Financial Mindset

China is becoming a “factory to the factories,” ramping up its exports of industrial components like smartphone parts, processors, memory chips and lithium-ion batteries, destined for final assembly in economies like Southeast Asia. “We may buy fewer ‘Made in China’ goods going forward, but more products will have internal components manufactured in China,” says Jeongmin Seong, a partner at the McKinsey Global Institute (MGI), the consulting firm’s research arm.  China’s exports of consumer goods declined by 2% last year, yet exports of intermediate goods rose by 9%.  Trade between the U.S. and China declined by 30% last year, due to U.S. President Donald Trump’s steep tariffs on Chinese goods. Yet “China stepped up to diversify its trading partners, and mostly with emerging economies,” explains Seong, who is also the author of a new MGI report on global trade. Those new trading partners, mostly manufacturing hubs, had more need for cheap machinery and components from Chin...

Federal agents on Thursday arrested Yih-Shyan “Wally” Liaw, a prominent Silicon Valley executive deep in the AI ecosystem who co-founded Supermicro in 1993 and is a close confidante of CEO and chairman Charles Liang. According to a stunning release from the Department of Justice, an indictment was unsealed in Manhattan federal court on Thursday charging Liaw, 71, and two others with allegedly working in secret to divert billions in Supermicro AI servers to China in violation of U.S. export control laws. The two alleged co-conspirators charged alongside Liaw include Supermicro’s Taiwan general manager Ruei-Tsang “Steven” Chang, who remains a fugitive, and a third-party fixer named Ting-Wei “Willy” Sun, who was also taken into custody on Thursday.  The DOJ claims during 2024 and 2025, Liaw took a direct hand in the alleged conspiracy, working with Chang to allegedly find Chinese buyers who wanted the servers, which are packed with highly coveted GPU chips. The pipeline they allege...

Straight‑A report cards have never been more common for America’s teens—but the payoff is not what parents think. A new National Bureau of Economic Research study finds that when teachers hand out “easy A” grades, their students are more likely to skip class, score worse on future tests, and earn less money years later. For a typical high school class, the researchers estimate grade inflation can shave about $213,000 off the group’s future earnings, or roughly $150 a year for each letter grade quietly nudged up. The findings arrive as President Donald Trump pushes a crackdown on grade inflation on college campuses, tying federal funding to whether universities hold the line on grading. Gen Z is already the first generation to score lower than their parents on some measures of cognitive performance, as reading habits erode and schools lean harder on grades instead of learning. The study, entitled “ Easy A’s, Less Pay: The Long-Term Effects of Grade Inflation ,” found that for each ind...

China won’t help the United States reopen the Strait of Hormuz as  requested by President Donald Trump , but it is probably welcoming the  delay in Trump’s highly anticipated trip  to Beijing as the U.S. risks getting bogged down in the Middle East, analysts say. The latest developments are unfolding as Trump’s Iran war, in its third week, is faced with mounting pressure as oil has stopped moving through the strait and U.S. allies have refused to step up to secure the strait. That has produced concerns that China, the United States’ biggest geopolitical rival, could stand to benefit from a war that some say was ill-considered. “President Trump’s request to delay his long-awaited summit with President Xi Jinping underscores how significantly he underestimated the fallout from Operation Epic Fury,” said Ali Wyne, senior research and advocacy adviser for U.S.-China relations at the International Crisis Group. “A show of U.S. force that was meant to intimidate Beijing has i...

In today’s CEO Daily: How CEOs are protecting their pay packages by lowering their goals The big leadership story: Whether Meta’s reported 20% layoffs will encourage a new wave of job cuts The markets: A big Asia rebound Plus: All the news and watercooler chat from  Fortune . Good morning. Call it the Hall of Blame. One time-honored tradition in business is to take credit for what goes well, blame disappointing results on factors beyond your control and lower the bar in tough times to be able to clear it so that your pay package remains intact. When Apple set performance targets for fiscal 2025 for CEO Tim Cook and his executive team last year, the board set goals at or below the prior year’s result, citing “trade policy” and an “uncertain macroeconomic outlook.” As my colleague Amanda Gerut points out , that essentially guaranteed that Cook would take home a $12 million bonus, no matter how well he did. ( Apple handily surpassed the modest targets.) With wobbly mar...

U.S. President Donald Trump is considering delaying a key meeting with Chinese President Xi Jinping “by a month or so” as he struggles to manage the surging conflict with Iran. The meeting was set to take place between March 31 and April 2, building on the two leaders’ previous face-to-face dialogue in South Korea last October .  On Monday, Trump pushed back against claims that he was considering postponing his visit to pressure China to intervene in the Strait of Hormuz, a key strategic waterway currently closed by Iran. “I’m looking forward to being with [Xi],” Trump told reporters at the White House on March 16. “[But] it’s very simple, we’ve got a war going on, and I think it’s important that I be here.” Still, a delay to the meeting will mean that Trump and Xi will have to wait to discuss a number of factors dragging down the U.S.-China relationship, such as China’s continued export controls on critical minerals, the U.S.’s export controls on semiconductors, and U.S. demand...

As the Iran war drags deeper into its third week, one seemingly obvious solution for more energy is crude oil from Venezuela after the Trump administration seized former leader Nicolás Maduro and pressed for the reopening of the nation’s oil sector. The glaring problem is more oil from Venezuela—or any other source around the world—represents only metaphorical drops in the global supply bucket compared to the massive losses each day from the Persian Gulf and the effective closure of the Strait of Hormuz by Iran. “It’s a math problem,” said Fernando Ferreira, director of the geopolitical risk service at Rapidan Energy Group. “Hormuz flows about 20 million barrels [of oil] a day. Venezuela is currently producing about 1 million [barrels daily].” The issue is there simply are no alternatives to the de facto closure of the passageway that sees about 20% of the world’s oil and liquefied natural gas trek through it each day. “Venezuela helps; every little bit helps. But, in the grand sc...