reported.

Michael D. Shear and David E. Sanger reported from Washington, Steven Erlanger from Brussels, and Andrew E. Kramer from Moscow.

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Jamie Dimon Sees a Boom Coming

The annual letter to shareholders by JPMorgan Chase’s chief Jamie Dimon was just published. The widely read letter is not just an overview of the bank’s business but also covers Mr. Dimon’s thoughts on everything from leadership lessons to public policy prescriptions.

“The U.S. economy will likely boom.” A combination of excess savings, deficit spending, a potential infrastructure bill, vaccinations and “euphoria around the end of the pandemic,” Mr. Dimon wrote, may create a boom that “could easily run into 2023.” That could justify high equity valuations, but not the price of U.S. debt, given the “huge supply” soon to hit the market. There is a chance that a rise in inflation would be “more than temporary,” he wrote, forcing the Fed to raise interest rates aggressively. “Rapidly raising rates to offset an overheating economy is a typical cause of a recession,” he wrote, but he hopes for “the Goldilocks scenario” of fast growth, gently increasing inflation and a measured rise in interest rates.

“Banks are playing an increasingly smaller role in the financial system.” Mr. Dimon cited competition from an already large shadow banking system and fintech companies, as well as “Amazon, Apple, Facebook, Google and now Walmart.” He argued those nonbank competitors should be more strictly regulated; their growth has “partially been made possible” by avoiding banking rules, he wrote. And when it comes to tougher regulation of big banks, he wrote, “the cost to the economy of having fail-safe banks may not be worth it.”

“China’s leaders believe that America is in decline.” While the U.S. has faced tough times before, today “the Chinese see an America that is losing ground in technology, infrastructure and education — a nation torn and crippled by politics, as well as racial and income inequality — and a country unable to coordinate government policies (fiscal, monetary, industrial, regulatory) in any coherent way to accomplish national goals,” he wrote. “Unfortunately, recently, there is a lot of truth to this.”

a leveraged buyout offer from the private equity firm CVC Capital, sending its shares to a four-year high. Toshiba has had a series of scandals, and faces pressure from activist investors.

raising the corporate rate to help pay for President Biden’s infrastructure plans — though he didn’t mention the White House’s proposed rate, 28 percent. Other corporate chiefs are privately criticizing the potential tax rise.

The company behind the Johnson & Johnson vaccine mix-up has a history of errors. Emergent BioSolutions, which the U.S. relied on to produce doses by J.&J. and AstraZeneca, had a made manufacturing errors before. Experts worry this may leave some Americans more wary of getting vaccinated, even as Mr. Biden has moved up the eligibility deadline for U.S. inoculations.

An electric aircraft maker sues a rival for intellectual property theft. Wisk, which is backed by Boeing and the Google founder Larry Page, said that former employees downloaded confidential information before joining Archer, a competitor. Archer, which is going public by merging with a SPAC run by Moelis & Company and which counts United Airlines as an investor, denied wrongdoing and said it was cooperating with a government investigation.

A blistering start for venture capital in 2021. Start-ups set a fund-raising quarterly record in the first three months of the year, raising more than $62 billion, according to the MoneyTree report from PwC and CB Insights. That’s more than twice the total a year earlier and represents nearly half of what start-ups raised in all of 2020.

Voting in the union election at an Amazon warehouse in Bessemer, Ala., ended on March 29, and counting began the next day, but the outcome is still unknown. What’s going on? It’s less about the number of ballots than how they’re counted.

The stakes are high, for both Amazon and the labor movement. Progressive leaders like Bernie Sanders have argued a victory for the union, the first at an Amazon facility in the U.S., could inspire workers elsewhere to unionize. And Amazon is facing increased scrutiny for its market power and labor practices.

a painstaking process:


— Kristalina Georgieva, the managing director of the I.M.F., on how the uneven rollout of vaccines poses a threat to the global economic recovery.


After the 2008 financial crisis, Credit Suisse emerged battered by high-risk bets and promised to do better. A series of recent scandals suggests it hasn’t, The Times’s Jack Ewing writes.

A recap of the Swiss bank’s troubles over the past year or so:

30-day comment period on to-be-drafted regulations that would make it harder to obscure who controls a company. Among the details to be worked out are what entities should report and when; how to collect, protect and update information for a database; and the criteria for sharing with law enforcement.

“We could not be more excited,” Kenneth Blanco, the director of the Treasury’s Financial Criminal Enforcement Network (FinCEN), told bankers recently. The U.S. has been under pressure to address its vulnerability to money laundering and financial crimes:

New rules could make forming small businesses, special purpose vehicles and other closely held entities “significantly” more burdensome, said Steve Ganis of Mintz, an expert in anti-money laundering regulation. “FinCEN’s new regime will make things much more complicated for start-ups, where control and ownership are highly fluid,” he said. Public companies and many larger businesses would be exempt because they already face stricter scrutiny.

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‘The U.S. Economy Will Likely Boom,’ Jamie Dimon Predicts: Live Updates

was published early Wednesday. The letter, which is widely read on Wall Street, is not just an overview of the bank’s business but also covers Mr. Dimon’s thoughts on everything from leadership lessons to public policy prescriptions.

“The U.S. economy will likely boom.” A combination of excess savings, deficit spending, vaccinations and “euphoria around the end of the pandemic,” Mr. Dimon wrote, may create a boom that “could easily run into 2023.” That could justify high stock valuations, but not the price of U.S. debt, given the “huge supply” soon to hit the market. There is a chance that a rise in inflation would be “more than temporary,” he wrote, forcing the Federal Reserve to raise interest rates aggressively. “Rapidly raising rates to offset an overheating economy is a typical cause of a recession,” he wrote, but he hopes for “the Goldilocks scenario” of fast growth, gently increasing inflation and a measured rise in interest rates.

“Banks are playing an increasingly smaller role in the financial system.” Mr. Dimon cited competition from an already large shadow banking system and fintech companies, as well as “Amazon, Apple, Facebook, Google and now Walmart.” He argued those nonbank competitors should be more strictly regulated; their growth has “partially been made possible” by avoiding banking rules, he wrote. And when it comes to tougher regulation of big banks, he wrote, “the cost to the economy of having fail-safe banks may not be worth it.”

“China’s leaders believe that America is in decline.” The United States has faced tough times before, but today, “the Chinese see an America that is losing ground in technology, infrastructure and education — a nation torn and crippled by politics, as well as racial and income inequality — and a country unable to coordinate government policies (fiscal, monetary, industrial, regulatory) in any coherent way to accomplish national goals,” he wrote. “Unfortunately, recently, there is a lot of truth to this.”

“The solution is not as simple as walking away from fossil fuels.” Addressing climate change doesn’t mean “abandoning” companies that produce and use fossil fuels, Mr. Dimon wrote, but working with them to reduce their environmental impact. He sees “huge opportunity in sustainable and low-carbon technologies and businesses” and plans to evaluate clients’ progress according to reductions in carbon intensity — emissions per unit of output — which adjusts for factors like size.

Other notable news (and views) from the letter:

This was Mr. Dimon’s longest letter yet, at 35,000 words over 66 pages. The steadily expanding letters — aside from a shorter edition last year, weeks after Mr. Dimon had emergency heart surgery — could be seen as a reflection of the range of issues top executives are now expected, or compelled, to address.

Target said its commitment added to its other moves to improve racial equity in the past year,.
Credit…Kendrick Brinson for The New York Times

Target will spend more than $2 billion with Black-owned businesses by 2025, it announced on Wednesday, joining a growing list of retailers that have promised to increase their economic support of such companies in a bid to advance racial equity in the United States.

Target, which is based in Minneapolis, will add more products from companies owned by Black entrepreneurs, spend more with Black-owned marketing agencies and construction companies and introduce new resources to help Black-owned vendors navigate the process of creating products for a mass retail chain, the company said in a statement.

After last year’s protests over police brutality, a wave of American retailers, from Sephora to Macy’s, have committed to spending more money with Black-owned businesses. Many of them have joined a movement known as the 15 Percent Pledge, which supports devoting enough shelf space to Black-owned businesses to align with the African-American percentage of the national population.

Target’s announcement appears to be separate from that pledge. It said its commitment added to other racial-equity and social-justice initiatives in the past year, including efforts to improve representation among its work force.

A Samsung store in Seoul. The company’s Galaxy S21 series of  phones have sold well in the United States since their introduction in January. 
Credit…Jung Yeon-Je/Agence France-Presse — Getty Images

Samsung’s sales grew by an estimated 17 percent in the first quarter from a year earlier, and operating profit increased by 44 percent, the company said on Wednesday. The South Korean electronics titan’s growth has been helped during the pandemic by strong demand for televisions, computer monitors and other lockdown staples.

The company released its latest flagship smartphones, the Galaxy S21 series, in January. In the United States, the devices handily outsold Samsung’s last line of premium phones in their first six weeks on the market, according to Counterpoint Research, which attributed the strong performance in part to Americans receiving stimulus payments.

Samsung’s handset business has also been buoyed of late by the U.S. campaign against Huawei, one of the company’s main rivals in smartphones. The Chinese tech giant’s device sales have plummeted because American sanctions prevent its phones from running popular Google apps and services, limiting their appeal to many buyers.

Another competitor, LG Electronics, said this week that it was getting out of the smartphone business to focus on other products.

Samsung’s first-quarter revenue was likely hurt by February’s winter storm in Texas, which caused the company to halt production for a while at its manufacturing facilities in Austin.

The company is expected to report detailed financial results later this month.

Jeff Bezos in 2019. He said in a statement on Tuesday that he applauded the Biden administration’s “focus on making bold investments in American infrastructure.”
Credit…Jared Soares for The New York Times

Jeff Bezos, Amazon’s founder and chief executive, said on Tuesday that he supported an increase in the corporate tax rate to fund investment in U.S. infrastructure.

President Biden is pushing a plan to spend $2 trillion on infrastructure improvements, in part by raising the corporate tax rate to 28 percent, from its current rate of 21 percent.

Mr. Bezos said in a statement on Amazon’s corporate website that he applauded the administration’s “focus on making bold investments in American infrastructure.”

“We recognize this investment will require concessions from all sides — both on the specifics of what’s included as well as how it gets paid for (we’re supportive of a rise in the corporate tax rate),” Mr. Bezos said.

For years, Amazon has been a model for corporate tax avoidance, fielding criticism of its tax strategies from Democrats and former President Donald J. Trump. In 2019, Amazon had an effective tax rate of 1.2 percent, which was offset by tax rebates in 2017 and 2018, according to the Institute on Taxation and Economic Policy, a left-leaning research group in Washington. In 2020, the company paid 9.4 percent in taxes on U.S. pretax profit of about $20 billion, the group said.

The company has said in the past that it “pays all the taxes we are required to pay in the U.S. and every country where we operate.”

Companies employ varied strategies to reduce their tax liabilities. In 2017, the same federal bill that lowered the tax rate to 21 percent expanded tax breaks, including allowing the immediate expensing of capital expenditures. The goal was to lift investment, but the change also caused the number of profitable companies that paid no taxes to nearly double in 2018 from prior years.

Brandon Brown and Jeremiah Collins, students at American Diesel Training.
Credit…Brian Kaiser for The New York Times

American Diesel Training, a school in Ohio that prepares people for careers as diesel mechanics, is part of a new model of work force training — one that bases pay for training programs partly on whether students get hired.

The students agree to an share about 5 percent to 9 percent of their income depending on their earnings. The monthly payments last four years. If you lose your job, the payment obligation stops.

Early results are promising, Steve Lohr reports for The New York Times, and experts say the approach makes far more economic sense than the traditional method, in which programs are paid based on how many people enroll. But there are only a relative handful of these pay-for-success programs. The challenge has been to align funding and incentives so that students, training programs and employers all benefit.

State and federal officials are now looking for new ways to improve work force development. President Biden’s $2 trillion infrastructure and jobs plan, announced last week, includes billions for work force development with an emphasis on “next-generation training programs” that embrace “evidence-based approaches.”

Social Finance, a nonprofit organization founded a decade ago to develop new ways to finance results-focused social programs, is seeking, designing and supporting new programs — for-profit or nonprofit — that follow the pay-for-success model.

“There is emerging evidence that these kinds of programs are a very effective and exciting part of work force development,” said Lawrence Katz, a labor economist at Harvard. “Social Finance is targeting and nurturing new programs, and it brings a financing mechanism that allows them to expand.”

A former Kmart in West Orange, N.J., is now a coronavirus vaccination center. The International Monetary Fund said successful vaccination programs have improved countries’ growth prospects.
Credit…James Estrin/The New York Times

Major U.S. and European stock indexes hovered near record highs on Wednesday after a stream of mostly upbeat economic data and the progress on vaccinations.

U.S. stock futures were little changed on Wednesday, but the S&P 500 was set to open within half a percentage point of its record. The Stoxx Europe 600 and DAX index in Germany both fell about 0.1 percent after climbing to new highs on Tuesday.

On Tuesday, the International Monetary Fund upgraded its forecast for global economic growth and said some of the world’s wealthiest countries would lead the recovery, particularly the United States, where the economy is now projected to grow by 6.4 percent this year.

The rollout of vaccines is a major reason for the rosier forecast in some countries, the I.M.F. said. President Biden said that he wanted states to make all adults eligible for vaccines by April 19, two weeks earlier than his previous deadline. In Britain, the Moderna vaccine was administered for the first time on Wednesday, making it the third vaccine available.

Still, the I.M.F. warned on Tuesday against an unequal recovery because of the uneven distribution of vaccines around the world with some lower-income countries not expected to be able to vaccinate their populations this year.

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Miami’s Mayor Wants to Make His City a Crypto Hub

Mayor Francis Suarez of Miami is selling his city as the world’s cryptocurrency capital. “We want to be on the next wave of innovation,” he told DealBook. To make that happen, Mr. Suarez said he was “refashioning” the city’s “fun in the sun” image. Thanks in part to the mayor’s marketing efforts, tech and finance titans have flocked to Miami during the pandemic.

Visions of Bitcoin City. Last month, the Republican mayor suggested Miami pay municipal workers and accept tax payments in Bitcoin, as well as invest city funds in the cryptocurrency. Local officials have agreed to study the proposals. The notion made him popular in the crypto community, advancing his rebranding campaign. His efforts have also won him campaign donations from tech investors, attracted money to cultivate Miami’s burgeoning tech sector and may soon pay a big county bill.

The cryptocurrency exchange FTX is seeking naming rights for the city’s N.B.A. arena, currently known as AmericanAirlines Arena. Miami-Dade County took over branding deals in 2018 and is supposed to pay the team $2 million per year, sponsor or no (American’s contract ended in 2019). The FTX agreement is nearly final, pending a Friday vote by county commissioners. “It’s awesome that we’ve attracted a huge cryptocurrency exchange,” Mr. Suarez said, noting that FTX’s bid “complements the brand” that Miami is establishing.

  • It would be the N.B.A.’s first crypto sponsorship of an arena, The Miami Herald notes, but it would also tie a county revenue stream to a relatively young exchange and C.E.O. FTX was founded in 2019 and is run by Samuel Bankman-Fried, a 28-year-old billionaire who was one of the biggest donors to President Biden’s campaign.

The tech center exodus and crypto boom converge in Miami. The pandemic prompted people to relocate to Florida from Silicon Valley and New York as Bitcoin gained legitimacy and value. The mayor sees the trends as interrelated, and he is seizing the moment. “People come here and start realizing that there’s way more tech talent than they thought,” he said.

  • All that’s missing is a regulatory scheme, Mr. Suarez said: Lawmakers are modeling Florida’s approach on Wyoming’s crypto policies. Ultimately, the success of the mayor’s effort won’t be apparent until it’s clear that people are making their moves permanent and maintaining their enthusiasm for crypto if — or when? — there is another market downturn.

Not so fast, AstraZeneca. American officials said early today that the company may have included “outdated information” from a U.S. clinical trial of its Covid-19 vaccine, providing “an incomplete view” of data that could cast doubt on promising news.

a huge infrastructure proposal. It will go beyond roads and bridges to also address climate change and racial and gender equity.

Microsoft will ease workers back to the office starting next week. The 57,000 employees who left the tech giant’s Redmond, Wash., headquarters because of the pandemic can choose to work from the office, home or both.

BlackRock investigates allegations of employee misconduct. The money-management giant hired a law firm after employees said that they had faced harassment and discrimination over their sex, race and religion. A senior executive, Mark Wiedman, apologized for making inappropriate comments at work events.

Goldman Sachs’s C.E.O. promises to ease the burden on junior bankers. David Solomon told employees that the firm would better enforce a ban on working Saturdays and hire more analysts, after a presentation by first-year bankers that described 100-hour work weeks drew media attention.

Though she lost the Democratic presidential primary, Senator Elizabeth Warren is exerting considerable sway over President Biden’s financial policies, judging by the number of people from her orbit who have been picked to join the administration. But her influence is increasingly being tested, The Times’s Alan Rappeport writes.

on Bitcoin and other cryptocurrencies.


manufacturers of batteries for electric vehicles. The International Trade Commission recently ruled in favor of LG Chem in a trade secrets case against SK Innovation, issuing a default judgment based on a problematic absence of documentation. SK says its partially built factory in Georgia is threatened by the decision.

ban on imports of a Botox competitor.) But a federal court could order SK to submit to monitoring and impose damages, if warranted, “without killing jobs and setting back the Georgia economy,” Ms. Yates said.

Automakers will need lots of batteries for electrical vehicles, and the decision could make American manufacturers less competitive, said Carol Browne, the former Obama administration “climate czar.” President Biden signed an executive order last month aimed at strengthening the domestic supply chain, including for EV batteries, and “one way to guarantee that is domestic production,” Ms. Browne said.

“The Georgia plant will not sit idle,” countered LG’s lawyer, David Callahan of Latham & Watkins. LG’s attorneys say SK exaggerates the order’s impact on American manufacturing and minimizes its I.P. violations. SK can “redesign” or settle, they suggested, but in any case “the demand for these batteries ensures that another manufacturer will step in” if it abandons the plant. (The Botox dispute was ultimately settled.)

The Biden administration can veto the I.T.C. by early April. Gov. Brian Kemp of Georgia has urged the president to do so, citing a 2013 reversal of a ruling in a dispute between Apple and Samsung. (The administration did not respond to a request for comment). Gov. Mike DeWine of Ohio — where LG is constructing a battery plant with General Motors — has asked the president to uphold the ruling, saying that “stolen intellectual property” shouldn’t be used to compete with his state’s workers. Mr. Biden is visiting Ohio today.

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Microsoft to Ease Workers Back to the Office Starting Next Week: Live Updates

wrote on the company blog.

Microsoft also released on Monday the results of a survey of that it says shows the work force has changed after a year of working remotely. In the survey of more than 30,000 full-time and self-employed workers, 73 percent said they wanted flexible remote work options to continue, and 46 percent said they were planning to move this year now that they could work remotely.

“There are some companies that think we’re just going to go back to how it was,” Jared Spataro, the corporate vice president for Microsoft 365, said in an interview. “However, the data does seem to indicate that they don’t understand what has happened over the last 12 months.”

Jerome H. Powell, the chair of the Federal Reserve, said the Fed’s research into central bank-issued digital currencies is early and exploratory — and that U.S. officials would only consider issuing a digital dollar if they believed there was a clear use and if the idea had widespread public and political buy-in.

“You can expect us to move with great care and transparency,” Mr. Powell said on Monday at a Bank for International Settlements event on central bank innovation. “We would not proceed with this without support from Congress.”

Mr. Powell said that at this stage, the Fed is looking into whether there is even a need for a central bank digital currency — a technology-based instrument with official government backing. Payment systems are already speeding up and banks offer digital money in the form of bank deposits, he noted, so the need for a central bank version is an open question.

“Does the public want, or need, a new digital form of central bank money to complement what is already a highly efficient, reliable and innovative payments arena?” he said.

Central bank digital currency could offer benefits, Mr. Powell said — perhaps laying the groundwork for a more efficient, more inclusive payment system, and maintaining the dollar’s competitive position as the leading global currency. But there are also big risks. Digital currencies could bring cybersecurity vulnerabilities and the possibility of money laundering, and they might disrupt the stable relationship between customers, banks and the Fed.

“We’re sort of purveyors of stability,” Mr. Powell said Monday.

The Fed’s Washington-based board has begun experimenting with central bank digital currencies, and the Federal Reserve Bank of Boston is collaborating with researchers at the Massachusetts Institute of Technology on complementary research.

“The focus really is on developing and understanding the capabilities and limitations of the relevant technologies,” he said. “It’s not an attempt to create a prototype.”

Mr. Powell said regulation is not “where it needs to be” when it comes to stable coins — a type of cryptocurrency which has value tied to an outside asset. He dismissed the possibility that private stable coins could substitute for central bank money.

And when it comes to cryptocurrencies like Bitcoin that aren’t backed by some value anchor, Mr. Powell said they are risky assets as opposed to dollar-like money.

“Crypto assets, they’re highly volatile — see Bitcoin — and therefore not really useful as a store of value,” Mr. Powell said. “It’s more a speculative asset, that’s essentially a substitute for gold, rather than for the dollar.”

A group of junior bankers at Goldman Sachs assembled a presentation about working conditions at the Wall Street bank that circulated on social media.
Credit…Emon Hassan for The New York Times

Last week, a presentation by a group of junior bankers at Goldman Sachs went viral on social media, in which they complained about what they described as workplace abuse, including 100-hour weeks.

The DealBook newsletter’s inbox has been overflowing with reactions, notably from current, former and aspiring investment bankers. Here’s what some had to say — most requested anonymity to speak freely about their experiences — edited and condensed for clarity:

Turkish lira banknotes at a currency exchange in Ankara. An unexpected change at the head of Turkey’s central bank caused a steep drop in the lira’s value.
Credit…Murad Sezer/Reuters

Turkey’s currency tumbled on Monday after President Recep Tayyip Erdogan fired the head of the central bank, who had been in the job just four months and had pursued policies aimed at taming inflation. The Turkish lira plunged 10 percent against the U.S. dollar.

The removal of Turkey’s central bank chief, Naci Agbal, signals a return to the unorthodox policies that Mr. Erdogan has long favored, such as cutting interest rates to lower inflation, but which most economists regard as counterproductive. Mr. Erdogan has repeatedly meddled in the central bank’s activities and over the years traders have dumped the lira.

Since his appointment in November, Mr. Agbal has raised the central bank’s benchmark interest rate from 10.25 percent to 19 percent in an effort to slow the overheating economy, control inflation and lure in foreign investment. He had succeeded in pulling the lira up from its record low. The most recent increase in the benchmark rate was on Thursday and he was fired on Friday.

The annual inflation rate was officially 15.6 percent in February but is probably much higher.

The new central bank chief, Sahap Kavcioglu, a university professor and former member of Turkey’s National Assembly, said in a statement that he would continue to fight inflation. But on Monday, the lira was trading at about 7.93 to the dollar, compared with 7.22 on Friday. The plunge in value was a sign that currency traders expect him to bow to pressure from Mr. Erdogan to cut rates, worsening the inflation problem and pushing the country of 82 million people closer to economic collapse.

“We have abandoned our cautiously optimistic view on the lira,” Piotr Matys, a strategist at Rabobank wrote in a note. Mr. Kavcioglu’s comments suggest he is clearly in favor of lower interest rates to stimulate growth, he added.

Carlos Ghosn, the former chief executive of Nissan, is a fugitive after fleeing Japan, where he was facing charges of alleged financial misconduct, which he had denied.  
Credit…Hussein Malla/Associated Press

Tokyo prosecutors on Monday charged two Americans with helping Carlos Ghosn, the former Nissan chief, jump bail in Tokyo, where he was awaiting trial on four counts of financial wrongdoing.

Japanese prosecutors said in an indictment that the two men, Michael Taylor, 60, a former Green Beret, and his son Peter Maxwell Taylor, 27, assisted Mr. Ghosn’s efforts to escape the country, helping him flee to Turkey and then on to Lebanon, where he has been beyond the reach of Japanese law.

American officials arrested the men last May in Massachusetts. Earlier this month, they were extradited to Japan, where they have been held in a Tokyo detention center while undergoing questioning by prosecutors. A third man believed to have aided Mr. Ghosn’s escape remains at large.

The Japanese authorities have accused Michael Taylor of helping Mr. Ghosn travel by train to the western city of Osaka, through security checks at a private jet terminal and then onto a plane bound for Turkey. Once there, Mr. Ghosn transferred to a flight bound for Beirut. Peter Taylor assisted in planning for the escapade, visiting Mr. Ghosn several times before the escape, officials say.

Mr. Ghosn and his son, Anthony Ghosn, paid more than $1.3 million to the Taylors and a company they controlled, U.S. prosecutors have said in court filings.

Mr. Ghosn’s case raised international concerns about what some critics call Japan’s system of “hostage justice,” which includes lengthy detentions of criminal suspects without charge. While in the United States, the Taylors fought a long legal battle to prevent their extradition, with their lawyers arguing that they could be subjected to harsh conditions in a Japanese jail.

Jessie Astbury Allen with her daughters Mae, 7, and Livia, 12. They left China more than a year ago; Ms. Astbury Allen’s husband is still there.
Credit…Francesca Jones for The New York Times

For the past year, people trying to go to China have run into some of the world’s most formidable barriers to entry. To stop the coronavirus, China bans tourists and short-term business travelers outright, and it sets tough standards for all other foreigners, even those who have lived there for years.

The restrictions have hampered the operations of many companies, separated families and upended the lives of thousands of international students, report Sui-Lee Wee and Keith Bradsher for The New York Times. Global companies say their ranks of foreign workers in the country have dwindled sharply.

As deadlier and more infectious virus variants appeared in other countries in recent months, China introduced onerous new requirements.

Officials regard travel restrictions as crucial to their success in containing the virus. Since the outbreak started, China has reported more than 101,000 Covid cases. Although questions have been raised about the accuracy of the numbers, they are far lower than in the United States, where 29.8 million people have tested positive for the virus.

China’s tough restrictions, including its recent ban on dependents, have exacted an emotional toll on some families who have been forced to live apart for months.

In February of last year, Jessie Astbury Allen took her two young daughters to England to wait out the outbreak as it swept across China, hoping they would reunite with her husband in Shanghai by Easter. It was a plan she would come to regret.

“I knew in my gut we were doing the wrong thing, but it was too late,” she said, weeping, as she described how she felt on landing at London’s Heathrow Airport.

Abraham Sanchez, a Sacramento musician, put $1,200 of his stimulus money last week into his Robinhood trading account.
Credit…Salgu Wissmath for The New York Times

For a decade before the pandemic, small investors accounted for roughly a tenth of trading activity in the stock market. But in the last year, they have become responsible for close to a quarter, according to Goldman Sachs analysts.

The speculative appetite of small investors may seem at odds with an economy still reeling from a pandemic that has killed more than half a million Americans, decimated jobs and snuffed out businesses and livelihoods. But one of the biggest tools deployed by the U.S. government to cushion the economic blow — stimulus payments — is also driving a huge surge in investing by small traders, Matt Phillips reports for The New York Times.

Analysts at Deutsche Bank recently estimated that as much $170 billion from the latest round of stimulus payments could flow into the stock market. They conducted a survey of retail traders in which respondents said they planned to put roughly 40 percent of any payment they received — or $2 of every $5 — into the stock market. Traders between the ages of 25 and 34 said they expected to put half of their stimulus check into stocks.

“That could lead to a bit more mania, speculation in the market,” said Patrick Fruzzetti, managing director and partner at Hightower Advisors, an investment firm. The “stimmies,” he said — using a popular online term for stimulus checks — will go into people’s trading accounts, and “they will trade.”

Volkswagen can spread the cost of developing new technologies over millions of vehicles and undercut Tesla on price.
Credit…Matthias Rietschel/Reuters

In October 2015, a month after Volkswagen confessed to rigging diesel cars to conceal illegally high emissions, shellshocked company executives gathered in the brick-clad high-rise executive office building topped with a giant VW logo that looms over the carmaker’s main factory in Wolfsburg, Germany.

The executives authorized development of a collection of mix-and-match components that would serve as the basis for a range of electric models including sedans, S.U.V.s and vans, Jack Ewing reports for The New York Times. The standardized platform, called the Modular Electrification Toolbox, could also be used by other company brands, including Audi.

The platform will allow Volkswagen to exploit the big advantage it has over Tesla: size. With 665,000 employees and sales of 9.3 million vehicles last year, Volkswagen is the second-largest carmaker in the world after Toyota. It can spread the cost of developing new technologies over millions of vehicles and undercut Tesla on price.

The commitment Volkswagen made then is paying off now as the company rolls out a line of vehicles developed from the ground up to run on batteries, with more interior space and more appeal than adaptations of gasoline vehicles.

By 2025, Volkswagen will be able to produce electric vehicles for less than it costs to build a gasoline or diesel car, UBS analysts wrote in this month’s report. They cautioned that Tesla retained a significant lead in battery technology and autonomous driving software.

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Jerome Powell says the Fed won’t issue a digital currency without congressional approval.

Jerome H. Powell, the chair of the Federal Reserve, said the Fed’s research into central bank-issued digital currencies is early and exploratory — and that U.S. officials would only consider issuing a digital dollar if they believed there was a clear use and if the idea had widespread public and political buy-in.

“You can expect us to move with great care and transparency,” Mr. Powell said on Monday at a Bank for International Settlements event on central bank innovation. “We would not proceed with this without support from Congress.”

Mr. Powell said that at this stage, the Fed is looking into whether there is even a need for a central bank digital currency — a technology-based instrument with official government backing. Payment systems are already speeding up and banks offer digital money in the form of bank deposits, he noted, so the need for a central bank version is an open question.

“Does the public want, or need, a new digital form of central bank money to complement what is already a highly efficient, reliable and innovative payments arena?” he said.

Central bank digital currency could offer benefits, Mr. Powell said — perhaps laying the groundwork for a more efficient, more inclusive payment system, and maintaining the dollar’s competitive position as the leading global currency. But there are also big risks. Digital currencies could bring cybersecurity vulnerabilities and the possibility of money laundering, and they might disrupt the stable relationship between customers, banks and the Fed.

“We’re sort of purveyors of stability,” Mr. Powell said Monday.

The Fed’s Washington-based board has begun experimenting with central bank digital currencies, and the Federal Reserve Bank of Boston is collaborating with researchers at the Massachusetts Institute of Technology on complementary research.

“The focus really is on developing and understanding the capabilities and limitations of the relevant technologies,” he said. “It’s not an attempt to create a prototype.”

Mr. Powell said regulation is not “where it needs to be” when it comes to stable coins — a type of cryptocurrency which has value tied to an outside asset. He dismissed the possibility that private stable coins could substitute for central bank money.

And when it comes to cryptocurrencies like Bitcoin that aren’t backed by some value anchor, Mr. Powell said they are risky assets as opposed to dollar-like money.

“Crypto assets, they’re highly volatile — see Bitcoin — and therefore not really useful as a store of value,” Mr. Powell said. “It’s more a speculative asset, that’s essentially a substitute for gold, rather than for the dollar.”

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Covid-19 Subdues Growth in Global Arms Industry

The diplomatic breakthrough that brought last summer’s normalization of relations between Israel and both the United Arab Emirates and Bahrain was also seen as a potential boon for the international defense industry.

But prospects for direct transfers of Israeli defense technology to the Arab countries instead have lagged amid the coronavirus pandemic—one of many factors contributing to reduced defense sales across the board.

Overall, defense analyst Janes expects the industry to grow this year, although at its lowest rate—just 0.7%—since 2013, with total global spending on defense at nearly $1.8 trillion. Janes expects significant drops in Africa, the Middle East and Russia, with no growth in Asia Pacific, Europe and Latin America.

These are tangible signs of how the coronavirus, and efforts to combat it, have affected the defense industry—usually resilient given its financial and geopolitical importance—as governments have deemed the public-health crisis a national-security issue.

Logistical and economic hurdles have disrupted sales, development and manufacturing. Many defense companies have been rocked by rising costs and production irregularities. And governments have poured trillions of dollars into combating the economic and public-health effects of Covid-19.

The impact of the virus on the defense industry has varied. The aerospace sector, with its heavy reliance on civilian aviation, has been hit especially hard as a result of pandemic lockdowns on travel. The General Aviation Manufacturers Association said global business jet deliveries declined 20.4% last year.

Military exercises, traditionally an opportunity for seller nations to showcase weapons systems to prospective clients, have been limited. The Pentagon suspended travel and troop deployments.

Last year in February, Washington and Seoul postponed planned joint military exercises due to the coronavirus and President Donald Trump’s objection to their cost. Military exercises on their own account for millions of dollars in economic activity.

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The pandemic has limited human intelligence gathering, increasing reliance on cyber intelligence and cybersecurity and continuing development of unmanned systems such as ariel drones. Analysts also have seen an increase in sales of thermal-imaging equipment, which can be used to take body temperatures remotely.

Despite setbacks, some analysts see the defense industry as broadly protected from major volatility, thanks to the multiyear nature of its contracting cycle.

“Demand over the next two years is unlikely to be affected, since budgets for these projects had been allocated prior to the pandemic, and the projects are critical to national defense,” a report released by accounting firm Deloitte LLP said.

But an acute reduction of in-person meetings—a necessity given the political aspects of most arms agreements—has impeded the progress of new deals. One Gulf official at last month’s International Defence Exhibition and Conference, held in Abu Dhabi, said some international counterparts were also reluctant to engage in videoconferences.

For this and other reasons, the biennial Abu Dhabi exhibition—the region’s largest defense conference, known as IDEX—held particular value for the industry. The fact that the Emiratis, who have employed strict public-health controls since the pandemic began, mounted the exhibition at all came as a surprise. More than 900 exhibitors from 59 countries attended.

By contrast, this year’s Paris Air Show, a traditional industry palm-presser scheduled for June, was canceled, one of many defense conferences and exhibitions called off, postponed or held remotely in the past year.

This year’s IDEX conference demonstrated the U.A.E.’s priority on becoming a major arms player against the backdrop of continued rivalry with Iran and the Biden administration’s review of U.S. arms sales to the U.A.E. and Saudi Arabia.

Coming after completion of the accords between Israel, the U.A.E. and Bahrain, this year’s gathering held promise in the arms industry as the first IDEX attended by Israeli defense companies, marking a major shift in the region’s defense complexion.

However, a coronavirus-related shutdown of international flights to and from Israel left the exhibition stands of those Israeli companies all but vacant.

Many companies that succeeded in attending the conference brought with them lessons of the difficulties of the pandemic. One of the few Israeli companies represented at IDEX, small-arms manufacturer Emtan Karmiel Ltd., halted production at its factory for several weeks and faced shipping costs that ballooned from $5 to $20 per kilogram.

The Biden administration approved a $60 million sale of Lockheed Martin’s F-16s to Jordan in the past month.

Photo: Luka Dakskobler/Zuma Press

“It’s because there were fewer flights,” said Ron Pollak, Emtan’s vice president of sales and marketing. “Our profit was damaged.”

An executive at the Edge, an Emirati defense conglomerate, said that some subsidiaries adopted what amounted to a staggered shift schedule in order to continue production while accommodating strict governmental health regulations.

Janes said that defense purchases in the Gulf region increased by 5.4% in 2020, to $100 billion, but were expected to decline by 9.4% in 2021, and fall further in 2022 to $89.4 billion. Janes predicts that Gulf military spending will return to its pre-pandemic level only in 2024.

China was among countries demonstrating resilience in the pandemic, with its 2021 defense budget marking an increase of 6.8%, to $209.4 billion, in the first year of a new five-year plan.

Israel wasn’t the only marquee country with a limited presence at IDEX. Pandemic concerns dissuaded the U.S., customarily the largest governmental mission at the exhibition, from sponsoring a delegation.

State-owned Israel Aerospace Industries saw record sales of $4.2 billion last year. An assembly line near Or Yehuda, Israel.

Photo: baz ratner/Reuters

The Pentagon has taken steps to shore up U.S. contractors during the past year, more than doubling the amount—$135 million in 2020, up from $64 million in 2019—annually distributed through the Defense Production Act. The act was known during the past year for its use in coronavirus-related procurements, but it has been regularly used by the Defense Department for national security.

The majority of that money, $80 million, went to Spirit AeroSystems Holdings Inc., a Kansas aircraft manufacturer that furloughed hundreds of workers due to aerospace-sector slowdowns.

For some U.S. companies, new defense deals continue despite the general slowdown. The Biden administration approved several large contracts in the past month, including a $60 million sale of Lockheed Martin Corp. F-16s to Jordan and an $85 million Raytheon Technologies Corp. missile sale to Chile.

Prosperity in hard times wasn’t limited to the U.S. Turkey’s largest defense manufacturer, Aselsan Elektronik Sanayi ve Ticaret AS ., increased its revenue last year by 24%, hitting $2.23 billion.

Owing to a new focus on profit ahead of a planned listing on the Tel Aviv Stock Exchange, the state-owned Israel Aerospace Industries, one of the country’s largest exporters, recorded record sales of $4.2 billion last year. Despite that, an IAI spokeswoman said, it was still a tough year.

“We had to do a lot of creative solutions to bring our products to our clients,” she said.

Write to Brett Forrest at brett.forrest@wsj.com

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U.S. Extradites North Korean From Malaysia

The U.S. extradited a North Korean accused of money laundering from Malaysia, Pyongyang said Friday, as the regime said it would cut ties with Kuala Lumpur over the decision.

It was the first successful extradition of a North Korean by the U.S., experts said, in a case that could strengthen Washington’s hand in enforcing sanctions.

“This will likely make the North Koreans feel less secure in operating in countries that have closer ties to the U.S. than them,” said Go Myong-hyun, a research fellow at the Asan Policy Institute in Seoul. “Because now they know they can be sent to the U.S.”

The accused North Korean, Mun Chol Myong, is wanted by U.S. authorities on suspicions of money laundering and violating U.N. sanctions, according to Malaysia’s foreign ministry.

Sanctioning North Korea

North Korea denied the accusations against Mr. Mun, saying he was engaged in legal business activities. “It is absurd fabrication and sheer plot to argue that he was involved in ‘illegal money laundering,’ ” Pyongyang’s foreign ministry said Friday.

Accusing Malaysia of a hostile act, Pyongyang said it would immediately sever diplomatic ties with the Southeast Asian country. North Korea also said the U.S. would pay a price.

An attorney for Mr. Mun in Malaysia declined to comment.

The U.S. Department of Justice declined to comment. The Treasury Department didn’t immediately respond to a request for comment.

Washington asked Kuala Lumpur for his extradition in May 2019, according to Malaysia’s foreign ministry.

The U.S. has sought to cut off North Korea from the global financial system through sanctions to prevent it from furthering its nuclear weapons program. Sanctions enforcement, though, has been imperfect. North Korea conducts much of its illicit money-earning schemes, such as cyberhacking or exporting sanctions-banned goods, in countries where the U.S. has no jurisdiction or in those that are considered adversaries of Washington such as China or Russia.

Sanctions monitors have long suspected North Korea of using Malaysia as a hub for illicit money-earning schemes. In multiple reports, a U.N.-appointed panel of experts have mentioned Malaysia Korea Partners, a company based in Malaysia that earned cash for North Korea.

The company created a global network that undertook projects in Africa, Hong Kong, and the Middle East, allegedly in an effort to evade sanctions. It has carried out services in information technology, construction, mining, coal trading, security and transportation, the U.N. has said.

Just days before Joe Biden’s inauguration, North Korea unveiled a new submarine-launched ballistic missile and labeled the U.S. as its biggest enemy. WSJ’s Timothy Martin explains why Pyongyang wants to be at the top of Washington’s agenda. Photo: KCNA/Shutterstock

Relations between Malaysia and North Korea have been deteriorating since Kim Jong Nam, the elder half-brother of North Korean leader Kim Jong Un, was killed there in 2017 with an internationally-banned nerve agent. The U.S. and South Korea have accused Pyongyang of being behind the killing, which it has denied.

North Korea’s decision to cut diplomatic ties with Malaysia may in part be an indication that Pyongyang is no longer able to effectively use the country to evade sanctions, said Woo Jung-yeop, a research fellow at the Sejong Institute, a think tank near Seoul. “If they still felt they could earn meaningful money there, they’d likely wanted to have kept their embassy,” he said.

The U.N. has said North Korean diplomats based in foreign countries, including Malaysia, have participated in sanctions evasion work for the cash-strapped Kim regime. Malaysia and North Korea have had diplomatic relations since 1973.

Friday’s statement also comes as relations between the Biden administration and North Korea have had a rocky start.

North Korea has rebuffed U.S. outreach for talks over the phone and email since mid-February, American officials have said. Instead, top Pyongyang officials lashed out at the U.S. in public statements this week as President Biden’s secretaries of state and defense were visiting Japan and South Korea.

On Tuesday, Kim Yo Jong, the sister of North Korea’s leader, warned the Biden administration against “causing a stink.” On Thursday, Choe Son Hui, a senior Pyongyang diplomat, said North Korea wasn’t interested in returning to long-stalled nuclear negotiations with Washington. The Biden administration, meanwhile, is nearing completion of a policy review on North Korea.

Write to Andrew Jeong at andrew.jeong@wsj.com

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Carmakers Strive to Stay Ahead of Hackers

“Human life is involved, so cybersecurity is our top priority,” said Kevin Tierney, General Motors’ vice president for global cybersecurity. The company, which has 90 engineers working full time on cybersecurity, practices what it calls “defense in depth,” removing unneeded software and creating rules that allow vehicle systems to communicate with one another only when necessary.

It’s a practice also followed by Volkswagen, said Maj-Britt Peters, a spokeswoman for the company’s software and technology group. She noted that Volkswagen’s sensitive vehicle control systems are kept in separate domains.

Continental, a major supplier of electronic parts to automakers, employs an intrusion detection and prevention system to thwart attacks. “If the throttle position sensor is talking to the airbag, that is not planned,” Mr. Smoly said. “We can stop this, but we wouldn’t do so while the vehicle was moving.”

Still, determined hackers will eventually find a way in. To date, vehicle cybersecurity has been a patchwork effort, with no international standards or regulations. But that is about to change.

This year, a United Nations regulation on vehicle cybersecurity came into force, obligating manufacturers to perform various risk assessments and report on intrusion attempts to certify cybersecurity readiness. The regulation will take effect for all vehicles sold in Europe from July 2024 and in Japan and South Korea in 2022.

While the United States is not among the 54 signatories, vehicles sold in America aren’t likely to be built to meet different cybersecurity standards from those in cars sold elsewhere, and vice versa.

“The U.N. regulation is a global standard, and we have to meet global standards,” Mr. Tierney of G.M. said.

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China Plans to Ask U.S. to Roll Back Trump Policies in Alaska Meeting

Beijing plans to press Washington to reverse many of the policies targeting China introduced during the Trump presidency in the first face-to-face meeting of senior U.S. and China officials since President Biden’s election, according to people with knowledge of the plans.

The meeting in Alaska on Thursday gives both sides a chance to reset the stormy relationship between the world’s two largest economies, which are at loggerheads over technology development, human rights, trade and military leadership in Asia.

U.S. officials say the meeting is a way to present American complaints about Chinese actions, such as its curtailing of freedoms in Hong Kong, naval expansion in the South China Sea, economic pressure on U.S. allies, intellectual-property violations and cybersecurity incursions. The U.S. also plans to sound out Chinese officials about ways the two countries could work together on issues such as climate change and global health.

China comes with a different agenda that has little overlap with Washington’s, a sign of how far apart the two sides are and how difficult it will be to repair the relationship.

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Yang Jiechi, a member of the Communist Party ruling body, and Foreign Minister Wang Yi plan to urge Secretary of State Antony Blinken and national security adviser Jake Sullivan to drop sanctions and restrictions on Chinese entities and individuals put in place by the Trump administration, said the people with knowledge of the plans.

The Chinese officials also plan to propose re-establishing regular high-level meetings between the two sides and scheduling a virtual summit between Chinese leader Xi Jinping and Mr. Biden in April during a global conference on climate change. The White House declined to comment on the prospect of such a meeting.

China’s broad agenda reflects a greater confidence by Beijing, which in the past has used high-level meetings mainly to react to U.S. initiatives. “China feels that it has the wind at its back, that the East is rising and the West is fading,” said Daniel Russel, a former Obama State Department official.

The measures China wants reversed include limits on American sales to Chinese firms such as its telecommunications company Huawei Technologies Co. and chip maker Semiconductor Manufacturing International Corp. ; visa restrictions on Communist Party members, Chinese students and state-media journalists; and closure of the Chinese Consulate in Houston. Beijing has retaliated in kind, hitting American entities and individuals with similar penalties.

Should those restrictions be removed or relaxed, China would consider eliminating its own countermeasures, said the people with knowledge of the Chinese plans.

Messrs. Yang and Wang plan to propose a new framework for setting up recurring, annual meetings between the two powers to hash out differences in economic, trade, security and other areas. The so-called strategic dialogue format was put in place during the George W. Bush administration and continued through the Obama years, when Messrs. Blinken and Sullivan were top foreign-policy officials.

President Donald Trump abolished the mechanism because his advisers said that China used it to tie up the Americans in endless discussions. The Biden administration has shown no interest so far in re-establishing the talks.

A senior Biden administration official played down expectations that the Alaska meeting would lead to any agreement. The official described it as a one-off meeting that didn’t portend “the resumption of a particular dialogue mechanism or the beginning of a dialogue process.”

Beijing also may not expect any concrete results, said Mr. Russel, the former Obama official, who is now vice president at the Asia Society Policy Institute, a think tank. Rather, the Chinese “will attempt to gain a better understanding of where the Americans are thinking the relationship will go and what might be possible,” he said.

So far, the Biden administration has continued some of Mr. Trump’s policies, including on Tuesday expanding sanctions against Chinese officials who it says have undermined Hong Kong’s autonomy from Beijing.

On Wednesday, the U.S. Commerce Department served subpoenas on multiple Chinese companies as part of the U.S. effort to target technology and services that could threaten national security.

Tariffs the Trump administration imposed on Chinese goods aren’t expected to be high on China’s agenda in Alaska, even though Mr. Wang, the foreign minister, in a February speech called for the removal of trade-related penalties.

China started reaching out to Biden aides late last year, though China’s Foreign Ministry said the suggestion for the Alaska meeting came from Washington. “The U.S. side proposed to hold this high-level strategic dialogue, which we think is meaningful,” the ministry told The Wall Street Journal. It didn’t elaborate further, but said, “We hope that the two sides can have a candid dialogue on issues of mutual concern.”

Chinese officials plan to propose using a virtual climate summit attended by global leaders on April 22, which is Earth Day, to schedule a meeting between Messrs. Xi and Biden, the people with knowledge of Beijing’s plans said. Both sides have indicated that they are willing to work together to fight global warming and other climate-related issues, though the U.S. is wary that China will try to use the climate issue to get the U.S. to back off in other areas.

The two leaders have spoken once since the U.S. presidential election, a session that lasted for two hours, according to Mr. Biden.

Chinese officials indicate that there is no room for compromise on sovereignty issues involving Hong Kong and Taiwan. Mr. Blinken, who will stop in Alaska on his way back from a trip to Japan and South Korea this week, fired salvos at China from Tokyo on Thursday over both issues.

China also plans to propose that both countries create a “vaccine passport” to verify proof of immunization, according to the people familiar with the plans. Chinese officials hope that can help facilitate travel between the two countries.

It could also help China get recognition for its homegrown vaccines. In recent days, some Chinese embassies have said they would facilitate visas for foreigners who have received Chinese vaccines.

Chinese bitcoin miners have long dominated the global processing power that runs the bitcoin network with sophisticated equipment and access to cheap electricity. But now, a group of U.S. miners with deep pockets wants to conquer a greater share of the industry. Photo: Adam Chapman for The Wall Street Journal

Beijing’s broad agenda for the meeting shows the Chinese leadership’s increasing confidence in the party-state system. China’s economy has withstood a trade war with the Trump administration and has been rebounding strongly, helped by its early headway in reining in coronavirus infections. Mr. Xi, the most forceful Chinese leader in recent decades, is enjoying widespread support among the Chinese public, Chinese officials say.

Still, Beijing is eager to move past the turmoil in the U.S. relationship, which has taken a toll on business and investor confidence in the world’s second-largest economy.

The Biden team also feels that it is in a strong position, having passed a $1.9 trillion economic relief package and having started to work with allies on China and other economic issues, the senior Biden administration official said.

The symbolism of the meeting is important, said the official, who noted the importance of having both the secretary of state and the national security adviser represent the U.S. In the past, China has tried to capitalize on splits among American representatives, the official said.

Having Messrs. Blinken and Sullivan at the session will make clear, the official said, “there is not going to be daylight and that the games that China has played in the past, to divide us, or attempt to divide us, are simply not going to work here.”

The U.S. side plans to address the economic pressure China has placed on Australia by curtailing imports after Canberra called for an independent investigation into the origins of the coronavirus. A Chinese Foreign Ministry spokesman this week blamed the tension on “Australia’s wrong words and deeds on issues concerning China’s sovereignty, security and development interests.”

The session will help each side better understand the other, said the senior Biden administration official. “It’s about communicating the areas where we intend to take steps, and it’s about understanding where our Chinese interlocutors are at,” the official said.

Write to Lingling Wei at lingling.wei@wsj.com and Bob Davis at bob.davis@wsj.com

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