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China might not make major changes to its Covid policy any time soon

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A couple pass necessities over a Covid lockdown barrier in Guangzhou city on Nov. 17, 2022.

Future Publishing | Future Publishing | Getty Images

BEIJING — China won’t likely make major changes to its Covid policy in the near future despite this weekend’s protests, analysts said.

One of the reasons for public unrest was the local implementation of recent central government policy, they said.

“Without a clear guidance from the top, local officials are inclined to play safe by sticking to the existing zero-Covid stance,” said Larry Hu, chief China economist at Macquarie. “It upset many people, who expect[ed] more loosening following the ’20 measures'” announced earlier this month.

Groups of people in China took to the streets over the weekend to vent their frustration, built up over nearly three years of stringent Covid controls. Local infections have surged, prompting more lockdowns in the last week.

Although the protests were rare, it was not immediately clear to what scale the demonstrations were held.

Earlier this month, the central government signaled a step toward reopening by announcing “20 measures” to trim quarantine times and generally make Covid controls more targeted.

Relaxation of China's Covid measures is 'the key' to its growth rebound in 2023, economist says

However, Hu said it’s unclear whether the purpose of the measures is to drastically reduce new infections — likely requiring a hard lockdown — or lower the pace of increase, with less disruption to the economy and hospitals.

“The week ahead could be crucial, as the news on social unrests over the weekend have increased the sense of urgency for more policy clarification and guidance from the top,” he said.

In Beijing over the weekend, unverified social media videos showed residents pointing to the 20 measures and convincing their community management there was no legal basis for locking down their apartment compound.

An implementation gap

On Saturday, a publication overseen by Chinese Communist Party mouthpiece People’s Daily said that based on the 20 measures, only authorities at a county level or above could call for Covid controls, and that school or traffic closures should not occur arbitrarily.

Separately, the People’s Daily ran a front page op-ed Monday on the need to make Covid controls more targeted and effective, while removing those that should be removed.

It will likely take a month for the 20 measures to fully implemented, after which policymakers can make further changes, said Qin Gang, Beijing-based executive director of research institute ICR.

Especially prior to the measures, “it’s clear we have excessively controlled the virus,” Qin said in Mandarin, according to a CNBC translation. “Because it’s excessive, it has brought many problems.”

He noted how it was no longer sustainable for China’s economy and society to accept continued Covid controls.

Read more about China from CNBC Pro

China’s GDP barely grew in the second quarter, dragged down by a stringent lockdown in Shanghai. As of the third quarter, growth for the year so far is just 3%, far below the official target of around 5.5% announced in March.

“In the short term, the Covid policy will only be fine-tuned without moving the needle,” said Bruce Pang, chief economist and head of research for Greater China at JLL. “The focus of narratives is expected to be shifting back and forth between eliminating cases and making more precise measures.”

“Authorities are sending signals of a more pragmatic attitude toward economic roadmap, COVID policy and geopolitical relationships, all of which will help to deliver a gradual economic recovery for China,” he said.

Mostly asymptomatic cases



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Boeing to slash about 2,000 white-collar jobs in finance and HR, report says

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Boeing expects to slash about 2,000 white-collar jobs this year in finance and human resources through a combination of attrition and layoffs, the planemaker confirmed to Seattle Times newspaper on Monday.

Last month, the Virginia-based company announced it would hire 10,000 workers in 2023, but some support positions would be cut.

Back then Boeing acknowledged it will “lower staffing within some support functions” – a move meant to enable it to better align resources to support current products and technology development.

“Over time, some of our corporate functions have grown quite large. And with that growth tends to come bureaucracy or disparate systems that are inefficient,” the newspaper quoted Mike Friedman, a senior director of communications at Boeing as saying. “So we’re streamlining.”

Boeing did not immediately respond to Reuters’ request for comment. 

Last year, Boeing said it plans to cut about 150 finance jobs in the United States to simplify its corporate structure and focus more resources into manufacturing and product development.

Watch CNBC's full interview with Boeing's Dave Calhoun



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Trump appeals sanctions for ‘frivolous’ suit against Hillary Clinton

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presidential candidates Donald Trump and Hillary Clinton attend campaign rallies in Ambridge, Pennsylvania, October 10, 2016 and Manchester, New Hampshire U.S., October 24, 2016 in a combination of file photos.

Mike Segar | Carlos Barria | Reuters

Former President Donald Trump and one of his lawyers said Monday they are appealing nearly $1 million in sanctions imposed on them for what a federal judge called their “frivolous” lawsuit against Hillary Clinton and more than two dozen other defendants.

The court filing about the appeal came days after a lawyer for Trump and his attorney Alina Habba told the judge in the case they were willing to put up a bond of $1,031,788 to cover the costs of the sanctions while the federal Court of Appeals for the 11th Circuit considered the matter.

In imposing those sanctions Jan. 19, Judge John Middlebrooks said in an order, “We are confronted with a lawsuit that should never have been filed, which was completely frivolous, both factually and legally, and which was brought in bad faith for an improper purpose.”

Trump’s suit, which sought $70 million in damages, accused Clinton, former FBI officials, the Democratic National Committee and others of conspiring to create a “false narrative” that Trump and his 2016 presidential campaign against Clinton were colluding with Russia to try to win the election that year.

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Middlebrooks in September dismissed the lawsuit, which was filed in U.S. District Court for the Southern District of Florida, and barred Trump from refiling the complaint.

He later ordered Trump and Habba to pay more than $937,000 in sanctions.

Middlebrooks in his sanctions order called Trump “a mastermind of strategic abuse of the judicial process,” and a “prolific and sophisticated litigant who is repeatedly using the courts to seek revenge on political adversaries.”

A day after Middlebrooks issued that order, Trump voluntarily dropped another lawsuit he had pending before the same judge against New York Attorney General Letitia James. That suit was related to James’ pending $250 million fraud lawsuit against Trump and his company in Manhattan state court.

Jared Roberts, the lawyer for Trump and Habba, did not immediately respond to a request for comment from CNBC about the appeal.



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Nissan to buy up to 15% stake in Renault EV unit under reshaped alliance

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Pavlo Gonchar | LightRocket | Getty Images

Nissan and Renault on Monday unveiled details of their redesigned alliance, with the Japanese car maker committing to buy a stake of up to 15% in Renault’s electric vehicles unit Ampere.

The alliance junior partner Mitsubishi Motors will also consider investing in Ampere, which Renault aims to list, the companies said in a statement.

“Nissan’s intention is to invest up to 15% in Ampere, Renault Group’s EV & Software entity in Europe, with the aim to become a strategic investor,” the statement said ahead of a presentation in London.

The companies had already announced that under the deal to revive their long-standing alliance the French carmaker would reduce its stake in its Japanese partner to 15% from around 43% now.

Renault will transfer 28.4% of Nissan shares into a French trust, making the two more equal partners in the alliance.

Sources close to the matter said the agreement aimed to make the alliance freer and more balanced for the next 15 years.

The partnership will produce synergies from joint projects in Europe, India and Latin America, and the companies will work together in Renault’s flagship EV business, electronics and solid-state batteries. 

Renault will have flexibility to sell the Nissan shares held in the trust but “it has no obligation to sell the shares within a specific pre-determined period of time,” the statement on Monday said.

When it does sell, “Nissan would benefit from a right of first offer, to its or the benefit of a designated third party.”

The two companies last month announced a sweeping remake of their 24-year-old automaking alliance, which was thrown into disarray by the ouster of its architect and former chairman, Carlos Ghosn, amid financial scandal.

That announcement came after nearly four months of intense talks complicated by concerns about the sharing of intellectual property as Renault sought tie-ups with companies outside their alliance.

Renault’s board approved the deal on Sunday night, according to a source. Nissan’s board also approved it early on Monday, the source said.

Investors and analysts will be looking for more clarity on how the trust in which Renault will place the bulk of its Nissan stake will operate.

“There is absolutely no word about what’s going to happen to those shares in the trust,” said CLSA analyst Christopher Richter. “It seems they’re all avoiding the issue of Nissan buying them back which I think would be the best thing for all parties involved.”

Richter said Renault’s brand is not seen as being a strong brand, so it may be tough for the French carmaker to raise money for Ampere.

“I wonder once this thing goes into the market how much money you would really raise, he said. “That’s why I think they’re going to push Nissan to pay too much.”

The unequal relationship between the two carmakers had long been a source of friction among Nissan executives.

While Renault bailed out Nissan two decades ago, it is the smaller automaker by sales.

CLSA’s Richter said that the revamped alliance could enable Nissan and Renault to work together on R&D, shared costs and a few shared products “with a little bit less rancor and acrimony between them,” but added that Honda and General Motors <GM.N> have built a partnership that includes jointly developing lower-cost EVs together without any need for a capital relationship.

“One almost wonders what’s the point of them having any stake in either one, any stake at all,” Richter said.



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