Business News at a Glance
U.S. Blocks a Chinese Deal Amid Rising Tensions Over Technology
U.S. officials have torpedoed a Chinese state-backed group’s plan to buy a U.S. electronics company, signaling the Trump administration’s continuing skepticism toward Chinese investment deals, particularly those that involve transferring technological know-how. Xcerra, a Massachusetts-based provider of equipment for testing computer chips and circuit boards, said this week it was withdrawing from its $580 million sale because the deal was not likely to be approved by the Committee on Foreign Investment in the United States, which can block foreign acquisitions of U.S. companies over national security concerns.
Top Chinese Official Plans U.S. Trip to Address Trade Friction
President Xi Jinping of China is sending his top economic policymaker to Washington on Tuesday in a bid to reduce trans-Pacific trade tensions before China’s congress convenes for its annual session. The trip by Liu He comes as Trump administration officials have increased their criticism of Beijing’s trade policies in recent weeks. Liu’s trip was described by a person involved in the planning who spoke on condition of anonymity. Trump has considered imposing a “reciprocal tax” on countries, like China, that impose higher tariffs on their imports of U.S. products than the United States levies on theirs.
Dropbox Files for IPO, and Other ‘Unicorns’ Are Watching
In Silicon Valley and on Wall Street, it has long been a guessing game about which of the technology startups would be next to test the public markets. On Friday, there was an answer: Dropbox, an online file storage company privately valued at $10 billion, filed paperwork to raise up to $500 million in an initial public offering. Dropbox is in the same broad group known as “unicorns,” which are startups valued at more than $1 billion by the private investors that have so far funded their growth. How Dropbox fares as it goes public could help determine whether other unicorns follow suit.
Anbang Takeover Sends Blunt Message: China Knows It Has a Debt Problem
In a forceful statement about the country’s changing priorities, the government on Friday seized control of Anbang Insurance Group, the heavily indebted Chinese company that spent billions buying businesses and properties around the globe like the storied Waldorf Astoria hotel. For years, Beijing encouraged big Chinese companies to invest overseas, spreading the country’s wealth and influence beyond its borders. The money transformed global markets and industries. Now, the government wants to rein them in, worried the debt-fueled spending spree could curtail the country’s growth. A concern is that the companies’ big borrowing binge could weigh on the country’s financial system.
Citi to Refund $330 Million to Credit Card Customers It Overcharged
Citigroup is preparing to issue $330 million in refunds after the bank discovered it had overcharged nearly 2 million credit card accounts on their annual interest rates, a spokeswoman said Friday. The bank, which has about 150 million credit card accounts, said it caught the error in a routine internal review mandated under federal law. Citigroup said it had notified regulators about the mistake. Bank spokeswoman Elizabeth Fogarty said the average refund would be $190 and that 1.75 million accounts were affected.
Experts Doubt Trump’s Infrastructure Plan Will Boost Economy
Independent analysts are beginning to forecast that President Donald Trump’s infrastructure plan will pack much less of an economic punch than the administration predicts. Trump has promised his plan, which includes $200 billion in federal spending, will leverage a total of $1.5 trillion in new infrastructure spending over the next decade, with $1.3 trillion coming from state and local governments and the private sector. A new forecast from the University of Pennsylvania’s Penn Wharton Budget Model predicts the plan would yield far less investment: $20 billion to $230 billion in combined public and private infrastructure spending over the next decade, including the $200 billion federal investment.
