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China schedules meeting expected to reveal fiscal stimulus details

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2 months ago

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A general view shows the skyline over the central business district in Beijing on Feb. 28, 2023.

Jade Gao | Afp | Getty Images

BEIJING — China’s parliament will hold a highly anticipated meeting Nov. 4 to 8, state media said Friday, according to a CNBC translation.

Investors have been awaiting news of the gathering of the standing committee of the National People’s Congress, which is expected to announce details on any fiscal stimulus.

Last year, the committee’s meeting in late October oversaw a rare increase in China’s fiscal deficit to 3.8%, from 3%, which was subsequently reported by state media.

This parliamentary meeting is a key part of the process, if China once more wants to press ahead with adjusting the national budget or deficit, said Bruce Pang, chief economist and head of research for Greater China at JLL.

He pointed out that the last month of Chinese stimulus measures have all underscored the need for more fiscal support.

Earlier this month, China’s Minister of Finance Lan Fo’an told reporters that there was room to increase the deficit and issue more bonds. He indicated at the time that significant changes had to be processed before being announced.

His remarks followed a meeting of top leaders in late September led by Chinese President Xi Jinping, which called for strengthening fiscal and monetary policy.

The People’s Bank of China has cut various rates and extended real estate support policies. Chinese stocks have surged in the weeks since the late-September meetings, with trading turning volatile in the absence of more concrete measures.

Pang said the upcoming parliamentary meeting should confirm how the budget will be adjusted and communicate any potentially planned bond issuance.

Analysts have tempered expectations that large-scale fiscal stimulus would directly pillar consumption, instead noting how struggling local governments would likely get support first. 

China’s economy grew by an annual 4.8% in the first three quarters of the year, slightly slower than the 5% pace observed in the combined first half of the year. Beijing has a target of around 5% economic growth for the whole of 2024.

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Economics

Matt Gaetz vs the ethics committee

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December 23, 2024

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On December 23rd a congressional committee released a lurid 37-page report alleging ethical misconduct by Matt Gaetz, the former maverick member of the House of Representatives who briefly stood as Donald Trump’s nominee for attorney-general. In a different time the investigation’s details about illicit sex and drug use would definitively end Mr Gaetz’s political career, and perhaps it will now. Yet he could soon test how far deviance has been defined down in America’s norm-smashing political era.

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Economics

At the state level, democracy in America is fracturing

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9 hours ago

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December 23, 2024

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The residents of Bristol, Tennessee and Bristol, Virginia share a border, a downtown and even a Nascar speedway. But thanks to the quirks of American federalism, the 27,800 Bristolians who live in the Volunteer State reside in America’s least democratic state, while their 16,800 neighbors to the north live in one of the most democratic.

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Economics

BOI Reporting and the impact of the recent Federal Injunction

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2 days ago

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December 21, 2024

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The Corporate Transparency Act (CTA) is a legislative measure designed to enhance financial transparency

The Corporate Transparency Act (CTA) is a legislative measure designed to enhance financial transparency and mitigate risks such as money laundering, terrorist financing, and other illicit financial activities. The CTA aims to close loopholes and create a fairer business environment by requiring certain entities to disclose their beneficial ownership information. However, recent legal developments have temporarily impacted compliance requirements, bringing attention to the act’s ongoing litigation and implementation.

Federal Court Decision and Its Implications

On December 3, 2024, the U.S. District Court for the Eastern District of Texas issued a preliminary injunction in the case of Texas Top Cop Shop, Inc., et al. v. Garland, et al. (No. 4:24-cv-00478). This injunction temporarily halts the enforcement of the CTA, specifically its beneficial ownership reporting requirements. Additionally, the court order stays all deadlines for compliance.

As a result, reporting companies are currently not obligated to submit beneficial ownership information (BOI) reports to the Financial Crimes Enforcement Network (FinCEN). During the injunction, these entities are also shielded from liability for non-compliance with CTA mandates.

Despite this pause, FinCEN has clarified that companies may still voluntarily submit their BOI reports. This voluntary reporting option remains available for businesses that wish to align with the CTA’s transparency goals.

Overview of the Corporate Transparency Act

The CTA mandates that certain entities provide information about their beneficial owners—individuals who own or control a business. The act is intended to increase transparency, enhance national security, and reduce the anonymity that can facilitate financial crimes.

While the CTA has garnered support for its objectives, it has also faced legal challenges questioning its constitutionality. Courts in different jurisdictions have issued varying rulings, with some upholding the law and others granting temporary injunctions. For example, district courts in Virginia and Oregon have ruled in favor of the Department of the Treasury, asserting the CTA’s alignment with constitutional principles.

Compliance During the Injunction

Currently, the federal injunction exempts businesses from mandatory BOI filing requirements nationwide. This temporary halt will remain in place until further developments, such as a decision by an appellate court or a reversal of the injunction.

In response to the ruling, the Department of Justice, representing the Department of the Treasury, has filed an appeal. While the case proceeds through the legal system, FinCEN has confirmed its compliance with the court order.

Looking Ahead

The legal proceedings surrounding the CTA highlight the evolving nature of financial regulation. As courts continue to deliberate, businesses should monitor updates to remain informed about their obligations. By staying informed and prepared, businesses can effectively manage their compliance responsibilities and contribute to efforts that promote financial integrity and transparency.

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