Business News at a Glance
Posted August 23, 2018 9:46 p.m. EDT
Alibaba Had a Bright Quarter, Despite Clouds Over China’s Economy
The Alibaba Group, the Chinese e-commerce leviathan, reported a rise in sales of more than 60 percent in the latest quarter compared with a year earlier. Profits for April to June fell by more than 40 percent, however, reflecting the effect of a large increase in the valuation of Ant Financial, an Alibaba sister company. Because Alibaba has given some employees awards based on Ant shares, the group’s compensation expenses grew sizably. Thursday’s strong results suggest that the company’s empire building has not harmed the current core of its business: selling ads to the merchants on its shopping platforms.
Business Leaders View U.S. Immigration Policy as Threat to Economy
Dozens of U.S. business leaders, all members of the Business Roundtable, are challenging the Trump administration over changes to immigration policy they say threaten the livelihoods of thousands of their skilled foreign workers, and the nation’s economic growth and competitiveness as well. The executives expressed their “serious concern” in a jointly signed letter Wednesday. The group’s members took issue with a series of immigration enforcement guidelines that they said were “arbitrary and inconsistent” and created new and unnecessary hurdles for skilled foreigners working in the United States. The business group’s complaint focused on new guidelines and practices by the U.S. Citizenship and Immigration Services, an arm of Homeland Security that vets visa applications and administers immigration policy.
Beijing Takes a Gamble on Debt
As China’s economy slows and the trade war with the United States intensifies, officials are pushing banks to lend more and allowing indebted local governments to spend money on big projects again. They have moved to shore up the value of the country’s currency, and also have helped out the stock market, say financial analysts, as the government works to avert a stock market collapse like the one three years ago that shook the world. On Thursday, the United States formally enacted its previously threatened tariffs on $16 billion in Chinese-made goods. Beijing said it would immediately retaliate with its own tariffs and file a complaint with the World Trade Organization.
Australia Bans China’s Huawei From Building 5G Wireless Network
The fog of cyberespionage concerns surrounding Huawei has for years kept the Chinese technology giant largely out of the United States. Now it has cost the company potentially lucrative business in another country: Australia. Huawei said Thursday that the Australian government had barred it and another Chinese company, ZTE, from providing equipment to support the country’s new telecommunications networks. Mobile carriers around the world have prepared to build infrastructure using fifth-generation, or 5G, wireless technology, which promises to enable the ultrafast communications necessary for technologies such as self-driving cars. Huawei has said repeatedly that it is a private company owned by its employees, and that it obeys the law wherever it operates.
One Tesla Investor Wants It to Stay Public
Elon Musk has insisted that taking Tesla private would allow the company to achieve its potential. On Thursday, one Tesla investor took issue with Musk’s argument. Catherine Wood, chief investment officer of ARK Invest, beseeched Tesla’s chief executive not to go forward with his plan. On Aug. 7, Musk proposed in a tweet taking Tesla private at $420 a share, which would value the company at about $71.6 billion. He did not elaborate on any sources of financing that day. Wood — whose firm owned a roughly 0.26 percent stake in Tesla as of June 30, according to public filings — argued the public markets would better support Tesla’s growth over the long term.
Treasury Issues Crackdown on State and Local Tax Workarounds
The Treasury Department moved Thursday to block states from circumventing new federal limits on state and local tax deductions. A proposed rule, certain to face legal challenges from several states, would limit the type of charitable contributions Americans are allowed to deduct on their federal taxes. The rule would effectively exclude donations that are rewarded with state tax credits. The regulation would affect taxpayers who deduct more than $10,000 in state and local taxes. And its effect would most likely be concentrated among high earners in high-tax states, some of which created credits to help residents reduce the federal take.
Google Deletes 39 YouTube Channels Linked to Iranian Influence Operation
Google, which owns YouTube, said Thursday that it had removed 39 YouTube channels linked to the Islamic Republic of Iran Broadcasting. It discovered those accounts working off a tip from the cybersecurity firm FireEye about a handful of suspicious Google accounts. Google terminated those accounts, along with six blogs on its Blogger service and 13 Google+ accounts, for running an influence campaign starting as early as January 2017 while disguising its connection to Iran, said Kent Walker, Google’s senior vice president of global affairs. Google said those accounts had shared “English-language political content in the U.S.,” but it did not provide details on what types of videos or content.