Financial Watchdog: Regulate Cryptocurrencies Now, Or Else

A global financial body says governments worldwide must establish rules for virtual currencies like bitcoin to stop criminals from using them to launder money or finance terrorism.

The Financial Action Task Force said Friday that from next year it will start assessing whether countries are doing enough to fight criminal use of virtual currencies.

Countries that don’t could risk being effectively put on a “gray list” by the FATF, which can scare away investors.

Marshall Billingslea, an assistant U.S. Treasury secretary who holds the FATF’s rotating leadership, said, “We’ve made clear today that every jurisdiction must establish” virtual currency rules. “It’s no longer optional.”

The FATF described how the Islamic State group and al-Qaida have used virtual currencies.

Financial regulators worldwide have struggled to deal with the rise of electronic alternatives to traditional money.

Hosting

US Again Declines to Label China a Currency Manipulator 

The Trump administration has again declined to label China a currency manipulator, but says it is keeping China and five other nations on a watch list.

“Of particular concern are China’s lack of currency transparency and the recent weakness in its currency,” U.S. Treasury Secretary Steven Mnuchin said in his biannual report to Congress.

“Those pose major challenges to achieving fairer and more balanced trade and we will continue to monitor and review China’s currency practices, including thorough ongoing discussions with the People’s Bank of China,” he said.

Mnuchin said China — along with Germany, India, Japan, South Korea and Switzerland — would be placed on a list of countries whose currency practices require what the report calls “close attention.”

Governments manipulate currency by keeping the exchange rates artificially low to make its goods and services cheaper on the world market. 

But that puts trading partners and others at a disadvantage. President Donald Trump promised throughout the campaign to label China a currency manipulator once he got into office, but so far he has declined to do so.

Instead, Trump has imposed tariffs on billions of dollars’ worth of Chinese imports to address what he says are unfair trade practices and the trade deficit.

Hosting

Jubilant Customers Light Up as Marijuana Sales Begin in Canada

Jubilant customers stood in long lines for hours then lit up and celebrated on sidewalks Wednesday as Canada became the world’s largest legal marijuana marketplace.

In Toronto, people smoked joints as soon as they rolled out of bed in a big “wake and bake” celebration. In Alberta, a government website that sells pot crashed when too many people tried to place orders.

And in Montreal, Graeme Campbell welcomed the day he could easily buy all the pot he wanted. 

“It’s hard to find people to sell to me because I look like a cop,” the clean-cut, 43-year-old computer programmer said outside a newly opened pot store.

He and his friend Alex Lacrosse were smoking a joint when two police officers walked by. “I passed you a joint right in front of them and they didn’t even bat an eye,” Lacrosse told his friend.

Festivities erupted throughout the nation as Canada became the largest country on the planet with legal marijuana sales. At least 111 pot shops were expected to open Wednesday across the nation of 37 million people, with many more to come, according to an Associated Press survey of the provinces. Uruguay was the first country to legalize marijuana.

Ian Power was first in line at a store in St. John’s, but didn’t plan to smoke the one gram he bought after midnight.

“I am going to frame it and hang it on my wall,” the 46-year-old Power said. “I’m going to save it forever.”

Tom Clarke, an illegal pot dealer for three decades, opened a pot store in Portugal Cove, Newfoundland, and made his first sale to his dad. He was cheered by the crowd waiting in line.

“This is awesome. I’ve been waiting my whole life for this,” Clarke said. “I am so happy to be living in Canada right now instead of south of the border.”

Promise of pardons

The start of legal sales wasn’t the only good news for pot aficionados: Canada said it intends to pardon everyone with convictions for possessing up to 30 grams of marijuana, the newly legal threshold.

“I don’t need to be a criminal anymore, and that’s a great feeling,” Canadian singer Ashley MacIsaac said outside a government-run shop in Nova Scotia. “And my new dealer is the prime minister!”

Medical marijuana has been legal since 2001 in Canada, and Prime Minister Justin Trudeau’s government has spent the past two years working toward legalizing recreational pot to better reflect society’s changing opinion about marijuana and bring black-market operators into a regulated system.

Corey Stone and a friend got to one of the 12 stores that opened in Quebec at 3:45 a.m. to be among the first to buy pot. Hundreds later lined up.

“It’s a once-in-a-lifetime thing — you’re never ever going to be one of the first people able to buy legal recreational cannabis in Canada ever again,” said Stone, a 32-year restaurant and bar manager.

Shop in stores, online

The stores have a sterile look, like a modern clinic, with a security desk to check identification. The products are displayed in plastic or cardboard packages behind counters. Buyers can’t touch or smell the products before they buy. A small team of employees answer questions but don’t make recommendations.

“It’s a candy store, I like the experience,” said Vincent Desjardins, a 20-year-old-student who plans to apply for a job at the Montreal shop.

Canadians can also order marijuana products through websites run by provinces or private retailers and have it delivered to their home by mail.

At 12:07 a.m., the Alberta Liquor and Gaming Commission tweeted: “You like us! Our website is experiencing some heavy traffic. We are working hard to get it up and running.”

Alberta and Quebec have set the minimum age for purchase at 18, while other provinces have made it 19.

No stores will open in Ontario, which includes Toronto. The nation’s most populous province is working on its regulations and doesn’t expect stores to operate until spring.

A patchwork of regulations has spread in Canada as each province takes its own approach within the framework established by the federal government. Some provinces have government-run stores, others allow private retailers, and some have both.

Canada’s national approach allows unfettered banking for the pot industry, inter-province shipments of cannabis and billions of dollars in investment — a sharp contrast with prohibitions in the United States, where nine states have legalized recreational sales of pot and more than 30 have approved medical marijuana.

Bruce Linton, CEO of marijuana producer and retailer Canopy Growth, claims he made the first sale in Canada — less than a second after midnight in Newfoundland.

“It was extremely emotional,” he said. “Several people who work for us have been working on this for their entire adult life and several of them were in tears.”

Linton is proud that Canada is now at the forefront of the burgeoning industry.

“The last time Canada was this far ahead in anything, Alexander Graham Bell made a phone call,” said Linton, whose company recently received an investment of $4 billion from Constellation Brands, whose holdings include Corona beer and Robert Mondavi wines.

Hosting

Tesla Secures Land in Shanghai for First Factory Outside US

Electric auto brand Tesla Inc. said it signed an agreement Wednesday to secure land in Shanghai for its first factory outside the United States, pushing ahead with development despite mounting U.S.-Chinese trade tensions.

Tesla, based on Palo Alto, California, announced plans for the Shanghai factory in July after the Chinese government said it would end restrictions on full foreign ownership of electric vehicle makers to speed up industry development.

Those plans have gone ahead despite tariff hikes by Washington and Beijing on billions of dollars of each other’s goods in a dispute over Chinese technology policy. U.S. imports targeted by Beijing’s penalties include electric cars.

China is the biggest global electric vehicle market and Tesla’s second-largest after the United States.

Tesla joins global automakers including General Motors Co., Volkswagen AG and Nissan Motor Corp. that are pouring billions of dollars into manufacturing electric vehicles in China.

Local production would eliminate risks from tariffs and other import controls. It would help Tesla develop parts suppliers to support after service and make its vehicles more appealing to mainstream Chinese buyers.

Tesla said it signed a “land transfer agreement” on a 210-acre (84-hectare) site in the Lingang district in southeastern Shanghai.

That is “an important milestone for what will be our next advanced, sustainably developed manufacturing site,” Tesla’s vice president of worldwide sales, Robin Ren, said in a statement.

Shanghai is a center of China’s auto industry and home to state-owned Shanghai Automotive Industries Corp., the main local manufacturer for GM and VW.

Tesla said earlier that production in Shanghai would begin two to three years after construction of the factory begins and eventually increase to 500,000 vehicles annually.

Tesla has yet to give a price tag but the Shanghai government said it would be the biggest foreign investment there to date. The company said in its second-quarter investor letter that construction is expected to begin within the next few quarters, with significant investment coming next year. Much of the cost will be funded with “local debt” the letter said.

Tesla’s $5 billion Nevada battery factory was financed with help from a $1.6 billion investment by battery maker Panasonic Corp.

Analysts expect Tesla to report a loss of about $200 million for the three months ending Sept. 30 following the previous quarter’s $742.7 million loss. Its CEO Elon Musk said in a Sept. 30 letter to U.S. securities regulators that the company is “very close to achieving profitability.”

Tesla’s estimated sales in China of under 15,000 vehicles in 2017 gave it a market share of less than 3 percent.

The company faces competition from Chinese brands including BYD Auto and BAIC Group that already sell tens of thousands of hybrid and pure-electric sedans and SUVs annually.

Until now, foreign automakers that wanted to manufacture in China were required to work through state-owned partners. Foreign brands balked at bringing electric vehicle technology into China to avoid having to share it with potential future competitors.

The first of the new electric models being developed by global automakers to hit the market, Nissan’s Sylphy Zero Emission, began rolling off a production line in southern China in August.

Lower-priced electric models from GM, Volkswagen and other global brands are due to hit the market starting this year, well before Tesla is up and running in Shanghai.

Hosting

Uber Driver Charged with Kidnapping New York Woman

An Uber driver in New York City kidnapped a woman who fell asleep in his vehicle, groped her in the back seat and then left her on the side of a highway in Connecticut, federal authorities said Tuesday.

Harbir Parmar, 24, of Queens was charged in U.S. District Court with kidnapping. It wasn’t immediately clear whether he had an attorney.

The FBI said in court papers that Parmar picked the woman up in Manhattan at 11:30 p.m. on Feb. 21 for a trip to her home in White Plains, New York, about an hour away. The woman fell asleep, authorities said, and Parmar changed her destination to an address in Boston, Massachusetts.

The woman woke up to find the driver “with his hand under her shirt touching the top of her breast,” according to a criminal complaint unsealed Tuesday.

The woman reached for her phone, the complaint said, but Parmar took it from her and continued driving. She asked the driver to take her to the police station but the Parmar refused, the complaint said.

Parmar eventually left the woman on the side of Interstate 95 in Branford, Connecticut, about an hour’s drive east of her home. The complaint said the woman memorized Parmar’s license plate and called a cab from a nearby convenience store.

The woman later learned that Uber had charged her more than $1,000 for a trip from New York to Massachusetts.

Federal authorities and New York police condemned Parmar’s behavior as reprehensible.

“No one — man or woman — should fear such an attack when they simply hire a car service,” U.S. Attorney Geoffrey Berman said in a statement.

Uber said it blocked Parmar from using the app when the alleged kidnapping occurred.

“What’s been reported is horrible and something no person should go through. As soon as we became aware, we immediately removed this individual’s access to the platform. We have fully cooperated with law enforcement and will continue to support their investigation,” the company said in a statement.

The company’s CEO, Dara Khosrowshahi, said over the summer that he hoped to make Uber the “safest transportation platform on the planet,” after enduring years of criticism that it wasn’t doing enough to screen drivers. That included adding a new feature to the app that is supposed to alert both passengers and drivers if a car makes an unplanned stop.

The state of Colorado fined Uber $8.9 million last year for allowing people with criminal records to work as drivers. New York City requires ride-hailing service drivers to go through a licensing process similar to the one it has for traditional limo and car service drivers.

Federal authorities also charged Parmar with wire fraud, accusing him of overcharging Uber riders by inputting false information about their destinations.

The complaint said he also reported “false information” about cleaning fees that he charged to Uber riders on at least three occasions, including the woman he allegedly groped and left on the side of the road.

Hosting

US Employers Post Record Number of Open Jobs in August

U.S. employers posted the most jobs in two decades in August, and hiring also reached a record high, fresh evidence that companies are desperate to staff up amid solid economic growth.

Job openings rose a slight 0.8 percent to 7.14 million, the highest on records dating back to December 2000, the Labor Department said Tuesday. That is also far more than the 6.2 million of people who were unemployed that month.

The number of available jobs has swamped the number of unemployed for five straight months. Hiring has been solid, which has pushed down the unemployment rate to a nearly five-decade low of 3.7 percent. Strong demand for workers when so few are out of work.

President Donald Trump celebrated the report on Twitter, tweeting: “Incredible number just out… Astonishing! It’s all working!” Trump added that the stock market was “up big” and referenced “Strong Profits.”

Yet so far, pay raises have been modest. Average hourly earnings rose 2.8 percent in September compared with a year earlier. That’s much higher than several years ago, but below the roughly 4 percent gain that is typical when unemployment is so low.

It’s a sharp turnaround from the Great Recession and its aftermath. In 2009, there were as many as six unemployed workers for each available job. Now, that number has fallen below one.

Employers hired roughly 5.8 million people in August, the report showed. That is also the most on record, but that increase partly reflects population growth. The percentage of the workforce that found jobs in August ticked up to 3.9 percent from 3.8 percent in July. That matched an 11-year high first reached in May.

Job openings rose in August in professional and business services, which include mostly higher-paying positions in engineering, accounting and architecture, as well as temporary help. Postings in that category have jumped 27 percent from a year ago.

Construction firms are also desperate for workers, posting 298,000 open jobs. That’s nearly 39 percent more than a year ago. Job openings also increased in finance and insurance and health care.

Openings fell in August from the previous month in manufacturing, retail, and slipped slightly in hotels and restaurants.

Hosting

Caution, Cancellations, Protests as Concerns Grow on China’s Belt and Road

Concerns about debt diplomacy on China’s expansive infrastructure megaproject — the Belt and Road — have become an increasing source of debate from Asia to Africa and the Middle East. In recent weeks, more than $30 billion in projects have been scrapped and other loans and investments are under review.

 

Public opposition is also testing the resolve of ruling authorities from Hanoi to Lusaka, the capital of Zambia, as concerns about Chinese investment build.

In late August, Malaysia’s newly elected Prime Minister Mahathir Mohamad canceled more than $20 billion in Belt and Road projects for railway and pipelines, and Pakistan lopped another $2 billion off plans for a railway following a decision late last year to cancel a $14 billion dam project, citing financial concerns. Nepal canceled its dam project last month and Sierra Leone announced last week that it was dropping an airport project over debt concerns.

 

In some countries such as Vietnam, it is just the idea of Chinese investment — against the backdrop of the Belt and Road — that has led to push back.

Following public protests, Vietnam recently decided to postpone plans for several special economic zones.

 

Several Belt and Road projects have seen setbacks in countries where debt concerns have coincided with political elections and a change of power — be it Pakistan, Malaysia or the Maldives, says economist Christopher Balding.

 

“The people in these countries are very worried about the level of debt that these countries are taking on in regard to China and I think that is very important to note,” Balding said. “It’s not just anti-China people that are driving this, but that there is a lot of concern on the ground in the countries about that.”

 

China says there are no political strings attached to its investments and loans. It also argues it is providing funding in places others will not. But Beijing’s takeover of a port in Sri Lanka last year and the sheer volume of Chinese investments along the Belt and Road project have done little to ease those concerns.

 

String of ports

 

Late last year, according to the New York Times, China agreed to forgive Sri Lanka’s debt in exchange for a 99-year lease of Hambanthota Port and 15,000 acres of surrounding land.

The government of Sri Lanka denies it divested land to a Chinese company, but the deal has convinced some that China is setting up debt traps to then take over the infrastructure that Chinese state-run companies build.

 

Hambanthota is one of 42 ports where China has participated in construction and operations, with more on the horizon.

In 2021, China will take over operation of one of Israel’s largest ports in Haifa. Beijing is also being eyed as a possible candidate for the development of Chabahar port in Iran, which is near the Iran-Pakistan border.

The port proposal remains in limbo, however, due to U.S. sanctions. And that’s not the only obstacle, according to David Kelly, research director at the Beijing-based group China Policy.

“It’s in the driest and most remote part of Iran,” Kelly said. “It looks like a real loser commercially, unless it handles a lot of oil.”

Analysts say the Middle East, with its oil money and deep pockets, is less at risk for debt traps.

 

However, the port that is most likely to follow in Sri Lanka’s footsteps is Djibouti, a strategically important country on the Horn of Africa, where China recently established its first overseas military base.

According to official figures, Djibouti’s debt is more than 88 percent of the GDP and China owns $1.4 billion of that. That kind of debt overhang could lead to the same type of concessionary agreements as in Sri Lanka, analysts note.

 

Debt traps

 

A report released earlier this year by Washington, D.C.-based Center for Global Development said 23 of the 68 countries where China is investing for Belt and Road projects are at high risk of debt distress. Another eight, including Djibouti, are vulnerable to debt distress linked to future projects.

 

China argues its investments are aimed at boosting trade and commerce and giving developing countries a leg up.

 

China Policy’s Kelly says places where the debt situation is more critical are countries such as land-locked and poverty-stricken Zambia. There, concerns are causing a very public push for the government to disclose the full burden of Chinese debt.

 

“The upset and upheaval in Zambia recently, where you’ve got African civil society coming out and making this case,” Kelly said, “That is always going to be more significant where you have the local people, making a local case.”

 

BRI indigestion

 

Oh Ei Sun, a senior fellow with the Singapore Institute of International Affairs, says cancellations and changes are what he calls Belt and Road indigestion.

Concerns about debt traps and debt diplomacy will not have an impact on China going forward, he says, but stops, starts and cancellations will continue.

 

Oh says China’s model of development — build infrastructure and the economy will grow — may have worked at home, but it doesn’t always fit along the Belt and Road.

 

“In many of these Belt and Road initiative countries, if you lay out the infrastructure, it doesn’t automatically mean that trade and investment will take place,” Oh said, “Some of these projects will have to be more attuned to the local requirements of particular countries.”

Hosting

US Budget Deficit Hits Six-Year High

The U.S. government’s budget deficit hit $779 billion in the fiscal year that ended Sept. 30, while spending increased and tax revenues remained nearly flat, the Treasury said Monday.

It was the biggest deficit since 2012, and $113 billion more than the figure a year ago. The 2018 deficit amounted to 3.9 percent of the country’s more than $18 trillion annual economy, up from 3.5 percent last year.

The government’s deficit spending boosted the country’s long-term debt figure to more than $21 trillion, forcing the government to pay an extra $65 billion last year in interest on money the government has had to borrow to run its programs.

In all, government spending rose by $127 billion last year, while tax collections increased by $14 billion.

The Treasury said the annual deficit rose partly because corporate tax collections dropped by $76 billion after Congress approved cuts in tax rates for both businesses and individuals that were supported by President Donald Trump.

Mick Mulvaney, the government’s budget director, said the country’s “booming economy will create increased government revenues — an important step toward long-term fiscal sustainability. But this fiscal picture is a blunt warning to Congress of the dire consequences of irresponsible and unnecessary spending.”

Hosting

Zimbabwe’s Government Says Worst of its Economic Woes is Over

Zimbabwe’s government says the country is emerging from a recent economic meltdown that saw shops run out of goods and motorists spend long hours in lines at gas stations. Economists say Zimbabwe’s crisis is not over, as people have no confidence in the currency or in President Emmerson Mnangagwa’s government.

For weeks now, there have been long and winding queues at most fuel stations in Zimbabwe, as the precious liquid has been in short supply. Lameck Mauriri is one of those now tired of the situation.

“We are really striving but things are tough to everyone,” said Mauriri. “I do not know how those in rural areas, how they are surviving, especially if in Harare it is like this. We are sleeping in fuel queues. There is not fuel, there is no bread, there is no drink. There is no everything. No cash, no jobs.”

For a decade, the country has been without an official currency and relied on U.S. dollars, the British pound and South African rand to conduct transactions. In the past three years, however, all three currencies have been hard to find, paralyzing the economy.

The introduction of bond notes — a currency Zimbabwe started printing two years ago to ease the situation — has not helped.

The bond notes were supposed to trade at par with the U.S. dollar; but, on the black market, a dollar now is now equal to close to three bond notes.

Prosper Chitambara, an economist of the Labor and Economic Development Research Institute of Zimbabwe says the bond notes are partly to blame for the price increases and shortages in the country.

“What is lacking in the economy, in the market is confidence. There is a distrust of the formal economic system,” said Chitambara. “The bond notes have definitely contributed a great deal to the current economic situation, a fallacy economic situation. What they have done is for example to increase money supply in the economy. And that money supply is not actually backed by significant productivity in the economy. That actually gives rise to general of inflationary pressures.”

He said the government’s recent introduction of a 2 percent tax on all electronic transactions pushed prices even higher and caused some shops to close.

Ndabaningi Nick Mangwana, Zimbabwe’s secretary in the Ministry of Information and Publicity, says the situation in the country is normal and there is no need for alarm.

“There is no shortage to oil itself, there is no challenge in terms of production of all these essential services,” said Mangwana. “That is why they are there if you go. There were a few people who panicked, closed a couple of shops, but those opened within hours. There was fake news and people panicked, but it is all under control.”

That is not exactly what seems to be the case on the ground. Some shops remain closed and prices continue rising. Long fuel lines remain the order of the day. 

Hosting

Global Stocks Climb Following Two Days of Sharp Losses

World stocks are climbing Friday after two days of sharp losses. Major U.S. stock indexes are up more than 1 percent, but they’re still on track for their biggest one-week loss since late March.

Technology and internet companies were some of the hardest hit over the last two days and they led the market higher Friday. Apple climbed 2.7 percent to $220.18. Consumer-focused companies also rallied, as Amazon jumped 3.8 percent to $1,783.96 and Netflix surged 4.7 percent to $336.30.

The S&P 500 index climbed 37 points, or 1.4 percent, to 2,766 at 9:45 a.m. Eastern time. The benchmark index tumbled 5.3 percent over the past two days and as of Thursday it had fallen for six consecutive days. The S&P is down 5.6 percent from its latest record high, set Sept. 20.

The Dow Jones Industrial Average jumped 305 points, or 1.2 percent, to 25,358. The Nasdaq composite surged 138 points, or 1.9 percent, to 7,467. The Russell 2000 index gained 17 points, or 1.2 percent, to 1,563. That index, which is made up of smaller and more U.S.-focused companies, has fallen into a 10 percent “correction” since reaching a record high at the end of August.

On the New York Stock Exchange, winners outnumbered losers eight to one.

Stocks in Europe and Asia also recovered some of their recent losses. The French CAC 40 and the DAX in Germany both rose 0.8 percent while Britain’s FTSE 100 was 0.7 percent higher. Japan’s Nikkei 225 index gained 0.5 percent after sinking early in the day and following a nearly 4 percent loss on Thursday. Hong Kong’s Hang Seng surged 2.1 percent and the Kospi in South Korea rose 1.5 percent.

The market’s recent losing streak started when strong economic data and positive comments from Federal Reserve Chair Jerome Powell helped set off a wave of selling in the bond market. Investors were betting that the U.S. economy would keep growing at a healthy pace. The sales pushed bond prices lower and yields higher. That drove interest rates sharply higher, which worried investors who felt that a big increase in interest rates could eventually stifle economic growth. Higher yields also make bonds more appealing to investors versus stocks.

The worst losses went to stocks that have led the market in recent years, including technology companies, as well as companies that do better when economic growth speeds up, like industrial firms.

Banks rose as they began to report their third-quarter results. Citigroup jumped 2.4 percent to $70.04. Last year’s corporate tax cut and rising interest rates have helped banks make more money.

Bond prices turned lower as the stock market stabilized. The yield on the 10-year Treasury note rose to 3.16 percent from 3.13 percent.

High-dividend stocks lagged the rest of the market, and utilities and household goods makers were little changed. Those stocks held up a bit better than the rest of the market over the last six days. Investors view them as relatively safe, steady assets that look better when growth is uncertain and the rest of the market is in turmoil.

U.S. crude oil added 0.6 percent to $71.43 a barrel in New York. Brent crude, the international standard, was up 0.6 percent to $80.77 a barrel in London.

The dollar rose to 112.17 yen from 111.94 yen. The euro fell to $1.1548 from $1.1594.

Hosting

‘Winter Is Coming’: Indonesia Warns World Finance Leaders Over Trade War

Just in case any of the global central bankers and finance ministers gathered in Indonesia missed the message delivered repeatedly this week, the host nation said it again Friday: Everyone stands to lose if trade wars are allowed to escalate.

Indonesian President Joko Widodo didn’t mention the United States or China, the world’s two largest economies, but it was clear who he was talking about in an address to the plenary session of the International Monetary Fund and World Bank meetings on the island of Bali.

“Lately it feels like the relations among the major economies are becoming more and more like Game of Thrones,” Widodo said in a speech peppered with references to the HBO series about dynasties and kingdoms battling for power.

“Are we so busy fighting with each other and competing against each other that we fail to notice the things which are increasingly threatening, all of us alike, rich and poor, large and small,” he said.

Poorer and populous emerging market countries like his are among the most vulnerable to the fallout from the ongoing U.S.-Sino tariff war, and rising U.S. interest rates that are drawing investors away and driving down currencies.

“All these troubles in the world economy, are enough to make us feel like saying: ‘Winter is coming,'” Widodo said, using a phrase that characters in the popular fantasy series constantly repeat to refer to spectral dangers that could destroy them all.

With rivalry growing in the world economy, Widodo said “the situation could be more critical compared to the global financial crisis 10 years ago.”

The market ructions have now cascaded through to developed markets with Wall Street extending a slide into a sixth session on Thursday amid the trade war fears.

The United States and China have slapped tit-for-tat tariffs on hundreds of billions of dollars of each other’s goods over the past few months.

The tariffs stem from the Trump administration’s demands that China make sweeping changes to its intellectual property practices, rein in high-technology industrial subsidies, open its markets to more foreign competition and take steps to cut a politically sensitive U.S. goods trade surplus.

Rubbing salt in U.S. wounds, China reported on Friday an unexpected acceleration in export growth in September and a record $34.13 billion trade surplus with the United States.

Mnuchin: China trade talks must include yuan

In an interview with Reuters, U.S. Treasury Secretary Steven Mnuchin said that he told China’s central bank chief that currency issues need to be part of any further U.S.-China trade talks and expressed his concerns about the yuan’s recent weakness.

Mnuchin also said that China needs to identify concrete “action items” to rebalance the two countries’ trade relationship before talks to resolve their disputes can resume.

The U.S. Treasury chief and People’s Bank of China Governor Yi Gang extensively discussed currency issues on the sidelines of the meetings in Bali.

Mnuchin’s comments on China’s currency come ahead of next week’s scheduled release of a hotly anticipated Treasury report on currency manipulation, the first since a significant weakening of yuan began this spring.

Mnuchin said re-launching trade talks would require China to commit to taking action on structural reforms to its economy.

If the relationship could be rebalanced, he said the U.S.-China total annual trade relationship could grow to $1 trillion from $650 billion currently, with $500 billion of exports from each country.

G-20 members and trade issues

Meanwhile, the chairman of a meeting of finance leaders from the Group of 20 leading industrialized and emerging economies admitted that the trade tensions within the group could only be solved by the countries directly involved.

“The G-20 can play a role in providing the platform for discussions. But the differences that still persist should be resolved by the members that are directly involved in the tensions,” Nicolas Dujovne, Argentina’s Treasury Minister, told a news conference after chairing the G-20 meeting in Bali.

More than 19,000 delegates and other guests, including ministers, central bank heads and some leaders, were attending the IMF-World Bank meetings, and Widodo asked them to “cushion the blows from trade wars, technical disruption and market turmoil.”

“I hope you will each do your part to nudge our various leaders in the right direction,” Widodo said, adding that “confrontation and collision impose a tragic price.”

The IMF’s twice-yearly report on the Asia Pacific region, released Thursday, warned that the market rout seen in emerging economies could worsen if the Federal Reserve and other major central banks tightened monetary policy more quickly than expected.

At Friday’s plenary, IMF managing director Christine Lagarde estimated that the escalation of current trade tensions could reduce global GDP by almost one percent over the next two years.

IMF forecasts of global economic growth for both 2018 and 2019 were cut to 3.7 percent, from 3.9 percent in its July forecast.

“Clearly, we need to de-escalate these disputes,” Lagarde told the plenary session.

Hosting

Musk Rejects Report on Succession at Tesla

Elon Musk replied with a tweet saying “This is incorrect” after the Financial

Times reported that outgoing Twenty-First Century Fox Inc. Chief Executive James Murdoch was the lead candidate to replace him as Tesla Inc. chairman.

Tesla has until Nov. 13 to appoint an independent chairman of the board, part of settlements reached last month between Tesla, Musk and U.S. regulators after Musk tweeted in August that he had secured funding to take the electric car maker private.

The SEC settlement capped months of debate and some investor calls for stronger oversight of Musk, whose recent erratic public behavior raised concerns about his ability to steer the money-losing company through a rocky phase of growth.

The U.S. Securities and Exchange Commission, which said Musk’s tweeted statements about going private were fraudulent, allowed the billionaire to retain his role as CEO while requiring he give up his chairmanship.

Musk had said he was considering taking Tesla private at a price of $420 a share, a number that is slang for marijuana. He tweeted the three-word denial of the Financial Times story on Wednesday at 4:20 pm PDT (2320 GMT), about six hours after the newspaper’s post.

In a vote of confidence for Musk, shareholder T. Rowe Price Group Inc. said in a regulatory filing on Wednesday that it had raised its stake to 10.2 percent at the end of September from just under 7 percent in June.

The Financial Times cited two people briefed on discussions saying Murdoch was the lead candidate for the job. Murdoch, already an independent director of Tesla, has signaled he wants the job, the report said.

The son of Fox mogul Rupert Murdoch, he joined Tesla’s board last year after years of work with media companies. He has no experience in manufacturing and has never led a company that makes cars or electric vehicles.

Murdoch could not immediately be reached for comment. Tesla did not respond to a request for comment. Twenty-First Century Fox declined to comment.

​Board roles

Musk is the public face of Tesla, and any chairman would have to contend with his powerful personality. Thanks to his vision and audacious showmanship, Tesla’s valuation has at times eclipsed that of established U.S. automakers with billions in revenues, and the company has garnered legions of fans, despite repeated production issues.

“The question when it comes to James Murdoch is, ‘Is he the guy who’ll be able to establish that level of authority with Elon Musk?’ ” asked Abby Adlerman, CEO of Boardspan, a corporate governance consulting company.

Murdoch, who at 45 is a near contemporary of 47-year-old Musk, recently navigated a takeover battle between Fox and Comcast Corp. to buy European pay-TV company Sky, which he also chaired.

His record in ensuring Sky’s independent shareholders were represented throughout was exemplary, media analyst Alice Enders said.

“His experience is very recent and very relevant,” she said.

Investor concerns that Tesla’s board was too closely tied to Musk led to the company’s addition of two independent directors, including Murdoch, in July 2017.

Earlier this year, leading U.S. proxy advisers Glass Lewis & Co. and Institutional Shareholder Services and union-affiliated investment adviser CtW Investment Group had recommended investors cast votes “against” the re-election of Murdoch as a Tesla director at the company’s annual meeting held on June 5.

While CtW cited a lack of relevant experience and a “troubled history as an executive and director,” both proxy firms warned that Murdoch already served on too many boards.

Murdoch currently serves on the boards of Twenty-First Century Fox and News Corp. He stepped down from Sky Plc on Tuesday following the completion of Comcast’s takeover of the broadcaster.

He was appointed chief executive of Sky, founded by his father, in 2003, becoming the youngest CEO of a FTSE 100 company.

“Under his leadership, Sky went down the technology route,” Enders said. “It’s no accident he oversaw that strategy, which was really distinct from the strategy other pay-TV companies followed, and in my view was his most valuable contribution.”

Murdoch replaced his father as chairman of Sky in 2007, but was forced out in 2012 after being embroiled in Britain’s phone-hacking scandal. He returned to Sky’s board in 2016 after rebuilding his career at Fox.

Hosting