Hong Kong (CNN) – American businessman Scott Huff has a tough juggling act. His business spans three countries: China, Cambodia and the United States. That means keeping his eye on many things, including three separate corporate tax codes. "My advice about corporate taxes is to stay on your toes. It's always changing. It's part of the total burden," he says.
Huff's company, Innovate International, is a design engineering firm based in Shenzhen, China that manufactures everything from hand tools to pet toys. Corporate tax in China is a flat rate of 25%. Cambodia has none if you get can "qualified investor status." Most international companies easily obtain this status because the Cambodian government is trying to attract more business to the country. The U.S. corporate tax rate can be as high as 35% but will likely change since the Republican candidates and President Obama have all proposed to lower the tax rate in order to stimulate the U.S. economy.
Editor's note: The European Council has since sent out a revised release, and added this line to the bottom: “The Heads of State or Government of Bulgaria, Czech Republic, Denmark, Hungary, Latvia, Lithuania, Poland, Romania and Sweden indicated the possibility to take part in this process after consulting their Parliaments where appropriate.”
According to CNN's Jim Boulden: The line is weak and a bit of "eurospeak," but it does look like the continental leaders have decided to start to circle the wagons a little bit after some much needed sleep.
Brussels (CNN) – In this era of clumping countries together with catchy acronyms, we now have the chance to coin a phrase for the EU countries not participating in the new fiscal compact.
It’s no surprise that Hungary, Sweden and the UK are out. Add to that the Czech Republic and we have a mishmash of possibilities.
I present to you the CzHuUKS.
In the opulence of probably the world’s most luxurious hotel, finance ministers from more than 20 Arab countries have gathered to examine the state of the global economy. They are also calculating the impact the debt crisis in Europe and the slowdown in the United States could have at the crossroads of East and West, the Middle East.
But nearly nine months into the Arab Spring, the finance ministers who are in charge of regional economies without the benefit of huge oil and gas reserves have expressed deep concerns about funding transitions in Egypt and Tunisia and potentially in Syria and Yemen.
The Chairman of the Arab Monetary Fund Jassim Al Mannai painted a picture of a prolonged period of economic uncertainty: "The fear is that economies of countries whether those that witnessed political shifts or those that are still witnessing political unrest today, will take a long time before they recover and go back to normal.”
He arrived decades ago on Wall Street with long hair and turquoise jewelry. Today, he presides over the world's largest money manager, with assets of more than $3.5 trillion.
BlackRock CEO Larry Fink has emerged in recent years as a pre-eminent force in the post-recession financial world, but maintains a lower profile than many of his contemporaries. In addition to the funds it controls, the company recently helped the Irish government evaluate the strength of its banking system.
"We're involved in some enormous things that can change the course of countries," says Fink, when asked about what he still enjoys about the job after more than 20 years. "Our stress tests in Ireland that we are doing. Our auctions now for Maiden Lane II for the Federal Reserve. These are very important, visible things and we take it very seriously."
His reference to the so-called Maiden Lane fund is certainly topical: BlackRock is currently overseeing the auction of nearly $40 billion worth of sub-prime assets bought by the Fed from AIG as it teetered on the brink of bankruptcy. It puts the firm in the unusual position of having the world's most powerful central bank as a client. How does he keep track of the firm’s many tentacles?
"We are the largest shareholder of corporations worldwide. We have a 5% position in 2,500 companies worldwide. And I don't manage money myself so I can't tell you what we are doing with one specific stock... Did I have any idea we would be of this scale? Not at all. But it is exciting as the leader of this firm watching it grow."
We met Fink at BlackRock's global headquarters in midtown Manhattan. Housed in a non-descript tower, the offices are immaculately maintained and have the discreet aroma of a luxury business hotel. One floor was largely deserted and the trading floor seemed to have an excess of desks and Bloomberg terminals.
Still, it was a busy session, with events moving fast in the Middle East. For Fink, markets need to look past the conflict in Libya.
"The area I am most concerned about is Bahrain. Bahrain is a causeway. On the other side of that bridge are the oilfields of Saudi Arabia. That area of Eastern Saudi Arabia is also where all of the many Shiites are. So the problem you see in Bahrain, which is being funded by Iran, is the most important thing to watch.”
He planned to fly to Saudi Arabia the following week, to learn more about the situation on the ground and offer BlackRock's support to regional clients. During a time of such global instability, the role of a CEO must surely be more vital than ever. Before we left, we asked him what his best and worst management qualities are.
"Intense neuroses. That's positive and negative. I am what I am. You can see me on my sleeve,“ he says brandishing his wrist. There is no evidence of turquoise jewelry, but the enthusiam remains undimmed.
(CNN) – “Coordinated foreign currency intervention” may prove a mouthful, but get used to it. It’ll be the catchphrase for the next few news cycles, as we talk about Japan’s attempt at economic recovery. And as one J.P. Morgan analyst told me, this intervention is “a big deal.”
G7 finance ministers and central bank governors held a special conference call early Friday morning Tokyo time. Their goal with this intervention: to weaken a super strong yen. And at least for today, their actions are working. Before the G7 announcement, the yen was trading at around the 79 yen to the dollar mark. Right after the communiqué was released, the yen weakened sharply to push past the 81 yen mark.
But wait, a two-yen uptick? Is that really significant? You bet.
New York City (CNN) – Twenty-three years ago Oliver Stone introduced us to the notion that greed is good. Or at least that is what his villainous character Gordon Gekko famously told a group of shareholders in “Wall Street.” For the sequel it is “banksters” that Stone shines a bright light on.
“What Gekko was doing in the 1980s became legitimate in the 2000s,” he explains. “The banks became Gekko. The Securities and Exchange Commission did nothing, these buccaneers, these pirates – 'banksters' you could call them - were running rampant, selling junk securities to the world. There is a lack of trust between us and the banking class, we’ll never trust them again.”
Known for his thorough research, Stone and his stars once again immersed themselves in the subject. They spent months talking to Wall Street insiders who explained the complex world of derivatives and credit default swaps. Shia LaBeouf, who stars as the young hero of the movie Jake Moore, even passed his Series 7 exam and is a licensed dealer broker.
Though critical of the actions of banks during the crisis, Stone is not completely anti-Wall Street.
“My father was a stock broker for 50 years,” he says. “ think there is a reason for free markets. Markets do define things, they distribute well. At the end of the day we need some version of Wall Street to work… The system has to be reformed.”
I talked to Stone just hours before the film’s New York premiere and it was clear that two decades after the success of the first Wall Street, he is still passionate about finance. “The 2008 crash was like a triple by-pass to capitalism and everything is in question.”
In our interview he talks about the lust for money, the damage this episode has done, leadership in Washington. But the most interesting part for me was our discussion about Shia LaBeouf’s character Jake Moore and whether it is possible to be truly ethical and rise to the top in business.
You can see what Stone says in the video above - but I want know what you think?
Can good guys rise to the top in finance or do you have to be part shark to swim with them? Can the Gordon Gekko’s of the world truly reform?
The South African government has increased its offer to striking public sector workers, in the latest effort to end a walkout that has crippled hospitals and schools across the country.
After repeatedly saying the country could not afford to increase wages to the levels demanded by the unions, the government has now increased its offer from 7 to 7.5 percent, which is nearly double the inflation rate – but less than the 8.6 percent rise unions have demanded.
The government has argued that the money spent on giving public servants wage increases could be used to create jobs, build more houses and help South Africa's poor.
The striking workers, who include teachers and nurses, contend that they are a critical part of South Africa's work force and that they are not earning a living wage.
Is the decision to offer a 7.5 percent increase the right one? Can you see a better way to resolve this dispute? I'd like to hear your views.
(CNN) – After a lot of finger pointing, squabbling, and teeth-sucking, the Chinese have finally loosened their grip on their currency.
Over the weekend, the government said it would allow the yuan to be more flexible. So far, no one thinks the Chinese will tolerate anything more than a small blip.
However, longer term the flexibility could bring greater purchasing power to Chinese consumers by making imported goods cheaper.
Brokerages say consumer companies globally could benefit from a new currency rate and the official push to encourage the Chinese to spend.
Internationally-branded cars and cell phones might become more affordable.
Other kinds of multinational firms like those in the construction business may also enjoy a bump in buyers. Analysts though say major retail chains could suffer a bit as some of their suppliers struggle to offset potentially unfavorable currency fluctuations.
In business, are you a Chinese currency winner or loser?
For an entertaining, thought-provoking and sometimes infuriating read, Marc Faber’s aptly titled “The Gloom, Boom & Doom Report” fits the bill. Among the wide swath of topics he tackles in his New Year’s Day edition this year, this section on the potential for cyber attacks jumped out at me:
“I, for one, am convinced that sometime in this next decade we shall experience successful cyber attacks, which may result in electricity blackouts, airport control tower failures, traffic jams, train and underground collisions, erroneous missile launches, a breakdown of the Internet, and so on.
“And whereas I perfectly understand their entire investment strategy around such highly disruptive events, they should at least prepare themselves for the day, week, month or even year when they may not be able to access or use their credit cards, bank and brokerage accounts, the Internet, and their mobile phones, and when they may have to live without oil and electricity amidst acute food shortages and poisoned water…
“It’s all wonderfully depressing, and some readers will consider me to be an alarmist. But the fact is that the likelihood of one or other of these conditions occurring sometime in the future is actually rather high. Therefore, I advise my readers to take out some insurance (but not with … any insurance company) in term for being prepared for an emergency situation.
“I suppose most people keep a small toolbox in their cars for emergencies, a fifth wheel in case of a flat tire (the Fed chairman doesn’t need a spare wheel because he wouldn’t know how to replace one in the first place), and a small home pharmacy for treating minor injuries. So, being prepared in the event of a major disruption in our lives might be considered prudent (especially if other people, such as small children) and not just an unnecessary warning by an insane alarmist. Hoping that all will go well is just not an option at this stage.”
Yikes! Sounds like science fiction. But as he quotes Arthur C. Clarke, famed writer of “2001: A Space Odyssey”: “If we have learned one thing from the history of invention and discovery, it is that, in the long run – and often in the short one – the most daring prophecies seem laughably conservative.”
SINGAPORE – The talk was about global rebalancing. U.S. President Barack Obama arrived in Asia on his first official tour, talking about a "rare inflection point in history". A time where "we have the opportunity to take a different path." A chance to rebalance the model where Asia consumers consume more and US exporters export more.
Chinese President Hu Jintao was among world leaders at the APEC summit in Singapore.
APEC leaders fully endorsed the strategy; virtually every economy in the world does. But look inside the APEC meeting in Singapore, and see the problems of turning this into reality. One of the biggest may be China.
More than two years ago, China began to allow its currency to appreciate against the dollar. By the time the financial crisis exploded, it had risen in value by about 20 percent. The crisis was the signal for China to freeze the exchange rate there at about 6.83 to the US dollar.
That was a year ago. Even China's Asian trade partners are now worried that the Chinese yuan is undervalued against the sinking dollar. So one of the key issues in Singapore was to put subtle pressure on China to unfreeze its currency.
Finance ministers talked about flexible exchange rates, the APEC leaders were expected to talk to about "market oriented" exchange rates - all aimed at prodding China to become a little more "market oriented" in its own exchange rates.
But by the end of the gathering, all reference to market-oriented exchange rates in the final statement from leaders had been erased. There had been debate behind closed doors between the U.S. and China about the statement. In the end China appears to have won out.
The message seem to be China will move only when its ready. And for all its newfound goodwill and push for re-engagement, there's not much the U.S. can do about that.
About Business 360
CNN International's business anchors and correspondents get to grips with the issues affecting world business, and they want your questions and feedback.