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OF THE MANY differences between Donald Trump and Joe Biden, perhaps the easiest to quantify has to do with tax policy. Mr Biden has long pledged to raise taxes on both the wealthy and companies. Mr Trump’s main legislative achievement from his presidency was a tax-cut package in 2017. Unsurprisingly, many corporate bosses prefer Mr Trump on taxes. The big economic question is whether they are being short-sighted and overlooking America’s fiscal health, which they also profess to care about.When Mr Trump was elected in 2016, net federal debt was about 75% of GDP. When he left office in 2021, it was 97% of GDP. The Congressional Budget Office (CBO) forecasts that it is on track to hit an eye-watering 181% three decades from now. At that level the government’s annual interest payments are expected to exceed its combined spending on national defence, education and highways. That raises the risk of a financial crisis—hardly an ideal environment for business.image: The EconomistCritics of Mr Trump point to the debt trajectory on his watch as evidence of fiscal mismanagement and warn he would make things worse if elected for a second term. Many of his tax cuts are set to expire at the end of 2025 (the individual-income-tax rate for the highest earners will revert to 39.6% from 37%, for instance). If Mr Trump returns to office, he will try to make the cuts permanent. The CBO estimates that this would add $350bn or so to the deficit annually over the next decade, equivalent to 1% of GDP (see chart).Yet this line of criticism misses two important points. First, the accumulation of debt under Mr Trump largely stemmed from the stimulus launched soon after covid-19 struck, which countered some of the economic drag from the pandemic. The comparison is unflattering for Mr Biden: he expanded the stimulus in 2021 when there was less need for extra fiscal support from the government, and this additional spending helped stoke inflation.Second, it is not enough to look at taxes alone. The interaction between taxation and growth lies at the heart of debt sustainability. “The overriding driver of our fiscal problems is that we don’t have enough growth,” says Stephen Moore, who helped design Mr Trump’s tax cuts in 2017. “We want to bring jobs and capital here, and yes, we can grow out of this.” Many economists dismiss such talk as hyperbole. After all, in the 2016 election, Mr Trump vowed that deregulation and tax cuts would unleash a torrent of economic growth; in reality America’s growth rate ticked up just slightly in the two years after his tax law went into effect, before covid erupted. But this extra activity did help to boost America’s fiscal revenues, offsetting some of the cost of the tax cuts. “Thinking you should tax away to a lower deficit is misleading,” says Tomas Philipson, an economic adviser in Mr Trump’s administration.Mr Biden’s approach offers a counterpoint. He has called for a range of tax increases, including raising the corporate rate from 21% to 28%. “That may be counterproductive,” says Erica York of the Tax Foundation, a think-tank. Ms York and her colleagues estimate that Mr Biden’s tax proposals would lower America’s debt-to-GDP ratio but also shrink the economy by 1.3%, whereas Mr Trump’s tax cuts would, if permanent, push up debts but expand long-run GDP by 1.2%. It is not a simple trade-off either way.A true clean-up of America’s finances would require reforms to big social programmes, especially income support for pensioners and state-provided medical insurance, which together account for nearly half of federal spending. Here, Mr Trump and Mr Biden look indistinguishable. Both are silent on serious changes to these programmes, because both are well aware how deeply unpopular any cuts would be. ■To stay on top of the biggest stories in business and technology, sign up to the Bottom Line, our weekly subscriber-only newsletter. More

“GO WOKE, GO broke,” intone Republicans fed up with socially aware American firms. But it is the politicians who are paying for their own ideological zeal. In 2000 and 2004 corporate political-action committees (PACs) gave them twice as much as they gave Democrats. After divvying up donations nearly evenly between the two parties in 2008 (perhaps thanks to a charismatic newcomer named Barack Obama), in 2012 and 2016 they favoured Republican candidates again, by a factor of nearly two to one. Company bosses, too, preferred conservatives. A paper in 2019 found that between 2000 and 2017 CEOs of firms in the S&P 1500 index directed two-thirds of their giving to the right.In the 2019-20 election cycle, by contrast, corporate PAC donations to Republicans fell by a quarter, compared with four years earlier. One explanation is that donors were unhappy with the party’s populist shift away from trade, immigration and international co-operation. After Mr Trump’s supporters stormed the Capitol on January 6th 2021, dozens of firms halted donations to Republican lawmakers who voted against certifying Joe Biden’s 2020 election win. According to Jeffrey Sonnenfeld of the Yale School of Management, more than three-quarters of these firms were still withholding such donations a year later.image: The EconomistPreliminary figures suggest this will be another disappointing year for Republican fundraisers. Data from the Federal Election Commission show that in the first 11 months of this presidential cycle Republicans got a third less from corporate PACs than in 2020 and half as much as in 2016 (see chart). Comcast, a cable operator, and Northrop Grumman, an armsmaker, have cut their cheques by a third since 2020. ExxonMobil, an oil giant, has halved donations. Top-spending trade groups, such as the National Beer Wholesalers Association and the National Association of Realtors, gave Republicans less than four years ago.The unspent money may not go to Democrats. According to End Citizens United, an advocacy group, 73 mostly Democratic congressmen have sworn off corporate PACs entirely, up from 56 five years ago. America Inc is always looking for friends in Washington. In the post-Trump era, it is finding itself alone. ■To stay on top of the biggest stories in business and technology, sign up to the Bottom Line, our weekly subscriber-only newsletter. More

China’s powerful internet regulator is conducting a security review of Shein.
The review squarely positions Shein as a Chinese company despite its many efforts to distance itself from the country where it was founded.
To move forward with its IPO, Shein will need the blessing of both Washington, D.C., and Beijing.

Clothes at the Shein headquarters in Singapore on June 19, 2023.
Ore Huiying | Bloomberg | Getty Images

China’s powerful internet regulator is conducting a security review of Shein as the fast-fashion giant gears up for its highly anticipated U.S. initial public offering, CNBC has learned. 
The Cyberspace Administration of China is reviewing Shein’s supply chain presence in the country, where the bulk of its manufacturers and suppliers are located, a person familiar with the matter told CNBC.

The review focuses on how Shein handles information about its employees, partners and suppliers in the region, The Wall Street Journal reported. The CAC is also examining whether Shein can ensure that data doesn’t get leaked overseas, according to the Journal. 
Shein didn’t respond to CNBC’s request for comment.
The review poses several issues for Shein, as it takes steps toward an IPO after it confidentially filed to go public in the U.S. in November, CNBC previously reported.
For one, it squarely positions Shein as a Chinese company — at least in the eyes of China — at a time when relations between Washington, D.C., and Beijing are increasingly strained. Shein has worked hard to present itself as a global company that was merely founded in China, as lawmakers from both sides of the aisle have expressed concerns about its ties to the region.
If Shein wasn’t a Chinese company, the retailer wouldn’t necessarily need Beijing’s permission to go public, said Drew Bernstein, the co-chairman of Marcum Asia and an expert in U.S. and Asian capital markets. 

U.S. regulators are increasingly concerned about Chinese companies doing business in the U.S., and want to ensure sensitive data on American customers doesn’t end up in the Chinese government’s hands. 
Beijing also has similar concerns. Shein will not only have to win over U.S. regulators, but it will also have to secure China’s blessing. 
In 2021, Beijing launched a similar security review of ride-hailing giant Didi Global just days after it went public on the New York Stock Exchange and raised some $4.4 billion. Within a year, the company was delisted and shareholder value was wiped out. 
Following Didi’s downfall, all Chinese companies seeking an overseas IPO are now subject to a security review and government approval in China. If the reviews turn up information that doesn’t sit well with Chinese regulators, they could squash the deal. 
However, contrary to Didi, Shein is seeking China’s approval before it starts trading in the U.S., which could prevent a similar share collapse and help boost investor confidence, said Bernstein, who works with Chinese companies listed on U.S. stock markets. 
Bernstein noted that Shein previously moved its headquarters to Singapore and does not sell its products in China, which could alleviate concerns from Beijing that information on Chinese customers could end up in the U.S. 
“By having zero exposure to Chinese consumers, they’re not likely to be viewed as a security sensitive company,” said Bernstein. “I think that [Shein] anticipated this and is well prepared.” Don’t miss these stories from CNBC PRO: More

One reason the world’s corporate elite jet off to Davos each year is to check in on important relationships, be it with critical suppliers or big-spending customers. This year many are wondering about their relationships with Microsoft and OpenAI, the startup behind ChatGPT. The companies are the world’s most prominent purveyors of artificial intelligence (AI), which has the business world giddy. OpenAI exclusively licenses its technology to Microsoft. The software giant is busy injecting it into products from Word to Windows.The relationship between the two companies is also under scrutiny. In November Sam Altman, OpenAI’s boss, was fired by his board, only to be reinstated days later. Satya Nadella, Microsoft’s chief, whose company reportedly owns 49% of the startup, supported Mr Altman during the ordeal. The kerfuffle still left many wondering about risks to what Mr Altman has called the “best bromance in tech”. When the pair sat down with The Economist in Davos on January 17th in their first joint public appearance since November, they were upbeat and, for the most part, singing from the same hymn sheet. Their partnership is “great” and “unbelievable”. They often remarked on how much they agree.image: The EconomistOne concurrence was that 2024 will be a big year for AI. Microsoft’s huge bet on the technology this month helped it to dethrone Apple as the world’s biggest firm (see chart). Today it is closing in on a value of $3trn. Its forthcoming quarterly earnings will give the first clear indication of how much corporate customers are willing to spend on AI. Although some observers have been underwhelmed by the progress made by OpenAI’s latest model, GPT-4, Mr Altman hints at new capabilities, such as greater ability to understand and produce audio. Mr Nadella says models will get better at all tasks, from writing essays to churning out computer code. “I really think the magic of this is the generality,” says Mr Altman.[embedded content]The general-purpose nature of AI is one reason why Mr Altman thinks of the technology as “a new computer”. Mr Nadella sees it in similar terms. He argues that “since the PC, we have not had sort of the real driver of getting more things done with less drudgery.” Microsoft’s supply-chain team already use AI to help model the impact of their decisions, without having to wait for the finance department to do this at the end of the quarter.AI’s ability to replace skilled workers, such as accountants, raises concerns about its impact on jobs. An IMF paper published on January 14th calculates that the technology could reshape labour markets. Those with college educations are both most exposed to disruption but also best positioned to reap the rewards of a new wave of innovation. Both Messrs Nadella and Altman are convinced that the technology will create more new jobs than it destroys. Mr Nadella thinks it may make the labour market more dynamic, by allowing people to learn new skills and switch jobs faster. That, he says, will cause some wages to go up and others to be “commoditised” (in other words, decline).That disruption is likely to be all the more dramatic with the advent of artificial general intelligence (agi), which, if it is achieved, would be able to outperform humans on most intellectual tasks. AI doomers think this could generate all manner of ills, from economic chaos to a robot apocalypse. Nonetheless, producing AGI is the stated goal of OpenAI. Mr Altman describes progress towards this aim as “surprisingly continuous”. He likens it to the evolution of the iPhone, where no single new model represented a big leap but the technological advance from the first version to the latest one has been extraordinary. For that reason he expects the ado caused by the first AGI to be short-lived. “The world will have a two-week freakout and then people will go on with their lives,” he says.Neither Mr Nadella nor Mr Altman will say when AGI might come around. Mr Nadella believes that by the time it does, its use will be regulated: “Nation states are absolutely going to have a say on…what is ready for deployment or not.” Mr Altman broadly agrees, but is a bit more circumspect. Regulators, he notes, will have to weigh the risks and capabilities of AI—as with aeroplanes, which create enormous benefits despite occasionally crashing. Likewise, AI’s “tremendous upside” means that halting progress would be a mistake. Safety is not a binary question of using or not using a technology; it is “the many little decisions along the way”. He points to the launch of GPT-4, which was pushed back by seven or eight months.Mr Altman, ever the techno-optimist, insists that “technological prosperity is the most important ingredient to a much better future”. Mr Nadella, a corporate veteran, strikes a more businesslike note. He talks about the 20 meetings he had earlier in the day with executives from a range of industries, talking to them “about something that they are doing where I can have some input”. He is, in other words, firming up Microsoft’s relationships—as befits a big boss in Davos. ■ More

Drugmakers have been scrambling to join a two-horse race to make highly sought after weight loss drugs.
There may still be room for lesser-known competitors like the privately held Boehringer Ingelheim, and smaller public companies such as Terns Pharmaceuticals, Viking Therapeutics and Structure Therapeutics.
Most of Wall Street’s attention has been on the dominant players, Novo Nordisk and Eli Lilly, and other large drugmakers hoping to join the market, such as Pfizer, Roche and Amgen.

Still life of Wegovy an injectable prescription weight loss medicine that has helped people with obesity. It should be used with a weight loss plan and physical activity. 
Michael Siluk | UCG | Getty Images

Drugmakers have been scrambling to join a two-horse race to lead the market for popular weight loss drugs, which could be worth tens of billions in less than a decade.
Demand is only expected to grow, leaving room in the segment for lesser-known weight loss drug hopefuls such as the privately held German drugmaker Boehringer Ingelheim and smaller public companies such as Terns Pharmaceuticals, Viking Therapeutics and Structure Therapeutics.

The next entrants into the booming market have a key window of opportunity in the coming years: Goldman Sachs analysts expect 15 million U.S. adults to be on obesity medications by 2030.
During the JPMorgan Healthcare Conference in San Francisco last week, attendees flocked to hear Novo Nordisk and Eli Lilly – the two dominant players in the weight loss drug space – speak about what to expect this year from their blockbuster weight loss drugs. Demand for those treatments soared, and they slipped into shortages over the last year, as they helped patients shed significant weight over time.
Other large drugmakers such as Pfizer — which has a widely followed but so far ill-fated weight loss drug program — Amgen, Roche and AstraZeneca also outlined their strategies for joining the market. 
But other companies with weight loss drug ambitions have garnered less attention throughout the recent weight loss drug industry gold rush. They may soon compete with the larger players.
Here are some of the lesser-known businesses angling to enter the market.

Boehringer Ingelheim

Boehringer Ingelheim is developing a weight loss drug with Danish biotech firm Zealand Pharma. That company has been working on obesity treatments for nearly a decade. 
Their experimental drug works by targeting two gut hormones: GLP-1 to suppress appetite, and glucagon to increase energy expenditure. Some popular weight loss drugs such as Novo Nordisk’s Wegovy only target GLP-1. 
Boehringer Ingelheim in August said it was moving the drug, called survodutide, into a late-stage study, bringing it one step closer to potential Food and Drug Administration approval. A mid-stage trial found patients who are overweight or have obesity lost up to 19% of their weight after 46 weeks of treatment with the drug. 
That weight loss could be closer to 20% to 25% in a phase three trial, Zealand Pharma said ahead of the JPMorgan Healthcare Conference last week. It’s unclear when that product could win approval. 

Terns Pharmaceuticals

Smaller drugmakers are developing their own weight loss drugs. They could eventually enter the market through a buyout or partnerships with large pharmaceutical companies. 
Those companies include Terns Pharmaceuticals, which is much earlier in the development process than Boehringer Ingelheim is. 
The company is conducting an early-stage trial examining its oral weight loss drug, which works by targeting GLP-1, in patients who are overweight or obese. Oral drugs will likely be easier for patients to take and for companies to manufacture compared to the existing weight loss injections.
Terns Pharmaceuticals expects to release initial 28-day data from that trial in the second half of 2024, the company’s head of research and development, Erin Quirk, said during the conference. 
Quirk acknowledged that it may be difficult for Terns to set its pill apart from other weight loss drugs. But she added that “even if it’s not the best…analysts are out there predicting that this could be $100 billion market. If you get a 1% piece of that, that’s a $1 billion drug, right?”

Small biotech companies make moves

Other small drugmakers trying to enter the space include Viking Therapeutics, which is developing drugs that target GLP-1 and another hormone called GIP. Those are the same hormones that Eli Lilly’s weight loss and diabetes drugs, Zepbound and Mounjaro, target.
Viking Therapeutics expects to release mid-stage trial data on its weight loss injection in the first half of the year. An early-stage study on that drug showed that it caused up to 7.8% weight loss after 28 days.
The company is also slated to release phase one trial data on an oral version of its weight loss drug during the first quarter of the year. 
Structure Therapeutics is similarly developing an obesity pill, which missed Wall Street’s expectations for weight loss in a mid-stage trial last month. 
The oral drug helped obese patients lose roughly 5% of their weight compared to patients who received a placebo after eight weeks. Before that data was published, Jefferies analyst Roger Song had said he was expecting 6% to 7% weight loss relative to a placebo. 
Structure said it expects full 12-week results on patients with obesity in the second quarter of this year. The company plans to launch a larger mid-stage study in the second half of 2024 and a late-stage trial in 2026. 

Potential players down the line

Some large drugmakers signaled that they could eventually move to enter the weight loss drug market. 
That includes French company Sanofi, whose own GLP-1 drug failed a mid-stage trial almost half a decade ago. In the coming years, the company could look at potential “next-generation” weight loss drugs that could have advantages over the existing treatments, such as fewer side effects, executives told industry news publication Endpoint News at the JPMorgan Healthcare conference.
“There’s a lot of determination in companies, including ours to say, the first wave is going to be this, what’s the second wave going to be?” said Sanofi CEO Paul Hudson. 
Meanwhile, Bayer’s pharmaceuticals head Stefan Oelrich said in an interview during the conference that the company is hesitant to enter the obesity market on its own, but it may partner with other companies.  More

Shares of Spirit Airlines sank about 22% Wednesday.
It’s Spirit’s second day of double-digit losses after a judge blocked its proposed merger with JetBlue Airways.
Shares of JetBlue fell roughly 9% Wednesday and are down about 4% since the judge blocked the merger.

JetBlue Airways planes are seen near Spirit Airlines planes at the Fort Lauderdale-Hollywood International Airport in Fort Lauderdale, Florida, on May 16, 2022.
Joe Raedle | Getty Images News | Getty Images

Shares of Spirit Airlines fell about 22% Wednesday, the stock’s second day of double-digit losses, after a judge blocked the budget carrier’s proposed merger with JetBlue Airways.
Spirit is down roughly 60% since the decision blocking its $3.8 billion acquisition by JetBlue was handed down Tuesday, citing reduced competition. The combination would have created the country’s fifth-largest airline.

“JetBlue plans to convert Spirit’s planes to the JetBlue layout and charge JetBlue’s higher average fares to its customers,” U.S. District Court Judge William Young wrote in his decision. “The elimination of Spirit would harm cost-conscious travelers who rely on Spirit’s low fares.”
Spirit stock was trading just over $6 a share Wednesday. Wall Street analysts on average have a price target for the stock of $14 and a hold rating, according to FactSet.
The airline earlier Wednesday traded at an all-time low, sinking to $5.74 per share. It’s down more than 90% from its record high of $84.47, reached in December 2014.
Shares of JetBlue fell roughly 9% Wednesday and are down about 4% since the judge blocked the merger.Don’t miss these stories from CNBC PRO: More