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Joe Biden, Xi Jinping exchange warnings on US election and Taiwan

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President Joe Biden and Chinese President Xi Jinping discussed Taiwan, artificial intelligence and security issues Tuesday in a call meant to demonstrate a return to regular leader-to-leader dialogue between the two powers.

The call, described by the White House as “candid and constructive,” was the leaders’ first conversation since their November summit in California produced renewed ties between the two nations’ militaries and a promise of enhanced cooperation on stemming the flow of deadly fentanyl and its precursors from China.

Xi told Biden that the two countries should adhere to the bottom line of “no clash, no confrontation” as one of the principles for this year.

“We should prioritize stability, not provoke troubles, not cross lines but maintain the overall stability of China-U.S. relations,” Xi said, according to China Central Television, the state broadcaster.

The roughly 105-minute call kicks off several weeks of high-level engagements between the two countries, with Treasury Secretary Janet Yellen set to travel to China on Thursday and Secretary of State Antony Blinken to follow in the weeks ahead.

Biden has pressed for sustained interactions at all levels of government, believing it is key to keeping competition between the two massive economies and nuclear-armed powers from escalating to direct conflict. While in-person summits take place perhaps once a year, officials said, both Washington and Beijing recognize the value of more frequent engagements between the leaders.

The two leaders discussed Taiwan ahead of next month’s inauguration of Lai Ching-te, the island’s president-elect, who has vowed to safeguard its de-facto independence from China and further align it with other democracies. Biden reaffirmed the United States’ longstanding “One China” policy and reiterated that the U.S. opposes any coercive means to bring Taiwan under Beijing’s control. China considers Taiwan a domestic matter and has vigorously protested U.S. support for the island.

Taiwan remains the “first red line not to be crossed,” Xi told Biden, and emphasized that Beijing will not tolerate separatist activities by Taiwan’s independence forces as well as “exterior indulgence and support,” which alluded to Washington’s support for the island.

Biden also raised concerns about China’s operations in the South China Sea, including efforts last month to impede the Philippines, which the U.S. is treaty-obligated to defend, from resupplying its forces on the disputed Second Thomas Shoal.

Next week, Biden will host Philippines President Ferdinand Marcos Jr. and Japanese Prime Minister Fumio Kishida at the White House for a joint summit where China’s influence in the region was set to be top of the agenda.

Biden, in the call with Xi, pressed China to do more to meet its commitments to halt the flow of illegal narcotics and to schedule additional precursor chemicals to prevent their export. The pledge was made at the leaders’ summit held in Woodside, California, last year on the margins of the Asia-Pacific Economic Cooperation meeting.

At the November summit, Biden and Xi also agreed that their governments would hold formal talks on the promises and risks of advanced artificial intelligence, which are set to take place in the coming weeks. The pair touched on the issue on Tuesday just two weeks after China and the U.S. joined more than 120 other nations in backing a resolution at the United Nations calling for global safeguards around the emerging technology.

Biden, in the call, reinforced warnings to Xi against interfering in the 2024 elections in the U.S. as well as against continued malicious cyberattacks against critical American infrastructure.

He also raised concerns about human rights in China, including Hong Kong’s new restrictive national security law and its treatment of minority groups, and he raised the plight of Americans detained in or barred from leaving China.

The Democratic president also pressed China over its defense relationship with Russia, which is seeking to rebuild its industrial base as it presses forward with its invasion of Ukraine. And he called on Beijing to wield its influence over North Korea to rein in the isolated and erratic nuclear power.

As the leaders of the world’s two largest economies, Biden also raised concerns with Xi over China’s “unfair economic practices,” National Security Council spokesman John Kirby said, and reasserted that the U.S. would take steps to preserve its security and economic interests, including by continuing to limit the transfer of some advanced technology to China.

Xi complained that the U.S. has taken more measures to suppress China’s economy, trade and technology in the past several months and that the list of sanctioned Chinese companies has become ever longer, which is “not de-risking but creating risks,” according to the broadcaster.

Yun Sun, director of the China program at Stimson Center, said the call “does reflect the mutual desire to keep the relationship stable” while the men reiterated their longstanding positions on issues of concern.

The call came ahead of Yellen’s visit to Guangzhou and Beijing for a week of bilateral meetings on the subject with finance leaders from the world’s second largest economy — including Vice Premier He Lifeng, Chinese Central Bank Gov. Pan Gongsheng, former Vice Premier Liu He, American businesses and local leaders.

An advisory for the upcoming trip states that Yellen “will advocate for American workers and businesses to ensure they are treated fairly, including by pressing Chinese counterparts on unfair trade practices.”

It follows Xi’s meeting in Beijing with U.S. business leaders last week, when he emphasized the mutually beneficial economic ties between the two countries and urged people-to-people exchange to maintain the relationship.

Xi told the Americans that the two countries have stayed communicative and “made progress” on issues such as trade, anti-narcotics and climate change since he met with Biden in November. Last week’s high-profile meeting was seen as Beijing’s effort to stabilize bilateral relations.

Ahead of her trip to China, Yellen last week said that Beijing is flooding the market with green energy that “distorts global prices.” She said she intends to share her beliefs with her counterparts that Beijing’s increased production of solar energy, electric vehicles and lithium-ion batteries poses risks to productivity and growth to the global economy.

U.S. lawmakers’ renewed angst over Chinese ownership of the popular social media app TikTok has generated new legislation that would ban TikTok if its China-based owner ByteDance doesn’t sell its stakes in the platform within six months of the bill’s enactment. Kirby said Biden “reiterated our concerns about the ownership of TikTok” to Xi during their call.

As chair of the Committee on Foreign Investment in the U.S., which reviews foreign ownership of firms in the U.S., Yellen has ample leeway to determine how the company could remain operating in the U.S.

Meanwhile, China’s leaders have set a goal of 5% economic growth this year despite a slowdown exacerbated by troubles in the property sector and the lingering effects of strict anti-virus measures during the COVID-19 pandemic that disrupted travel, logistics, manufacturing and other industries.

China is the dominant player in batteries for electric vehicles and has a rapidly expanding auto industry that could challenge the world’s established carmakers as it goes global.

The U.S. last year outlined plans to limit EV buyers from claiming tax credits if they purchase cars containing battery materials from China and other countries that are considered hostile to the United States. Separately, the Department of Commerce launched an investigation into the potential national security risks posed by Chinese car exports to the U.S.



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Who is Paula Vennells? Ex-Post Office boss in Horizon IT inquiry

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The ordained priest who led the Post Office from 2012 to 2019 faces three days of questioning at the Horizon Inquiry.



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Deutsche Bank lifts S&P 500 target on strong earnings By Investing.com

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Deutsche Bank strategists increased their year-end target for the to 5,500, up from the previous 5,100.

The revision is based on a strong earnings cycle and the anticipation that market confidence will grow by the end of the year, which should positively influence US stocks.

“We see the earnings cycle having plenty of legs,” strategists said in note to clients on Friday.

“While all the growth may not materialize this year, we see market confidence in a continued recovery rising by year end, supporting equity multiples.”

However, the strategists also cautioned about potential market volatility due to geopolitical risks. Moreover, they warned that a hung election poses a “real risk” for markets.

The brokerage firm noted that although all growth may not materialize this year, the market’s confidence in a continued recovery is expected to rise by year-end. This sentiment is projected to support equity multiples.

Alongside the revised index target, Deutsche Bank has also raised its base case for S&P 500 earnings to $258 per share from the previous estimate of $250. This adjustment indicates a year-over-year growth of 13%.

If the macroeconomic growth continues to exceed trends as it has for the past seven quarters, the strategists suggest earnings could reach as high as $271 per share, which is at the upper end of their original forecast range of $250 to $271.

 





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Mercedes-Benz workers in Alabama vote against union

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United Auto Workers (UAW) members and supporters on a picket line outside the ZF Chassis Systems plant in Tuscaloosa, Alabama, US, on Wednesday, Sept. 20, 2023.

Andi Rice | Bloomberg | Getty Images

Mercedes-Benz workers in Alabama have voted against union representation by the United Auto Workers, the National Labor Relations Board said Friday.

The results are a blow to the UAW’s organizing efforts a month after the Detroit union won an organizing drive of roughly 4,330 Volkswagen plant workers in Tennessee. Voting started Monday and ended Friday.

Union organizing failed with 56% of the vote, or 2,642 workers, casting ballots against the UAW, according to the NLRB, which oversaw the election. More than 90% of the 5,075 eligible Mercedes-Benz workers voted in the election, according to the results.

The NLRB said 51 ballots were challenged and not counted, but they aren’t determinative to the outcome of the election. There were five void ballots. 

The union and company have five business days to file objections to the election, including any alleged interference, according to the NLRB. If no objections are filed, the election result will be certified, and the union will have to wait one year to file for a union election for a similar bargaining unit.

Mercedes-Benz in a statement said company officials “look forward to continuing to work directly with our Team Members to ensure [Mercedes-Benz US International] is not only their employer of choice, but a place they would recommend to friends and family.”

United Auto Workers President Shawn Fain (right) and UAW Secretary-Treasurer Margaret Mock (left) lead a march outside Stellantis’ Ram 1500 plant in Sterling Heights, Michigan after the union called a strike at the plant on Oct. 23, 2023.

Michael Wayland / CNBC

The loss is expected to hurt the UAW in an unprecedented organizing drive launched late last year of 13 non-union automakers in the U.S. after securing record contracts with Detroit automakers Ford Motor, General Motors and Stellantis. Those agreements included significant wage increase, reinstatement of cost-of-living adjustments and other benefits.

UAW President Shawn Fain said while the Mercedes-Benz vote was obviously not the result the union wanted, it was a valiant effort, adding the vote “isn’t a failure” but a “bump in the road.”

“While this loss stings, I’ll tell you this, we’re going to keep our heads up, keep our heads up high. These workers have nothing to do but be proud in the effort they put forth and what they’ve done,” he said Friday during a media conference. “We fought the good fight and we’re going to continue on, continue forward. Ultimately, these workers here are going to win.”

The Mercedes-Benz vote was expected to be more challenging for the union than the Volkswagen plant in Tennessee, where the union had already established a presence after two failed organizing drives in the past decade and where it faced less opposition from the automaker.

Stephen Silvia, author of “The UAW’s Southern Gamble: Organizing Workers at Foreign-Owned Vehicle Plants,” noted Mercedes-Benz replaced the plant’s leader weeks ahead of the election. He said companies routinely do this, promising workers changes at their facilities in an effort to stave of organizing.

“Companies do anti-union campaigns because they can be effective, and I think this one was effective,” said Silvia, a professor at American University in Washington, D.C. “A common piece of an anti-union campaign is firing the plant manager … That seems to have persuaded enough of the workers to vote against the union.”

Mercedes-Benz Alabama plant votes against unionization

Alabama Gov. Kay Ivey, who was one of six Republican governors to condemn the union’s organizing drive, hailed the outcome of the vote.

“The workers in Vance have spoken, and they have spoken clearly! Alabama is not Michigan, and we are not the Sweet Home to the UAW. We urge the UAW to respect the results of this secret ballot election,” she said.

Workers at Mercedes-Benz’s Tuscaloosa plant, located about 60 miles southwest of Birmingham, have produced more than 4 million vehicles since the plant opened in 1997, including 295,000 vehicles in 2023, according to the plant’s website.

The Alabama plant currently produces vehicles such as the gas-powered GLE and GLS Maybach SUVs as well as the all-electric EQS and EQE SUVs.

The NLRB last week said it continues to process and investigate open unfair labor practice charges filed by the UAW against automakers, including six unfair labor practice charges against Mercedes-Benz since March.

Fain said Friday the union would continue to move forward with those charges. He declined to say whether the union plans to challenge the election results, saying he’d “leave that” to the union’s legal team.

The charges allege that Mercedes-Benz has “disciplined employees for discussing unionization at work, prohibited distribution of union materials and paraphernalia, surveilled employees, discharged union supporters, forced employees to attend captive audience meetings, and made statements suggesting that union activity is futile,” the NLRB said.

The union has filed other charges against automakers Honda, Hyundai, Lucid, Rivian, Tesla and Toyota, according to the NLRB.



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