong.

(Additional reporting by Jessie Pang, Vimvam Tong, Clare Jim, Anne Marie Roantree, Farah Master, Twinnie Siu, Sijia Jiang Felix Tam, Ryan Chang; Writing by Anne Marie Roantree and Farah Master; Editing by Clarence Fernandez; Nick Macfie and Toby Chopra)

Hong Kong leader signals end to extradition bill but refuses to quit

Pro-democracy activists Nathan Law, Joshua Wong and Agnes Chow attend a news conference regarding the proposed extradition bill, outside the Legislative Council building in Hong Kong, China June 18, 2019. REUTERS/Tyrone Siu

By Clare Jim and Noah Sin

HONG KONG (Reuters) – Hong Kong leader Carrie Lam on Tuesday signaled the end of a controversial extradition bill that she promoted and then postponed after some of the most violent protests since the former British colony returned to Chinese rule in 1997.

In a closely watched press conference, Lam apologized for the turmoil but refused to say the bill would be “withdrawn”, only that it wouldn’t be re-introduced during her time in office if public fears persist.

This was the strongest indicator yet that the government was effectively shelving legislation that would allow people to be extradited to mainland China to face trial, even if it fell short of protester demands for the government to scrap the bill altogether.

“Because this bill over the past few months has caused so much anxiety, and worries and differences in opinion, I will not, this is an undertaking, I will not proceed again with this legislative exercise if these fears and anxieties cannot be adequately addressed,” Lam told reporters.

Lam, appearing both contrite and defiant, used much of the same language as a previous press conference on Saturday when she announced a postponement of the bill. A day later, about two million people spilled on to the streets, many demanding that she step down.

Lam, asked repeatedly whether she would quit, refused to do so, saying there remained important work ahead in the next three years, which would bring her to the end of her current five-year term of office.

“After this incident, I think work in the next three years will be very difficult … but myself and my team will work harder to rebuild public confidence.”

Lam apologized for plunging the city into major upheaval, saying she had heard the people “loud and clear” and would try to rebuild trust.

But some protest organizers and opposition Democrats said Lam remained tone-deaf to public demands, namely that she state categorically a retraction of the bill, step down immediately and pledge not to prosecute any protesters on rioting charges.

“Carrie Lam is continuing to lie,” said Jimmy Sham, the convener of the Civil Human Rights Front. “We hope the people of Hong Kong can unite with us … to keep working hard to withdraw the evil law,” he told reporters.

Alvin Yeung, a Democratic lawmaker, said Lam had failed again to lower the political temperature in the city of seven million.

“Hong Kong will not accept this,” he said.

Lam’s climb-down, with the approval of China’s Communist Party leaders, was the biggest policy reversal since 1997 and presented a new challenge for Chinese President Xi Jinping who has ruled with an iron fist since taking power in 2012.

Since the proposed amendments to the Fugitives Offenders’ Ordinance were first put to the legislature in February, Lam has repeatedly rebuffed concerns voiced in many quarters, including business groups, lawyers, judges, and foreign governments against the bill.

Critics say the bill would undermine Hong Kong’s independent judiciary and rule of law, guaranteed by the “one country, two systems” formula under which Hong Kong returned to China, by extending China’s reach into the city and allowing individuals to be arbitrarily sent back to China where they couldn’t be guaranteed a fair trial.

Chinese courts are ultimately controlled by the Communist Party.

Lam issued an apology on Sunday night through a written government statement that many people said lacked sincerity. It failed to pacify many marchers who said they no longer trusted her and doubted her ability to govern.

Lam, a career civil-servant known as “the fighter” for her straight-shooting and tough leadership style, took office two years ago pledging to heal a divided society. Some observers say she is unlikely to step down immediately but any longer-term political ambitions she may have harbored are now all but dead.

(Reporting by Clare Jim, Noah Sin, Twinnie Siu, Anne Marie Roantree and Hong Kong newsroom; Writing by James Pomfret; Editing by Nick Macfie)

Don’t open ‘Pandora’s Box’ in Middle East, China warns

FILE PHOTO: Chinese Foreign Minister Wang Yi attends a news conference with Cuban Foreign Minister Bruno Rodriguez (not pictured) at Diaoyutai state guesthouse in Beijing, China May 29, 2019. REUTERS/Florence Lo

By Ben Blanchard

BEIJING (Reuters) – The Chinese government’s top diplomat warned on Tuesday that the world should not open a “Pandora’s Box” in the Middle East, as he denounced U.S. pressure on Iran and called on it not to drop out of a landmark nuclear deal.

Fears of a confrontation between Iran and the United States have mounted since last Thursday when two oil tankers were attacked in the Gulf of Oman.

The United States blamed Iran for the attacks, more than a year after President Donald Trump withdrew from a 2015 Iran nuclear deal.

Iran denied involvement in the tanker attacks and said on Monday it would soon breach limits on how much enriched uranium it can stockpile under the deal, which had sought to limit its nuclear capabilities.

Acting U.S. Defense Secretary Patrick Shanahan announced on the same day the deployment of about 1,000 more troops to the Middle East for what he said were defensive purposes, citing concerns about a threat from Iran.

Speaking in Beijing after meeting Syria’s foreign minister, Chinese State Councillor Wang Yi said the United States should not use “extreme pressure” to resolve issues with Iran.

Wang told reporters that China was “of course, very concerned” about the situation in the Gulf and with Iran, and called on all sides to ease tension and not head towards a clash.

“We call on all sides to remain rational and exercise restraint, and not take any escalatory actions that irritate regional tensions, and not open a Pandora’s box,” Wang said.

“In particular, the U.S. side should alter its extreme pressure methods,” Wang said.

“Any unilateral behavior has no basis in international law. Not only will it not resolve the problem, it will only create an even greater crisis.”

Wang also said that the Iran nuclear deal was the only feasible way to resolve its nuclear issue, and he urged Iran to be prudent.

“We understand that relevant parties may have different concerns but first of all the comprehensive nuclear deal should be properly implemented,” he added. “We hope that Iran is cautious with its decision-making and not lightly abandon this agreement.”

At the same time, China hopes other parties respect Iran’s legitimate lawful rights and interests, Wang said.

China and Iran have close energy ties, and China has been angered by U.S. threats against countries and companies that violate U.S. sanctions by importing Iranian oil, including Chinese firms.

China has had to walk a fine line as it has also been cultivating relations with Iran’s regional rival, Saudi Arabia, the Asian giant’s top oil supplier.

Iran’s foreign minister has visited China twice this year already. Saudi Arabia’s crown prince has also visited Beijing this year.

(Reporting by Ben Blanchard; Writing by Se Young Lee and Michael Martina; Editing by Clarence Fernandez, Robert Birsel)

Hong Kong leader says sorry as protesters insist she quits

Protesters attend a demonstration demanding Hong Kong's leaders to step down and withdraw the extradition bill, in Hong Kong, China, June 16, 2019. REUTERS/Tyrone Siu

By James Pomfret and Farah Master

HONG KONG (Reuters) – Hong Kong’s leader Carrie Lam apologized to its people on Sunday as an estimated 1 million-plus black-clad protesters insisted that she resign over her handling of a bill that would allow citizens to be sent to mainland China for trial.

Organizers said almost 2 million turned out on Sunday to demand that chief executive Lam step down in what is becoming the most significant challenge to China’s relationship with the territory since it was handed back by Britain 22 years ago.

Sunday’s demonstration came in spite of Lam indefinitely delaying – though not withdrawing – the bill on Saturday in a dramatic climbdown that threw into question her ability to continue to lead the city.

On Sunday, she apologized for the way the government had handled the draft law, which had been scheduled for debate last Wednesday, but gave no further insight into its fate.

Organizers pressed ahead with the protest to demand the bill’s full withdrawal, as well as to mark their anger at the way police handled a demonstration against it on Wednesday, when more than 70 people were injured by rubber bullets and tear gas.

Some of Sunday’s marchers held signs saying, “Do not shoot, we are HongKonger.”

Police said the demonstration reached 338,000 at its peak. Organizers and police have routinely produced vastly different estimates at recent demonstrations.

Organizers estimated a protest the week before drew 1 million while police said 240,000.

“It’s much bigger today. Many more people,” said one protester who gave her name as Ms Wong. “I came today because of what happened on Wednesday, with the police violence.”

Loud cheers rang out when activists called through loud hailers for Lam’s resignation and the cry “step down” echoed through the streets.

“(An) apology is not enough,” said demonstrator Victor Li, 19.

‘SHORTING’ CARRIE LAM

The protests have plunged Hong Kong into political crisis, heaping pressure on Lam’s administration and her official backers in Beijing.

Critics say the planned extradition law could threaten Hong Kong’s rule of law and its international reputation as an Asian financial hub. Some Hong Kong tycoons have already started moving personal wealth offshore.

U.S. Secretary of State Mike Pompeo said President Trump would raise the issue of Hong Kong human rights at a potential meeting with president Xi Jinping at the G20 summit in Japan this month.

In a blog post published on Sunday, Hong Kong Financial Secretary Paul Chan sought to play down the impact of the protests.

“Even if the external environment continues to be unclear and the social atmosphere is tense recently, overall Hong Kong’s economic and financial markets are still operating in a stable and orderly manner,” he wrote.

Activist investor David Webb, in a newsletter on Sunday, said if Lam was a stock he would recommend shorting her with a target price of zero.

“Call it the Carrie trade. She has irrevocably lost the public’s trust,” Webb said. “Her minders in Beijing, while expressing public support for now, have clearly lined her up for the chop.”

In another indication of a possible shift of mood in the Chinese capital, a leader of the pro-democracy “Occupy” demonstrations that galvanized Hong Kong in 2014 appeared set to be released from jail.

Joshua Wong’s pro-democracy Demosisto movement said he would be freed on Monday.

Chinese censors have been working hard to erase or block news of the latest series of protests -the largest since crowds demonstrated against the bloody suppression of pro-democracy activists in and around Beijing’s Tiananmen Square in June 1989 – amid concerns that any large public rallies could inspire demonstrations on the mainland.

Pompeo said in an interview with “Fox News Sunday” he was sure the protests would be among the issues that Trump and Xi will discuss.

“We’re watching the people of Hong Kong speak about the things they value, and we’ll see what Lam’s decision is in the coming days and weeks,” Pompeo said.

Last week U.S. lawmakers introduced legislation that would require the U.S. government to certify Hong Kong’s autonomy from China each year in order to continue the special treatment the city gets under the U.S. Hong Kong Policy Act of 1992.

ONE COUNTRY TWO SYSTEMS

The city’s independent legal system was guaranteed under laws governing Hong Kong’s return from British to Chinese rule and is seen by business and diplomatic communities as its strongest asset.

Hong Kong has been governed under a “one country, two systems” formula since then, allowing freedoms not enjoyed in mainland China but not a fully democratic vote.

Many accuse Beijing of extensive meddling, including obstruction of democratic reforms, interference with elections and of being behind the disappearance of five Hong Kong-based booksellers, starting in 2015, who specialized in works critical of Chinese leaders.

Asked repeatedly on Saturday if she would step down, Lam avoided answering directly and appealed to the public to “give us another chance.”

Her reversal was hailed by business groups including the American Chamber of Commerce, which had spoken out strongly against the bill, and overseas governments.

The UK Foreign Secretary Jeremy Hunt said on Twitter: “Well done HK Government for heeding concerns of the brave citizens who have stood up for their human rights”.

In the self-ruled island of Taiwan, which China claims as its own, about 5,000 people rallied outside the parliament building in Taipei with banners saying, “No China extradition law” and “Taiwan supports Hong Kong.”

Some of the protesters in Hong Kong also waved Taiwan flags.

China’s top newspaper, the People’s Daily, on Sunday condemned “anti-China lackeys” of foreign forces in Hong Kong.

Lam had argued that the extradition law was necessary to prevent criminals hiding in Hong Kong and that human rights would be protected by the city’s courts which would decide on any extradition on a case-by-case basis.

Critics, including leading lawyers and rights groups, have noted China’s justice system is controlled by the Communist Party, and say it is marked by torture and forced confessions, arbitrary detention and poor access to lawyers.

(Reporting by Alun John, Jessie Pang, James Pomfret, John Ruwitch, Marius Zaharia, Anne Marie Roantree, Felix Tam, Twinnie Siu, Clare Jim, Noah Sin, Farah Master; Additional reporting by by Richard Cowan in Washington, Ben Blanchard in Beijing and Fabian Hamacher in Taipei; Writing by Anne Marie Roantree and Jennifer Hughes; Editing by Michael Perry and John Stonestreet)

Chinese raids hit North Korean defectors’ ‘Underground Railroad’

Photo sheets of the North Korean refugees helped by the North Korea Refugees Human Rights Association of Korea are displayed in Seoul, South Korea, June 11, 2019. REUTERS/Josh Smith

By Josh Smith and Joyce Lee

SEOUL (Reuters) – A decade after leaving her family behind to flee North Korea, the defector was overwhelmed with excitement when she spoke to her 22-year-old son on the phone for the first time in May after he too escaped into China.

While speaking to him again on the phone days later, however, she listened in horror as the safe house where her son and four other North Korean escapees were hiding was raided by Chinese authorities.

“I heard voices, someone saying ‘shut up’ in Chinese,” said the woman, who spoke on condition of anonymity to protect her son’s safety. “Then the line was cut off, and I heard later he was caught.”

The woman, now living in South Korea, said she heard rumors her son is being held in a Chinese prison near the North Korean border, but has had no official news of his whereabouts.

At least 30 North Korean escapees have been rounded up in a string of raids across China since mid-April, according to family members and activist groups.

It is not clear whether this is part of a larger crackdown by China, but activists say the raids have disrupted parts of the informal network of brokers, charities, and middlemen who have been dubbed the North Korean “Underground Railroad”.

“The crackdown is severe,” said Y. H. Kim, chairman of the North Korea Refugees Human Rights Association of Korea.

Most worrisome for activists is that the arrests largely occurred away from the North Korean border – an area dubbed the “red zone” where most escapees get caught – and included rare raids on at least two safe houses.

“Raiding a house? I’ve only seen two or three times,” said Kim, who left North Korea in 1988 and has acted as a middleman for the past 15 years, connecting donors with brokers who help defectors.

“You get caught on the way, you get caught moving. But getting caught at a home, you can count on one hand.”

The increase in arrests is likely driven by multiple factors, including deteriorating economic conditions in North Korea and China’s concern about the potential for a big influx of refugees, said Kim Seung-eun, a pastor at Seoul’s Caleb Mission Church, which helps defectors escape.

“In the past, up to half a million North Korean defectors came to China,” Kim said, citing the period in the 1990s when famine struck North Korea. “A lot of these arrests have to do with China wanting to prevent this again.” 

DIVIDED FAMILIES

Kim Jeong-cheol already lost his brother trying to escape from North Korea, and now fears his sister will meet a similar fate after she was caught by Chinese authorities.

“My elder brother was caught in 2005, and he went to a political prison and was executed in North Korea,” Kim told Reuters. “That’s why my sister will surely die if she goes back there. What sin is it for a man to leave because he’s hungry and about to die?”

Reuters was unable to verify the fate of Kim’s brother or sister. Calls to the North Korean embassy in Beijing were not answered.

Activist groups and lawyers seeking to help the families say there is no sign China has deported the recently arrested North Koreans yet, and their status is unknown.

The Chinese Foreign Ministry, which does not typically acknowledge arrests of individual North Korean escapees, said it had no information about the raids or status of detainees.

“We do not know about the situation to which you are referring,” the ministry said in a statement when asked by Reuters.

North Koreans who enter China illegally because of economic reasons are not refugees, it added.

“They use illegal channels to enter China, breaking Chinese law and damaging order for China’s entry and exit management,” the ministry said. “For North Koreans who illegally enter the country, China handles them under the principled stance of domestic and international law and humanitarianism.”

South Korea’s government said it tries to ensure North Korean defectors can reach their desired destinations safely and swiftly without being forcibly sent back to the North, but declined to provide details, citing defectors’ safety and diplomatic relations.

When another woman – who also asked to be unnamed for her family’s safety – escaped from North Korea eight years ago, she promised her sister and mother she would work to bring them out later.

In January, however, her mother died of cancer, she said.

On her death bed, her mother wrote a message on her palm pleading for her remaining daughter to escape North Korea.

“It will haunt me for the rest of my life that I didn’t keep my promise,” said woman, who now lives in South Korea.

Her 27-year-old sister was in a group of four defectors who made it all the way to Nanning, near the border with Vietnam, before being caught.

“When you get there, you think you’re almost home free,” she said. “You think you’re safe.”

INCREASE IN ARRESTS

There are no hard statistics on how many North Koreans try to leave their country, but South Korea, where most defectors try to go, says the number safely arriving in the South dropped after Kim Jong Un came to power in 2011.

In 2018 about 1,137 North Korean defectors entered South Korea, compared to 2,706 in 2011.

Observers say the drop is partly because of increased security and crackdowns in both North Korea and China.

Over the past year, more cameras and updated guard posts have been seen at the border, said Kang Dong-wan, who heads an official North Korean defector resettlement organization in South Korea and often travels to the border between China and North Korea.

“Kim Jong Un’s policy itself is tightening its grip on defection,” he said. “Such changes led to stronger crackdowns in China as well.”

Under President Xi Jinping, China has also cracked down on a variety of other activities, including illicit drugs, which are sometimes smuggled by the same people who transport escapees, said one activist who asked not to be named due to the sensitive work.

North Koreans who enter China illegally face numerous threats, including from the criminal networks they often have to turn to for help.

Tens of thousands of women and girls trying to flee North Korea have been pressed into prostitution, forced marriage, or cybersex operations in China, according to a report last month by the non-profit Korea Future Initiative.

“SMASH UP NETWORKS”

An activist at another organization that helps spirit defectors out of North Korea said so far its network had not been affected, but they were concerned about networks being targeted and safe houses being raided.

“That is a bit of a different level, more targeted and acting on intelligence that they may have been sitting on to smash up networks,” he said, speaking on condition of anonymity to protect the organization’s work.

Y. H. Kim, of the Refugees Human Rights Association, said the raids raised concerns that Chinese authorities had infiltrated some smuggling networks, possibly with the aid of North Korean intelligence agents.

“I don’t know about other organizations, but no one is moving in our organization right now,” he said. “Because everyone who moves is caught.”

(Reporting by Josh Smith and Joyce Lee. Additional reporting by Ben Blanchard in Beijing and David Brunnstrom in Washington. Editing by Lincoln Feast.)

U.S. farmers experimenting with hemp as China trade war drags on

A sample of industrial hemp seeds is shown at a research station site in Haysville, Kansas, U.S., May 2, 2019. REUTERS/Julie Ingwersen

By Julie Ingwersen and David Randall

HAYSVILLE, Kansas (Reuters) – A growing number of U.S. farmers battered by low grain prices and the threat of a prolonged trade war with China are seeking salvation in a plant that until recently was illegal: hemp.

A cousin of cannabis plants that produce marijuana, hemp is used in products ranging from food to building materials and cannabidiol, or CBD oil, which is being touted as a treatment for everything from sleeplessness to acne to heart disease.

Interest in hemp picked up with the passage of the 2018 Farm Bill in December, which removed hemp from the federal Drug Enforcement Administration’s list of controlled substances and put it under the oversight of the U.S. Department of Agriculture (USDA). Unlike marijuana, industrial hemp doesn’t contain enough of the psychoactive chemical THC to give users a high.

The new rules call for the USDA to award hemp planting licenses to farmers but the agency has not yet regulated the process, meaning individual states are still issuing the licenses.

Industrial hemp plantings this year could double from the 78,176 acres seeded in 2018, said Eric Steenstra, president of advocacy group Vote Hemp. In 2017, 25,713 acres were planted on pilot programs authorized under the 2014 farm bill.

The U.S. hemp market is growing along with supply. U.S. sales of hemp reached $1.1 billion in 2018 and are projected to reach $1.9 billion by 2022, according to Vote Hemp and the Hemp Business Journal, a trade publication.

The profit potential is high: A good yield of food-grade hemp, for instance, can net farmers about $750 per acre, said Ken Anderson, founder of Prescott, Wisconsin-based hemp processor Legacy Hemp. Hemp seeds can be baked in to bread or sprinkled onto cereal or salads.

“That’s a profit that blows corn and wheat and everything else out of the water,” he said.

By comparison, soybeans bring in $150 or less per acre, and sales of the U.S. crop to China have fallen sharply since the onset of the trade war last year.

Before they can cash in on hemp, however, U.S. farmers must learn the science of producing an unfamiliar crop and wrestle with shifting regulations and other uncertainties.

“Nobody has any experience whatsoever,” said Rick Gash, 46, a businessman in Augusta, Kansas, who plans to grow his first-ever hemp crop on a horse pasture on his old family property.

NEW FRONTIER FOR REGULATION

CBD oil, which is concentrated in the hemp plant’s flowers, made up an estimated 23 percent of hemp sales in 2017, according to the Hemp Business Journal.

While the USDA oversees hemp planting, regulation of hemp products mostly falls to The Food and Drug Administration (FDA). Though the agency has not approved food and supplements containing CBD, such products are widely available and the agency has done little to curtail their sales.

Furthermore, the FDA mainly has jurisdiction over commerce between states, meaning products developed and sold locally in states that have more tolerant laws for hemp products is legal.

“To date, the FDA has only gone after people making aggressive claims – cancer treatment claims, AIDS treatment claims and the like,” said attorney Jonathan Havens, former FDA regulatory counsel and current co-chair of cannabis law practice at Saul Ewing Arnstein & Lehr.

Other CBD products with no health claims or ‘soft’ claims have drawn no federal enforcement, he said, “causing many people to confuse availability with legality.”

The FDA said in a statement to Reuters it had developed a strategy to evaluate existing CBD products and create lawful pathways for bringing them to market. The agency knows some companies are marketing products containing hemp-derived compounds in ways that violate the law but has prioritized those making unwarranted health claims for enforcement action, the FDA said.

“Our biggest concern is the marketing of products that put the health and safety of consumers at greatest risk, such as those claiming to prevent, diagnose, treat, or cure serious diseases, such as cancer,” the agency said in the statement.

CBD ICE CREAM?

Despite the uncertainty, analysts at U.S. financial services firm Cowen & Co estimate that products with CBD as an ingredient will generate $16 billion in retail sales for humans and animals in the U.S. by 2025.

Hemp seed is pictured at a salad bar at Whole Foods Market in Evanston, Illinois, U.S., June 10, 2019. REUTERS/Julie Ingwersen

Hemp seed is pictured at a salad bar at Whole Foods Market in Evanston, Illinois, U.S., June 10, 2019. REUTERS/Julie Ingwersen

Companies are also making big bets: Kroger Co, the nation’s largest grocery chain, said on Tuesday it plans to sell CBD creams, balms and oils in nearly 1,000 stores across 17 states.

Unilever Plc’s Ben & Jerry’s ice cream chain said in a May 30 statement it planned to debut CBD-infused ice cream flavors as soon as consuming the oil is “legalized at the federal level.”

In Kentucky, which launched a pilot program for hemp in 2014, farmers who used to grow tobacco are finding hemp grown for CBD oil to be a profitable alternative with a better reputation.

“When I was growing tobacco, everyone said I was growing something that’s bad for your health,” said Brian Furnish, an eighth-generation tobacco farmer. “It’s fun to grow something that is making people feel better.”

Farther west, in the U.S. midsection where farmers are more familiar with commodity crops like corn and wheat and have been more scarred by the trade war, some see hemp as a rotational crop grown on a larger scale for seed and fiber, rather than for its labor-intensive CBD oil.

Entrepreneur Rick Gash, founder and CEO of the Hemp Development Group LLC, surveys a field where he plans to grow industrial hemp near his home in Augusta, Kansas, U.S., May 3, 2019. REUTERS/Julie Ingwersen

Entrepreneur Rick Gash, founder and CEO of the Hemp Development Group LLC, surveys a field where he plans to grow industrial hemp near his home in Augusta, Kansas, U.S., May 3, 2019. REUTERS/Julie Ingwersen

EXPENSIVE SEED, HARVESTING BY HAND

The Kansas Department of Agriculture began issuing licenses to growers this spring, allowing the crop to be cultivated in the state this year for the first time in decades.

Jason Griffin, a specialist at Kansas State University, remains skeptical of the crop’s potential and cringes when he hears descriptions like ‘gold rush’ to describe it.

Beyond navigating changing regulations, expensive seed is one of many challenges that pioneering hemp farmers will face.

Special equipment for harvesting hemp may also be required, although some growers have been able to re-purpose the combines they already own. The hemp plant’s flowers are typically harvested by hand, while hemp for fiber is grown in fields and must be cut mechanically and dried in the field before storage.

Farmers are particularly dependent on the end buyers of hemp, as there are few third-party brokers to sell it as there are for other cash crops.

“You can’t just go to the local grain elevator and ask what’s your cash price for hemp grain right now,” said Legacy Hemp’s Anderson.

He often cautions farmers not to plant seeds until they have a contract with a buyer because prices vary widely. Legacy Hemp signs contracts with farmers before the planting season.

Other farmers are concerned over the long-term prospects. Montana wheat farmer Nathan Keane is growing female hemp plants exclusively for CBD oil, starting in a greenhouse and transplanting each plant later by hand.

“Honestly, I think the CBD thing is going to be a bubble,” he said. “I will ride the wave but I’m really hoping the sustainability of hemp is going to be in the grain and the fiber.”

(Reporting by Julie Ingwersen and David Randall; Additional reporting by Richa Naidu; Editing by Caroline Stauffer and Brian Thevenot)

Protesters scuffle with Hong Kong police, government offices shut

Pro-democracy legislators speak to the media demanding the Hong Kong Chief Executive Carrie Lam withdraw a controversial extradition bill outside Government House, following a day of violence over an extradition bill that would allow people to be sent to mainland China for trial, in Hong Kong, China June 13, 2019. REUTERS/Thomas Peter

By Clare Jim and Sumeet Chatterjee

HONG KONG (Reuters) – Scuffles broke out between demonstrators and police in Hong Kong on Thursday as hundreds of people kept up a protest against a planned extradition law with mainland China, a day after police fired tear gas and rubber bullets to break up big crowds.

Protests around the city’s legislature on Wednesday forced the postponement of debate on the extradition bill, which many people in Hong Kong fear will undermine freedoms and confidence in the commercial hub.

Hong Kong’s China-backed Chief Executive Carrie Lam condemned the violence and urged a swift restoration of order but has vowed to press ahead with the legislation despite the reservations about it, including within the business community.

The number of protesters milling about outside the legislature in the financial district fell overnight but rose again through the day on Thursday to about 1,000 at one stage.

They expect the legislature, which has a majority of pro-Beijing members, will try to hold the debate at some stage, though it issued a notice saying there would be no session on Thursday.

“We will be back when, and if, it comes back for discussion again,” said protester Stephen Chan, a 20-year old university student.

“We just want to preserve our energy now.”

Earlier, some protesters tried to stop police from removing their supplies of face masks and food and scuffles broke out.

Police with helmets and shields blocked overhead walkways and plainclothes officers checked commuters’ identity cards.

A clean-up got underway to clear debris like broken umbrellas, helmets, plastic water bottles and barricades from the streets after the previous day’s clashes. Police fired rubber bullets, tear gas and pepper spray on Wednesday in a series of skirmishes to clear demonstrators from the legislature.

Officials said 72 people were admitted to hospital.

Hong Kong Police Commissioner Stephen Lo said what began as a peaceful gathering on Wednesday had degenerated into a riot with protesters “acting violently in an organized manner”.

Police arrested 11 people and fired about 150 tear gas canisters at the crowd. The city’s hospital authority said a total of 81 people were injured in the protests. 22 police were injured according to Lo.

Police also later arrested two students at the University of Hong Kong after a raid on a student hall of residence, according to an official at the university. The police gave no immediate response to Reuters inquiries on what charges the students face.

In Beijing, foreign ministry spokesman Geng Shuang said the Chinese government “strongly condemns the violent behavior and we support the (Hong Kong) government in dealing with it according to law”.

‘LAWLESSNESS’

Authorities shut government offices in the financial district, which is overlooked by the towers of some of Asia’s biggest firms and hotel chains, for the rest of the week after some of the worst violence in Hong Kong in decades.

Hong Kong’s benchmark stock exchange slid as much as 1.5% on Thursday before closing down 0.1%, extending losses from the previous day.

Most roads in the business district were open on Thursday but some shops and offices were closed and banks, including Standard Chartered, Bank of China and DBS, said they had suspended branch services in the area.

Wednesday saw the third night of violence since a protest on Sunday drew what organizers said was more than a million people in the biggest street demonstration since the 1997 handover of the former British colony back to Chinese rule.

The handover included a deal to preserve special autonomy, but many Hong Kong people accuse China of extensive meddling since then, including obstruction of democratic reforms and interference in local elections.

The extradition bill, which will cover Hong Kong residents and foreign and Chinese nationals living or traveling through the city, has sparked concern it may threaten the rule of law that underpins Hong Kong’s international financial status.

Beijing rejects accusations of meddling and Chinese state media said this week “foreign forces” were trying to damage China by creating chaos over the bill.

The English-language China Daily said the “lawlessness” would hurt Hong Kong, not the proposed amendments to its law.

Lam and her officials say the law is necessary to plug loopholes that allow criminals wanted on the mainland to use the city as a haven. She has said the courts would provide human rights safeguards.

The Civil Human Rights Front, which organized Sunday’s huge march, said it was planning another demonstration for Sunday.

INTERNATIONAL CONCERN

Opponents of the bill, including lawyers and rights groups, say China’s justice system is marked by torture and forced confessions and arbitrary detention.

Democratic city legislators condemned Lam and what they said was heavy-handed police action.

“We are not a haven for criminals, but we have become a haven of violent police. Firing at our children? None of the former chief executives dared to do that,” said legislator Fernando Cheung.

“But ‘mother Carrie Lam’ did it. What kind of mother is she?”

Taiwan’s president Tsai Ing-wen said Taiwan would not accept any extradition requests from Hong Kong under the proposed law. The self-ruled island also issued a travel alert.

Hong Kong’s Tourism Board called off a dragon boat carnival this weekend while the city’s Bar Association expressed concern over video footage of police using force against largely unarmed protesters.

Amnesty International and domestic rights groups condemned what they said was excessive force by the police, while a spokeswoman for the U.N. Human Rights Office in Geneva said it was following the situation closely.

Diplomatic pressure was also building after leaders such as British Prime Minister Theresa May and U.S. President Donald Trump commented on the protests.

The European Union said it shared many concerns over the proposed extradition reform and urged public consultation.

(Reporting by Joyce Zhou, Julie Zhu, Sumeet Chatterjee, Clare Jim, Jennifer Hughes, Anne Marie Roantree, James Pomfret, Alun John, Vimvang Tong, Jessie Pang and Felix Tam; Additional reporting by Yimou Lee in TAIPEI, Ben Blanchard and Cate Cadell in BEIJING, and David Stanway in SHANGHAI; Writing by Farah Master and Greg Torode in HONG KONG; Editing by Michael Perry, Robert Birsel and Frances Kerry)

 

U.S. weekly unemployment claims rise; imported inflation weak

FILE PHOTO: People wait in line to attend TechFair LA, a technology job fair, in Los Angeles, California, U.S., January 26, 2017. REUTERS/Lucy Nicholson/File Photo

By Lucia Mutikani

WASHINGTON (Reuters) – The number of Americans filing applications for unemployment benefits unexpectedly rose last week, which could add to concerns that the labor market was losing steam after job growth slowed sharply in May.

Other data on Thursday showed import prices fell by the most in five months in May amid a broad decline in the cost of goods, the latest indication of muted inflation pressures. Signs of a slowing labor market and tepid inflation strengthen the case for the Federal Reserve to cut interest rates this year.

U.S. central bank policymakers are scheduled to meet on June 18-19 against the backdrop of rising trade tensions. Financial markets have priced in at least two rate cuts by the end of 2019. A rate cut is not expected next Wednesday.

Initial claims for state unemployment benefits rose 3,000 to a seasonally adjusted 222,000 for the week ended June 8, the Labor Department said on Thursday. Economists polled by Reuters had forecast claims decreasing to 216,000 in the latest week.

While layoffs remain relatively low, the third straight weekly increase in claims suggests some softening in labor market conditions. The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, rose 2,500 to 217,750 last week.

The economy created only 75,000 jobs in May, with annual wages increasing at their slowest pace in eight months, the government reported last week. U.S. financial markets were little moved by the claims data.

The slowdown in hiring, which occurred before a recent escalation in trade tensions between the United States and China, raised fears of a sharp deceleration in economic growth. The claims data is being closely monitored for signs of any fallout from the trade war.

President Donald Trump in early May imposed additional tariffs of up to 25% on $200 billion of Chinese goods, prompting retaliation by Beijing. Trump on Monday threatened more duties on Chinese imports if no deal was reached when he meets Chinese President Xi Jinping at a G20 summit later this month in Japan.

A tariff on all goods from Mexico to force authorities in that country to stop immigrants from Central America from crossing the border into the United States was narrowly averted after the two nations struck an agreement late on Friday.

ECONOMY SLOWING

Data so far have suggested a sharp slowdown in U.S. economic growth in the second quarter after a temporary boost from exports and an accumulation of inventory early in the year. In addition to the sharp moderation in hiring last month, manufacturing production, exports and home sales dropped in April, while consumer spending cooled.

The Atlanta Fed is forecasting gross domestic product increasing at a 1.4% annualized rate in the April-June quarter. The economy grew at a 3.1% pace in the first quarter.

In another report on Thursday, the Labor Department said import prices dropped 0.3% last month, the biggest decline since last December, after edging up 0.1% in April.

Economists had forecast import prices slipping 0.2% in May. In the 12 months through May, import prices fell 1.5% after decreasing 0.3% in April. The report came on the heels of data on Wednesday showing consumer prices remained tame in May.

Import prices exclude duties. In May, prices for imported fuels and lubricants declined 1.0% after rising 1.7% percent in the prior month. Imported food prices dropped 0.8% last month after surging 2.7% in April.

Excluding fuels and food, import prices slipped 0.2% in May after falling 0.3% in the prior month. So-called core import prices decreased 1.5% in the 12 months through May. Though the dollar has weakened a bit this year, its gains last year against the currencies of the United States’ main trading partners continue to depress core import prices.

The cost of imported capital goods declined 0.1% last month. Prices for imported consumer goods excluding automobiles was unchanged. The cost of goods imported from China edged down 0.1% last month after falling 0.2% in April. Prices fell 1.4% in the 12 months through May, the largest drop since February 2017.

The report also showed export prices fell 0.2% in May, with prices for both agricultural and nonagricultural products dropping. Export prices nudged up 0.1% in April. They fell 0.7% on a year-on-year basis in May after gaining 0.2% in April. Soybean prices tumbled 20.6% year-on-year.

(Reporting By Lucia Mutikani; Editing by Andrea Ricci)

Trump likely to meet with Xi when G20 gathers: White House

FILE PHOTO: FILE PHOTO: U.S. President Donald Trump and China's President Xi Jinping meet business leaders at the Great Hall of the People in Beijing, China, November 9, 2017. REUTERS/Damir Sagolj/File Photo - RC11ACBFE610

WASHINGTON (Reuters) – U.S. President Donald Trump and Chinese President Xi Jinping will likely meet on the sidelines of the Group of 20 summit later this month in Japan, a White House spokesman said on Thursday, although he suggested a meeting was not yet firmly scheduled.

“It looks like we’re moving in that direction,” White House spokesman Hogan Gidley told Fox News Channel when asked if the two leaders would have a bilateral meeting.

Trump has repeatedly said he expects to meet Xi at the G20 gathering to talk about the trade dispute between the two nations.

(Reporting by Tim Ahmann; Editing by Chizu Nomiyama)