US answers Belt and Road with own Indo-Pacific investment plan www.asia.nikkei.com

NEW YORK -- The U.S. declared a "new era" in American commitment to the Indo-Pacific on Monday, with Secretary of State Mike Pompeo announcing a $113 million package aimed at developing the region's digital economy, energy sector and infrastructure.

Although Pompeo made no mention of China, experts say the plan is meant to defend U.S. interests in the region as China forges ahead with its own trade and infrastructure investment program, the Belt and Road Initiative.

Pompeo said he will leave Wednesday on a trip to Malaysia, Singapore and Indonesia, where he will discuss the plan, which he called a "whole-of-government" mission.

Speaking at the Indo-Pacific Business Forum in Washington on Monday, Pompeo said, "The Indo-Pacific, which stretches from the United States west coast to the west coast of India, is a subject of great importance to American foreign policy." He called it one of the greatest engines of the future global economy and that the American people "have a stake" in the peace and prosperity of the region.

Speaking about the pledged $113 million, Pompeo said the "funds represent just a down payment on a new era in U.S. economic commitment to peace and prosperity in the Indo-Pacific region."

Of the $113 million, an initial investment of $25 million will be made toward improving partner countries' digital connectivity to expand opportunities for U.S. tech exports. Nearly $50 million will be earmarked this year to help partners manage energy resources, with approximately $30 million to be spent on infrastructure.

At multiple points during his remarks, Pompeo appeared to take jabs at China's activities in the region. The U.S. "will never seek domination in the Indo-Pacific, and we will oppose any country that does," he said.

In explaining the concept of a "free and open Indo-Pacific," Pompeo said that "free" expresses the desire for "every nation to be able to protect their sovereignty from coercion by other countries." By "open," the U.S. is looking for "a peaceful resolution of territorial and maritime disputes," he said.

"The United States of America does not invest for political influence but rather practices partnership economics," Pompeo added.

The vision of a "free and open" Indo-Pacific region was first announced by President Donald Trump at last year's Asia-Pacific Economic Cooperation summit in Vietnam.

Alyssa Ayres, senior fellow at the Council on Foreign Relations and former deputy assistant secretary of state for South Asia, said Pompeo's speech lacked clarity on what the strategy was and that the funds were small in comparison to Chinese investments. "The $113 million is not comparable to, say, the $62 billion that China is providing for the China-Pakistan Economic Corridor. The U.S. needs to show how they are going to leverage this investment and which countries, such as Japan, India, Australia and Singapore, that it intends to cooperate with."

Ayres said that Pompeo's scheduled visit to India in September, when the U.S. and India will hold two-plus-two talks involving the foreign affairs and defense ministers, will be an opportunity to deepen discussions on the Indo-Pacific strategy.

Tanvi Madan, a fellow at the Brookings Institution and the director of The India Project at the think tank, said "there will be questions about the scale of American funding and broader involvement, as well as how this all fits in with the administration's approach to trade."

"In some ways Delhi sees the Trump administration as more clear-eyed about Beijing than its predecessor," Madan said. "But there are concerns about the nature of U.S. involvement and questions about reliability and consistency, as well as the administration's America First approach."

While Monday's announcement was presented as an economic decision made for the benefit the American people and the companies doing business in the region, it also stands to assuage fears among U.S. allies that China will fill a leadership gap left by an increasingly inward-facing White House.

Pompeo acknowledged that "some are wondering about America's role in the region" after Trump's withdrawal from the Trans-Pacific Partnership, a 12-country agreement that served as the cornerstone of former president Barack Obama's Asia strategy. The 11 countries that remain a part of the pact are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

The secretary affirmed Washington's commitment to economic engagement in the region, noting that American companies would continue to expand and advance U.S. economic interests, "while we work with our partners to craft better and higher-standard bilateral trade agreements."

"We seek to work with anyone to promote a free and open Indo-Pacific, so long as that cooperation adheres to the highest standards that our citizens demand," Pompeo said, in what appears to be criticism of China, whom the U.S. has accused of militarily overstepping its bounds and engaging in unfair trade practices.

Mongolia's unemployment rate drops 11.1 pct in H1 www.xinhuanet.com

ULAN BATOR, July 30 (Xinhua)-- The number of jobless people in Mongolia went down 11.1 percent from the same period last year, with 25,800 people registering themselves as unemployed in the first half of this year, data from the National Statistical Office of Mongolia showed Monday.

Doctors Without Borders provides free dental checkups in Mongolia www.xinhuanet.com

ULAN BATOR, July 30 (Xinhua) -- International medical charity Doctors Without Borders provided free dental checkups and treatment for about 8,500 people in northern Selenge Province in Mongolia, a member of parliament said Monday.

Turkey rejects 'kidnap' attempt on teacher in Mongolia www.afp.com

Turkey on Monday rejected claims it tried to kidnap a teacher from Mongolia with links to the head of an outlawed movement Ankara accuses of fomenting a botched 2016 coup attempt.

Top-20 index decreases by 2.65 percent www.montsame.mn

Ulaanbaatar/MONTSAME/ During the week spanning July 23 to July 27, 2018, MNT1,036,318,735.12 worth of securities were traded through 5 trading sessions on the MSE. The daily average MNT volume was MNT207.2 million.
Last week, a total of 40 companies’ 6,513,364 shares worth MNT 794,069,135.12 were traded.
In Government securities secondary market trading, 2,320 Government securities worth MNT 242,249,600 were traded.
As of July 27, 2018, total market capitalization of MSE is MNT 2,361,516,976,987.77. The TOP-20 index decreased by 2.65 percent to stand at 19345.19 units.

Erdenes Tavan Tolgoi JSC gains net profit of MNT373.3 billion www.montsame.mn

Ulaanbaatar/MONTSAME/ On July 30, B.Gankhuyag, CEO of ‘Erdenes-Tavan Tolgoi’ JSC, introduced a 2018 half-year report of the company.

In the beginning of his report, B.Gankhuyag, CEO of Erdenes Tavan Tolgoi JSC remarked, “Since our company established in 2010, we encountered a number of socio-economic and financial complications and coal price downs, which led us to be incapable to pay wages. Sometime, we even stopped mining operations, due to politicians’ decision. Today, we have overcome such difficulties. In other words, we will have financial opportunities and great future. The statistics indicates how the company is fulfilling its duty sufficiently before three million people of Mongolia, the shareholders of the company”.

ETT’s half-year report shows positive indications. According to first half of the year, the company exported 6.9 million tons of coal, earning MNT 953 billion that stands at 78 percent of the total planned revenue in 2018. The company paid MNT216.5 billion to the state budget as duty and fee. By doing so, the company has earned the net profit worth MNT373.3 billion.

As the ETT’s financial condition has improved, it has now been solvent to fund some of its projects with its own money. In addition, the company has created a fundamental economic condition to put 1072 shares of every shareholder into economic circulation, highlighted the company authorities.

The profit of the company is based on the coal price. The company held talks with Chalco Trading Hong Kong Co Limited. As a result, the both sides reached an agreement to raise the coal price to USD61 per ton and set it as the fundamental price. It ensures the company to keep distributing the coal at USD61 per ton, even if the coal price in the world market goes down. In case coal price goes above USD61, the company will raise the price in accordance with the world market price. Moreover, the supply price for coal being excavated at Western Tsankhi and other blocks is set by an open tender. This year, it has been set at USD70 per ton, which means price of coal being supplied except Chalco Trading Hong Kong Co Limited is USD70 and it led to net profit increase of the company.

Alongside the economic indicators, there has been improvement in social issues of employees. For instance, a basic salary of workers was raised by 21 percent, night work pay was increased by five-fold as well as labor safety incentive has been reached 15 percent.

As a preparation to make IPO at world capital market, the company started taking actions to collaborate with stock exchanges and financial and legal consultants and have its auditing done by international accredited organization.

Concluding the report, B.Gankhuyag said, “Our company has a total of 2,511,000 shareholders—Mongolian citizens. However, just 300 thousand people have their registration account opened and about 600 thousand have not authenticated their rights to own the shares. Therefore, we are working to intensify this issue.“

M.Unurzul

President Kh.Battulga supports Third Neighbor Trade Act www.president.mn

Ulaanbaatar /MONTSAME/ President Kh.Battulga expresses full support and gratitude to the sponsors of the bipartisan H.R.6636, the Mongolia Third Neighbor Trade Act, which was introduced for consideration in the U.S. House of Representatives. Rep. Ted Yoho (R-FL-3), Rep. Dina Titus (D-NV-1), Rep. Don Young (R-AK-At Large), Rep. Mark Meadows (R-NC-11), Rep. Brian K. Fitzpatrick (R-PA-8), Rep. Elise M. Stefanik (R-NY-21), Rep. Jared Polis (D-CO-2), Rep. David E. Price (D-NC-4), Rep. William R. Keating (D-MA-9), and Rep. Dwight Evans D-PA-2) represent a broad political spectrum of support for Mongolia. Hopefully, the House and Senate will vote and approve this legislation.

Mongolia has consistently adhered to the principles of equality and mutual respect of interests in its foreign policy. This legislative bill is an important milestone to further strengthen Mongolia-U.S. alliance and demonstrates our bilateral cooperation that strengthens the economic security and democracy of Mongolia.

Last year, Mongolia celebrated 30 years of diplomatic relations with the United States. Our land is bordered by Russia and China, yet Mongolia refers to the United States as its ‘third neighbor’.

Total Mongolia-U.S. trade in 2012 measured a record USD 707 million, but in 2017 Mongolia exported only USD 9.4 million, while importing just USD 82.2 million in goods from the United States. There is much room for growth for both U.S. imports and Mongolian exports.

Mongolia has supported the U.S. efforts in Iraq and Afghanistan since 2003. This underlines our deep commitment to democracy, rule of law, human rights, and a robust free market economy.

Cashmere, fine wool obtained from cashmere goats, industry is essential to Mongolia’s economy. Over a third of the population of Mongolia works in the animal husbandry sector, and cashmere provides income and employment for the majority of these people. Agricultural products are Mongolia’s second largest export after the mining sector, and cashmere products constitute the biggest share in the agricultural exports.

In 2017, only 1,100 tons out of total of 9,400 tons raw cashmere, which is almost 50 percent of world cashmere, is processed within the country while the rest of 8,300 tons is exported mainly to China in raw without adding value. The United States buys nearly all of its cashmere products from China. Duty free treatment of Mongolian cashmere and other textile garments exports to the United States would facilitate increased trade with the U.S. and reduced Mongolian export dependence on one country and single sector of mining. This would allow Mongolia to diversify its trade and ensure its sustainable economic growth.

The development of Mongolia’s garment industry would also promote women’s employment and empowerment. Women have historically participated in Mongolia’s garment industry at high rates, and the garment industry has historically provided safe and stable employment for women in Mongolia.

Mongolia's Tavan Tolgoi coal mine sees profits surge in H1, raising IPO prospects www.reuters.com

ULAANBAATAR, July 30 (Reuters) - Revenue from Mongolia’s giant Tavan Tolgoi coal mine surged in the first half of the year due to higher commodity prices and a big jump in coal exports, the project’s owner said on Monday, raising prospects for a planned overseas listing.

Lotte Considers Selling China Malls Amid Anti-Korean Sentiment www.bloomberg.com

Lotte Group, reeling from a wave of anti-Korean sentiment in China for more than a year, is considering selling some of its department stores in the country, a move that would accelerate the conglomerate’s withdrawal from the world’s second-largest economy.

'Happy with tariffs': Steel industry emerges as trade war winner www.cnn.com

1. Blockbuster profits: The trade war has cast a shadow over parts of Corporate America, but it is bringing a bit of good fortune to the steel industry.
President Donald Trump's metal tariffs have sent steel prices surging and sparked blockbuster profits for steel manufacturers.

Reliance Steel & Aluminum (RS) hauled in record sales, thanks to an 18% spike in prices. Nucor (NUE) recorded the best second quarter in its history. Its profit more than doubled.

"All in all, we're very happy with tariffs," Nucor CEO John Ferriola told analysts earlier this month.

Those words haven't been uttered by many other corporate bosses, who are grappling with sticker shock.

Tariffs levied by the United States and major trading partners are eating into the profits of Harley-Davidson (HOG), General Motors (GM), General Electric (GE), 3M (MMM) and hundreds of other companies. CEOs are scrambling to raise prices and reshuffle their supply chains.

Unsurprisingly, steel companies are feasting on a price spike from Trump's 25% steel tariff. The benchmark price of US-made steel has zoomed 41% higher since the start of the year to $917 per short ton, according to S&P Global Platts.

Tariffs aren't the only factor. Steel demand is strong in an economy that just clocked its fastest growth since 2014.

Following the booming profits from Nucor and Reliance, US Steel (X) and AK Steel are scheduled to report results this week.

Both steel makers are expected to reveal a jump in revenue, though not by as much as their rivals. That's because US Steel and AK Steel (AKS) are locked into annual contracts that have fixed pricing. Those contracts expire later this year, potentially allowing them to capitalize on the price hikes.

Nucor is seizing on the momentum to plow $1 billion back into its business, a huge increase that will mostly go toward expansion.

"What will happen to our great country if we continue to operate with a massive trade imbalance?" Ferriola asked. "We agree with the administration's efforts to address this issue."

Of course, steel customers are less than thrilled.

Material costs have risen by as much as 50% at FJM Ferro, a Brooklyn company that fabricates steel used in Manhattan skyscrapers.

Steel companies may have record profits, but it does hurt the mom-and-pop shops," said Joe Casucci, FJM Ferro's founder and CEO.

Even large companies are getting squeezed. GM slashed its profit outlook last week, warning of a $300 million jump in commodity costs linked to higher steel and aluminum costs.

"You have to be careful with tariffs because there's always a cost," said Philip Gibbs, a steel analyst at KeyBanc Capital Markets.

He pointed out that spiking US steel prices threaten to make American businesses less competitive. Some companies may eventually try to find other ways to get steel into the country.

"It feels good in the short run as prices go up," Gibbs said. "But then all the customers complain."

2. Jobs report: Economists are expecting another solid month of gains when the Labor Department reports Friday on job growth for July.

The US economy has cranked into high gear, growing at the fastest pace in almost four years, and unemployment is 4%, near the lowest in a half-century.

Economists surveyed by Thomson Reuters expect 195,000 jobs were created in July, roughly in line with the average for this year.

3. Fed watch: The Federal Reserve is not expected to raise interest rates when it meets on Tuesday and Wednesday. But investors will be watching the Fed's statement closely for its read on the economy and clues about interest rates.

The Fed has signaled that it plans two more rate hikes this year and three in 2019.

4. Critical moment: This may be the most closely watched earnings report in Tesla's history.

The electric car maker reports results on Wednesday. Tesla just hit an important target for production of the Model 3, its most accessibly priced car. But Tesla is trying to stop mounting losses, and Elon Musk keeps making headlines with bizarre tweets.

5. Apple earnings: Apple will release is quarterly results on Tuesday, and a strong report could push the most valuable company in America to a milestone — a $1 trillion market cap.

Analysts may question Apple executives on whether the trade war its hurting the bottom line. And Apple fans will be hunting for hints about the next iPhone.

6. Coming this week:

Monday — Caterpillar (CAT) earnings

Tuesday — Eurozone second-quarter GDP; Pfizer (PFE), Procter & Gamble (PG), Apple (AAPL) earnings

Wednesday — Fed statement; Humana (HUM), Sprint (S), Tesla (TSLA) earnings

Thursday — Bank of England meets; Berkshire Hathaway (BRKA), Yum Brands (YUM), Aetna (AET) earnings

Friday — US jobs report; Kraft Heinz (KHC), Toyota (TM) earnings

CNNMoney (New York)
First published July 29, 2018: 7:18 AM ET