20231116

Young and Rich: China’s New Rich List

That $120 billion is just the tip of the iceberg. China’s wealth boom started more than four decades ago when the country began embracing private businesses. Over that period, the founders of some of China’s biggest companies have collectively built up $1 trillion of wealth. Now, as the tycoons approach retirement age, some are tapping the next generation.

“China’s entrepreneurs are thinking about succession five to ten years earlier than they used to,” said Gao. “They are seeing more paradigm shifts in the economy and business environments.”

Many of the heirs featured in this list, including the son of a bottled water magnate and the daughter of a glass mogul, have followed similar paths: studying in the UK or the US before returning to China to join the family business, oftentimes helping their parents tap international markets or younger consumers. And as geopolitical tensions rise, more ultra-rich Chinese scions are flocking home.

These are the Zoomers and Millennials set to lead the companies of some of China’s richest clans.

EK: Same here in Korea – Choi’s divorce suit and his three adult children from the marriage and an illegitimate daughter and a step son. Where would the crown go?

Biden and Xi Meet Today – But Can The Thaw Last?

It’s an encounter that’s been declared a success even before US President Joe Biden and Chinese leader Xi Jinping sit down today in San Francisco.

Their last talks — in Bali a year ago — were also seen as a breakthrough in putting a floor under a troubled bilateral relationship. But the thaw didn’t last, derailed by a furor over an alleged Chinese surveillance balloon that floated into US airspace.

It’s taken months of delicate diplomatic work to get back to this point. Officials have had to skirt frictions over technology, trade, human rights and Taiwan, alongside US unease over China’s prevaricating on Russia’s war on Ukraine.

China has bought a bunch of US soybeans in the past week. It’s making noises about a purchase agreement for Boeing’s 737 Max jetliner. And Xi is set to promise to crack down on the export of fentanyl, the opioid behind a devastating health crisis in America.

The Chinese president in turn gets a key government body taken off a Commerce Department blacklist, weakening US measures to punish China over human-rights abuses. And he gets to mix and mingle with US business executives.

Washington is allowing a large number of Chinese journalists to cover the event: Xi needs good press as he seeks to settle his wobbly economy and Chinese markets and burnish his image at home. There was a sizable and effusive crowd bussed in for his airport arrival.

But how long can the bonhomie last, and how meaningful might it be? This meeting is only happening now because it suits both Biden and Xi, because they feel they can benefit.

Beyond San Francisco, Xi is still working to build a fundamentally different global architecture where American clout is challenged and diminished. Things are getting heated again in the South China Sea over Beijing’s expansive territorial claims. There is an election looming in Taiwan, a democratically-run island that China sees as its own.

The US meantime is on a protectionist arc no matter who is in the White House after 2024. Biden may be politer than his predecessor and potential Republican nominee Donald Trump, but he’s very much a protectionist. And there aren’t many votes in dismantling tariffs on China.

Like Bali, this meeting will achieve an immediate goal. Lines of communication are opened and may stay so for a while.

Xi and Biden have known each other for more than a decade — before either was the top leader. But it is, above all, a transactional relationship.

EK: In Love and War. Good enough for now, at least, although it’s all business.

Letting People Work From Home Is Good for Companies’ Revenue Growth

Mercer senior principal Lauren Mason said the results from her firm’s latest study surprised her, and could be due to remote employees feeling marginalized inside their organization even if they are satisfied with their work arrangement. “That’s one theory we have,” she said, adding that those sentiments are often more prevalent among women, who engage in flex-work at higher rates than men. “And it’s not a good thing.”

A good practice, according to workplace experts, is to provide individual teams with some autonomy on when and where they work, rather than the CEO mandating a firm-wide attendance policy that rarely works for everyone. Teams that set their hybrid policy together have the highest employee engagement, according to Gallup.

EK: I just LOVE working at home. 🙂

Nowhere Is Safe From Worsening Climate Change, New US Report Warns

The floods, heat waves, storms and fires fed by global warming are getting worse across the US and will pose increasing danger to Americans unless greenhouse gas emissions are cut sharply and swiftly. The tools to do that are available today and are being adopted by communities nationwide, although not quickly enough to avert the crisis, according to a major government report released Tuesday.

Most everywhere in the US is affected by the extra heat trapped in the Earth system. Wildfire smoke is fast becoming a health threat on top of conventional air pollution. Forest owners and managers around the country are girding for a continuous increase in weather conducive to large fires. Sea levels along the Atlantic, Pacific and Gulf coasts are set to rise 11 inches by 2050 — about the same increase as they experienced over the entire past century.

Every region is changing in ways that present distinct challenges. California withered for more than two decades through its worst drought in more than 1,200 years, though the winter of 2022 to 2023 brought some relief. Fisheries have collapsed in Alaska. Diseases from ticks and mosquitos are on the rise in the Southeast.

In the Midwest, which is responsible for producing nearly a third of the world’s corn and soybeans, higher temperatures and more rapid oscillations between extreme droughts and floods threaten agricultural production and, by extension, the global food supply.

Markets are already absorbing the losses, and both trade and economic growth are directly impacted. This edition of the report is the first to include a chapter dedicated to economics, an exploration of both cumulative and expected future losses from greenhouse gas emissions. American households can expect impacts to property values, employment, income and quality of life.

Compared to past editions, the report places a stronger emphasis on climate justice and climate solutions and will be the first to be entirely translated into Spanish. Climate change is disproportionately harming the health and well-being of historically marginalized populations in the US, including Black and Indigenous communities. That exacerbates other community stressors such as pollution and lack of access to high-quality health care.

EK: What goes around comes around. Btw, didn’t think all those wildfires are attributed to global warming. The unfortunate is paying for the result.

Wall Street Is Tapping Firms Led by Women, Minorities for Billion-Dollar Bond Deals

Top billing on the $1 billion bond deal went to a big name in banking: Wells Fargo & Co.

The other players were less familiar but chosen for a specific reason: they’re led by executives from groups underrepresented on Wall Street.

After being relegated to bit parts for decades, women- and minority-owned investment banks are slowly stepping into larger roles as corporations like Verizon Communications Inc., which issued the $1 billion of bonds this year, push their go-to banking partners to team up with diverse firms.

Verizon picked Wells Fargo as lead underwriter for its green bonds because the bank has partnered with diverse firms “significantly” when issuing its own bonds, Scott Krohn, Verizon’s treasurer, said in an interview. The rest of the lineup included Samuel Ramirez & Co., which describes itself as the first Hispanic-owned investment bank in the US, as well as three firms founded by African-Americans — CastleOak Securities LP, Loop Capital Markets and Siebert Williams Shank & Co.

“It’s a prestigious role,” Krohn said of the lead underwriter spot. “But you earn that through your own commitment to diversity as well.”

The bond market’s public support of minorities – fueled by a broader corporate commitment to do better on diversity, equity and inclusion in the aftermath of George Floyd’s murder in police custody in 2020 – is noteworthy at a time when many businesses are under fire for those policies. American corporations have become increasingly reluctant to speak on social issues and some businesses have even changed the eligibility criteria for their diversity programs to fend off conservatives’ attacks on such strategies in light of the Supreme Court’s decision to ban affirmative action in college admissions.

Yet in this part of the market, corporations are leaning on Wall Street to demonstrate diversity bona fides. Who gets lucrative investment-banking assignments will depend in part on who has cultivated the diverse arrangers.

It’s unclear if the development will help women and minorities break through in the broader US financial industry, where businesses are still mostly run by white men. Diverse firms rarely manage big deals on their own. Historically, they’ve often taken relatively passive roles next to bigger, richer banks. This year, of the $701 billion in deals involving minority-led banks, only 5% had at least one acting as bookrunner — the lead advisor — Bloomberg data show. While that’s a slight improvement on last year’s 4.5%, it means they generally take home a much smaller portion of the fees on offer.

EK: Sociopolitical climates matter to DEI and firms in supportive of DEI to earn deals. Whether they can keep the deals on will depend on their own performance.