Business
China Outlines Plan to Stabilize Economy in Crucial Year for Xi
![China Outlines Plan to Stabilize Economy in Crucial Year for Xi China Outlines Plan to Stabilize Economy in Crucial Year for Xi](https://newspub.live/wp-content/uploads/2022/03/05china-congress-sub2-facebookJumbo.jpg)
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.”
Russia-Ukraine Warfare: Key Issues to Know
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.
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Business
Allstate receives approval for 34% increase in homeowners insurance rates
![Allstate receives approval for 34% increase in homeowners insurance rates Allstate receives approval for 34% increase in homeowners insurance rates](https://ca-times.brightspotcdn.com/dims4/default/1babf41/2147483647/strip/true/crop/4800x2520+0+339/resize/1200x630!/quality/75/?url=https%3A%2F%2Fcalifornia-times-brightspot.s3.amazonaws.com%2F62%2F35%2F22d31db04afea341a6ed19387e2e%2Fla-photos-1staff-470207-la-me-camp-fire-paradise007-ls.jpg)
Allstate has received approval to raise its California homeowners insurance premiums by an average of 34% starting in November — the largest rate increase this year amid the state’s insurance crisis.
The rate increase approved this month by state regulators affects more than 350,000 policyholders statewide and exceeds a 30% increase sought in June by State Farm, the state’s largest homeowners insurer. That request is still under review.
The sixth-largest homeowners insurer in the state, Allstate first filed for a 39.6% rate increase last year and in January amended its request to 34.1%, according to the state Department of Insurance.
“This home insurance rate approval allows us to continue protecting our existing customers as we work with the California Department of Insurance to improve coverage availability and create a more viable and sustainable homeowners insurance market for consumers in the state,” Allstate said in a statement that cited higher home values and repair costs and more severe weather as causes of the rate increase.
The rate hike also includes discounts for homeowners who take steps to reduce wildfire risks on their properties, the company noted.
Allstate stopped writing new California homeowners insurance policies in November 2022, citing such challenges. But as part of this increase, the company agreed to not engage in mass nonrenewals of policies through the end of January, the department said.
The suspensions of nonrenewals was a three-party agreement among Allstate, the department and Consumer Watchdog, a Los Angeles consumer advocacy group that had opposed the rate increase but changed its position.
Carmen Balber, executive director of the group, said as inflation and reconstruction costs have continued to rise since Allstate’s original filing, the group concluded the increase was warranted.
“That 34% rate increase was actually justified due to the company’s costs, as much as we don’t like to stomach that,” she said.
The company is among multiple California home insurers that have pulled back from the market and sought rate increases in recent years, citing the rising severity of wildfires and other factors.
In its rate request in June, State Farm cited an obscure provision of the state insurance code that typically indicates an insurer is facing serious financial issues — even though State Farm received a 6.9% increase in January 2023 and a 20% boost that went into effect in March.
Also in March, State Farm announced that it would not renew 72,000 property owner policies statewide, joining Farmers, Allstate and other companies in either not writing or limiting new policies or tightening underwriting standards.
The decision by State Farm to not renew the policies despite receiving its 20% rate increase was a key factor in prompting Consumer Watchdog to seek a moratorium on nonrenewals from Allstate, Balber said.
The rising costs and lack of availability of homeowners insurance have created a crisis in California’s market.
With the support of Gov. Gavin Newsom, Insurance Commissioner Ricardo Lara is seeking to stabilize the market through a series of executive actions called the Sustainable Insurance Strategy that should be in place by year’s end.
They are the biggest changes to California’s insurance regulations since Proposition 103 passed in 1988, providing for an elected insurance commissioner with authority to block rate increases.
The executive actions include allowing insurers to factor the cost of reinsurance they buy to protect themselves from catastrophes into the price of homeowners policies.
Rates also could include the estimated costs of future wildfires as identified by complex computer models, instead of determining rates simply through past claims data.
In April, an Allstate executive said at a state hearing that if the plan is adopted, the company would once again start writing new policies in California, assuming its approved rates were adequate. It reiterated that commitment in its statement Thursday.
Business
Money Talk: A parent had life insurance, but the companies are gone. What to do?
![Money Talk: A parent had life insurance, but the companies are gone. What to do? Money Talk: A parent had life insurance, but the companies are gone. What to do?](https://ca-times.brightspotcdn.com/dims4/default/af9f99f/2147483647/strip/true/crop/840x441+0+59/resize/1200x630!/quality/75/?url=https%3A%2F%2Fcalifornia-times-brightspot.s3.amazonaws.com%2Fb4%2Fbf%2F7e8acd534124a6fdc05a2491a89b%2Ftaxes-image.jpg)
Dear Liz: My mother died last year. I discovered she had two old life insurance policies written by companies that no longer exist. How can I determine which modern insurance company is responsible for policies written by these old companies? How can I submit a claim? My mother was born in 1932. The first policy began 1939 for $350. The second began in 1943 for $600.
Answer: It’s not a given that a modern insurer still has these policies, but it’s possible. You can start by entering the old companies’ names in an internet search engine to see whether new owners are mentioned in the results. If that doesn’t work, contact the insurance department in the state where the old company was headquartered because it will have records of mergers or other changes.
If the company went bankrupt, you’ll need to consult the guaranty association in the state where your mother lived. State guaranty associations protect policyholders when an insurer defaults or becomes insolvent. The National Organization of Life and Health Insurance Guaranty Assns. has a search tool you can use to find the correct association.
Another option is to check the life insurance policy locator service offered by the National Assn. of Insurance Commissioners at https://eapps.naic.org/life-policy-locator/#/welcome. You’ll need to input your mother’s Social Security number as well as her dates of birth and death.
Also check the unclaimed property offices of any states where she lived. You’ll find links at unclaimed.org.
Beware the insurance salesperson in financial planner’s clothing
Dear Liz: Do you have any general advice for choosing a tax preparer? My financial advisor has recommended switching my 403(b) contributions over to Roth 403(b) with the same investment plan. I am worried that this could put us at risk for a higher tax bracket currently.
Answer: Ideally, a financial advisor wouldn’t recommend switching to a Roth option without knowing a fair amount about your current and future tax situations. Otherwise, the advisor wouldn’t be qualified to determine whether giving up the current tax break is likely to pay off later.
Unfortunately, not all financial advisors are truly qualified to give the advice they do. Some, particularly those advising people about 403(b) investments, are insurance salespeople rather than fiduciary financial planners.
You can get referrals to tax pros from the National Assn. of Enrolled Agents and your state’s chapter of certified public accountants. (The American Institute of CPAs has compiled a list of those at its website.) Both enrolled agents and CPAs are fiduciaries who promise to put your best interests first.
For broader financial advice, consider getting referrals from one of the organizations representing fee-only fiduciary planners such as the Garrett Planning Network, the XY Planning Network, the National Assn. of Personal Financial Advisors and the Alliance of Comprehensive Planners.
Also, teachers should consider spending some time on the nonprofit 403bwise website, which grades school districts’ retirement plans and seeks to educate teachers about the costs of trusting the wrong people.
After her husband died, a widow’s credit limit plummeted
Dear Liz: You’ve mentioned how important it is for spouses to each have credit cards on which they are the primary account holder. My husband died last year. We had a credit card with statements that showed the charges we each had made on our separately numbered credit cards. I found the account was in his name only. I had to get a new credit card in my own name, and the credit limit dropped from $75,000 to $7,000. Hope this warns others.
Answer: It bears repeating that most credit cards these days are not joint accounts. If two of you are using a card, one is probably the primary account holder and the other the authorized user.
After a primary account holder dies, credit card companies are often willing to work with surviving spouses who were authorized users to establish new accounts. But as you experienced, the credit limits for these new accounts may be much lower than those of the original.
Liz Weston, Certified Financial Planner®, is a personal finance columnist. Questions may be sent to her at 3940 Laurel Canyon, No. 238, Studio City, CA 91604, or by using the “Contact” form at asklizweston.com.
Business
Opinion: Silicon Valley is maximizing profit at everyone's expense. It doesn't have to be this way
![Opinion: Silicon Valley is maximizing profit at everyone's expense. It doesn't have to be this way Opinion: Silicon Valley is maximizing profit at everyone's expense. It doesn't have to be this way](https://ca-times.brightspotcdn.com/dims4/default/3f8cff1/2147483647/strip/true/crop/4612x2421+0+327/resize/1200x630!/quality/75/?url=https%3A%2F%2Fcalifornia-times-brightspot.s3.amazonaws.com%2F7c%2F79%2Fe091ba5e42cc8270d287103130a3%2Felection-2024-trump-65546.jpg)
A public battle has broken out among the titans of Silicon Valley. One side, led by Elon Musk, PayPal co-founder Peter Thiel and venture capitalists Marc Andreessen and Ben Horowitz, is backing Donald Trump for president. The other, led by LinkedIn co-founder Reid Hoffman, is behind Kamala Harris.
We should not make the mistake of thinking this is a battle over ideology or policy. It’s a battle to maximize Silicon Valley’s profits regardless of the consequences for society.
On this objective, both sides agree. Andreessen Horowitz is one of the largest investors in cryptocurrency and artificial intelligence, and Trump has signaled that he would keep the government out of its business. Meanwhile, soon after donating $7 million to a Harris super PAC, Hoffman called for her to oust Federal Trade Commission Chairwoman Lina Khan, who has brought antitrust cases against Big Tech and introduced rules to protect workers.
Silicon Valley, a longtime engine of human achievement, has become a significant source of human harm. Aware of the gathering backlash, its leaders have dived into the political fray to protect their wealth.
Two Silicon Valley obsessions threaten the most damage: creating human addiction to increase profits and eliminating humans altogether to decrease costs.
Social media platforms, which started out by bringing old friends together and giving voice to the otherwise powerless, have become “social slot machines” compelling excessive use. Gaming companies have a similar objective. Teenagers today spend more than eight hours a day on screens, fueling digital advertising revenues that reached $225 billion last year.
Meanwhile, the artificial intelligence revolution promises to cut labor costs. A recent study by MIT economist Daron Acemoglu found that 50% to 70% of the growth in inequality between more and less educated workers can be attributed to automation. Poverty rates in Silicon Valley’s home state are rising even as AI makes Big Tech richer.
The broader prospects are equally concerning. AI is enabling killer robots, autonomous weapons and massively destructive misinformation.
The root of the problem is that the United States and Silicon Valley in particular are dominated by what we call an “investor monoculture.” Modern corporations are designed to serve investors and no one else. About 80% of public company stock in the United States is owned by institutional investors, most of which have one objective: to maximize profits, largely in the short term and without regard to the costs for society. In 1980, their share of stocks was just 29%.
Venture capital firms, the biggest funders of Silicon Valley startups, have grown from under $400 billion in assets in 2010 to nearly $4 trillion today. Their performance is measured by “multiples on invested capital,” or “MOIC,” as insiders call it.
Suicide rates among young people are up more than 60% since 2007, and U.S. democracy is in danger. But these are not investors’ concerns.
Regulation and advocacy can certainly make a difference. But Big Tech is cash-rich, lawyered up and capable of running circles around regulators.
It’s time for a different approach. When businesses are owned and governed by employees, customers, suppliers or communities, they become less predatory and more benign. And as it turns out, corporations have been designed in such ways across time and cultures. Capitalism comes in many forms.
Farmers, employees or customers own and govern some of the world’s most respected companies, including Ocean Spray, Publix Super Markets, Organic Valley, New York Life Insurance Co. and Vanguard. Corporations such as Patagonia, Rolex, Novo Nordisk and Ikea are owned or controlled by nonprofits, trusts or foundations, which have no investors and thus face less pressure to boost profits.
Silicon Valley has examples too. Mozilla, which operates the web browser Firefox, is owned by a nonprofit. It has no incentive to maximize profits, which explains why it does not sell user data to advertisers. Wikipedia, among the world’s most visited websites, is also run by a nonprofit, which shows that scale and impact don’t always depend on investor capital.
A nonprofit owns a majority of ChatGPT maker OpenAI, a design it chose to “ensure that artificial intelligence benefits all of humanity.” But its minority investors, such as Microsoft, are profit-driven, which has led to concerns that it’s releasing products at an irresponsible pace.
Many technology companies would be more benign if they were owned and governed by their users. Users have the most to lose from tech-driven addiction and automation, and their data generate most of the companies’ value. User-owners would share in this value and have an incentive to keep companies from causing harm.
How might users come together to start and run more technology companies? Bringing together a disparate and dispersed group of people is difficult; economists call this the collective action problem.
Influential nonprofits such as the Center for Humane Technology and Project Liberty can play an organizing role, incubating a new generation of user-owned social media businesses. While it’s a competitive field with entrenched players, social media technology is not complex, and there is a real hunger for more benign versions.
Existing firms can also be redesigned. Instead of raising capital from profit-seeking corporations, OpenAI could seek funding from users and give them representation on its board. And with users on the board, the company might take more care to launch products safely and dedicate resources to maintaining employment. Most important, more of the financial gains of the AI revolution would flow to the people creating the value.
If Keith Gill, also known as Roaring Kitty, could organize retail investors to drive up the market value of GameStop by $10 billion, could a similar approach have been employed to acquire Twitter for users in 2022? Given the millions of defections from the platform since Musk purchased it, it may not be too late.
The government can also help if it’s not headed off by Big Tech political contributions. The Small Business Administration, the Department of Energy and the National Science Foundation should encourage user ownership of the companies they fund.
The venture capitalists of Sand Hill Road will of course scream that this is socialism, but they will be wrong. It’s just business.
Hans Taparia is a clinical professor and Bruce Buchanan is a professor of business ethics and marketing at New York University’s Stern School of Business.
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