Economy

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Malaysia’s prime minister has condemned a rising tide of “China-phobia” in the west, as south-east Asian countries navigate the challenges and benefits of tensions between Washington and Beijing.Anwar Ibrahim questioned why Malaysia would “pick a quarrel” with China, its largest trading partner, in response to US criticisms of his country’s ties with Beijing.“Why must I be tied to one interest? I don’t buy into this strong prejudice against China, this China-phobia,” he said in an interview with the Financial Times in Penang, his birthplace in northern Malaysia.The Malaysian leader’s comments underscored how the superpower rivalry has created a predicament for governments in south-east Asia, a region of 700mn on China’s doorstep that is also strategically important to the US Indo-Pacific strategy.But the friction has also created opportunities for countries such as Malaysia, Indonesia, Vietnam and the Philippines to leverage their economic, security and political ties with the US and China.Malaysia, which is officially neutral, seeks to maintain “good stable relations with the US [while] looking at China as an important ally”, said Anwar. He added that any claim he was leaning towards Beijing, as he said US vice-president Kamala Harris suggested at the Asean summit in Jakarta in September, was “not right and grossly unfair”.Anwar, Malaysia’s sixth prime minister in five years, took office in November 2022 following a long journey to the political leadership. He helped steer the country through the Asian financial crisis as deputy prime minister, but was jailed twice by his mentor-turned-rival Mahathir Mohamad on politically motivated corruption and sodomy charges. He returned to public life in 2018 following a royal pardon.As premier, Anwar has focused on resuscitating the economy from years of mismanagement and instability. Malaysia’s gross domestic product grew in 3.7 per cent in 2023, down from a post-pandemic boom of 8.7 per cent in 2022, and exports have suffered because of China’s economic slowdown, with the ringgit at 20-year lows.As part of that effort Anwar has prioritised boosting Malaysia’s manufacturing, energy and industrial sectors, often with the help of record foreign investment pledges. China’s Xi Jinping committed an estimated RM170.1bn ($35.6bn) to Malaysia after Anwar travelled to Beijing and the Boao Forum in Hainan last year. Weeks later, Anwar significantly changed Malaysia’s 5G network plan, paving the way for greater participation by Huawei, the Chinese telecommunications giant.Malaysia’s semiconductor industry has capitalised on companies shifting supply chains to protect against geopolitical risk, a strategy known as “China plus one”. Malaysia has set up a task force focused on moving up the semiconductor value chain, and Anwar said his government was “heavily focused” on strengthening its front end wafer manufacturing capacity.Much of that activity has focused on Penang, a former British colony that is a crucial hub for back-end chip operations such as packaging, assembly and testing. The state recorded more foreign direct investment in the first nine months of 2023 than in 2013-2018 combined, according to InvestPenang, a non-profit entity of the state government.US chipmaker Micron Technology said in October that it would invest $1bn to expand its operations in Penang, while Intel is building its first overseas facility for advanced 3D chip packaging in the state.Chinese chip groups have also been increasing their presence in Penang, where domiciling or striking joint ventures allows them to avoid US tariffs and maintain relationships with western suppliers, according to analysts.Former Huawei unit xFusion is partnering with local operator NationGate to manufacture graphics processing unit servers in Penang, while chip packaging and testing company TongFu Microelectronics has expanded its facility in the state in partnership with US group AMD.Anwar said he did not anticipate conflict from the convergence of US and Chinese companies in Penang, although he added that his government was advising local companies to ensure they understood relevant US policies and regulations.Washington has for years worked to restrict China’s development of semiconductor technology, including export bans on advanced chipmaking components and equipment.“We are a small country struggling to survive in a complex world,” Anwar said he told Harris. “I want to focus on what is best for us.”Video: The race for semiconductor supremacy | FT Film More

KYIV (Reuters) – Heads of the Group of Seven major democracies on Saturday pledged to stand by war-weary Ukraine, and Western leaders traveled to Kyiv to show solidarity on the second anniversary of Russia’s invasion, with no end in the sight to the fighting.After initial successes in pushing back the Russian army, Ukraine has suffered recent setbacks on eastern battlefields, with its generals complaining of growing shortages of both arms and soldiers.The G7 leaders on Saturday held a video conference with Ukrainian President Volodymyr Zelenskiy on the anniversary of Russia’s “special military operation,” which ranks as the deadliest conflict in Europe since World War Two. “As Ukraine enters the third year of this relentless war, its government and its people can count on the G7’s support for as long as it takes,” the G7 leaders said in a statement.The officials, who have been critical sources of military and financial aid to Kyiv, also vowed to continue targeting Russia’s sources of revenue with sanctions. Zelenskiy stressed the need to protect Ukrainian skies and strengthen its army. “We are counting on you,” he said on the call, according to remarks published on his website.Looking to dispel concerns the West is losing interest in the conflict, Italy’s Giorgia Meloni and Canada’s Justin Trudeau came to Kyiv early on Saturday with European Commission President Ursula von der Leyen and Belgian Prime Minister Alexander De Croo. “The message I want to send today to … all the Ukrainian people is that they are not alone,” Meloni said as she signed a 10-year defence pact with Zelenskiy. Trudeau signed a similar accord and pledged some $2.25 billion in financial and military support this year.”We will stand with Ukraine with whatever it takes, for as long as it takes,” Trudeau said.Ordinary Ukrainians held services to commemorate the anniversary, laying flowers to honour their many dead, amid fears the war will last years longer as Russian President Vladimir Putin shows no sign of relenting. “I’m a realist and understand that most likely the war will drag on for the next three or four years. I hope society will mobilise, I hope we’ll be able to somehow defeat Russia,” said Denys Symonovskiy, a Kyiv resident.Outside Kyiv, the war continued unabated.Russian drones attacked the port of Odesa for a second night running, hitting a residential building and killing one person, the regional governor said. In Dnipro, a Russian drone hit an apartment building and a rescue operation uncovered two dead.Meanwhile, a source in Kyiv said Ukrainian drones caused a blaze at a Russian steel plant, which a Russian official identified as one in Lipetsk, some 400 km (250 miles) from Ukraine, that is responsible for about 18% of Russian output.HOLDING THE FRONT LINEThe Canadian and Italian security deals mirror similar pacts signed recently with France and Germany.However, $61 billion in aid promised by U.S. President Joe Biden is being blocked by Republicans in Congress, casting a long shadow over Kyiv’s hopes of pushing back the much larger, better supplied Russian military.In the G7 video call, Biden discussed Washington’s continued support for Ukraine and steps the group can take to continue holding Russia accountable, a White House official said.Seeking to maintain Western focus on Ukraine, Zelenskiy has warned Putin may not stop at Ukraine’s borders if he emerges victorious. Putin dismisses such claims and casts the war as a wider struggle with the United States, which he says aims to dismantle Russia.Anniversary events were held across Ukraine including in the western city of Lviv, hundreds of kilometres from the fighting. Grieving women cried as a priest led a prayer in a cemetery festooned with blue and yellow Ukrainian flags, each marking the death of a soldier. “The boys are holding the front line. We can only imagine what effort and price is paid for every peaceful day we have. I want to believe it is not all in vain. We have funerals every day,” Evhenia Demchuk, a widow and mother of two, told Reuters. The initial shock of the invasion faded into familiarity then fatigue as the world watched initial Russian gains and a stunning Ukrainian counteroffensive in late 2022 slow into grinding trench warfare.Russia, with a much bigger population to replenish the army’s ranks and a larger military budget, might favour a drawn-out war, although its costs have been huge as it seeks to navigate sanctions and a growing reliance on China. UKRAINE’S POSITION GROWS PRECARIOUSUkraine’s position is more precarious. Villages, towns and cities have been razed, troops are exhausted and Russian missiles and drone strikes rain down almost daily.Russia this month registered its biggest victory in nine months, capturing the eastern town of Avdiivka and ending months of deadly urban combat.A recent World Bank study said rebuilding Ukraine’s economy could cost nearly $500 billion. Two million housing units have been damaged or destroyed, and nearly 6 million people remain abroad after fleeing the invasion.In addition to seeking money and weaponry, Zelenskiy is promoting legislation allowing Ukraine to mobilise up to half a million more troops – a target some economists say could paralyse the economy.Russia’s finances have so far proved resilient to unprecedented sanctions. While natural gas exports have slumped, oil sales have held up, thanks largely to Indian and Chinese buying, and the economy has been boosted by massive defence spending.Russia has also ruthlessly punished dissent over the war. On Feb. 16, Putin’s most formidable domestic opponent, Alexei Navalny, died suddenly of unexplained causes in an Arctic penal colony where he was serving terms totalling more than 30 years. More

(Reuters) – Warren Buffett on Saturday moved to reassure investors that his conglomerate Berkshire Hathaway (NYSE:BRKa) would serve them well over the long term, even as he mourned the recent passing of his longtime second-in-command Charlie Munger.In his widely-read annual letter to Berkshire shareholders Buffett said his more than $900 billion conglomerate has become a fortress that could withstand even an unprecedented financial disaster.”Berkshire is built to last,” Buffett wrote.Still, Buffett tempered expectations for Berkshire’s stock price, saying his Omaha, Nebraska-based company “should do a bit better” than the average American corporation, but that its huge size left “no possibility of eye-popping performance.””There remain only a handful of companies in this country capable of truly moving the needle at Berkshire, and they have been endlessly picked over by us and by others,” Buffett wrote.The letter was accompanied by Berkshire’s financial results, including a record $37.4 billion operating profit and $96.2 billion net profit for all of 2023.Berkshire’s shares have risen by 4,384,748% since Buffett took over in 1965, or 19.8% compounded annually.The Standard & Poor’s 500, in contrast, gained a mere 31,223%, or 10.2% annually, though in recent years Berkshire has performed more like the index.The 93-year-old Buffett assured investors that Vice Chairman and designated successor Greg Abel was “in all respects ready to be CEO of Berkshire tomorrow.”But the billionaire saved his most heartfelt words for Munger, who died in November at age 99.Buffett called Munger the “architect” of Berkshire, with Buffett being only the “general contractor,” and reminded investors how Munger pushed him to buy wonderful businesses at fair prices instead of fair businesses at wonderful prices.Berkshire’s “extreme fiscal conservatism,” including a reluctance to pay inflated prices, is one reason Buffett let Berkshire’s cash stake swell to a record $167.6 billion.”In a way his relationship with me was part older brother, part loving father,” Buffett wrote, referring to Munger. “Even when he knew he was right, he gave me the reins, and when I blundered he never–never–reminded me of my mistake.”Edward Jones analyst Jim Shanahan said Buffett “wouldn’t have been as successful” without Munger.STICKING TO ITS KNITTINGCathy Seifert, a CFRA Research analyst who rates Berkshire “buy,” said Buffett tried to show Berkshire’s ability to withstand rocky shoals, after transforming it from a failing textile company into a colossus mirroring the broader economy.”Nothing is perfect,” she said. “He tried to show there is a succession plan, and Berkshire would stick to its knitting.”Buffett likened Berkshire’s caution, with the stock market now routinely setting record highs, to an insurance policy against hasty, “dumb” business decisions that would irk Munger.Thomas Russo, a longtime shareholder at Gardner, Russo & Quinn in Lancaster, Pennsylvania, said Buffett still offers shareholders “tremendous value from his ability to make decisions before the opportunity is far gone.”Berkshire said fourth-quarter operating profit from its dozens of insurance, railroad, industrial, energy, and retail businesses rose 28% to $8.48 billion. Full year profit rose 21%.The Geico car insurer benefited in 2023 from improved underwriting and cost cuts, including the shedding of 7,700 jobs, or 20% of its workforce, while higher interest rates boosted investment income for Berkshire’s insurance units.That helped offset wage pressures at the BNSF railroad and wildfire losses at Berkshire Hathaway Energy.”Berkshire has diversified, very solid assets,” said James Armstrong, a longtime Berkshire investor at Henry H. Armstrong Associates in Pittsburgh. “A mom-and-pop investor can feel that Berkshire is unlikely to suffer permanent harm.”Investment gains in Berkshire’s $354 billion portfolio of stocks such as Apple (NASDAQ:AAPL), American Express (NYSE:AXP), Bank of America and Coca-Cola (NYSE:KO), helped generate Berkshire’s $96.2 billion net profit.That amount reflects accounting rules that require Berkshire to report gains in stocks it hasn’t sold, however, making it “worse-than-useless” to investors according to Buffett.MARKET EXCESSBerkshire’s caution, and a reason for its record cash stake, was reflected in its having sold about $24 billion more stocks than it bought in 2023.”His letter is cautioning that other investors may be massively overpaying for stocks and businesses,” said Bill Smead, a longtime Berkshire investor at Smead Capital Management in Phoenix.Results also included some of Occidental Petroleum (NYSE:OXY)’s earnings, which reflected Berkshire’s approximately 28% stake in the oil company.Buffett said he expects Berkshire will keep that stake “indefinitely,” along with its stakes in five Japanese trading houses: Itochu, Marubeni, Mitsubishi, Mitsui and Sumitomo.Munger’s death means only Abel and Vice Chairman Ajit Jain will share the stage with Buffett at Berkshire’s annual meeting, where Buffett and Munger spent hours entertaining and answering questions from shareholders, with millions more watching online.This year’s meeting is scheduled for May 4 in Omaha.Buffett’s letter made no mention of portfolio managers Todd Combs and Ted Weschler, who have been slated to oversee Berkshire’s stock investments after he’s gone.Berkshire’s businesses also include industrial parts and chemical companies, a big real estate brokerage, and retail brands such as Dairy Queen, Fruit of the Loom and See’s candies. 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(Reuters) – Warren Buffett’s Berkshire Hathaway (NYSE:BRKa) on Saturday posted its second straight record annual operating profit, with its insurance business benefiting from improved underwriting and higher income from investments as interest rates rose.Net income also reached a record $96.2 billion, as the rising stock market boosted the value of Berkshire’s $354 billion equity portfolio, half of which is in Apple (NASDAQ:AAPL).In his annual letter to Berkshire shareholders, Buffett said Berkshire’s insurance businesses performed “exceptionally well” – among them, Geico, where better underwriting quality helped it more than reverse year-earlier losses.This helped offset declining fourth-quarter and full-year profit at the BNSF railroad, where rising wages and costs for upkeep increased as revenue fell, and Berkshire Hathaway Energy, beset by wildfire litigation and a tougher regulatory climate.Buffett nevertheless assured investors that his approximately $903 billion conglomerate’s “extreme fiscal conservatism” – including a now-record $167.6 billion cash stake – would serve them well.Operating profit rose 28% to $8.48 billion, or about $5,884 per Class A share, in the fourth quarter, topping the average analyst forecast for $5,471 per share according to LSEG IBES.For the year, operating profit rose 21% to $37.4 billion.”Results reflect the value of holding a diversified collection of operating businesses,” said Edward Jones analyst Jim Shanahan.He said Geico benefited from a willingness to cede market share by writing fewer risky policies, while also cutting advertising expenses.The cash stake helped Berkshire’s insurance businesses, which have $169 billion of so-called “float,” generate 38% more investment income in the quarter, as the Federal Reserve boosted short-term interest rates to curb inflation.Results also included some of Occidental Petroleum (NYSE:OXY)’s earnings, from Berkshire’s roughly 28% stake in the oil company.Buffett said Berkshire plans to keep its stake indefinitely but has “no interest” in buying all of Occidental. Berkshire is also a big investor in oil company Chevron (NYSE:CVX).”He is keeping a portfolio that is massively defensive and earning interest, and is buying oil stocks,” said Bill Smead, a longtime Berkshire investor who runs Smead Capital Management in Phoenix. ‘COSTLY MISTAKE’Fourth-quarter net income more than doubled to $37.57 billion, or $26,043 per Class A share, while the $96.2 billion annual profit topped the old record $89.9 billion from 2021.Buffett considers net results misleading because they include gains and losses on investments that Berkshire has not sold.Berkshire also spent about $2.2 billion in the fourth quarter repurchasing its own stock, and roughly $600 million more in the first six weeks of 2024.But the cash stake grew in part because Berkshire was a net seller of stocks, selling $24.2 billion more than it bought in 2023.It has been quietly building one or more holdings after obtaining U.S. Securities and Exchange Commission approval for confidentiality so that other investors will not copy Buffett while he is buying.Some analysts have said those holdings could come from the bank, insurance and finance sector, where Berkshire invested about $3.6 billion in last year’s second half.Buffett said BNSF’s margins have fallen behind those at its five major rivals since Berkshire bought the railroad in 2010, but that “a century from now, BNSF will continue to be a major asset of the country and of Berkshire. You can count on that.”He also acknowledged making a “costly mistake” in not considering changes in the regulatory environment for utilities, including from climate change.Buffett said it may also take years to know Berkshire’s final bill from wildfires in Oregon and northern California, where it has already racked up $2.4 billion of charges.Berkshire’s dozens of businesses also include industrial parts and chemical companies, a big real estate brokerage, and retail brands such as Dairy Queen ice cream, Fruit of the Loom underwear and See’s candies.Its stock has outperformed the market in 2024, rising 16% compared with the Standard & Poor’s 500’s 7% gain, and set a record on Friday. More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.China and India have signed agreements to restructure their holdings of Zambian debt, the bankrupt southern African nation’s president has said, raising hopes that a delayed effort to exit a long-running default is back on track.Hakainde Hichilema said Zambia planned to resume talks with private creditors to resolve a “terrible debt mountain” of more than $13bn in external debt that Africa’s second largest copper producer stopped paying in 2020.Zambia agreed outline terms to modify $6.3bn in debt owed to official lenders last year. But progress was wrecked when China, the single biggest creditor, objected to a deal with private investors involving about $4bn in US dollar bond claims — making Beijing’s signing of a deal now more significant.“The last two countries that had not signed [deals as] official creditors, China and India, have signed, and I’m very pleased to indicate that,” Hichilema told traditional leaders at Zambia’s annual N’cwala harvest ceremony in the country’s east.“We are getting there — working steadily, definitely, we are getting there, and now we are turning our attention to the private creditors that we hope to be able to put to bed soon,” he added.Zambia needs deals with its creditors to continue a $1.3bn IMF bailout and resume an economic recovery, with Hichilema hoping to bring in more foreign investment to revitalise the country’s copper mines.Delays to Zambia’s restructuring had become a symbol of the failure of a G20 process to better integrate China into negotiations to avoid debt crises dragging on for the world’s poorest nations.Beijing rose to be the world’s biggest lender to poor countries in the last decade, but remained outside the western-dominated Paris Club of creditor nations.The “Common Framework” to include China as well as India has become bogged down by tension between creditors about how losses on defaulted debts should be shared.China rejected last year’s deal with Zambia’s bondholders because the agreement did not meet its understanding of “comparability of treatment”, a notoriously slippy yet crucial concept in sovereign debt restructuring for ensuring that official and private creditors come out equally.“This concept [of comparability of treatment] was not properly clarified, leading to ambiguous understanding by different creditors,” Finance Minister Situmbeko Musokotwane told Zambia’s parliament this week. “With progress made to clarify the term, this should pave the way for agreement on the private creditors as well.”While Zambia remains in default, the central bank has been battling depreciation of the kwacha against the dollar and a revival of inflation.Musokotwane warned this week that a drought during the country’s current growing and harvest season was also “one of the worst in living memory” that would require extra support for households in the government’s budget. More

ABUJA (Reuters) – The West African regional bloc said on Saturday it would lift strict sanctions on Niger as it seeks a new strategy to dissuade three junta-led states from withdrawing from the political and economic union – a move that threatens regional integration.Leaders of the Economic Community of West African States (ECOWAS) met to address a political crisis in the coup-hit region that deepened in January with military-ruled Niger, Burkina Faso, and Mali’s decision to exit the 15-member bloc.After closed-door talks, ECOWAS said it had decided to lift Niger sanctions including border closures, the freezing of central bank and state assets, and the suspension of commercial transactions with immediate effect.In a communique it said this was done for humanitarian reasons, but the move will be seen as a gesture of appeasement as ECOWAS tries to persuade the three junta states to remain in the nearly 50-year-old alliance. Their planned exit would bring a messy disentanglement from the bloc’s trade and services flows, worth nearly $150 billion a year.The bloc “further urges the countries to reconsider the decision in view of the benefits that the ECOWAS member states and their citizens enjoy in the community,” it said.It also said it had lifted certain sanctions on junta-led Guinea, which has not said it wants to leave ECOWAS but like other junta states has not committed to a timeline to return to democratic rule.ECOWAS Commission President Omar Touray said some targeted sanctions and political sanctions remained place for Niger, without giving details.STRATEGY RETHINKEarlier, ECOWAS chairman Bola Tinubu said the bloc had to rethink its strategy in its bid to get countries to restore constitutional order and urged Niger, Burkina Faso, Mali and Guinea “not to perceive our organisation as the enemy”.ECOWAS closed borders and imposed the strict measures on Niger last year after soldiers detained President Mohamed Bazoum on July 26 and set up a transitional government, one of a series of recent military takeovers that have exposed the bloc’s inability to halt democratic backsliding.The sanctions have forced Niger, already one of the world’s poorest countries, to slash government spending and default on debt payments of more than $500 million.In its communique, ECOWAS repeated its call for the release of Bazoum and request for the junta to provide an “acceptable transition timetable”.Niger’s coup followed two each in neighbouring Mali and Burkina Faso over the past three years, leaving a swathe of territory in the hands of military governments that have also moved to distance themselves from former colonial ruler France and other Western allies. The military also seized power in Guinea in 2021.ECOWAS also imposed sanctions on Mali in a bid to hasten its return to constitutional order, although they were lifted in 2022.The three countries have called ECOWAS’s sanctions strategy illegal and grounds for their decision to leave the bloc immediately without abiding by usual withdrawal terms.The three have started cooperating under a pact known as the Alliance of Sahel States (AES (NYSE:AES)) and sought to form a confederation, although it is not clear how closely they plan to align political, economic and security interests as they struggle to contain a decade-old battle with Islamist insurgents. More

(Reuters) – A U.S. judge on Friday accepted Binance’s guilty plea and more than $4.3 billion penalty for violating federal anti-money laundering and sanctions laws through lapses in internal controls at the world’s largest cryptocurrency exchange.U.S. District Judge Richard Jones in Seattle approved the plea, which includes a $1.81 billion criminal fine and $2.51 billion of forfeiture, about an hour after the government proposed changes to Binance founder Changpeng Zhao’s bond, drawing an objection from Zhao’s lawyers.Binance’s plea announced in November resolved a years-long probe that found the exchange had failed to report more than 100,000 suspicious transactions involving designated terrorist groups including Hamas, al Qaeda and the Islamic State of Iraq and Syria, or ISIS.Prosecutors said Binance’s platform also supported the sale of child sexual abuse materials and was among the largest recipients of ransomware proceeds.In a statement on Friday, Binance said it accepted responsibility, has upgraded its anti-money laundering and “know-your-customer” protocols, and has made “significant progress” toward changes required under its plea agreement.Zhao has been free in the United States on a $175 million bond after also pleading guilty in November to money laundering violations.His plea included a $50 million fine and required that he step down as Binance chief executive.In a court filing, prosecutors said the proposed bond changes were meant to reflect Jones’ orders that Zhao stay in the continental United States and under court officer supervision until his April 30 sentencing.The conditions include that Zhao provide three days notice of any travel plans, surrender his passports and maintain his current residence unless he gets approval for a change.Pretrial services officers are recommending that Zhao also be subjected to location monitoring.Prosecutors said they have discussed the changes with Zhao’s lawyers several times, but that they “object to this motion as written.”Zhao’s lawyers did not immediately respond to requests for comment.The cases are U.S. v Binance Holdings Ltd, U.S. District Court, Western District of Washington, No. 23-cr-00178, and U.S. v. Zhao in the same court, No. 23-cr-00179. More

(Reuters) -U.S. Deputy Treasury Secretary Wally Adeyemo said on Friday that he is concerned about China’s excess manufacturing capacity spilling over to the global economy, even if China’s current economic woes are unlikely to slow U.S. growth in the near term.”I am not concerned about the headwinds from China having a large impact on the US economy,” Adeyemo told a Council on Foreign Relations event in New York, referring to challenges from its property sector, an aging population and a worsening business climate for private firms.”The thing that I am fundamentally concerned about from China is excess capacity coming from China and hitting the global economy,” Adeyemo said.China’s heavily subsidized manufacturing capacity for electric vehicles, solar panels and other goods has followed industries such as steel and aluminum in producing more goods than China can consume, he added.”Fundamentally that overcapacity is going to go somewhere,” Adeyemo said, adding that U.S. tariffs and tax credits for EVs and their batteries will help keep Chinese EVs out of the U.S. market and allow American firms to compete more fairly.”This is going to be a challenge for the global economy and it’s something we are talking directly with the Chinese about,” Adeyemo said. “They need to compete on a level playing field, not just with the United States, but with countries around the world.”U.S. Treasury Secretary Janet Yellen is expected to raise her concerns about Chinese excess capacity with counterparts on the sidelines of a Group of 20 finance ministers meeting in Sao Paulo, Brazil, next week, a senior Biden administration official said. DOLLAR DOMINANCEAdeyemo, who presented a new round of U.S. sanctions on over 500 Russian-linked targets a day before the second anniversary of Russia’s invasion of Ukraine, downplayed the potential for damage to the dollar’s status as the world’s reserve currency from such measures. He said it was important that sanctions be multilateral and targeted to maximize their effectiveness.”Fundamentally, my view about this question of whether the use of sanctions is going to lead to some challenges to the dollar, is that the thing that’s going to matter to the dollar’s role in the global economy isn’t the strength of our economy.”He said Biden administration policies, including investments in infrastructure, semiconductors and clean energy technologies, have made the U.S. a more attractive investment destination.”As long as we are able to continue to do that, I feel good about the fact that the dollar, America’s financial system, is going to remain dominant in the world,” Adeyemo said. More