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    Cómo sale el dinero de China

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    Las personas chinas acaudaladas han sacado cientos de miles de millones de dólares del país este año, aprovechando el fin de las precauciones por covid que habían sellado casi por completo las fronteras de China durante casi tres años.Están utilizando sus ahorros para comprar apartamentos en el extranjero, acciones y pólizas de seguros. Ahora que pueden volar de nuevo a Tokio, Londres y Nueva York, los viajeros chinos han comprado apartamentos en Japón y han invertido dinero en cuentas en Estados Unidos o Europa que pagan intereses más altos que en China, donde las tasas son bajas y sigue cayendo.La salida de dinero indica, en parte, el malestar existente en China por su vacilante recuperación tras la pandemia, así como por problemas más profundos, como la alarmante desaceleración del sector inmobiliario, principal depósito de riqueza de las familias. Para algunas personas, también es una reacción a los temores sobre la dirección de la economía bajo el liderazgo de Xi Jinping, que ha tomado medidas enérgicas contra las empresas y ha reforzado la influencia del gobierno en muchos aspectos de la sociedad.En algunos casos, los residentes chinos están improvisando maneras de eludir los estrictos controles gubernamentales de su país sobre las transferencias de dinero al extranjero. Han comprado lingotes de oro lo suficientemente pequeños como para esparcirlos discretamente por el equipaje de mano, así como grandes cantidades de divisas extranjeras.Los bienes inmuebles también son una opción. Los chinos se han convertido en los principales compradores de apartamentos en Tokio que cuestan 3 millones de dólares o más, y a menudo pagan con maletas llenas de dinero en efectivo, dijo Zhao Jie, director ejecutivo de Shenjumiaosuan, un servicio en línea de venta de inmuebles en Tokio. “Es un trabajo muy duro contar esta cantidad de dinero en efectivo”.Antes de la pandemia, dijo, los compradores chinos solían comprar estudios en Tokio por 330.000 dólares o menos para alquilarlos. Ahora compran unidades mucho más grandes y obtienen visas de inversión para trasladar a sus familias.El Park Tower Harumi, un complejo de apartamentos de lujo en Tokio que ha atraído a compradores de China continental.Hiroko Masuike/The New York TimesLos jardines del Branz Tower Toyosu, otro proyecto de apartamentos de lujo en Tokio que también ha atraído a compradores de China continental.Hiroko Masuike/The New York TimesEn total, se calcula que este año han salido de China unos 50.000 millones de dólares al mes, principalmente de hogares chinos y empresas del sector privado.Los expertos dijeron que el ritmo de salida de dinero de China probablemente no representaba un riesgo inminente para la economía del país, de 17 billones de dólares, en gran parte porque las exportaciones de muchos de los principales productos manufacturados del país son fuertes, lo que devuelve un flujo constante de efectivo.Una amplia operación para enviar los ahorros familiares a otra parte podría ser motivo de alarma. Las salidas de dinero a gran escala han desencadenado crisis financieras en las últimas décadas en América Latina, el sudeste asiático e incluso la propia China, a finales de 2015 y principios de 2016.Hasta ahora, todo indica que el gobierno chino cree tener la situación bajo control. La salida de dinero de China ha debilitado la moneda, el renminbi, frente al dólar y otras divisas. Y esa debilidad del renminbi ha ayudado a mantener las exportaciones del país, que sostienen decenas de millones de empleos chinos.El flujo de dinero que sale de China “es muy manejable”, dijo Wang Dan, economista jefe para China en la oficina de Shanghái del Hang Seng Bank.Personas comprando joyas en LukFook.Billy H.C. Kwok para The New York TimesLos legisladores chinos siguen recurriendo a algunos de los límites a la salida de dinero del país que impusieron para frenar la crisis monetaria hace ocho años. Otras restricciones que se hicieron entonces, como el escrutinio de las exportaciones e importaciones para detectar estrategias encubiertas de transferencias internacionales de dinero, se dejaron sin efecto y no se han vuelto a imponer este año, a pesar de que se han reanudado las salidas de dinero.La salida de dinero de China ha igualado aproximadamente la entrada de dinero por los grandes superávits comerciales del país. Para consternación de muchos países, sobre todo europeos, China está exportando cada vez más paneles solares, autos eléctricos y otros productos avanzados, incluso cuando ha reemplazado más importaciones por producción nacional.El valor del renminbi cayó a principios de año a su nivel más bajo en 16 años. Durante gran parte de los dos últimos meses, se mantuvo en torno a los 7,3 por dólar, antes de subir un poco en la última semana.En 2015, los inversores que operan a tiempo real observaron fuertes ventas masivas de acciones chinas, cuando la salida de dinero del país provocó turbulencias en los mercados de todo el mundo.Ng Han Guan/Associated PressLa oleada de dinero que salió de China hace ocho años fue provocada por una caída en la bolsa de valores y un intento fallido de devaluar la moneda de forma controlada. El banco central de China tuvo que gastar hasta 100.000 millones de dólares al mes de sus reservas de divisas extranjeras para apuntalar el renminbi.En cambio, China parece haber gastado unos 15.000 millones de dólares al mes desde mediados de verano para estabilizar su moneda, según datos del banco central. “No hay nada que sugiera que sea desordenada”, dijo Brad Setser, especialista en finanzas internacionales del Consejo de Relaciones Exteriores. “La escala de la presión sigue siendo mucho menor que en 2015 o 2016”.Las salidas de 2015 y 2016 reflejaron los esfuerzos de las grandes empresas estatales por trasladar fuertes sumas de dinero al extranjero. En la actualidad, el gobierno ejerce un control político más estricto sobre esas empresas, y no ha habido indicios de una urgencia por movilizar dinero de su parte.En cambio, las empresas privadas y los hogares chinos han estado trasladando dinero al extranjero. Pero gran parte de la riqueza de la gente está anclada a bienes inmuebles, que no pueden venderse fácilmente.Al mismo tiempo, las empresas ilegales de cambio de moneda de Shanghái, Shenzhen y otras ciudades que solían convertir el renminbi en dólares y otras divisas extranjeras fueron cerradas por redadas policiales hace ocho años.Turistas chinos frente al Casino Londoner de Macao en octubrePeter Parks/Agence France-Presse — Getty ImagesTuristas chinos en un ferry durante una excursión a Hong KongBilly H.C. Kwok para The New York TimesY los reguladores han cerrado casi todos los viajes de apuestas a Macao, una región china de administración especial. Estos viajes permitían a los chinos adinerados comprar fichas de casino con renminbi, apostar una parte en el bacará o la ruleta y convertir el resto en dólares.Pekín también ha prohibido la mayoría de las inversiones extranjeras en hoteles, torres de oficinas y otros activos de escaso valor geopolítico. El arquitecto de las restricciones a la inversión extranjera en China, Pan Gongsheng, fue ascendido en julio a gobernador del banco central, el Banco Popular de China.Pero los hogares y las empresas siguen arreglándoselas para enviar dinero al extranjero.Una tarde reciente, las sucursales del Banco de China y del China Merchants Bank en China continental vendían lingotes de oro un 7 por ciento más caros que sus bancos afiliados en la adyacente Hong Kong. Esa diferencia de precios indica que, dentro de China, existe una gran demanda de oro, que puede trasladarse fácilmente fuera del país.Otro truco que están utilizando los residentes de China continental para sacar su dinero es abrir cuentas bancarias en Hong Kong y luego transferir dinero para comprar productos de seguros que se asemejan a certificados de depósito bancario. Según la Autoridad de Seguros de Hong Kong, las primas de las nuevas pólizas de seguro vendidas a los habitantes de China continental que visitan Hong Kong fueron un 21,3 por ciento más altas en el primer semestre de este año que en el primer semestre de 2019, tras casi desaparecer durante la pandemia.Una larga fila frente al Banco de China en Hong Kong el lunesBilly H.C. Kwok para The New York TimesEn una sucursal del Banco de China en la península de Kowloon, en Hong Kong, los habitantes de China continental esperaban a las 7:30 de una mañana reciente para abrir cuentas, 90 minutos antes de la apertura del banco. La fila era tan larga a las 8 a. m. que quien llegaba más tarde tenía suerte de llegar al principio de la fila antes de que terminara la jornada laboral, dijo Valerius Luo, agente de seguros de Hong Kong.Las familias suelen invertir entre 30.000 y 50.000 dólares estadounidenses en productos de seguros, varias veces más que antes, mientras buscan lugares seguros donde colocar sus ahorros, dijo Luo. “Sigue habiendo personas con un capital poderoso”, dijo, “y quieren un paquete de inversión que conserve el valor”.Li You More

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    U.S. to Press China to Stop Flow of Fentanyl

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    President Biden pressed the Chinese leader Xi Jinping on Wednesday to crack down on the Chinese firms that are helping to produce fentanyl, a potent drug that has killed hundreds of thousands of Americans.A plan to curb China’s illicit exports of fentanyl and, particularly, the chemicals that can be combined to make the drug was hoped to be one of the more significant achievements for the United States out of Mr. Biden and Mr. Xi’s meeting, which took place as leaders from Pacific nations gathered for an international conference in San Francisco.A summary of the meeting published by China’s CCTV News said that Mr. Biden and Mr. Xi had agreed to establish an anti-drug working group.China is home to a thriving chemical industry that pumps out compounds that are made into pharmaceuticals, fragrances, textile dyes and fertilizers. Some of those same compounds can also be combined to create fentanyl, an opioid that can be 100 times as potent as morphine.U.S. officials argue that this vast chemical industry is playing a key role in the American fentanyl crisis by supplying the bulk of materials used in illegal drug labs, including in Mexico, which is now the largest exporter of fentanyl to the United States.The Chinese government denies that its country plays such a pivotal role and instead blames the United States for harboring a culture of drug use.“All-out marketing by pharmaceutical companies, over-prescription by doctors, ineffective government crackdowns and the negative implications of marijuana legalization are among the combination of factors behind an ever-growing market for narcotics,” China’s foreign ministry said in a statement last year.U.S. officials say they have stopped more fentanyl from coming into the United States in the past two years than in the previous five years combined. According to the Centers for Disease Control and Prevention, fentanyl and other synthetic opioids may have resulted in more than 77,000 overdose deaths in the United States between May 2022 and April 2023. The problem with fentanyl overdoses is particularly acute in San Francisco, where Mr. Biden and Mr. Xi are meeting.Ian Johnson, a senior fellow for China studies at the Council on Foreign Relations, said that getting China to agree to do something about fentanyl would resonate more with average Americans than the typical “deliverables” from international meetings.“For Biden, that would be nice to have to show to the heartland of the United States that relations with China are more than just some esoteric matter, but can actually bring something to ordinary people,” Mr. Johnson said in a briefing held by the council last week. Republicans have made fentanyl-related deaths a central piece of their campaign against Mr. Biden and Democrats in the 2024 elections.Red stained pollen grain sample at the U.S. Customs and Border Protection in Chicago, last year.Lyndon French for The New York TimesCollecting pollen samples at a Customs and Border Protection facility. The extent to which an agreement with China would curb the flow of fentanyl into the United States is unclear.Lyndon French for The New York TimesStill, given the difficulties with policing an illicit industry, the extent to which an agreement would curb the flow of fentanyl into the United States is unclear.Roselyn Hsueh, an associate professor of political science at Temple University, said that an agreement between Mr. Biden and Mr. Xi could lead the Chinese central government to provide more oversight and invest more resources into inspection and monitoring. But she said Beijing had run into difficulty in the past clamping down on fentanyl and precursor chemicals.Before 2019, China was the primary source of fentanyl coming into the United States, typically through the mail and other commercial couriers. As a part of trade talks with President Donald J. Trump, the Chinese government in 2019 agreed to prohibit the production, sale and export of all fentanyl-related drugs except through special licenses.But that resulted in Chinese companies rerouting to Mexico and India’s emergence as a new production site, Ms. Hsueh said. The main source of U.S. fentanyl became Mexican criminal organizations, which used Chinese-made components and Chinese money-laundering services.Today, online sales that mask the identities of sellers and buyers further complicate enforcement. The regulation and enforcement of fentanyl and precursor chemicals remain “fragmented and decentralized” among Chinese local governments, industry associations and firms with vested interests in the chemical trade, Ms. Hsueh said.U.S. officials have said that problem is compounded because many of the ingredients used to make fentanyl are legal chemicals that can be used for legitimate purposes in other industries. The United States has issued sanctions against dozens of people in China and Hong Kong for their role in fentanyl trafficking. In September, Mr. Biden added China to the U.S. list of the world’s major drug-producing countries, a move that the Chinese government denounced as “a malicious smear.”Last month, the U.S. customs department released an updated strategy to combat fentanyl and synthetic drugs, including through the enhanced use of data and counterintelligence operations to track drug manufacturing and distribution networks, and target suspicious locations and recipients that demonstrate patterns of illicit activity. “In my 30 years as a customs official, the trafficking of synthetic illicit drugs like fentanyl is one of the toughest, most daunting challenges I have ever seen,” said Troy Miller, the acting commissioner for Customs and Border Protection.U.S. officials say they have stopped more fentanyl from coming into the United States in the past two years than in the previous five years combined.Mamta Popat/Arizona Daily Star, via Associated PressU.S. officials believe China’s dominance as a chemical producer makes Beijing’s cooperation key for enforcement. Administration officials, including Commerce Secretary Gina M. Raimondo, have raised the issue with top Chinese officials during recent trips to China.When six lawmakers, including Senator Chuck Schumer, the majority leader, had a chance to talk to Mr. Xi during a visit to China last month, the main issue they brought up was not trade or military coordination or climate change, but the harm that fentanyl had caused in their home states.“Everyone told stories, personal stories about how, you know, friends of ours, family, have died from fentanyl, and how this was a really important issue, and I think that you could tell that made an impression on him, how deeply we felt about it,” said Mr. Schumer, a New York Democrat.Fentanyl precursors from China have become a bipartisan issue in Congress, and the six senators who spoke with Mr. Xi were three Democrats and three Republicans.“China needs to enforce laws that prevent the export of fentanyl precursors to international drug markets,” said Senator Bill Cassidy, Republican of Louisiana.Despite the scale of the problem, there is hope that greater coordination between the United States and China could improve the situation. Cooperation between the countries on preventing shipments of the precursor chemicals stalled several years ago after the United States placed sanctions on a Chinese government entity for its alleged involvement in human rights abuses in China’s westernmost region, Xinjiang.That entity was located at the same address in Beijing as the National Narcotics Laboratory of China, which plays a key role in China’s law enforcement effort on drug-related chemicals.Chinese officials deeply resent American sanctions on their institutions, and U.S. officials have taken the position that because of the risk of confusion among the two institutes at the same address, neither institute can work with the United States.China then broadened its position in August 2022 when it halted any counternarcotics coordination with the United States as one of a series of measures taken in response to a visit to Taiwan by Representative Nancy Pelosi, then the speaker of the House. Beijing claims Taiwan, a self-ruled island democracy, as part of its territory.Eileen Sullivan More

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    Xi Jinping to Address U.S. Business Leaders Amid Rising Skepticism of China Ties

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    Corporate executives will pay $2,000 a head to dine with China’s leader in San Francisco next week, in one of a series of engagements aimed at stabilizing the U.S.-China relationship.The Chinese leader Xi Jinping, who is set to meet with President Biden in San Francisco next week, is expected to speak to top American business executives at a dinner following that bilateral meeting.Mr. Xi, who is traveling to the United States for an international conference, will address business leaders at a challenging moment in U.S.-China relations. The United States has expressed growing concern about China’s military ambitions and has sought to cut off Beijing’s access to technology that could be used against the United States. China’s treatment of Western companies, which are facing tougher restrictions in how they do business, have also prompted firms to question the wisdom of investing in China.Still, Chinese and American leaders have expressed interest in bolstering ties between their economies, the world’s two largest, which remain inextricably linked through trade. The Biden administration has sent several top officials to China this year to try to make clear that while the United States wants to protect national security, it does not seek to sever economic ties with Beijing.It is unclear whether Mr. Xi’s visit will do much to alleviate the skepticism of foreign businesses, many of which are deterred both by China’s slowing economic growth and the tighter grip of the Chinese Communist Party on business activity under Mr. Xi.Tickets to the dinner and reception, hosted by the National Committee on U.S.-China Relations and the U.S.-China Business Council, cost $2,000 each, according to an invitation circulating online. For $40,000, companies can purchase eight seats at a table plus one seat at Mr. Xi’s table, a person familiar with the event said.Engagements between Chinese officials and the U.S. business sector will try to send the signal that China remains an attractive place to do business, “as evidenced by these companies flocking to meet with Xi Jinping and have dinner with him,” Jude Blanchette, the Freeman Chair in China Studies at the Center for Strategic and International Studies, said in a briefing on Tuesday.Beijing wants this for “tactical reasons,” Mr. Blanchette said. “I don’t think, at a broad level, they’re expecting or see the prospect of resetting or recalibrating the relationship.”Foreign firms are particularly concerned about Chinese regulations that block them from selling to the government or into certain markets, and a broader counter-espionage law that can lead to prison time for company executives and researchers who deal in sensitive industries. At the same time, the United States is stepping up restrictions on investing and selling advanced technology to China, saying that such ties can pose national security concerns.Many businesses still see China as an essential market, but an increasing number are starting to look to other countries for their new investments. A survey by the U.S.-China Business Council of its members this year found that 34 percent had stopped or reduced planned investment in China over the past year, a higher percentage than in previous years.Mr. Blanchette said Chinese officials would also see the meeting as an opportunity to try to shift the U.S. trajectory on the technology controls it has placed on China. But the United States is unlikely to change its stance, he said.“I think this will be one of the issues where the U.S. and China will have longstanding tensions. And I’m sure this will be communicated to Beijing,” Mr. Blanchette said.The visit will be Mr. Xi’s first trip to the United States since 2017, when he met with President Donald J. Trump at the Mar-a-Lago estate in Florida. Since then, U.S.-China business relations have changed drastically, with the countries carrying out a trade war and sparring over advanced technology and geopolitical influence, and China turning notably more authoritarian under Mr. Xi.The dinner and reception featuring Mr. Xi will be part of a two-day “C.E.O. Summit” taking place next week on the sidelines of a bigger meeting of the leaders of the Asia Pacific Economic Cooperation, a group of 21 countries that ring the Pacific Ocean. Mr. Biden is expected to meet with Mr. Xi earlier next Wednesday, in their first face-to-face meeting in a year.Mr. Biden and Mr. Xi are expected to discuss business and technology ties, as well as issues like communication between the countries’ militaries, stopping the flow of fentanyl to the United States and new agreements for governing artificial intelligence.In recent weeks high-level Chinese officials have met with U.S. counterparts to lay the groundwork for the trip. In a news release Wednesday, the organizers of the C.E.O. summit said that Mr. Biden and Mr. Xi would be in attendance at the two-day summit, along with other world leaders and the chief executives of companies including Microsoft, Mastercard and Pfizer. More

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    Solar Manufacturing Lured to U.S. by Tax Credits in Climate Bill

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    A combination of government policies is finally succeeding in reversing a long decline in solar manufacturing in the United States.Six years ago, an executive from Suniva, a bankrupt solar panel manufacturer, warned a packed hearing room in Washington that competition from companies in China and Southeast Asia was causing a “blood bath” in his industry. More than 30 U.S.-based solar companies had been forced to shut down in the previous five years alone, he said, and others would soon follow unless the government supported them.Suniva’s pleas helped spur the Trump administration to impose tariffs in 2018 on foreign-made solar panels, but that did not reverse the flow of jobs in the industry from going overseas. Suniva’s U.S. factories remained shuttered, with dim prospects for reopening.That is, until now. Last month, Suniva announced plans to reopen a Georgia plant, buoyed by tariffs, protective regulations and, crucially, lavish new tax breaks for Made-in-America solar manufacturing that President Biden’s signature climate law, the Inflation Reduction Act, created.Solar companies have long been the beneficiaries of government subsidies and trade protections, but in the United States, they have never been the object of so many simultaneous efforts to support the industry — and so much money from the government to back them up.The combination of billions of dollars of tax credits for new facilities and tougher restrictions on foreign products appears to be driving a wave of so-called reshoring of solar jobs. Those efforts are succeeding where more modest approaches did not, although critics argue that the gains come at a high cost to taxpayers and may not hold up in the long run.In the year since the climate law was passed, companies have announced nearly $8 billion in new investments in solar factories across the United States, according to data from the Massachusetts Institute of Technology and the Rhodium Group, a nonpartisan research firm. That is more than triple the amount of total investment announced from 2018 through the middle of 2022.Suniva plans to reopen and expand a factory to make solar cells in Norcross, Ga., by spring. REC Silicon will restart this month a polysilicon plant in Moses Lake, Wash., that it shut down in 2019. Maxeon, a Singapore-based producer of solar cells and modules, will start work next year on a $1 billion site in New Mexico.In each of those cases, executives cited the incentives in the climate law as a driving factor in their investment decisions.In recent years, China overtook foreign competitors through huge government investments that allowed it to build factories 10 times as large as American ones.Gilles Sabrie for The New York Times“It was kind of exactly what we had in mind in terms of what would be needed, to pull these kinds of manufacturing initiatives forward,” said Peter Aschenbrenner, Maxeon’s chief strategy officer.China has loomed large over the industry for more than a decade. American demand for solar power has grown sharply since 2010 — by about 24 percent each year in that time, according to the Solar Energy Industries Association, a trade group. But much of that spending went to cheaper foreign solar panels, often made by Chinese companies or with Chinese parts. That raised concerns of American overreliance on China, which is restricting supplies of other key products and whose solar production has been troubled by human rights concerns.U.S. solar manufacturing employment peaked in 2016, with just over 38,000 workers. By 2020, nearly one-fifth of those jobs were gone.Factory solar jobs have begun to grow again.E2, an environmental nonprofit organization, estimated that new investments announced in the first year of the climate law would create 35,000 temporary construction jobs and 12,000 permanent jobs across the entire solar industry in the years to come. Thousands of those permanent jobs are related to manufacturing, including an expected 2,000 at Maxeon’s planned plant in New Mexico.Economists and executives said that surge was largely due to public subsidies that flipped the economics of the solar industry in favor of domestic production.Mr. Aschenbrenner said Maxeon’s cost of domestic solar manufacturing would fall roughly 10 percent, just through a new manufacturing tax credit in the climate law that targets the production of both solar cells and solar modules. That is enough to offset the higher wage and construction costs of American factories, he said.The law also includes credits for customers, like homeowners and utilities, that install solar panels and begin generating electricity from them. If the customer buys panels that are sourced from the United States, like the ones Maxeon is planning, the value of that credit grows 10 percent.Those incentives could be enough to build an American industry that, within a matter of years, could be large and efficient enough to compete with China even without subsidies, Mr. Aschenbrenner said.Others are more skeptical. Analysts at Wood Mackenzie, an energy consultancy, estimate that nearly half the solar module capacity announced by 2026 will not materialize, given that some manufacturers announce long-term plans to gauge feasibility and interest.The recent embrace of subsidies and tariffs by politicians of both parties also irks some economists, who say that while such programs can save or create jobs, they do so at an extremely high cost.A 2021 study by the Peterson Institute of International Economics of past industrial policy programs found that the Obama administration’s 2009 investment in Solyndra, a solar company that ultimately went bankrupt, cost taxpayers about $216,000 for each job created, more than four times prevailing industry wages. Other programs were even more expensive.REC Silicon, a Norwegian maker of polysilicon, entered into a deal with QCells to supply that company’s planned U.S. plants.Megan Varner/Reuters“With certain kinds of technology, you can subsidize and protect your way to having factories,” said Scott Lincicome, who studies trade policy at the Cato Institute, a libertarian think tank. “The question is always about at what cost?”In addition to the costs incurred to taxpayers, protections for the U.S. industry are making solar products more expensive in the United States than in other countries, Mr. Lincicome said. That slows the adoption of solar technology, in contrast to climate goals.Trends in the global solar industry have often been closely linked with government action. The industry started booming over a decade ago when Germany and Japan began offering subsidies for solar power.In recent years, China overtook foreign competitors through huge government investments that allowed it to build factories 10 times as large as American ones. Since 2011, China has invested more than $50 billion in the sector, ultimately capturing more than 80 percent of the global share of every stage in the manufacturing process, according to the International Energy Agency.Tariffs also shaped the industry’s evolution. The United States imposed levies on Chinese solar products in 2012. The next year, China retaliated with tariffs of up to 57 percent on U.S. polysilicon, a raw material for solar panels.That proved to be the death knell for the factory that REC Silicon, a Norwegian maker of polysilicon, was operating in Washington State, said Chuck Sutton, the company’s vice president of global sales and marketing. With few companies still standing outside China, REC Silicon “basically didn’t have any customers left,” he said.REC Silicon worked with the Trump administration to get China to commit to buying more American polysilicon as part of a 2019 trade deal. But China never followed through on those purchases.The turnaround for REC Silicon came, Mr. Sutton said, with the new tax credits this year. The manufacturer entered into a deal with QCells to supply its polysilicon to QCells’ planned U.S. plants. The deal allowed REC Silicon to reopen its Washington site, Mr. Sutton said.To compete with China, the industry needed “a whole-of-government approach,” Mr. Card of Suniva said, that included both tariffs and tax credits for domestic manufacturing.“They are not opposing forces,” he said. “They work together and make each other stronger.” More

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    Fragile Global Economy Faces New Crisis in Israel-Gaza War

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    A war in the Middle East could complicate efforts to contain inflation at a time when world output is “limping along.”The International Monetary Fund said on Tuesday that the pace of the global economic recovery is slowing, a warning that came as a new war in the Middle East threatened to upend a world economy already reeling from several years of overlapping crises.The eruption of fighting between Israel and Hamas over the weekend, which could sow disruption across the region, reflects how challenging it has become to shield economies from increasingly frequent and unpredictable global shocks. The conflict has cast a cloud over a gathering of top economic policymakers in Morocco for the annual meetings of the I.M.F. and the World Bank.Officials who planned to grapple with the lingering economic effects of the pandemic and Russia’s war in Ukraine now face a new crisis.“Economies are at a delicate state,” Ajay Banga, the World Bank president, said in an interview on the sidelines of the annual meetings. “Having war is really not helpful for central banks who are finally trying to find their way to a soft landing,” he said. Mr. Banga was referring to efforts by policymakers in the West to try and cool rapid inflation without triggering a recession.Mr. Banga said that so far, the impact of the Middle East attacks on the world’s economy is more limited than the war in Ukraine. That conflict initially sent oil and food prices soaring, roiling global markets given Russia’s role as a top energy producer and Ukraine’s status as a major exporter of grain and fertilizer.“But if this were to spread in any way then it becomes dangerous,” Mr. Banga added, saying such a development would result in “a crisis of unimaginable proportion.”Oil markets are already jittery. Lucrezia Reichlin, a professor at the London Business School and a former director general of research at the European Central Bank, said, “the main question is what’s going to happen to energy prices.”Ms. Reichlin is concerned that another spike in oil prices would pressure the Federal Reserve and other central banks to further push up interest rates, which she said have risen too far too fast.As far as energy prices, Ms. Reichlin said, “we have two fronts, Russia and now the Middle East.”Smoke rising from bombings of Gaza City and its northern borders by Israeli planes.Samar Abu Elouf for The New York Times Pierre-Olivier Gourinchas, the I.M.F.’s chief economist, said it’s too early to assess whether the recent jump in oil prices would be sustained. If they were, he said, research shows that a 10 percent increase in oil prices would weigh down the global economy, reducing output by 0.15 percent and increasing inflation by 0.4 percent next year. In its latest World Economic Outlook, the I.M.F. underscored the fragility of the recovery. It maintained its global growth outlook for this year at 3 percent and slightly lowered its forecast for 2024 to 2.9 percent. Although the I.M.F. upgraded its projection for output in the United States for this year, it downgraded the euro area and China while warning that distress in that nation’s real estate sector is worsening.“We see a global economy that is limping along, and it’s not quite sprinting yet,” Mr. Gourinchas said. In the medium term, “the picture is darker,” he added, citing a series of risks including the likelihood of more large natural disasters caused by climate change.Europe’s economy, in particular, is caught in the middle of growing global tensions. Since Russia invaded Ukraine in February 2022, European governments have frantically scrambled to free themselves from an over-dependence on Russian natural gas.They have largely succeeded by turning, in part, to suppliers in the Middle East.Over the weekend, the European Union swiftly expressed solidarity with Israel and condemned the surprise attack from Hamas, which controls Gaza.Some oil suppliers may take a different view. Algeria, for example, which has increased its exports of natural gas to Italy, criticized Israel for responding with airstrikes on Gaza.Even before the weekend’s events, the energy transition had taken a toll on European economies. In the 20 countries that use the euro, the Fund predicts that growth will slow to just 0.7 percent this year from 3.3 percent in 2022. Germany, Europe’s largest economy, is expected to contract by 0.5 percent.High interest rates, persistent inflation and the aftershocks of spiraling energy prices are also expected to slow growth in Britain to 0.5 percent this year from 4.1 percent in 2022.Sub-Saharan Africa is also caught in the slowdown. Growth is projected to shrink this year by 3.3 percent, although next year’s outlook is brighter, when growth is forecast to be 4 percent.Staggering debt looms over many of these nations. The average debt now amounts to 60 percent of the region’s total output — double what it was a decade ago. Higher interest rates have contributed to soaring repayment costs.This next-generation of sovereign debt crises is playing out in a world that is coming to terms with a reappraisal of global supply chains in addition to growing geopolitical rivalries. Added to the complexities are estimates that within the next decade, trillions of dollars in new financing will be needed to mitigate devastating climate change in developing countries.One of the biggest questions facing policymakers is what impact China’s sluggish economy will have on the rest of the world. The I.M.F. has lowered its growth outlook for China twice this year and said on Tuesday that consumer confidence there is “subdued” and that industrial production is weakening. It warned that countries that are part of the Asian industrial supply chain could be exposed to this loss of momentum.In an interview on her flight to the meetings, Treasury Secretary Janet L. Yellen said that she believes China has the tools to address a “complex set of economic challenges” and that she does not expect its slowdown to weigh on the U.S. economy.“I think they face significant challenges that they have to address,” Ms. Yellen said. “I haven’t seen and don’t expect a spillover onto us.” More

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    A Rural Michigan Town Is the Latest Battleground in the U.S.-China Fight

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    Firestorms over Chinese investments, like a battery factory in Green Charter Township, are erupting as officials weigh the risks of taking money from an adversary.Yard signs along the quiet country roads of Green Charter Township, Mich., home to horse farms and a 19th-century fish hatchery, blare a message that an angered community hopes is heard by local leaders, the Biden administration and China: “No Gotion.”The opposition is to a plan by Gotion, a subsidiary of a Chinese company, to build a $2.4 billion electric vehicle battery factory on roughly 270 acres of largely uninhabited scrub land. An investment of that magnitude can transform a local economy, but in this case it is unwelcome by many. Residents fear that the company’s presence is a dangerous infiltration by the Chinese Communist Party and it has led to backlash, death threats and an attempt to unseat the elected officials who backed the project.The debate over the factory has turned a township of about 3,000 people located 60 miles north of Grand Rapids against each other and into an unlikely battleground in the economic contest between the United States and China. The resistance is part of a broader movement by states to erect new barriers to Chinese investment amid concerns about national security and growing anti-China sentiment.“It’s the Communist influences that I’m bothered by, because they have shown repeatedly that they don’t care about our rules, our laws or anything,” said Lori Brock, who lives on a 150-acre horse farm near where the battery factory is being built. “They shouldn’t be able to buy here.”Gotion purchased 270 acres of land in Green Charter Township with plans to build an electric vehicle battery plant.Cydni Elledge for The New York TimesThat sentiment has been reverberating in the United States and on the Republican presidential campaign trail this year. In August, the campaign of Nikki Haley called Michigan’s Democratic governor, Gretchen Whitmer, a “comrade” for backing the Gotion factory. On Wednesday, Vivek Ramaswamy, a Republican candidate who has called for banning Chinese investments, will hold a rally at Ms. Brock’s farm.Gotion has insisted that it has no ideological ties to China. John Whetstone, a company spokesman, said Gotion was “in no way affiliated with any political party,” explaining that it had pledged to the township not to partake in any activity that supports or encourages any political philosophy.Animosity toward China has been deterring Chinese investment in the United States in recent years. Annual investment by Chinese companies has fallen to $5 billion in 2022 from $46 billion in 2016, according to a recent report by Rhodium Group, as relations between the world’s two largest economies soured. Employment at Chinese firms in the United States has declined by nearly 40 percent since 2017, to 140,000 workers.But investment is starting to turn around as a result of new federal incentives — included in the 2022 Inflation Reduction Act — that were meant to spur American production of electric vehicles. Foreign companies, including those from China, are trying to capitalize on tax credits for businesses that manufacture renewable energy products inside the United States.The Coalition for a Prosperous America, which represents American manufacturers, estimates that Chinese companies could gain access to $125 billion in U.S. tax credits related to “green energy manufacturing” investments.“There are really strong commercial logics driving this, and those commercial logics aren’t going away anytime soon,” said Kyle Jaros, a professor at the University of Notre Dame, who studies Chinese investment in the United States.The possibility that American taxpayers could subsidize Chinese firms has stoked anger in local communities and in Congress, where lawmakers are scrutinizing transactions involving companies with ties to China and urging the Biden administration to block them.Experts predict that Chinese companies will continue to pursue investments in the United States but concerns at the local level and in Washington are mounting.Cydni Elledge for The New York TimesSenator Marco Rubio of Florida, a Republican, has introduced legislation that would block subsidies to Chinese battery companies. A House committee has demanded answers about a licensing agreement between Ford and the Chinese battery company Contemporary Amperex Technology Co. Limited. Ford has defended the project and described it as an effort to strengthen domestic battery production.House Republicans have also urged Treasury Secretary Janet L. Yellen to withhold any federal subsidies for the Gotion facility and questioned why the Committee on Foreign Investment in the United States did not block its investment.Gotion has said that it voluntarily submitted documents to the interagency panel, known as CFIUS, and the committee declined to block the transaction.The Inflation Reduction Act does restrict American consumers from getting tax credits if they buy electric cars that have parts that come from “foreign entities of concern,” such as China. However, the law does not allow the Treasury to block Chinese companies from securing tax credits if they build factories in the United States.“We know that the vast majority of investments made through the Inflation Reduction Act are being made by American companies,” said Wally Adeyemo, the deputy Treasury Secretary.The Treasury estimates that only 2 percent of the electric vehicle and battery investments that have been made during the Biden administration involve Chinese companies.Gotion already has operations in California and Ohio and plans to open a $2 billion lithium battery manufacturing plant in Illinois. The company chose Michigan last year after securing nearly $800 million in grants and tax exemptions from the state’s strategic fund, whose officials said the investment would bring jobs, customers and economic vitality to the region. At the time, Ms. Whitmer hailed the factory as a win for the state.Since then, a growing and vocal contingent has been working to halt the project.Much of that effort has been directed at Green Charter Township’s board of trustees, a group of local Republican officials who voted to allow Gotion to secure the state tax breaks. When residents realized that the company that was coming to town had ties to China, township meetings that usually drew a handful of people attracted hundreds of angry critics.Green Charter Township’s supervisor, Jim Chapman, sees the advantages of having a Gotion electric vehicle battery plant in the region.Cydni Elledge for The New York TimesJim Chapman, the township supervisor, has heard residents suggest that they would call in the Michigan militia or exercise their Second Amendment rights to stop Gotion from building the factory. Mr. Chapman, a lifelong Republican and former police officer, has found himself in the position of trying to convince his neighbors that allowing Gotion to bring more than 2,000 new jobs to the area will create a housing boom and bring other new businesses to the area.Yet residents have confronted Mr. Chapman with a host of conspiracy theories including that the plant is a “Trojan Horse” and that it will be used to spy on Americans. Some in town believe that the plant will employ cheap Chinese labor, instead of local workers, and erect cooling towers to conceal ballistic missiles.“No Gotion” groups active on Facebook and other social media platforms have seized on the company’s bylaws, which say the company operates in accordance with the Constitution of the Communist Party of China.Kelly Cushway, an organizer in the Gotion resistance movement, opposes the facility and is running for trustee of Green Charter Township.Cydni Elledge for The New York Times“I will go to my grave and people will curse me for this project,” Mr. Chapman said during an interview in his office inside the Green Charter Township building.After researching the company and the actions of other Chinese businesses that operate in the United States, Mr. Chapman concluded that Gotion was not a threat and that the opportunity to invigorate a relatively poor part of the state was worthwhile.“What are they going to spy on us for in Big Rapids? Are they going to steal Carlleen Rose’s fudge recipe?” Mr. Chapman asked, referring to the owner of a popular confectionery in Big Rapids.Opponents hope that a November recall election can replace the board and stop Gotion in its tracks. Residents are raising money to file lawsuits and petition against every permit that Gotion will need to construct a factory that is expected to span more than a million square feet.“I’m worried about environmental catastrophes — there’s going to be 200 to 300 truckloads of chemicals coming in every day,” said Kelly Cushway, who opposes Gotion and is running for a seat on the Green Charter Township board. “We know China has not worried too much about their environment.”Some community activists such as Ms. Brock are coordinating with counterparts in other states including North Dakota, where Fufeng USA tried and failed to construct a corn mill, to learn how to terminate a Chinese investment.Ms. Brock said she remained hopeful that the Gotion factory in her town could be halted.“We haven’t even started,” Ms. Brock said. “We haven’t even hit them with one lawsuit yet, and it’s coming.” More

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    What Retail Sales and Other Data Say About China’s Economy

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    Consumers are spending a little more, but apartment prices and the pace of construction keep falling.China’s trains, planes, stores and beaches were a little fuller last month than a year ago, and the pace of activity picked up at factories, particularly those making mobile phones and semiconductors.A batch of numbers released on Friday by China’s National Bureau of Statistics showed a modest improvement in the country’s overall retail sales and industrial production during August. A series of small steps taken by the government over the summer, including two rounds of interest rate cuts, seems to be yielding a slightly better-than-expected improvement in the country’s economy.“The national economy has accelerated its recovery, production and supply have increased steadily, market demand has gradually improved,” Fu Linghui, China’s director of national economic statistics, said at a news conference.But many foreign economists were more guarded.“Some may be of the view that China’s economy has already bottomed out, but we remain cautious,” said a research note from Nomura, a Japanese bank.Real estate remains a persistent risk.The broad troubles of China’s real estate sector continue to cast a long shadow over the country’s economic prospects. Property investment plummeted nearly a fifth in August from the same month a year ago, an even steeper decline than in July.Construction sites around China appear visibly less busy, although activity has not stopped entirely and tower cranes still dot the skyline.Construction of new apartment towers has faltered because of falling apartment prices.Based on data released on Friday for prices of new apartments in 70 large and medium-sized cities across China, Goldman Sachs calculated that prices were falling in August at a seasonally adjusted annual rate of 2.9 percent, compared with 2.6 percent in July.Construction sites around China appear visibly less busy, although activity has not stopped entirely and construction cranes still dot the skyline.Qilai Shen for The New York TimesThe statistics for new apartments considerably understate the speed and extent of price declines, however, as local governments have put heavy pressure on developers not to cut prices.Prices of existing homes in 100 cities across China fell an average of 14 percent by early August from their peak two years earlier, according to the Beike Research Institute, a Tianjin research firm. Rents have fallen 5 percent.Construction and related activities, including public works projects, make up at least a quarter of the Chinese economy. The government has tried to offset the plunge in apartment construction by demanding that already deeply indebted local and provincial governments undertake a debt-fueled wave of large projects, including new subways, municipal water systems, highways, public parks, high-speed rail lines and other infrastructure.Banks are being squeezed.Loans that China’s banks have made to property developers, dozens of which have defaulted on debt payments, are in trouble. So are loans to local governments and their financial affiliates involved in real estate. Banks are allowed to demand immediate repayment if work on a construction project has stopped, but they are reluctant to do so. Demand for new real estate loans remains weak.The central bank, the People’s Bank of China, announced on Thursday that it was freeing banks to set aside smaller reserves and start extending more credit. The move was widely seen as intended to accommodate an upcoming large batch of bond issuance by local and provincial governments to pay for their infrastructure projects.Investment in fixed assets was held back by property woes.Overall investment in what are known as fixed assets was up 3.2 percent for the first eight months of this year compared to the same months last year — infrastructure spending plus some manufacturing investment offset the property nosedive. The pace through August represented a slowdown from 3.4 percent the prior month.The value of China’s industrial production, a proxy for the activity of factories, rose 4.5 percent in August from a year ago.Agence France-Presse — Getty ImagesThe production of semiconductors rose 21.1 percent in August from a year earlier. The government has more heavily subsidized chip-making as the United States has restricted the export to China of a few of the highest-speed computer chips and of the gear to manufacture them.The value of China’s industrial production, a proxy for the activity of factories, rose 4.5 percent in August from a year ago after adjusting for considerable deflation in wholesale prices for factory goods over the past year. The increase had been 3.7 percent in July.Consumers are changing how they spend.Retail sales were up 4.6 percent in August from the same month last year, as rising energy prices likely pushed up retail sales, Nomura said.A main reason that retail sales rebounded was because a year ago, people in China were still living under stringent “zero Covid” measures that restricted their activity.Beer and wine production dropped from a year ago while output rose for bottled water, carried by many Chinese people during outdoor activities, and production of fruit and vegetable juices climbed sharply. More

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    The U.S. and China Are Talking Again. Where It Will Lead Is Unclear.

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    Gina Raimondo, the U.S. commerce secretary, and her Chinese counterparts agreed to continue economic talks, but such dialogues have a disheartening record.Gina Raimondo, the commerce secretary, expressed hopes that American and Chinese officials would work on improving the countries’ business relationship.Pool photo by Andy WongWhen Gina Raimondo, the commerce secretary, visited China this week, she joined a long line of U.S. politicians who have come to the country to try to sway Chinese officials to open their market to foreign businesses and buy more American exports, in addition to other goals.Ms. Raimondo left Shanghai on Wednesday night with no concrete commitments from China to treat foreign businesses more equitably or step up purchases of Boeing jets, Iowa corn or other products. In a farewell news conference, she said that hoping for such an outcome would have been unrealistic.Instead, Ms. Raimondo said her biggest accomplishment was restoring lines of communication with China that would reduce the chance of miscalculation between the world’s two largest economies. She and Chinese officials agreed during the trip to create new dialogues between the countries, including a working group for commercial issues that American businesses had urged her to set up.“The greatest thing accomplished on both sides is a commitment to communicate more,” Ms. Raimondo said on Wednesday.She had also delivered what she described as a tough message. The Biden administration was willing to work to promote trade with China for many categories of goods. But the administration was not going to heed China’s biggest request: that the United States reduce stringent controls on exports of the most advanced semiconductors and the equipment to make them.“We don’t negotiate on matters of national security,” Ms. Raimondo told reporters during her visit.While she called the trip “an excellent start,” the big question is where it will lead. There is a long history of frustrating and unproductive economic dialogues between the United States and China, and there are not many reasons to believe this time will prove different.Forums for discussion may have helped resolve some individual business complaints, but they did not reverse a broad, yearslong slide toward more conflict in the bilateral relationship. Now, the U.S.-China relationship faces a variety of significant security and economic issues, including China’s more aggressive posture abroad, its use of U.S. technology to advance its military and its recent raids on foreign-owned businesses.Ms. Raimondo says she has the backing of the president and U.S. officials. And Biden administration officials argue that even the shift to begin talking has been significant, after a particularly tense period. Relations between the United States and China became frosty last August when Representative Nancy Pelosi, the House speaker at the time, visited Taiwan, and they froze entirely after a Chinese surveillance balloon flew across the United States in February.Ms. Raimondo’s trip capped a summer of outreach by four senior Biden officials. R. Nicholas Burns, the U.S. ambassador to China, who took office in January 2022 and accompanied Ms. Raimondo on the trip, said on Tuesday that American officials “literally were not talking to the Chinese leadership at a senior level, my first 15 months here.”“In a very, very challenging relationship, intensive diplomacy is critical,” he added.Not everyone views re-engagement as a good thing. Republican lawmakers, in particular, increasingly see the conflict between the United States and China as a fundamental clash of national interests. Critics view the outreach as an invitation for China to drag out reforms, or a signal to Beijing that the United States is willing to make concessions.“Of the more than two dozen great-power rivalries over the past 200 years, none ended with the sides talking their way out of trouble,” Michael Beckley, an associate professor of political science at Tufts University, wrote in Foreign Affairs this month. He added, “The bottom line is that great-power rivalries cannot be papered over with memorandums of understanding.”The space for compromise also seems narrow. Both governments have little desire to be seen by domestic audiences as making concessions. And in both countries, the share of trade that is considered off limits or a matter of national security concerns is growing.Ms. Raimondo at Shanghai Disneyland on Wednesday. She said her biggest accomplishment in her trip to China was restoring communication to reduce the chance of miscalculation.Pool photo by Andy WongMs. Raimondo expressed wariness at being drawn into unproductive talks with China — a persistent issue over the last several decades. But she also described herself as a pragmatist, who would push to accomplish what she could and not waste time on the rest.“I don’t want to return to the days of dialogue for dialogue’s sake,” she said. “That being said, nothing good comes from shutting down communication. What comes from lack of communication is mis-assessment, miscalculation and increased risk.”“We have to make it different,” Ms. Raimondo said of her new dialogue, adding that the U.S.-China relationship was too consequential. “We have to commit ourselves to take some action. And we can’t allow ourselves to devolve into a cynical place.”Kurt Tong, a former U.S. consul general in Hong Kong who is now a managing partner at the Asia Group, a Washington consulting firm, said Ms. Raimondo had offered China half of what it wanted. She sent a clear message that many American companies should feel free to do business in China, after years of receiving criticism for doing so during the Trump administration and still from many Republicans in Congress. But she did not agree to relax American export controls.“China is essentially forced by circumstances to accept that half a loaf,” Mr. Tong said, adding, “I do sense there is a real desire in Beijing to stabilize the relationship, both because of the geopolitical relationship but also, perhaps more important, the doldrums on the economic side.”The recent weakness in the Chinese economy may create some opening for compromise. The Chinese economy has only limped back from its pandemic lockdowns. China’s youth unemployment rate has risen, its debt is piling up, and foreign investment in the country has fallen, as multinational companies look for other places to set up their factories.In a meeting with Ms. Raimondo on Wednesday, the Shanghai party secretary, Chen Jining, admitted that the sluggish economy made business ties more crucial.“The business and trade ties serve the role as stabilizing ballast for the bilateral ties,” Mr. Chen said. “However, the world today is quite complicated. The economic rebound is a bit lackluster. So stable bilateral ties in terms of trade and business is in the interest of two countries and is also called for by the world community.”Ms. Raimondo met with Chen Jining, the Shanghai party secretary, on Wednesday.Pool photo by Andy WongMs. Raimondo responded that she was looking forward to discussing “concrete” ways they might be able to work together to accomplish business goals and “to bring about a more predictable business environment, a predictable regulatory environment and a level playing field for American businesses here in Shanghai.”Some of the issues that Ms. Raimondo raised during her visit — including intellectual property theft, patent protection and the inability of Visa and Mastercard to receive final approval for access to the Chinese market — are the very same ones that were discussed in economic dialogues with China more than a decade ago, including under Presidents George W. Bush and Barack Obama.For instance, China promised in 2001 as part of its entry into the World Trade Organization that it would quickly allow American credit card companies into its market, and it lost a W.T.O. case on the issue in 2012. But 22 years later, Visa and Mastercard still do not have equal access to the Chinese market.For more than three decades, commerce secretary visits to China followed a familiar script. The visiting American official would call on China to open its markets to more American investment, and to allow more equal competition among foreign and local companies. Then the commerce secretary would attend the signing of contracts for exports to China.That included Barbara H. Franklin, who in 1992, at the end of the George H.W. Bush administration, oversaw the signing of $1 billion in contracts and the re-establishment of commercial relations with China after the deadly Tiananmen Square crackdown in 1989.Gary Locke of the Obama administration oversaw the signing of a broad contract in 2009 for the provision of American construction services. And Wilbur Ross, who went to China on behalf of President Donald J. Trump in 2017, came back with $250 billion in deals for everything from smartphone components to helicopters to Boeing jets.These deals did little to erase China’s enormous trade imbalance with the United States. China has fairly consistently sold $3 to $4 a year worth of goods to the United States for each dollar of goods that it purchased.In a sign of how much the focus of the relationship has shifted, Ms. Raimondo’s trip contained more discussion of national security than of new contracts. She gave her final news conference in a hangar at Shanghai Pudong Airport near two Boeing 737-800s, but did not mention the contract for several Boeings that China has yet to accept, much less any new sales.China, the world’s largest single market for new jetliners in recent years, essentially stopped buying Boeing jets during the Biden administration and switched to Airbus planes from Europe to show its unhappiness with American policies. Ms. Raimondo said on Tuesday that she had raised the lapse of Boeing purchases with Chinese leaders during her two days in Beijing.“I brought up all those companies,” Ms. Raimondo said. “I didn’t receive any commitments. I was very firm in our expectations. I think I was heard. And as I said, we’ll have to see if they take any action.” More