Capital Crackdown: Companies Face Delays Getting Cash Out of China

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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.

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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.

Calls to the People’s Bank of China weren’t returned. Read the rest of this entry »


Say Goodbye to the Humvee

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.

[Read the full story here, at VICE News]

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 »


Championship Socialism: Hillary Clinton to Propose ‘Behavior Modification’ Taxation

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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’.

Laura Meckler writes: Hillary Clinton will propose a sharp increase in the capital-gains tax rate for the highest earners for investments held only a few years, a campaign official said Friday.

[Also see – Hillary’s Inconceivably Stupid Capital-Gains Tax Scheme by Larry Kudlow at National Review Online]

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.

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.

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Democratic Presidential candidate and former U.S. Secretary of State Hillary Clinton speaks during a forum at Greenville Technical College Thursday in Greenville, S.C. Photo: Agence France-Presse/Getty Images

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.

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.”

[Read the full story here, at WSJ]

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 »


Ready for Increased Costs and Decreased Access? 2015: Obamacare’s Supporters Prepare To Get Care, They’ll Get It Good & Hard

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 writes: Obamacare was designed such that its most harmful provisions would not be implemented until after the President had been returned to office for a second term and his Democrat accomplices had been reelected to their congressional seats. Fortunately for the nation, the latter part of that strategy was a spectacular failure. Nonetheless, it did provide the public with a temporary reprieve from the health care law’s most painful exactions. That brief respite is now at an end. This year, you will begin to experience the realities of “reform” first hand and you are not going to like how it feels.

“But your premiums are just the start. The real pain will come when you need medical services. Your new plan probably has a far higher deductible and co-pay requirement than your old one. Consequently, when you see a doctor or have a test performed, you’ll have to pay the entire cost.”

In fact, you are probably already feeling the first twinges without recognizing that their source is Obamacare. If you are among the 150 million Americans who get health insurance through their employers, for example, chances are that the coverage your company offered for 2015 has much higher premiums than did last year’s plan. The President and his toad eaters in the legacy media will do their best to convince you that these increases are caused by insurance company avarice, but this is merely another lie they are peddling in the hope that they can save Obama’s “signature domestic achievement.”

“This need to pay for such services out-of-pocket despite being insured, according to USA Today, is already causing people to forego care.”

The actual cause was the looming employer mandate and other Obamacare regulations that took effect January 1. The mandate and accompanying red tape dramatically increase the cost of employee health insurance for companies with 100 or more full-time-equivalent workers. It requires all such firms to offer “minimum essential” coverage to 70 percent of their full-time employees or pay huge fines. These PPACA-mandated benefits are expensive, and very few small-to-medium sized employers can unilaterally absorb the costs of such “essential” coverage. So you get to share the pain. Read the rest of this entry »


David French on Hobby Lobby: ‘The Left Is Weeping Hot, Bitter Tears, and It Should’

Indulgent Pulp Fiction Propaganda disguised as prestigious literature: Left-Wing Paranoia Peddling Author Margaret Atwood in a Twist

Margaret Atwood with a Twist: Margaret Atwood is the author of “Handmaiden’s Tale”: Deliciously Fun Third-Rate Trashy Left-Wing Paranoid Pulp Fiction. Hailed by Critics as Prestigious, Important Literature.

“For some time, the Left has been selling the public and the courts on the notion that somehow the act of forming a corporation and opening for business operates as an effective waiver of your most basic liberties…”

For National Review OnlineDavid French nails it:

 [Read the whole thing here]

Andrew’s and Molly’s post reflecting the hysterical reaction on the Left to the Hobby Lobby decision makes for both entertaining and instructive reading. It’s entertaining because — regarding the issue they claim to care most about, access to contraceptives — the decision blocks exactly no one from obtaining the drugs they choose to purchase. There’s just slightly less free stuff on the market. This is hardly Handmaid’s Tale territory.

It’s instructive because it demonstrates the extent to which the Left is emotionally and ideologically committed to the power of the regulatory state. For some time, the Left has been selling the public and the courts on the notion that somehow the act of forming a corporation and opening for business operates as an effective waiver of your most basic liberties, including free speech, free exercise of religion, and virtually the entire panoply of property rights. In effect, your business is not “your” business at all, but instead all aspects of its operations exist at the whim of the state, and if the state wants to draft you into its child-killing abortion crusade — or wants to muzzle you during political campaigns – then you best salute and fall in line. 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?

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

This man thinks "Rights "need to be reexamined.

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.

Read the rest of this entry »