Finance

China’s Xi Jinping meets with U.S. national security advisor Jake Sullivan

Published

3 months ago

August 29, 2024

US National Security Advisor Jake Sullivan shakes hands with China’s President Xi Jinping during their meeting at the Great Hall of the People in Beijing on August 29, 2024.

Trevor Hunnicutt

BEIJING — Chinese President Xi Jinping told U.S. national security advisor Jake Sullivan during a meeting Thursday that Beijing hopes Washington will find “a right way” to get along.

“While great changes have taken place in the two countries and in China-U.S. relations, China’s commitment to the goal of a stable, healthy and sustainable China-U.S. relationship remains unchanged,” Xi said, according to an English-language release shared by China’s Ministry of Foreign Affairs.

Tensions between the world’s two largest economies have escalated in recent years, spilling over from trade into finance and technology.

The Chinese leader said Thursday he hopes the U.S. would view China’s development “in a positive” light and “work with China to find a right way for two major countries to get along with each others,” according to Beijing.

China's 'appetite and dreams' about Taiwan are still there, says CFR's Richard Haass

Sullivan, advisor to the outgoing Biden administration, arrived in Beijing Tuesday for two days of meetings with Wang Yi, China’s top diplomat.

On Thursday, Sullivan met with Zhang Youxia, vice chairman of the Chinese Communist Party’s Central Military Commission.

This is Sullivan’s first trip to China as national security advisor, despite having met multiple times with Wang in recent years.

The last official trip to China by a U.S. president’s national security advisor was in 2016, when Susan Rice traveled to Beijing under the Obama administration.

U.S. President Joe Biden and Xi have decided to speak by phone in “coming weeks,” the White House said Wednesday. Sullivan is scheduled to depart China later Thursday.

While the outcome of November’s U.S. presidential election remains unclear, being tough on Beijing is a rare issue that both U.S. political parties agree on.

Biden dropped out of the U.S. presidential race this summer, endorsing his Vice President Kamala Harris as the Democrat nominee.

Harris’ current national security advisor, Phil Gordon, said in May at a Council on Foreign Relations event that the “China challenge” is much greater than Taiwan, and requires ensuring that Beijing “doesn’t have the advanced technology, intelligence and military capabilities that can challenge us.”

Finance

Visa & Mastercard execs grilled by senators on high swipe fees

Published

5 hours ago

November 19, 2024

Business Finance News

The Senate Judiciary Committee convened on Tuesday for a hearing on the alleged Visa–Mastercard “duopoly,” which committee members from both sides of the aisle say has left retailers and other small businesses with no ability to negotiate interchange fees on credit card transactions.

“This is an odd grouping. The most conservative and the most liberal members happen to agree that we have to do something about this situation,” committee chair and Democratic Illinois Sen. Dick Durbin said.

Interchange fees, also known as swipe fees, are paid from a merchant’s bank account to the cardholder’s bank, whenever a customer uses a credit card in a retail purchase. Visa and Mastercard have a combined market cap of more than $1 trillion, and control 80% of the market.

“In 2023 alone, Visa and Mastercard charged merchants more than $100 billion in credit card fees, mostly in the form of interchange fees,” Durbin told the committee.

Durbin, along with Republican Kansas Sen. Roger Marshall, have co-sponsored the bipartisan Credit Card Competition Act, which takes aim at Visa and Mastercard’s market dominance by requiring banks with more than $100 billion in assets to offer at least one other payment network on their cards, besides Visa and Mastercard.

“This way, small businesses would finally have a real choice: they can route credit card transactions on the Visa or Mastercard network and continue to pay interchange fees that often rank as their second or biggest expense, or they could select a lower cost alternative,” Durbin told the committee.

Visa and Mastercard, however, stand by their swipe fees.

“We consider them incentives, some people might consider them penalties. But if you can adopt new technology that reduces the risk and takes fraud out of the system and improves streamlined processing, then you would qualify for lower interchange rates,” said Bill Sheedy, senior advisor to Visa CEO Ryan McInerney. “It’s very expensive to issue a product and to provide payment guarantee and online customer service, zero liability. All of those things, and many more, senator, get factored into interchange [fees].”

The executives also warned against the Credit Card Competition Act, with Sheedy claiming that it “would remove consumer control over their own payment decisions, reduce competition, impose technology sharing mandates and pick winners and losers by favoring certain competitors over others.”

“Why do we know this? Because we’ve seen it before,” Mastercard President of Americas Linda Kirkpatrick said, in reference to the Durbin amendment to the 2010 Dodd-Frank Act, which required the Fed to limit fees on retailers for transactions using debit cards. “Since debit regulation took hold, debit rewards were eliminated, fees went up, access to capital diminished, and competition was stifled.”

But the current high credit card swipe fees for retailers translate to higher prices for consumers, the National Retail Federation told the committee in a letter ahead of the hearing. The Credit Card Competition Act, the retail industry’s largest trade association wrote, will deliver “fairness and transparency to the payment system and relief to American business and consumers.”

“When we think of consumer spending, credit card swipe fees are not the first thing that comes to mind, yet those fees are a surprisingly large part of consumer spending,” Notre Dame University law professor Roger Alford said. “Last year, the average American spent $1,100 in swipe fees, more than they spent on pets, coffee or alcohol.”

Visa and Mastercard agreed to a $30 billion settlement in March meant to reduce their swipe fees by four basis points for three years, but a federal judge rejected the settlement in June, saying they could afford to pay more.

Visa is also battling a Justice Department lawsuit filed in September. The payment network is accused of maintaining an illegal monopoly over debit card payment networks, which has affected “the price of nearly everything,” according to Attorney General Merrick Garland.