ГОЛОВНЕ

African heads of state, representatives of international organizations and private business leaders gathered in Tunisia on Saturday for the Tokyo International Conference on African Development, a triennial event launched by Japan to promote growth and security in Africa.

Economic fallout from the COVID-19 pandemic, a food crisis worsened by Russia’s war in Ukraine, and climate change are among the challenges facing many African countries expected to define the two-day conference.

Tensions among African countries also weighed on the meeting: On Friday, Morocco announced a boycott of the event and recalled its ambassador to Tunisia to protest the inclusion of a representative of the Polisario Front movement fighting for independence for Western Sahara.

The conference comes as Russia and China have sought to increase their economic and other influence in Africa.

While 30 African heads of state and government attended the event in Tunis, Tunisia’s capital, many key talks are being held remotely, including those involving Japanese Prime Minister Fumio Kishida, who tested positive for COVID-19 ahead of the summit.

The Japanese government created and hosted the first TICAD summit in 1993. The conferences now are co-organized with the United Nations, the African Union and the World Bank. The summits have generated 26 development projects in 20 African countries.

This year, discussion around an increase of Japanese investments in Africa is anticipated, with particular focus on supporting start-ups and food security initiatives. Japan has said it plans to provide assistance for the production of rice, alongside a promised $130 million in food aid.

The Africa Center for Strategic Studies, an academic institution of the U.S. Defense Department, compared the conference’s format to the annual World Economic Forum in Davos, Switzerland, “where government, business, and civil society leaders participate on an equal basis.”

However, this weekend’s summit has sparked controversy in Tunis, which faces its own acute economic crisis, including a recent spike in food and gasoline shortages.

Critics have spoken about the organizers’ alleged “white-washing” of the city, which has seen cleaner streets and infrastructure improvements in preparation for the conference summit. One local commentator said the North African capital looked like it had applied makeup to impress participants.

Meanwhile, the journalists’ union in Tunisia issued a statement Friday condemning restrictions on reporting and information around the summit.

Morocco’s complaint stemmed from Tunisia inviting the Polisario Front leader to attend. Morocco annexed Western Sahara from Spain in 1975, and the Polisario Front fought to make it an independent state until a 1991 cease-fire. It’s a highly sensitive issue in Morocco, which seeks international recognition for its authority over Western Sahara.

“The welcome given by the Tunisian head of state to the leader of the separatist militia is a serious and unprecedented act, which deeply hurts the feelings of the Moroccan people,” Morocco’s Foreign Ministry said in a statement.

Morocco announced its withdrawal from the conference and the recall of its ambassador for consultations. But the ministry said the decision does not “call into question the commitment of the Kingdom of Morocco to the interests of Africa.”
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The U.S. and China have reached a tentative agreement to allow U.S. regulators to inspect the audits of Chinese companies whose stocks are traded on U.S. exchanges.

In a long-festering dispute, U.S. regulators have threatened to boot a number of Chinese companies off the New York Stock Exchange and Nasdaq if China doesn’t permit inspections.

The deal announced Friday by market regulators in the U.S. and China is preliminary. Securities and Exchange Commission Chairman Gary Gensler said, “The proof will be in the pudding.”

“While important, this framework is merely a step in the process,” Gensler said in a prepared statement. “This agreement will be meaningful only if [U.S. regulators] actually can inspect and investigate completely audit firms in China. If [they] cannot, roughly 200 China-based issuers will face prohibitions on trading of their securities in the U.S. if they continue to use those audit firms.”

An agreement would mean that U.S. investors will maintain access to shares of important Chinese companies while at the same time being protected by the integrity of company audits.

‘Positive,’ but just a first step

“This is unequivocally positive news and a major step toward averting mass delisting of Chinese companies in the U.S.,” analyst Tobin Marcus at Evercore ISI said in a note to clients. However, he said, “a deal is only the first step toward avoiding delisting. What ultimately needs to happen is that [U.S.] inspectors need to show up and complete inspections.” He said the inspections could take months.

The U.S. regulators plan to have inspection teams on the ground in China by mid-September. The Public Company Accounting Oversight Board (PCAOB) is due to determine by year’s end whether the Chinese government is continuing to block access to the audit books. A negative finding could result in U.S. actions such as stock trading bans.

Although it’s preliminary, the agreement is a rare instance of accord at a time when relations between the U.S. and China are fraught by sparring over trade, the war in Ukraine and human rights. The tension was ratcheted higher by U.S. House Speaker Nancy Pelosi’s recent trip to Taiwan, the self-governing island that China claims as its territory. The Chinese responded to the visit by Pelosi, second in the line of succession to the U.S. presidency, with military drills around the island.

U.S. regulators had warned that without an agreement, 200 companies including Alibaba Group, the world’s biggest e-commerce competitor, might be ejected from U.S. exchanges or face trading restrictions. The Americans said that other governments had agreed to allow such audit reviews, which are required by U.S. law, and that China and Hong Kong were the only holdouts.

Three of China’s biggest state-owned companies announced this month that they would remove their shares from the New York Stock Exchange but didn’t indicate the action was related to the audit dispute. PetroChina Ltd., China Life Insurance Ltd. and China Petroleum & Chemical Co. cited the small volume of trading of their shares in the New York market and the expense of complying with regulations in a foreign market. The companies said their shares still would be traded in Hong Kong, which is Chinese territory but open to non-Chinese investors.

The dispute over audits of Chinese companies goes back more than a decade. Scores of Chinese companies were suspended or kicked off U.S. exchanges, most of them for failing to file timely financial reports. At least two dozen were hit with SEC fraud or accounting charges, but investigations stalled because the companies’ audit papers were in China — beyond the SEC’s reach.

Direct access to personnel

Under terms of the new agreement, U.S. accounting inspectors in the PCAOB would have independent discretion to select any Chinese company audit for inspection or investigation, and they would get direct access to interview all personnel of the audit firms whose work is being inspected. The inspectors could see complete audit work papers with no redactions.

In Beijing, the China Securities Regulatory Commission called the agreement an important step in “resolving the issue of common concern of audit and regulatory cooperation.” Investors and companies on both sides will benefit from keeping Chinese shares trading on U.S. exchanges, the commission said.

The terms the commission outlined would give Chinese officials a role in any possible investigations. China won the right to conduct similar reviews of U.S. audit firms where relevant, according to the Chinese regulators, allowing Beijing to portray the agreement as mutually positive rather than an instance of China giving in to American pressure.

China has yet to express any need to carry out such reviews of its own.

Chinese regulators also would be allowed to participate in interviews with audit personnel.
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California set itself on a path Thursday to end the era of gas-powered cars, with air regulators adopting the world’s most stringent rules for transitioning to zero-emission vehicles.

The move by the California Air Resources Board to have all new cars, pickup trucks and SUVs be electric or hydrogen by 2035 is likely to reshape the U.S. auto market, which gets 10% of its sales from the nation’s most populous state.

But such a radical transformation in what people drive will also require at least 15 times more vehicle chargers statewide, a more robust energy grid and vehicles that people of all income levels can afford.

“It’s going to be very hard getting to 100%,” said Daniel Sperling, a board member and founding director of the Institute of Transportation Studies at the University of California-Davis. “You can’t just wave your wand, you can’t just adopt a regulation — people actually have to buy them and use them.”

Democratic Governor Gavin Newsom told state regulators two years ago to adopt a ban on gas-powered cars by 2035, one piece of California’s aggressive suite of policies designed to reduce pollution and fight climate change. If the policy works as designed, California would cut emissions from vehicles in half by 2040.

More to come

Other states are expected to follow, further accelerating the production of zero-emissions vehicles.

Washington state and Massachusetts already have said they will follow California’s lead and many more are likely to — New York and Pennsylvania are among 17 states that have adopted some or all of California’s tailpipe emission standards that are stricter than federal rules. The European Parliament in June backed a plan to effectively prohibit the sale of gas and diesel cars in the 27-nation European Union by 2035, and Canada has mandated the sale of zero-emission cars by the same year.

California’s policy doesn’t ban cars that run on gas — after 2035 people can keep their existing cars or buy used ones, and 20% of sales can be plug-in hybrids that run on batteries and gas. Though hydrogen is a fuel option under the new regulations, cars that run on fuel cells have made up less than 1% of car sales in recent years.

The switch from gas will drastically reduce emissions and air pollutants. Transportation is the single largest source of emissions in the state, accounting for about 40% of the state’s greenhouse gas emissions. The air board is working on different regulations for motorcycles and larger trucks.

California envisions powering most of the economy with electricity, not fossil fuels, by 2045. A plan released by the air board earlier this year predicts electricity demand will shoot up by 68%. Today, the state has about 80,000 public chargers. The California Energy Commission predicted that needs to jump to 1.2 million by 2030.

The commission says car charging will account for about 4% of energy by 2030 when use is highest, typically during hot summer evenings. That’s when California sometimes struggles to provide enough energy because the amount of solar power diminishes as the sun goes down. In August 2020, hundreds of thousands of people briefly lost power because of high demand that outstripped supply.

That hasn’t happened since, and to ensure it doesn’t going forward, Newsom, a Democrat, is pushing to keep open the state’s last-remaining nuclear plant beyond its planned closure in 2025. Also, the state may turn to diesel generators or natural gas plants as a backup when the electrical grid is strained.

More than 1 million people drive electric cars in California today. Their charging habits vary, but most people charge their cars in the evening or overnight, said Ram Rajagopal, an associate professor of civil and environmental engineering at Stanford University who has studied car charging habits and energy grid needs.

If people’s charging habits stay the same, once 30% to 40% of cars are electric, the state would need to add more energy capacity overnight to meet demand, he said. The regulations adopted Thursday require 35% of vehicle sales to be electric by 2026, up from 16% now.

But if more people charged their cars during the day, that problem would be avoided, he said. Changing to daytime charging is “the biggest bang for the buck you’re going to get,” he said.

Both the state and federal government are spending billions to build more chargers along public roadways, at apartment complexes and elsewhere to give people more charging options.

The oil industry believes California is going too far. It’s the seventh-largest oil-producing state and shouldn’t wrap its entire transportation strategy around a vehicle market powered by electricity, said Tanya DeRivi, vice president for climate policy with the Western States Petroleum Association, an industry group.

“Californians should be able to choose a vehicle technology, including electric vehicles, that best fits their needs based on availability, affordability and personal necessity,” she said.

Some difficulties seen

Many car companies, like Kia, Ford and General Motors, are already on the path to making more electric cars available for sale, but some have warned that factors outside their control like supply chain and materials issues make Californians’ goals challenging.

“Automakers could have significant difficulties meeting this target, given elements outside of the control of the industry,” Kia Corp.’s Laurie Holmes told the air board before its vote.

As the requirements ramp up over time, automakers could be fined up to $20,000 per vehicle sold that falls short of the goal, though they’ll have time to comply if they miss the target in a given year.

The new rules approved by the air board say that the vehicles need to be able to travel 150 miles (241 kilometers) on one charge. Federal and state rebates are also available to people who buy electric cars, and the new rules have incentives for car companies to sell electric cars at a discount to low-income buyers.

But some representatives of business groups and rural areas said they fear electric cars will be too expensive or inconvenient.

“These regulations are a big step backwards for working families and small businesses,” said Gema Gonzalez Macias of the California Hispanic Chambers of Commerce.

Air board members said they are committed to keeping a close eye on equity provisions in the rules to make sure all California residents have access.

“We will not set Californians up to fail, we will not set up the other states who want to follow this regulation to fail,” said Tania Pacheco-Warner, a member of the board and co-director of the Central Valley Health Policy Institute at California State University-Fresno.
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