Trouble in Paradise: Chinese Tourists Left Stranded During Lockdowns | Big Indy News
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Trouble in Paradise: Chinese Tourists Left Stranded During Lockdowns



A few days into a two-week tour through the island province of Hainan — known as the Hawaii of China — Nicole Chan received a message from local authorities that no traveler in the country wants to see in the pandemic.

On Aug. 3, a day after officials reported 11 cases of Covid-19 in Sanya, a city of more than one million in Hainan, Ms. Chan was identified by the authorities as at risk because she had been in the area that day. She was told to quarantine right away for a three-day monitoring period and to undergo two coronavirus tests.

After her isolation period was over and her tests negative, Ms. Chan, a freelance videographer, was told that she was not allowed to come to the airport because she had traveled to Sanya. It took 10 more days, 10 canceled flights and more than a dozen negative test results before she was permitted to leave the island and fly back to Shanghai, where she lives.

With China’s borders still shut, some people have turned to domestic travel to find relief from the aggressive testing, mass quarantines and widespread lockdowns that have become common in cities across the country. But China’s commitment to ensuring no Covid-19 cases in a population of 1.4 billion people has meant that even domestic tourists risk traveling to the wrong place at the wrong time and getting stuck there.

“It’s like playing Russian roulette with travel,” Ms. Chan said. “So much of it is out of your hands and out of your control.”

Over the last month, during the height of the summer travel season, China has shut down popular travel destinations in Hainan, Tibet and Xinjiang after outbreaks in those areas, stranding tens of thousands of tourists. In some cases, the tourists are on the hook to pay for their own hotel quarantines. In Sanya, the government ordered hotels to offer 50 percent discounts to stranded guests.

China’s hard-line approach of doing whatever it takes to keep Covid-19 under wraps — testing live fish in the port city of Xiamen, among countless other pandemic protocols — has taken a toll on the economy and weighed on the psyche of its citizens.

Travel offers little escape.

Chinese citizens are not allowed to go overseas for “nonessential” trips. Traveling within the country involves navigating a maze of ever-changing quarantine rules and testing requirements that vary by region — and that’s a best-case scenario.

In Sanya, the local government suspended local public transportation and halted sales of rail tickets as part of a citywide lockdown on Aug. 6. A day later, all flights departing from Sanya were canceled.

Even though flights were canceled for at least a week, crowds gathered at the airport demanding to leave, according to local media. Videos of angry travelers chanting “Go home, go home, we are going home!” quickly spread online.

Nearby places such as Haikou, the capital of Hainan Province, and Wanning, a popular surfing spot, also shut down to curb the spread of the virus.

Michelle Chen, a 30-year-old engineer, traveled to Sanya for a five-day beach vacation with her husband. It was the first trip that she had taken in two years, a getaway after a two-month lockdown in Shanghai. She found the experience in Sanya “surreal,” she said.

One day, people were on the beach having fun in bikinis, and the next they were trying to flee with their luggage — only to encounter a police blockade on the highway.

Ms. Chen and her husband were stranded in Sanya for an additional week, unable to leave their hotel room until they secured seats on a flight chartered by the Sanya government on Aug. 13. Now she’s unsure whether she wants to travel again for leisure.

“I may not travel again for a year except for going home or business trips,” she said. “I really wouldn’t dare to travel in the future without good reason.”

Other popular tourist destinations also experienced lockdowns after reporting confirmed Covid-19 cases. When Tibet reported 22 cases on Aug. 8, the first positive results in more than two years, the local government locked down a few popular stops in the area and closed some tourist destinations.

As of Tuesday, more than 4,700 tourists were stranded in Tibet.

Xinjiang, a prime vacation spot for outdoor enthusiasts in northwest China, has had similar challenges, with thousands of tourists prohibited from leaving the region after a recent outbreak. According to an official in Ili Prefecture, the group included not just people who had tested positive for Covid-19, but also their close contacts, close contacts of those close contacts and people staying in medium and high-risk areas.

The severity and duration of the lockdowns has made domestic travel less appealing. In the first six months of this year, the number of domestic tourists in China is down 22 percent from the same period a year earlier, and tourism revenue is down 28 percent over that period, according to the country’s Ministry of Culture and Tourism.

For Zhu Yan, who owns a 16-room hostel by Qionghai Lake, a scenic destination in Xichang, a city in Sichuan Province in southwest China, the tourism business has gotten worse as the pandemic has lingered on. In 2020 and 2021, tourists returned quickly even after periods of lockdowns, she said, with most people choosing to travel within their own provinces.

But this year, private companies and public institutions are telling employees not to leave the cities where they live for fear of exposure to Covid-19 and being trapped somewhere else, said Ms. Zhu, 40.

“This year, no one came out, including holidays. No one,” she said, about the first half of the year. Business has picked up slightly in recent weeks, she said.

The headaches of traveling in China during the pandemic involve difficulties not just with leaving a place dealing with an outbreak, but also with returning home.

Ms. Chan, who was stranded in Hainan, had gone to the island for work. Three colleagues from Beijing who traveled with her had to remain behind because they were told that the capital city would not yet let them return.

When Ms. Chan finally caught a flight back to Shanghai on Tuesday, she said her plane remained on the tarmac for two hours as medical professionals boarded the aircraft. It was an additional three hours before she arrived at a quarantine hotel, where the travelers finally received some food, and workers came to their rooms to administer PCR tests.

On Wednesday, Ms. Chan left the hotel expecting to begin a three-day period of at-home quarantine, as required by the city. Instead, she was told by a neighborhood official that she would have to quarantine for a full seven days, she said. By the time she arrived at her apartment, it had been 37 hours since she left Hainan — usually, a two-and-a-half-hour flight from Shanghai, she said.

So why would she travel to Hainan in the first place?

Ms. Chan, 27, said she was there shooting a promotional video for tourism in Hainan, an irony that was not lost on her.

“Since Covid started in 2020, I’ve done very limited travel within China,” she said. “This experience has made it even less likely. There is too much risk.”

Claire Fu contributed research.

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Sister Patricia Daly, 66, Dies; Took On Corporate Giants on Social Justice



For years, Sister Pat and other environmentalists had urged ExxonMobil to take significant steps to reduce greenhouse-gas emissions from its operations and products. In 2007, she proposed a resolution that called on that energy giant to set a firm date to report on its progress.

“We’re the most profitable company in the history of the planet,” she told Rex Tillerson, then the company’s chief executive (and later secretary of state in the Trump administration), at the company’s annual meeting, “but what will be our long-term health when we are really faced with the regulatory and other challenges around global warming?”

She added: “We are now, this company and every single one of us, challenged by one of the most profound moral concerns. And we have the wherewithal to respond to that.”

The proposal won 31 percent of the ballots, or about 1.4 billion shares, the largest tally for an ExxonMobil climate-change resolution. If not an outright victory, it was a page in a decades-long narrative that led ExxonMobil to put a climate scientist on its board in 2017. Three executives who recognized the urgency to address climate change joined the company’s board in 2021, nominated by a tiny activist hedge fund, Engine No. 1.

“The arc of her work led us to those victories by working from the inside and the outside,” John Passacantando, the founder of Ozone Action, an anti-global warming group, and a former executive director of Greenpeace, said in a phone interview.

In 1999, Vanity Fair named her to its Hall of Fame, applauding her as one who “translates belief into commitment and never backs down from a fight.”

Mary Beth Gallagher, who replaced Sister Pat as executive director of the Tri-State Coalition in 2017, said Sister Pat had not become frustrated when her resolutions were routinely voted down.

“She lived in hope,” Ms. Gallagher said. “We never talked about winning or losing. It was about raising consciousness and educating. If we’re not asking these questions, who will?”

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Families can make a tax-free rollover from 529 plans to Roth individual retirement accounts starting in 2024



Maskot | Maskot | Getty Images

Americans who save for college in 529 plans will soon have a way to rescue unused funds while keeping their tax benefits intact.

A $1.7 trillion government funding package has a provision that lets savers roll money from 529 plans to Roth individual retirement accounts free of income tax or tax penalties.

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The House passed the measure Friday and the Senate did so Thursday. The bill heads to President Biden, who’s expected to sign it into law.

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The rollover measure — which takes effect in 2024 — has some limitations. Among the largest: There’s a $35,000 lifetime cap on transfers.

“It’s a good provision for people who have [529 accounts] and the money hasn’t been used,” said Ed Slott, a certified public accountant and IRA expert based in Rockville Centre, New York.

That might happen if a beneficiary — such as a child or grandchild — doesn’t attend a college, university, vocational or private K-12 school, or other qualifying institution, for example. Or, a student may receive scholarships that mean some 529 funds are left over.

Millions of 529 accounts hold billions in savings

There were nearly 15 million 529 accounts at the end of last year, holding a total $480 billion, according to the Investment Company Institute. That’s an average of about $30,600 per account.

529 plans carry tax advantages for college savers. Namely, investment earnings on account contributions grow tax-free and aren’t taxable if used for qualifying education expenses like tuition, fees, books, and room and board.

Retirement plan changes in the omnibus spending bill

However, that investment growth is generally subject to income tax and a 10% tax penalty if used for an ineligible expense.

This is where rollovers to a Roth IRA can benefit savers with stranded 529 money. A transfer would skirt income tax and penalties; investments would keep growing tax-free in a Roth account, and future retirement withdrawals would also be tax-free.  

Some think it’s a handout for the rich

However, some critics think the rollover policy largely amounts to a tax handout to wealthier families.

“You’re giving savings incentives to those who can save and leaving behind those who cannot save,” said Steve Rosenthal, a senior fellow at the Urban-Brookings Tax Policy Center.

A 2012 analysis conducted by the Government Accountability Office found the typical American with a 529 account had “much more wealth” than someone without: $413,500 in total wealth for the median person, about 25 times the amount of a non-accountholder.

You’re giving savings incentives to those who can save and leaving behind those who cannot save.

Steve Rosenthal

senior fellow at the Urban-Brookings Tax Policy Center

Further, the typical owner had a roughly $142,000 annual income versus $45,000 for other families, the GAO report said. Almost half, 47%, had incomes over $150,000.

The new 529-to-Roth IRA transfer provision doesn’t carry income limits.

Limitations on 529-to-IRA transfers

While the new tax break primarily benefits wealthier families, there are “pretty significant” limitations on the rollovers that reduce the financial benefit, Jeffrey Levine, a certified financial planner and certified public accountant based in St. Louis, said in a tweet.

The restrictions include:

  • A $35,000 lifetime cap on transfers.
  • Rollovers are subject to the annual Roth IRA contribution limit. (The limit is $6,500 in 2023.)
  • The rollover can only be made to the beneficiary’s Roth IRA — not that of the account owner. (In other words, a 529 owned by a parent with the child as beneficiary would need to be rolled into the child’s IRA, not the parent’s.)
  • The 529 account must have been open for at least 15 years. (It seems changing account beneficiaries may restart that 15-year clock, Levine said.)
  • Accountholders can’t roll over contributions, or earnings on those contributions, made in the last five years.

In a summary document, the Senate Finance Committee said current 529 tax rules have “led to hesitating, delaying, or declining to fund 529s to levels needed to pay for the rising costs of education.”

“Families who sacrifice and save in 529 accounts should not be punished with tax and penalty years later if the beneficiary has found an alternative way to pay for their education,” it said.

Are 529 plans already flexible enough?

Some education savings experts think 529 accounts have adequate flexibility so as not to deter families from using them.

For example, owners with leftover account funds can change beneficiaries to another qualifying family member — thereby helping avoid a tax penalty for non-qualified withdrawals. Aside from a kid or grandkid, that family member might be you; a spouse; a son, daughter, brother, sister, father or mother-in-law; sibling or step-sibling; first cousin or their spouse; a niece, nephew or their spouse; or aunt and uncle, among others.

Owners can also keep funds in an account for a beneficiary’s graduate schooling or the education of a future grandchild, according to Funds can also be used to make up to $10,000 of student loan payments.

The tax penalty may also not be quite as bad as some think, according to education expert Mark Kantrowitz. For example, taxes are assessed at the beneficiary’s income-tax rate, which is generally lower than the parent’s tax rate by at least 10 percentage points.

In that case, the parent “is no worse off than they would have been had they saved in a taxable account,” depending on their tax rates on long-term capital gains, he said.

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Goldman grumbling grows for banking giant to sack CEO David Solomon



The knives are out for Goldman Sachs CEO David Solomon, and this time the people brandishing them aren’t the usual suspects — his junior staffers annoyed that they have to work late or come into the office several times a week.

Solomon’s problems are more serious and existential, I am told, and how he handles what can best be described as a revolt in some quarters of Goldman’s middle and upper management ranks could determine how much longer he stays in his job.

Solomon, 60, took the job in 2018 and was always somewhat of an odd choice to run the white-shoe investment bank that usually cultivated its leaders from within. He cut his teeth at a decidedly un-Goldman-like venue: the scrappy investment bank Bear Stearns (ultimately one of the causalities of the 2008 financial crisis).

He joined Goldman in 1999, as a partner, no less, because his deal-making chops allowed him to skip layers of management.

In other words, Solomon is an outsider at a firm with a wickedly insular culture. He has a quirky side gig as a DJ in the summer Hamptons party circuit. He’s also not one for small talk, and doesn’t consult with a lot of people before handing down his edicts. 

“He doesn’t breed a lot of love,” said one former Goldman executive who knows Solomon well.

Lots of people at Goldman don’t like him, and they’re letting their views be heard both internally and with pals at rival firms.

Solomon as a DJ
Solomon is an outsider at a firm with a wickedly insular culture.
David Solomon/Instagram

For the record: I’ve met Solomon and like him for his no-BS style. And until pretty recently, the numbers show him doing a great job. Goldman was running on all cylinders in deals and trading. Even as the market corrects, shares are up about 60% since Solomon took over as CEO in 2018 compared to around a 44% rise in the S&P during that time.

Goldman is still the top M&A shop, even widening its market share over rivals in that important business line. Solomon was the first among his fellow CEOs to see the downturn and enact significant layoffs to cut costs.

Still, the grumbling about Solomon is spreading to the managing director and partner class. High-priced Wall Street talent don’t call all the shots at any firm, of course. But Goldman’s MDs and partners have historically been a powerful force when the board decides the fate of current management, which makes Solomon’s hold on his job increasingly precarious as more and more of them defect from his camp.

David Solomon as a DJ
Solomon was the first among his fellow CEOs to see the downturn and enact significant layoffs to cut costs.
David Solomon/Instagram

Here’s how they’re building a case against him: Goldman’s longtime archrival investment bank Morgan Stanley now easily dwarfs Goldman in market value, $144 billion to $116 billion, continuing a trend that predates Solomon. That comes amid a slowdown in banking deals, Goldman’s bread-and-butter business, and Solomon’s home turf.

Morgan’s CEO James Gorman deftly expanded the firm’s wealth management operations, which provide steady revenues. Solomon’s effort to diversify was an overindulgence in something called Marcus, a digital retail bank launched by his predecessor Lloyd Bankfein that Solomon made his baby. So far, it’s been a disaster, so much so that Solomon has been forced to scale back, possibly on the way to winding it down.

Goldman, meanwhile, has missed targets in its recent earnings announcements, and more downward surprises could be in store as markets continue to wobble. Bonuses are down, in some places cut in half, albeit from the nosebleed levels of 2021.

Goldman Sachs headquarters
The grumbling about Solomon is spreading to the managing director and partner class.
AFP via Getty Images

Traders did well in 2022 because Goldman’s are particularly adept in profiting off turbulence, but part of their pool is being diverted to bankers to keep them in-house until the deal slowdown ends.

Since Solomon is a banker, he’s also being accused of favoritism, which in truth is a pretty lame charge, since bankers often subsidize trader bonuses when the markets aren’t profitable. Still, the Goldman trading department is powerful and can spark management change, as it has done in the past.

There’s also a question about Solomon’s allegiance to Goldman’s stand-alone culture. In its 153-year existence, Goldman has operated on the assumption that it would be the acquirer in any major strategic acquisition. Solomon’s experience at Bear, then one of the most transactional places on Wall Street, means he could be looking for a deal and not one that keeps Goldman in charge.

Morgan Stanley CEO James Gorman deftly expanded the firm’s wealth management operations, which provide steady revenues.
Morgan Stanley’s James Gorman deftly expanded the firm’s wealth management operations, which provide steady revenues.
AFP via Getty Images

At a time when most Goldman insiders believe he needs to do a “transformational deal,” i.e., something big that allows it to better compete against Morgan Stanley and super banks like JP Morgan, there is speculation that Solomon might allow Goldman to be swallowed whole by, say, a big asset manager or bank if the price was right.

As best I can tell, this grumbling, though real, doesn’t immediately threaten Solomon’s job. Then again, there is something to be said for keeping your producers happy.

Jack Welch, the legendary CEO of General Electric, was a notorious screamer and demanding beyond belief. Yet Welch knew how to nurture his people.

Former General Electric CEO Jack Welch
Jack Welch was a notorious screamer and demanding beyond belief. Yet Welch knew how to nurture his people.
Getty Images

“Jack could chew your ass, then put his arm around you and make you feel great,” one of his longtime executives, Bob Nardelli, once told me.

It’s why so many other talented execs chose to stay around under Welch, abuse and all, and left when his successor took over, watching GE implode from the outside.

Maybe it’s a good time for Solomon to take a page from Welch and start hugging it out.

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