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China’s Communist Party Congress: What It Means for Business

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At a Communist Party congress starting in Beijing on Oct. 16, Xi Jinping is expected to be named to a third five-year term as the country’s top leader, paving the way for him to consolidate power to an extent not seen in decades.

Under Mr. Xi, China has become the world’s dominant manufacturer of everything from cement to solar panels, as well as the main trading partner and dominant lender for most of the developing world. It has built the world’s largest navy, developed some of the world’s most advanced ballistic missiles and constructed air bases on artificial islands strewn across the South China Sea.

in a tailspin. Its property market, which over the last ten years contributed about a quarter of the country’s economic output, is melting down. Foreign investment has faltered. And widespread lockdowns and mass quarantines, part of China’s zero-tolerance approach to Covid-19, have hurt consumer demand and stalled businesses.

At the same time, Mr. Xi has worked to turn China into a more state-led society that often puts national security and ideology before economic growth. He has cracked down on Chinese companies and limited their executives’ power. Some of China’s best-known entrepreneurs have left the country and others, such as Alibaba co-founder Jack Ma, have largely disappeared from public view.

All of this has hurt China’s economy, which was just 0.4 percent larger from April through June than during the same period last year. The growth was far below the government’s initial target for growth of about 5.5 percent this year. For the first year since the 1990s, China’s economic growth is expected to fall below the rest of Asia’s.

at the start of the last party congress, in 2017, lasted more than three hours. But buried in that jargon are likely to be some important messages. Here’s what finance leaders and corporate executives around the world want to know.

One of Mr. Xi’s favorite economic policy initiatives in recent months has a simple, innocuous-sounding name: “common prosperity.” The big question lies in what it means.

Common prosperity, a longtime goal of the Communist Party, has been defined by Mr. Xi as reining in private capital and narrowing China’s huge disparities in wealth. Regulators and tax investigators cracked down last year on tech giants and wealthy celebrities. Beijing demanded that tycoons give back to society. And Mr. Xi has strongly discouraged speculation in housing, pushing instead for government subsidies for the construction of more rental apartments.

A regulatory crackdown on tech companies and after-school education companies contributed to a wave of layoffs that left one in five young Chinese city dwellers unemployed by August. Lending limits on China’s highly inflated housing sector have triggered a nosedive in the number of fresh construction projects being started and a wave of insolvencies among real estate developers. Many Western hedge funds that bet heavily on the real estate developers’ overseas bond issues incurred considerable losses.

The term “common prosperity” was seldom used by top officials last spring during those setbacks. But Mr. Xi conspicuously revived it during a tour of northeastern China in mid-August. The Politburo subsequently mentioned common prosperity when it announced on Aug. 30 the starting date and agenda for the party congress.

first put forward in May 2020, is a theory of what he calls “dual circulation.” The concept involves relying primarily on domestic demand and innovation to propel the Chinese economy, while maintaining foreign markets and investors as a backup engine for growth.

Mr. Xi has pushed ahead with lavish subsidies to develop Chinese manufacturers, especially of semiconductors. But the slogan has attracted considerable skepticism from foreign investors in China and from foreign governments. They worry that the policy is a recipe for replacing imports with Chinese-made goods.

China’s imports have indeed stagnated this year while its exports have soared, producing the largest trade surpluses the world has ever seen. Those surpluses, not domestic demand, have sustained China’s economic growth this year.

Chinese officials deny that they are trying to discourage imports, and contend that China remains eager to welcome foreign companies and products. When the Politburo scheduled the party congress for Oct. 16, it did not mention dual circulation, so the term might be left aside. If it goes unmentioned, that could be a conciliatory gesture as foreign investment in China is already weakening, mainly because of the country’s draconian pandemic policies.

China’s zero-tolerance approach to Covid-19 has prevented a lot of deaths and long-term infections, but at a high and growing cost to the economy. The question now lies in when Mr. Xi will shift to a less restrictive stance toward controlling the virus.

in Tiananmen Square, on the 100th anniversary of the founding of the Chinese Communist Party, when he reiterated China’s claim to Taiwan, a self-ruled island democracy. President Biden has mentioned four times that the United States is prepared to help Taiwan resist aggression. Each time his aides have walked back his comments somewhat, however, emphasizing that the United States retains a policy of “strategic ambiguity” regarding its support for the island.

Even a vague mention by Mr. Xi at the party congress of a timeline for trying to bring Taiwan under the mainland’s political control could damage financial confidence in both Taiwan and the mainland.

The most important task of the ruling elite at the congress is to confirm the party’s leadership.

Particularly important to business is who in the lineup will become the new premier. The premier leads the cabinet but not the military, which is directly under Mr. Xi. The position oversees the finance ministry, commerce ministry and other government agencies that make many crucial decisions affecting banks, insurers and other businesses. Whoever is chosen will not be announced until a separate session of the National People’s Congress next March, but the day after the congress formally ends, members of the new Politburo Standing Committee — the highest body of political power in China — will walk on a stage in order of rank. The order in which the new leadership team walks may make clear who will become premier next year.

a leading hub of entrepreneurship and foreign investment in China. Neither has given many clues about their economic thinking since taking posts in Beijing. Mr. Wang had more of a reputation for pursuing free-market policies while in Guangdong.

Mr. Hu is seen as having a stronger political base than Mr. Wang because he is still young enough, 59, to be a potential successor to Mr. Xi. That political strength could give him the clout to push back a little against Mr. Xi’s recent tendency to lean in favor of greater government and Communist Party control of the private sector.

Precisely because Mr. Hu is young enough to be a possible successor, however, many businesspeople and experts think Mr. Xi is more likely to choose Mr. Wang or a dark horse candidate who poses no potential political threat to him.

In any case, the power of the premier has diminished as Mr. Xi has created a series of Communist Party commissions to draft policies for ministries, including a commission that dictates many financial policies.

What do you think? Let us know: dealbook@nytimes.com.

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How Are Gig Workers Faring In Today’s Economy?

Americans are now turning to “gig” work to make quick cash, and also have control over their own work schedules.

Some Americans looking for a job are seeking ways to make quick cash, or work for themselves in the gig economy. 

“Gig” is actually a slang word for a job with a limited duration.  

Some gig jobs include temporary hires, freelancers, independent contractors or project-based workers.  

The workers could be writers, ride-share drivers, accountants, consultants, handymen, tutors or dog walkers – really anyone who goes into a work agreement with a company without being an official employee or on the company’s payroll can be considered a gig worker.

Gig workers have become a major part of the workforce that is only growing. 

In 2017, there were about 13 million gig workers in the U.S.  

That number almost doubled in 2021, with expectations to nearly quadruple by 2027. 

Economists say the increase is associated with two things: the internet and a shift in what workers want in a job.

According to entrepreneurs, more employees are looking for flexible, non 9-to-5 jobs. 

The internet has allowed the gig workforce to work from anywhere, without the need to report in person.  

“I’m my own boss. I can take a break whenever I want to. I can live my life and work at the same time,” said Ryan Whyte Maloney, a freelance musician. 

Gig work trends peaked in great part due to the pandemic. 

Lockdowns have spurred employees to look at different opportunities amid a surge in the need for products and services closer to home and socially distanced. 

But with inflation hitting a 40-year high, a new wave is resorting to gig work, and it’s adding new pressures to a booming workforce.

A survey of 1,000 workers who turned to gig work in recent months found 85% increased, or plan to increase, their side hustle in the near future.

Almost half said inflation was the main driver in doing more gig work.   

And rising prices on consumers are inevitably impacting their bottom line. 

The summer spike in gas prices sent ride-share drivers struggling to cover their own costs.  

“I can easily make somewhere between $100 to $150, but of course I drive a big SUV, it’s the only vehicle that we have at the moment, so it takes about $60 to fill that up,” said Carson Johnson, a Doordash driver. 

“That $150 can mean the difference between us being able to get to the grocery store or paying our electric bill, opposed to rent,” said Sarah Jones, an Uber driver.

Inflation may be hurting gig workers.  

But gig companies are seeing benefits with Uber, Lyft and Doordash all reporting a rise in driver sign-ups. 

Uber’s CEO said over seven in 10 new drivers listed inflation as one of their top reasons for joining. 

Gig jobs aren’t new, but economists believe they have become more popular, especially for younger adults. 

“Younger generations are more comfortable with the platforms out there to earn money in a nontraditional way. Like gig work, through working online or remote work, they might just be more comfortable with those platforms,” said Anthony Koltz, a business professor at Texas A&M. 

Where the gig worker pipeline will go is anyone’s guess, but for now, the gig worker partnership seems to be a lifeline in a world of workers trying to make it to their next pay day.

Source: newsy.com

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Musk Subpoenas Former Twitter CEO And Friend Jack Dorsey

By Associated Press
August 23, 2022

Twitter and Musk are headed for an Oct. 17 trial that should determine whether Twitter can force him to go through with the acquisition.

Tesla CEO Elon Musk has subpoenaed his friend and former Twitter CEO Jack Dorsey as part of an effort to back out of his $44 billion agreement to acquire the company Dorsey helped found, according to court documents.

Twitter and Musk are headed for an Oct. 17 trial in Delaware that should determine whether Twitter can force the billionaire to go through with the acquisition.

Twitter has subpoenaed a host of tech investors and entrepreneurs connected to Musk, including prominent venture capitalist Marc Andreessen and David Sacks, the founding chief operating officer of PayPal.

Musk has claimed that Twitter failed to provide adequate information about the number of fake, or “spam bot,” Twitter accounts, and that it has breached its obligations under the deal by firing top managers and laying off a significant number of employees. Musk’s team expects more information about the bot numbers to be revealed in the trial court discovery process, when both sides must hand over evidence.

Twitter argues that Musk’s reasons for backing out are just a cover for buyer’s remorse. Shortly after Musk agreed to pay 38% above Twitter’s stock price, the stock market stumbled and shares of the electric-car maker Tesla, where most of Musk’s personal wealth resides, lost more than $100 billion of their value.

The subpoena was served last week. It asks Dorsey for documents and communications related to the acquisition, as well as information on the effect of fake or spam accounts on Twitter’s business and its measurement of daily active users.

A lawyer representing Dorsey did not immediately respond to a message for comment on Monday.

Additional reporting by the Associated Press.

Source: newsy.com

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Prince William Charity Invests With Bank Tied To Dirty Fuels

Financial experts say investments like those of the prince’s conservation foundation can be blind spots for charities and philanthropies.

The conservation charity founded by Prince William, second in line to the British throne and who launched the Earthshot Prize, keeps its investments in a bank that is one of the world’s biggest backers of fossil fuels, The Associated Press has learned.

The Royal Foundation also places more than half of its investments in a fund advertised as green that owns shares in large food companies that buy palm oil from companies linked to deforestation.

“The earth is at a tipping point and we face a stark choice,” the prince, a well-known environmentalist, is quoted saying on the websites of the Earthshot Prize and Royal Foundation.

Yet in 2021, the charity kept more than $1.3 million with JPMorgan Chase, according to the most recent filings, and still invests with the corporation today. The foundation also held $2 million in a fund run by British firm Cazenove Capital Management, according to the 2021 filing. As with JPMorgan, it still keeps funds with Cazenove, which in May had securities linked to deforestation through their use of palm oil. The foundation invested similar amounts in both funds in 2020, its older filings show. As of December 2021, the charity also held more than $12.1 million in cash.

The investments, which the Royal Foundation didn’t dispute when contacted by the AP, come as top scientists repeatedly warn that the world must shift away from fossil fuels to sharply reduce emissions and avoid more and increasingly intense extreme weather events.

Financial experts say investments like those of the foundation can be blind spots for charities and philanthropies. As climate change is an increasing area of attention for foundations and others, organizations have sometimes struggled to recognize where their own investments lie and align them with more environmentally friendly choices, despite growing numbers of ways to steer clear of funds linked to fossil fuels.

Like the Royal Foundation, in recent years other foundations, including high profile British charities like the National Trust and Wellcome Trust, also have faced criticism for investments with strong connections to fossil fuels or environmentally harmful practices. Microsoft co-founder and philanthropist Bill Gates announced that he divested his foundation’s direct oil and gas holdings in 2019.

Charities that are talking the talk “also need to walk the walk,” said Andreas Hoepner, professor of Operational Risk, Banking and Finance at University College Dublin, who helped design several European Union climate benchmarks and has sat on its sustainable finance group.

“There are funds that are more sustainably oriented,” Hoepner added, pointing to a dozen alternatives to the JPMorgan product that are marketed as sustainable.

There are also alternatives to Cazenove’s sustainability fund. For example, funds manager CCLA caters to churches and charities and does not invest in businesses that get more than 10% of their revenue from oil and gas. Another option is Generation Investment Management, founded in part by former U.S. Vice President Al Gore.

The Royal Foundation said by email that it had followed Church of England guidelines on ethical investment since 2015, and goes beyond them.

“We take our investment policies extremely seriously and review them regularly,” the statement said.

The foundation said management fees paid to JPMorgan were small, but declined to provide a figure.

It’s not clear what role, if any, Prince William had in investment decisions, as he did not respond to AP requests for comment. JPMorgan Asset Management in an email declined to comment on questions about charities investing in their products despite its record of financing fossil fuels.

Bloomberg data show JPMorgan has underwritten more bonds and loans for the fossil fuel industry and earned greater fees than its competitors in the five years up to 2021.

Environmental NGO Rainforest Action Network looked at direct loans and stock ownership along with bonds and estimated that between 2016 and 2021, JPMorgan’s banking arm financed fossil fuel companies with some $382 billion. This was more than any other bank.

“Major investors have their pick of companies to manage their assets, and mission-driven institutions have options well beyond the world’s worst fossil fuel bank,” said Jason Disterhoft, senior energy campaigner with Rainforest Action Network.

As one of the world’s biggest banks, JPMorgan is also a leading financier of green projects, and has set a target of investing $1 trillion in these over the next decade. However, it made about $985 million in revenue from fossil fuels compared to $310 million from green projects since the Paris Agreement in 2015, about three times more, according to Bloomberg Data.

Compared to some other charities, the Royal Foundation’s investments are small, with little impact on climate change. But they are not in line with the ethos of the foundation, which lists conservation and mental health as main points of emphasis, or Prince William’s public statements. His Earthshot Prize, a “global search for solutions to save our planet,” awards grants of up  to $1.2 million each year to projects confronting environmental challenges, according to the charity’s website, which suggests banks as among potential recipients. In July, the Royal Foundation announced that the Earthshot Prize had become an independent charity and Prince William would be its president.

Through launching and awarding the prize and in other public appearances, Prince William has been outspoken on the environment for years. He has argued that entrepreneurs should focus their energies on saving the Earth before investing in space tourism, encouraged parents to consider how their children don’t have the same outdoor opportunities they had and urged conservation.

“Today, in 2022, as the queen celebrates her Platinum Jubilee, the pressing need to protect and restore our planet has never been more urgent,” the prince said in June during Queen Elizabeth II’s Platinum Jubilee.

The policies of the Royal Foundation do not allow ownership of stock in oil companies, tobacco or alcohol. But profits from the Royal Foundation’s account could enable JPMorgan to loan more money to the many oil companies it backs, allowing their expansion. In the same way, investing in companies tied to problems with palm oil supply could help fund unsustainable practices.

While the Cazenove fund is marketed as “sustainable,” as of May 31 the fund held almost $6 million of shares in Nestlé, and shares worth $8.1 million in Reckitt Benckiser, according to Morningstar Direct data. Both Nestlé and Reckitt Benckiser have faced controversy over their palm oil supply. Clearing rainforests to make way for palm oil plantations is one of Southeast Asia’s biggest drivers of deforestation.

Nestlé is the world’s largest food and beverage manufacturer, while Reckitt manufactures popular U.S. brands including Lysol and Woolite, and Vanish and Dettol, familiar in the U.K.

A 2021 investigation by the environmental NGO Global Witness said both companies were sourcing palm oil via intermediaries from illegally deforested areas in Papua New Guinea. The plantations responsible were also accused of corruption, use of child labor and paying police to attack protesters.

Another 2021 report, by sustainability analysts Chain Reaction Research, said both companies purchased palm oil from an Indonesian firm that has an affiliated mining project accused of deforestation in an orangutan habitat.

An investigation in 2020 by Chain Reaction Research found that more than 1,235 acres — over 1,000 American football fields — of rainforest in Indonesia’s Papua province were felled by a supplier to Wilmar, a giant food and oils producer, from which both source their palm oil.

David Croft, head of sustainability at Reckitt, said no tainted palm oil entered its products from the Papua New Guinea properties, while conceding their mills were previously in its supplier list. An intermediary company linked Reckitt to the Indonesian mining conglomerate in its supply chain, he said, and it was investigating. Croft said they have had “active discussions” with Wilmar, which stopped sourcing from the Papua plantation in January 2022. In a public statement published in response to Chain Reaction’s investigation, Wilmar disputed the cleared area was high conservation value forest.

Despite being a “relatively small user of palm oil,” Reckitt knows there is more to do, said Croft, and is accelerating its progress. Croft said Reckitt could not get all the product it needs from certified producers before 2026.

Emma Keller, head of sustainability at Nestlé U.K. and Ireland, said the Wilmar case was to be investigated. Nestlé engages with suppliers that fall short to help them change and monitors performance, she said.

Sixty percent of Nestlé’s palm oil supply was certified as sustainable by the Roundtable on Sustainable Palm Oil, an industry-organized effort, in 2021, according to the World Wide Fund for Nature. For Reckitt, that figure was 15.3%.

Keller said that by winter 2021, more than 90% of Nestlé palm oil was deforestation-free and it will achieve zero-deforestation status by the end of 2022. It uses supply chain maps, on-the-ground verification and satellite monitoring for verification. Nestlé was moving toward “a model for conserving and restoring the world’s forests,” Keller said.

Lily Tomson, of the responsible investment charity ShareAction, said Cazenove had shown some leadership on sustainable investing, but there “remain areas charities such as the Royal Foundation can push them on.”

Investors can vote on key environmental issues in companies where they hold shares, for example setting targets to align with the Paris Agreement, or on climate lobbying. Yet Cazenove’s parent company, Schroders, voted against 22% of environmental resolutions last year, ShareAction research has found.

Kate Rogers, head of sustainability at Cazenove Capital, said the company engaged with Nestlé and Reckitt, and has seen progress on deforestation.

Environmental factors are ingrained in the company’s decision-making, she said, every investment assessed for sustainability. Cazenove has committed to eliminating commodity-driven deforestation from its investments by 2025 and said a new voting policy meant that as of June 2022, the firm had voted against 60 directors of companies it invests in over a lack of climate action.

Dr. Raj Thamotheram, former head of responsible investing at both a $109 billion British university pension fund and AXA Investment Managers, said foundations should be better regulated, with annual reports made to detail how well their investment strategy aligns with their mission.

Thamotheram, now an independent adviser, called unsustainable investments a “cultural and governance blind spot of huge proportions,” and said they were endemic in the charity sector.

“It’s the status quo approach and it needs shaking up,” he said.

Additional reporting by The Associated Press.

Source: newsy.com

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U.S. To Hold Trade Talks With Taiwan

The announcement of trade talks comes after Beijing fired missiles into the sea to intimidate Taiwan after U.S. House Speaker Nancy Pelosi visited.

The U.S. government will hold trade talks with Taiwan in a sign of support for the island democracy that China claims as its own territory, prompting Beijing to warn Thursday it will take action if necessary to “safeguard its sovereignty.”

The announcement of trade talks comes after Beijing fired missiles into the sea to intimidate Taiwan after U.S. House Speaker Nancy Pelosi this month became the highest-ranking American official to visit the island in 25 years.

Chinese President Xi Jinping’s government criticized the planned talks as a violation of its stance that Taiwan has no right to foreign relations. It warned Washington not to encourage the island to try to make its de facto independence permanent, a step Beijing says would lead to war.

“China firmly opposes this,” Ministry of Commerce spokesperson Shu Jueting said. She called on Washington to “fully respect China’s core interests.”

Also Thursday, Taiwan’s military held a drill with missiles and cannons simulating a response to a Chinese missile attack.

Taiwan and China split in 1949 after a civil war and have no official relations but are bound by billions of dollars of trade and investment. The island never has been part of the People’s Republic of China, but the ruling Communist Party says it is obliged to unite with the mainland, by force if necessary.

President Joe Biden’s coordinator for the Indo-Pacific region, Kurt Campbell, said last week that trade talks would “deepen our ties with Taiwan” but stressed policy wasn’t changing. The United States has no diplomatic relations with Taiwan, its ninth-largest trading partner, but maintains extensive informal ties.

The U.S. Trade Representative’s announcement of the talks made no mention of tension with Beijing but said “formal negotiations” would develop trade and regulatory ties, a step that would entail closer official interaction.

Being allowed to export more to the United States might help Taiwan blunt China’s efforts to use its status as the island’s biggest trading partner as political leverage. The mainland blocked imports of Taiwanese citrus and other food in retaliation for Pelosi’s Aug. 2 visit.

Taiwan’s Foreign Ministry expressed “high welcome” for the trade talks, which it said will lead to a “new page” in relations with the United States.

“As the situation across the Taiwan Strait has recently escalated, the U.S. government will continue to take concrete actions to maintain security and stability across the Taiwan Strait,” it said in a statement.

U.S.-Chinese relations are at their lowest level in decades amid disputes over trade, security, technology, and Beijing’s treatment of Muslim minorities and Hong Kong.

The U.S. Trade Representative said negotiations would be conducted under the auspices of Washington’s unofficial embassy, the American Institute in Taiwan.

“China always opposes any form of official exchanges between any country and the Taiwan region of China,” said Shu, the Chinese spokesperson. “China will take all necessary measures to resolutely safeguard its sovereignty.”

Washington says it takes no position on the status of China and Taiwan but wants their dispute settled peacefully. The U.S. government is obligated by federal law to see that the island has the means to defend itself.

“We will continue to take calm and resolute steps to uphold peace and stability in the face of Beijing’s ongoing efforts to undermine it, and to support Taiwan,” Campbell said during a conference call last Friday.

China takes more than twice as much of Taiwan’s exports as the United States, its No. 2 foreign market. Taiwan’s government says its companies have invested almost $200 billion in the mainland. Beijing says a 2020 census found some 158,000 Taiwanese entrepreneurs, professionals and others live on the mainland.

China’s ban on imports of citrus, fish and hundreds of other Taiwanese food products hurt rural areas seen as supporters of President Tsai Ing-wen, but those goods account for less than 0.5% of Taiwan’s exports to the mainland.

Beijing did nothing that might affect the flow of processor chips from Taiwan that are needed by Chinese factories that assemble the world’s smartphones and consumer electronics. The island is the world’s biggest chip supplier.

A second group of U.S. lawmakers led by Sen. Ed Markey, a Democrat from Massachusetts, arrived on Taiwan on Sunday and met with Tsai. Beijing announced a second round of military drills after their arrival.

Taiwan, with 23.6 million people, has launched its own military drills in response.

On Thursday, drills at Hualien Air Base on the east coast simulated a response to a Chinese missile attack. Military personnel practiced with Taiwanese-made Sky Bow 3 anti-aircraft missiles and 35mm anti-aircraft cannon but didn’t fire them.

“We didn’t panic” when China launched military drills, said air force Maj. Chen Teh-huan.

“Our usual training is to be on call 24 hours a day to prepare for missile launches,” Chen said. “We were ready.”

The U.S.-Taiwanese talks also will cover agriculture, labor, the environment, digital technology, the status of state-owned enterprises and “non-market policies,” the U.S. Trade Representative said.

Washington and Beijing are locked in a 3-year-old tariff war over many of the same issues.

They include China’s support for government companies that dominate many of its industries and complaints that Beijing steals foreign technology and limits access to an array of fields in violation of its market-opening commitments.

Then-President Donald Trump raised tariffs on Chinese goods in 2019 in response to complaints that its technology development tactics violate its free-trade commitments and threaten U.S. industrial leadership. President Biden has left most of those tariff hikes in place.

Additional reporting by The Associated Press.

Source: newsy.com

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Musk Says Twitter Deal Could Move Ahead With ‘Bot’ Info

By Associated Press
August 6, 2022

Twitter has argued in court that Musk is deliberately trying to tank the deal and using the bot question as an excuse.

Elon Musk said Saturday his planned $44 billion takeover of Twitter should move forward if the company can confirm some details about how it measures whether user accounts are ‘spam bots’ or real people.

The billionaire and Tesla CEO has been trying to back out of his April agreement to buy the social media company, leading Twitter to sue him last month to complete the acquisition. Musk countersued, accusing Twitter of misleading his team about the true size of its user base and other problems he said amounted to fraud and breach of contract.

Both sides are headed toward an October trial in a Delaware court.

“If Twitter simply provides their method of sampling 100 accounts and how they’re confirmed to be real, the deal should proceed on original terms,” Musk tweeted early Saturday. “However, if it turns out that their SEC filings are materially false, then it should not.”

Musk, who has more than 100 million Twitter followers, went on to challenge Twitter CEO Parag Agrawal to a “public debate about the Twitter bot percentage.”

Twitter declined comment Saturday. The company has repeatedly disclosed to the Securities and Exchange Commission an estimate that fewer than 5% of user accounts are fake or spam, with a disclaimer that it could be higher. Musk waived his right to further due diligence when he signed the April merger agreement.

Twitter has argued in court that Musk is deliberately trying to tank the deal and using the bot question as an excuse because market conditions have deteriorated and the acquisition no longer serves his interests. In a court filing Thursday, it describes his counterclaims as an imagined story “contradicted by the evidence and common sense.”

“Musk invents representations Twitter never made and then tries to wield, selectively, the extensive confidential data Twitter provided him to conjure a breach of those purported representations,” company attorneys wrote.

While Musk has tried to keep the focus on bot disclosures, Twitter’s legal team has been digging for information about a host of tech investors and entrepreneurs connected to Musk in a wide-ranging subpoena that could net some of their private communications with the Tesla CEO.

Additional reporting by The Associated Press.

Source: newsy.com

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China Blocks Some Taiwan Imports But Avoids Chip Disruptions

China blocked imports of hundreds of food items from Taiwan but has not disrupted the flow of processor chips and other industrial components.

China blocked imports of citrus, fish and other foods from Taiwan in retaliation for a visit by a top American lawmaker, Nancy Pelosi, but has avoided disrupting one of the world’s most important technology and manufacturing relationships.

The two sides, which split in 1949 after a civil war, have no official relations but multibillion-dollar business ties, especially in the flow of Taiwanese-made processor chips needed by Chinese factories that assemble the world’s smartphones and other electronics.

They built that business while Beijing threatened for decades to enforce the ruling Communist Party’s claim to the island by attacking.

Two-way trade soared 26% last year to $328.3 billion. Taiwan, which produces half the world’s processor chips and has technology the mainland can’t match, said sales to Chinese factories rose 24.4% to $104.3 billion.

“The global economy cannot function without chips that are made in either Taiwan or China,” Carl B. Weinberg of High-Frequency Economics said in a report.

On Wednesday, Beijing blocked imports of citrus and frozen hairtail and mackerel from Taiwan after Pelosi, speaker of the House of Representatives, arrived on the island. China has not disrupted the flow of chips and other industrial components, a step that would send shock waves through the shaky global economy.

Also this week, China blocked imports of hundreds of other food items from Taiwan including cookies and seafood, though the timing was unclear. The customs website showed their import status was switched to “suspended.”

Fruit, fish and other foods are a small part of Taiwan’s exports to China, but the ban hurts areas that are seen as supporters of President Tsai Ing-wen.

Beijing has used import bans on bananas, wine, coal and other goods as leverage in disputes with Australia, the Philippines and other governments.

Beijing also announced four days of military exercises with artillery fire in waters around Taiwan. That might delay or disrupt shipping to and from the island, one of the biggest global traders.

The potential disruption adds to concerns over weakening global economic growth, but Asian stock markets rose Wednesday after there was no immediate sign of Chinese military action.

The Communist Party says Pelosi’s visit might embolden Taiwan to make its decades-old de facto independence permanent. Beijing says that would lead to war.

The administration of U.S. President Joe Biden has tried to mollify Beijing, saying there is no change in Washington’s “one China policy.” That says the United States takes no position on the status of the two sides but wants their dispute settled peacefully.

Washington has no formal relations with Taiwan but maintains unofficial ties and is obligated by federal law to see the island has the means to defend itself.

Meeting leaders in Taiwan, Pelosi said she and members of Congress traveling with her were showing they will not abandon their commitment to the island democracy.

“America’s determination to preserve democracy, here in Taiwan and around the world, remains ironclad,” Pelosi said in a short speech during a meeting with the president, Tsai. She departed later in the day for South Korea.

“Facing deliberately heightened military threats, Taiwan will not back down,” Tsai said.

Taiwanese companies have invested nearly $200 billion in the mainland over the past three decades, according to the island’s government. Entrepreneurs, engineers and others have migrated to the mainland to work, some recruited by Chinese chipmakers and other companies that want to catch up with Taiwan.

A 2020 census found 158,000 Taiwanese living on the mainland, according to the police ministry.

Taiwan plays an outsized role in the chip industry for an island of 24.5 million people, accounting for more than half the global supply.

Its producers including Taiwan Semiconductor Manufacturing Corp. make the most advanced processors for smartphones, tablet computers, medical devices and other products.

Beijing has invested billions of dollars in developing its own industry, which supplies low-end chips for autos and appliances but cannot support the latest smartphones, tablet computers, medical devices and other products.

Chips are China’s biggest import at more than $400 billion a year, ahead of crude oil.

That concentration has fueled concern in the United States and Europe about relying too heavily on supplies from East Asia. The U.S. government is trying to expand America’s production capacity.

Overall, China is Taiwan’s biggest trading partner, taking more than twice as much of its exports as the United States, the island’s No. 2 foreign market.

Beijing has tried to use access to its markets to undermine Tsai and other Taiwanese leaders it accuses of pursuing independence.

The Communist Party also has used military action in the past to try to hurt Taiwanese leaders by disrupting the island’s economy.

The mainland tried to drive voters away from then-President Lee Teng-hui ahead of the island’s first direct presidential elections in 1996 by firing missiles into shipping lanes.

That forced shippers to cancel voyages and raised insurance costs but backfired by allowing Lee to brag about standing up to Beijing in front of cheering supporters. Lee won the four-way election with 54% of the vote.

Additional reporting by The Associated Press.

Source: newsy.com

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Intel Officers, Analysts Urge Stronger Tracking Of Weapons To Ukraine

U.S. officials fear weapons sent to Ukraine could fall into the wrong hands.

Before the U.S. sent Ukraine the first pallet of what would become about $8 billion in weapons and military equipment, officials had high level discussions about whether these arms could fall into the wrong hands. Three government sources familiar with the transfers now tell Newsy that although they support Ukraine’s defense, that fear remains. 

One source said U.S. officials calculated that Ukraine needs the weapons so urgently, it reduces the risk of stockpiles being misused. But analyst Elias Yousif says weapons tend to outlive wars, even long ones. 

Yousif is a conventional defense research analyst at Stimson Center. 

“The real concern may be when the conflict comes to an end, which eventually it will, and when the demand by the Ukrainians diminishes, it may increase the incentive to find alternative markets for these systems,” Yousif said. 

Analysts worry that bad actors, like terrorists, could acquire anything from portable, anti-aircraft Stinger missiles to small arms, which are harder to track. Just last month, a Homeland Security bulletin warned that a pro-al-Qaida magazine was encouraging followers to travel to Ukraine “for training and weapons to use in attacks against the West.”   

Ukraine’s Defense Minister Oleksii Reznikov says that some weapons have GPS trackers, which a source in the intelligence community confirmed, and that the country is using a NATO logistics system to monitor weapons.  

“This process was already underway but we are happy to expand and increase its tempo to ensure the comfort of our partners,” said Oleksii Reznikov, the defense minister of Ukraine. 

Ukraine has erected a temporary special commission to keep track of weapons and equipment.  

But Jonah Leff, director of operations at Conflict Armament Research, which traces the movements of illicit arms, says that’s not enough. 

NEWSY’S SASHA INGBER: Ukraine’s special commission to monitor these weapons is supposed to last for about a year. Is that enough time?

JONAH LEE: A year is quite a short time for any monitoring of weapons, especially those that are so valued. The proliferation or diversion of weapons can take place any time after a conflict ends. So it’s important that any group that’s assembled to ensure proper management of weapons continues that work really indefinitely.

President Zelenskyy last week began a campaign against treason and collaboration with Russia.  

Iain Overton,says the risk of smuggled weapons would come from potentially corrupt Ukrainians and entrepreneurial Russians. He’s the executive director of Action on Armed Violence, an organization that investigates its causes. And he spoke about what happened to Russian weapons in the port city of Odessa, a year after Russia first invaded Ukraine in 2014: “There I began to investigate a port called Oktyabrsk, which was run at the time by a former Soviet naval commander, had links to cronies, associates of President Putin. And it seemed that weaponry systems, even in the height of this proxy war with Russia, were still coming through Ukraine on trains, arriving to Oktyabrsk and then being pushed out from there in naval ships down to places like Syria and other locations in Africa and South America.”

He says Russia has something to gain, if Western weapons enter the black market and then surface in attacks outside of Ukraine. “The Russian state itself, fighting a disinformation war, may seek to place weapons seized from the Ukrainian forces, perhaps donated by NATO, and these may be sold on in order to create the propaganda of the deed. Because if a NATO donated weaponry system was found to have been used in, let’s say, Nairobi by Salafist jihadists to take down an airline jet, then that would be a not only an act of terrible terror, but it would be a profound propaganda coup for the Russian state who would point all fingers of culpability at Ukraine,” Overton said. 

The country before the Zelenskyy administration had already been a nexus of the illicit arms trade. 

INGBER: Is there historical precedent here?  

ELIAS YOUSIF: Ukraine kept a large arsenal of Soviet era equipment up through the 1990s, and with the collapse of the Soviet Union and the economic crisis that followed. It gave the opportunity for criminal entrepreneurs to co-opt that stockpile. And as much as $30 billion worth of Soviet equipment was lost over many years in Ukraine.  

The Russians are currently using American and European components on the battlefield in Ukraine. 

LEE: We were not expecting to see so many components from all over the world, in all of their weapons systems, including communication devices, other counter-UAV equipment, cruise missiles, drones.

INGBER: So this was before the U.S. imposed sanctions for the war in Ukraine. This isn’t, say, a get-around to the production issues that manufacturers in Russia are having to try to keep up with the demand. Is that what you’re saying?  

LEE: Some of these components were manufactured before and some after.  

INGBER: Can you give me an example of a U.S. component?  

LEE: I’m not able to discuss company names at this point. I can say that we’ve seen several semiconductors, electronics, guidance systems. Their use as weapons does constitute a violation of sanctions for some of these countries.  

Source: newsy.com

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California Beachfront Taken From 1920s Black Couple Given To Heirs

Los Angeles County took land from Charles and Willa Bruce in the 1920s under eminent domain. It has finally been returned to their family.

This week, a first-of-its kind land reparation is happening in southern California.

A Black family robbed of their money-making land in the 1920s now stands to make millions off the land they should have owned all along.

“Today we are celebrating the final step in the return of Bruce’s Beach to the legal heirs of two visionary entrepreneurs,” Los Angeles County Supervisor Holly Mitchell said. 

Charles and Willa Bruce bought the beachfront plot in Los Angeles’ Manhattan Beach in the early 1900s for a little over $1,200. They turned it into a little paradise — a bath house, a dance hall, a cafe — as the first west coast resort for Black people.

It was a new target for the KKK in the 1920s, when Manhattan Beach took the land from the couple under eminent domain — ostensibly to build a park.

But they didn’t do that.

Now, Charles and Willa Bruce’s great and great-great-grandsons – blocked from the wealth that should have been theirs — own a plot estimated to be worth tens of millions.

“It’s almost like being transported to the other side of the known universe,” Anthony Bruce, great-great-grandson of Charles and Willa Bruce, said. “It’s like going from [being] a middle-class American to, you know, a wealthy class American.”

The family is now leasing the land to the county that owned it for the last 20-plus years for $400,000 a year. The county has the option to buy it from them for some $20 million.

“This is one win, but we deserve more wins,” Kavon Ward, organizer of Justice for Bruce’s Beach, said. “And I’m going to help all the Black families that I can try to reclaim the land that was stolen from them.”

It’s the beginning of a new chapter in the country’s racist history, returning wealth to families robbed of it.

Source: newsy.com

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