Business

China Outlines Plan to Stabilize Economy in Crucial Year for Xi

Published

3 years ago

March 7, 2022

China Outlines Plan to Stabilize Economy in Crucial Year for Xi

BEIJING — Plowing previous international anxieties over the battle engulfing Ukraine, China set its financial system on a course of regular growth for 2022, prioritizing development, job creation and elevated social welfare in a 12 months when the nationwide chief, Xi Jinping, is poised to assert a brand new time period in energy.

The annual authorities work report delivered to China’s Nationwide Folks’s Congress by Premier Li Keqiang on Saturday didn’t even point out Russia’s invasion of Ukraine, and it took an implacably steady-as-it-goes tone on China’s financial outlook.

The implicit message seemed to be that China might climate the turbulence in Europe, and would concentrate on attempting to maintain the Chinese language inhabitants at dwelling contented and employed earlier than an all-important Communist Celebration assembly within the fall, when Mr. Xi is more and more sure to increase his time in energy.

“In our work this 12 months, we should make financial stability our high precedence and pursue progress whereas guaranteeing stability,” Mr. Li mentioned.

By saying a goal for China’s financial system to broaden “round 5.5 p.c” this 12 months, Mr. Li strengthened the federal government’s emphasis on shoring up development within the face of world uncertainty from the coronavirus pandemic and the battle in Ukraine. That purpose is slower than the 8.1 p.c rebound within the financial system that China reported final 12 months, however increased than many economists consider the nation can obtain with out large authorities spending applications.

Mr. Li upset anybody who might need thought he would have something to say about Ukraine. The Chinese language authorities’s annual work stories typically keep away from new bulletins on international coverage, and this 12 months’s was no exception. Beijing has sought to keep up its partnership with Russia whereas attempting to distance China from President Vladimir V. Putin’s resolution to go to battle.

“China will proceed to pursue an unbiased international coverage of peace, keep on the trail of peaceable growth, work for a brand new sort of worldwide relations,” Mr. Li mentioned in his report — the closest he got here to a touch upon worldwide developments.

Nonetheless, leaders in Beijing additionally signaled — in numbers, reasonably than phrases — that they had been making ready for an more and more harmful world. China’s navy price range will develop by 7.1 p.c this 12 months to about $229 billion, in accordance with the federal government’s price range report, additionally launched Saturday. Mr. Li indicated that there could be no slowing in China’s efforts to modernize and overhaul its navy, which incorporates increasing the navy and growing an array of superior missiles.

“Whereas financial growth offers a basis for a doable protection price range enhance, the safety threats China is going through and the calls for for nationwide protection functionality enhancement brought on by these threats are the driving elements,” International Occasions, a Communist Celebration-run newspaper, wrote in a report this week that predicted China’s rise in navy spending. “Over the previous 12 months, the U.S. additionally rallied its allies and companions around the globe to impress and confront China militarily.”

In December, america Congress permitted a price range of $768 billion for the American navy. However salaries and gear manufacturing prices are far increased in america, which has prompted some analysts to recommend that China’s navy price range is quickly catching up in precise buying energy.

The plan Mr. Li outlined means that China values financial development greater than attempting to make probably painful changes to shift the financial system towards larger reliance on home shopper spending. Beijing has been attempting, with restricted success, to maneuver the financial system away from dependence on debt-fueled infrastructure and housing building.

China had managed to cut back barely final 12 months its debt relative to financial output. It wanted to take action as a result of this ratio had climbed, through the first 12 months of the pandemic, to a stage that economists considered unsustainable.

However assembly this 12 months’s development goal would require extra borrowing, undoing most or all the progress made final 12 months in decreasing the debt burden, mentioned Michael Pettis, an economist with Peking College. He mentioned that it was laborious to see how China might break its dependence on reaching excessive development targets at the least partly by heavy borrowing.

Mr. Li acknowledged that the Chinese language financial system would face challenges this 12 months, pointing to the sluggish restoration of consumption and funding, flagging development in exports and a scarcity of sources and uncooked supplies. By the final three months of final 12 months, the financial system was rising solely 4 p.c.

A part of that financial slowdown mirrored a collection of presidency coverage shifts aimed toward reining in unsustainable growth in some sectors. Housing hypothesis was discouraged. Stringent limits had been imposed on the after-school tutoring business. And nationwide safety businesses imposed tighter scrutiny on the tech sector.

China’s big building business is stalling as dwelling patrons flip cautious, with builders starting to default on money owed. Dwindling revenues from land gross sales have made some native governments extra cautious about constructing further roads and bridges. Continued lockdowns and journey restrictions to stop the coronavirus from spreading have brought about a downturn in spending at lodges and eating places.

Mr. Li gave few clues as to if China may shift away from its stringent “zero Covid” pandemic technique, which has relied on mass testing and occasional lockdowns. He urged officers to deal with native outbreaks in a “scientific and focused method.”

He additionally individually alluded to the widespread public outrage that erupted in current weeks over the kidnapping of girls and youngsters. “We’ll crack down laborious on the trafficking of girls and youngsters and defend their lawful rights and pursuits,” he mentioned.

The outcry was set off after a blogger posted footage of a lady seen shackled in a windowless hut in east-central China’s Jiangsu Province, who had reportedly given delivery to eight youngsters. Official investigators mentioned the lady had been kidnapped in 1998, a discovering that individuals on social media mentioned uncovered longstanding issues with bride trafficking and insufficient protections for ladies. The lady turned an emblem of injustice, and censors have since sought to delete on-line discussions of her. (Mr. Li didn’t point out her.)

To bolster the financial system, Mr. Li issued a authorities price range for this 12 months that known as for further spending, and the issuance of extra bonds to pay for it.

The central authorities, which has pretty little debt, will enhance by 18 p.c this 12 months its transfers of cash to provincial and native governments, lots of that are closely indebted. The provincial and native governments perform a lot of China’s social spending and infrastructure building.

Social welfare and schooling outlays are each set to extend about 10 p.c this 12 months. That features elevated central authorities assist for China’s old-age pension funds, which should assist a fast-expanding inhabitants of retirees. The price range additionally contains heavy spending to assist rural households and to construct extra rental housing.

Many Chinese language provinces have set their very own development targets at 7 p.c or increased, because the Communist Celebration seeks to reassure the general public that financial growth stays a significant purpose, mentioned Feng Chucheng, a companion at Plenum, a political and financial consulting agency in Beijing. “They should challenge an image the place the get together places development targets as a high precedence,” he mentioned.

Keith Bradsher reported from Beijing, and Chris Buckley from Sydney. Li You, Liu Yi and Claire Fu contributed analysis.

Business

Cookies, Cocktails and Mushrooms on the Menu as Justices Hear Bank Fraud Case

Published

2 hours ago

January 15, 2025

Press Room

Cookies, Cocktails and Mushrooms on the Menu as Justices Hear Bank Fraud Case

In a lively Supreme Court argument on Tuesday that included references to cookies, cocktails and toxic mushrooms, the justices tried to find the line between misleading statements and outright lies in the case of a Chicago politician convicted of making false statements to bank regulators.

The case concerned Patrick Daley Thompson, a former Chicago alderman who is the grandson of one former mayor, Richard J. Daley, and the nephew of another, Richard M. Daley. He conceded that he had misled the regulators but said his statements fell short of the outright falsehoods he said were required to make them criminal.

The justices peppered the lawyers with colorful questions that tried to tease out the difference between false and misleading statements.

Chief Justice John G. Roberts Jr. asked whether a motorist pulled over on suspicion of driving while impaired said something false by stating that he had had one cocktail while omitting that he had also drunk four glasses of wine.

Caroline A. Flynn, a lawyer for the federal government, said that a jury could find the statement to be false because “the officer was asking for a complete account of how much the person had had to drink.”

Justice Ketanji Brown Jackson asked about a child who admitted to eating three cookies when she had consumed 10.

Ms. Flynn said context mattered.

“If the mom had said, ‘Did you eat all the cookies,’ or ‘how many cookies did you eat,’ and the child says, ‘I ate three cookies’ when she ate 10, that’s a false statement,” Ms. Flynn said. “But, if the mom says, ‘Did you eat any cookies,’ and the child says three, that’s not an understatement in response to a specific numerical inquiry.”

Justice Sonia Sotomayor asked whether it was false to label toxic mushrooms as “a hundred percent natural.” Ms. Flynn did not give a direct response.

The case before the court, Thompson v. United States, No. 23-1095, started when Mr. Thompson took out three loans from Washington Federal Bank for Savings between 2011 and 2014. He used the first, for $110,000, to finance a law firm. He used the next loan, for $20,000, to pay a tax bill. He used the third, for $89,000, to repay a debt to another bank.

He made a single payment on the loans, for $390 in 2012. The bank, which did not press him for further payments, went under in 2017.

When the Federal Deposit Insurance Corporation and a loan servicer it had hired sought repayment of the loans plus interest, amounting to about $270,000, Mr. Thompson told them he had borrowed $110,000, which was true in a narrow sense but incomplete.

After negotiations, Mr. Thompson in 2018 paid back the principal but not the interest. More than two years later, federal prosecutors charged him with violating a law making it a crime to give “any false statement or report” to influence the F.D.I.C.

He was convicted and ordered to repay the interest, amounting to about $50,000. He served four months in prison.

Chris C. Gair, a lawyer for Mr. Thompson, said his client’s statements were accurate in context, an assertion that met with skepticism. Justice Elena Kagan noted that the jury had found the statements were false and that a ruling in Mr. Thompson’s favor would require a court to rule that no reasonable juror could have come to that conclusion.

Justices Neil M. Gorsuch and Brett M. Kavanaugh said that issue was not before the court, which had agreed to decide the legal question of whether the federal law, as a general matter, covered misleading statements. Lower courts, they said, could decide whether Mr. Thompson had been properly convicted.

Justice Samuel A. Alito Jr. asked for an example of a misleading statement that was not false. Mr. Gair, who was presenting his first Supreme Court argument, responded by talking about himself.

“If I go back and change my website and say ‘40 years of litigation experience’ and then in bold caps say ‘Supreme Court advocate,’” he said, “that would be, after today, a true statement. It would be misleading to anybody who was thinking about whether to hire me.”

Justice Alito said such a statement was, at most, mildly misleading. But Justice Kagan was impressed.

“Well, it is, though, the humblest answer I’ve ever heard from the Supreme Court podium,” she said, to laughter. “So good show on that one.”

Business

SEC probes B. Riley loan to founder, deals with franchise group

Published

3 hours ago

January 14, 2025

Press Room

SEC probes B. Riley loan to founder, deals with franchise group

B. Riley Financial Inc. received more demands for information from federal regulators about its dealings with now-bankrupt Franchise Group as well as a personal loan for Chairman and co-founder Bryant Riley.

The Los Angeles-based investment firm and Riley each received additional subpoenas in November from the U.S. Securities and Exchange Commission seeking documents and information about Franchise Group, or FRG, the retail company that was once one of its biggest investments before its collapse last year, according to a long-delayed quarterly filing. The agency also wants to know more about Riley’s pledge of B. Riley shares as collateral for a personal loan, the filing shows.

B. Riley previously received SEC subpoenas in July for information about its dealings with ex-FRG chief executive Brian Kahn, part of a long-running probe that has rocked B. Riley and helped push its shares to their lowest in more than a decade. Bryant Riley, who founded the company in 1997 and built it into one of the biggest U.S. investment firms beyond Wall Street, has been forced to sell assets and raise cash to ease creditors’ concerns.

The firm and Riley “are responding to the subpoenas and are fully cooperating with the SEC,” according to the filing. The company said the subpoenas don’t mean the SEC has determined any violations of law have occurred.

Shares in B. Riley jumped more than 25% in New York trading after the company’s overdue quarterly filing gave investors their first formal look at the firm’s performance in more than half a year. The data included a net loss of more than $435 million for the three months ended June 30. The shares through Monday had plunged more than 80% in the past 12 months, trading for less than $4 each.

B. Riley and Kahn — a longstanding client and friend of Riley’s — teamed up in 2023 to take FRG private in a $2.8-billion deal. The transaction soon came under pressure when Kahn was tagged as an unindicted co-conspirator by authorities in the collapse of an unrelated hedge fund called Prophecy Asset Management, which led to a fraud conviction for one of the fund’s executives.

Kahn has said he didn’t do anything wrong, that he wasn’t aware of any fraud at Prophecy and that he was among those who lost money in the collapse. But federal investigations into his role have spilled over into his dealings with B. Riley and its chairman, who have said internal probes found they “had no involvement with, or knowledge of, any alleged misconduct concerning Mr. Kahn or any of his affiliates.”

FRG filed for Chapter 11 bankruptcy in November, a move that led to hundreds of millions of dollars of losses for B. Riley. The collapse made Riley “personally sick,” he said at the time.

One of the biggest financial problems to arise from the FRG deal was a loan that B. Riley made to Kahn for about $200 million, which was secured against FRG shares. With that company’s collapse into bankruptcy in November wiping out equity holders, the value of the remaining collateral for this debt has now dwindled to only about $2 million, the filing shows.

Griffin writes for Bloomberg.

Business

Starbucks Reverses Its Open-Door Policy for Bathroom Use and Lounging

Published

10 hours ago

January 14, 2025

Press Room

Starbucks Reverses Its Open-Door Policy for Bathroom Use and Lounging

Starbucks will require people visiting its coffee shops to buy something in order to stay or to use its bathrooms, the company announced in a letter sent to store managers on Monday.

The new policy, outlined in a Code of Conduct, will be enacted later this month and applies to the company’s cafes, patios and bathrooms.

“Implementing a Coffeehouse Code of Conduct is something most retailers already have and is a practical step that helps us prioritize our paying customers who want to sit and enjoy our cafes or need to use the restroom during their visit,” Jaci Anderson, a Starbucks spokeswoman, said in an emailed statement.

Ms. Anderson said that by outlining expectations for customers the company “can create a better environment for everyone.”

The Code of Conduct will be displayed in every store and prohibit behaviors including discrimination, harassment, smoking and panhandling.

People who violate the rules will be asked to leave the store, and employees may call law enforcement, the policy says.

Before implementation of the new policy begins on Jan. 27, store managers will be given 40 hours to prepare stores and workers, according to the company. There will also be training sessions for staff.

This training time will be used to prepare for other new practices, too, including asking customers if they want their drink to stay or to go and offering unlimited free refills of hot or iced coffee to customers who order a drink to stay.

The changes are part of an attempt by the company to prioritize customers and make the stores more inviting, Sara Trilling, the president of Starbucks North America, said in a letter to store managers.

“We know from customers that access to comfortable seating and a clean, safe environment is critical to the Starbucks experience they love,” she wrote. “We’ve also heard from you, our partners, that there is a need to reset expectations for how our spaces should be used, and who uses them.”

The changes come as the company responds to declining sales, falling stock prices and grumbling from activist investors. In August, the company appointed a new chief executive, Brian Niccol.

Mr. Niccol outlined changes the company needed to make in a video in October. “We will simplify our overly complex menu, fix our pricing architecture and ensure that every customer feels Starbucks is worth it every single time they visit,” he said.

The new purchase requirement reverses a policy Starbucks instituted in 2018 that said people could use its cafes and bathrooms even if they had not bought something.

The earlier policy was introduced a month after two Black men were arrested in a Philadelphia Starbucks while waiting to meet another man for a business meeting.

Officials said that the men had asked to use the bathroom, but that an employee had refused the request because they had not purchased anything. An employee then called the police, and part of the ensuing encounter was recorded on video and viewed by millions of people online, prompting boycotts and protests.

In 2022, Howard Schultz, the Starbucks chief executive at the time, said that the company was reconsidering the open-bathroom policy.