China’s economy grew 4.9% year on year in third quarter, beating estimates
Note. An abbreviated report today as I am en route back to Washington, DC, from a CIPA event in Boston, Massachusetts.
Today’s Digital Newspaper |
— President Joe Biden has arrived in Israel, where he faces the challenging task of showing support for the United States’ closest ally in the Middle East while also working to prevent the Israel-Hamas conflict from escalating further. Biden was warmly received by Israeli Prime Minister Benjamin Netanyahu, with whom he has had a long working relationship. Other Israeli officials, including President Isaac Herzog, were also present for his arrival. During the trip, Biden was originally scheduled to travel to Jordan to meet with King Abdullah II, Mahmoud Abbas, the president of the Palestinian Authority, and Egyptian President Abdel Fattah el-Sissi. The meeting in Amman was canceled after a rocket struck a Gaza hospital killing and injuring hundreds on Tuesday. Both sides have blamed the other for the attack, with Israeli Defense Forces sharing a video allegedly showing a rocket aimed at Israel misfiring while the hospital was struck. Biden said the deadly explosion appeared to have been caused by Palestinians, not the Israeli military, as outrage and mutual accusations fan across the Middle East.
— The Biden administration is mulling a supplemental request to Congress for $100 billion that includes defense assistance for Israel and Ukraine. The White House is also expected to ask for Taiwan aid and a border security plan as part of this package.
— The Senate Foreign Relations Committee will hold a confirmation hearing at 10:30 a.m. for Jack Lew, President Joe Biden’s nominee to serve as U.S. ambassador to Israel. Lew will be approved easily in committee next week. But Republicans will not likely consent to an expedited confirmation on the floor. Any one senator can slow down the process.
— China watcher: China to step up purchases of U.S. soybeans. China is short bought on soybeans and soybean crush margins are robust, a China watcher informs, with logistical problems in both Brazil and the United States limiting recent purchases. China is closely watching transportation glitches in both countries and will soon accelerate its purchases of U.S. soybeans, the source informs.
— Jim Jordan (R-Ohio) faces uphill battle for Speaker of the House amid Republican divisions. In the ongoing quest for the Speaker of the House position within the Republican Party, Jim Jordan faced significant challenges as he tried to win over skeptics within his party. Despite making progress by reducing the number of Republicans who initially opposed him, Jordan lost 20 Republicans on the House floor Tuesday during the speaker tally, netting just 200 votes. He then pushed off another roll-call vote until this morning as even more Republicans looked ready to go against him.
The divisions within the party have left the future Speaker unclear, leading to suggestions that acting Speaker Patrick McHenry (R-N.C.) could be a temporary solution to bridge the gap. His authority is currently limited to overseeing the election of a new speaker. A motion to formally elect McHenry following the second vote on Jordan’s speakership today is expected, assuming that Jordan falls short. The resolution needs 217 votes, meaning it will almost certainly need Democratic votes to pass. Former speakers Newt Gingrich and John Boehner endorsed McHenry’s candidacy Tuesday night.
Another vote on Jordan is expected around 11 a.m. ET.
The 20 Republicans who remained opposed to Jordan had various reasons, including resentment of aggressive tactics and lingering bitterness from the ongoing power struggle. Notably, some of his opponents came from districts that President Biden carried in the 2020 election, fearing that Jordan’s leadership style would jeopardize their positions and the Republican majority. Democrats are already targeting these moderates, urging them not to support Jordan as a Speaker.
The House faces pressing issues, including government funding running out soon and incomplete appropriations bills. Urgent matters like military aid for Israel and Ukraine also require attention. Another issue is a new farm bill.
Other potential “consensus” candidates have been suggested. These include House Majority Whip Tom Emmer (R-Minn.), and Reps. Mike Johnson (R-La.), Frank Lucas (R-Okla.), Tom Cole (R-Okla.) and others. Some GOP lawmakers want to survey the Republican Conference and see if they can come up with some potential choices.
— Arkansas governor requires Chinese-owned company Syngenta to sell farmland in landmark move. Arkansas Governor Sarah Huckabee Sanders, accompanied by Attorney General Tim Griffin and other Republican leaders, made a groundbreaking announcement on Oct. 17, stating that Arkansas will mandate a Chinese-owned company, Syngenta, to divest around 160 acres of farmland in Craighead County, Arkansas. This decision marks a significant move as it prohibits foreign entities from “owning agricultural land” within the state.
Syngenta, headquartered in Switzerland and owned by ChemChina, a Chinese state-owned enterprise specializing in seeds and pesticides, will be compelled to sell the land in compliance with this new regulation. Notably, ChemChina is listed by the U.S. Department of Defense as one of several “Chinese military companies” involved in activities in the United States.
The decision follows the enactment of a 2023 state law that bars foreign-controlled businesses from owning land in Arkansas. Governor Sanders underscored concerns over Chinese companies operating in the U.S., asserting that they transmit information and technology back to China, potentially compromising American research and national security interests.
Sanders emphasized the seriousness of the situation, given that the Chinese government passed a law in 2017 mandating cooperation from Chinese citizens abroad with state intelligence officials. This law imposes an obligation on “any organization” to assist with state intelligence work. Another Chinese law requires “relevant organizations” to provide evidence for investigations.
The governor expressed a commitment to ensuring that all companies operating in Arkansas support the state’s interests and its citizens. Syngenta has been informed of the requirement, and if they refuse to comply, Attorney General Griffin will initiate legal proceedings to enforce the divestment.
Griffin disclosed that Northrup King Seed Co., a Syngenta subsidiary, has a two-year window to divest its land in Craighead County. Failure to comply may result in a civil penalty fine of up to 25% of the property’s value, which is estimated at approximately $1.12 million, potentially equating to a maximum fine of $280,000.
In response, Syngenta expressed disappointment with the decision, stating that no directives from China prompted their land acquisition in 1988.
— China’s Q3 2023 GDP growth surpasses expectations, boosting hopes of meeting annual targets. China’s economy expanded by 4.9% year-on-year in the third quarter of 2023, surpassing market expectations of 4.4%. This positive growth performance has raised optimism that China may achieve its official annual target of approximately 5% for the year. The sustained stimulus measures implemented by Beijing have offset the adverse effects of a prolonged property crisis and sluggish trade. Comparatively, China’s GDP in the second quarter of the year recorded a growth rate of 6.3%, benefiting from a favorable comparison base with the previous year when major cities like Shanghai were under strict lockdowns due to the pandemic. Notably, in September, retail sales saw their most significant increase in four months, marking the ninth consecutive month of growth. Additionally, industrial output remained at its highest level since April.
The surveyed jobless rate also declined to a 22-month low of 5%, indicating improvements in the labor market. Fixed investment continued to grow during the first nine months of 2023. Earlier data revealed that exports, while still declining, did so at a slower pace, partly due to a peak shipping season related to Christmas products. When considering the performance of the first three quarters of the year, the Chinese economy expanded by 5.2%.
Last year, China’s GDP grew by 3%, falling short of the official goal of approximately 5.5%. The current growth figures suggest a more promising outlook for the Chinese economy in 2023.
Meanwhile, retail sales jumped 5.5% in September, also well above forecasts and the highest reading since May.
— Nvidia fell 4.7% after the U.S. restricted the sale of the company’s made-for-China chips. The company warned that the new rules could hinder product development and cause other difficulties, though the changes probably won’t take a financial toll in the short term.
— Oil prices experienced a rally triggered by a deadly explosion at a hospital in Gaza, which heightened tensions in the Middle East just before President Biden’s arrival in the region. West Texas Intermediate (WTI) crude oil prices surged above $88 per barrel, following a flat closing on the previous day. Traders are closely monitoring the situation, as there is concern that the conflict could escalate beyond Gaza, potentially jeopardizing the flow of crude oil. This could further tighten the oil market, which was already under strain due to months of supply cuts by OPEC+ (the Organization of the Petroleum Exporting Countries and its allies).
— Timing of farm bill discussed at CIPA event. Dr. Joe Outlaw of Texas A&M on Tuesday said there is a lack of decision-making and agreement among key decision-makers in the farm bill, which is hindering progress. He expressed doubt that a farm bill will be passed this year but remains somewhat optimistic about the possibility early next year, but stressed if it goes past February, it will confront presidential politics via primaries, etc.
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