Increase of minimum wage rate to come into effect from next January www.montsame.mn

Ulaanbaatar /MONTSAME/ A decision to increase the minimum wage rate to MNT 1904 per hour or MNT 320 thousand was made last Friday at the tripartite negotiation of Labor and Social Consensus.

Mongolia's Minister of Health in Luxembourg to Discuss Development Aid www.chronicle.lu

On Monday 20 August 2018, Luxembourg's Minister of Cooperation and Humanitarian Action, Romain Schneider, welcomed with the Minister of Health of Mongolia, Davaajantsan Sarangerel, for a meeting in Luxembourg city.

MBD projects on "Doing business with Britain in 2018" www.mongolianbusinessdatabase.com

Iain Cox Deputy Head of Mission of the British Embassy and Ser-Od Ichinkhorloo Founder & CEO of MBD met today in Aug 20 and discussed the MBD's partnership with UK TVET www.tvetuk.org on its new "TVET skills network" online training program, British Aggreko www.aggreko.com brand business development in Mongolia and the MBD's next Mongolian trade mission to "Brand Licensing Europe 2018" and which includes other business programs in London in Oct.

Mongolia-China-Russia forum focuses on Zamyn-Uud and Erenhot cooperation www.montsame.mn

Ulaanbaatar /MONTSAME/ A regular ‘Mongolia-China-Russia Economic and Trade Cooperation’ forum was held on August 17-19 in Erenhot, Inner Mongolia Autonomous Region, China. Government delegates led by Deputy Speaker of Parliament Ya. Sanjmyatav and representatives of 130 member companies of the Mongolian National Chamber of Commerce and Industry (MNCCI) attended the forum and presented their products at the expo organized within the event.

Trade war puts new strains on America Inc's factories in China www.reuters.com

SHENZHEN, China/SHANGHAI (Reuters) - Larry Sloven arrived in southern China three decades ago, just as the region was taking off as the low-cost manufacturing center of the world. Since then, he has exported millions of dollars of goods, ranging from power tools to LED lights, to some of America’s biggest retailers.

Businessman Larry Sloven, 69, speaks in Hong Kong, China August 9, 2018, in this still image taken from Reuters TV footage. Footage taken August 9, 2018. REUTERS/Samantha Vadas/via Reuters TV
That era may now be coming to an end.

For years, Sloven has seen profits whittled away by rising costs, tighter regulations and Chinese government policies aimed at building a more sustainable and services-oriented economy that have squeezed lower-end manufacturers.

But the final straw may be the prospect of tariffs stemming from a trade war between the United States and China, and a world of more protectionism.

“It’s been step, by step, by step. And it’s been getting more and more expensive to produce products in China,” said Sloven, president of Capstone International HK Ltd, a division of Capstone Companies, from Deerfield Beach, Florida, a maker of consumer electronics goods.

Manufacturers have been feeling the squeeze as China shifts its priorities from lower-end manufacturing to high technology industries as part of a broader bid to upgrade its economy.

But with tariffs looming, “everybody finally woke up to the extent that ‘maybe I should face reality’,” he said. Manufacturers were increasingly worried that “the next group of tariffs would be the killer”.

Sloven is now stepping up efforts to trim his exposure to China, diversifying into growing manufacturing centers like Thailand.

“Thailand, Vietnam, Malaysia and Cambodia are countries that have potential opportunities,” he said. “However, it’s not going to be as easy as many may think. And you don’t know what’s coming next in China.”

Interviews with over a dozen manufacturers from medical device makers to agricultural equipment firms illustrate how companies exporting to the United States are now rethinking their calculations about making goods in China.

“Before the tariffs came on board, we were looking to move about 30 percent of our production from China to the United States,” said Charles M. Hubbs, European director at Premier Guard, a medical products manufacturer, citing reasons such as rising wages, a shrinking workforce and soaring costs.

“With the latest tariff development, assuming those tariffs will go into effect, we’ll probably be moving about 60 percent of our manufacturing out of China to the United States.”

Other companies are closely reviewing their options.

“In the current tariff environment, it’s only natural for companies like ours and others to be internally reassessing the impact and taking steps to mitigate that,” said a senior China-based executive with a major U.S. manufacturer.

Moves could include “limiting additional sourcing from China, shifting sourcing to other countries, or bringing work back to the United States”.
The escalating tit-for-tat trade war between the United States and China, with President Donald Trump threatening to impose tariffs on Chinese-made goods, could have huge implications for heavily integrated and globalized supply chains.

For some, the impact has been obvious and direct.

Georgia-based AGCO Corp (AGCO.N) told the United States Trade Representative that tariffs would make the farm equipment it makes in Changzhou, a city in China’s Jiangsu province, “price uncompetitive” in the United States.

Maroon Group, a chemical maker from North America said it would be “priced out of the market”, a concern echoed by Goodman Global, which assembles air conditioners in Houston from Chinese-made parts.

Some firms have already made their moves. The furniture makers At Home Group Inc (HOME.N) and RH (RH.N) have said they will cut back production in China.

Others are trying to adjust supply chains. DSM China Ltd, part of the Dutch nutrition firm Royal DSM, is looking to replace U.S. soybeans with new ingredients such as pea powder it can source locally to avoid Beijing’s retaliatory import duties.

Rising risk from the trade tensions “gave us good impetus to check out how we look at the whole business”, said Bernard Cheung, director of global strategic marketing at DSM China.

For some, the response has been dictated by where they sit in the supply chain.

U.S.-based GMM Nonstick Coatings has moved some production to India after a 30-40 percent drop-off in China orders for advanced chemicals used to coat American household kitchenware brands such as George Foreman and Baker’s Secret as those clients move some production out of China.

“This tariff thing is adding extra friction to being in China and it’s making the decision” to shift production “quite easy for U.S. sourcing departments,” said Ravin Gandhi, GMM’s chief executive.

There are still plenty of manufacturers staying in China for now, especially those targeting the huge domestic or regional market, Gandhi said.

China still has the best infrastructure, supply chain networks and engineering talent, a major hurdle for potential rivals seeking to lure firms away with lower costs, according executives interviewed by Reuters.

In terms of scale, China cannot be easily replaced: it has a manufacturing output of around $2 trillion, according to a Brookings Institution report in July, the world’s largest.

Bird, a Santa Monica, California-based scooter start-up, wrote in a submission to the Office of the U.S. Trade Representative in June that it was “unaware of any U.S. producer of electric scooters that can manufacture to Bird’s scale and needs”.

Keith Siilats, the head of Bytelogics, another U.S.-based scooter start-up that manufactures in China, said it was hard to shift production from China. Instead, he expects to absorb the higher costs for the moment and plans to develop European operations less vulnerable to tariff pressure.

China’s manufacturing sector will not vanish overnight, but a shift is inevitable, said Dan Krassenstein, Shanghai-based director of Asia operations at ProconPacific, which makes around 3 million specialized industrial shipment bags.

He said manufacturing was moving to South Asia and Southeast Asia in search of cheaper labor costs and as Beijing discourages polluting, lower-margin sectors.

The tariff escalation “is just going to accelerate it”, he said.

Five years ago his company made all its products in China. Now, a quarter are made in India and 5-10 percent in Vietnam.

DOING THE SUMS
In Southern China’s Pearl River Delta, the cost of renting industrial and commercial space has surged around 80 percent in the past eight years, while companies have complained of soaring labor costs.

“Production costs are cheaper in the U.S. than in China,” said Yuan Juyou, deputy head of marketing at Wonderful Group, a ceramics maker. “Even though labor costs are more expensive, we have automated a lot of processes. Plus electricity, land, these kinds of costs are cheaper than China.”

Wonderful, a unit of the Chinese manufacturer Marco Polo, began shipping products from its new factory in Tennessee in June.

Regional rivals are also starting to sense an opportunity to step up and into China’s competitive space.

Thailand is actively promoting itself as a regional manufacturing hub, offering incentives such as an exemption of up to eight years on corporate income tax for certain industries and exemptions on import duties for some raw materials.

The country’s corporate income tax rate of 20 percent also ranks it as the second-lowest among countries in the Association of Southeast Asian Nations, according to Thailand’s Board of Investment.

Thailand is already a major center for some electronics and components, and the government plans a series of industrial zones to push development of target industries. A China-ASEAN free trade deal also helps mitigate the trade-war risk for companies trading with both the United States and China.

“The Thai government is making it very easy now to move down there,” said Sloven.

“The Chinese government embraced manufacturing back in the day. But now, they’re not looking for growth in the product business. They’re looking for high-tech,” he said. “It’s a bit like when a wife comes to a husband and says, ‘I don’t love you anymore’.”

Reporting by Samantha Vadas in SHENZHEN, Anne Marie Roantree in HONG KONG, Adam Jourdan, David Stanway, Brenda Goh, John Ruwitch in SHANGHAI, Elias Glenn in BEIJING and Holly Chik and Maggie Liu, Sue-Lin Wong in DONGGUAN; Editing by Anne Marie Roantree and Philip McClellan

Uruguay to open consulate general in Mongolia www.xinhuanet.com

ULAN BATOR (Xinhua) – Uruguay is planning to open a consulate general in Mongolia to promote bilateral ties, especially tourism exchanges, the Mongolian Foreign Ministry announced Saturday.

K-Bank, KT team up to export internet banking to Mongolia www.koreatime.co.kr

K-Bank, the nation's first internet-only lender, has teamed up with KT to export its banking services to Mongolia, the company said, Sunday.

Nebraska man lives alone in the woods for 60 days, wins $500,000 www.omaha.com

Thursday night, 25-year-old Lincoln man Sam Larson won $500,000 on television. All he had to do was get dropped off in a remote stretch of northern Mongolia for 60 days — hunting for his own food and enduring subzero temps, extreme isolation and the threat of deadly predators. No big deal!

Larson became the longest-remaining contestant on the fifth season of the History Channel reality series “Alone,” in which competitors rough it in remote locations, going into the wild carrying only what they can fit into a backpack. The one who lasts the longest wins the prize.

The contestants are in true isolation. There is no camera crew or producers. The survivors are tasked with filming every moment.

The show was shot last summer, which, Larson said, felt like a "crummy Nebraska November" in Mongolia.

Larson had been on “Alone” previously, in the first season. For this season, he and his nine fellow contestants were previous competitors who came up short.

Mongolia was a second chance for Larson, a writer, speaker and wilderness skills instructor who lives with his wife, Sydney, and their two children in Lincoln. Their 3-year-old son is named Alaska. Their now 1-year-old daughter is named Everest. She was only seven days old when Sam left to rough it in Mongolia. His growing family ended up being his key motivation and biggest worry while he was in the woods.

“This was an opportunity for personal redemption for me,” Larson said on Thursday’s season finale. “Coming out here set the reset button on my life and gave me the chance to have my family look at me as a provider rather than someone who’s just barely getting by all the time.”

Larson — by day 60 hungry, cold, unable to have a bowel movement — was already in tears on Thursday’s finale when his wife, Sydney, snuck up behind him to reveal that he’d outlasted everyone else and won the show.

Sam fell into Sydney’s arms laugh-crying.

Sam: “I’m so happy to see you. Oh my gosh.”

Sydney: “You did it! How are you feeling?"

Sam: “Alright, who has food? Who has stinkin’ food? You have food?”

Sam told her that with the $500,000, he’s going to get a new car, one that doesn’t break down all the time.

Thursday night on his Facebook page, Larson said, “I honestly feel like ‘winner’ is a weird title. How do you ‘win’ against nature?

“You really don’t,” he continued. “You just have to live as much as you can and be thankful for the time you get to spend in the natural world.”

When he was dropped into the Mongolian wilderness, Larson brought with him a saw, an ax, a pot, ferro rod, multitool, food ration, sleeping bag, paracord and trapping wire. Larson, who is 6-foot-2, went into the woods last summer weighting 250 pounds. He lost about 50 pounds over the next 60 days.

In a Friday phone call with The World-Herald, Larson said the worst part of his 60 days in Mongolia was not knowing what was going on with his family.

"But being a dad really toughened me up," he said. "And surviving in Vancouver (on the first season of 'Alone') was a perfect warm-up for Mongolia."

He has yet to receive his prize money, Larson said. But in the meantime, thank God, his old car has yet to break down.

"It's been many, many months since I got home from Mongolia," he said. "That '98 Honda has been pulling through for us."

Larson has been “playing in the woods” for as long as he can remember.

He got the survival skills bug when he saw an arrowhead exhibit at a natural history museum. That led to trips to western Nebraska rivers like the Dismal and Middle Loup. When he couldn’t travel far, he escaped to his backyard, “playing around, lighting things on fire before my parents could find me.”

At 14, he sold a bunch of his possessions to fund a canoe expedition in northern Ontario. After high school, he studied wilderness skills in Maine, lived under an army poncho in Arizona and solo trekked the Gila Wilderness of New Mexico before coming back to Lincoln.

On Thursday’s finale, Larson said he felt angry after leaving his camp on the first season of "Alone."

“But in Mongolia,” he said, “every time I started my morning fire, I felt grateful for the fire. I was thankful for the trees and the resources I had. I was thankful for every little thing that came my way.”

Ts.Davaasuren: OT sat idle for 5 years after power plant permit www.zgm.mn

Earlier this week, the Minister of Energy Davaasuren Tserenpil gave an interview to a local media outlet “iToim.mn” on recent scandalous deals in the energy sector, including the Power Sector Cooperation Agreement (PSCA) with Oyu Tolgoi, and expressed Mongolia’s position on them.

-Will the Government renegotiate Eastern Energy System agreement? Why was the contracted get terminated?

-The agreement violated the article 7.3 of the Investment Agreement, which states to draw electricity from the territory of Mongolia within four years of operation. In other words, the Parliament-consented agreement was hard to amend for the Cabinet without having to negotiated with the Parliament. Thus, the agreement was terminated. Arnaud Soirat, Chief executive of Copper and Diamonds of Rio Tinto Group, said some uncanny remark that the company will establish the plant if the Cabinet issues a demand to draw electricity domestically within four years. That mister still do not understand the Investment Agreement. They accepted that responsibility under the investment Agreement. They were obliged to draw electricity within four years after commencing operations due in 2017. I do not understand what this mister meant by “issuing a demand”.

Generators with over 240MW cannot be installed in Mongolia
-It seems that the location of the power station is currently under discussion?

-I am curious about that. They received a 5-years permission to build the station at the mine from our ministry in July 2012. The permit was expired in 2017. Nothing has been done within that period. They should stop playing with the Government of Mongolia. They did not lift a finger before the Southern Region Power Sector Cooperation Agreement. The 2014 Tavan Tolgoi negotiation was also the same. Therefore, the Cabinet decided to terminate the contract.

-Will the Tavan Tolgoi coal-fired power station project continue?

-The Parliament and Cabinet expressed their position that Mongolia will build the power plant based on Tavan Tolgoi residual coal deposits. It is up to them to select the three options proposed through the Investment Agreement.

-Although Oyu Tolgoi promised to draw power from Mongolia within four years after commencing operations, they violated the agreement. Will they be held accountable for that?

-The Government established a working group on some issues concerning high loan interest, tax act and violation of investment agreement. The group may report their review on that.

-What about Baganuur power station? Are there are talks on terminating the agreement? There are rumors that the Government will go under MNT 512 billion debt if the contract is terminated.

-As for the compensation, there are talks about potential risks with that amount. It does not mean we are obliged to pay them. The thing is, some compensation may come up after the contract termination. It does not mean the power station’s high technology is not incompatible to Mongolia. They are planning to install high-capacity generator that are not suitable for Mongolia’s system. Generators with over 240MW cannot be install in Mongolia. Because we manage our system by drawing 240MW power from the Russian Federation. We will not be able to manage higher generators. The contract was negotiated regardless of the incompatibility. We demanded the investors to install a system compatible with Mongolia. We did not discuss any termination of contract.

-Democratic Party’s group in the Parliament made a statement demanding the Cabinet’s dismissal. What is your position on this?

-Cabinet penalized the related officials regarding the issues around the Ministry of Road and Transport Development. The officials themselves resigned from their position, acknowledging their responsibility.

Mining Minister visiting Inner Mongolia www.montsame.mn

Ulaanbaatar/MONTSAME/ Mongolian delegation led by D. Sumiyabazar, Minister of Mining and Heavy Industry, is paying a working visit to Hohhot, Bayannur, Baotou and Ordos cities of Inner Mongolia Autonomous Region of the People’s Republic of China on August 15-18.