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With Covid-19 Under Control, China’s Economy Surges Ahead

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BEIJING — As most of the world still struggles with the coronavirus pandemic, China is showing once again that a fast economic rebound is possible when the virus is brought firmly under control.

The Chinese economy surged 4.9 percent in the July-to-September quarter compared with the same months last year, the country’s National Bureau of Statistics announced on Monday. The robust performance brings China almost back up to the roughly 6 percent pace of growth that it was reporting before the pandemic.

Many of the world’s major economies have climbed quickly out of the depths of a contraction last spring, when shutdowns caused output to fall steeply. But China is the first to report growth that significantly surpasses where it was at this time last year. The United States and other nations are expected to report a third-quarter surge too, but they are still behind or just catching up to pre-pandemic levels.

China’s lead could widen further in the months to come. It has almost no local transmission of the virus now, while the United States and Europe face another accelerating wave of cases.

The vigorous expansion of the Chinese economy means that it is set to dominate global growth — accounting for at least 30 percent of the world’s economic growth this year and in the years to come, Justin Lin Yifu, a cabinet adviser and honorary dean of the National School of Development at Peking University, said at a recent government news conference in Beijing.

Chinese companies are making up a greater share of the world’s exports, manufacturing consumer electronics, personal protection equipment and other goods in high demand during the pandemic. At the same time, China is now buying more iron ore from Brazil, more corn and pork from the United States and more palm oil from Malaysia. That has partly reversed a nosedive in commodity prices last spring and softened the impact of the pandemic on some industries.

Still, China’s recovery has done less to help the rest of the world than in the past because its imports have not increased nearly as much as its exports. This pattern has created jobs in China but placed a brake on growth elsewhere.

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China’s economic recovery has also been dependent for months on huge investments in highways, high-speed train lines and other infrastructure. And in recent weeks, the country has seen the beginning of a recovery in domestic consumption.

The affluent and people living in export-oriented coastal provinces were the first to start spending money again. But activity is resuming now even in places like Wuhan, the central Chinese city where the new coronavirus first emerged.

“You’ve had to line up to get into many restaurants in Wuhan, and for Wuhan restaurants that are popular on the internet, the wait is two or three hours,” said Lei Yanqiu, a Wuhan resident in her early 30s.

ImageA restaurant last month in Wuhan, the central Chinese city where the new coronavirus first emerged.
Credit…Hector Retamal/Agence France-Presse — Getty Images

George Zhong, a resident of Chengdu, the capital of Sichuan Province in western China, said that he had made trips to three provinces in the past two months and has been actively shopping when he is home. “I spend no less than in previous years,” Mr. Zhong said.

China’s broadening recovery could also be seen in economic statistics just for September, which were also released on Monday. Retail sales climbed 3.3 percent last month from a year ago, while industrial production was up 6.9 percent.

China’s model for restoring growth may be effective, but may not be appealing to other countries.

Determined to keep local transmission of the virus at or near zero, China has resorted to comprehensive cellphone tracking of its population, weekslong lockdowns of neighborhoods and cities and costly mass testing in response to even the smallest outbreaks.

Credit…Carlos Garcia Rawlins/Reuters

China’s rebound also comes with some weaknesses, particularly a surge in overall debt this year by an amount equal to 15 to 25 percent of the economy’s overall output. Much of the extra debt is either borrowing by local governments and state-owned enterprises to pay for new infrastructure, or mortgages taken out by households and companies to pay for apartments and new buildings.

The government is aware of the risk of letting debt accumulate quickly. But reining in new credit would hurt real estate activity, a sector that represents up to a quarter of the economy.

Another risk to China’s recovery is its heavy dependence on exports. The surge in exports in the past three months, along with lower prices for imports of commodities, accounted for a big chunk of economic growth, one of the largest shares of any quarter in a decade. Exports still represent over 17 percent of China’s economy, more than double the proportion that they make up in the American economy.

China’s leaders recognize that the country’s exports are increasingly vulnerable to geopolitical tensions, including the Trump administration’s moves to unwind trade relations between the United States and China. Shifts in global demand might also threaten exports, as the pandemic batters overseas economies.

Credit…Jane Barlow/Press Association, via Associated Press

Xi Jinping, China’s top leader, has increasingly emphasized self-reliance, a strategy that calls for expanding service industries and innovation in manufacturing, as well as enabling residents to spend more.

“We need to make consumers the mainstay,” said Qiu Baoxing, a cabinet adviser who is a former vice minister of housing, at the news conference in Beijing. “By focusing on domestic circulation, we are actually enhancing our own resilience.”

But empowering consumers has long been a challenge in China. Under ordinary circumstances, most Chinese are compelled to save for education, health care and retirement because of a weak social safety net. The economic slowdown, and the pandemic, have meant lost jobs, compounding the problem, particularly for low earners and rural residents.

Beijing’s approach to helping ordinary Chinese during the slowdown has been to provide companies with tax rebates and large loans from state-owned banks, so that businesses would not need to lay off workers. But some economists argue that Beijing should instead be handing out coupons or checks to more directly assist the country’s poorer citizens.

Millions of Chinese migrant workers endured at least a month or two of unemployment in the spring as factories were slow to reopen after the epidemic. Young Chinese found themselves dipping into their savings to eat or taking on second jobs to make up for slashed wages.

But Chinese government economists are wary of providing direct payments to consumers. They say that the government’s priorities are investment-driven growth and measures to improve productivity and quality of life, such as digging new sewerage systems or adding elevators to three million older apartment towers that lack them.

Credit…Keith Bradsher/The New York Times

“We’ve seen a lot of suggestions to increase consumption, but the crux is to enrich people first,” said Yao Jingyuan, a former chief economist of the National Bureau of Statistics who is now a policy researcher for the cabinet.

Western governments have experimented with providing extra-large unemployment checks, one-time payments and even subsidized meals at restaurants. These payments have been aimed at helping families sustain a minimum standard of living through the pandemic — which in turn has fueled demand for imports from China.

Michael Pettis, a finance professor at Peking University, said that as people in other countries supported by government subsidies continue to turn to China for products during the pandemic, “we’re going to see a resurgence of trade conflict, and not just U.S.-China, but global.”

Liu Yi and Amber Wang contributed research.

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Australia Says Female Passengers on Qatar Flight Got Invasive Medical Exams

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DARWIN, Australia — The Australian government on Monday demanded answers from Qatar Airways after female passengers on a flight to Sydney from Doha reported that they had been removed from the plane, strip-searched and given invasive medical exams to see if they had recently given birth.

The incident occurred earlier this month after a premature newborn was found abandoned in a terminal bathroom at Hamad International Airport in the Qatari capital, according to accounts provided to the Australian authorities.

“The Australian government is deeply concerned at the unacceptable treatment of some female passengers on a recent Qatar Airways flight at Doha Airport,” the Australian authorities said in a statement released on Monday.

It called the women’s treatment “offensive, grossly inappropriate and beyond circumstances in which the women could give free and informed consent.”

The government said it had registered its concerns with the Qatari authorities. Neither Qatar Airways nor officials at Hamad Airport could be immediately reached for comment. Much remains unclear, such as if any of the passengers had given permission for the exams, and the identity of the newborn’s parents. The BBC reported that the baby was being cared for.

Australia’s minister for foreign affairs, Marise Payne, said on Monday at a news conference in Canberra, the capital, that government officials had been made aware of the incident by passengers on the flight from Doha. None of the women involved have been publicly identified.

“This is a grossly, grossly disturbing, offensive, concerning set of events,” Ms. Payne said. “It is not something I have ever heard of occurring in my life in any context.”

Ms. Payne added that Qatari officials had indicated they would provide a report on the incident, and that once she had reviewed the details, the government would determine its next steps.

“It has been taken up directly with the ambassador here and, of course, directly with authorities in Doha,” she said.

Flight QR908 was waiting on the tarmac when the crew asked all the women on board to disembark, Wolfgang Babeck, a passenger, said in an interview. He said he saw more than a dozen Australian women, as well as women of other nationalities, being removed from the plane.

“About three hours in, there was an announcement that the women should disembark. I personally found this disturbing,” said Dr. Babeck, a law professor who was returning to Australia after visiting his sick father in Germany.

He said he later learned from the women that they had been escorted back to the terminal, where they had been given invasive exams by a female doctor. At least 13 women from Australia were medically examined, according to reports from the women given to the Australian government and accounts from other passengers. Some news reports indicated they had been examined in an ambulance on the tarmac.

When the women returned to the plane, Dr. Babeck said, many appeared “shellshocked,” and others were crying. “Everybody was, of course, desperate to get home,” he added.

Australia has among the strictest travel regulations in the world in response to the pandemic, and anyone coming into or leaving the country must get permission from the authorities, even Australian citizens. The country recently set up a one-way travel bubble with New Zealand, under which travelers to Sydney or Darwin, Australia, from Auckland, New Zealand, will not be required to quarantine in Australia after a negative test.

The director of Amnesty International Australia, Samantha Klintworth, noting that news outlets reported that the incident occurred on Oct. 2, said in a statement: “The women subjected to this terrible ordeal appear to have come forward straight away and told authorities what occurred at the airport. Why then has it taken until now, following a report in the media, for the department to approach the Qatari authorities for an explanation?”

“There must be an independent investigation into the events that took place if we are to ever get a truly transparent account of what occurred and to establish unequivocally who is responsible and hold them to account for this gross breach of these women’s rights,” she said.

Livia Albeck-Ripka reported from Darwin, Australia, and Yan Zhuang from Melbourne, Australia.

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Trump Had One Last Story to Sell. The Wall Street Journal Wouldn’t Buy It.

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By early October, even people inside the White House believed President Trump’s re-election campaign needed a desperate rescue mission. So three men allied with the president gathered at a house in McLean, Va., to launch one.

The host was Arthur Schwartz, a New York public relations man close to President Trump’s eldest son, Donald Jr. The guests were a White House lawyer, Eric Herschmann, and a former deputy White House counsel, Stefan Passantino, according to two people familiar with the meeting.

Mr. Herschmann knew the subject matter they were there to discuss. He had represented Mr. Trump during the impeachment trial early this year, and he tried to deflect allegations against the president in part by pointing to Hunter Biden’s work in Ukraine. More recently, he has been working on the White House payroll with a hazy portfolio, listed as “a senior adviser to the president,” and remains close to Jared Kushner.

The three had pinned their hopes for re-electing the president on a fourth guest, a straight-shooting Wall Street Journal White House reporter named Michael Bender. They delivered the goods to him there: a cache of emails detailing Hunter Biden’s business activities, and, on speaker phone, a former business partner of Hunter Biden’s named Tony Bobulinski. Mr. Bobulinski was willing to go on the record in The Journal with an explosive claim: that Joe Biden, the former vice president, had been aware of, and profited from, his son’s activities. The Trump team left believing that The Journal would blow the thing open and their excitement was conveyed to the president.

The Journal had seemed to be the perfect outlet for a story the Trump advisers believed could sink Mr. Biden’s candidacy. Its small-c conservatism in reporting means the work of its news pages carries credibility across the industry. And its readership leans further right than other big news outlets. Its Washington bureau chief, Paul Beckett, recently remarked at a virtual gathering of Journal reporters and editors that while he knows that the paper often delivers unwelcome news to the many Trump supporters who read it, The Journal should protect its unique position of being trusted across the political spectrum, two people familiar with the remarks said.

As the Trump team waited with excited anticipation for a Journal exposé, the newspaper did its due diligence: Mr. Bender and Mr. Beckett handed the story off to a well-regarded China correspondent, James Areddy, and a Capitol Hill reporter who had followed the Hunter Biden story, Andrew Duehren. Mr. Areddy interviewed Mr. Bobulinski. They began drafting an article.

Then things got messy. Without warning his notional allies, Rudy Giuliani, the former New York mayor and now a lawyer for President Trump, burst onto the scene with the tabloid version of the McLean crew’s carefully laid plot. Mr. Giuliani delivered a cache of documents of questionable provenance — but containing some of the same emails — to The New York Post, a sister publication to The Journal in Rupert Murdoch’s News Corp. Mr. Giuliani had been working with the former Trump aide Steve Bannon, who also began leaking some of the emails to favored right-wing outlets. Mr. Giuliani’s complicated claim that the emails came from a laptop Hunter Biden had abandoned, and his refusal to let some reporters examine the laptop, cast a pall over the story — as did The Post’s reporting, which alleged but could not prove that Joe Biden had been involved in his son’s activities.

While the Trump team was clearly jumpy, editors in The Journal’s Washington bureau were wrestling with a central question: Could the documents, or Mr. Bobulinski, prove that Joe Biden was involved in his son’s lobbying? Or was this yet another story of the younger Mr. Biden trading on his family’s name — a perfectly good theme, but not a new one or one that needed urgently to be revealed before the election.

Mr. Trump and his allies expected the Journal story to appear Monday, Oct. 19, according to Mr. Bannon. That would be late in the campaign, but not too late — and could shape that week’s news cycle heading into the crucial final debate last Thursday. An “important piece” in The Journal would be coming soon, Mr. Trump told aides on a conference call that day.

His comment was not appreciated inside The Journal.

“The editors didn’t like Trump’s insinuation that we were being teed up to do this hit job,” a Journal reporter who wasn’t directly involved in the story told me. But the reporters continued to work on the draft as the Thursday debate approached, indifferent to the White House’s frantic timeline.

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Finally, Mr. Bobulinski got tired of waiting.

“He got spooked about whether they were going to do it or not,” Mr. Bannon said.

At 7:35 Wednesday evening, Mr. Bobulinski emailed an on-the-record, 684-word statement making his case to a range of news outlets. Breitbart News published it in full. He appeared the next day in Nashville to attend the debate as Mr. Trump’s surprise guest, and less than two hours before the debate was to begin, he read a six-minute statement to the press, detailing his allegations that the former vice president had involvement in his son’s business dealings.

When Mr. Trump stepped on stage, the president acted as though the details of the emails and the allegations were common knowledge. “You’re the big man, I think. I don’t know, maybe you’re not,” he told Mr. Biden at some point, a reference to an ambiguous sentence from the documents.

As the debate ended, The Wall Street Journal published a brief item, just the stub of Mr. Areddy and Mr. Duehren’s reporting. The core of it was that Mr. Bobulinski had failed to prove the central claim. “Corporate records reviewed by The Wall Street Journal show no role for Joe Biden,” The Journal reported.

Asked about The Journal’s handling of the story, the editor in chief, Matt Murray, said the paper did not discuss its newsgathering. “Our rigorous and trusted journalism speaks for itself,” Mr. Murray said in an emailed statement.

And if you’d been watching the debate, but hadn’t been obsessively watching Fox News or reading Breitbart, you would have had no idea what Mr. Trump was talking about. The story the Trump team hoped would upend the campaign was fading fast.

The McLean group’s failed attempt to sway the election is partly just another story revealing the chaotic, threadbare quality of the Trump operation — a far cry from the coordinated “disinformation” machinery feared by liberals.

But it’s also about a larger shift in the American media, one in which the gatekeepers appear to have returned after a long absence.

It has been a disorienting couple of decades, after all. It all began when The Drudge Report, Gawker and the blogs started telling you what stodgy old newspapers and television networks wouldn’t. Then social media brought floods of content pouring over the old barricades.

By 2015, the old gatekeepers had entered a kind of crisis of confidence, believing they couldn’t control the online news cycle any better than King Canute could control the tides. Television networks all but let Donald Trump take over as executive producer that summer and fall. In October 2016, Julian Assange and James Comey seemed to drive the news cycle more than the major news organizations. Many figures in old media and new bought into the idea that in the new world, readers would find the information they wanted to read — and therefore, decisions by editors and producers, about whether to cover something and how much attention to give it, didn’t mean much.

But the last two weeks have proved the opposite: that the old gatekeepers, like The Journal, can still control the agenda. It turns out there is a big difference between WikiLeaks and establishment media coverage of WikiLeaks, a difference between a Trump tweet and an article about it, even between an opinion piece in The Wall Street Journal suggesting Joe Biden had done bad things, and a news article that didn’t reach that conclusion.

ImagePresident Trump and former Vice President Joe Biden at their debate last week. Mr. Trump had a surprise guest, a man making claims about Hunter Biden.
Credit…Erin Schaff/The New York Times

Perhaps the most influential media document of the last four years is a chart by a co-director of the Berkman Klein Center for Internet and Society at Harvard, Yochai Benkler. The study showed that a dense new right-wing media sphere had emerged — and that the mainstream news “revolved around the agenda that the right-wing media sphere set.”

Mr. Bannon had known this, too. He described his strategy as “anchor left, pivot right,” and even as he ran Breitbart News, he worked to place attacks on Hillary Clinton in mainstream outlets. The validating power of those outlets was clear when The New York Times and Washington Post were given early access in the spring of 2014 to the book “Clinton Cash,” an investigation of the Clinton family’s blurring of business, philanthropic and political interests by the writer Peter Schweizer.

Mr. Schweizer is still around this cycle. But you won’t find his work in mainstream outlets. He’s over on Breitbart, with a couple of Hunter Biden stories this month.

And fact that Mr. Bobulinski emerged not in the pages of the widely respected Journal but in a statement to Breitbart was essentially Mr. Bannon’s nightmare, and Mr. Benkler’s fondest wish. And a broad array of mainstream outlets, unpersuaded that Hunter Biden’s doings tie directly to the former vice president, have largely kept the story off their front pages, and confined to skeptical explanations of what Mr. Trump and his allies are claiming about his opponent.

“SO USA TODAY DIDN’T WANT TO RUN MY HUNTER BIDEN COLUMN THIS WEEK,” the conservative writer Glenn Reynolds complained Oct. 20, posting the article instead to his blog. President Trump himself hit a wall when he tried to push the Hunter Biden narrative onto CBS News.

“This is ‘60 Minutes,’ and we can’t put on things we can’t verify,” Lesley Stahl told him. Mr. Trump then did more or less the same thing as Mr. Reynolds, posting a video of his side of the interview to his own blog, Facebook.

The media’s control over information, of course, is not as total as it used to be. The people who own printing presses and broadcast towers can’t actually stop you from reading leaked emails or unproven theories about Joe Biden’s knowledge of his son’s business. But what Mr. Benkler’s research showed was that the elite outlets’ ability to set the agenda endured in spite of social media.

We should have known it, of course. Many of our readers, screaming about headlines on Twitter, did. And Mr. Trump knew it all along — one way to read his endless attacks on the establishment media is as an expression of obsession, a form of love. This week, you can hear howls of betrayal from people who have for years said the legacy media was both utterly biased and totally irrelevant.

“For years, we’ve respected and even revered the sanctified position of the free press,” wrote Dana Loesch, a right-wing commentator not particularly known for her reverence of legacy media, expressing frustration that the Biden story was not getting attention. “Now that free press points its digital pen at your throat when you question their preferences.”

There’s something amusing — even a bit flattering — in such earnest protestations from a right-wing movement rooted in efforts to discredit the independent media. And this reassertion of control over information is what you’ve seen many journalists call for in recent years. At its best, it can also close the political landscape to a trendy new form of dirty tricks, as in France in 2017, where the media largely ignored a last-minute dump of hacked emails from President Emmanuel Macron’s campaign just before a legally mandated blackout period.

But I admit that I feel deep ambivalence about this revenge of the gatekeepers. I spent my career, before arriving at The Times in March, on the other side of the gate, lobbing information past it to a very online audience who I presumed had already seen the leak or the rumor, and seeing my job as helping to guide that audience through the thicket, not to close their eyes to it. “The media’s new and unfamiliar job is to provide a framework for understanding the wild, unvetted, and incredibly intoxicating information that its audience will inevitably see — not to ignore it,” my colleague John Herrman (also now at The Times) and I wrote in 2013. In 2017, I made the decision to publish the unverified “Steele dossier,” in part on the grounds that gatekeepers were looking at it and influenced by it, but keeping it from their audience.

This fall, top media and tech executives were bracing to refight the last war — a foreign-backed hack-and-leak operation like WikiLeaks seeking to influence the election’s outcome. It was that hyper-vigilance that led Twitter to block links to The New York Post’s article about Hunter Biden — a frighteningly disproportionate response to a story that other news organizations were handling with care. The schemes of Mr. Herschmann, Mr. Passantino and Mr. Schwartz weren’t exactly WikiLeaks. But the special nervousness that many outlets, including this one, feel about the provenance of the Hunter Biden emails is, in many ways, the legacy of the WikiLeaks experience.

I’d prefer to put my faith in Mr. Murray and careful, professional journalists like him than in the social platforms’ product managers and executives. And I hope Americans relieved that the gatekeepers are reasserting themselves will also pay attention to who gets that power, and how centralized it is, and root for new voices to correct and challenge them.

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Kodak Loan Debacle Puts a New Agency in the Hot Seat

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WASHINGTON — At a virtual conference in September, Adam Boehler, chief executive of the U.S. International Development Finance Corporation, described his nascent agency as a bulwark against China’s “economic colonialism” — with $60 billion in annual lending authority to counter Beijing’s strategy of spreading its global influence with low-interest infrastructure loans.

But in recent months, Mr. Boehler, a former health care executive, has repurposed the international agency into something far from its intended role: a financing arm for projects inside the United States.

Working closely with Jared Kushner, the president’s son-in-law and senior adviser, Mr. Boehler helped draft an executive order over the summer that, for the first time, gave the agency authority to issue loans to U.S. companies for projects on American soil. The move was billed as a way to boost President Trump’s “Buy America” ambitions during a time of economic crisis.

Now, Mr. Boehler’s agency is embroiled in controversy over its first domestic loan — $765 million for Kodak, which was intended to help the once-iconic photography company transform into a pharmaceutical firm that could lessen America’s reliance on foreign countries for generic drugs and coronavirus treatments.

The Securities and Exchange Commission is probing allegations of insider trading by Kodak executives ahead of the deal’s announcement, and the Development Finance Corporation’s inspector general is looking into how Kodak got the loan. The funding has been put on hold and Mr. Trump, who hailed the loan as “momentous,” has distanced himself from the decision.

The questions about the Kodak project highlight the risks inherent in the Trump administration’s strategy to build American manufacturing by embracing the type of industrial policy that other nations have long employed — one that the United States has traditionally avoided in favor of free markets.

Mr. Trump has taken aggressive measures to prop up flagging sectors and companies, including supporting steel and aluminum by imposing global metal tariffs. He has funneled nearly $30 billion in subsidies to prop up struggling farmers who were hurt by his trade war with China. And this summer, Mr. Trump’s Treasury Department gave a $700 million stimulus loan to a struggling trucking company, YRC Worldwide, under the questionable rationale that it was critical to national security.

In May, the Trump administration found a new way to support domestic companies: The Development Finance Corporation. The agency had been created by Congress in 2018 to replace the Overseas Private Investment Corporation, which had encouraged American companies to invest in developing countries. Congress gave the new agency $60 billion to bankroll international infrastructure projects and a mandate to coordinate more closely with the State Department on loans that, ideally, would help to curb Chinese influence and support American foreign policy.

ImageRay Washburne, who ran the Overseas Private Investment Corporation during its transition to the Development Finance Corporation, rebuffed a request by Jared Kushner for money to fund President Trump’s border wall.
Credit…Marcos Brindicci/Reuters

The agency has funded 80 overseas projects totaling $4.8 billion in places like Mozambique, Kenya, Colombia and Costa Rica this year. But top Trump officials had long been eyeing the agency’s pot of money as a potential source of cash for domestic projects. In 2019, as Mr. Trump was seeking more funding for his wall along the Southern border with Mexico, Mr. Kushner approached Ray Washburne, who was then leading the agency as it began transitioning from the O.P.I.C. to the International Development Finance Corporation, to see if financing might be available.

“Can you give me a billion for the wall?” Mr. Kushner asked Mr. Washburne, who left the agency early last year, according to a person with knowledge of the exchange who was not authorized to reveal a private conversation.

Mr. Washburne spurned the request, citing the agency’s international mandate. A spokesperson for Mr. Kushner said he had no recollection of the request.

As the coronavirus pandemic swept through the United States, Mr. Trump signed an executive order on May 14 that allowed the Development Finance Corporation to shift its focus from international to domestic investment.

The move was part of an effort by the White House to use American companies to make supplies like ventilators and hand sanitizer and to transport testing swabs. In many cases, it used the threat of the Defense Production Act to compel companies to ramp up production of personal protective equipment.

Some critics in Congress and development experts panned the move, arguing that the agency lacked the resources to accomplish its original mission overseas, much less rebuild American industry.

But Kodak, which filed for bankruptcy protection in 2012 and had spent years trying to reinvent itself as its core photography business weakened, spied an opportunity. Kodak made the case to administration officials that the company could help with producing generic pharmaceuticals to reduce American reliance on foreign drugmakers and potentially help produce treatments for Covid-19, according to a review of the deal the law firm Akin Gump carried out at Kodak’s request.

Credit…Joshua Rashaad McFadden for The New York Times

The company had been producing some pharmaceutical ingredients for several years and had begun making hand sanitizer and face shields since the pandemic took hold. Kodak officials told the administration that the loan would be part of a larger corporate reinvention that entailed converting vast chemical facilities once dedicated to their print business to produce raw ingredients used in pharmaceuticals.

By July, after a byzantine application process, Kodak had won a “letter of intent” to receive government support.

Administration officials saw the loan to Kodak as dual victory — a way to both help restore America’s factory capacity and lessen its reliance on China and India for critical drugs.

In a White House briefing on July 28, Mr. Trump said the administration had taken “a momentous step toward achieving American pharmaceutical independence” and called it “one of the most important deals in the history of U.S. pharmaceutical industries.”

But critics immediately questioned why Kodak could not secure financing through the capital markets and were dubious the effort would help address the immediate health crisis.

“The Kodak loan didn’t seem directly relevant to the crisis that we’re in,” said Clemence Landers, policy fellow at the Center for Global Development. “This feels like part of the administration’s broader onshoring agenda.”

Scott Lincicome, a senior fellow in economic studies at the Cato Institute, noted that the effort to prop up Kodak “appears to be taking a page out of China’s playbook,” which the administration has criticized for helping “zombie” companies and politically connected firms, causing economic distortions.

A spokesman for the International Development Finance Corporation declined to comment.

Almost immediately after announcing the loan, the project unraveled amid accusations of insider trading.

Credit…Richard Drew/Associated Press

Kodak had issued its chief executive, Jim Continenza, 1.75 million stock options on July 27, the day before Mr. Trump publicly announced the project. The company’s stock rose from $2.62 per share on July 27 to more than $60 on Wednesday, before closing at $33.20. Within days, Mr. Continenza’s new options were worth about $50 million.

Public filings also showed that Mr. Continenza purchased 46,737 additional shares on June 23, while Philippe D. Katz, a board member, purchased 5,000 shares on June 11 and again on June 23.

In a statement, Kodak said Mr. Continenza has purchased shares with his own money at nearly every available window since joining the company in 2013. He has not sold a single share during his time at Kodak, the company said.

The damage was done. The loan was put on hold and, in the following weeks, Mr. Trump and Peter Navarro, a trade adviser who helped coordinate the agreement, distanced themselves from the deal.

“I wasn’t involved in the deal,” Mr. Trump said on Aug. 4. “Kodak has been a great name, but obviously pretty much in a different business.”

Democrats, led by Senator Elizabeth Warren of Massachusetts, have been scrutinizing Mr. Kushner’s medical supply chain projects and his close ties to Mr. Boehler. They have raised suspicion that personal ties, rather than economic considerations, were the main factor in granting the International Development Finance Corporation a prominent new domestic mission. At Ms. Warren’s request, the agency’s inspector general is reviewing the loan process.

Mr. Navarro, in an emailed comment, said that “a key mission of the Trump administration is to bring home our medical supply chains.” He said the White House was “pursuing numerous projects to advance this mission, with Kodak now far in the rearview mirror.”

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