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ASIAN (B) | Huewire | Opnion News | Forum |Diversity In America - Part 32

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President Trump Hints at Retaliation Against EU for Unfair Trade

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Donald Trump

extended his threats of action against America’s trading partners, this time hinting at major retaliation against the European Union for what he described as its “very unfair” trade policy toward the U.S.

Mr. Trump has repeatedly complained about global trading arrangements that he says discriminate against the U.S. and has threatened steps that have fanned anxieties around the world about U.S. protectionism and the possibility it could set off a global trade war.

His comments about the EU come days after he imposed steep tariffs on imports of solar panels and washing machines, a move aimed mainly at curbing imports from Asia.

They were the first of what administration officials said would be a series of trade-enforcement actions in the coming months.

“I’ve had a lot of problems with European Union, and it may morph into something very big from that standpoint, from a trade standpoint,” Mr. Trump said in an interview with the U.K. broadcaster ITV, conducted on the sidelines of the World Economic Forum in Davos, Switzerland, and broadcast Sunday. The U.S. response would be “very much to their detriment,” he said of the EU.

“It’s a very unfair situation. We cannot get our product in. It’s very, very tough,” he said. “And yet they send their product to us—no taxes, very little taxes.”

The EU’s executive branch—the European Commission—didn’t immediately respond to a request for comment.

Mr. Trump has frequently criticized multilateral trade agreements, and suggested he favored bilateral deals, while expressing concern about America’s trade deficits with other countries.

The U.S. runs a substantial trade deficit with the EU, importing over $93 billion more in goods and services than it exported to EU members in 2016, according to the U.S. Department of Commerce. Germany itself accounted for more than two-thirds of that.

The deficit with China stood at nearly $310 billion in 2016, with imports from Japan and Mexico also exceeding U.S. exports, by $57 billion and $63 billion, respectively.

Shortly before taking office, he called the EU a “vehicle for Germany.” After his trip to Europe in May, his first foreign visit as president, he also threatened action against Berlin.

“We have a MASSIVE trade deficit with Germany…. Very bad for U.S. This will change,” President Trump tweeted after meeting last year with EU and European leaders during a North Atlantic Treaty Organization summit in Brussels.

The EU has regularly warned that U.S. actions smack of protectionism and risk undermining international free trade. The U.S. and the EU are already locked in a number of disputes at the World Trade Organization, including over aircraft subsidies and poultry treatment.

Mr. Trump’s decision to impose levies on solar panels and washing machines drew ire from Brussels. European solar panels make up about 2% of all U.S. imports. An EU official said the bloc would review the measures and react “firmly and proportionately” if the measures significantly impacted European exports.

Mr. Trump has long promised to pursue a harder trade line in defense of U.S. manufacturers. On his first workday in office a year ago, he signed an order withdrawing from the Trans-Pacific Partnership, a 12-nation trade agreement being negotiated by his predecessor,

Barack Obama.

The president, however, signaled a potentially major policy shift on Friday in Davos, saying the U.S. “would consider negotiating” a trade deal with TPP countries, individually or as a group. Mr. Trump also is renegotiating the North American Free Trade Agreement, a 1994 trade pact between the U.S., Canada and Mexico.

Difficult negotiations over an EU-U.S. deal, the Transatlantic Trade and Investment Partnership, have ground to a halt after an October 2016 meeting, which was followed by Mr. Trump’s election and a busy election cycle in Europe. The EU’s trade chief, Cecilia Malmstrom, said days after Mr. Trump’s inauguration that talks are likely “firmly in the freezer at least for a while.” The parties have yet to reengage.

In the interview Sunday, Mr. Trump also criticized Britain’s approach to negotiating its exit from the EU, scheduled for March 2019, saying he “wouldn’t negotiate it the way it’s [being] negotiated.”

Mr. Trump said “I think I would have said that the European Union is not cracked up to what it’s supposed to be. And I would have taken a tougher stand in getting out.”

Mr. Trump, however, reiterated his commitment to striking a bilateral trade deal with the U.K. once its departure from the EU made that possible, saying the U.S. will be Britain’s “great trading partner.”

“We are going to make a deal with U.K. that’ll be great.”

Write to Wiktor Szary at Wiktor.Szary@wsj.com and Emre Peker at emre.peker@wsj.com

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U.S. Spending Rises in December; Saving Rate Lowest Since 2005

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—U.S. consumers increased spending in the final month of last year as their incomes improved, and they saved at the lowest rate since 2005.

The 2.4% saving rate in December hit a new low for this expansion, as high asset prices and the prospect of lower taxes enticed consumers to spend more. The rate was last lower in September 2005.

Personal-consumption expenditures, a measure of household spending on everything from cellphones to groceries, increased a seasonally adjusted 0.4% in December from the prior month, the Commerce Department said Monday.

Personal income—reflecting Americans’ pretax earnings from salaries, investments and other sources—rose 0.4% in December. Economists surveyed by The Wall Street Journal had forecast a 0.5% rise in spending and a 0.3% rise in incomes.

Low unemployment, the prospect of lower taxes and the rising values of houses and stocks have made households feel more financially secure and willing to spend in recent months. November’s spending was revised up to an 0.8% increase from a previously reported 0.6% gain. Spending rose 0.3% in October.

Americans’ rate of saving is at its lowest since September 2005. The personal saving rate -which measures the difference between what households earn and what they spend on goods, services and repaying loans- was 2.4% in December, down from a revised 2.5% in November.

While a low saving rate suggests consumers feel optimistic enough about their financial prospects to put aside less for a rainy day, it also means households have a smaller financial cushion should an economic downturn hit.

Consumer spending accounts for more than two-thirds of U.S. economic output, and Monday’s report suggests momentum was strong at the close of 2017. The latest spending data shows increased outlays in December were driven by spending on durable goods and services. Personal-consumption expenditures rose 4.5% in 2017, the largest increase since 2011.

For the final quarter, strong spending by Americans and businesses were a key driver of economic growth. The Commerce Department said Friday that gross domestic product, the value of goods and services produced in the U.S., rose at a 2.6% annual rate in the fourth quarter.

Monday’s report showed a key gauge of prices was weak in December, presenting the Federal Reserve with a mixed inflation picture on the eve of its policy meeting.

The price index for personal-consumption expenditures, the Fed’s preferred inflation measure, rose 0.1% from November and was up 1.7% from a year earlier. After touching the Fed’s 2% annual target in February 2017, inflation has lagged behind that goal for 10 consecutive months.

Excluding volatile food and energy costs, prices rose 0.2% in December from November, and increased 1.5% from a year earlier.

The latest below-target reading deepens the Fed’s inflation conundrum. The central bank meets on Tuesday and Wednesday and is widely expected to maintain the target for the federal-funds rate, charged on overnight loans between banks, at its current rate between 1.25% and 1.5%.

As the U.S. economy has strengthened in recent months, Fed officials have been gradually raising short-term interest rates, but they remain focused on boosting still-weak inflation. Officials have penciled in three quarter-percentage-point rate increases for 2018.

The Commerce Department report on personal income and spending can be accessed at http://www.bea.gov/newsreleases/rels.htm.

Write to Harriet Torry at harriet.torry@wsj.com and Sharon Nunn at sharon.nunn@wsj.com

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Canada, Mexico Reject Reworking Nafta Corporate Arbitration System

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MONTREAL—Mexico and Canada have rejected a proposal by the Trump administration to remake a corporate arbitration system that is a key part of the North American Free Trade Agreement, according to people involved in talks to update the pact.

The two countries’ resistance to the U.S. plan to change the system, known as investor-state dispute settlement, or ISDS, could lead to its removal altogether from Nafta, as neither Canada nor Mexico is interested in allowing countries to opt out of the system, as the U.S. has proposed. The U.S. made the proposal with an eye to opting out of the ISDS system, which it says erodes the sovereignty of the U.S. by allowing multinational companies to circumvent domestic courts.

Under the dispute mechanism, arbitration panels now hear complaints from corporations that their overseas investments were unfairly treated by an action by another Nafta government. The system is widely backed by multinational businesses because it allows them to avoid lengthy court battles and potentially discriminatory treatment abroad.

Officials from the U.S. Trade Representative’s office declined to comment on the proposal or the trading partners’ reaction to it, saying the negotiations are ongoing.

The future of the system, along with other dispute-resolution issues, is among the thorniest parts of Nafta negotiations, and is expected to be among the last to be resolved if negotiators are to be successful in rewriting the 24-year-old agreement. The three countries have aimed to complete the talks by the end of March, but many lobbyists and other officials watching the negotiations say they will have to accelerate their pace in order for that deadline to be met.

The sixth round of Nafta talks was scheduled to conclude Monday, after which U.S. trade representative

Robert Lighthizer

and his Mexican and Canadian counterparts were expected to issue a joint statement on the negotiations’ progress. In Montreal, negotiators were able to finalize a chapter on anticorruption issues, according to an official with one of the Nafta parties. Overall, officials and stakeholders briefed say the talks have taken a tentatively promising turn, after Canada came forth with an informal proposal to bridge the gap on U.S. demands over auto production.

“I think it was a positive week. We are moving in the right direction, but there’s a long way to go.” Canada’s chief Nafta negotiator

Steve Verheul

told reporters Saturday night. “We are still negotiating, and that’s the main thing.”

But the complicated struggle over ISDS is characteristic of the challenges the negotiators are up against. The Trump administration’s opt-out proposal would mean that the country opting out wouldn’t be subject to arbitration claims from companies from the other two.

Mexico and Canada, according to people close to the negotiations, say they won’t accept the opt-out proposal because if the U.S. were to leave the system, as would be expected, it would protect U.S. companies by allowing their complaints to go to arbitration but wouldn’t allow Mexican and Canadian companies to use the system in challenges against the U.S. government.

The possibility of dismantling the system has worried big companies, who are lobbying for its preservation by pressing U.S. lawmakers to insist that any Nafta deal contain some form of investor-state dispute settlement. Lawmakers get a vote on any major Nafta overhaul, so they can use their influence with Mr. Lighthizer to press to keep the dispute system.

The system has especially strong support from investors in long-term projects, such as energy exploration, that might be sensitive to domestic political changes.

Mexican and Canadian officials have said that they’d prefer to remove the investor-state provision from the three-way Nafta agreement and form their own bilateral investor pact rather than remain a part of a system under Nafta where different countries have different rights, according to people familiar with the talks. Under a bilateral system between Canada and Mexico, the U.S. wouldn’t be included, so Washington wouldn’t face arbitration challenges, but its companies also wouldn’t enjoy protections in the other two countries. One official said the bilateral proposal is in its very early stages but Canada and Mexico believe it is worth pursuing.

While business groups like ISDS, labor unions and environmental groups see the system as giving companies a green light to invest abroad while cutting the risk of environmental fines or regulatory actions by foreign governments.

The Trump administration has also proposed scaling back the types of challenges that companies could bring under the system. Mr. Lighthizer has expressed public skepticism about other forms of dispute settlement that result in binding outcomes for the U.S. government. So far, the U.S. has never lost an investor arbitration case under Nafta or any other agreement.

The proposal to scale back ISDS, supported by some labor and consumer groups, would only allow investors to seek damages from foreign governments if their assets were essentially stolen through “direct expropriation,” according to advisers to Mr. Lighthizer and people following the talks. Regulatory actions that indirectly impair an asset wouldn’t be grounds for a challenge under the system.

U.S. congressional staffers who back traditional Washington trade policy point out that the legislation that allows for the Nafta negotiations requires Mr. Lighthizer to strike a deal with strong investor protections. When the U.S. was negotiating with 11 Pacific partners in 2015, many congressional Republicans and some Democrats insisted on a strong version of investor-state dispute settlement, and business groups say lawmakers are pushing back against the Trump administration’s proposals.

Write to William Mauldin at william.mauldin@wsj.com

Appeared in the January 29, 2018, print edition as ‘U.S. Nafta Proposal Fails To Move Mexico, Canada.’

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Can Apple Find Enough Customers Willing to Pay Up?

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Generally speaking, technology gets a lot cheaper as it ages.


AAPL 0.23%

is counting on precisely the opposite.

The iPhone X, which made its debut in November, essentially ushers in the second decade of the touch-screen smartphone revolution that Apple kicked off with its original iPhone in 2007. Despite the fanfare christening the device as “the future of smartphones,” the iPhone X differs little in basic function from its recent predecessors. But an expanded display and other bells and whistles encouraged Apple to give the device a premium price tag. The iPhone X starts at $1,000—making it the most expensive base model smartphone ever in the U.S.

For Apple, that represents a gamble that customers won’t bolt for cheaper-but-still-premium Android options. In developed markets like the U.S., the company’s market share has stayed largely consistent. Switching is easier than ever in an age of cloud storage and streaming apps, but most smartphone customers by now have picked their platform and seem to stay on it.

That doesn’t mean the so-called supercycle many investors are expecting this year will be a sure thing. Several analysts have cited data from Apple’s supply chain pointing to a mixed picture for the new iPhones.

Toni Sacconaghi

of Bernstein said his analysis suggests total iPhone unit sales for the March quarter could come in at a range of 51 million to 57 million units—well below the 61 million units Wall Street is currently targeting.

Apple’s fiscal second quarter ending in March is particularly important this time around because the company needs iPhone sales to remain strong in order to hit Wall Street’s current prediction of overall revenue growing 19% this fiscal year compared with 6% last year.

That means Apple’s forecast for the March quarter will likely overshadow results for the December period that the company will report on Thursday. Analysts currently expect March-quarter revenue to surge 28% year over year to nearly $68 billion—a high mark to hit. And Apple’s stock price, which is up 40% over the last 12 months and near a record 15 times forward earnings, is likely to take a tumble if the company’s outlook disappoints.

Much depends on Apple finding enough customers willing to pay up. And higher prices can help the company meet revenue growth targets even if unit sales are weaker. Analysts currently expect the average selling price for the iPhone segment to hit $757 for both the December and March quarters—more than $100 above the average for the last four periods. A thousand bucks will seem ludicrous to many smartphone buyers, and Apple had better hope it has enough devoted fans to help the iPhone X make the connection.

Write to Dan Gallagher at dan.gallagher@wsj.com

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China's Big Car Makers Are Driving at Different Speeds

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As China’s car market cools, some auto makers are hitting speed traps.

Great Wall Motors, China’s largest SUV maker, warned late Friday its earnings last year likely fell 50% from a year earlier, thanks largely to its high spending on marketing and R&D. That was a stark contrast to a more welcome announcement from rival

Geely Automobile Holdings

GELYY -0.45%

earlier this month: It expects its profit to have more-than doubled last year thanks largely to higher sales volume and a varied and well-targeted product mix.

The fates of the two companies are diverging as China’s once-booming car sales become more pedestrian, and Beijing goes green. Best-case estimates put the industry’s growth at around 4% this year, up a touch from last year’s mediocre 2% rise, but a far cry from 16% growth in 2016.

Great Wall’s travails illustrate the looming challenges in China’s hypercompetitive car industry, which churns out more than 20 million cars a year. The building regulatory pressure to comply with tougher fuel-economy standards means it is having to spend heavily on electric-vehicle development. In 2016, it fell short of fuel-consumption targets and looks like it will for 2017 as well. The SUV and truck maker’s spending on selling and other nonproduction costs has continued to rise—to more than 40% of gross profits in the 12 months to September.

Geely has been spending even more on such items: The difference is, it’s been selling more vehicles and its profits are rising much faster, partly thanks to its success in tapping China’s obsession for new models and premium cars. It has been quicker than rivals to cotton on to the country’s push for greener cars too: Volvo, the Swedish car maker Geely owns, said last summer it would only make fully electric or hybrid cars by 2019. Within China, Geely plans to launch at least eight new SUVs, sedans and crossovers this year, including three premium models. Meanwhile, Great Wall has seven SUVs in the pipeline.

Geely has been an investor darling for over a year now; some investors who may have missed the boat jumped into Great Wall last autumn, giving its stock a boost. As result, the valuation gap between the two companies on a price-to-earnings basis has narrowed: Great Wall now trades at a 40% discount to its peer, down from 100% at Geely’s peak valuation last October.

Whether or not investors now have the two companies’ relative values more right than wrong, their recent performance shows that as China’s car market slows, not everyone can stay in the fast lane.

Write to Anjani Trivedi at anjani.trivedi@wsj.com

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Cyprus President Leads First-Round Vote, Heads to Runoff

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Incumbent Cypriot President

Nicos Anastasiades

was the top finisher on Sunday’s first round of presidential elections, but failed to garner a majority of votes needed to avoid a runoff.

The conservative leader will face

Stavros Malas,

an independent candidate backed by Communist party AKEL, in a runoff on Feb. 4. Mr. Anastasiades was leading all the opinion polls in the run-up to the vote. He said that this second 5-year term in office would be his last if he is re-elected.

Mr. Anastasiades secured a 35.5% support while Mr. Malas was backed by 30.2% of voters. Centrist

Nicos Papadopoulos

was third with 25.7% and

Christos Christou

of the far-right party ELAM got 5.7%. About 28% of the Cypriots abstained from voting.

The 71 year-old Mr. Anastasiades is credited with leading the country’s economy back to growth after it nearly collapsed in 2013 and for leading talks to bring the divided island closer than it has been in more than four decades.

Cyprus’s €10 billion ($12.43 billion) bailout program was launched in 2013, when Cypriot banks collapsed and the country had to impose capital controls to prevent a complete financial meltdown. Things began acrimoniously when Germany and the International Monetary Fund forced Cyprus to inflict losses on bank depositors to help pay for the rescue.

The country exited the program three years later and its economy is growing again. The Mediterranean island’s economic growth is seen at 3.5% in 2017 and is expected to ease but remain robust at 2.9% in 2018, according to European Commission estimates.

Cyprus—a European Union member in the eastern Mediterranean close to Turkey and Syria—has been split between the Greek south and the Turkish north since 1974. Numerous peace talks over the years have failed.

The latest round of reunification talks collapsed last July, marking the end of a more than two-year process that had been seen as the best chance to resolve the decades-old conflict.

Mr. Malas of the Communist AKEL party has accused the incumbent president of not being bold enough to reach an agreement. Mr. Anastasiades reiterated his commitment to reaching a deal.

An agreement could deliver economic benefits, such as allowing the installation of natural-gas pipelines connecting Europe and the Middle East.

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Baker Hughes Suffers From a GE Discount

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Baker Hughes

BHGE 1.33%

a GE co.” stands out in the annals of unfortunate corporate naming.

At first it was just an unwieldy mouthful. Now, though, Baker Hughes is being hurt by its affiliation with the battered blue chip. Since the beginning of 2016, General Electrichas shed an astonishing $175 billion in market value. A halving of GE’s once-secure dividend and a Securities and Exchange Commission probe of its accounting have weighed on Baker Hughes.

None of GE’s woes should affect Baker Hughes directly, but the selloff has given investors an opportunity in the No. 3 oil field services company by revenue. In just the past three months,

Baker Hughes

BHGE 1.33%

shares have underperformed those of Nos. 1 and 2, Schlumberger and Halliburton, by 13.1 and 25.5 percentage points, respectively.

There is rarely any reward without potential loss, though. The case against Baker Hughes boils down to three risks.

First and most significant, GE has indicated it may sell its 62.5% stake, worth $23 billion, to bolster its balance sheet. That has created a so-called overhang, weighing on the share price. The announcement of a stock offering would worsen the pressure while a private equity transaction might boost the shares. Any deal before the summer of 2019 would have to be approved by an independent conflicts committee.

The second risk is that, if such a sale took place, it might sap some of the synergies GE touted less than a year ago. These include shared intellectual property and contracts that Baker Hughes has said could be at risk if GE’s stake falls below 50%.

The third risk is that Baker Hughes just isn’t a very good company. Full-year results released Wednesday were underwhelming, and it is the only one of five large U.S.-listed peers that has seen earnings-per-share estimates for 2018 drop since October as oil has rallied. Only 41% of analysts surveyed by FactSet have a buy rating on it, compared with an average of 79% for three currently profitable peers. Traditional valuation measures for the recovering industry, meanwhile, offer little insight.

Only formed in July, Baker Hughes can benefit from further integration, and its management has an incentive to prove something to the market. It also has the strongest balance sheet of its peers. While no cream puff, it is priced to move.

Write to Spencer Jakab at spencer.jakab@wsj.com

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Dutch Skepticism About the EU Remains a Force

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The Netherlands was the front line in the European Union’s fightback against a euroskeptic populist rebellion in 2017.

The failure of Geert Wilders’ hard-right anti-immigrant PVV party to score a decisive breakthrough in March’s general election and Prime Minister Mark Rutte’s return to office as the head of a pro-EU four-party coalition—albeit after 208 days of negotiations and with a parliamentary majority of just one—was greeted with relief across the continent.

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Plea for Money Preceded Saudi Crackdown on Elites

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A sweeping, self-styled anticorruption campaign that has upended Saudi Arabian politics and business started with a request from the country’s king and new crown prince to prominent citizens: Make patriotic contributions to help shore up government finances.

When the plea for cash was largely rebuffed, according to people familiar with the matter, the prince,

Mohammed bin Salman,

decided on sterner steps. Members of the country’s elite were lured to the Ritz-Carlton luxury hotel, arrested, accused of bribery and other crimes and pressed to make what the government has termed settlement payments.

Billionaire Prince al-Waleed bin Talal, one of the world’s richest men and a large investor in


and other Western companies, was among a handful of businessmen freed over the weekend after agreeing to make payments and, in some cases, hand over corporate holdings, a senior Saudi official said on Sunday.

Efforts to reach Prince al-Waleed were unsuccessful. People close to him have said he maintains his innocence. In a video interview with Reuters aired Saturday, the prince said his business was a “clean operation” and that he would retain control of his company, Kingdom Holding Co.

Others released on Saturday and Sunday, the senior Saudi official said, include construction magnate

Bakr bin Laden,

whose company has been effectively nationalized, and media investor Waleed al-Ibrahim, who founded Mideast television network MBC. Neither could be reached for comment.

The Saudi official said those let go after months of confinement had signed documents admitting wrongdoing. He declined to discuss details of the settlement deals.

Saudi officials had earlier demanded that Prince al-Waleed pay more than $6 billion, The Wall Street Journal has reported. It was unclear what deal was eventually reached. Another royal family member,

Prince Miteb bin Abdullah,

settled for $1 billion in November, the Journal has reported.

Last week, Saudi Finance Minister

Mohammed Al-Jadaan

said authorities had received a total of roughly $100 billion in payments from around 350 people accused in the crackdown.

On Sunday, the senior Saudi official said about 40 remaining holdouts could go on trial. Some have been moved from the luxury Ritz hotel where detainees were initially held, to the maximum-security al-Hayer prison south of the Saudi capital, Riyadh.

These latest developments mark a new phase in Crown Prince Mohammed’s efforts to reorder the kingdom’s elite as part of a broader move to remake Saudi Arabia’s oil-reliant economy and ease religious restrictions that have long defined the country’s conservative society.

Saudi government officials have described the recent crackdown as a campaign against corruption and vowed that the proceeds would help ordinary Saudis. Human-rights groups have called the moves a power grab by the crown prince, who was named heir to the throne in June.

Prince Mohammed “has broken the resistance from the business elite and the royal family,” said Bill Law, an analyst at Gulf Matters, a London consultancy focused on the Middle East. “He stands unimpeded. He is unassailable.”

The crown prince and his father

King Salman

held intense meetings with rich Saudis in the runup to the crackdown last autumn and demanded financial help to support their economic and social revamp, according to a Europe-based financial adviser. Some of the adviser’s clients were present.

“What can you do for your country?” the prince asked the men, according to the adviser. The octogenarian king has turned over the day-to-day affairs of the country to his son.

Saudi officials didn’t answer questions about the meetings.

At the time, the government was preparing a record-high proposed budget of $260 billion that would impose new taxes on regular Saudis.

Late on the night of Nov. 4, dozens of Saudi princes, government officials and businesspeople were summoned for what they were told was an urgent meeting with Prince Mohammed at the Riyadh Ritz-Carlton.

Instead of a meeting with the prince, however, the elite Saudis found themselves in a makeshift prison. It was soon clear: They had “to cooperate to get out and pledge allegiance” to the crown prince, said a person close to detainees.

Those being held weren’t allowed to close the doors of their suites so they could be monitored, people familiar with the matter said. Their phone calls were restricted to routine business dealings, the people said, and they weren’t allowed to discuss their detention.

Caught off guard, Prince al-Waleed ordered his staff to find some freshly laundered clothes to wear during detention, said a person familiar with his situation.

In Prince al-Waleed’s video interview, he gave a tour of his expansive suite, which included a kitchenette, a large dining room, an office, a bedroom and bathroom. Wearing a traditional white robe, he held up a can of Diet Pepsi and drank from it.

“It’s no problem at all,” he said.

He said he was allowed to exercise, given access to food compatible with his vegan diet and allowed to make calls to his company, Kingdom Holding, a Saudi-based conglomerate.

After news of his release, the company’s share price closed up 10% on Sunday in Riyadh trading. It had fallen 21% after his November arrest, though it recovered from some of those losses in recent weeks.

Other detained businessmen have had to give up substantial stakes in their businesses.

Mr. bin Laden, chairman of construction company Saudi Binladin Group, was released after agreeing to surrender his stake in the company to the government, according to the senior Saudi official.

Saudi Binladin Group said it will remain a private-sector company, though it has said some shareholders had possibly agreed to transfer some of the company’s shares to the Saudi government.

The agreement marks the end of Mr. bin Laden’s decades-old role at the helm of the construction group tasked with handling many of the kingdom’s most prestigious and complex projects.

The company helped revamp mosques and build vast new infrastructure in the holy cities of Mecca and Medina and over time built an unrivalled position as the Saud family’s preferred contractor, with a reputation for navigating the Saudi bureaucracy and completing projects ahead of schedule.

Foreign investors have registered complaints about how Prince al-Waleed and others had been treated. Saudi officials say foreign investments flows in the Kingdom have rebounded after dipping immediately after the arrests in early November.

“Investors have realized [the anti-corruption crackdown] is good for the economy, it is creating a level-playing field,” said Mohammed Al-Jadaan, the Saudi finance minister, speaking at the World Economic Forum meetings last week.

The impact on domestic businesses could be more dramatic, said Ellen Wald, non-resident scholar at the Washington, D.C.-based Arabia Foundation. “People won’t be rushing to invest more, to build up companies and infrastructure, if they are concerned they might be arrested tomorrow,” she said.

Among ordinary Saudis, Prince Mohammed’s crackdown has been popular, especially as citizens face new taxes and higher fuel prices.

At the World Economic Forum, Saudi Princess Reema bint Bandar summed up Saudi leaders’ frustration with how the changes unfolding in her country are viewed elsewhere.

“You ask us to change but when we begin to exhibit change you come to us with cynicism,” she said.

Write to Summer Said at summer.said@wsj.com, Benoit Faucon at benoit.faucon@wsj.com and Georgi Kantchev at georgi.kantchev@wsj.com

Appeared in the January 29, 2018, print edition as ‘Money Plea Preceded Saudi Crackdown.’

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Volcano Spews Lava, Ash as Philippine Officials Tell Residents: Stay Out

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Philippine authorities enforced the evacuation of tens of thousands of people as ash and lava spewed from erupting Mount Mayon, warning that mudslides caused by heavy rains now threaten surrounding areas.

The highly active volcano has been erupting for days in the rural central part of the country, sending lava flowing some two miles from its crater and threatening the livelihoods of people who live and farm there.


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