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Category: Економіка

Chinese President Xi Meets With US Executives as Investment Wanes

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BEIJING — China’s President Xi Jinping met American business leaders at the Great Hall of the People in Beijing on Wednesday, as the government tries to woo back foreign investors and international firms seeking reassurance about the impact of new regulations. 

Beijing wants to boost growth of the world’s second-largest economy after foreign direct investment shrank 8% in 2023 amid heightened investor concern over an anti-espionage law, exit bans, and raids on consultancies and due diligence firms. 

Xi’s increasing focus on national security has left many companies uncertain where they might step over the line, even as Chinese leaders make public overtures toward foreign investors. 

“China’s development has gone through all sorts of difficulties and challenges to get to where it is today,” Xi said, according to state media. 

“In the past, [China] did not collapse because of a ‘China collapse theory,’ and it will also not peak now because of a ‘China peak theory,'” he said. 

Stephen Schwarzman, co-founder and CEO of private equity firm Blackstone, Raj Subramaniam, head of American delivery giant FedEx, and Cristiano Amon, the boss of chips manufacturer Qualcomm, were part of the around 20-strong all-male U.S. contingent.  

The audience with Xi — organized by the National Committee on U.S.-China Relations, the U.S.-China Business Council and the Asia Society think tank — lasted around 90 minutes, according to a person with direct knowledge of the matter. 

The source, who declined to be named as they were not authorized to speak to the media, had no immediate comment on what was discussed. The National Committee on U.S.-China Relations and Asia Society did not immediately respond to requests for comment on the meeting. 

A statement from U.S.-China Business Council said the participants “stressed the importance of rebalancing China’s economy by increasing consumption there and encouraging the government to further address longstanding concerns with cross border data flows, government procurement, intellectual property rights, and improved regulatory transparency and predictability.” 

The U.S. and China are gradually resuming engagements after relations between the two economic superpowers sank to their lowest in years due to clashes over trade policies, the future of democratically ruled Taiwan and territorial claims in the South China Sea. 
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Categories: Економіка, Новини

Iran’s Currency Hits Record Low

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Tehran — Iran’s currency fell to a record low on Sunday, plunging to 613,500 to the dollar, as its people celebrated the Persian New Year. 

On Sunday, people were trying to exchange rials for foreign currency at Tehran’s main hub of exchange shops in Ferdowsi Street, but most were closed due to the Nowruz holidays, which are run from March 20 to April 2. 

Mohsen, a 32-year-old employee at one of the exchange shops, said the holiday was contributing to the low prices, “The price is not real, the demand for purchasing dollars is very high, but there are just a few exchange shops open.” He and other Iranians spoke on condition their last names not be used, because of potential repercussions for speaking to foreign media about the country’s economic struggles. 

The two-week holiday is an opportunity to travel abroad, driving demand for U.S. dollars and Euros. 

Mojtaba, a 49-year-old father, was shocked: “The rial fell 5% compared to the last six days, while the whole country is on vacation!” 

Niloufar, 28-year-old wife and her husband Behzad, 30, said that they’d booked a weeklong tour of Turkey at a discount rate, but were now looking at spending as much as full-price tour. 

The exchange rate strongly affects other markets, including housing and rentals. 

The price was 590,000 to the dollar on March 18, the last workday before the holiday. 

Many Iranians have seen their life savings evaporate as the local currency has depreciated. Today, it’s worth about one-twentieth as much as it was in 2015, when Iran signed a nuclear accord with world powers. 

Since then, it’s fallen from 32,000 rials to the dollar to the hundreds of thousands. In February 2023, it briefly reached a nadir of 600,000 reals to the dollar, and since then has not risen above 439,000. 

The government’s Statistics Center put the country’s inflation rate for Feb. 2024 at 42.5%, while Central Bank said it was more than 46%. There is no explanation for the discrepancy. 

Iran’s relations with the west have been at exceptional lows since then-U.S. President Donald Trump abandoned a deal that called for the country to end its nuclear program in return for access to frozen funds and other benefits. President Joe Biden said he was willing to re-enter a nuclear deal with Iran, but formal talks to try to find a roadmap to restart the deal collapsed in August 2022. In the meantime, tensions in the Middle East have increased significantly, making nuclear diplomacy with Iran more complicated. Iran has further angered Western countries by supplying armed drones to Russia that have been used in its invasion of Ukraine. 

Dire economic conditions have contributed to widespread anger at the government in the past, but have also forced many Iranians to focus on putting food on the table rather than engaging in high-risk political activism amid a fierce crackdown on dissent. 

The rial’s record low came less than a month after a parliamentary election that saw the lowest turnout since the 1979 Islamic Revolution, whose results were dominated by hard-line politicians. 

Hard-liners have controlled the parliament for the past two decades — with chants of “Death to America” often heard during its sessions.
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Categories: Економіка, Новини

Reddit, the Self-Anointed ‘Front Page of the Internet,’ Jumps 55% in Wall Street Debut

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NEW YORK — Reddit soared in its Wall Street debut as investors pushed the valued of the company close to $9 billion seconds after it began trading on the New York Stock Exchange.

Reddit, which priced its IPO at $34 a share, debuted Thursday afternoon at $47 a share. The going price has climbed even higher since, with shares for the self-anointed “front page of the internet” soaring more than 55% as of around 1:20 p.m. ET.

The IPO will test the quirky company’s ability to overcome a nearly 20-year history colored by uninterrupted losses, management turmoil and occasional user backlashes to build a sustainable business.

“The supply is pretty limited and there’s strong demand, so my sense is that this is going to be a hot IPO,” Reena Aggarwal, director of Georgetown University’s Psaros Center for Financial Markets and Policy, said ahead of Reddit’s trading Thursday. “The good news for Reddit is it’s a hot market.”

Still, she also anticipates Reddit’s IPO to be volatile. Even with a sizeable “pop,” it’s possible that some might sell their shares to reap their gains soon after, potentially causing prices to drift.

The interest surrounding Reddit stems largely from a large audience that religiously visits the service to discuss a potpourri of subjects that range from silly memes to existential worries, as well as get recommendations from like-minded people.

About 76 million users checked into one of Reddit’s roughly 100,000 communities in December, according to the regulatory disclosures required before the San Francisco company goes public. Reddit set aside up to 1.76 million of 15.3 million shares being offered in the IPO for users of its service.

Per the usual IPO custom, the remaining shares are expected to be bought primarily by mutual funds and other institutional investors betting Reddit is ready for prime time in finance.

Reddit’s moneymaking potential also has attracted some prominent supporters, including OpenAI CEO Sam Altman, who accumulated a stake as an early investor that has made him one of the company’s biggest shareholders. Altman owns 12.2 million shares of Reddit stock, according to the company’s IPO disclosures.

Other early investors in Reddit have included PayPal co-founder Peter Thiel, Academy Award-winning actor Jared Leto and rapper Snoop Dogg. None of them are listed among Reddit’s largest shareholders heading into the IPO.

By the tech industry’s standards, Reddit remains extraordinarily small for a company that has been around as long as it has.

Reddit has never profited from its broad reach while piling up cumulative losses of $717 million. That number has swollen from cumulative losses of $467 million in December 2021 when the company first filed papers to go public before aborting that attempt.

In the recent documents filed for its revived IPO, Reddit attributed the losses to a fairly recent focus on finding new ways to boost revenue.

Not long after it was born, Reddit was sold to magazine publisher Conde Nast for $10 million in deal that meant the company didn’t need to run as a standalone business. Even after Conde Nast parent Advance Magazine Publishers spun off Reddit in 2011, the company said in its IPO filing that it didn’t begin to focus on generating revenue until 2018.

Those efforts, mostly centered around selling ads, have helped the social platform increase its annual revenue from $229 million in 2020 to $804 million last year. But the San Francisco-based company also posted combined losses of $436 million from 2020 through 2023.

Reddit outlined a strategy in its filing calling for even more ad sales on a service that it believes companies will be a powerful marketing magnet because so many people search for product recommendations there.

The company also is hoping to bring in more money by licensing access to its content in deals similar to the $60 million that Google recently struck to help train its artificial intelligence models. That ambition, though, faced an almost immediate challenge when the U.S. Federal Trade Commission opened an inquiry into the arrangement.

Since Thursday just marks Reddit’s first day on the public market, Aggarwal stresses that the first key measure of success will boil down to the company’s next earnings call.

“As a public company now they have to report a lot more … in the next earnings release,” she said. “I’m sure the market will watch that carefully.”

Reddit also experienced tumultuous bouts of instability in leadership that may scare off prospective investors. Company co-founders Steve Huffman and Alexis Ohanian — also the husband of tennis superstar Serena Williams — both left Reddit in 2009 while Conde Nast was still in control, only to return years later.

Huffman, 40, is now CEO, but how he got the job serves as a reminder of how messy things can get at Reddit. The change in command occurred in 2015 after Ellen Pao resigned as CEO amid a nasty user backlash to the banning of several communities and the firing of Reddit’s talent director. Even though Ohanian said he was primarily responsible for the firing and the bans, Pao was hit with most of the vitriol.

Although his founder’s letter leading up to this IPO didn’t mention it, Huffman touched upon the company’s past turmoil in another missive included in a December 2021 filing attempt that was subsequently canceled.

“We lived these challenges publicly and have the scars, learnings, and policy updates to prove it,” Huffman wrote in 2021. “Our history influences our future. There will undoubtedly be more challenges to come.”
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Categories: Економіка, Новини

Biden to Tout Government Investing $8.5 Billion in Intel’s Computer Chip Plants in Four States  

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Washington — The Biden administration has reached an agreement to provide Intel with up to $8.5 billion in direct funding and $11 billion in loans for computer chip plants in Arizona, Ohio, New Mexico and Oregon. 

President Joe Biden plans to talk up the investment on Wednesday as he visits Intel’s campus in Chandler, Arizona, which could be a decisive swing state in November’s election. He has often said that not enough voters know about his economic policies and suggested that more would support him if they did know. 

Commerce Secretary Gina Raimondo said the deal reached through her department would put the United States in a position to produce 20% of the world’s most advanced chips by 2030, up from the current level of zero. The United States designs advanced chips, but its inability to make them domestically has emerged as a national security and economic risk. 

“Failure is not an option — leading-edge chips are the core of our innovation system, especially when it comes to advances in artificial intelligence and our military systems,” Raimondo said on a call with reporters. “We can’t just design chips. We have to make them in America.”

The funding announcement comes amid the heat of the 2024 presidential campaign. Biden has been telling voters that his policies have led to a resurgence in U.S. manufacturing and job growth. His message is a direct challenge to former President Donald Trump, the presumptive Republican nominee, who raised tariffs while in the White House and wants to do so again on the promise of protecting U.S. factory jobs from China. 

Biden narrowly beat Trump in Arizona in 2020 by a margin of 49.4% to 49.1%. 

U.S. adults have dim views of Biden’s economic leadership, with just 34% approving, according to a February poll by The Associated Press-NORC Center for Public Affairs. The lingering impact of inflation hitting a four-decade high in 2022 has hurt the Democrat, who had a 52% approval on the economy in July 2021. 

Intel’s projects would be funded in part through the bipartisan 2022 CHIPS and Science Act, which the Biden administration helped shepherd through Congress at a time of concerns after the pandemic that the loss of access to chips made in Asia could plunge the U.S. economy into recession.  

When pushing for the investment, lawmakers expressed concern about efforts by China to control Taiwan, which accounts for more than 90% of advanced computer chip production. 

Ohio Sen. Sherrod Brown, a Democrat up for reelection this year, stressed that his state would become “a global leader in semiconductor manufacturing” as Intel would be generating thousands of jobs. Ohio has voted for Trump in the past two presidential elections, and Brown in November will face Republican Bernie Moreno, a Trump-backed businessman from Cleveland. 

Wednesday’s announcement is the fourth and largest so far under the chips law, with the government support expected to help enable Intel to make $100 billion in capital investments over five years. About 25% of that total would involve building and land, while roughly 70% would go to equipment, said Pat Gelsinger, CEO of Intel. 

“We think of this as a defining moment for the United States, the semiconductor industry and for Intel,” said Gelsinger, who called the CHIPS Act “the most critical industrial policy legislation since World War II.” 

The Intel CEO said on a call with reporters that he would like to see a sequel to the 2022 law in order to provide additional funding for the industry. 

Biden administration officials say that computer chip companies would not be investing domestically at their expected scale without the government support. Intel funding would lead to a combined 30,000 manufacturing and construction jobs. The company also plans to claim tax credits from the Treasury Department worth up to 25% on qualified investments. 

The Santa Clara, California-based company will use the funding in four different states. In Chandler, Arizona, the money will help to build two new chip plants and modernize an existing one. The funding will establish two advanced plants in New Albany, Ohio, which is just outside the state capital of Columbus. 

The company will also turn two of its plants in Rio Rancho, New Mexico into advanced packaging facilities. And Intel will also modernize facilities in Hillsboro, Oregon. 

The Biden administration has also made workforce training and access to affordable childcare a priority in agreements to support companies. Under the agreement with the Commerce Department, Intel will commit to local training programs as well as increase the reimbursement amount for its childcare program, among other efforts. 
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