Статті

In a possible sign that the so-called “decoupling” of the U.S. and Chinese economies is continuing, a recent media report said that the Chinese government has urged large state-owned enterprises (SOEs) to cease using the world’s biggest global accounting firms to audit their onshore businesses.

The report, published last week by Bloomberg, cites people familiar with communications between the Chinese Ministry of Finance and large SOEs, in which the ministry encouraged the companies to allow their existing contracts with Western firms to lapse when they expire, and to replace them with accounting firms from mainland China or Hong Kong.

According to the report, the Chinese government’s focus is on the so-called “Big Four” accounting firms, PricewaterhouseCoopers (PwC), Ernst & Young, KPMG and Deloitte. All four firms have headquarters in London but are instrumental in helping many global companies comply with the audit requirements U.S. authorities require of public firms with shares listed on U.S. stock exchanges.

There has long been tension between the Chinese government, which highly values the security of information held by its large companies, and Western financial services regulators, who prize the kind of transparency that allows investors to make informed decisions about companies seeking to raise money in the capital markets.

Chinese authorities have, for years, been trying to strike a balance between the protection of Chinese firms’ information and the access to international investment capital that comes with exposure on stock markets like those in the U.S.

China disputes report

The Chinese government, through the state-controlled publication the Global Times, has disputed the Bloomberg report. A recent news story in the Global Times said that Big Four firms “have won bids to provide accounting services to China’s state-owned enterprises in recent days.”

The Global Times cited a decision in February by state-run insurance firm China Taiping to hire PwC to provide its audits from 2023-2027, and another recent decision by Liaoshen Bank, closely connected to the state-owned Liaoning Financial Holding Group, to hire KPMG. Neither report could be independently verified.

The Global Times article, published under a “GT Staff reporters” byline, did not quote any government officials by name.

A request for comment emailed by VOA to the Chinese Embassy in Washington was not answered in time for publication.

An uneven pattern

In recent years, Beijing has taken a number of measures to curtail the outside world’s access to information about Chinese companies.

Last year, citing concerns about potential privacy violations, the Chinese Communist Party forced several firms to give up their listings on U.S.-based stock exchanges, and blocked the efforts of others to list in the U.S.

At the same time, the Communist Party has, at times, seemed willing to cooperate with Western regulators. Last year, Beijing struck a deal that provided U.S. regulators with data on Chinese firms, eliminating the possibility that several would have been forced off of U.S. stock exchanges.

Report comes amid tension

The Bloomberg report was published at a low point in relations between the U.S. and China. Early this month, the U.S. shot down a suspected Chinese spy balloon after it traversed most of the continental U.S. The presence of the balloon led Secretary of State Antony Blinken to cancel a trip to China that was seen as the beginning of an effort to restore dialogue.

Since then, U.S. and Chinese officials have had conversations at international gatherings, but those interactions were marked by U.S. warnings that China should avoid providing arms to Russia to support its invasion of Ukraine or risk serious consequences.

The House of Representatives Select Committee on the Chinese Communist Party was scheduled on Tuesday evening to hold a prime-time hearing entitled “The Chinese Communist Party’s Threat to America.” The hearing is expected to be the first in a long series of high-profile public forums in which members of Congress dig into perceived threats from China.

Data security concerns

Also on Tuesday, media reports revealed that the White House Office of Management and Budget had given all federal agencies 30 days to ensure that the Chinese social media app TikTok is removed from all electronic devices owned by the federal government.

As minor as it might seem on its face, the TikTok ban is actually a mirror image of some of the concerns driving China’s suspicion of Western auditing firms. The concern on the part of the White House is that ByteDance, the firm that owns TikTok, is collecting personal information about the app’s users, and making it available to the Chinese government.

U.S. officials frequently point to a Chinese law that obligates companies to assist state intelligence services in their investigations.

Experts dubious

Some experts told VOA they were not convinced of the validity of the Chinese government’s fears about data security, especially because Western accounting firms are legally bound to protect the privacy of client data that is not part of publicly released reports.

“It’s an excuse. No other government or country has this problem,” said James Lewis, director of the Strategic Technologies Program at the Center for Strategic and International Studies in Washington. “Beijing is paranoid about controlling the economic narrative and worries that the audits might give access to information about the problems of the SOEs that they regard as sensitive.”

Lewis added in an interview, “This is another part of China’s decision to separate itself from the global market and force other countries to accept China’s rules.”

Impact on business may be small

Derek Scissors, a senior fellow at the American Enterprise Institute, told VOA that if the Bloomberg report is correct, and the Chinese government’s request went to state-owned enterprises only, the impact on foreign investment in Chinese firms might not be significant.

“Most foreign investment does not involve state-owned enterprises,” Scissors said. “If this is the only step taken, it will not have a big effect. If other firms are urged to drop foreign auditors, that could frighten investors.”

Scissors also said that the request would not necessarily cut off Chinese state firms from overseas listings.

“They can use foreign auditors just for [initial public offerings] if they ever want to list units overseas,” he said.

Rong Shi of VOA’s Mandarin Service contributed to this report.
…

A majority of the nation’s business economists expect a U.S. recession to begin later this year than they had previously forecast, after a series of reports have pointed to a surprisingly resilient economy despite steadily higher interest rates.

Fifty-eight percent of 48 economists who responded to a survey by the National Association for Business Economics envision a recession sometime this year, the same proportion who said so in the NABE’s survey in December. But only a quarter think a recession will have begun by the end of March, only half the proportion who had thought so in December.

The findings, reflecting a survey of economists from businesses, trade associations and academia, were released Monday.

A third of the economists who responded to the survey now expect a recession to begin in the April-June quarter. One-fifth think it will start in the July-September quarter.

The delay in the economists’ expectations of when a downturn will begin follows a series of government reports that have pointed to a still-robust economy even after the Federal Reserve has raised interest rates eight times in a strenuous effort to slow growth and curb high inflation.

In January, employers added more than a half-million jobs, and the unemployment rate reached 3.4%, the lowest level since 1969.

And sales at retail stores and restaurants jumped 3% in January, the sharpest monthly gain in nearly two years. That suggested that consumers as a whole, who drive most of the economy’s growth, still feel financially healthy and willing to spend.

At the same time, several government releases also showed that inflation shot back up in January after weakening for several months, fanning fears that the Fed will raise its benchmark rate even higher than was previously expected. When the Fed lifts its key rate, it typically leads to more expensive mortgages, auto loans and credit card borrowing. Interest rates on business loans also rise.

Tighter credit can then weaken the economy and even cause a recession. Economic research released Friday found that the Fed has never managed to reduce inflation from the high levels it has recently reached without causing a recession.
…

Twitter Inc has laid off at least 200 employees, or about 10% of its workforce, the New York Times reported late on Sunday, in its latest round of job cuts since Elon Musk took over the micro-blogging site last October. 

The layoffs on Saturday night impacted product managers, data scientists and engineers who worked on machine learning and site reliability, which helps keep Twitter’s various features online, the NYT report said, citing people familiar with the matter. 

Twitter did not immediately respond to a Reuters request for comment. 

The company has a headcount of about 2,300 active employees, according to Musk last month. 

The latest job cuts follow a mass layoff in early November, when Twitter laid off about 3,700 employees in a cost-cutting measure by Musk, who had acquired the company for $44 billion. 

Musk said in November that the service was experiencing a “massive drop in revenue” as advertisers pulled spending amid concerns about content moderation. 

Twitter recently started sharing revenue from advertisements with some of its content creators. 

Earlier in the day, The Information reported that the social media platform laid off dozens of employees on Saturday, aiming to offset a plunge in revenue. 
…

In its latest ambitious roadmap to tackle climate change, California relies on capturing carbon out of the air and storing it deep underground on a scale that’s not yet been seen in the United States.

The plan — advanced by Democratic Gov. Gavin Newsom’s administration — comes just as the Biden administration has boosted incentives for carbon capture projects to spur more development nationwide. Ratcheting up 20 years of climate efforts, Newsom last year signed a law requiring California to remove as much carbon from the air as it emits by 2045 — one of the world’s fastest timelines for achieving so-called carbon neutrality. He directed the powerful California Air Resources Board to drastically reduce the use of fossil fuels and build massive amounts of carbon dioxide capture and storage.

To achieve its climate goals, California must rapidly transform an economy that’s larger than most nations’, but opposition to carbon capture from environmental groups and concerns about how to safely transport the gas may delay progress — practical and political obstacles the Democratic-led Legislature must now navigate.

Last year, the California state legislature passed a law that says no carbon dioxide may flow through new pipelines until the federal government finishes writing stronger safety regulations, a process that could take years. As a potential backup, the law directed the California Natural Resources Agency to write its own pipeline standards for lawmakers to consider, a report now more than three weeks overdue.

While there are other ways to transport carbon dioxide gas besides pipelines, such as trucks or ships, pipelines are considered key to making carbon capture happen at the level California envisions. Newsom said the state must capture 100 million metric tons of carbon each year by 2045 — about a quarter of what the state now emits annually.

“We do not expect to see (carbon capture and storage) happen at a large scale unless we are able to address that pipeline issue,” said Rajinder Sahota, deputy executive officer for climate change and research at the air board.

State Sen. Anna Caballero, who authored the carbon capture legislation, said the state’s goal will be to create a safety framework that’s even more robust than what the federal government will develop.

Last year’s Inflation Reduction Act increased federal funding for carbon capture, boosting payouts from $50 to $85 per ton for capturing carbon dioxide from industrial plants and storing it underground.

Without clarity on the state’s pipeline plans, the state is putting itself at a “competitive disadvantage” when it comes to attracting projects, said Sam Brown, a former attorney at the Environmental Protection Agency and partner at law firm Hunton Andrews Kurth.

The geology for storing carbon dioxide gas is rare, but California has it in parts of the Central Valley, a vast expanse of agricultural land running down the center of the state.

Oil and gas company California Resources Corp. is developing a project there to create hydrogen. It plans to capture carbon from that hydrogen facility and the natural gas plant that powers it. The carbon dioxide would then be stored in an old oil field. That doesn’t require special pipeline approval because it’s all happening within the company’s property.

But the company also wants to store emissions from other industries like manufacturing and transportation. Transporting that would rely on pipelines that can’t be built yet.

“These are parts of the economy that have to be decarbonized,” said Chris Gould, the company’s executive vice president and chief sustainability officer. “It makes economic sense to do it.”

Safety concerns increased in 2020 after a pipeline in Mississippi ruptured in a landslide, releasing a heavier-than-air plume of carbon dioxide that displaced oxygen near the ground. Forty-five people were treated at a hospital, and several lost consciousness. There are thousands of miles of carbon dioxide pipelines operating across the country and industry proponents call the event an anomaly. But the Mississippi rupture prompted federal regulators to explore tightening the existing rules for carbon pipelines.

Lupe Martinez, who lives in California’s Kern County, worries about what will happen as developers target the region for carbon storage.

He used to spray fields with pesticides without protective equipment. On windy days, he’d be soaked in chemicals. Martinez, who watched some of his fellow workers later fight cancer, says he was lied to about safety then and doesn’t believe promises that carbon capture is safe now.

“They treat us like guinea pigs,” said Martinez, a longtime labor activist.

The oil and gas industry’s emissions are a main cause of climate change and in the past the industry undermined sound evidence that greenhouse gases are deeply disturbing the climate. Now carbon capture — unproven as a major climate solution — will help the industry keep polluting places that are already heavily polluted, environmentalists argue. Instead of shutting down fossil fuel plants, carbon capture will increase their profits and extend their life, said Catherine Garoupa, executive director of the Central Valley Air Quality Coalition.

But advocates of carbon capture say it’s essential for Kern County oil and gas companies to find new ways to make money and keep people employed as California moves away from fossil fuels, an industry that is the “very fabric” of the region’s identity, said Lorelei Oviatt, director of Kern County Planning and Natural Resources.

Without a new revenue source like carbon capture, “Kern County will be the next Gary, Indiana,” she said, referring to the rust belt’s years-ago collapse.

There are currently no active carbon capture projects in California. To demonstrate the technology is viable and people can get permits for it, it’s essential to build the first projects, said George Peridas, director of carbon management partnerships at Lawrence Livermore National Laboratories.

Peridas said one area with potential to store carbon dioxide is the Sacramento-San Joaquin River Delta, a vast estuary on the western edge of the Central Valley that’s a vital source of drinking water and an ecologically sensitive home to hundreds of species.
…

Mexico is undergoing a fevered competition among states to win a potential Tesla facility in jostling reminiscent of what happens among U.S. cities and states vying to win investments from tech companies.

Mexican governors have gone to extremes, like putting up billboards, creating special car lanes or creating mock-ups of Tesla ads for their states.

And there’s no guarantee Tesla will build a full-fledged factory. Nothing is announced, and the frenzy is based mainly on Mexican officials saying Tesla boss Elon Musk will have a phone call with Mexican President Andrés Manuel López Obrador.

The northern industrial state of Nuevo Leon seemed to have an early edge in the race.

It painted the Tesla logo on a lane at the Laredo-Colombia border crossing into Texas last summer and is erecting billboards in December in the state capital, Monterrey, that read “Welcome Tesla.”

The state governor’s influencer wife, Mariana Rodriguez, was even shown in leaked photos at a get-together with Musk.

However, López Obrador appeared to exclude the semi-desert state from consideration Monday, arguing he wouldn’t allow the typically high water use of factories to risk prompting shortages there.

That set off a competitive scramble among other Mexican states. The governors’ offers ranged from crafty proposals to near-comic ones.

“Veracruz is the only state with an excess of gas,” quipped Gov. Cuitláhuac García of the Gulf Coast state, before quickly adding “gas … for industrial use, for industrial use!”

A latecomer to the race, García had to try harder: He noted Veracruz was home to Mexico’s only nuclear power plant. And he claimed Veracruz had 30% of Mexico’s water, though the National Water Commission puts the state’s share at around 11%.

The governor of the western state of Michoacan wasn’t going to be left out. Gov. Alfredo Ramírez Bedolla quickly posted a mocked-up ad for a Tesla car standing next to a huge, car-sized avocado — Michoacan’s most recognizable product — with the slogan “Michoacan — The Best Choice for Tesla.”

“We have enough water,” Ramírez Bedolla said in a television interview he did between a round of meetings with auto industry figures and international business representatives.

Michoacan also has an intractable problem of drug cartel violence. But similar violence in neighboring Guanajuato state hasn’t stopped seven major international automakers from setting up plants there.

Nuevo Leon Gov. Samuel García had to think fast to avoid being shut out entirely.

García reached out to the western state of Jalisco, whose governor, Enrique Alfaro, belongs to the same small Citizen’s Movement party. Together, the two came up with an alliance Thursday that would allow trucks from Jalisco preferential use of Nuevo Leon’s border crossing, the same one where a “Tesla” lane appeared last year.

Jalisco has a healthy foreign tech sector, but most importantly, it has more water than Nuevo Leon.

López Obrador’s focus on water might be more about politics than about droughts, said Gabriela Siller, chief economist at Nuevo Leon-based Banco Base. She said the president appeared to be trying to steer Tesla investment to a state governed by his own Morena party, like Michoacan or Veracruz.

That could be a dangerous game, Siller said.

“Tesla could say it’s not somebody’s toy to be moved around anywhere, and it could decide not to come to Mexico,” she said.

There are doubts that whatever Musk eventually does announce will be an auto assembly plant. Foreign Relations Secretary Marcelo Ebrard said his understanding is that it won’t be a plant, but rather an ecosystem of suppliers.

Musk at times has floated the idea of building a $25,000 electric vehicle that would cost about $20,000 less than the current Model 3, now Tesla’s least-expensive car. Many automakers build lower-cost models in Mexico to save on labor costs and protect profit margins.

A Tesla investment could be part of “near shoring” by U.S. companies that once manufactured in China but now are leery of logistical and political problems there. That those companies will now turn to Mexico represents the Latin American country’s biggest foreign investment hope.

“The fight among states to attract investments from this nearshoring phenomenon is going to be tough, complicated,” Michoacan’s Ramírez Bedolla said.

As Ramírez Bedolla put it, “wherever Tesla sets up, it is going to be big news in Mexico.”
…

Pakistan has to unwillingly accept the strict conditions of a deal with the International Monetary Fund (IMF) to provide a lifeline for an economy in turmoil, Prime Minister Shehbaz Sharif said Friday.

Sharif was speaking to top security officials at his office in Islamabad in a meeting that was telecast live.

“We have to accept unwillingly the strict conditions for the IMF deal,” he said, adding that an accord was still a “week, 10 days” away.

Pakistani authorities have been negotiating with the IMF since early February over policy framework issues and are hoping to sign a staff-level agreement that will pave the way for more inflows from other bilateral and multilateral lenders.

Once the deal is signed, the lender will disburse a tranche of more than $1 billion from the $6.5 billion bailout agreed to in 2019.

Pakistan has already taken a string of measures, including adopting a market-based exchange rate; a hike in fuel and power tariffs; the withdrawal of subsidies, and more taxation to generate revenue to bridge the fiscal deficit.

Officials say the lender is still negotiating with Islamabad over power sector debt, as well as a potential increase in the policy rate, which stands at 17%.

The strict measures are likely to further cool the economy and stoke inflation, which was 27.50% in January.

The South Asian country’s economy has been in turmoil and desperately needs external financing, with its foreign exchange reserves dipping to about $3 billion, barely enough for three weeks’ worth of imports.

A “friendly country” is also waiting for the deal to be confirmed before extending support to Pakistan, Sharif said without elaborating.

Longtime ally China this week announced refinancing of $700 million, according to Pakistan’s Finance Ministry.

Finance Minister Ishaq Dar on Friday said Pakistan’s central bank has received the money.

“Thank God,” he said in a tweet.
…

Russia’s invasion of Ukraine nearly a year ago has profoundly affected how the world powers itself.
…

The extensive sanctions imposed on Russia after its invasion of Ukraine one year ago have not led to the decimation of the Russian economy, as many experts had predicted. As recently as last fall, according to new polling data, many Russians actually believed they were better off economically than they had been before the war started.

According to data gathered by the Gallup organization, the share of Russians reporting they were satisfied with their standard of living increased by 15 percentage points, to 57% in 2022. For the first time in the poll’s history, satisfaction with living standards was above 50% in every region of the country.

The number of Russians reporting that their economic conditions were improving grew to 44% from 40%, while the number who said their economic prospects were declining plummeted to 29% from 50%.

Similarly, the percentage of Russians reporting that they were satisfied with the country’s leadership surged to 66%, up from 50% in 2021, while the share reporting that they were dissatisfied fell from just under half to only 21%.

The survey is part of Gallup’s expansive annual World Poll, which conducts large-scale polling in dozens of countries around the world every year. The poll of Russian citizens was taken between mid-August and early November of last year, and therefore cannot have captured any changes in attitudes since the fall. The survey involved in-person interviews with a random sample of 2,000 individuals ages 15 or older, living in Russia. The margin of sampling error is plus or minus 2.6 percentage points.

Surprising resilience

Recent data has demonstrated that the impact of international sanctions on Russia was not nearly as dramatic as the 10% contraction that many economists were foreseeing in 2022. The Russian economy contracted by a relatively mild 2.1% in 2022, and the International Monetary Fund has predicted that it will post small, but positive growth of 0.3% in 2023.

Russia began the war with a financial system braced for sanctions. The Russian central bank used currency controls and sharp interest rate hikes to stabilize the ruble early in the first year of the war. At the same time, Russian businesses began exploring deeper ties with countries such as China, India and Turkey, which allowed trade in goods and commodities to largely recover from initial dips at the outset of the conflict.

The biggest reason for Russia’s surprising resilience, however, was that it was allowed to continue selling petroleum products, far and away its largest source of pre-war revenue, on global markets. Prices were elevated at the outset of the fighting, and a slow move by many Western nations away from Russian oil and gas gave Russian firms time to broaden their sales to countries such as India and China.

In an address to the nation this week, Russian President Vladimir Putin touted the country’s economic performance.

“The Russian economy and system of governance proved to be much stronger than the West supposed,” he said. “Their calculation did not come to pass.”

‘Rally’ effect

Benedict Vigers, a consultant with Gallup, told VOA that the better-than-expected performance of the Russian economy may explain some of the economic optimism. However, a strong “rally-round-the-flag” effect is probably also in place.

When two countries go to war, there is a tendency for the people in both countries to demonstrate stronger affection for and satisfaction with their respective homelands, Vigers said.

“It is a well-known effect in Russia,” he said. “We have seen it historically, and it is happening now, in conjunction, to some degree, with Russia’s broader ability to evade some of the worst impacts of Western sanctions.”

He pointed out a similar spike in Russians reporting optimism about the economy and satisfaction with their government in the wake of the invasion of Ukraine’s Crimean Peninsula in 2014.

Repression of dissent

Another factor potentially coloring the responses to the Gallup survey is the fact that the Russian government aggressively punishes public criticism of the government, and has done so with more frequency in the months since launching its invasion of Ukraine. Tens of thousands of Russian citizens have been arrested for protesting against the war.

Galina Zapryanova, Gallup’s regional director for Eastern Europe and the former Soviet Union, told VOA in an email that the company cannot rule out the possibility that fear of reprisal affects peoples’ answers to poll questions.

“It is certainly possible that some people would not give a truly honest answer on questions related to approval of government policies, etc. — they may give the ‘safest’ answer that they consider most appropriate,” she wrote.

“This is a risk in all survey research in countries that are not entirely free, but we need to try our best to obtain representative data, while keeping in mind that a portion of any trend could be due to self-censorship by respondents.”

However, she noted that on the question of how Russians feel about the future of the economy, 56% opted for a response other than the seemingly “safe” option of declaring themselves optimistic.

Economic data suppressed

Another potentially complicating factor is that since the invasion in February 2022, the Kremlin has significantly closed off access to economic data that used to be public information.

“As far as mass media is concerned, economic information just recently fell victim to censorship,” Vasily Gatov, a senior fellow at the University of Southern California Center on Communication Leadership and Policy, told VOA. “Until spring last year, the Kremlin literally didn’t control narratives and the way people were writing about the economy in general.”

Gatov, who studies Russian media, said that since then, the government has blocked access to many reports on economic activity, making it more difficult for journalists and academics to get a full picture of what is happening with the Russian economy.

However, Gatov said, while it may be possible for the Kremlin to control access to some information, much of people’s perception about the economy comes from their own lived experiences.

“People receive economic information from various sources, and not always media sources,” he said. “One of them is their bank account. Another is prices at the gas station or grocery store.”

Without addressing the Gallup findings specifically, Gatov said that in his view, Russians “read between the lines” of information coming from the Kremlin and Kremlin-controlled media sources.

He said that they see major international brands refusing to do business in their country and are experiencing infrequent but serious shortages such as an ongoing lack of Western-produced drugs like insulin. “Russians are skeptical about the economic future of the country.”
…

Moscow’s invasion of Ukraine a year ago has had profound impacts on how the world powers itself. VOA’s Steve Baragona explains.
…

Russia’s invasion of Ukraine a year ago saw a dramatic rise in the price of fertilizer for importers like Ghana, where farmers are struggling to cope.  Ghana’s economic problems have made imports even more expensive, forcing farmers to switch to different crops and ultimately, reduce production.  Kent Mensah reports from Akatsi, Ghana.

Camera: Nneka Chile
…

The United States is nominating former Mastercard CEO Ajay Banga to lead the World Bank, President Joe Biden announced on Thursday, crediting him with critical experience on global challenges including climate change.

The news comes days after Trump appointee David Malpass announced plans to step down in June from his role leading the 189-nation poverty reduction agency. His five-year term was due to expire in April 2024.

Addressing the impacts of climate change at the multilateral bank is a priority for the U.S. And leading climate figures have urged the Biden administration to use Malpass’ early departure as an opening to overhaul the powerful financial institution, which has been increasingly criticized as hostile to less-wealthy nations and efforts to address climate change.

Malpass ran into criticism last year for seeming, in comments at a conference, to cast doubt on the science that says the burning of fossil fuels causes global warming. He later apologized and said he had misspoken, noting that the bank routinely relies on climate science.

Banga, currently vice chairman at private equity firm General Atlantic, has more than 30 years of business experience, having served in various roles at Mastercard and the boards of the American Red Cross, Kraft Foods and Dow Inc. He is the first Indian-born nominee to the World Bank president role.

“Ajay is uniquely equipped to lead the World Bank at this critical moment in history,” Biden said in a statement, adding that Banga “has critical experience mobilizing public-private resources to tackle the most urgent challenges of our time, including climate change.”

Treasury Secretary Janet Yellen said in a statement that Banga’s experience “will help him achieve the World Bank’s objectives of eliminating extreme poverty and expanding shared prosperity while pursuing the changes needed to effectively evolve the institution,” which include meeting “ambitious goals for climate adaptation and emissions reduction.”

Biden’s climate envoy, John Kerry, said on Twitter that Banga was “the right choice.”

“He can help put in place new policies that help deploy the large sums of money necessary to reduce global emissions and help developing and vulnerable countries adapt, build resilience, and mitigate the impact of greenhouse gases,” Kerry tweeted.

The United States has traditionally picked the World Bank chief. The head of its sister agency, the International Monetary Fund, has traditionally come from Europe. But critics have called for an end to that arrangement and for developing countries to gain a bigger voice in the two organizations.

The World Bank has promised to conduct “an open, merit-based and transparent selection process″ and said it would accept nominations through March 29.

Eric LeCompte, executive director of the anti-poverty coalition Jubilee USA Network, said the United States was “looking to nominate people that will be supported by the developing world” and that it was “incredibly relevant” that Banga was born in India. “They want to be able to appoint people who have experience and roots with other economies,” LeCompte said.

“I can’t think of a more intense time for a person to be coming into this job,” said Clemence Landers, policy fellow at the Center for Global Development, a Washington think tank.

The bank is under pressure to expand its mandate — an effort that likely would require the next president to convince donor countries to provide more money.

Critics say the bank should be doing more to help poor countries finance projects to combat and prepare for climate change without saddling them with heavy debt burdens. And Landers said it needs to do a better job at tackling problems that cross borders such as providing pandemic surveillance and backing broad vaccination programs.
…

Pakistan Prime Minister Shehbaz Sharif has asked his ministers and advisers to fly economy class, forgo luxury cars and their salaries as part of an austerity drive that will save the government $766 million a year.

The belt tightening comes as Islamabad — which is facing a balance of payment crisis — thrashes out a deal with the International Monetary Fund (IMF) to secure funds worth $1 billion which have been pending since late last year over policy issues.

Pakistan’s foreign exchange reserves have fallen below a three-week import cover and the expenditure cuts announced on Wednesday are part of an effort to stave off an economic meltdown.

“These austerity measures will save us 200 billion rupees annually,” Sharif told a news conference in Islamabad.

“These measures are need of the hour, and these savings no matter if that’s one penny is very significant,” he said, terming it a sacrifice for the poor who wouldn’t afford food on the table or medicines in the face of consistently high inflation, which touched 27.5% in January.

Sharif said all federal ministries and government offices have been directed to reduce expenditure by 15% and that he had asked his ministers and advisers to forgo salaries, allowances, luxury cars, foreign trips and business class travel.

The ministers agreed to the measures voluntarily, he said, adding all Cabinet members will surrender their salaries and perks, and they will pay all of their utility bills from their pockets.

Armed forces have given a positive response to cut non-combat expenditures, Sharif said without elaborating.

Other steps include a complete ban on the purchase of luxury items or vehicles for all government-run entities and no administrative unit like a new district or town will be created for two years.

All luxury vehicles will be withdrawn from the ministers, advisers and bureaucrats, who would travel abroad only if inevitable and that too in economy class.

The South Asian nation hopes to secure funds from the IMF soon, Sharif said, adding the stringent measures were part of the requirements the lender had asked Pakistan to fulfill before finalizing a deal.

Talks between Pakistan and the IMF are due to conclude this week, officials say.

Before the talks the IMF had asked Pakistan to take a host of prior actions, which included withdrawal of subsidies, hiking energy tariffs, raising extra revenues and arranging external financing.
…

The disappearance of a star Chinese dealmaker has left his bank struggling to reassure clients and staff, people with knowledge of the matter said on Monday, and has heightened concerns about “key man risk” for investors.

Shares of China Renaissance Holdings 1911.HK fell by as much as 5% on Monday, following a record low in the previous session after the investment bank said it could not contact its founder, chairman and CEO Bao Fan.

The stock ended the day up 0.1% in the Hong Kong market that rose 0.8%.

Though the reasons for Bao’s disappearance are unclear, his case follows a series of incidents in which high-profile executives in China have gone missing with little explanation during a sweeping anti-corruption campaign spearheaded by President Xi Jinping.

Some of them reappeared as abruptly as they disappeared.

China Renaissance said on Thursday in a stock exchange filing that it had no information that Bao’s “unavailability” was related to its business, and that its operations were continuing normally.

China Renaissance co-founder Kevin Xie and its investment banking head, Wang Lixing, who are running the company in Bao’s absence, have asked staff not to believe or spread rumours, according to two sources and copies of their messages to staff seen by Reuters.

“At such a critical moment, everyone should trust the company. Don’t fret and stumble. It’s OK to encounter some difficulties in the short term,” Wang said in his message posted on the company’s Wechat group on Friday.

According to two sources and some media reports, authorities took Bao away earlier this month to assist in an investigation into a former colleague, Cong Lin, the company’s former president.

All the sources, who have knowledge of the matter, declined to be identified due to its sensitivity.

A spokesperson for Beijing-based China Renaissance declined to comment on specific details and referred Reuters to its exchange filing made on Thursday.

Xie and Wang did not immediately respond to Reuters’ requests for comment on Monday.

Beijing’s public security bureau also did not respond to request for comment. Asked during a daily news conference on Friday whether the banker had been detained, Foreign Ministry spokesperson Wang Wenbin said he was not aware of the situation.

The Hong Kong-listed stock, which climbed as much as 3.5% early on Monday, gave up all those gains and fell to as low as HK$6.82. It hit an all-time low of HK$5 on Friday but later recovered some ground to close at HK$7.18, down 28%.

‘Key man risk’

Bao, also China Renaissance’s controlling shareholder, started the firm in 2005 as a two-person team, seeking to match capital-hungry startups with venture capitalist and private equity investors.

It firm later expanded into services including underwriting, sales and trading.

Known to be well connected in the corporate world, Bao was involved with tech mergers including the tie-up of ride-hailing firms Didi and Kuaidi, food delivery giants Meituan 3690.HK and Dianping, and travel platforms Ctrip 9961.HK and Qunar.

“What happened to China Renaissance highlighted the key man risk with some Chinese companies,” Li Nan, professor of Finance at Shanghai Jiaotong University, said.

“A group of Chinese financial institutions rose quickly over the past few years on one to two controllers’ efforts, while it makes these companies particularly vulnerable to any negative headlines that show the controllers are in trouble.”

Key man risk generally refers to the threat posed to a company from over-reliance on a limited number of personnel for decision making.

While it is not uncommon in China for authorities to take away business executives for various reasons, Bao’s disappearance comes against the backdrop of more than two years of sweeping regulatory crackdown on technology companies.

“This should once again remind foreign investors of the relative level of regulatory and governance risk associated with Chinese equities,” said Propitious Research analyst Wium Malan, who publishes on Smartkarma platform. 
…

Iran’s troubled currency broke below the psychologically key level of 500,000 rial per U.S. dollar on Monday, as market participants saw no end in sight to sanctions.

The Iranian rial plummeted to a new record low of 501,300 against the U.S. dollar, according to Bonbast.com which gathers live data from Iranian exchanges.

Facing an inflation rate of about 50%, Iranians seeking safe havens for their savings have been buying dollars, other hard currencies or gold, suggesting further headwinds for the rial.

The reimposition of U.S. sanctions in 2018 by former President Donald J. Trump have harmed Iran’s economy by limiting Tehran’s oil exports and access to foreign currency.

Since September, nuclear talks between Iran and world powers to curb Tehran’s nuclear program in exchange for the lifting of sanctions have stalled, worsening economic expectations for Iran’s future. Over the last six months, Iran’s currency has slumped nearly 60% in value, according to Bonbast.com.

Meanwhile, the central bank said it was opening a new foreign exchange center to ease access to foreign exchange and increase the volume of official transactions.

“The rate set in this exchange will become the market’s rate. It should be free from expectation factors that do not reflect our assessment of the country’s financial situation,” Mohammad Reza Farzin, the central bank governor, told state TV on Monday.

Farzin was appointed in December as governor with the key job of controlling the value of foreign currencies, according to IRNA.
…

China’s job fairs are making a comeback after being forced online by COVID-19 for three years, but subdued wages and less abundant offerings in sectors exposed to weakening external demand point to an uneven and guarded economic recovery. 

Authorities announced hundreds of such events across the country this month, the latest sign that China is returning to its pre-COVID way of life and that youth unemployment, a major headache for Beijing, may ease from its near 20% peak. 

In a country of 1.4 billion people, job fairs are one of the most efficient ways for employers and workers to connect. Although attendees said their long-awaited return is encouraging, some were not brimming with confidence. 

“I only pray for a stable job, and do not have high salary expectations,” said Liu Liangliang, 24, who was looking for a job in a hotel or property management company at a fair in Beijing on Thursday, one of more than 40 held in the capital in February. “The COVID outbreak has hurt many people. There will be more job seekers battling for offers this year.” 

Employment anxiety is widespread. 

A survey of about 50,000 white-collar workers published on Thursday by Zhaopin, one of China’s biggest recruiting firms, showed 47.3% of respondents were worried they may lose their jobs this year, up from 39.8% a year ago. 

About 60% cited the “uncertain economic environment” as the main factor affecting their confidence, up from 48.4% in 2022. 

Job confidence of those working in consumer-facing sectors, which are recovering faster from a low base, was higher than in sectors such as manufacturing, affected by weakening external demand, or property, which has only just started to show tentative signs of stabilizing, the survey showed. 

A human resources manager at Beijing Xiahang Jianianhua Hotel, who only gave his surname Zhang, said his company had three times more job openings compared with last year, as Chinese resumed travelling. 

By contrast, Jin Chaofeng, whose company exports outdoor rattan furniture, said he has no plans to add to his payroll as orders from abroad are slowing. 

“People in my industry are waiting and seeing, prudently,” he said, adding that he plans to cut production by 20%-30% in March from a year earlier.  

Frederic Neumann, chief Asia economist at HSBC, expects the service and manufacturing sectors to run at vastly different speeds this year, but said overall employment in China should grow. 

“Restaurants, hotels, and entertainment venues are now scrambling to hire staff. This is especially helpful for younger workers,” Neumann said. “The youth unemployment rate should start to fall in the coming months.” 

China’s economy grew 3% last year, in one of its weakest performances in nearly half a century. Policymakers are expected to aim for growth of about 5%, which would still be below the blistering pre-pandemic pace. 

That’s partly because the pain caused by stringent COVID rules persists. 

At another job fair in the capital, Wei, a former cleaner looking for similar work, said she and her unemployed husband are struggling with credit card debt. 

Wei, who has a child in primary school and did not want to give her full name, citing personal privacy, quit her previous job last year after her employer wanted to cut her wages to 3,200 yuan ($465.34) a month from 3,500 yuan despite demanding she work late hours to conduct COVID-related disinfection. 

“We owe the banks hundreds of thousands yuan,” she said. “We are overwhelmingly anxious.” 
…

Long before the pandemic shut down Hong Kong’s vibrant retail sector, traders from China crossed the border to purchase everything from cosmetics to cars tax-free for profitable reselling upon returning home, where buyers worried about the quality of locally available products.

The brisk parallel import trade, which included some Hong Kong residents taking goods into China, survived protests by Hong Kong residents who felt it caused shortages of in-demand items such as baby formula and increased prices.

COVID-19 travel restrictions shut down parallel trading more effectively than any law could.

But within days of cross-border travel resuming between China and Hong Kong on Feb. 6, the parallel import trade picked up. Also revived were calls from Hong Kong residents who want the so-called “ants trade” regulated if not shut down.

Near Exit C of the Sheung Shui Station of the Mass Transit Railway (MTR), more than 10 people presumed to be parallel importers gathered to distribute goods around 11 a.m. on Feb. 12, the first Sunday after the border reopened. The station is in the Sheung Shui District of the New Territories, an area of Hong Kong that is closest to Shenzhen, a city in China’s Guangdong province. The Sheung Shui Station is one stop from the immigration control point at Lo Wu.

The number of people with either empty or jammed luggage grew as Sunday wore on. VOA Cantonese observed buying and selling of red wine, daily necessities and food.

Hong Kong Police Commissioner Raymond Siu Chak-yee said during a February 11 press briefing that the Immigration Department and the Food and Environmental Hygiene Department had stepped up crackdowns on popular parallel trading spots by issuing tickets. He said the operation will continue as part of an effort to nip the problem in the bud.

Leung Kam Sing, a spokesperson for the North District Parallel Imports Concern Group, told VOA Cantonese that the parallel import activities resumed sooner than he expected.

“If you look at where we are standing now, some people are already distributing the goods, and there are already bagged goods,” he said, adding that parallel importing thrives in Hong Kong because people in China worry about the quality of pharmaceuticals and cosmetics there.

According to a report by the local newspaper Ming Pao, more than 10 people gathered during the peak period of the parallel import activities near Sheung Shui MTR Station on Feb. 9 and dispersed when police arrived.

Leung said that the “ants trade” before and after the pandemic created a garbage problem in the Sheung Shui area and increased crowds.

He added that some of the traders hold Hong Kong ID cards and called on the governments of China and Hong Kong to cooperate in combating parallel trading activities. “I have repeatedly reiterated that it is not only Chinese mainland tourists but also Hong Kong people who engage in parallel imports,” Leung said. “We all hope that the government will really face up to this problem, for example, continuing to use the blacklist of (parallel importers) who pass through customs. For example, if some Hong Kong people engage in parallel imports, will the Shenzhen customs take some [actions]? If there are things that are out of reach for Hong Kong customs, will there be some actions by Shenzhen customs?”

According to statistics from the Hong Kong Immigration Department, about 2.43 million people from China entered and exited through border control points from Feb. 6-12, or more than the 2.4 million who visited in the entire pre-pandemic month of December 2019, according to the Hong Kong Immigration Department.

Leung, who launched many anti-parallel import activities before the pandemic, said that under the expansive, vaguely worded National Security Law, the group will not begin a campaign. But if parallel trading intensifies, he believes upset local residents might respond spontaneously.

He looked to political groups active in the community for years to “feel the reaction of the residents. I think even if my organization does not carry out (anti-parallel import operations), (the political groups) should all speak out for the residents.”
…

America’s consumers rebounded last month from a weak holiday shopping season by boosting their spending at stores and restaurants at the fastest pace in nearly two years, underscoring the economy’s resilience in the face of higher prices and multiple interest rate hikes by the Federal Reserve.

The government said Wednesday that retail sales jumped 3% in January, after having sunk the previous two months. It was the largest one-month increase since March 2021.

Driving the gain was a jump in car sales, along with healthy spending at restaurants, electronics stores and furniture outlets. Some of the supply shortages that had slowed auto production have eased, and more cars are gradually moving onto dealer lots. The enlarged inventories have enabled dealers to meet more of the nation’s pent-up demand for vehicles.

Whether America’s shoppers can continue to spend briskly will help determine how the economy fares this year. The eight interest rate hikes the Fed has carried out in the past year have raised the costs of mortgages and auto loans as well as credit card interest rates. Inflation has also eroded workers’ paychecks, thereby limiting their ability to spend freely.

Yet for all the challenges, consumers continue to show resilience. Several factors likely helped propel last month’s spending. About 70 million recipients of Social Security and other government pension programs last month received an 8.7% boost in their benefit checks, an annual cost-of-living adjustment to offset inflation. It was the largest such increase in 40 years.

The job market also surged in January, with nearly a half-million new jobs added. The unemployment rate reached 3.4%, its lowest level since 1969. With many businesses still eager to hire and keep workers, average wages and salaries have risen about 5% from a year ago — among the fastest such rates of increase in decades.

Those raises have generally been eaten up by inflation. Still, consumer price increases have been slowing. And for many households, a sharp drop in gas prices since summer has freed up more money to spend.

As price increases have slowed, average wage gains have surpassed inflation in some months, lending some consumers additional spending power.

On Tuesday, the government reported that inflation eased again in January compared with a year earlier, the seventh straight such decline, to 6.4% from 6.5% in December. But on a month-to-month basis, price increases accelerated in January compared with November and December, evidence that high inflation won’t be defeated quickly or smoothly.
…