Exclusive: Julius Baer plans wealth management joint venture in China – sources

October 30, 2020

By Sumeet Chatterjee and Brenna Hughes Neghaiwi

HONG KONG/Zurich (Reuters) – Swiss private bank Julius Baer Gruppe AG <BAER.S> plans to set up business in China in partnership with a local financial firm as part of its strategy to boost growth in Asia, people with direct knowledge of the matter told Reuters.

Julius Baer aims to establish a majority-owned joint venture to tap the rapidly growing wealth in the world’s second-largest economy and has started looking for a partner, said the people.

The plan comes as China, the world’s second-largest country by number of billionaires, has been rapidly opening up its financial sector for bigger foreign participation.

If successful, Julius Baer will be the first major private bank to set up a wealth management joint venture in China. Its plan to establish onshore presence is reported here for the first time.

Booming stock markets and a flurry of new listings have created five new dollar billionaires in China each week for the past year, according to the Hurun China Rich List 2020 released earlier this month.

China’s wealth management industry is the fastest-growing in the world but has historically been linked to the sale of high-risk, illiquid investment products and lax regulatory oversight.

That made offshore business – where banks help Chinese clients manage their riches in locations such as Hong Kong, Singapore and Zurich – the preferred route for most global wealth management firms.

In the past year, however, Chinese authorities have cracked down on dubious practices in the domestic wealth management industry as part of a broader push to reduce debt and limit the sale of risky products. They have also made it easier for foreigners to set up wealth management joint ventures.

Julius Baer, Switzerland’s third-largest listed lender, will likely take a decision on its Chinese partner next year before starting the formal license application process, said the people.

The people declined to be identified as the bank’s plans are confidential. A spokesman for Julius Baer in Zurich declined to comment on the matter.


An onshore presence in China will significantly bolster Julius Baer’s position in Asia, where it competes with compatriots UBS Group AG <UBSG.S> and Credit Suisse Group AG <CSGN.S> as well as a host of other regional and global wealth managers.

“Mainland China of course is always the big prize,” Julius Baer Chief Executive Philipp Rickenbacher said at a conference in Zurich last month.

“But we’ve seen that, by being present locally, many firms have lost a lot of money in recent years … Is it impossible? No, and we’re working intensely on continuously exploring these possibilities.”

The China business plans come as the bank is also weighing re-establishing presence in the United States to help its Latin American clients book assets.

The bank saw rapid growth over recent years following a period of takeovers and buoyant hiring.

But a money laundering sanction by Switzerland’s finance watchdog earlier this year barring Julius Baer from making large and complex acquisitions – as well as a cost-cutting exercise which started last year – have complicated its path to growth.

It has been looking to emerging markets, as well as a build-out of some of its European operations to bring in fresh assets.

(Reporting by Sumeet Chatterjee in Hong Kong and Brenna Hughes Neghaiwi in Zurich; Editing by Christopher Cushing)

In Tibet, China preaches the material over the spiritual

October 30, 2020

By Yew Lun Tian

LHASA, China (Reuters) – Dzekyid, a 54-year-old barley farmer, presents himself as a role model for his neighbours and for the success of China’s efforts to tie economic development to social control in Tibet.

Dzekyid’s well-built house in Jangdam village has a hall filled with Buddhist scriptures and Thangka paintings, and a row of prayer wheels for his religious 76-year-old father, Tenzin, to spin twice a day. As a member of China’s ruling Communist Party, Dzekyid is an atheist.

“This house is possible because of good government policies. My heart is wholly with the party, not even one bit with religion,” said Dzekyid, whose family was showcased to a group of reporters on a government-organised tour of Tibet, an area where access to foreign journalists is normally barred.

Government officials in both Beijing and Tibet vetted the reporters from media organisations who were invited to join the trip. On the closely supervised tour, there was little opportunity to interact with ordinary Tibetans without government officials in attendance.

China is pushing to transform the mindsets and values of Tibetans to bring them into the country’s modern mainstream, which includes urging the region’s devout Buddhists to focus less on religion and more on material prosperity.

“Tibet has some bad old habits, mainly due to the negative influence of religion that emphasises the afterlife and weakens the urge to pursue happiness in the current life,” said Che Dhala, chairman of the Tibet Autonomous Region.

On the trip to Tibet, officials showcased poverty-relief programmes that include relocation of families to better homes, schooling, vocational training, and business development efforts such as a climate-controlled mushroom farm. The efforts are part of China’s push to eradicate rural poverty nationwide by the end of this year.

Officials also described efforts to “manage the minds” of Tibetans, who for centuries lived in a deeply religious society with a belief in reincarnation and a devotion to their spiritual leader.

The head of Caiqutang village, Dekyi Paldron, described how poor households who receive free new government housing “should not” set up a family room for worshipping Buddha, a common feature in traditional Tibetan houses, because they “shouldn’t be two-faced” after benefiting from the atheist Communist Party.

“If space is taken up by the Buddha room, the boy and girl may have to squeeze into one bedroom – this is not ideal for the healthy development of either child,” another official told the visiting journalists.

China seized Tibet after troops entered the region in 1950, in what Beijing calls a “peaceful liberation.”

In 1959, spiritual leader the Dalai Lama fled China after a failed uprising, and the long-impoverished region has been one of the most politically sensitive and restricted parts of China.


Recipients of poverty relief are told to curb their spending on religion and to instead invest in increasing their earning power and in their children.

At a vocational school in Nyingchi, a signboard stated that the school uses ideological and political education to fight against “separatism”, denounce the Dalai Lama and to prevent religion from making people “passive”.

“Ten years ago, villagers competed among themselves to see who donates more to temples. Now they compete to see whose son or daughter has a stable government job, or who owns a car,” Karma Tenpa, deputy propaganda minister for the Tibet Autonomous Region, told Reuters.

Pictures of the Dalai Lama, once commonly displayed in Tibetans’ houses, are banned, but framed posters of President Xi Jinping were visible inside all the homes the journalists were shown.

Propaganda slogans urging allegiance to China and the Communist Party are conspicuous along roadsides and billboards in Tibet.

Critics say China’s efforts linking poverty eradication to an embrace of a secular life and the Communist Party infringe on human rights.

“The Chinese government’s efforts to force Tibetans to change their way of life to the one the government approves is a violation of their fundamental human rights, including their freedoms of thought and religion,” Maya Wang of Human Rights Watch told Reuters.

A recent Reuters report based on official documents described how growing numbers of rural Tibetans were being pushed into recently built training centres, where they are trained to be factory workers in a programme that some critics have called coercive – a characterisation China rejects.

“At first we have to go around explaining to the nomads and herders why they should go for skills training to earn higher wages. Now that they see the benefit of doing so, they come to us automatically,” Lin Bei, a poverty alleviation official, told Reuters.


Families who practise good hygiene or have other desirable attributes receive credits for goods such as washing powder or towels, Lin said. The best are listed as “Five Star Families” on the village notice board.

Those deemed to show undesirable behaviour are named and shamed.

“If someone has been lazy, drunk alcohol, hung out at the teahouse or played games instead of taking care of his family, we will call him out at the village meeting,” said Lin, who is a member of China’s ethnic Han majority.

Dzekyid, who like many Tibetans uses only one name, encourages his neighbours to support the party and its programmes. His house was built with a government grant of nearly $20,000.

“Praying to the gods and Buddha can’t get me this,” he told Reuters.

(Reporting by Yew Lun Tian; Editing by Tony Munroe and Gerry Doyle)

Delta Air Lines, pilot union reach preliminary deal to avoid furloughs

October 30, 2020

(Reuters) – Delta Air Lines Inc <DAL.N> and the union that represents its pilots have reached a preliminary cost-cutting deal that will prevent furloughs until Jan. 1, 2022, the union said late on Thursday.

Delta MEC, a unit of the Air Line Pilots Association, said the agreement – which still needs approval from Delta’s nearly 13,000 pilots – will cut monthly minimum guaranteed hours by 5%.

In September, Delta reached a tentative agreement with the negotiating committee of its pilots’ union to reduce the number of furloughs by 220, bringing the new total number of job reductions to 1,721.

The airline industry has been hit hard by the coronavirus outbreak as travel has been restricted amid the pandemic, with Delta and other airlines focusing on cutting costs, boosting liquidity and restoring customer confidence.

(Reporting by Kanishka Singh; Editing by Lincoln Feast.)

China must commit to battery recycling in electric vehicle boom: Greenpeace

October 30, 2020

SHANGHAI (Reuters) – China needs to step up the recycling and repurposing of batteries for electric vehicles in order to ease supply strains and curb pollution and carbon emissions, environmental group Greenpeace said on Friday.

Though the deployment of electric vehicles is an important environmental initiative, the manufacturing of batteries is energy- and carbon-intensive and puts the supply of key raw materials like lithium and cobalt under severe strain, the group said in a research report.

“We’re about to see a tidal wave of old EV batteries hit China,” said Ada Kong, Greenpeace East Asia’s senior programme manager. “How the government responds will have huge ramifications for Xi Jinping’s 2060 carbon neutral commitment.”

Greenpeace said 12.85 million tonnes of EV lithium-ion batteries will go offline worldwide between 2021 and 2030, while more than 10 million tonnes of lithium, cobalt, nickel and manganese will be mined for new batteries.

Repurposed batteries could be used as backup power systems for China’s 5G stations or reused in shared e-bikes, and would save 63 million tonnes of carbon emissions from new battery manufacturing, it estimated.

It said total global demand for energy storage could be met by old EV batteries by 2030.

China, the world’s biggest EV user and EV battery manufacturer, has launched its own battery recycling schemes to cope with the expected surge in utilisation, and is also implementing tracing systems that will track the entire lifespan of a battery from manufacturing to disposal.

(Reporting by David Stanway; Editing by Michael Perry)

Argentina, Mexico delay IDB board meeting to vote on new leaders

October 30, 2020

By Andrea Shalal and Dave Graham

WASHINGTON/MEXICO CITY (Reuters) – Mexico and Argentina have delayed a key meeting of the Inter-American Development Bank until after the Nov. 3 U.S. election, delivering an early setback to plans by the bank’s new U.S. chief to install vice presidents from smaller countries.

Wednesday’s meeting of the IDB’s 14-member board was abruptly postponed at the request of Argentina and Mexico, the IDB press office said, adding that a majority of the board backed the three nominees from Honduras, Ecuador and Paraguay.

No new date has been published on the bank’s website. One source close to the process said the two countries could in theory delay the vote for three months under the bank’s rules.

Mexico and Argentina want to wait until after the U.S. election before voting on the basis that support for IDB President Mauricio Claver-Carone, the first U.S. citizen to head the regional lender, might fade if President Donald Trump loses his re-election bid, said one official familiar with the matter.

Both countries had opposed the candidacy of Claver-Carone, a former top adviser to Trump, who took over the helm of Latin America’s main financial institution this month.

Democratic presidential nominee Joe Biden, who is leading Trump in national polls, also criticized Trump’s nomination of Claver-Carone, and sources close to the former vice president say he could seek to remove Claver-Carone if elected. The United States is the bank’s largest shareholder.

It was unclear if Argentina and Mexico would seek to delay a vote on the nominations until after Jan. 20, when the next president will be sworn in.

One congressional source said the situation reflected the continuing fallout of Claver-Carone’s contentious election.

“It illustrates that he has not earned the trust and confidence of key shareholders, which begs the question of whether he can deliver on his promise to obtain a capital increase,” said the source.

Claver-Carone this week said he is pushing to boost the bank’s yearly lending capacity by two-thirds to $20 billion.

The new IDB chief had nominated Reina Irene Mejia, chief executive of Citi Honduras, for the No. 2 job at the IDB, along with former Paraguayan finance minister Benigno Lopez to serve as vice president of sectors, and Richard Martinez, Ecuador’s former finance minister, as vice president of countries, according to sources familiar with the plans.

No comment was immediately available from Claver-Carone. He was quoted by Argentine newspaper La Nacion as saying that only Mexico and Argentina wanted to delay the vote and the bank should focus on its main job of lending.

(Reporting by Andrea Shalal in Washington and Dave Graham in Mexico City; additional reporting by Cassandra Garrison in Buenos Aires; editing by Jonathan Oatis, Sonya Hepinstall and Leslie Adler)

Japan’s factory output rises for fourth month on jump in car, machinery production

October 30, 2020

By Daniel Leussink

TOKYO (Reuters) – Japan’s industrial output rose for the fourth straight month in September as the world’s third-largest economy continued to shake off the drag from the COVID-19 crisis largely thanks to improving external demand.

Separate data showed the September jobless rate held steady, while the number of available jobs per applicant fell to the lowest level since late 2013.

Official data released on Friday showed factory output surged 4.0% in September from the previous month, mainly due to strength in car and production machinery manufacturing.

“Overseas economies and especially China are picking up, and Japan’s exports are growing,” said Hiroshi Miyazaki, senior economist at Mitsubishi UFJ Morgan Stanley Securities.

“The output recovery in the automobile industry and in high-tech components whose production moves closely in line with exports is the overall driving force.”

The jump beat the median market forecast of a 3.2% gain in a Reuters poll of economists, and compared with a downwardly revised 1.0% rise in August.

Manufacturers surveyed by the Ministry of Economy, Trade and Industry (METI) expect output to rise 4.5% in October and 1.2% in November.

The government kept unchanged its assessment of industrial production, saying it was picking up.

The economy posted its worst postwar contraction in the second quarter due to the coronavirus pandemic but has been gradually recovering. Gross domestic product data due on Nov. 16 is expected to show a return to growth in the three months through September, thanks in part to a rebound in exports and output.

But some analysts warned that capital spending will likely put a drag on third-quarter growth as firms are forced to put off investments due to the heavy impact of COVID-19 on corporate earnings.

“Capital spending usually recovers slower than output,” said Miyazaki. “It’ll possibly pull down third-quarter growth.”

Output of capital goods, which are an indicator of the health of capital spending, rose just 2.6% from the previous month, following a steep 4.5% fall in August.

Prime Minister Yoshihide Suga will announce next week a plan for extra stimulus measures to speed up the patchy recovery, four government and ruling party sources told Reuters this week.

Although the size of the package has yet to be decided, some ruling party lawmakers have already called for one of about 10 trillion yen ($95.51 billion), including measures to stimulate domestic demand.

Japan’s seasonally adjusted jobless rate was steady at 3.0% in September, separate government data showed, beating the median estimate of 3.1%.

The jobs-to-applicants ratio fell to 1.03 in September from 1.04 in the previous month to hit its lowest level since December 2013.

(Reporting by Daniel Leussink; Editing by Christopher Cushing)

Black franchisees at McDonald’s file new discrimination lawsuit

October 30, 2020

By Jonathan Stempel

(Reuters) – McDonald’s Corp <MCD.N> was hit on Thursday with a potentially multi-billion-dollar lawsuit by Black franchise owners who accused the fast-food giant of racial discrimination for steering them to underperforming stores.

The proposed class action led by James and Darrell Byrd, brothers with four McDonald’s restaurants in Tennessee, was filed by the law firm representing 52 Black former franchisees who filed a similar lawsuit on Aug. 31.

McDonald’s was accused of placing Black franchisees in undesirable inner-city locations with high security and insurance costs and below-average sales, and driving many away by failing to support them as debts rise and profits fall short.

Jim Ferraro, a lawyer for the plaintiffs, estimated that McDonald’s has 186 Black franchisees in the United States, down from a peak of 377 in 1998, who own “700-plus” stores.

The lawsuit, filed in federal court in Chicago, where McDonald’s is headquartered, seeks damages of $4 million to $5 million per store, potentially totaling more than $3 billion.

In a statement, McDonald’s USA said it has an “obvious interest” in the franchisees’ success, and invested significantly in the Byrds’ franchises after they encountered difficulties. McDonald’s said it will defend against the lawsuit.

McDonald’s has taken steps this year to address concerns about its workplace culture, including updating its corporate values for the first time since 2008.

It has denied treating Black franchisees differently, while acknowledging it wants its franchisee ranks to become more diverse. McDonald’s has also denied racial discrimination claims in a lawsuit filed in January by two Black executives.

“They’ve been on a massive PR campaign to clean up their image,” Ferraro told reporters on a conference call. “This is actually a good thing, at some level, but not a good enough thing.”

McDonald’s sought last week to dismiss the lawsuit by the former franchisees, which seeks up to $1 billion in damages, saying it disclosed the risks of owning stores and did not set anyone up for failure.

The case is Byrd et al v McDonald’s USA LLC et al, U.S. District Court, Northern District of Illinois, No. 20-06447.

(Reporting by Jonathan Stempel in New York; Editing by Aurora Ellis and Leslie Adler)

WATCH: Tucker Carlson Gives An Update On His Missing UPS Package

Tucker: Hunter Biden documents suddenly reappear

The post WATCH: Tucker Carlson Gives An Update On His Missing UPS Package appeared first on Breaking911.

Source: Breaking 911, WATCH: Tucker Carlson Gives An Update On His Missing UPS Package

LG Chem shareholders approve plan to split off battery business: source

October 30, 2020

SEOUL (Reuters) – LG Chem shareholders approved the company’s proposal to separate its battery business into a new company, a source familiar with the matter told Reuters on Friday.

The decision paves the way for the battery business, a supplier for Tesla Inc and General Motors Co, to potentially raise funds and go public to finance its high-cost capacity expansion.

(Reporting by Heekyong Yang and Hyunjoo Jin; Editing by Himani Sarkar)

So what if Biden is up in the polls? Weren’t they wrong last time?

October 30, 2020

By Chris Kahn

NEW YORK (Reuters) – Whenever President Donald Trump is confronted with polls he does not like, especially the torrent of national data showing him trailing Democratic challenger Joe Biden in public support, the president’s response is usually the same: Fake news.

If the polls were always right, his thinking goes, Hillary Clinton should be running for re-election, not him. The former Democratic presidential candidate consistently led Trump in state and national polls in 2016 before he won the White House, just like Biden does now.

But opinion poll experts say there are good reasons to trust this year’s polls more than those of 2016.

Here are a few of them.


Trump’s upset win four years ago prompted pollsters to re-evaluate their survey methods in the United States.

Many pollsters tweaked their methods to better account for a demographic group that tends to avoid polls but largely favors Trump: whites without a college degree.

It is not entirely clear why non-college whites are less likely than others to participate in polls. But when evaluating their survey samples, pollsters routinely saw that those Americans were not well represented.

That was a problem in political polls, since non-college whites tend to favor Republicans. They also make up a substantial proportion of the U.S. electorate: Pew Research estimated that 44% of voters in 2016 were whites without a college degree.

As a fix, many polls, including Reuters/Ipsos, installed an education “weight” to calibrate their survey data so that it better reflects the education levels of all Americans.

What that means is that if a poll gathers a smaller number of non-college adults than one would expect given their population size, the poll will automatically give their responses a greater weight so they are properly represented in the survey.

White Americans were not always so polarized according to their education level, said Chris Jackson, who runs political polling at Ipsos. But after 2016, Ipsos and others found ways to design surveys with Trump’s base in mind.

Not all polls are showing Biden with such a wide lead. Republican-leaning polls have shown Trump doing much better nationally and in some battleground states.


A lot of Americans had trouble making a decision in 2016. Neither Trump nor Clinton was popular, and opinion polls routinely showed that 20% of likely voters remained undecided until the final weeks of the campaign.

That added a considerable amount of uncertainty to an already volatile year in American politics. Clinton’s once-sizable lead in October nearly vanished just before Election Day in 2016 as more and more voters made up their minds.

This year, indecisive voters are much less of a concern. The latest Reuters/Ipsos poll shows that less than 7% of likely voters have yet to back a major-party candidate, less than half of what it was four years ago.

Political analysts say they are more certain about polls this year because the public appears to be much more certain about their vote.

“The polls are much more reminiscent of 2012, when there was an incumbent on the ballot and the electorate was much more decided,” said Kyle Kondik, a political analyst at the University of Virginia.

“And since there are fewer undecided voters, Biden is more consistently hitting above 50% support,” Kondik said. “And to me, that is a higher-quality lead than Clinton’s was because it suggests Biden has majority support.”

The latest Reuters/Ipsos national poll shows that Biden is backed by 52% of likely voters, while Trump is supported by 42%. Even if all of the undecided voters decided to cast their ballots for Trump, it would not be enough to surpass Biden in the popular vote.

But to win the presidency, a candidate must prevail in enough states to win the Electoral College.


News organizations are also investing more resources this year on state polls, especially in some of the most competitive parts of the country. Reuters, for example, is running 36 polls in six battleground states this year between Labor Day on Sept. 7 and Election Day next Tuesday.

More polls do not necessarily increase the accuracy of the measurements in those states. But they allow analysts to track opinions there over a longer time period and give them more opportunities to find inconsistencies in the survey data.

So far, Reuters/Ipsos’ state polls have shown tight races between Biden and Trump in Arizona, Florida and North Carolina, while Biden has maintained a lead in Wisconsin, Pennsylvania and Michigan.

All of those surveys will face the ultimate test on Election Day on Tuesday, when millions of Americans who did not cast early votes will head to the polls. It may take days or even weeks, however, for the votes to be counted and the final results to be known.

(Reporting by Chris Kahn; Editing by Ross Colvin and Peter Cooney)