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The Star
4 days ago
- Business
- The Star
News Analysis: Britain delays second high-speed railway construction, again
by Xinhua writers Zheng Bofei, Larry Neild LONDON, June 18 (Xinhua) -- Britons won't be boarding their second high-speed railway -- High Speed 2 (HS2) -- before the 2030s, as the government confirmed on Wednesday that construction has been delayed until at least 2033. The delay stems from years of mismanagement and escalating costs, spanning from the tenure of the Conservative government to the current Labour administration. Sixteen years after HS2 was first proposed, Britain has yet to lay a single track for its long-planned rail line -- more than two decades after the country launched its first high-speed railway, HS1, which links London with the Channel Tunnel. The HS2 project was initially expected to cost 33 billion pounds (44.22 billion U.S. dollars) in 2012 and open by 2026. In a statement to the House of Commons on Wednesday, Transport Secretary Heidi Alexander said that based on an interim report conducted by HS2 chief executive Mark Wild, "I see no route by which trains can be running by 2033 as planned." The report concluded that there was "no single root cause" behind the rising costs and delays at HS2 Ltd, but rather "an accumulation of issues over time." UNREALISTIC PLANNING When HS2 was first envisioned, the rail line was planned to connect London to Manchester and Leeds, linking major cities such as Birmingham as part of a broader route to the north of England. However, under former Prime Minister Rishi Sunak's Conservative government, the plan was scaled back to only include the section from London to Birmingham. According to The Guardian, when the Department for Transport (DfT) set the Phase One budget in 2013, only a "basic design" existed. Poorly suited to early-stage planning, the proposal lacked sufficient contingency provisions. As a result, the projected cost soared to 55.7 billion pounds by 2015. One early miscalculation was the decision to route HS2 through the Chiltern Hills. Bowing to political pressure from local interests, the government added expensive tunnel segments in 2013, causing the budget to be reset to 50 billion pounds. In January 2020, the National Audit Office reported that HS2 was billions over budget and years behind schedule because the government had "failed to understand the risks" inherent in the project. Internal reviews by HS2 Ltd, the public company managing the project, found the full network could cost up to 88 billion pounds and might not be completed until 2040. Nevertheless, by late 2019, the government's funding envelope remained fixed at 56 billion pounds -- well below projected requirements, leaving a major shortfall. Chen Chai-Lin, senior lecturer at the University of Liverpool's Department of Geography and Planning, who has long studied high-speed rail development, told Xinhua: "It is an embarrassment to the country to have a project that was first announced 16 years ago, and Britain still relies on railway as its major transportation option." "To do a contract with the UK, all this uncertainty adds to the future project. I think we need to sit down and then try to reflect on this situation. What's the future for the UK?" said Chen. "APPALLING MESS" In her Wednesday address, Alexander described HS2 as an "appalling mess" -- a "litany of failure" that resulted in missed deadlines and cost increases of 37 billion pounds between 2012 and 2024. She confirmed the appointment of Mike Brown, former commissioner of Transport for London, as the new chair of HS2. Systemic management problems and weak governance have compounded delays over the past 16 years. HS2 Ltd has experienced persistent internal lapses and high turnover. In its 2013 assessment, the Infrastructure and Projects Authority cited major, seemingly unresolved issues in HS2's scope, timeline, budget, and benefits, warning that the project might need to be rescoped or fundamentally reassessed. In 2017, HS2 Ltd admitted to paying 1.8 million pounds in unauthorized redundancy compensation -- a serious breach of governance. Despite multiple attempts at reform, oversight remained inadequate. In February 2025, Parliament's Public Accounts Committee (PAC) declared HS2 a "casebook example of how not to run a major project." The PAC cited a "cycle of repeated failure" in collaboration between the DfT and HS2 Ltd, highlighting ongoing disagreement even over fundamental matters such as final cost, scope, and delivery date. POLITICAL MALFUNCTION Over time, HS2's original purpose became clouded by shifting government priorities. After commissioning an independent review in 2019, then-Prime Minister Boris Johnson gave the project the green light in early 2020, but simultaneously scrapped the eastern leg to Leeds as a cost-saving measure. In November 2021, the government officially cancelled the Leeds branch of Phase 2, abandoning plans to extend HS2 to the East Midlands and Yorkshire. The decision, prompted by concerns over rising costs, was seen as a politically convenient way to cap spending, but it also undermined HS2's core objective of improving northern England's infrastructure. "If investing in major infrastructure projects is an important sign that the UK is focused on growth and tackling regional inequality, this decision seems to signal the opposite," said the Institute for Government (IfG) in 2023. In March 2023, in the face of rising inflation and tight public finances, then Transport Secretary Mark Harper announced the deferral of key HS2 segments. Phase 2a (Birmingham to Crewe) was delayed by at least two years, and construction of the London Euston terminal was paused indefinitely. Although the official justification was to distribute spending more evenly over time, the delays only raised long-term costs. The pause at Euston followed a surge in the station's estimated cost to 4.8 billion pounds -- nearly double the original budget -- largely due to changes in design and scope. As a result, the launch of HS2's first phase was pushed back. Rather than reaching central London, initial HS2 services will terminate at Old Oak Common in west London, with no trains expected to reach the city centre before the 2040s. Rather than planning every detail years in advance, ministers and officials should focus on launching a minimum viable option and scaling up over time to avoid locking into expensive and inflexible commitments, the IfG recommended. In October 2023, ahead of a general election, Prime Minister Rishi Sunak cancelled the remaining northern half of HS2 -- the Birmingham to Manchester section -- during his Conservative Party conference speech. This sudden reversal came despite billions already being spent on planning and land acquisition for the now-abandoned route. Industry groups strongly criticized the decision. A suppliers' association remarked, "Every change in scope has added to the delays and costs" on HS2. As the PAC later noted, recent government interventions have had "damaging consequences" for HS2's timeline and financial health. As Geoffrey Clifton-Brown, PAC chair, put it: "It is time to deal with HS2 as what it is -- a cautionary tale that should be studied by future governments in how not to run a major project." (1 pound = 1.34 U.S. dollar)
The Star
13-06-2025
- Business
- The Star
Xi plays long game on US-China trade as Trump seeks quick wins
WASHINGTON: While Donald Trump hailed the outcome of trade talks in London, Xi Jinping walked away with an understated strategic gain: a negotiating process that buys China time and helps defuse the threat of more harmful tariffs and technology curbs. Shortly after two days of negotiations wrapped, Trump declared Wednesday (June 11) on social media that a deal had been "DONE' to restore the flow of critical magnets from China, and pledged to lift curbs on student visas. Hours earlier, US Commerce Secretary Howard Lutnick revealed Washington would unwind its recent tech curbs, if niche metals essential to US auto and defense firms now flowed fast enough. China's focus was very different. A People's Daily commentary on Thursday - Beijing's most substantial remarks so far on the talks - made no mention of export controls. Instead, the Communist Party mouthpiece touted an "institutional guarantee' established in Geneva for the two sides to bridge differences via a "consultation mechanism.' In a long-awaited leaders' call before the London negotiations, Xi told Trump the importance of using this channel, it added. The contrast illustrates a disconnect in how the world's biggest economies want to manage their trade dispute, and broader rollercoaster relationship. While Trump seeks quick deals done directly with top leaders, Xi favours a framework led by his lieutenants that wards against being blindsided. Such haggling could drag on for years, with the "Phase One' deal from the last trade war taking most of Trump's first term. "Xi is playing a longer game on US-China trade. His time in office is simply much longer than Trump's,' said Christopher Beddor, deputy China research director at Gavekal Research. "That's not to say there's never any short-term thinking, but the lack of term limits presents very different incentives than for Trump.' While slow-walking negotiations allows China the chance to assess how hard a bargain Trump drives with other nations, the lingering uncertainty is bad for business, he added. Xi showed last week he can be flexible, getting on the phone with Trump as ties spiralled, breaking from the normal protocol to set up such an interaction. In the Biden era, then National Security Advisor Jake Sullivan and Foreign Minister Wang Yi would huddle in overseas locations for days before their leaders spoke, managing outcomes and expectations. While the Geneva talks last month wrapped with an identical US-China statement, suggesting a degree of alignment, that accord quickly fell apart over US claims China reneged on a promise to release shipments of rare earths. Beijing says it always intended to keep in place a permit process, which American companies complained moved so slowly some factories were forced to pause production. The lack of a detailed read out from either side this time around has left much in doubt, including over what Beijing committed to doing on the export of niche metals used in everything from fighter jets to electric vehicles. Lutnick told CNBC on Wednesday that China was going to approve "all applications for magnets from United States companies right away' - a sweeping claim that appeared to leave plenty of room for disappointment. Chinese Commerce Ministry spokesman He Yadong pledged his country would "fully consider the reasonable needs and concerns of all countries in the civilian sector,' at a regular press briefing in Beijing on Thursday, adding that approval work was being strengthened. "The Chinese incentive is also to keep cards close to their chest, and not make a lot of proclamations about what they have or have not committed to,' said Arthur Kroeber, founding partner and head of research at Gavekal. "There is a lot of leeway for them within the whole export licensing regime.' One approach could be to restart enough export licences so commercial buyers aren't stymied, but not so much that firms can stockpile, thus blunting Beijing's future leverage, he added. Adding to the fuzziness, Trump declared on social media that China now faces a 55% charge, a number that appears to include levies introduced during his first presidency. It also combines a 10% baseline duty imposed by Trump and a 20% tax tied to fentanyl trafficking - an area where Beijing was seen as having room to negotiate if it stepped up scrutiny of its companies. Lutnick cast doubt on that, and raised questions about the nature of future negotiations, saying tariffs on China would "definitely' stick at their current level. That suggests a 90-day pause set to expire in August on Trump's blanket 145% rate is now irrelevant. Such a position also dilutes the incentive for Beijing to offer concessions in future trade talks, if tariffs can't budge. While China has felt the pain from US levies, with exports to the world's largest economy plunging 34% in May, Trump appears to be in the bigger hurry to get a deal. His administration is facing a self-imposed July 9 deadline to either strike pacts with dozens of trading partners or reimpose sweeping tariffs. In a sign of the Republican leader's growing impatience, he warned Wednesday that he will soon send letters to countries saying, "this is the deal, you can take it or leave it.' Exemplifying that willingness to keep things moving, Trump's team this week put export controls on the negotiating table - previously, such tools have been justified with national security concerns, and were largely off limits. - Bloomberg
Malaysian Reserve
13-06-2025
- Business
- Malaysian Reserve
Xi plays long game on US-China trade as Trump seeks quick wins
WHILE Donald Trump hailed the outcome of trade talks in London, Xi Jinping walked away with an understated strategic gain: a negotiating process that buys China time and helps defuse the threat of more harmful tariffs and technology curbs. Shortly after two days of negotiations wrapped, Trump declared Wednesday on social media that a deal had been 'DONE' to restore the flow of critical magnets from China, and pledged to lift curbs on student visas. Hours earlier, US Commerce Secretary Howard Lutnick revealed Washington would unwind its recent tech curbs, if niche metals essential to US auto and defense firms now flowed fast enough. China's focus was very different. A People's Daily commentary on Thursday — Beijing's most substantial remarks so far on the talks — made no mention of export controls. Instead, the Communist Party mouthpiece touted an 'institutional guarantee' established in Geneva for the two sides to bridge differences via a 'consultation mechanism.' In a long-awaited leaders' call before the London negotiations, Xi told Trump the importance of using this channel, it added. The contrast illustrates a disconnect in how the world's biggest economies want to manage their trade dispute, and broader rollercoaster relationship. While Trump seeks quick deals done directly with top leaders, Xi favors a framework led by his lieutenants that wards against being blindsided. Such haggling could drag on for years, with the 'Phase One' deal from the last trade war taking most of Trump's first term. 'Xi is playing a longer game on US-China trade. His time in office is simply much longer than Trump's,' said Christopher Beddor, deputy China research director at Gavekal Research. 'That's not to say there's never any short-term thinking, but the lack of term limits presents very different incentives than for Trump.' While slow-walking negotiations allows China the chance to assess how hard a bargain Trump drives with other nations, the lingering uncertainty is bad for business, he added. Xi showed last week he can be flexible, getting on the phone with Trump as ties spiraled, breaking from the normal protocol to set up such an interaction. In the Biden era, then National Security Advisor Jake Sullivan and Foreign Minister Wang Yi would huddle in overseas locations for days before their leaders spoke, managing outcomes and expectations. While the Geneva talks last month wrapped with an identical US-China statement, suggesting a degree of alignment, that accord quickly fell apart over US claims China reneged on a promise to release shipments of rare earths. Beijing says it always intended to keep in place a permit process, which American companies complained moved so slowly some factories were forced to pause production. The lack of a detailed read out from either side this time around has left much in doubt, including over what Beijing committed to doing on the export of niche metals used in everything from fighter jets to electric vehicles. Lutnick told CNBC on Wednesday that China was going to approve 'all applications for magnets from United States companies right away' — a sweeping claim that appeared to leave plenty of room for disappointment. Chinese Commerce Ministry spokesman He Yadong pledged his country would 'fully consider the reasonable needs and concerns of all countries in the civilian sector,' at a regular press briefing in Beijing on Thursday, adding that approval work was being strengthened. 'The Chinese incentive is also to keep cards close to their chest, and not make a lot of proclamations about what they have or have not committed to,' said Arthur Kroeber, founding partner and head of research at Gavekal. 'There is a lot of leeway for them within the whole export licensing regime.' One approach could be to restart enough export licenses so commercial buyers aren't stymied, but not so much that firms can stockpile, thus blunting Beijing's future leverage, he added. Adding to the fuzziness, Trump declared on social media that China now faces a 55% charge, a number that appears to include levies introduced during his first presidency. It also combines a 10% baseline duty imposed by Trump and a 20% tax tied to fentanyl trafficking — an area where Beijing was seen as having room to negotiate if it stepped up scrutiny of its companies. Lutnick cast doubt on that, and raised questions about the nature of future negotiations, saying tariffs on China would 'definitely' stick at their current level. That suggests a 90-day pause set to expire in August on Trump's blanket 145% rate is now irrelevant. Such a position also dilutes the incentive for Beijing to offer concessions in future trade talks, if tariffs can't budge. While China has felt the pain from US levies, with exports to the world's largest economy plunging 34% in May, Trump appears to be in the bigger hurry to get a deal. His administration is facing a self-imposed July 9 deadline to either strike pacts with dozens of trading partners or reimpose sweeping tariffs. In a sign of the Republican leader's growing impatience, he warned Wednesday that he will soon send letters to countries saying, 'this is the deal, you can take it or leave it.' Exemplifying that willingness to keep things moving, Trump's team this week put export controls on the negotiating table — previously, such tools have been justified with national security concerns, and were largely off limits. Watering down that rationale could open the door to more cooperation, and advance Trump's stated goal to 'open up China to American trade.' Still, China is unlikely to agree to large purchases of goods that compete in areas where Beijing is looking to build self sufficiency and nurture national champions. Rebalancing their economies, a concept touted by US Treasury Secretary Scott Bessent, could involve attracting more Chinese investment into the US. Policy whiplash might deter companies from pouring money into the US, even if Xi were to encourage them to do so. Addressing these issues will take time, requiring long discussions using the mechanism China and the US included in what Beijing called their 'hard won' agreement. 'Some people say that the result of the London talks was just a framework,' said Zhu Junwei, a former researcher in the People's Liberation Army who is now director of American research at Grandview Institution in Beijing. 'It's better to have a framework than have nothing.' –BLOOMBERG
Yahoo
03-06-2025
- Business
- Yahoo
What is eminent domain? What to know about Iowa's bill limiting it for carbon pipelines
After years of inaction, Iowa lawmakers have finally sent Gov. Kim Reynolds a bill limiting the use of eminent domain for carbon capture pipelines. Reynolds' spokesperson says she is reviewing the legislation, which has implications for Summit Carbon Solutions' proposed $8.9 billion carbon sequestration pipeline that would span 2,500 miles across South Dakota, Iowa, Minnesota, Nebraska and North Dakota to connect 57 ethanol plants. The measure isn't a full ban on eminent domain for carbon capture pipelines, as some advocates wanted. Instead, it combines several other pieces of legislation that limit eminent domain in certain circumstances, requires projects to carry more insurance and places new guidelines on the Iowa Utilities Commission. More: Republicans' frustrations spill into debate as Iowa Senate passes eminent domain bill Here's what to know about the bill. Eminent domain is the power to take private property for public use, with the property owner receiving compensation. The Iowa Utilities Commission is the body in charge of granting eminent domain to projects such as electric transmission lines and pipelines. The commission granted Summit eminent domain powers in 2024 to acquire land, or access to land, from owners who aren't willing to sign voluntary agreements with the company. Opponents of Summit's pipeline say they do not believe the project qualifies as a public use. Summit officials have said the company has invested nearly $175 million on voluntary agreements in Iowa, signed agreements with more than 1,300 landowners and secured 75% of the Phase One route. More: How Iowa lawmakers voted on a bill limiting eminent domain for carbon capture pipelines The bill, House File 639, passed the Senate in a 27-22 vote and now awaits Reynolds' signature. Here's what it says. Pipeline companies must prove that their project is insured sufficiently to cover any losses or injury from the pipeline construction and any discharge. The company would have to either buy insurance for affected landowners or reimburse them for increased insurance premiums due to the pipeline's presence. Hazardous liquid pipelines could not receive eminent domain powers unless they qualify as common carriers, meaning they can prove they will sell the commodity to an unaffiliated buyer. All Iowa Utilities Commission members must be present at hearings on proposed public utility regulations, electric transmission lines and pipelines and at least one commissioner must be present at informational meetings held in counties along the project's route. The Iowa Utilities Commission could not renew any permit granted to a liquefied carbon dioxide pipeline and no CO2 pipeline would be allowed to operate longer than 25 years. State lawmakers, city and county officials and 'any resident with a minimally plausible interest' would be allowed to intervene in Iowa Utilities Commission cases. The Iowa Utilities Commission could not file sanctions against intervenors unless the commission determines the intervenor was knowingly dishonest, committed a crime or caused injury to the commission. Catch up on the tense Senate debate over the legislation here. This article originally appeared on Des Moines Register: What is eminent domain? What to know about Iowa's House File 639
Business Times
03-06-2025
- Business
- Business Times
Trade talks get bumpier, but China's dark-horse status will hold firm
ON MAY 12, both China and the United States took a major step forward by slashing tariffs. The US announced a sweeping cut from 145 per cent to 30 per cent on Chinese imports. The figure includes a 10 per cent 'reciprocal' tariff and 20 per cent tied to fentanyl concerns. China responded in kind, slashing duties on US goods from 125 per cent to 10 per cent, and temporarily halting non-tariff measures that were previously imposed on US entities under its unreliable-entity list and export-control list. Talks between the US and China continued on May 22, with both sides signalling a willingness to continue dialogue. That was a positive gesture that markets welcomed. It seems that the risk of escalating tariffs is easing between the two major superpowers, and markets are starting to breathe a little easier. Tariff de-risking only a temporary reprieve While recent breakthroughs have dominated headlines, the prospect of further tariff reductions appears limited in the near term. The 'reciprocal' US tariff has already been reduced to 10 per cent, a threshold previously accepted by US President Donald Trump in negotiations with allies such as the United Kingdom, and now seemingly established as a de facto floor. On the other side, China remains steadfast on the fentanyl issue. Beijing has pushed back on Washington's framing, stating the issue as a domestic challenge for the US rather than a bilateral concern. With Beijing unwilling to soften its stance on fentanyl-related claims, the current combined tariff rate of 30 per cent could prove sticky. The risk of a renewed tariff escalation remains on the table. Trump's erratic history on trade policy serves as a reminder of how quickly detente can unravel. In 2018, a similar pause gave way to an abrupt US reversal, prompting over 18 months of trade tensions before the 'Phase One' agreement was eventually signed in January 2020. In that light, today's 'thaw' should be seen as fragile, not final. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Looking ahead, the pace of negotiations is expected to slow. Buoyed by its perceived success in this latest round, Beijing appears more confident in its hardline approach. Washington, meanwhile, has yet to make progress on reducing the trade deficit. The misalignment in strategic goals, coupled with Trump's simultaneous trade talks with other nations, suggests that any substantial progress will take time. Given this dynamic, tariff levels are likely to hold near the 30 per cent mark – or potentially edge higher. Full-scale decoupling remains less likely, as future tariff measures are expected to be more targeted, focusing on strategic sectors such as semiconductors and aluminium, rather than broad-based increases. China's growth risks remain contained China's economy has already felt the sting of triple-digit US tariffs in April. The official NBS Manufacturing purchasing managers' index slipped to 49 in April – the fastest contraction in 16 months – as sentiment deteriorated across both domestic and external-facing industries. In response, Beijing has activated its macroeconomic toolkit to shore up liquidity amid ongoing trade pressures. Ahead of recent tariff talks, the People's Bank of China (PBOC) cut the required reserve ratio by 50 basis points (bps) and trimmed the seven-day reverse repo rate by 10 bps to 1.4 per cent. The easing momentum continued on May 20, with PBOC lowering both the one-year and five-year loan prime rates by 10 bps, signalling a push to stimulate consumer and corporate borrowing. These consecutive moves underscore Beijing's commitment to supporting domestic growth against the backdrop of external challenges. Meanwhile, efforts to pivot trade flows are starting to bear fruit. April's trade data showed exports rising a robust 8.1 per cent year on year – well ahead of market expectations of 1.9 per cent. While shipments to the US fell sharply by 21 per cent, this was offset by strong export growth to Asean (+20.8 per cent), Taiwan (+15.5 per cent) and Japan (+7.8 per cent). Tariffs remain a structural headwind, but China appears increasingly equipped to cushion their impact. With US tariffs now scaled back to 30 per cent, the estimated drag on China's GDP in 2025 is forecast to narrow to just 0.3 percentage points, a marked improvement from the previously projected 1 percentage point hit under the former 145 per cent tariff level. This more manageable burden better positions China to achieve its target of around 5 per cent GDP growth for the year. Domestic-focused tech leaders better insulated In a macro environment where tariffs remain elevated at 30 per cent – with the potential to climb further – Chinese companies with a domestic orientation appear better positioned to navigate trade-related headwinds. On average, constituents of the MSCI China Index derive just 15 per cent of their revenue from international markets, well below the levels seen in MSCI emerging markets ex-China (29 per cent) and MSCI Japan (47 per cent). Technology heavyweights such as Alibaba, and Tencent exemplify this resilience, with overseas revenue exposure of 10 per cent or less. This limited external dependence provides a natural buffer against geopolitical and trade shocks. These firms have also delivered strong results in the first quarter of 2025, buoyed by a recovery in consumer demand and strong momentum in artificial intelligence (AI)-related product revenues. The earnings rebound has driven notable sector outperformance, with consumer discretionary and communication services posting the highest positive earnings surprises at 9.3 and 6.9 per cent, respectively. China's economy continues to draw support from diversified trade flows and timely policy stimulus aimed at anchoring growth. A renewed emphasis on domestic consumption and advancements in AI are also injecting fresh momentum into the country's technology sector, positioning leading firms for resilience amid ongoing global trade uncertainty. While the path of tariff negotiations is likely to remain uneven – with the possibility of renewed escalation – we maintain the view that China remains well-positioned to outperform. Against a cautious global backdrop, it stands as a potential dark horse in the 2025 investment landscape. The writer is a research analyst with the research and portfolio management team of the B2C division of iFast Financial, the Singapore subsidiary of iFast Corp.
