Tag Archives: Economy

Weaker dollar helps lift oil, supply worries persist

An oil derrick and wind turbines stand above the plains north of Amarillo, Texas, U.S., March 14, 2017. REUTERS/Lucas Jackson

By Sabina Zawadzki

LONDON (Reuters) – Oil prices rose on Friday, helped by a weaker dollar, as investors weighed the impact of OPEC production cuts against rising U.S. shale oil output and persistently high inventories.

Saudi Energy Minister Khalid al-Falih said on Thursday oil output cuts by the Organization of the Petroleum Exporting Countries and non-OPEC producers could be extended beyond June if oil stocks stayed above a long-term average.

But analysts said the comments gave limited support because Riyadh has said it needs cooperation to rebalance the market and non-OPEC producers, such as Russia, have yet to deliver fully on reduction commitments in the first half of 2017.

Brent crude was up 31 cents at $52.05 a barrel by 1102 GMT. U.S. light crude was up 33 cents at $49.08.

“The market remains relatively calm today with concerns about having to extend the production cut deal being offset by a weaker dollar,” said Saxo Bank head of commodity strategy Ole Hansen.

Oil prices, which lost ground earlier on Friday, have found some support from dollar weakness after the U.S. Federal Reserve indicated it would not accelerate plans for rate rises. The fall in the greenback boosted dollar-denominated crude.

Investors will also look for more direction from data due later on Friday. The Baker Hughes weekly rig count will indicate activity in the U.S. shale industry and the U.S. Commodity Futures Trading Commission releases calculations of net long and short positions in the crude futures market.

Oil prices fell sharply last week on concerns that OPEC-led production cuts were not reducing the global supply overhang as quickly as expected in the face of increased U.S. output.

OPEC and non-OPEC members reached agreement last year to cut output by a combined 1.8 million barrels per day (bpd) in the first half of 2017.

But OPEC’s monthly report showed global oil inventories rose in January to 278 million barrels above the five-year average.

Investors took some comfort from a dip in U.S. stockpiles in the week to March 10, after nine weekly rises. However, the fall in U.S. inventories was a modest 237,000 barrels, leaving 528 million barrels in storage, close to record highs. [EIA/S]

In a further sign that OPEC’s efforts have had little impact so far, oil shipments to Asia have increased 3 percent since the OPEC supply cut deal was made.

(Additional reporting by Jane Chung; Editing by Edmund Blair)

GM will rehire 500 Michigan workers slated for layoffs

The GM logo is seen in Warren, Michigan, U.S. on October 26, 2015. REUTERS/Rebecca Cook/File Photo

By David Shepardson

WASHINGTON (Reuters) – General Motors Co plans next year to rehire 500 Michigan assembly plant workers who are to be laid off in May, citing increased demand for larger vehicles, the company said on Wednesday.

GM said last week it planned to lay off 1,100 workers in May at its Lansing Delta Township assembly plant in Michigan. The company is moving production of the GMC Acadia mid-size SUV to Spring Hill, Tennessee, from the factory, which will build just two models, the Chevrolet Traverse and Buick Enclave SUVs.

The company said that when it begins full production of the new versions of the two models in 2018, it would “bring back approximately 500 jobs to give the company flexibility to meet market demand.”

GM also said it would add 220 jobs at a plant in Romulus, Michigan, that is building 10-speed automatic transmissions, and it would retain 180 jobs by shifting Lansing workers to a Flint assembly plant to support pickup truck production.

The news comes as U.S. President Donald Trump is set to visit Michigan later on Wednesday to announce that his administration will reopen a review of fuel efficiency standards, a move that could help automakers sell more of their larger models. GM did not credit Trump with the decision to add jobs.

“We haven’t fundamentally changed any of our plans, but we continue to look for ways to improve our operations and find ways to help the country, grow jobs and support economic growth,” spokesman Pat Morrissey said.

He said Trump’s visit “gave us a positive venue to share good news for the state of Michigan – and specifically for our plants and people in Flint, Romulus and Lansing.”

The Detroit automaker in recent months has announced other U.S. job cuts and new investments. GM said in January it would invest another $1 billion in its U.S. factories.

Trump has urged GM and other automakers to build more cars in the United States as part of his pledge to boost the nation’s manufacturing jobs and discourage the industry from investing in Mexico.

GM said in November it would cut about 2,000 jobs when it ended the third shift at its Lordstown, Ohio, and Lansing Grand River plants in January. In December, it said it planned to cancel the second shift and cut nearly 1,300 jobs from its Detroit-Hamtramck assembly plant in March.

(Reporting by David Shepardson; Editing by Lisa Von Ahn)

Brazil workers protest against pension reform, disrupt transport

Protestors partially block the main avenue during a strike against Brazilian Social Welfare reform project from government, in Sao Paulo, Brazil March 15, 2017. REUTERS/Paulo Whitaker

SAO PAULO (Reuters) – Brazilian civil servants, rural workers and labor confederations staged nationwide demonstrations on Wednesday against President Michel Temer’s pension reform plan, with hundreds of protesters occupying the premises of the finance ministry in the capital Brasilia.

Bus and subway services were partially disrupted in São Paulo and Rio de Janeiro, the country’s most populous cities. Drivers remained stranded because of small street demonstrations across several major avenues in São Paulo’s eastern, southern and northern corners.

In Brasilia, more than 1,500 people from peasant and homeless groups held protests at the finance ministry, the Landless Peasant Movement said in a statement.

Finance Minister Henrique Meirelles said some damage occurred inside the ministry, without providing details.

“Several floors of the building were invaded because of this strike,” Meirelles told reporters in Brasilia.

The demonstrations reflect the deep ideological divide among Brazilians as Temer seeks to pass the nation’s most ambitious platform of economic reforms in two decades.

Leaders in Temer’s 22-party alliance say capping pension benefits would be a key step to pull the country out of its worst recession on record.

Last week, Temer acknowledged that his administration would have to negotiate with Congress to win passage of the pension reform, which would establish a minimum age of retirement and scale back benefits for civil servants.

Still, senior lawmakers have said there is not much room for changes to Temer’s original proposal if the country wants to reduce a record budget deficit that is putting the brakes on an economic recovery and hampering investor confidence.

Public transport workers in the cities of Recife, Curitiba and Belo Horizonte were also striking.

(Reporting by Guillermo Parra-Bernal; Additional reporting bY Marcela Ayres iN Brasilia; Editing by W Simon and Lisa Von Ahn)

U.S. retail sales weakest in six months; inflation firming

Shoppers ride escalators at the Beverly Center mall in Los Angeles, California November 8, 2013. REUTERS/David McNew

By Lucia Mutikani

WASHINGTON (Reuters) – U.S. retail sales recorded their smallest increase in six months in February as households cut back on motor vehicle purchases and discretionary spending, the latest indication that the economy lost further momentum in the first quarter.

Other data on Wednesday showed a steady increase in inflation, with the consumer price index posting its biggest year-on-year increase in nearly five years in February. Firming inflation could allow the Federal Reserve to raise interest rates on Wednesday despite signs of slowing domestic demand.

“Nothing here to suggest the Fed shouldn’t raise interest rates at the policy meeting that concludes later today,” said Paul Ashworth, chief U.S. economist at Capital Economics in Toronto.

The Commerce Department said retail sales edged up 0.1 percent last month, the weakest reading since August. January’s retail sales were revised up to show a 0.6 percent rise instead of the previously reported 0.4 percent advance.

Sales were likely held back by delays in issuing tax refunds this year as part of efforts by the government to combat fraud. Compared to February last year retail sales were up 5.7 percent.

February’s retail sales gain was in line with economists’ expectations. Excluding automobiles, gasoline, building materials and food services, retail sales rose 0.1 percent after an upwardly revised 0.8 percent jump in January.

These so-called core retail sales, which correspond most closely with the consumer spending component of gross domestic product, were previously reported to have increased 0.4 percent in January.

In a separate report, the Labor Department said its Consumer Price Index ticked up 0.1 percent last month as a drop in gasoline prices offset increases in the cost of food and rental accommodation. That was the weakest reading in the CPI since July and followed a 0.6 percent jump in January.

In the 12 months through February, the CPI accelerated 2.7 percent, the biggest year-on-year gain since March 2012. The CPI rose 2.5 percent in the year to January. Inflation is firming in part as the 2015 drop, which was driven by lower oil prices, fades from the calculation.

The so-called core CPI, which strips out food and energy

costs, increased 0.2 percent last month as new motor vehicle prices fell and apparel prices moderated after spiking in January. The core CPI increased 0.3 percent in January.

In the 12 months through February, the core CPI increased

2.2 percent after advancing 2.3 percent in January. It was the 15th straight month the year-on-year core CPI remained in the 2.1 percent to 2.3 percent range.

The Fed has a 2 percent inflation target and tracks an inflation measure which is currently at 1.7 percent.

ECONOMY SLOWING

The U.S. central bank is expected to raise its overnight benchmark interest rate by 25 basis points to a range of 0.75 percent to 1.00 percent on Wednesday. It increased borrowing costs last December and has forecast three rate hikes in 2017.

U.S. financial markets were little moved by the data as traders awaited the outcome of the Fed’s meeting. The Fed will announce its decision on interest rates at 2 p.m. (1800 GMT)

February’s retail sales added to January’s weak reports on trade, construction and business spending that have pointed to sluggish economic growth in the first quarter.

The Atlanta Fed is forecasting GDP rising at a 1.2 percent annualized rate in the first quarter. With the labor market near full employment, slowing growth probably understates the health of the economy. In addition, GDP growth tends to be weaker in the first quarter because of calculation issues that the government has acknowledged and is working to resolve.

Tightening labor market conditions, which are steadily lifting wages, continue to underpin consumer spending.

In February, motor vehicle sales fell 0.2 percent after declining 1.3 percent the prior month. Receipts at service stations slipped 0.6 percent, reflecting lower gasoline prices.

Sales at electronics and appliances stores fell 2.8 percent, the biggest decline since December 2011, after climbing 1.1 percent in January. Receipts at building material stores increased 1.8 percent.

Sales at clothing stores fell 0.5 percent. Retailers including J.C. Penney Co Inc <JCP.N>, Abercrombie & Fitch <ANF.N> and Macy’s Inc <M.N> are scaling back on brick-and-mortar operations amid increased competition from online retailers, led by Amazon.com <AMZN.O>.

Sales at online retailers jumped 1.2 percent last month after increasing 0.5 percent in January. Receipts at restaurants and bars dipped 0.1 percent, while sales at sporting goods and hobby stores fell 0.4 percent.

(Reporting by Lucia Mutikani; Editing by Andrea Ricci)

Short of options, Venezuela opposition stages flash protests

Carlos Paparoni (C, in yellow), deputy of the Venezuelan coalition of opposition parties (MUD), clashes with Venezuelan National Guards during a protest outside the food ministry in Caracas, Venezuela March 8, 2017. REUTERS/Carlos Garcia Rawlins

By Andrew Cawthorne

CARACAS (Reuters) – A dozen activists alight surreptitiously from cars, walk determinedly toward Venezuela’s heavily-guarded Food Ministry, and dump two bags of garbage at its front entrance.

Soldiers quickly form a cordon and a young opposition lawmaker pounds their riot shields with his fists as government supporters appear from nowhere, throwing punches at the protesters.

The activists, who use garbage to symbolize how people are scavenging for food because of Venezuela’s economic crisis, chant “The People Are Hungry!” and “Democracy!” After a few minutes, they are chased back to their cars by a fast-growing crowd of supporters of socialist President Nicolas Maduro.

The mid-morning fracas in a working-class district of Caracas is the latest of near-weekly “surprise” protests by the opposition this year intended to embarrass Maduro, galvanize street action and highlight Venezuela’s litany of problems.

“Three million Venezuelans are eating out of rubbish today,” said the 28-year-old legislator Carlos Paparoni, nursing a few bruises after the Food Ministry protest.

“No one can shut us up. We will fight wherever we have to.”

While the small, flash protests briefly paralyze streets, turn heads and provide colorful photo ops for journalists tipped off in advance, they are little more than a minor irritant to Maduro.

In fact, they have only been on the rise this year because of the failure of traditional mass marches in 2016.

A year of marches, which peaked with a million-person rally in Caracas, did not stop authorities blocking a referendum on Maduro’s rule that could have changed the balance of power in the South American member of OPEC with 30 million people.

Instead, they led to a short-lived Vatican-championed dialogue that helped shore up the unpopular president and divided the opposition Democratic Unity coalition, leaving rank-and-file activists demoralized.

With Maduro’s term due to finish in early 2019, authorities are now delaying local elections and making opposition parties jump through bureaucratic hoops to remain legally registered.

“We’ll have to stop conventional rallies and use the surprise factor to make the government see it must respect the constitution,” said opposition leader Henrique Capriles, whose First Justice party is a main promoter of the flash protests.

‘NO TO DICTATORSHIP!’

After traditional-style marches around the country on Jan. 23 were again blocked by security forces, Capriles debuted the new strategy the next day with a surprise protest that briefly immobilized vehicles on a highway.

Demonstrators held banners demanding “Elections Now!”

Since then, activists coordinating clandestinely and rotating responsibilities, have popped up regularly to stop traffic, chant slogans and demand meetings with officials. One day, they held three simultaneous protests.

Numbers, however, are small, seldom more than a dozen or two. Security forces normally move them on quickly, and pro-Maduro supporters hang around government buildings precisely to display their political zeal in such moments.

“These fascist coup-mongers are seeking violence. They should go to jail!” shouted Jorge Montoya, 48, wearing a “Chavez Lives!” T-shirt in honor of late leader Hugo Chavez outside the Food Ministry where he helped chase off the protesters.

Officials did not respond to requests for interviews on the flash protests. Maduro and other senior government officials routinely denounce opposition activists as coup-plotters, intent on bringing down socialism in Venezuela.

Another opposition party, Popular Will, which has long promoted civil disobedience tactics, is also a main instigator of street activism.

Its members last month painted a mosaic of their jailed leader Leopoldo Lopez on a highway, decked lamp posts with black “No To Dictatorship!” signs overnight, and on Valentine’s Day handed flowers to security personnel.

“They are actions that have to be creative, have high impact for communication, dent the government’s sense of invincibility, transmit a message … and reduce fear,” said Emilio Grateron, Popular Will’s national head of activism.

The party’s more than 150,000 activists take inspiration from successful models of non-violent protest abroad such as those in the 1980s by then-trade union leader Lech Walesa against communism in Poland and opposition in Chile to the military dictatorship of Augusto Pinochet.

Such heady comparisons, though, seem far-fetched in Venezuela right now where not just government officials but even some cynical opposition supporters scoff at the flash protests as ineffectual stunts.

“No one sees these surprise protests,” said Julio Pereira, 25, a student and long-time supporter of opposition marches. “The government laughs at them.”

Even though the opposition coalition proved it had majority support by winning legislative elections at the end of 2015, and despite the disastrous state of Venezuela’s economy, the prospect of political change has dimmed this year.

“Not so long ago, I was ready to march to Miraflores (presidential palace),” said Pereira, now about to join friends who have found work in Argentina. “Now I’m instead heading to the airport to get out. The government is a disaster, the opposition is a disaster, my country is a disaster. I’m gone.”

(Reporting by Andrew Cawthorne; editing by Christian Plumb and Grant McCool)

Japan lays groundwork for free education policy to help economy

An elementary school student walks past next to a rice paddy field in Kazo, north of Tokyo July 1, 2015. REUTERS/Issei Kato

TOKYO (Reuters) – Japan is laying the groundwork for a free education program for some households that will cover a student’s costs from pre-school to college to ensure the country maintains a highly-skilled workforce.

The program, still in its early stages, is expected to feature in the government’s economic strategy due sometime around June, which is part of Prime Minister Shinzo Abe’s economic agenda, commonly called “Abenomics.”

The government invited Joseph Stiglitz, an economist and a Nobel laureate, to speak at its top advisory panel on Tuesday about investing more in education by introducing universal access to a college education.

A ruling Liberal Democratic Party panel is also debating the scope of the plan and how to fund it, with an eye on helping low-income families.

“Stiglitz has many ideas that agree with some of the things that we are trying to do in the second stage of ‘Abenomics,'” Abe said after the panel met.

Stiglitz also recommended that Japan raise salaries for workers in education and healthcare to draw more workers into the services sector, raise minimum wages, raise public-sector wages and increase productivity.

These are all policies that Abe has adopted recently, but some economists say the pace of improvement in wages has been too slow.

“I talked about some of the underlying reasons for the slowdown in growth and productivity and the dangers of what happens if these issues that are dividing societies are not addressed,” Stiglitz told reporters.

Stiglitz also said that monetary policy in Japan has reached its limits, so it is better to support growth by narrowing the wealth divide and increasing productivity.

Abe shifted his economic agenda last year to focus on raising the minimum wage, curbing long working hours and improving access to child care.

At the time, Abe framed the shift as a focus on the redistribution of wealth. Economists have largely welcomed this shift, but some critics say policies are not bold enough.

Abe is trying to breathe new life into his economic agenda after the growth spurt caused by his mix of fiscal spending and monetary easing from the central bank started to fade.

(Reporting by Stanley White; Editing by Jacqueline Wong)

U.S. producer prices rise broadly in February

A combine drives over stalks of soft red winter wheat during the harvest on a farm in Dixon, Illinois, July 16, 2013. REUTERS/Jim Young

WASHINGTON (Reuters) – U.S. producer prices increased more than expected in February, and the year-on-year gain was the largest in nearly five years, pointing to a steady rise inflation pressures.

The Labor Department said on Tuesday that its producer price

index for final demand increased 0.3 percent last month after rising 0.6 percent in January. Economists polled by Reuters had forecast a 0.1 percent uptick.

In the 12 months through February, the PPI jumped 2.2 percent, the biggest advance since March 2012 and ahead of the 2.0 percent gain forecast in the Reuters poll. It followed a 1.6 percent increase in January.

Producer prices are rising as the prior weak readings, induced by cheap oil, drop out of the calculation. Crude oil prices have risen above $50 per barrel.

Also boosting price pressures are the dollar’s 1.5 percent drop against the currencies of the United States’ main trading partners since January and overall commodity price gains in tandem with a firming global economy.

A key gauge of underlying producer price pressures that excludes food, energy and trade services increased 0.3 percent in February, the biggest gain since April 2016. The so-called core PPI rose 0.2 percent in January.

Core PPI increased 1.8 percent in the 12 months through February after advancing 1.6 percent in January.

The Federal Reserve has a 2 percent inflation target and tracks a measure that is currently at 1.7 percent. Fed officials were due to start a two-day policy meeting later on Tuesday.

The U.S. central bank is expected to raise its overnight benchmark interest rate by 25 basis points to a range of 0.75 percent and 1.00 percent. It has projected three hikes in 2017.

In February, prices for final demand services increased 0.4

percent, accounting for more than 80 percent of the rise in the PPI. That was the biggest rise since June 2016 and followed a 0.3 percent gain in January.

The cost of energy products increased 0.7 percent last month, slowing from January’s 4.7 percent surge.

Wholesale food prices increased 0.3 percent after being unchanged in January. Healthcare costs rose 0.2 percent after a similar gain in January. Those costs feed into the Fed’s preferred inflation measure, the core personal consumption expenditures index.

The volatile trade services component, which measures changes in margins received by wholesalers and retailers, rose 0.4 percent last month after shooting up 0.9 percent in January.

(Reporting by Lucia Mutikani; Editing by Chizu Nomiyama and Lisa Von Ahn)

Dollar inches higher as investors look to Fed decision this week

Arrangement of various world currencies including Chinese Yuan, US Dollar, Euro, British Pound,

By Gertrude Chavez-Dreyfuss

NEW YORK (Reuters) – The dollar edged higher from two-week lows on Monday, recovering after Friday’s bout of profit-taking following a robust U.S. jobs report, as investors looked to this week’s Federal Reserve’s policy meeting in which it is expected to raise rates by a quarter percentage point.

“We remain bullish on the dollar, but as Friday’s events suggested, a lot of good news is already priced into the dollar at current levels,” said Shaun Osborne, chief FX strategist, at Scotiabank in Toronto.

“Yields are high enough and spreads are wide enough to keep the dollar broadly supported against its major currency peers for the moment, but additional gains will likely hinge on the messaging from the Fed at the FOMC.”

The Federal Open Market Committee will hold a two-day monetary policy meeting, which starts on Tuesday. Fed funds futures on Monday have priced in a nearly 90-percent chance the Fed will hike rates on Wednesday.

Sterling, which has been one of the worst performers against the dollar over the last two weeks, rose half a percent after the devolved Scottish government demanded the right to hold a new referendum on independence.

In late morning trading, the dollar was slightly higher  against a basket of currencies at 101.31 and was marginally up against the euro. The single European currency was last at $1.0664.

The dollar index earlier fell to a two-week low of 101.01.

Friday’s solid jobs number cemented the case for a rise in U.S. interest rates this week that will long predate any rise in European equivalents.

Britain is expected to formally lodge its request to leave the European Union, but was given another curve ball from Scottish First Minister Nicola Sturgeon’s call for a new referendum on independence.

But Sturgeon’s timeframe for the referendum, which at the earliest could happen by the end of next year when Brexit negotiations are expected to be concluded, partially eased concerns about the issue adding to more political risk over the next 12 months.

Sterling, as a result, held gains against the dollar rising 0.5 percent to $1.2229.

Against the yen, the dollar slipped 0.1 percent to 114.68 yen.

Scotiabank, in a research note, said there is speculation on the potential for changes at the Bank of Japan, including a possible shift to 10-year government bond yield target range from the current zero level. This is considered positive for the yen.

(Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by Patrick Graham in London; Editing by Nick Zieminski)

Cruise control: China squeezes South Korea as boats and planes stay away

A Royal Caribbean cruise is seen at a port in Dalian, Liaoning province, China, July 20, 2017. Picture taken July 20, 2017. REUTERS/Stringer

By Adam Jourdan and Cynthia Kim

SHANGHAI/SEOUL (Reuters) – Pressure in China on travel firms forced airlines and cruise operators to cut routes to South Korea, as the fallout spread on Friday from a diplomatic row over Seoul’s plans to deploy a U.S. missile defense system against Beijing’s objections.

China Eastern Airlines Corp Ltd <600115.SS> and Spring Airlines Co Ltd <601021.SS> stopped offering flights on their websites between the eastern Chinese city of Ningbo and popular South Korean tourist island Jeju from next week.

Korea’s Eastar Jet said it was halting flights between the South Korean cities of Cheongju and tourist hotspot Jeju with various Chinese cities including Ningbo, Jinjiang and Harbin.

This followed Carnival Corp’s <CCL.N> Costa Cruises and Royal Caribbean Cruises <RCL.N> cutting South Korean visits by their China ships. Royal Caribbean cited “recent developments regarding the situation in South Korea”.

The moves reflect a more aggressive and blatant stance against South Korean business in China, although Beijing has not directly said it is targeting South Korean firms.

An internal South Korean government document seen by Reuters said Chinese authorities gave a “7-point” verbal instruction to travel firms to curtail or ban trips to South Korea.

These included a ban on tour groups visiting South Korea from March 15, cruise ships not being allowed to dock in South Korea ports and a warning that those who violated the guidance would face “severe punishment”.

Reuters could not immediately reach China’s tourism administration for comment. China Eastern and Spring Airlines did not respond to requests for comment.

The crackdown has sent a chill across South Korea’s retail and tourism sectors, which rely heavily on China trade, and prompted South Korea to say it will consider filing a complaint against China to the World Trade Organization.

South Korea sold $124 billion worth of goods and services to China last year, about five times the amount it exported to nearby Japan and double the amount it shipped to its second-biggest overseas market, the United States.

Tourism is a particularly sensitive sector, with official South Korean data showing almost half of the visitors to the country come from China.

Asked about cruise operators cancelling South Korean port visits, an official from South Korea’s Ministry of Trade, Industry and Energy told Reuters the ministry was checking if any WTO rules have been violated.

“If we are to launch a dispute, we still need to make sure if anything has been ordered by Beijing,” the official said.

“RELEVANT DEPARTMENTS”

Political risk analysts said the widespread actions against South Korean firms pointed to centralized coordination.

Princess Cruises, also owned by Carnival, said in a statement on Friday it would remove visits to South Korea from routes after talks with “relevant departments”.

“Due to the current situation, Princess Cruises’ China team has been in close dialogue and prudent discussions with relevant departments,” the firm said. “All routes which involve South Korea have been altered.”

The diplomatic problems with its biggest trade partner have come at a difficult time for South Korea.

On Friday, South Korea’s Constitutional Court removed President Park Geun-hye from office on Friday over a graft scandal involving the country’s conglomerates.

Analysts said the upheaval had given China the opportunity to put pressure on Park’s possible successors to ditch or delay the installation of the U.S. Terminal High Altitude Area Defence (THAAD) missile system.

“I think they’ll keep up this pressure well into the period where we get a new government in South Korea,” said Andrew Gilholm, director of analysis for China and North Asia at risk consultancy Control Risks.

“Possibly the reason they’re pushing so hard is that they are trying to influence whatever policy the next government in Seoul takes.”

Meantime, South Koreans living in China have been advised by business groups to adopt a low profile, while residents and shopkeepers in a Shanghai neighborhood where many South Koreans live told Reuters of a growing sense of anxiety.

“I feel wherever I am people are watching me. On the street, in the car and at restaurants, I don’t feel I can freely speak Korean,” said Seo Lan Kyung, 48, a housewife who said she has been living in China for 18 years.

“I want to keep living here but increasingly there’s a feeling of impending crisis.”

(Additional reporting by Christian Shepherd and Muyu Xu in BEIJING, Alexandra Harney in SHANGHAI, Heekyong Yang and Hyunjoo Jun in SEOUL; Editing by Simon Cameron-Moore)