Flexibility of smaller, more fuel efficient planes trump behemoths

I remember, 14 years ago, when I was doing my MBA in Ottawa, I had a discussion with one of my professors; I was convinced that the large planes with 500+ passengers were the way of the future due to the boom in travel.

My point was that these cost so much to that it will be harder for aircraft vendors and airlines to upgrade, and as such, smaller planes would be always beat them on operational efficiency.

Furthermore, travelers are increasingly more interested in exotic destinations which require point-to-point service, something that huge planes are not good at.

Another point he was making was that airports would become the limiting factor as the number of movements would limit their ability to grow and this would therefore support the rationale for larger planes.

I didn't think this was a good argument either as the incentives for larger planes are with the airports, not the airlines and there's no clear reason why the airports would be able to pass the incentives to the airlines in a realistic way .

So, now, almost 15 years later, it seems that history proved me right; airports are much larger, and behemoth planes are on the way out. 

Russia was dabling with the idea of a massive Sukhoi KR-860. It would have been a gigantic failure...

https://simpleflying.com/airbus-a380-vs-a350/

https://simpleflying.com/russias-a380-alternative/

U.S. Senate Passes Bill That Could Delist Chinese Companies

May 21st, 2020

(Bloomberg) — The Senate overwhelmingly approved legislation Wednesday that could lead to Chinese companies such as Alibaba Group Holding Ltd. and Baidu Inc. being barred from listing on U.S. stock exchanges amid increasingly tense relations between the world’s two largest economies.

The bill, introduced by Senator John Kennedy, a Republican from Louisiana, and Chris Van Hollen, a Democrat from Maryland, was approved by unanimous consent and would require companies to certify that they are not under the control of a foreign government.

U.S. lawmakers have raised red flags over the billions of dollars flowing into some of China’s largest corporations, much of it from pension funds and college endowments in search of fat investment returns. Alarm has grown in particular that American money is bankrolling efforts by the country’s technology giants to develop leading positions in everything from artificial intelligence and autonomous driving to internet data collection.

Shares in some of the biggest U.S.-listed Chinese firms, including Baidu and Alibaba, slid Thursday in New York while the broader market gained.

If a company can’t show that it is not under such control or the Public Company Accounting Oversight Board, or PCAOB, isn’t able to audit the company for three consecutive years to determine that it is not under the control of a foreign government, the company’s securities would be banned from the exchanges.

“I do not want to get into a new Cold War,” Kennedy said on the Senate floor, adding that he wants “China to play by the rules.”

“Publicly listed companies should all be held to the same standards, and this bill makes common sense changes to level the playing field and give investors the transparency they need to make informed decisions,” Van Hollen said in a statement. “I’m proud that we were able to pass it today with overwhelming bipartisan support, and I urge our House colleagues to act quickly.”

Stricter U.S. oversight could potentially affect the future listing plans of major private Chinese corporations from Jack Ma’s Ant Financial Services Group to SoftBank-backed ByteDance Ltd. But since discussions on increased disclosure requirements began last year, many other Chinese companies have either listed in Hong Kong already or plan to do so, said James Hull, a Beijing-based analyst and portfolio manager with Hullx.

“All Chinese U.S.-listed entities are potentially impacted over the coming years,” he said. “Increased disclosure may hurt some smaller companies, but there’s been risk disclosures around PCAOB for a while now, so it shouldn’t be a shock to anyone.”

In a sign of broad support for the measure, Rep. Brad Sherman, a California Democrat on the House Financial Services Committee, introduced a companion bill in that chamber. Sherman said in a statement that Nasdaq moved this week to delist China-based Luckin Coffee after executives at the company admitted fabricating $310 million in sales between April and December 2019.

“I commend our Senate counterparts for moving to address this critical issue,” Sherman said. “Had this legislation already been signed into law, U.S. investors in Luckin Coffee likely would have avoided billions of dollars in losses.”

House leaders are discussing the legislation — and a separate Senate-passed bill to sanction Chinese officials over human rights abuses against Muslim minorities — with lawmakers and members of the relevant committees, a Democratic aide said.

The Senate measure — S. 945 — is an example of the rising bipartisan pushback against China in Congress that had been building over trade and other issues. It has been amplified especially by Republicans as U.S. President Donald Trump has sought to blame China as the main culprit in the coronavirus pandemic.

Republican lawmakers have in recent weeks unleashed a torrent of legislation aimed at punishing China for not being more forthcoming with information or proactive in restricting travel as the coronavirus began to spread from the city of Wuhan, where it was first detected.

Trump escalated his rhetoric against China on Wednesday night, suggesting that leader Xi Jinping is behind a “disinformation and propaganda attack on the United States and Europe.”

“It all comes from the top,” Trump said in a series of tweets. He added that China was “desperate” to have former Vice President Joe Biden win the presidential race.

Kennedy told Fox Business on Tuesday that the bill would apply to U.S. exchanges such as Nasdaq and the New York Stock Exchange.

“I would not turn my back on the Chinese Communist Party if they were two days dead,” Kennedy said. “They cheat. And I’ve got a bill to stop them from cheating.”

At issue is China’s longstanding refusal to allow the PCAOB to examine audits of firms whose shares trade on the New York Stock Exchange, Nasdaq and other U.S. platforms. The inspections by the little-known agency, which Congress stood up in 2002 in response to the massive Enron Corp. accounting scandal, are meant to prevent fraud and wrongdoing that could wipe out shareholders.

Since then China and the U.S. have been at odds on the issue even as companies including Alibaba and Baidu have raised billions of dollars selling shares in American markets. The long-simmering feud came to the forefront last year as Washington and Beijing clashed over broader trade and economic issues, and some in the White House have been urging Trump to take a harder line on the audit inspections.

Last week, Trump said in an interview on Fox Business that he’s “looking at” Chinese companies that trade on the NYSE and Nasdaq exchanges but do not follow U.S. accounting rules. Still, he said that cracking down could backfire and simply result in the firms moving to exchanges in London or Hong Kong.

While not technically part of the government, the PCAOB is overseen by the Securities and Exchange Commission. The ability to inspect audits of Chinese firms that list in the U.S. is certain to come up at a roundtable that the SEC is holding July 9 on risks of investing in China and other emerging markets.

Senators Kevin Cramer, Tom Cotton, Bob Menendez, Marco Rubio and Rick Scott are also sponsors of the bill. Rubio applauded the passage of the Kennedy-Van Hollen bill and said it incorporated aspects of a similar bill he introduced last year.

“I was proud to work with Senator Kennedy on this important legislation that would protect American retail investors and pensioners from risky investments in fraudulent, opaque Chinese companies that are listed on U.S. exchanges and trade on over-the-counter markets,” Rubio said in a statement. “If Chinese companies want access to the U.S. capital markets, they must comply with American laws and regulations for financial transparency and accountability.”

According to the SEC, 224 U.S.-listed companies representing more than $1.8 trillion in combined market capitalization are located in countries where there are obstacles to PCAOB inspections of the kind this legislation mandates.

Time to move the factory of the world somewhere else

The Covid-19 pandemic has shown that the Chinese Communist Party:

• Cannot be trusted to be transparent even in times of crisis, thereby threatening the lives of millions of people, not only in China, but also everywhere else in the rest of the world
• Is unwilling to play by the rules of global trade; stealing intellectual property whenever it suits its goals
• Is a global propagandist and disinformation bully
• Is unwilling to consider the introduction of true multi-party and universal suffrage for the citizen of China
• Is leveraging its capitalist, globalization-driven economic gains of the past 30 years to impose its neo-imperialistic rule

Something must be done and the G7 countries would be well positioned to do so.

Majorly invest in upgrading infrastructures, education system, and supporting G7 countries p[rivate investment in India, with the goal of replacing China as the current 'factory of the world' with one which is going to play by the rules, and is a democracy.

(2020-06-06 update)

Seems that India got the message...

https://www.caixinglobal.com/2020-06-05/indias-66-billion-incentive-program-challenges-china-in-manufacturing-insiders-say-101563697.html

'India’s $6.6 Billion Incentive Program Challenges China in Manufacturing, Insiders Say

By He Shujing and Mo Yelin.

India’s new incentive program to entice global smartphone-makers to set up factories there will give it a long-term edge over China in competing for manufacturing, industry observers said.

Earlier this week, India’s government announced that it would set aside 500 billion rupees ($6.6 billion) over the next five years to bring in global companies to set up facilities to make products across the smartphone supply chain.

As part of the program, the government will offer subsidies to qualified companies equal to 4% to 6% of incremental sales of the goods they manufacture in India over the five-year period. It will also offer these companies subsidies on their capital expenditures on an identified list of products including electronics components and semiconductors.

The announcement came against a backdrop in which governments around the world are increasingly calling for their countries to reduce their dependency on China for manufacturing amid the Covid-19 pandemic that exposed risks in key supply chains. It also came as Indian Prime Minister Narendra Modi, who has called for a more self-reliant India, has pushed for additional incentives to create more domestic manufacturing in an effort to create jobs.

The latest programs, which involve direct financial support, are much stronger than past policies that focused on increasing duties on imported goods as a way to support local production, said Tarun Pathak, an India-based analyst at Counterpoint Research. The new programs are also more aggressive, targeting high-value companies like contract manufacturing giant Foxconn and Chinese smartphone-makers such as Oppo and Vivo.

China remains the dominant player in the global supply chain for smartphone manufacturing, as nearly 65% of the world’s smartphones are assembled and directly shipped from the country to buyers around the world, according to Counterpoint.

But analysts said India’s latest programs will give the country a long-term edge over China in competing for manufacturing. India’s manufacturing capabilities in the smartphone industry have greatly improved over the past few years, Pathak said. In 2014, 70% of phones bought in India were imported. Now, 99% of the phones are assembled locally.

Adwait Mardikar, another India-based analyst who works for research group Canalys, said in an online seminar earlier this year that the Indian government’s policy push, along with multinationals’ strategies to mitigate supply chain risk, will make the country an attractive destination for manufacturers. “India will be a major manufacturer and exporter in the coming years,” Mardikar said, “and by the end of this decade, it might even rival China in terms of scale.”

Still, India has several weak spots that stand in the way of its goals, such as poor infrastructure and a lack of workers skilled in manufacturing, Pathak said.

Bloomberg contributed to this report.'

WHO Coronavirus tracking

China delayed releasing coronavirus info, frustrating WHO
Associated Press, June 2nd, 2020
https://apnews.com/3c061794970661042b18d5aeaaed9fae

'Throughout January, the World Health Organization publicly praised China for what it called a speedy response to the new coronavirus. It repeatedly thanked the Chinese government for sharing the genetic map of the virus “immediately,” and said its work and commitment to transparency were “very impressive, and beyond words.”

But behind the scenes, it was a much different story, one of significant delays by China and considerable frustration among WHO officials over not getting the information they needed to fight the spread of the deadly virus, The Associated Press has found.

Despite the plaudits, China in fact sat on releasing the genetic map, or genome, of the virus for more than a week after three different government labs had fully decoded the information. Tight controls on information and competition within the Chinese public health system were to blame, according to dozens of interviews and internal documents.'

(...)

The recordings suggest that rather than colluding with China, as Trump declared, WHO was kept in the dark as China gave it the minimal information required by law. However, the agency did try to portray China in the best light, likely as a means to secure more information. And WHO experts genuinely thought Chinese scientists had done “a very good job” in detecting and decoding the virus, despite the lack of transparency from Chinese officials.

WHO staffers debated how to press China for gene sequences and detailed patient data without angering authorities, worried about losing access and getting Chinese scientists into trouble. Under international law, WHO is required to quickly share information and alerts with member countries about an evolving crisis. Galea noted WHO could not indulge China’s wish to sign off on information before telling other countries because “that is not respectful of our responsibilities.”

WHO chief says widespread travel bans not needed to beat China virus
Reuters, February 3rd, 2020
https://mobile.reuters.com/article/amp/idUSKBN1ZX1H3

'GENEVA (Reuters) - World Health Organization chief Tedros Adhanom Ghebreyesus said on Monday there was no need for measures that "unnecessarily interfere with international travel and trade" in trying to halt the spread of a coronavirus that has killed 361 people in China.

"We call on all countries to implement decisions that are evidence-based and consistent," Tedros told the WHO executive board, reiterating his message from last week when he declared an international emergency.

China is facing increasing international isolation due to restrictions on flights to and from the country, and bans on travelers from China.

There have been 17,238 confirmed infections in China including 361 deaths, as well as 151 confirmed cases in 23 countries and 1 death which was reported from the Philippines on Sunday, Tendros added.

"Because of this strategy and it weren't for China, the number of cases outside China would have been very much higher," he said.

Referring to the virus' spread abroad, he said it was "minimal and slow", while warning that it could worsen.

Tedros, who held talks in Beijing a week ago with Chinese President Xi Jinping and other leaders, coughed and interrupted his speech to take a drink of water, quipping: "Don't worry, it's not corona".

China's delegate took the floor at the WHO Executive Board and denounced measures by "some countries" that have denied entry to people holding passports issued in Hubei province - at the center of the outbreak - and to deny visas and cancel flights.


"All these measures are seriously against recommendation by the WHO," said Li Song, who is China's ambassador for disarmament at the United Nations in Geneva.

China's regular Executive Board representative was unable to attend after her flight from Beijing was canceled, Chinese diplomats told reporters on Friday.

U.S. ambassador Andrew Bremberg said that the outbreak in two dozen countries required focused attention.

"We express our support, prayers, sympathy, and appreciation to the people of China and especially the health responders on the front lines, who are protecting not only their communities, but the world," Bremberg said.


"We are learning more about the virus every day and implementing appropriate public health measures, in keeping with WHO’s recommendations, to minimize the spread based on the best evidence available. The United States is committed to working with all partners to address this outbreak," he added.