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    Italy’s Government Takes Aim at Taxi Shortages

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    The government took steps this week to increase the supply of cabs after months of shortages, but critics say the problems with the industry run deeper.This summer, countless tourists, as well as residents of many top Italian destinations, found themselves in the fruitless pursuit of elusive game: a taxi.In Italy, where ride-sharing services like Uber, Lyft and Bolt have been met with strong resistance and are heavily restricted, social media sites channeled tirades describing hourslong taxi lines at train stations and airports. Callers to taxi dispatch numbers were put on hold for interminable waits. And regular taxi apps failed to find cars.Returning to Rome from Naples one Monday afternoon in June, a train trip that takes just over an hour, Daniele Renzoni said that he and his wife waited for more than an hour and a half at Termini station for a cab under a blazing sun.“Just image a long line of grumbling, frustrated people, complaining, cursing. Hot day, angry tourists, there’s not much else to say,” said Mr. Renzoni, who is retired. “Taxi drivers will tell you there’s too much traffic, too many requests, too much everything, but the fact is, the customer pays.”The situation is “a disgrace to Italy,” said Furio Truzzi, president of the consumer rights group Assoutenti, one of several associations that protested the shortage.Things got so bad that earlier this week the government intervened, introducing measures that would simplify procedures so that cities can issue new taxi licenses, including temporary ones to cover peak periods like the summer or major events like the Catholic Church’s Jubilee in 2025 and the Winter Olympics in Milan and Cortina d’Ampezzo in 2026.Major cities and those with international airports, like Rome, Milan and Naples, where the taxi crunch has been felt most keenly, will also be able to increase the number of licenses by 20 percent, though owners of the new permits must use electric or hybrid cars.In Rome, for example, there are now about 7,800 taxis, and if 20 percent more licenses were issued, there would be about 1,500 more. Parliament now has two months to convert the decree into law.But transportation experts said the decree falls far short of what they say is a needed overhaul of the industry, which holds outsized sway over local — and national — politics. Thanks to the taxi lobby, ride-sharing services are almost nonexistent in Italy, where Uber is the only platform in use, with many restrictions.The government lost an opportunity for real change, said Andrea Giuricin, a transportation economist at a research center at the University of Milan Bicocca. He said the best way to meet consumer needs would be to increase the number of licenses for Italy’s chauffeur services, known as N.C.C., which work with Uber.“It’s very difficult in Italy” because “there isn’t a culture of liberalization in general,” creating little opportunity for competition, said Professor Giuricin. Taxis “are a small but powerful lobby” that easily influences politics, “which is very weak” in Italy, he said.Taxis parked in the Piazza del Plebiscito in Naples during a strike last year. Taxi drivers are a powerful lobby, and ride-sharing services have only made timid inroads in Italy.Ciro Fusco/EPA, via ShutterstockAngela Stefania Bergantino, a professor of transportation economics at the University of Bari, pointed out that previous governments had tried to open up the taxi market. But they failed.“The problem is that taxis are regulated by municipal governments, which can find themselves captive in the sense that it is difficult for City Hall to implement policies that the cab lobby doesn’t like,” she said. “These are lobbies that have effective strike tools,” like wildcat strikes or traffic blockages that can paralyze entire cities, she said.Industry officials were dismissive of the new decree. “Much ado about nothing,” said Andrea Laguardia, director of Legacoop Produzione e Servizi, an association of taxi cooperatives. “The government presented these measures as crucial to resolving the taxi shortage,” he said, but city governments, which issue taxi licenses, could already issue more if warranted. The measures don’t “resolve the problem of urban mobility,” Mr. Laguardia said.According to a 2022 report by Italy’s transportation authority, Italy has roughly one taxi for every 2,000 people, fewer than other European countries like France or Spain.Italy’s competition watchdog said this month that it was also examining the industry.Representatives of drivers for chauffeur services, who have much to gain from any liberalization of the market, say they are being held hostage by the taxi lobby, even as the world becomes digital and a rebound in tourism increases demand.“We are losing out on rides because we can’t increase the number of cars on the road,” said Luigi Pacilli, the president of Federnoleggio, a group representing some N.C.C. drivers.“It’s a complete bluff,” he said of the new measures, which allow, but do not mandate, new licenses. Prime Minister Giorgia Meloni could shake things up, he said, “but I don’t know if she’ll have the will or desire to fight one of the strongest lobbies in Europe.”Taxi drivers say they are taking the hit for a plethora of problems: traffic in cities that slows cars to a snail’s pace, the surge in tourism after the pandemic’s peak and inefficient public transportation.“Let’s make local public transportation work well and then we can decide if more licenses are necessary,” said Loreno Bittarelli, the president of one of Italy’s largest taxi dispatch consortiums.The drivers say that critical shortages last only last a few months each year, and that demand slows to a standstill in winter. Adding new licenses would only stretch the winter fasting among more drivers.Above all, though licenses are issued by the city, they can then be sold by the drivers, for sums that can reach 250,000 euros, or about $276,000, depending on the city — a retirement nest egg for many. With an influx of new licenses, the value of an existing license would depreciate.City administrators fear cabbies could revolt and strike if the status quo changes. “If I decide to issue new licenses,” said Eugenio Patanè, Rome’s city councilor in charge of transportation, “I’m going to find 1,000 taxis blocking traffic in Piazza Venezia,” the downtown Rome square that taxi drivers habitually clog while protesting. More

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    China’s Extreme Floods and Heat Ravage Farms and Kill Animals

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    China’s leader has made it a national priority to ensure the country can feed its large population. But weather shocks have disrupted wheat harvests and threatened pig and fish farming.The downpour began in late May, drenching the wheat crops in central China. As kernels of wheat blackened in the rain, becoming unfit for human consumption, the government mobilized emergency teams to salvage as much of the harvest as possible. In a viral video, a 79-year-old farmer in Henan Province wiped away tears as he surveyed the damage.The unusually heavy rainfall, which local officials said was the worst disruption to the wheat harvest in a decade, underscored the risks that climate shocks pose to President Xi Jinping’s push for China to become more self-reliant in its food supply.Ensuring China’s ability to feed 1.4 billion people is a key piece of Mr. Xi’s goal of leading the country to superpower status. In recent years, tensions with the United States, the coronavirus pandemic and Russia’s war on Ukraine have all created more volatility in global food prices, heightening the urgency for China to grow more of its own crops.The country has not experienced food price inflation at the levels seen in other major economies, but officials are concerned about the vulnerability of its food supply to global shocks. Last summer, prices for pork, fruit and vegetables spiked in China, prompting the government to release pork from its strategic reserves to stabilize prices. Afterward, Chinese leaders reiterated their call to prioritize food security.In recent weeks, extreme heat has killed fish in rice paddies in southern China’s Guangxi Province and thousands of pigs at a farm in the eastern city of Nantong, according to local news reports. The fire department in the northeastern city of Tianjin was called in to spray water on pigs that were suffering heat strokes while riding in a truck. Officials have warned about extreme heat and flooding damaging wheat crops in the northwestern region of Xinjiang.In a country where famines have destabilized dynasties throughout history, the ruling Communist Party is also aware that fulfilling basic needs is a prerequisite for political stability.Harvesting wheat in early June in Zhumadian, Henan Province, China.Josh Arslan/ReutersLast year, food shortages became a potent source of unrest after the government imposed a draconian lockdown on Shanghai, a city of 25 million people, to control the spread of the coronavirus. Online videos showed fighting among residents in the streets and in grocery stores to grab food. In the nationwide protests that ensued against China’s “zero Covid” policies, protesters shouted, “We want food, not Covid tests.” Already, farmland in China is shrinking, as rapid urbanization has polluted large swaths of the country’s soil and governments have sold rural land to developers. The distribution of water between northern and southern China is uneven, leaving some crop-growing regions vulnerable to droughts and others to flooding. The war in Ukraine has threatened China’s access to wheat and fertilizers. And a trade war with the United States that began in 2018 made it more expensive for China to buy soybeans and other foods from America.Mr. Xi has depicted self-reliance in food as a matter of national security, often saying, “Chinese people should hold their rice bowls firmly in their own hands.” He has set a “red line” that the country must maintain 120 million hectares of farmland, and has declared war on food waste, especially in restaurants. The Chinese government frequently points out that it has to feed one-fifth of the world’s population with less than 10 percent of the world’s arable land.Farmers spreading fertilizer in a recently harvested wheat field, now newly planted with corn, in Luohe, Henan Province, this month.Qilai Shen for The New York TimesTo create a more stable food supply, China has stockpiled crops and purchased more farmland overseas. It has been developing heat-resistant rice strains, genetically modified soybeans and new seed technologies, an effort that has triggered accusations of intellectual property theft from the United States.An article on the front page of the People’s Daily newspaper on Monday said Mr. Xi had a “special affection” for farmers and prioritized increasing their incomes. Last month, he visited a wheat field in northern China’s Hebei Province, where farmers were attempting to boost grain production by growing wheat varieties that could withstand drought.In a state-produced video of Mr. Xi’s visit, local officials showed off the breads and noodles that could be made with the new wheat varieties. “President Xi hopes that we can lead a happier life,” a local farmer said in the video, “and we will work harder toward that goal.”But weather-related shocks to the food supply are a far more unpredictable challenge.“You can impose more regulations to dis-incentivize local governments from selling farmland. You can subsidize farmers,” said Zongyuan Zoe Liu, a fellow for international political economy at the Council on Foreign Relations, a U.S.-based research institute. “But when extreme weather conditions happen, it not only creates damage, but it’s also very expensive to fix.”This month, record rainfall flooded the city of Beihai in southern China. And parts of China, including major cities like Shanghai and Beijing, have already experienced unusually early heat waves this year, with temperatures this month exceeding 106 degrees Fahrenheit in some areas.But the most recent fears about food security stemmed from the flooding in Henan Province and the surrounding regions in central China, which produce more than three-quarters of the country’s wheat.A farmer planting soy beans in a recently harvested wheat field in Luohe on Wednesday.Qilai Shen for The New York Times“During harvest season, the thing wheat farmers fear the most is long-lasting rains,” said Zhang Hongzhou, a research fellow who studies China’s food strategy at Nanyang Technological University in Singapore. “This is happening at the worst time.”The rains hit just as farmers were preparing to begin this year’s harvest, causing some of the wheat to sprout. This lower-quality wheat is unsuitable to process into flour and is typically sold at a lower price as animal feed.The extent of the damage to this year’s crop is still unclear. A lower wheat yield could force China to import more wheat this year and raise global grain prices, analysts said.China is the world’s largest producer and consumer of wheat. Demand has risen along with incomes as people in cities buy more Western-style breads and desserts. Soaring meat consumption in China has also necessitated more wheat, which is used for animal feed.In response to the rainfall in Henan, the Chinese government authorized 200 million yuan, or about $28 million, in disaster relief to help dry the wet grains and drain the soaked fields. Rural officials set up a 24-hour hotline for farmers and urged local governments to find corporate buyers for damaged wheat that is still edible.A farmer watering a recently harvested wheat field in Luohe.Qilai Shen for The New York TimesState media outlets have said the government’s efforts minimized losses for farmers, with a front-page article in a recent People’s Daily newspaper trumpeting the progress of the harvest. CCTV, the state broadcaster, aired a 15-minute video segment showing government officials warning farmers to harvest early.China’s fixation on food security has global implications, in large part because it maintains huge stockpiles of food, including what the U.S. Department of Agriculture estimates is about half of the world’s wheat reserves. Last year, U.S. officials accused China of hoarding food stocks and causing global food prices to rise, particularly in poorer countries. In response, China blamed the United States for instigating a global food crisis, saying American sanctions against Russia were hurting wheat exports to African countries.Gauging the stability of China’s food supply is difficult because information about the exact quantity and quality of its crop stockpiles is treated like a state secret. Although the country’s official data regularly shows record high wheat output, for instance, analysts have questioned the reliability of the data.But in January 2022, the government offered a rare glimpse. In response to the accusations by Western countries that China was hoarding food, a commentary published in The Economic Daily, a state-controlled newspaper, revealed that China had enough wheat and rice reserves to feed its people for at least 18 months, which the article suggested was a reasonable amount of stockpiling.“To be prepared for unexpected incidents is a principle of governing a nation,” the commentary said.Farmers planting soy beans in Luohe. A trade war with the United States that began in 2018 has made it more expensive for China to buy soybeans and other foods from America.Qilai Shen for The New York TimesZixu Wang More

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    Congress Spotlights Forced Labor Concerns With Chinese Shopping Sites Shein and Temu

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    A congressional investigation into Temu and Shein offered new insight into services that are delivering a deluge of cheap and little-regulated products.Lawmakers are flagging what they say are likely significant violations of U.S. law by Temu, a popular Chinese shopping platform, accusing it of providing an unchecked channel that allows goods made with forced labor to flow into the United States.In a report released Thursday, the House Select Committee on the Chinese Communist Party said Temu, a rapidly growing site that sells electronics, makeup, toys and clothing, had failed “to maintain even the facade of a meaningful compliance program” for its supply chains and was likely shipping products made with forced labor into the United States on a “regular basis.”The report stems from a continuing investigation into forced labor in supply chains that touch on China. Lawmakers said the report was based on responses submitted to the committee by Temu, as well as the fast fashion retailer Shein, Nike and Adidas.The report offered a particularly scathing assessment of Temu, saying there is an “extremely high risk that Temu’s supply chains are contaminated with forced labor.” The site advertises itself under the tagline “Shop like a billionaire” and is now the second most downloaded app in the Apple store.The report also criticized Shein’s use of an importing method that allows companies to bring products into the United States duty-free and with less scrutiny from customs, as long as packages are sent directly to consumers and valued at under $800. Some lawmakers have been pushing to close off this shipping channel, which is called de minimis, for companies sourcing goods from China.Lawmakers said that they were troubled by what the bipartisan committee’s investigation had uncovered so far, and that Congress should review import loopholes and strengthen forced labor laws.“Temu is doing next to nothing to keep its supply chains free from slave labor,” said Representative Mike Gallagher, a Wisconsin Republican who heads the committee. “At the same time, Temu and Shein are building empires around the de minimis loophole in our import rules: dodging import taxes and evading scrutiny on the millions of goods they sell to Americans.”“The initial findings of this report are concerning and reinforce the need for full transparency by companies potentially profiting from C.C.P. forced labor,” said Representative Raja Krishnamoorthi, an Illinois Democrat and a co-author of the report, referring to the Chinese Communist Party.Temu, which began operating in the United States in September, told the committee that it now brought millions of shipments into the United States annually through a network of more than 80,000 suppliers that sell directly from Chinese factories to U.S. consumers. The site sells clothing, temporary tattoos, modeling clay, electronics and other items directly to consumers for low prices, like $3 for a baby romper, $6 for sandals and $8 for a vacuum.The report also contained new data showing that Temu and Shein make heavy use of the de minimis rule, together accounting for almost 600,000 such packages shipped to the United States daily.The shipping method allows retailers to sell their goods to consumers at cheaper prices, since they are not subject to duties, taxes or government fees that apply to traditional retailers that typically ship overseas goods in bulk.A Shein pop-up store last year at the Shops at Willow Bend in Plano, Texas.Cooper Neill for The New York TimesDe minimis shipping also requires far less information to be disclosed about the products and the companies involved in the transaction, making it harder for U.S. customs officials to detect packages with narcotics, counterfeits and goods made with forced labor. The number of de minimis packages entering the United States more than tripled between 2016 and 2021, when it reached 720 million.At an annualized rate, the shipments reported by Shein and Temu would represent more than 30 percent of the de minimis shipments that came into the United States last year, and nearly half of those packages from China, the report said.Both Shein and Temu have steadily taken market share from U.S. brick-and-mortar retailers and won over younger consumers by investing in sophisticated e-commerce technology and offering hundreds more new products than competitors. Among teenagers, Shein was the third most popular e-commerce site behind Amazon and Nike, according to a Piper Sandler report this spring.As their popularity has grown, so has congressional scrutiny of the firms, given their ties to China. Shein was originally based in China but has moved its headquarters to Singapore. Temu, which is based in Boston, is a subsidiary of PDD Holdings, which moved its headquarters to Ireland from China this year.Lawmakers have been questioning their relationship with the Chinese government, as well as the companies’ ability to vet their supply chains to ensure they don’t contain materials or products from Xinjiang. Last year, the U.S. imposed a ban on products from Xinjiang, citing the region’s use of forced labor in factories and mines.The Chinese government has carried out a crackdown in Xinjiang on Uyghurs and other ethnic minorities, including the organized use of forced labor to pick cotton; work in mines; and manufacture electronics, polysilicon and car parts. Because of this, the U.S. government now presumes all materials from the region to be made with forced labor unless proved otherwise.A young Uyghur women working in a garment factory in Xinjiang in 2019.Gilles Sabrié for The New York TimesShein said in a statement that it had zero tolerance for forced labor and had a robust compliance system, including a code of conduct, independent audits, robust tracing technology and third-party testing. It provided detailed information to the House committee and will continue to answer its questions, the company said.“We have no contract manufacturers in the Xinjiang region,” it said. “As a global company, our policy is to comply with the customs and import laws of the countries in which we operate.” Temu did not respond to a request for comment.Laboratory tests commissioned by Bloomberg News in November found that some Shein clothing had been made with cotton from Xinjiang. Shein didn’t dispute those findings, but said in a statement to Bloomberg that it took steps in all global markets to comply with local laws and had engaged another lab, Oritain, to test its materials.The congressional report also criticized Temu’s failure to set up a compliance or auditing system that could independently verify that its sellers were not sourcing products from Xinjiang.Temu told the committee that it had a reporting system that consumers and sellers could use to file complaints, and that it asked its sellers to sign a code of conduct specifying a “zero-tolerance policy” for the use of forced, indentured or penal labor. Temu’s code of conduct also says the company reserves the right to inspect factories and warehouses to ensure compliance.But the code does not mention Xinjiang or the U.S. ban, and Temu told the House committee that it did not prohibit vendors from selling products made in Xinjiang, the report said.Temu also argued that its use of direct shipping meant that the U.S. consumer, not Temu, would bear the ultimate responsibility for adhering to the ban on Xinjiang goods.“Temu is not the importer of record with respect to goods shipped to the United States,” the report quoted it as saying.Customs lawyers said that it was not entirely clear which party would be liable for complying with the U.S. ban, but that any company facilitating the importation of goods from Xinjiang could face civil or criminal penalties.The committee report also pictured a key chain that was listed on Temu’s website this month and labeled “pendant with Xinjiang cotton.” The key chain itself is shaped like a bud of cotton, and the report said that the Xinjiang label “may refer to the materials, the supplier, the pattern or the origin of the product.”Temu’s “policy to not prohibit the sale of products that explicitly advertise their Xinjiang origins, even in the face of mounting congressional and public scrutiny on related topics, raises serious questions,” the report said.The New York Times was not able to verify whether the product is made using Xinjiang cotton, which is barred under U.S. law. The Times found an identical product listed for sale on a Chinese wholesale site that was described as manufactured in Henan Province, outside Xinjiang.A Times review of information shared by Temu vendors on Chinese social media sites also suggested that Temu did not require sellers to provide detailed information about where their products were made or which companies manufactured them.Vendors sharing tips online about Temu’s product review process gave several reasons that Temu commonly rejected new listings: for example, if the price was too high, if the samples were inconsistent with the photos or if the goods lacked consumer warning labels. But none mentioned concerns about links to Xinjiang or the U.S. import ban.Jordyn Holman More

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    As U.S. and Chinese Officials Meet, Businesses Temper Their Hopes

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    Chief executives in the U.S. have long pushed for closer ties between the two countries. Now they just hope a rocky situation won’t get worse.In a meeting in Beijing on Friday, China’s leader, Xi Jinping, traded warm smiles with Bill Gates and praised Mr. Gates as “the first American friend” he had met this year.The encounters in Beijing between Secretary of State Antony J. Blinken and his Chinese counterparts, starting on Sunday, are likely to feel noticeably chillier.The high-level meetings are aimed at getting the U.S.-China relationship back on track, and many American business leaders have been pushing the Biden administration to try to restore some stability in one of the world’s most important bilateral relationships.But for business leaders, and for officials on both sides, expectations for the meetings appear modest, with two main goals for the talks. One is to restore communication between the governments, which broke down this year after a Chinese surveillance balloon flew into U.S. airspace and Mr. Blinken canceled a visit scheduled for February. The other is to halt any further decline in the countries’ relationship.There is already evidence of the impact of the fraying ties. Foreign direct investment in China has fallen to an 18-year low. A 2023 survey by the American Chamber of Commerce in China showed that companies still see the Chinese market as a priority, but that their willingness to invest there is declining.“The economic relationship has become so dismal that any sign of progress is welcome, though expectations are low for any sort of a breakthrough,” said Jake Colvin, the president of the National Foreign Trade Council, which represents multinational businesses.“The hope is that high-level dialogues like this can start to inject some certainty for business into an increasingly fraught and unpredictable trade relationship,” he said.Still, as one of the world’s largest consumer markets and home to many factories that supply global businesses, China exerts a powerful pull. This year, as it eased its travel restrictions after three years of pandemic lockdowns, a parade of chief executives made trips to China, including Mary Barra of General Motors, Jamie Dimon of JPMorgan Chase and Stephen Schwarzman of Blackstone.On a visit to China this month, Elon Musk, the chief executive of Tesla and owner of Twitter, described the American and Chinese economies as “conjoined twins” and said he opposed to efforts to split them. Apple’s chief executive, Tim Cook, traveled to China in March and lauded the company’s “symbiotic” relationship with the nation.Sam Altman, the leader of OpenAI, which makes the ChatGPT chatbot, appeared virtually at a conference in Beijing this month, saying American and Chinese researchers should continue to work together to counter the risks of artificial intelligence.The tech industry, which has forged lucrative relationships with Chinese manufacturers and consumers, has warily watched Washington’s aggressive approach to China. While industry groups acknowledge the importance of moves to safeguard national security, they have urged the Biden administration to carefully calibrate its actions.Wendy Cutler, a former diplomat and trade negotiator who is now vice president at the Asia Society Policy Institute, said the United States and China might announce some small steps forward at the end of the meetings. The governments might agree, she said, to increase the paltry number of flights between their countries or the visas they are issuing to foreign visitors.But both sides will have plenty of grievances to air, Ms. Cutler said. Chinese officials are likely to complain about U.S. tariffs on goods made in China and restrictions on U.S. firms selling coveted chip technology to China. American officials may highlight China’s deteriorating business environment and its recent move to bar companies that handle critical information from buying microchips made by the U.S. company Micron.“I’m not expecting any breakthroughs, particularly on the economic front,” Ms. Cutler said, adding, “Neither side will want to be smiling.”American officials hope Mr. Blinken’s visit paves the way for more cooperation, including on issues like climate change and the restructuring the debt loads of developing countries. Other officials, including Treasury Secretary Janet L. Yellen, are considering visits to China this year, and Mr. Xi and President Biden may meet directly at either the Group of 20 meetings in Delhi in September or an Asia-Pacific economic meeting in San Francisco in November.In recent months, Biden officials have tried to mend the rift between the countries by arguing for a more “constructive” relationship. They have echoed European officials in saying their desire is for “de-risking and diversifying” their economic relationships with China, not “decoupling.”But trust between the governments has eroded, and Chinese officials appear to be skeptical of how much the Biden administration can do to restore ties.The extensive U.S. restrictions on the semiconductor technology that can be shared with China, which were issued in October, continue to rankle officials in Beijing. The United States has added dozens of Chinese companies to sanctions lists for aiding the Chinese military and surveillance state, or circumventing U.S. restrictions against trading with Iran and Russia.Biden administration officials are weighing further restrictions on China, including a long-delayed order covering certain U.S. venture capital investments. And the White House faces intense pressure from Congress to do more to crack down on national security threats emanating from Beijing.Not all companies are pushing for improved ties. Some with less exposure to China have tried to reap political benefits in Washington from the growing competition with the country. Meta, the parent company of Facebook and Instagram, has repeatedly raised concerns about TikTok, the Chinese-owned video app that has proved a formidable competitor to Instagram.“It’s really a dispute over the degree,” said James Lewis, a senior vice president at the Center for Strategic and International Studies. “How accommodating are you? How confrontational are you?”How aggressively companies are resisting the tensions with China, Mr. Lewis said, is linked to their exposure to the country’s market.“I think a lot of this has to do with your presence in China,” he said. More

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    TikTok, Shein and Other Companies Distance Themselves From China

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    Companies are moving headquarters and factories outside the country and cleaving off their Chinese businesses. It’s not clear the strategy will work.As it expanded internationally, Shein, the rapidly growing fast fashion app, progressively cut ties to its home country, China. It moved its headquarters to Singapore and de-registered its original company in Nanjing. It set up operations in Ireland and Indiana, and hired Washington lobbyists to highlight its U.S. expansion plans as it prepares for a potential initial public offering this year.Yet the clothing retailer can’t shake the focus on its ties with China. Along with other brands like the viral social app TikTok and shopping app Temu, Shein has become a target of American lawmakers in both parties. Politicians are accusing the company of making its clothes with fabric made with forced labor and calling it a tool of the Chinese Communist Party — claims that Shein denies.“No one should be fooled by Shein’s efforts to cover its tracks,” Senator Marco Rubio, Republican of Florida, wrote in a letter to other lawmakers this month.As relations between the United States and China turn increasingly rocky, some of China’s most entrepreneurial brands have taken steps to distance themselves from their home country. They have set up new factories and headquarters outside China to serve the United States and other foreign markets, emphasized their foreign ties and scrubbed any mention of “China” from their corporate websites.TikTok has set up headquarters in Los Angeles and Singapore, and invested in new U.S. operations that it says will wall off its American user data from its parent company, ByteDance. Temu has established a headquarters in Boston, and its parent company, PDD Holdings, has moved its headquarters from China to Ireland.Chinese solar companies have set up factories outside China to avoid U.S. tariffs on solar panels from China and limit their exposure to Xinjiang, a region that the United States now bars imports from because of its use of forced labor.JinkoSolar, a behemoth that produces one in 10 solar modules installed globally, has set up a supply chain entirely outside China to make goods for the United States.Other companies, including those that are foreign-owned, are building walls between their Chinese operations and their global businesses, judging that this is the best way to avoid running afoul of new restrictions or risks to their reputation.Sequoia Capital, the venture capital firm, said last week that it would split its global business into three independent partnerships, spinning off unique entities for China and India.Shein said in a statement that it was “a multinational company with diversified operations around the world and customers in 150 markets, and we make all business decisions with that in mind.” The company said it had zero tolerance for forced labor, did not source cotton from Xinjiang and fully complied with all U.S. tax and trade laws.A spokesperson for TikTok said that the Chinese Communist Party had neither direct nor indirect control of ByteDance or TikTok, and that ByteDance was a private, global company with offices around the world.“Roughly 60 percent of ByteDance is owned by global institutional investors such as BlackRock and General Atlantic, and its C.E.O. resides in Singapore,” said Brooke Oberwetter, a spokesperson.Temu did not respond to requests for comment.Analysts said companies were being driven out of China by a variety of motivations, including better access to foreign customers and an escape from the risk of a crackdown by the Chinese authorities.Some companies have more practical concerns, like reducing their costs for labor and shipping, lowering their tax bills or shedding the shoddy reputation that American buyers continue to associate with goods made in China, said Shay Luo, a principal at the consulting firm Kearney who studies supply chains.But a wave of tougher restrictions in the United States on doing business with China appears to be having an effect, too.Research by Altana, a supply chain technology company, shows that since 2016, new regulations, customs enforcement actions and trade policies that hurt Chinese exports to the United States were followed by “adaptive behavior,” like setting up new subsidiaries outside China, said Evan Smith, the company’s chief executive.For Chinese companies, going global is not a new phenomenon. The Chinese government initiated a “go out” policy at the turn of the century to encourage state-owned enterprises to invest abroad to gain overseas markets, natural resources and technology.Private companies like the electronics firm Lenovo, the appliance maker Haier and the e-commerce giant Alibaba soon followed, seeking investment targets and new customers.As tensions between the United States and China have risen in recent years, investment flows between the countries have slowed. U.S. tariffs on Chinese goods put in place by President Donald J. Trump and maintained by President Biden encouraged companies to move manufacturing from China to countries like Vietnam, Cambodia and Mexico. The pandemic, which halted factories in China and raised costs for moving goods across the ocean, accelerated the trend.International companies are now increasingly adopting a “China plus one” model of securing an additional source of goods in another country in case of supply interruptions in China. Chinese companies, too, are following this practice, Ms. Luo said.In the 12 months that ended in April, the share of imports to the United States from China reached its lowest level since 2006.“It is definitely a rational strategy for these companies to offshore, to move manufacturing or their headquarters to a third country,” said Roselyn Hsueh, an associate professor of political science at Temple University.In addition to tariffs and the ban on products from the Xinjiang region, the United States has imposed new restrictions on trade in technology and tougher security reviews for Chinese investments.The Chinese government, too, is clamping down on the transfer of data and currency outside the country, and it has squashed some Chinese companies’ efforts to list their stocks on American exchanges because of such concerns.Beijing has detained and harassed top tech executives, and foreign consulting firms. And its draconian lockdowns during the pandemic made clear to businesses that they operate in China at the mercy of the government.“Companies like Shein and TikTok move overseas both to reduce their U.S. regulatory and reputational risk, but also to reduce the likelihood that their founders and staff get intimidated or arrested by Chinese officials,” said Isaac Stone Fish, the chief executive of Strategy Risks, a consultant on corporate exposure to China.But companies like Shein and Temu still source nearly all of their products from China, and it’s not clear that the changes the Chinese companies are making to their businesses have done much to lower the heat.The opposition to these companies in Washington is being fueled by an incendiary combination of legitimate concerns over national security and forced labor, and the political appeal of appearing tough on China. It also appears to be driven by the opposition of certain competitors to these services, which are now some of the most downloaded apps in the United States.Shou Chew, the chief executive of TikTok, was questioned at a House hearing in March over whether the social app would make U.S. user data available to the Chinese government.Haiyun Jiang/The New York TimesIn March, a group called Shut Down Shein sprang up to pressure Congress to crack down on the retailer. The group, which has hired five lobbyists with the firm Actum, declined to disclose who is funding its campaign.In a five-hour hearing in March, lawmakers grilled TikTok’s chief executive over whether it would make U.S. user data available to the Chinese government, or censor the information broadcast to young Americans. Legislation is being considered that could permanently ban the app.Some lawmakers are arguing that JinkoSolar’s U.S.-made panels should not be eligible for government tax credits, and, for reasons that have not yet been disclosed, the company’s Florida factory was raided by customs officials last month.State governments, which have often been more welcoming to Chinese investment, are also growing more hostile. In January, Glenn Youngkin, the Republican governor of Virginia, blocked a deal for Ford Motor to set up a factory using technology from a Chinese battery maker, Contemporary Amperex Technology, calling it a “Trojan-horse relationship.”A House committee set up to examine economic and security competition with China is investigating the ties that Temu and Shein have with forced labor in China, and lawmakers are calling for Shein to be audited before its I.P.O.“The message of our investigation of Shein, Temu, Adidas and Nike is clear: Either ensure your supply chains are clean — no matter how difficult it is — or get out of countries like China implicated in forced labor,” Representative Mike Gallagher, the Republican chair of the committee, said in a statement.An investigation by Bloomberg in November found that some of Shein’s clothes were made with cotton grown in Xinjiang. In a statement, Shein said it had “built a four-step approach to ensure compliance” with the law, including a “code of conduct, independent audits, robust tracing technology and third-party testing.Jordyn Holman More

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    California Panel Calls for Billions in Reparations for Black Residents

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    A task force recommended that legislators enact a sweeping program to compensate for the economic harm from racism in the state’s history.A California panel approved recommendations on Saturday that could mean hundreds of billions of dollars in payments to Black residents to address past injustices. The proposals to state legislators are the nation’s most sweeping effort to devise a program of reparations.The nine-member Reparations Task Force, whose work is being closely monitored by politicians, historians and economists across the country, produced a detailed plan for how restitution should be handled to address a myriad of racist harms, including housing discrimination, mass incarceration and unequal access to health care.Created through a bill signed into law by Gov. Gavin Newsom in the wake of the nationwide racial justice protests after the murder of George Floyd in 2020, the panel has spent more than a year conducting research and holding listening sessions from the Bay Area to San Diego.It will be up to legislators to weigh the recommendations and decide whether to forge them into law, a political and fiscal challenge that has yet to be reckoned with.The task force’s final report, which is to be sent to lawmakers in Sacramento before a July 1 deadline, includes projected restitution estimates calculated by several economists working with the task force.One such estimate laid out in the report determined that to address the harms from redlining by banks, which disqualified people in Black neighborhoods from taking out mortgages and owning homes, eligible Black Californians should receive up to $148,099. That estimate is based on a figure of $3,366 for each year they lived in California from the early 1930s to the late 1970s, when federal redlining was most prevalent.To address the impact of overpolicing and mass incarceration, the report estimates, each eligible person would receive $115,260, or about $2,352 for each year of residency in California from 1971 to 2020, during the decades-long war on drugs.In theory, a lifelong state resident who is 71 years old, the average life expectancy, could be eligible for roughly $1.2 million in total compensation for housing discrimination, mass incarceration and additional harms outlined in the report.All of these estimates, the report notes, are preliminary and would require additional research from lawmakers to hash out specifics. The costs to the state were not outlined in the report, but totals from harms associated with housing and mass incarceration could exceed $500 billion, based on estimates from economists.While the panel members considered various methods for distributing reparations — some favored tuition or housing grants and others preferred direct cash payments — they ultimately recommended the direct payments.“The initial down payment is the beginning of a process of addressing historical injustices,” the report reads, “not the end of it.“Kamilah Moore, the chair, and Amos Brown, the vice chair, at the task force meeting on Saturday.Jason Henry for The New York TimesLast year, the task force, which is made up of elected officials, academics and lawyers, decided on the eligibility criteria, determining that any descendant of enslaved African Americans or of a “free Black person living in the United States prior to the end of the 19th century” should receive reparations.Still, on Saturday, there was sometimes contentious debate over clearly expressing the criteria in certain sections of the report — particularly regarding compensation.Should lawmakers pass legislation for payments, the panel suggested that a state agency be created to process claims and render payments, with elderly individuals getting priority. Nearly 6.5 percent of California residents, roughly 2.5 million, identify as Black or African American.“This is about closing the income and racial wealth gap in this country, and this is a step,” Gary Hoover, an economics professor at Tulane University who has studied reparations, said in an interview. “Wealth is sticky and is able to be transferred from generations. Reparations can close that stickiness.”In voting on its final report on Saturday on the Oakland campus of Mills College at Northeastern University, the panel also suggested that state legislators draw up a formal apology to Black residents. A preliminary report made public last year, outlined how enslaved Black people were forced to California during the Gold Rush era and how, in the 1950s and 1960s, racially restrictive covenants and redlining segregated Black Californians in many of the state’s largest cities.In emotional testimony for much of the past year, Black residents have stood before the panel often revealing personal stories of racial discrimination, lack of resources in communities because of redlining and trauma that has had negative effects on health and well-being.While the task force marked the first such effort by a state, a similar measure aimed at creating a commission to explore reparations has stalled in Congress for decades.Representative Barbara Lee speaking during the task force meeting on Saturday.Jason Henry for The New York TimesIn brief remarks before the panel on Saturday, Representative Barbara Lee, a Democrat whose district spans Oakland, lauded the work members have done.“California is leading on this issue,” said Ms. Lee, who is running for the U.S. Senate. “It’s a model for other states in search of reparative damage, realistic avenues for addressing the need for reparations.”The median wealth of Black households in the United States is $24,100, compared with $188,200 for white households, according to the most recent Federal Reserve Board Survey of Consumer Finances. In California, a recent report from the nonpartisan Public Policy Institute of California found for every $1 earned by white families, Black families earn 60 cents — the result of disparities in, among other things, education, and discrimination in the labor market.Assemblyman Reggie Jones-Sawyer, who is one of two state lawmakers on the panel, said he had spoken with Mr. Newsom in recent weeks and expressed optimism that legislation would be approved based on the panel’s report.“The reality is Black Californians have suffered, and continue to suffer, from institutional laws and policies within our state’s political, social, and economic landscape that have negated Blacks from achieving life, liberty and the pursuit of happiness for generations,” said Mr. Jones-Sawyer, who represents a Los Angeles district. “This really is a trial against America’s original sin, slavery, and the repercussions it caused and the lingering effects in modern society.”Mr. Jones-Sawyer said he expected to present some form of legislation early next year.But the efforts and support for racial justice that followed Mr. Floyd’s death are now confronted with an economy that is shadowed by fears of a recession. In January, Mr. Newsom announced that the state faced a $22.5 billion deficit in the 2023-24 fiscal year, a turnaround from a $100 billion surplus a year ago.Nationwide, opinions on reparations are sharply divided by race. Last fall, a survey from the Pew Research Center found that 77 percent of Black Americans say the descendants of people enslaved in the United States should be repaid in some way, while 18 percent of white Americans say the same. Democrats were even split on the issue, with 49 percent opposed and 48 percent in support. Other polls on the issue have found similar splits.Even so, cities across the country have moved forward with reparations proposals. In 2021, officials in Evanston, Ill., a Chicago suburb, approved $10 million in reparations in the form of housing grants.More recently, the San Francisco Board of Supervisors has expressed support for reparations that could offer several million dollars. And in nearby Hayward, Calif., city officials are hearing proposals for reparations for land taken from Black and Latino families in the 1960s.Kamilah Moore, a lawyer who is chair of the California task force, said she was confident that the Legislature would “respect the task force’s official role as a legislative advisory body and work in good faith to turn our final proposals into legislation.”“It will soon be in their hands to act,” Ms. Moore said. More

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    Russian Pranksters Trick the Fed Chair, Based on Internet Videos

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    Videos circulating online show Jerome H. Powell, the Federal Reserve chair, answering basic questions about the American and global economy.WASHINGTON — Pranksters posing as Ukraine’s president tricked Jerome H. Powell, the Federal Reserve chair, into a conversation in January about the U.S. and global economy, based on video clips covered on Russian state television and posted online.The footage shows Mr. Powell answering an interviewer’s questions on a video call, apparently thinking that he is talking to Volodymyr Zelensky, Ukraine’s leader. The ruse appears to have been carried out by Vladimir Kuznetsov and Alexei Stolyarov, pranksters who are supporters of President Vladimir V. Putin of Russia.The clips — now circulating on the internet — were earlier reported on by Bloomberg News. They show Mr. Powell answering questions about central banking and inflation. His comments appear to be in line with what he regularly expresses in public.A Fed spokesperson said Mr. Powell participated in a conversation in January with someone who misrepresented himself as the Ukrainian president, noting that the discussion took place in the context of the central bank’s support for the Ukrainian people. The spokesperson said no sensitive or confidential information was discussed.The video appears to have been edited, and the Fed said it could not confirm its accuracy. The matter has been referred to law enforcement, the spokesperson said.The two men who carried out the prank have also tricked other global leaders, including Christine Lagarde, the president of the European Central Bank, and Angela Merkel, Germany’s former chancellor.An E.C.B. spokesperson said Ms. Lagarde had agreed to the conversation in good faith, and to show support for Ukraine and its people.The Fed-related video was posted on Rutube, a Russian video hosting platform, and covered by Russian state-run television and news agencies. Mr. Kuznetsov and Mr. Stolyarov posted excerpts from the call on their social media page, and dedicated a special episode of a show that they host to it.The clips show Mr. Powell discussing a number of challenges facing the American economy — including rapid inflation and the possibility of a recession. In the clips, he acknowledges that an economic downturn is possible or even likely, but that it is necessary to cool the economy and slow price increases. That is consistent with what the Fed chair has said in testimony and speeches.Fed officials are now in their pre-meeting quiet period, during which officials avoid speaking publicly in the run-up to an interest rate decision. They will meet next week and release a rate decision on Wednesday, after which Mr. Powell will hold a news conference.Oleg Matsnev More

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    Pressure Mounts on China to Offer Debt Relief to Poor Countries Facing Default

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    There was optimism at the spring meetings of the I.M.F. and World Bank that China will make concessions over restructuring its loans.WASHINGTON — China, under growing pressure from top international policymakers, appeared to indicate this week that it is ready to make concessions that would unlock a global effort to restructure hundreds of billions of dollars of debt owed by poor countries.China has lent more than $500 billion to developing countries through its lending program, making it one of the world’s largest creditors. Many of those countries, including several in Africa, have struggled economically in the wake of the pandemic and face the possibility of defaulting on their debt payments. Their problems have been compounded by rising interest rates and disruptions to supplies of food and energy as a result of Russia’s war in Ukraine.The United States, along with other Western nations, has been pressing China to allow some of those countries to restructure their debt and reduce the amount that they owe. But for more than two years, China has insisted that other creditors and multilateral lenders absorb financial losses as part of any restructuring, bogging down a critical loan relief process and threatening to push millions of people in developing countries deeper into poverty.A breakthrough would offer an economic lifeline to vulnerable nations at a time of sluggish growth and uncertain financial stability, and it would signal a renewed interest from China in economic diplomacy.Economists and development experts are watching carefully to determine if China is serious about easing the loan forgiveness logjam and if its talk will be followed by action. By some calculations, the world’s poor countries owe around $200 billion to wealthy nations, multilateral development banks and private creditors. Leaders of the world’s advanced economies have been grappling in recent months with how to avert financial crises in teetering markets such as Zambia, Sri Lanka and Ghana.Africa’s private and public external debt has increased more than fivefold over the last two decades to about $700 billion and Chinese lenders account for 12 percent of that total, according to Chatham House, the London policy institute. Researchers for the Debt Relief for Green and Inclusive Recovery Project estimated in a recent report that 61 emerging market and developing economies were facing debt distress, and that more than $800 billion in debt must be restructured.Leaders of the world’s advanced economies have been grappling in recent months with how to avert financial crises in teetering markets such as Sri Lanka.Dinuka Liyanawatte/Reuters“China is facing increasing pressure from every quarter, including from other emerging market economies, to play a more constructive role in the negotiations over debt restructuring,” said Eswar Prasad, a former head of the International Monetary Fund’s China division, who said China’s intransigence had left it “increasingly isolated.”There were indications this week that China was prepared to end that isolation as top economic officials from around the world convened at the spring meetings of the I.M.F. and World Bank. Participants expressed optimism that representatives from Beijing appeared to be ready to back off its insistence that multilateral lenders such as the World Bank, which provides low-interest loans and grants to poor countries, accept losses in the debt restructuring.“My sense from the current context is we’re moving on to new steps,” David Malpass, the departing World Bank president, said at a news conference on Thursday, pointing to “progress on equal burden sharing.”Kristalina Georgieva, the I.M.F.’s managing director, said she was “very encouraged” that a “common understanding” had been reached that could accelerate relief for countries such as Zambia, Ghana, Ethiopia and Sri Lanka.“I always say the proof of the pudding is in the eating,” Ms. Georgieva said.To restructure a country’s debt, creditors generally must agree to a combination of lowering the interest rate on the loan, extending the duration of the loan or writing off some of what is owed. China, which has faced an array of domestic economic challenges over the last three years, has been reluctant to take losses on debt and has pushed for other lenders, such as the World Bank, to incur losses.The urgency for a resolution was palpable among countries that are most in need of relief. Zambia defaulted in 2020 and has been trying to restructure $8.4 billion that it owes through a program established by the Group of 20 nations. It owes about $6 billion to Chinese lenders, and its total debt to foreign lenders is approaching $20 billion.On Friday, Ghana’s finance minister, Ken Ofori-Atta, lamented that 33 African nations were saddled with interest payments that approached or exceeded what their governments spent on health and education.Yuri Gripas for The New York Times“Zambia urgently needs debt relief,” Situmbeko Musokotwane, Zambia’s finance minister, told The New York Times. “Delay on debt restructuring puts our currency under pressure, excludes Zambia from capital markets and makes it difficult to attract much-needed foreign direct investment.”Ghana appealed to the Group of 20 nations this year for debt relief through a fledgling program known as the Common Framework after securing preliminary approval for a $3 billion loan from the I.M.F. That money is contingent on Ghana’s receiving assurances that it can restructure the approximately $30 billion that it owes to foreign lenders. Officials from Ghana have been meeting with their Chinese counterparts about restructuring the $2 billion that it owes China.On Friday, Ghana’s finance minister, Ken Ofori-Atta, lamented that 33 African nations were saddled with interest payments that approached or exceeded what their governments spent on health and education and expressed disappointment that advanced economies had been slow to act.“Honestly, it is disheartening to watch Africa struggle in this way, especially considering the potential loss of productivity over the next decade should African economies buckle under the weight of suffocating debts,” Mr. Ofori-Atta said at an Atlantic Council event on Friday.But it remains uncertain how far China is willing to go.Brad Setser, a senior fellow at the Council on Foreign Relations, said that it was not clear what financial terms Beijing would accept when restructuring debt but that it appeared to be taking a “positive step” that would remove “a financially unwarranted roadblock to any progress.”Treasury Secretary Janet Yellen at a farm in Zambia in January. She said this week that she would continue to press her Chinese counterparts to make the restructuring process work better.Fatima Hussein/Associated PressBut given the grinding pace of the talks, big investors in emerging markets are not counting on quick resolutions.“We are starting to see tokens of flexibility from China on their stance in sovereign debt restructuring, but complexities abound,” said Yacov Arnopolin, emerging markets portfolio manager at PIMCO. “Near term, we don’t expect a clear-cut solution on China’s willingness to take losses.”China’s reluctance has been another source of tension with the United States, which has expressed concern that Beijing’s onerous lending terms and refusal to renegotiate have amplified the financial problems that developing countries are facing. Treasury Secretary Janet L. Yellen said this week that she would continue to press her Chinese counterparts to improve the restructuring process but that she was encouraged that China had recently expressed a willingness to help Sri Lanka restructure its debt.People familiar with Chinese economic policymaking said domestic politics had made it hard for China to make difficult decisions last autumn and over the winter about accepting possible losses on its loans.In October, the Communist Party held its once-in-five-years national congress and chose a new team of senior party officials to work with Xi Jinping, the country’s top leader. Maneuvering then began to reshuffle the government’s senior ranks, which had been expected during the annual session of the National People’s Congress in early March, although some changes of financial policymakers were unexpectedly delayed.China is now ready to focus on addressing a wide range of economic issues, including international debt, the people said. However, Beijing still faces other challenges that may limit its willingness to bargain, including a commercial banking system that faces very heavy losses on loans to real estate developers and does not want to accept large losses on loans to developing countries at the same time.Chinese officials offered support for the debt relief initiatives in broad terms this week.Wang Wenbin, a spokesman for the Chinese Foreign Ministry, said on Friday that China had put forward a three-point proposal that included calling for the I.M.F. to more quickly share its debt sustainability assessments for countries that need relief, and for creditors to detail how they will carry out the restructurings on “comparable terms.”After a meeting in Washington between Yi Gang, China’s central bank governor, and Mr. Musokotwane of Zambia, the Chinese central bank released a brief statement.“They exchanged views on issues of common concern including bilateral financial cooperation,” it said.Keith Bradsher More