With 5 Missiles, China Sends Stark Signal to Japan and U.S. on Taiwan | Big Indy News
Connect with us

Business

With 5 Missiles, China Sends Stark Signal to Japan and U.S. on Taiwan

Published

8 months ago

on

TOKYO — North Korea has for years lobbed missiles into Japan’s waters without great incident. But for an increasingly powerful and aggressive China to do the same — as it did Thursday as a part of military exercises — has sharply raised concerns in political and security circles from Tokyo to Washington.

Beijing’s firing of five missiles into Japanese waters to the east of Taiwan has sent a warning to both the United States and Japan about coming to the aid of Taiwan in the event of a conflict there, analysts said.

Beijing wants to remind Washington that it can strike not only Taiwan, but also American bases in the region, such as Kadena air base on Okinawa, as well as any marine invasion forces, said Thomas G. Mahnken, a former Pentagon official who is now president of the Center for Strategic and Budgetary Assessments in Washington.

It also reminds the Japanese that the American military presence on Okinawa makes Japan a target, he added.

Daniel Sneider, an expert on Japan’s foreign relations at Stanford University, said the Chinese “want to demonstrate that they have the capability to impose a blockade on Taiwan, and they want to send a very clear message to those that would come to the aid of Taiwan — the U.S. and Japan — that they can target them as well.”

“If anyone in Japan thought they could avoid involvement in a conflict in the Taiwan Strait,” Mr. Sneider added, “the Chinese have demonstrated that’s not the case.”

Analysts also suggested that China’s military exercises in the waters around Taiwan seem likely to alter the status quo in the region, just as exercises in 1995 and 1996 obliterated the median line in the center of the Taiwan Strait.

“This exercise will last for only three days,” said Tetsuo Kotani, professor of international relations at Meikai University and a senior fellow at the Japan Institute of International Affairs, “but this kind of massive exercise will possibly become routine over the next few years.”

U.S. House Speaker Nancy Pelosi, whose visit to Taiwan this week ignited regional tensions, arrived in Japan Thursday night and is expected to meet with top Japanese politicians on Friday, starting with a breakfast with Prime Minister Fumio Kishida.

Some analysts have argued that if Beijing’s intent was to intimidate Japan, the missile shots might have the opposite effect on Japan’s leaders.

“Seeing something like this unfolding and having Chinese missiles landing in Japan’s economic zone may actually accelerate the argument for a more rapid increase in defense spending,” said Yuki Tatsumi, director of the Japan program at the Stimson Center, a Washington think tank.

Japan has for years warily eyed the growing strength of its neighbor, and has begun plans to take more responsibility for its own defense, working closer with its allies to counter China and relying less on Washington.

That evolution from its pacifist, postwar orientation gained new impetus with Russia’s invasion of Ukraine, after which the ruling Liberal Democrats recommended doubling military spending to 2 percent of gross domestic product.

More hawkish politicians have pushed for Japan to develop a first-strike capability with conventionally armed missiles, and even suggested that the country could one day host American nuclear weapons as a deterrent. Such talk would have been unthinkable a decade ago.

Taiwan, only 68 miles from a Japanese military base on Yonaguni Island, in Okinawa prefecture, lies at the center of Tokyo’s security concerns. It is one of Japan’s largest trade partners, is a major source of advanced computer chips and lies astride a narrow strait through which virtually all of Japan’s energy resources are shipped.

Policymakers fear that any military confrontation over the island would inevitably draw in Japan, which hosts U.S. military bases on nearby Okinawa and has had a contentious territorial dispute with Beijing over the Senkaku Islands.

In its most recent white paper, Japan’s Defense Ministry cautioned that the country should have “a sense of crisis” over the possibility of a U.S.-China confrontation.

Preparing for such an event, military planners have increased coordination with American forces and moved more troops and missile batteries to islands in southern Japan, which could be on the front lines of a clash.

In December, during remarks to a Taiwanese policy organization, Shinzo Abe, the former prime minister, who was assassinated last month, warned that a “Taiwan crisis would be a Japan crisis. In other words, a crisis for the U.S.-Japan alliance.”

In an opinion article in April in The Los Angeles Times, he called for the United States to clarify its policy of “strategic ambiguity” toward the island, arguing that it is “fostering instability in the Indo-Pacific region, by encouraging China to underestimate American resolve.”

The Japanese public has taken a keen interest in the question of Taiwan’s security in recent years, as worries have grown about supply chains, China’s regional military activity and its treatment of Uighurs and its hostility to democratic governance in Hong Kong. Since the start of the pandemic, public opinion has shifted decisively against China, while support for Taiwan has grown apace.

Shortly after the missiles landed, Tokyo issued a formal protest to China and called on it to immediately stop its military exercises near Taiwan, Japan’s Foreign Ministry said in a statement.

Speaking to reporters, Japan’s defense minister, Nobuo Kishi, called the incident “a grave issue that concerns our national security and the safety of the people.”

Earlier on Thursday, before the missiles were fired, Hua Chunying, a spokeswoman for the Chinese Foreign Ministry, had told reporters that Beijing did not recognize Japan’s economic zone, where the missiles landed.

China also called off a meeting between its foreign minister, Wang Yi, and his Japanese counterpart, Yoshimasa Hayashi, after the Group of 7 industrialized nations issued a statement expressing concern about Beijing’s “threatening actions” around Taiwan.

The missile incident is in some ways a familiar routine for Japan, which has seen 10 North Korean ballistic missiles land in its economic zone since 2016. In the short term, according to Ms. Tatsumi, the analyst, Japan’s response to Beijing is likely to follow the same playbook as with Pyongyang: diplomatic protests and more vigilance.

“Japan definitely does not want to be blamed by China for quote unquote overreacting,” she said, “so they won’t counter with anything physical, but their monitoring will ramp up.”

In the longer term, however, China should expect Japan to harden itself militarily, she said.

“It will not slow down Japan’s debate on increasing its defense spending,” she added. “If anything it will probably accelerate it, and it will also accelerate conversations between the U.S. and Japan.”

Hisako Ueno and Makiko Inoue contributed reporting from Tokyo, and Eric Schmitt from Washington.

Read the full article here

Related Topics:
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Business

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

Published

3 months ago

on

December 23, 2022

By

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?”

Read the full article here

Continue Reading

Business

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

Published

3 months ago

on

December 23, 2022

By

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.

related investing news

CNBC Pro

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.

More from Personal Finance:
10 ways to avoid the early withdrawal penalty for IRAs
Retirement savers with lower incomes may be getting a federal ‘match’
‘Best’ ways to maximize your tax deduction for charitable gifts

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 Savingforcollege.com. 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.



Read the full article here

Continue Reading

Business

Goldman grumbling grows for banking giant to sack CEO David Solomon

Published

3 months ago

on

December 23, 2022

By

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.

Read the full article here

Continue Reading

Trending