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Lagarde Says U.S. Is at Risk of Losing Global Leader Role

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Christine Lagarde,

the departing head of the International Monetary Fund who is set to take over as president of the European Central Bank, said in an interview that the U.S. risks diminishing its role as a global leader and warned of dire consequences of its trade war with China.

“I was brought up as a citizen of this world. The risk I see is that the United States is at risk of losing leadership. And that would be just a terrible development,” Ms. Lagarde said in a “60 Minutes” program that aired Sunday.

Ms. Lagarde also warned President Trump against pushing the Federal Reserve for lower interest rates because it could spur inflation. “When the unemployment rate is at 3.7%, you don’t want to accelerate that too much by lowering interest rates,” she said. “Because the risk you take is that then prices begin to go up. You have to be very careful. You know, it’s like navigating a plane.”

She said she would tell Mr. Trump: “Market stability should not be the subject of a tweet here or a tweet there. It requires consideration, thinking, quiet and measured and rational decisions.”

The White House didn’t immediately respond to a request for comment.

Ms. Lagarde, who made the comments in interviews in September, said the U.S. has been a force for good, fostering the principles of rule of law, democracy, free markets and respect for the individual.

She urged policy makers to work to end the trade war between the U.S. and China, which she said is seriously affecting the global economy. “If you shave off, you know, almost a percentage point of growth that means less investment, less jobs, more unemployment, reduced growth.”

Finance ministers and central bankers who gathered in Washington for the IMF’s fall meetings this past week said the biggest risks to the global economy are trade-related uncertainties. Global economic growth has shrunk this year to its slowest pace since the 2009 recession, the IMF said.

Ms. Lagarde, in the interview, lamented both the U.S. and the U.K.’s retreat from international ties, saying that the U.K.’s attempt to leave the European Union in particular has caused her “great sadness.”

“International trade, connections, movement of people and movement of capital has taken hundreds of millions out of poverty. Now, some people in the advanced economies might say, ‘Pooh. What do I care?’” she said.

She added: “What can walls do about pandemics? What can walls do about terrorism? What can walls do about climate change and destruction of the environment? This is not the answer to the global questions and issues that interconnect, whether we like it or not.”

Write to Kate O’Keeffe at kathryn.okeeffe@wsj.com

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WeWork May Lay Off Thousands

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WeWork is preparing to cut at least 4,000 people from its work force as it tries to stabilize itself after the company’s breakneck growth racked up heavy losses and led it to the brink of collapse, two people with knowledge of the matter said.

The cuts are expected to be announced as early as this week and will take place across WeWork’s sprawling global operation. Under the plan, the company’s core business of subletting office space would lay off 2,000 to 2,500 employees, one of the people said. An additional 1,000 employees will leave as WeWork sells or closes down noncore businesses, like a private school in Manhattan that WeWork set up. Additionally, roughly 1,000 building maintenance employees will be transferred to an outside contractor. Together, these employees would represent around a third of the 12,500 people WeWork employed at the end of June.

But one of the people said the company could shed as many as 5,000 to 6,000 employees.

The staff reductions will be included in a five-year plan to overhaul WeWork that could be presented to employees as early as Tuesday, said the people, who spoke on the condition of anonymity to discuss the layoff plans.

The layoffs represent the human cost of a remarkable reversal in WeWork’s fortunes. Under its co-founder and former chief executive, Adam Neumann, the company piled billions of dollars into an erratic expansion that included adding huge office spaces in the world’s most expensive cities, offering discounts to lure tenants and buying other businesses. WeWork, which leases office space from landlords, refurbishes it and rents it out to its customers, shelved plans for an initial public offering in late September after investors were put off by the company’s losses and had questions about its corporate governance.



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HP Rejects Xerox Takeover Bid

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HP said on Sunday that it had turned down a takeover offer from Xerox, rejecting a deal that would have brought together two once-formidable printing companies that have faced business difficulties as demand for printed documents and ink has waned.

The cash-and-stock offer from Xerox “significantly undervalues HP and is not in the best interests of HP shareholders,” company officials wrote in a letter to John Visentin, Xerox’s chief executive.

The letter to Xerox called the proposal “highly conditional and uncertain” and expressed qualms about “the potential impact of outsized debt levels on the combined company’s stock.” It also raised concerns about a recent stark decline in Xerox’s revenue.

But the letter left open the possibility of a merger under different terms. “We recognize the potential benefits of consolidation,” it said, “and we are open to exploring whether there is value to be created for HP shareholders through a potential combination with Xerox.”

A Xerox spokeswoman did not respond to a request for comment.

In its proposal, submitted on Nov. 5, Xerox put the total value of a possible transaction at $33.5 billion, or $22 a share — $17 in cash and 0.137 Xerox shares for each HP share. Xerox said a merger would save $2 billion in costs within two years.

HP and Xerox have cut costs significantly in recent months as they have struggled to navigate the accelerating erosion of the traditional printing business.

Over the years, HP has aimed to sell printers at no profit or a loss, while making its profit on selling a steady stream of replacement cartridges, called aftermarket supplies.

But a number of forces are undermining that model: the popularity of smartphones and tablet computers that allow electronic documents to be easily transported; the rise of sharing services that people use to distribute documents in the cloud; and a growing awareness of the environmental effects of profligate printing.

At the same time, companies that collect, clean and rebuild printer cartridges have made steady inroads. And the rise in recent years of Chinese cartridge-clone makers in particular has hurt the sales and profits of both HP and Xerox.



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SEMINAR ON CHINA UAE ECONOMIC AND TRADE COOPERATION

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On the 30th of October the UAE was organizing a seminar on CHINA and UAE Economic and trade cooperation, Held at the Hyatt Regency Dubai.

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