New regulations aimed at slowing the yuan’s decline create confusion for multinationals.
French construction-materials company Cie. de Saint-Gobain SA, is finding it harder to take its money out of China.
“The process of authorization is going to become longer now. The procedures will be controlled more strictly.”
— Javier Gimeno, head of Saint-Gobain’s China operations
The conglomerate—like all multinationals operating there—faces new delays in recent weeks as Chinese regulators impose tougher restrictions on the movement of capital out of the country to slow the yuan’s decline.
“The process of authorization is going to become longer now,” said Javier Gimeno, who heads Saint-Gobain’s China operations. “The procedures will be controlled more strictly.”
Nearly 7% of Saint-Gobain’s world-wide group sales come from Asia and Oceania, a large part of that from China. The new rules are adding confusion and anxiety to a process that had been getting much easier over the past year, he said. The shift could cause some multinationals to rethink future investments in a country where once-sure payoffs are suddenly facing an uncertain return, analysts say.
As of late November, firms that want to exchange yuan into dollars in China now need approval for any transaction greater than $5 million. They also face tighter limits on amounts they can transfer in and out of bank accounts in China to affiliates in other countries, in a practice known as “cross-border sweeping.”
“We hear a lot questions from corporates about whether they will be able to repatriate their money in the future,” said Alexander Tietze, managing director at Acon Actienbank AG, a German bank that advises companies on Chinese investments. He expects foreign investments in China to slow, and cautioned that foreign takeovers or plans for new joint ventures could fail because of the controls.
With the Chinese economy struggling, multinationals have fewer opportunities to reinvest there, which makes it more difficult for them to do much with money trapped in China.
“A majority of clients are currently consolidating and restructuring their China business,” said Bernd-Uwe Stucken, a lawyer with Pinsent Masons LLP in Shanghai. Some clients are closing down their business, with new investments being the exception to the rule, Mr. Stucken said.
Adding to the confusion: it is unclear where the limits are, because regulators haven’t published official rule changes, but instead have given only informal guidance to banks, according to Daniel Blumen, partner at Treasury Alliance Group, a consulting firm.
The new offering provides underbody and side-armor protection similar to a tank’s, but retains the on-ground and in-theater mobility of an all-terrain vehicle.
Matt Yurus reports: This week marks the beginning of the end for the Humvee.
That’s because the US Army chose Oshkosh Defense to manufacture about 55,000 joint light tactical vehicles (JLTVs) that will become the successors to Humvees and mine-resistant, ambush-protected vehicles (MRAPs). The initial contract awarded to Oshkosh on Tuesday is for $6.7 billion and 17,000 vehicles. The total contract, valued at up to $30 billion, could provide the Wisconsin-based company with work through 2040.
“The Humvee has since accompanied troops in Panama, the Persian Gulf, Bosnia, Iraq, Afghanistan, and elsewhere. But now the mainstay military vehicles are being sold off by the dozen, with the bidding starting at $7,500.”
The new offering provides underbody and side-armor protection similar to a tank’s, but retains the on-ground and in-theater mobility of an all-terrain vehicle. The vehicle’s reduced weight allows it to be transported by Chinook helicopters and amphibious vessels, a feat that was largely impossible with MRAPs.
Thousands of MRAPs were purchased in response to the traditional Humvees’ failures to sufficiently protect troops from the widespread use of improvised explosive devices (IEDs) by Iraqi insurgents in the mid-2000s. It was not unusual for soldiers to stack sandbags on the floors of the vehicles for added protection — and still have to contend with canvas for doors. The introduction of the MRAP solved the protection problem, though it came at the expense of battlefield mobility.
Watch VICE News’ ‘Rearming Iraq: The New Arms Race.’
“Our JLTV has been extensively tested and is proven to provide the ballistic protection of a light tank, the underbody protection of an MRAP-class vehicle, and the off-road mobility of a Baja racer,” John M. Urias, president of Oshkosh Defense, said in a statement. Read the rest of this entry »
Doubling Capital Gains Tax Rate on Short-Term Investments: Campaign officials have said that their goal is not to address income inequality or to raise money for the federal treasury, but to ‘change investor behavior’.
Under the Clinton plan, investments held between one and two years would be taxed at the normal income-tax rate of 39.6%, nearly double the existing 20% capital gains rate. Neither figure counts an extra 3.8% tax on net investment income included as part of the health-care law, a campaign official said.
MSM handling bad news about Hillary like… pic.twitter.com/Wqj7CCoJXY
— Matt (@Matthops82) July 24, 2015
The campaign isn’t proposing any changes to the capital gains rate for lower-income taxpayers. The change would affect top-bracket single filers with taxable income above $413,201 and married couples filing jointly with taxable income above $484,850.
The rate for top-bracket taxpayers would be set on a sliding scale, with the lowest rate applied to investments held the longest. To qualify for the existing 20% rate, one would have to hold an investment for at least six years.
Mrs. Clinton will lay out the plan in a speech Friday in New York City, where she plans to spotlight what she sees as unhealthy corporate efforts to boost stock prices. She will argue that a focus on short-term results is undercutting longer-term economic growth and hurting American workers.
Capital gains recap, since 1997: Bill: CUT 28% to 20% W: CUT 20% to 15% O: HIKE 15% to 23.8% Hillary (proposed): HIKE 23.8% to 43.4%
— Phil Kerpen (@kerpen) July 24, 2015
Mrs. Clinton will also endorse a $15 per hour minimum wage proposal for fast-food workers in New York, a campaign official said. Asked about this on Thursday, she hedged as to whether the minimum wage should be that high nationally but said certain cities can justify higher minimums. “I do recognize that the cost of living in Little Rock is different than the cost of living in Manhattan,” she told reporters. Asked if $15 per hour is justified in New York, she said, “That’s up to local leaders in New York. They certainly believe it is.”
The campaign said she would also call for greater disclosure of stock buybacks by companies, saying that while they may give a quick lift to stock prices, they often come at the expense of research and development spending. She will also call for a review of securities rules related to shareholder activism and rules governing tax treatment of executive compensation. Read the rest of this entry »
Althouse: Did You Know Theres a “Corporate Consumption Complex” Conspiring to Make Us Think We Have a “Right” to Do Dangerous Things?Posted: February 27, 2014
That’s what Nicholas Freudenberg says in “Lethal But Legal: Corporations, Consumption, and Protecting Public Health,” and Mark Bittman is writing about it in the NYT today:
It sounds creepy; it is creepy. But it’s also plain to see. Yes, it’s unlikely there’s a cabal that sits down and asks, “How can we kill more kids tomorrow?” But Freudenberg details how six industries — food and beverage, tobacco, alcohol, firearms, pharmaceutical and automotive — use pretty much the same playbook to defend the sales of health-threatening products….
There is no “playbook.” It’s just as if there were a playbook, because the 6 industries are all doing the same thing, which is simply the obvious thing: They don’t put their promotional resources into reminding you
how their products could cause harm. Except to the extent that they do. I’ve seen liquor ads that tell you not to drink too much, and liquor ads don’t show people overindulging or even seeming tipsy. Ads for foods and drinks show slim models, which subliminally urges us to keep slim. Gun ads don’t scare us with the not-unknown news that these things could kill you, but gun companies promote gun safety — maybe not the gun safety policy some NYT readers prefer (i.e., no guns) — but safety features on guns and safe gun use. Car companies build safety features into their products and call attention to them in their ads.
But I notice the care Bittman took in the phrase “to defend the sales of health-threatening products.” The companies still want to sell their products, and if anyone threatens their sales, they go to an argument about the consumers’ role in choosing which products to buy, and that argument takes the form of “rights” talk:
All of these industries work hard to defend our “right” — to smoke, feed our children junk, carry handguns and so on — as matters of choice, freedom and responsibility. Their unified line is that anything that restricts those “rights” is un-American.
And that is the way we talk in America. We think we have rights, and we get stirred up when anyone seems to mobilize to take them away. It’s not surprising that successful marketers know what pitch works on us. There doesn’t need to be a playbook, but if you want to imagine an American playbook, that playbook is about freedom from constraints; it’s about personal autonomy over the choices that affect our lives and, especially, our bodies.