China’s trade surplus surges to new heights.
The country’s trade surplus broke records for December and for all of last year, as the pandemic continued to generate demand for its goods.
Caterpillar construction vehicles ready for export in Yantai, in China’s Shandong Province.Credit…CHINATOPIX, via Associated Press
All over the world, families finding themselves with more time at home because of the pandemic have responded by buying more furnishings, consumer electronics and other goods made in China.
Those purchases pushed China’s trade surplus to its highest level ever last year, according to data released on Friday by the Chinese government. The country’s surplus in December also shattered by a wide margin the record for the highest single month, set only two months earlier.
China’s trade surplus reached $94.5 billion in December, breaking the previous record of $84.5 billion, set in October. The country’s trade surplus for all of last year climbed to $676.2 billion.
China has carefully managed its trade in recent years. Xi Jinping, the country’s leader, has called for China to become more self-reliant and avoid dependence on imports.
Beijing has particularly focused on developing globally competitive manufacturing industries while importing mostly raw materials, so as to create as many well-paid jobs as possible within China’s borders. The government has also focused during the pandemic on helping Chinese companies become more competitive, while avoiding subsidies for consumers.
By contrast, governments in the West have put more emphasis on providing direct subsidies to consumers, who have used part of the money to buy more manufactured goods from China.
Chinese officials on Friday applauded the latest trade data, saying that it fulfilled the country’s goals. “In general, the 14th Five-Year Plan foreign trade has achieved a good start,” Li Kuiwen, the director of the Statistics and Analysis Department of China’s General Administration of Customs, said at a news conference in Beijing.
At the same time, a widening trade deficit with China has become a serious drag on growth in the United States and the European Union and has become a source of political friction.
Nearly half of China’s trade surplus in December was with the United States. The bilateral imbalance in December was $39.2 billion, slightly trailing the previous record of $42 billion, set in September.
President Donald J. Trump concluded a Phase 1 trade agreement in January 2020 that called for a sharp increase in China’s imports from the United States in 2020 and 2021, followed by further increases from 2022 through 2025. China fell short of the promised increases in the first two years of the agreement. Chinese experts have said that the pandemic interfered with normal trade flows.
China will not release until Monday its full-year statistics on total economic output. But estimates by Western economists, based on data through November, indicate that the widening of the trade surplus is now the main engine keeping China’s economy going, as real estate and other sectors falter.
JPMorgan Chase closed out a bumper year that yielded a record $48.3 billion in profit in 2021, while reporting strong quarterly earnings as its investment bankers raised money for companies and arranged corporate deals.
The bank, the country’s largest by assets, reported flat revenue compared with the final quarter of 2020, although profit fell 14 percent to $10.4 billion in the three-month period ending in December. Even so, its earnings of $3.33 a share surpassed analysts’ expectations. Much of the decline from last year was a result of the bank raising pay and spending more on technology, according to its earnings statement.
“The economy continues to do quite well despite headwinds related to the Omicron variant, inflation and supply chain bottlenecks,” Jamie Dimon, JPMorgan’s chief executive, said Friday in the company’s fourth-quarter earnings report. “We remain optimistic on U.S. economic growth as business sentiment is upbeat and consumers are benefiting from job and wage growth.”
Investment bankers capped a blockbuster year with a 37 percent jump in fees, while revenue for the banking unit surged 28 percent to $5.3 billion. The company’s asset and wealth management division also benefited from higher management fees and growth in deposits and loans.
But there were some laggards. In the bank’s consumer division catering to Main Street customers, profit fell 2 percent to $4.2 billion. Revenue from trading fell 11 percent from a record fourth quarter a year ago, to $5.3 billion, but was still up compared with the same period in 2019.
Two other major U.S. banks, Citigroup and Wells Fargo, also report results on Friday. Three others — Bank of America, Goldman Sachs and Morgan Stanley — report next week.
Citigroup’s unvaccinated staff members in the United States have rushed to get shots — or request exemptions — just before its coronavirus vaccination requirement kicks in.
The bank reached 99 percent compliance with its mandate before a Friday deadline, Sara Wechter, the bank’s head of human resources, wrote on LinkedIn on Thursday. That was up from 90 percent on Jan. 7, according to a person familiar with the policies who spoke on condition of anonymity to discuss personnel matters.
The figures excluded branch workers who had been given more time to comply, employees who received medical or religious accommodations and those who live in states that do not permit vaccine mandates.
“Going into the last day, we expect the number of employees who have not complied will decrease even further,” Ms. Wechter wrote.
Citigroup announced earlier this month that unvaccinated employees would lose their jobs by the end of the month. and some may not receive year-end bonuses unless they sign documents agreeing not to sue the company, according to the person familiar with the policies.
The bank has been more assertive than its Wall Street peers on the thorny issue of vaccines. The Supreme Court on Thursday blocked the Biden administration from enforcing a vaccine-or-testing mandate for large employers, dealing a blow to a key element of the White House’s plan to address the pandemic as virus cases surge.
Google said Friday that it would spend $1 billion to purchase a London office building, making it the owner of another high-priced piece of real estate as the internet giant bets on an eventual return to office for its employees around the world.
The company said it would buy a building in London’s West End where it had already been leasing office space. The purchase is on top of another $1 billion that Google is estimated to be spending to construct an 11-story, one-million-square-foot building less than two miles away that looks like a horizontal skyscraper and will have a rooftop garden and running track.
The purchases in London, one of the world’s most expensive cities for real estate, will give Google the capacity to hold up to 10,000 employees across Britain.
The world’s largest tech companies have used flush balance sheets to become major buyers of global real estate. In September, Google announced it would spend $2.1 billion on a Manhattan office building. Apple, Meta and Amazon have also been buying up property in the United States and abroad.
Google said the purchase of the London office is part of a broader vision for a “flexible workplace,” where people can work from home and spend a few days per week in the office.
The investment, Google said in a blog post, “represents our continued confidence in the office as a place for in-person collaboration and connection.”
In November, the month before Omicron swept through Britain, the nation’s economy reached a milestone: It surpassed its prepandemic size for the first time.
Gross domestic product increased 0.9 percent in November from the month before, according to the Office for National Statistics, with the construction and manufacturing sectors returning to growth as some businesses were less disrupted by supply shortages. Wholesale and retail businesses were also important contributors.
And so, the economy was 0.7 percent larger than it was in February 2020, before the pandemic plunged Britain into a deep recession.
If the economy does not shrink by more than 0.2 percent in December, and there are not more data revisions, then the quarterly G.D.P. for the last three months of the year, the more conventional statistic, will also surpass its prepandemic levels, the statistics office said.
But the British economy is expected to take a hit in December. Omicron pushed coronavirus cases to record highs, the government instructed people to work from home, restaurants and bars faced mass cancellations, staff shortages were rampant and the Treasury had to revive some pandemic financial support for businesses.
In December, the Bank of England cut its growth forecast for the fourth quarter by half a percent, which would leave the economy 1.5 percent smaller than its prepandemic size. The central bank added that measures from the government and voluntary social distancing would weigh on the economy in the first quarter.
Although the daily number of Covid cases is falling again in Britain, the economy faces other hurdles in the next few months. Households face a notable increase in the cost of living as inflation is expected to peak at about 6 percent in the spring, energy bills are set to rise significantly and tax increases are looming.
“Omicron looks set to fade almost as quickly as it arrived, thanks partly to the rapid rollout of booster jabs,” Samuel Tombs, an economist at Pantheon Macroeconomics, wrote in a note to clients. He said he expected economic output to bounce back in February.
But growth from the middle of the year “likely will be sluggish, as households’ real incomes are squeezed by high inflation and taxes, and exports remain constrained by Brexit,” he added.
Shares of the French state-controlled utility ?lectricit? de France fell by as much as 24 percent on Friday after the government announced measures to protect retail customers from energy price rises. The company estimated that the impact of these measures on its financial performance could be as much as 8.4 billion euros ($9.6 billion). The company also announced that the shutdowns of five nuclear plants to fix defects would be extended.
Germany’s economy weathered supply chain shortages and delivery bottlenecks to expand by 2.7 percent last year, the country’s statistics office said Friday, but a weak final three months could foreshadow a decline in the near term, analysts warned. Overall growth in gross national product in 2021 was more than expected, but output remained 2 percent lower than in 2019, before the pandemic. Despite the lack of hard data for December, analysts cautioned that a resurgence of Covid infections along with fresh restrictions on shopping and entertainment pointed to the start of a possible recession at the end of the year, with the economy not picking up again until the second quarter of 2022.
President Biden plans to nominate three new Federal Reserve officials as he seeks to remake the central bank at a critical economic moment, a White House official familiar with the matter said on Thursday.
If confirmed, his picks would result in the most diverse Fed board in the institution’s history, Jeanna Smialek reports for The New York Times.
The White House plans to nominate Lisa Cook, an economist at Michigan State University who has researched racial disparities and labor markets, and Philip Jefferson, an economist and administrator at Davidson College, to open seats on the Fed’s Board of Governors. Both Ms. Cook and Mr. Jefferson are Black.
Mr. Biden will also nominate Sarah Bloom Raskin to serve as the Fed’s vice chair for supervision, a job created to help police the nation’s largest banks after the 2008 financial crisis.
Mr. Biden had previously nominated Jerome H. Powell for a second stint as Fed chair and Lael Brainard, now a governor, as vice chair of the central bank. If they are confirmed to their posts, the seven-person Fed board would have four women, one Black man and two white men — the most diverse team in the Fed’s roughly 108 years of existence.
The administration had promised to make the Fed — historically dominated by white men — look more like the public it served, and prominent lawmakers have pushed for a focus on tougher financial regulation. The picks seek to deliver along those dimensions. READ THE FULL ARTICLE ->
A requirement that large companies mandate vaccines or weekly testing for workers was blocked by the Supreme Court on Thursday, leaving the often fraught choice up to employers.
Parts of the rule, which the Occupational Safety and Health Administration issued in November, had been scheduled to take effect on Monday.
Vaccine mandates have been a controversial approach to battling the pandemic. United Airlines and Tyson Foods are among the major companies that already have such requirements, but many others are waiting for legal battles to be resolved.
Walmart, Amazon and JPMorgan Chase, three of the largest private employers in the United States, have yet to issue broad requirements for their staff. A spokesman for Macy’s, which began to request the vaccination status of its employees this month, said the retailer was “evaluating this late breaking development.”
Some companies with vaccine mandates said keeping those policies might become more difficult in light of the Supreme Court’s ruling.
Franz Spielvogel, who owns Laughing Planet, a chain of fast casual restaurants with more than 200 employees, required his employees to be fully vaccinated or submit to weekly testing by mid-January and does not plan to change that rule. But the Supreme Court’s decision frustrated him, he said, because he no longer has federal cover to justify his policy.
“It turns into a bit of a head scratcher for us,” Mr. Spielvogel said, though the recent surge of Covid-19 cases has made him feel more strongly about the need for a mandate. “As a business owner and as an employer and as someone dealing with the public, I want my customers to know they’re walking into a safe place.”
In a November poll of 543 companies by the consulting firm Willis Towers Watson, 57 percent said they either required or planned to require Covid-19 vaccinations. That included 32 percent that planned to mandate vaccines only if the OSHA rule takes effect. Seven percent said they planned to carry it out regardless of the outcome. A little more than 70 percent of the adult U.S. population is fully vaccinated.
“Our recent survey suggests that many more employers would have pursued vaccine mandates if the rule was left in place,” Dr. Jeffrey Levin-Scherz, who leads the consulting firm’s clinical response to the coronavirus, said in a statement.
Some companies have been concerned about losing employees when workers are already scarce, and although firms with mandates have said those concerns have largely not come to fruition, a national requirement could have further eased those concerns.
The National Retail Federation, which was one of several trade groups to sue the administration over the mandate, called the Supreme Court’s action a “significant victory for employers.” The organization said it “urges the Biden administration to discard this unlawful mandate and instead work with employers, employees and public health experts on practical ways to increase vaccination rates and mitigate the spread of the virus in 2022.”
Companies have been preparing for months for the mandate, and many may still go forward with their policies, said Douglas Brayley, an employment lawyer at Ropes & Gray. He noted that the Supreme Court did not say anything against employer vaccination mandates.
Some local and state laws still require employers to mandate vaccines or weekly testing. New York City, for example, has a more stringent rule than the federal government’s, requiring all on-site workers to be vaccinated. The Supreme Court has repeatedly upheld state vaccine mandates, and it did not limit the ability of employers to create their own requirements.
But other states have laws blocking mask and vaccine mandates, which the federal rule would have pre-empted. With the Biden administration’s rule blocked, many employers in those states will be unable to require vaccines, said David Michaels, an epidemiologist and a professor at George Washington University and a former OSHA administrator.
“This decision will be an excuse for those employers who care less about their employees to return to business as usual,” Dr. Michaels said. He added that the decision could exacerbate the divide between white-collar workers who can remain at home and workers who have to conduct business in person as Covid cases surge.
The Supreme Court’s decision, which described OSHA’s rule as “a blunt instrument,” left open the possibility that the agency could issue a revised rule that is targeted at certain types of workplaces or is more clearly within its purview, such as requiring improved ventilation and personal protective equipment, Dr. Michaels said. It could also follow a more traditional rule-making process rather than the emergency one it used, though that could take years.
In the meantime, the court’s ruling could encourage states and local governments to go forward with their own requirements. That could create further complications for national employers.
“Local jurisdictions are going to look more carefully at the OSHA mandate and determine whether to adopt something similar,” said Domenique Camacho Moran, a partner in the labor and employment practice at the law firm Farrell Fritz.
United Airlines said this week that while 3,000 of its employees had Covid-19, none of its vaccinated employees were currently hospitalized. Since its vaccine policy went into effect, the airline said, its employee hospitalization rate had dropped significantly below the rate for the U.S. population.
Dr. Megan Ranney, an emergency physician and the associate dean at Brown University’s School of Public Health, called the ruling a “tremendous blow” to national efforts to battle the pandemic.
“There is 30 percent of the movable adult population” that isn’t vaccinated for which a mandate may have made a difference, she said. “Now, the mandates are not going to be in place, and so I worry that those folks are going to continue to not get vaccinated — unless an awful lot of employers decide that this is in their best interest to put in place.”
Sapna Maheshwari contributed reporting.
Microsoft has selected a law firm to review its sexual harassment and gender discrimination policies, the company’s board announced on Thursday, after shareholders raised alarms about how Microsoft and Bill Gates, one of its founders, had treated employees, especially women.
The board said it had chosen Arent Fox, based in Washington, D.C. Microsoft said the firm had never done employment-related work for it in the past.
Shareholders passed a resolution during the company’s 2021 annual meeting to review the policies Microsoft has in place for its employees to protect them against abuse and unwanted sexual advances.
The resolution passed with support from almost 78 percent of Microsoft’s shareholders. It was the only of five proposals on ethical issues put forth by shareholders to succeed. Others, like a call for a report on race- and gender-based pay gaps at the company and a pledge to prohibit sales of facial recognition to government entities, failed.
“Microsoft is under intense public scrutiny due to numerous claims of sexual harassment and an alleged failure to address them adequately and transparently,” the text of the resolution said. “Reports of Bill Gates’s inappropriate relationships and sexual advances toward Microsoft employees have only exacerbated concerns, putting in question the culture set by top leadership and the board’s role holding those culpable accountable.”
Mr. Gates solicited at least two employees while he was running Microsoft, according to reports in The New York Times and The Wall Street Journal. In one incident, in 2007, Mr. Gates sat through a presentation by a Microsoft employee, then immediately emailed her to ask for a date. Microsoft leaders later warned Mr. Gates not to do things like that. In 2019, Microsoft’s board received a letter from an engineer claiming to have had a sexual relationship with Mr. Gates in 2000. A spokeswoman for Mr. Gates confirmed that the two had had an affair that “ended amicably.”
Satya Nadella, Microsoft’s chief executive, said in a statement on Thursday that workplace culture was Microsoft’s “No. 1 priority.”
“We’re committed not just to reviewing the report but learning from the assessment so we can continue to improve the experiences of our employees,” he said.
Karen Weise contributed reporting.