A top executive of Chinese communications giant Huawei Technologies has resolved criminal charges against her as part of a deal with the U.S. Justice Department that could pave the way for her to return to China. 

The deal with Meng Wanzhou, Huawei’s chief financial officer and the daughter of the company’s founder, was disclosed in federal court in Brooklyn on Friday. It calls for the Justice Department to dismiss the case next December, or four years after her arrest, if she complies with certain conditions. 

The deal, known as a deferred prosecution agreement, resolves a yearslong legal and geopolitical tussle that involved not only the U.S. and China but also Canada, where Meng has remained since her arrest there in December 2018. Meng appeared via videoconference at Friday’s hearing. 

The deal was reached as President Joe Biden and Chinese counterpart Xi Jinping have sought to minimize signs of public tension, even as the world’s two dominant economies are at odds on issues as diverse as cybersecurity, climate change, human rights, and trade and tariffs. 

A spokesperson for Huawei declined to comment, and a spokesman for the Justice Department in Washington did not respond to an email seeking comment. 

Charges unsealed in 2019

Under then-President Donald Trump, the Justice Department unsealed criminal charges in 2019, just before a crucial two-day round of trade talks between the U.S. and China, that accused Huawei of stealing trade secrets. The charges also alleged that Meng had committed fraud by misleading banks about the company’s business dealings in Iran. 

The indictment accuses Huawei of using a Hong Kong shell company called Skycom to sell equipment to Iran in violation of U.S. sanctions. 

Meng fought the Justice Department’s extradition request, and her lawyers called the case against her flawed. Last month, a Canadian judge didn’t rule on whether Meng should be extradited to the U.S. after a Canadian Justice Department lawyer wrapped up his case saying there was enough evidence to show she was dishonest and deserved to stand trial in the U.S. 

Huawei is the biggest global supplier of network gear for phone and internet companies, and some analysts say Chinese companies have flouted international rules and norms amid allegations of technology theft. The company represents China’s progress in becoming a technological power and has been a subject of U.S. security and law enforcement concerns. 

It has repeatedly denied the U.S. government’s allegations and the security concerns about its products. 
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Торги на міжбанківському ринку завершилися на рівні 26 гривень 71,5–73,5 копійки за долар
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За словами прем’єр-міністра, Кабінет міністрів співпрацює з місцевим самоврядуванням, на якому лежить відповідальність за формування тарифів
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Як повідомили в Мінсоцполітики, міністерка Лазебна зустрілася з представниками Світового банку з пенсійних питань
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Japan’s widening wealth gap has emerged as a key issue in a ruling party leadership contest that will decide who becomes the next prime minister, with candidates forced to reassess the legacy of former premier Shinzo Abe’s “Abenomics” policies.

Under Abenomics, a mix of expansionary fiscal and monetary policies and a growth strategy deployed by Abe in 2013, share prices and corporate profits boomed, but a government survey published earlier this year showed households hardly benefited.

Mindful of the flaws of Abenomics, frontrunners in the Liberal Democratic Party’s leadership race –- vaccination minister Taro Kono and former foreign minister Fumio Kishida — have pledged to focus more on boosting household wealth.

“What’s important is to deliver the benefits of economic growth to a wider population,” Kishida said Thursday. “We must create a virtual cycle of growth and distribution.”

But the candidates are thin on details over how to do this with Japan’s economic policy tool-kit depleted by years of massive monetary and fiscal stimulus.

Kono calls for rewarding companies that boost wages with a cut in corporate tax, while Kishida wants to expand Japan’s middle class with targeted payouts to low-income households.

The winner of the LDP leadership vote on Sept. 29 is assured of becoming Japan’s next prime minister because of the party’s parliamentary majority. Two women – Sanae Takaichi, 60, a former internal affairs minister, and Seiko Noda, 61, a former minister for gender equality – are the other candidates in a four-way race.

Parliament is expected to convene on Oct. 4 to vote in a successor to Prime Minister Yoshihide Suga, who announced his decision to quit less than a year after taking over from Abe.

A government survey, conducted once every five years and released in February, has drawn increasing attention to trends in inequality during Abe’s time.

Shigeto Nagai, head of Japan economics at Oxford Economics, said the survey revealed “the stark failure of Abenomics to boost household wealth through asset price growth.”

Average wealth among households fell by 3.5% from 2014 to 2019 with only the top 10% wealthiest enjoying an increase, according to survey conducted once every five years.

Japanese households’ traditional aversion to risk meant they did not benefit from the stock market rally, with the balance of their financial assets down 8.1% in the five years from 2014, the survey showed.

“We think the new premier will need to consider the failures of Abenomics and recognize the myth that reflation policies relying on aggressive monetary easing will not solve all Japan’s problems without tackling endemic structural issues,” Nagai said.

Bank of Japan Governor Haruhiko Kuroda defended Abenomics and said the pandemic, not slow wage growth, was mainly to blame for sluggish consumption.

“Unlike in the United States and Europe, Japanese firms protected jobs even when the pandemic hit,” Kuroda said when asked why the trickle-down to households has been weak.

“Wage growth has been fairly modest, but that’s not the main reason consumption is weak,” he told a briefing Wednesday.

“As the pandemic subsides, consumption will likely strengthen.” 

 
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«Ми за будь-яких умов продовжимо боротьбу за повернення виведених коштів як в українських судах, так і в судах іноземних юрисдикцій», – заявили у Фонді
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China Evergrande inched closer on Friday to the potential default that investors fear as an interest deadline expired without any announcement from the property giant whose mountain of debt has spooked world markets.

The company owes $305 billion, has run short of cash and investors are worried a collapse could pose systemic risks to China’s financial system and reverberate around the world.

A deadline for paying $83.5 million in bond interest passed without remark from Evergrande or any sign of bondholders being paid. The firm is now in uncharted waters and enters a 30-day grace period. It will default if that passes without payment.

“These are periods of eerie silence as no-one wants to take massive risks at this stage,” said Howe Chung Wan, head of Asia fixed income at Principal Global Investors in Singapore.

“There’s no precedent to this at the size of Evergrande … we have to see in the next 10 days or so, before China goes into holiday, how this is going to play out.”

China’s central bank again injected cash into the banking system on Friday, seen as a signal of support for markets. But authorities have been silent on Evergrande’s predicament and China’s state media has offered no clues on a rescue package.

Evergrande appointed financial advisers and warned of default last week, and world markets fell heavily on Monday amid fears of contagion, though they have since stabilized.

The conundrum for policymakers is how fiercely they can impose financial discipline without fueling social unrest, since an ugly collapse at Evergrande could crush a property market which accounts for 40% of Chinese household wealth.

Protests by disgruntled suppliers, home buyers and investors last week illustrated discontent that could spiral in the event a default sparks crises at other developers.

Evergrande has promised to prioritize such investors and resolved one coupon payment on a domestic bond this week. But it has said nothing about the offshore interest payment that was due on Thursday or a $47.5 million payment due next week.

Bondholders are starting to think it might be a month or so before things become clearer and markets have already assumed they will take a large haircut.

“Current market pricing estimates that investors in Evergrande’s dollar bonds are likely to recover very little,” said Jennifer James, a portfolio manager and lead emerging markets analyst at Janus Henderson Investors.

“The likeliest outcome is that the company will engage with creditors to come up with a restructuring agreement,” she said, warning that if such a deal is mismanaged “the loss of confidence could have contagion effects.”

Play for time

Global markets have begun to recover after Evergrande’s plight sparked a sharp selloff, trading on the basis that the crisis can be contained.

Only some $20 billion of Evergrande’s debts are owed offshore. Yet the risks at home are considerable because of the risks to China’s property sector, a vast store of wealth.

“Housing sales and investments could inevitably slow further – this would knock nearly 1 percentage point off GDP growth,” analysts at Societe Generale said in a note.

“The longer policymakers wait before acting, the higher the hard-landing risk.”

So far there have been few signs of official intervention.

The People’s Bank of China’s $42 billion cash injection this week is the largest weekly sum since January and has helped put a floor under stocks.

Bloomberg Law also reported that regulators had asked Evergrande to avoid a near-term default, citing unnamed people familiar with the matter.

However The Wall Street Journal said, citing unnamed officials, that authorities had asked local governments to prepare for Evergrande’s downfall.

“Given the deliberate pace of Chinese policy making, the authorities may well choose to play for time,” said Wei-Liang Chang, a macro strategist at DBS Bank in Singapore.

He said they could extend liquidity assistance through the grace period on Evergrande’s coupon payments, given it had no dollar bond maturities looming until March 2022.

Evergrande’s shares handed back some Thursday gains on Friday and fell 6%, while stock of its electric-vehicle unit dropped 18% to a four-year low. Its bonds fell slightly on Friday and its offshore bonds with imminent payments due last traded around 30 cents on the dollar. 

 
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First-time claims for U.S. unemployment compensation unexpectedly increased again last week but remained near the low point during the 18-month coronavirus pandemic, the Labor Department reported Thursday.

A total of 351,000 jobless workers filed for assistance, up 16,000 from the revised figure of the week before, the second straight week the figure moved higher. The increase was at odds with projections of economists, who had predicted a declining number.

Still, the claims figures for the last month have been on the whole the lowest since the pandemic swept through the U.S. in March 2020, although they remain above the 218,000 average in 2019.

The jobless claims total has fallen steadily but unevenly since topping 900,000 in early January. Filings for unemployment compensation have often been seen as a current reading of the country’s economic health, but other statistics also are relevant barometers.

Even as the U.S. said last month that its world-leading economy grew at an annualized rate of 6.6% in the April-to-June period, it added only a disappointing 235,000 more jobs in August, a figure economists said was partly reflective of the surging Delta variant of the coronavirus inhibiting job growth.

The number of new jobs was down sharply from the more than 2 million combined figure added in June and July. The unemployment rate dipped to 5.2%, which is still nearly two percentage points higher than before the pandemic started in March 2020.

About 8.7 million workers remain unemployed in the U.S. There are nearly 11 million available jobs in the country, but the skills of the available workers often do not match what employers want, or the job openings are not where the unemployed live.

The size of the U.S. economy – nearly $23 trillion – now exceeds its pre-pandemic level as it recovers faster than many economists had predicted during the worst of the business closings more than a year ago.

Policy makers at the Federal Reserve, the country’s central bank, on Wednesday signaled that in November it could start reversing its pandemic stimulus programs and next year could begin to increase its benchmark interest rate.

How fast the U.S. economy will continue to grow is unclear.

For months, the national government had sent an extra $300 a week in unemployment compensation, on top of often less generous state aid, to jobless workers. But that extra assistance ended earlier this month, with about 7.5 million jobless workers affected by the cutoff in extra funding.

The delta variant of the coronavirus also poses a new threat to the economy.  

Political disputes have erupted in numerous states between conservative Republican governors who have resisted imposing mandatory face mask and vaccination rules in their states at schools and businesses, although some education and municipal leaders are advocating tougher rules to try to prevent the spread of the Delta variant.

U.S. President Joe Biden has ordered workers at companies with 100 or more employees to get vaccinated or be tested weekly for the coronavirus. In addition, he is requiring 2.5 million national government workers and contractors who work for the government to get vaccinated if they haven’t already been inoculated.

In recent weeks, about 150,000 new cases have been identified each day in the U.S. and more than 2,000 people are dying from COVID-19 every day.    

More than 66% of U.S. adults now have been fully vaccinated against the coronavirus, and overall, 54.9% of the U.S. population of 332 million have completed their shots, according to the Centers for Disease Control and Prevention.

 
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Торги на міжбанківському ринку завершилися для долара позитивно – на рівні 26 гривень 62–64 копійки за одиницю американської валюти
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Chinese officials are bracing for a potential financial crisis as giant real estate conglomerate China Evergrande Group appears to be unable to make good on bond payments due on Thursday. 

According to the Wall Street Journal, the central government has instructed local officials across the country to begin “getting ready for the possible storm,” if the firm is unable to come to an agreement with creditors. Evergrande is currently carrying a staggering load of more than $300 billion in debts and other liabilities. 

The central government in China is concerned about civil unrest because of both the size and the nature of Evergrande. The company has more than 800 construction projects spread across every province in the country, employing thousands of Chinese workers and engaging with an untold number of suppliers.

Many of the projects are housing units for which individual buyers paid large sums of money in advance. In some cases, construction has already been halted because the company has been unable to pay suppliers.

In addition to angry homeowners, the company is facing complaints from individual investors who have placed money in the company’s publicly traded shares. Since July of 2020, the company’s share price has plummeted by 91%, to about 34 cents a share today. 

Actual default may be postponed 

Evergrande had two major bond payments due Thursday. One, denominated in U.S. dollars, was for $83.5 million. The agreement with creditors gives the company a 30-day grace period before it is officially considered to be in default. However, failure to make payment on the due date will be seen as a very bad sign by the financial markets. 

The second bond payment was denominated in Chinese renminbi, and the company announced Wednesday that the debt had been “resolved through off-exchange negotiations” — though what exactly that means and how much the company actually paid is not clear. 

In addition to its real estate holdings, Evergrande has a wide array of subsidiaries, including an electric vehicle manufacturer, a soccer team, two theme parks, and a life insurance company, among other things. The company has been trying to sell off some of those assets to help pay its debts, but so far it does not appear to have been successful in raising enough cash to satisfy its creditors. 

The company’s chairman, Hui Ka Yan, has been striving to instill confidence in the company. In a memo to employees this week, he praised the company’s workforce as “an invincible army that is loyal and bears hardship without complaint.”

Hui added, “I firmly believe that Evergrande people’s spirit of never admitting defeat, and becoming stronger when the going gets tough, is our source of strength in overcoming all difficulties!” He promised that the company would emerge from its “darkest hour.” 

Government intervention possible 

Signals from the Chinese government about its intentions toward Evergrande have been mixed. In recent weeks, the government has not suggested that it intends to help the company. On Wednesday, the government issued a vaguely worded statement urging the company to “avoid near-term default” on its dollar-denominated bonds. 

Many experts believe the Chinese government will step in if it appears that Evergrande is facing collapse — deeming it too big to fail. However, that does not mean that all stakeholders in the company will be made whole. Most likely to be hurt are those holding the company’s U.S. dollar-denominated debt, who will face a “haircut” — meaning that they will be forced to accept payments of less than they are owed by the massive company. 

“It’s unlikely that the Chinese government will allow chaos to ensue,” said Doug Barry, a spokesman for the U.S.-China Business Council. “They have plenty of money to cover the losses, though foreign bond holders may receive a sizable haircut.” 

Major restructuring possible 

Experts expect that the Chinese government eventually will organize a major restructuring of the company. That would involve selling off large parts of Evergrande to other Chinese companies — probably state-owned firms. Those transactions would likely be facilitated by funding from state-owned banks. 

The goal, experts say, would be to avoid the collapse of housing projects that the company has already sold to Chinese buyers, and the related loss of construction jobs and related economic activity that would entail. 

“The government may help in restructuring Evergrande with shareholders and bondholders taking a big hit,” said Robert Dekle, a professor of economics at the University of Southern California. “This is overall good for China, reducing over-borrowing and moral hazard in the future.” 

A positive change 

Although a restructuring of Evergrande would be painful — especially for its investors — it could have important positive implications for the future of the Chinese economy. The country is currently dotted with thousands of “zombie” companies that have been kept solvent only by continued infusions of cash from state-owned banks. By refusing to bail out Evergrande’s bondholders and investors, the Chinese government may be signaling that in the future, companies will be expected to stand — or fall — on their own. 

“Longer term, China needs to get its financial house in order, especially throwing light on the shadow economy where even more debt bombs and zombie companies may lurk,” said Barry, of the U.S.-China Business Council. “Odds are good that the government will get on top of things without serious damage to the domestic or global economy. It’s a sobering reminder of the role China plays and the need for more transparency and fewer shadows and casino activities.” 

Global contagion seen as unlikely 

Evergrande’s troubles have caused investors in other high-yield Chinese debt to become cautious, demanding much higher interest rates to compensate for the perception of increased risk. 

However, experts believe that the fallout from the company’s troubles will have limited impact outside of China.

“Apparently there are other Chinese property developers in trouble,” said Dekle, the USC economist. “But the fact that Chinese authorities have allowed the firm to reach near bankruptcy suggests that the fallout will be self contained.” 

Voice of America Mandarin Service reporter Mo Yu contributed to this story. 

 
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