Source: Barron's Chinese Author: Nicholas Jaskinski Evan Greenberg, CEO of Chubb Ltd, has a highly influential fan - Warren Buffet, CEO of Berkshire Hathaway. Berkshire Hathaway disclosed last month that it held 6% of the shares in Chubb, one of the world's largest insurance companies, by the end of 2023. Berkshire itself is a major participant in the insurance industry, but it is not the only buyer. In the past year, Chubb's stock return, including dividends, was about 40%, surpassing the S&P 500 index's total return of 25%, and making the company's market capitalization reach $110 billion. This increase in market capitalization reflects Chubb's outstanding performance, which is attributed to its prudent underwriting practices and conservative management of its investment portfolio of about $140 billion. The company's earnings per share increased by 48% in 2023 and its book value per share increased by 21%. Greenberg is the son of Maurice "Hank" Greenberg, the former CEO of American International Group (AIG). Greenberg worked at AIG for 25 years, rising through the ranks. He left the insurance company in 2000 and took over Ace Limited in 2004. The company merged with Chubb in 2016, the largest M&A in the property and casualty insurance industry at the time. Today, Chubb is the largest commercial insurance provider in the United States, and the company is also known for its high-end homeowner insurance for the wealthy. However, about half of the company's premiums last year came from outside the United States. Asia has always been a growth area where the company is bullish: Although Asia accounts for 40% of global GDP, the insurance industry accounts for only 26% of the global insurance market share. This gap is expected to narrow over time. Greenberg sits on the board of several nonprofits that focus on international and Asian affairs. Barron's recently interviewed Greenberg about his underwriting philosophy, the challenges of dealing with increasingly frequent climate disasters, and US-China relations. Following are the edited excerpts of the conversation.

On Tuesday (September 10th) local time, the first TV debate was held between the Democratic presidential candidate and vice president Harris and the Republican presidential candidate and former president Trump. From the trend of the financial market after the debate, the probability of Trump being reelected as president has decreased.

Early Wednesday, US stock index futures trended mildly lower, with the US dollar falling against major currencies, especially the yen.$Bitcoin (BTC.CC)$Falling 2%, DJT, a company owned by Trump, fell 15% in pre-market trading. From the trend of these assets, traders believe that the winner of this debate is Harris.

Stephen Innes, managing partner at SPI Asset Management, commented: "Currently, the US dollar is weakening against Asian currencies, and US stock index futures show signs of weakness, which is consistent with the opinion polls showing that Harris has gained the upper hand in the debate with Trump."

Chris Weston, research director at Pepperstone, also holds this view. He said, "As the dust settles on the debate, it is clear that the market believes that this debate favors Harris in the election." He also pointed out that the support of popular singer Taylor Swift for Harris has also played a role in promoting the situation.

According to the data from the prediction website Election Betting Odds, Harris leads with a support rate of 51.8%, while Trump's support rate is 47%.

The economy was the focus of the first debate between Harris and Trump. Trump claimed that, due to the policies implemented by Harris as Vice President, the USA has become a "declining country", while Harris stated that Trump has no plan for the future of the USA.

For voters, Trump is a "known quantity", he has had a strong base of supporters for many years, while Harris is just becoming known to voters. They discussed the following issues in this debate.

Tariffs

At the beginning of the debate, tariffs and taxes became the main topic. Harris said that Trump's high tariffs on other countries are equivalent to sales tax on Americans.

Harris mentioned her proposals to increase the child tax credit for some families to $6,000 and provide a $0.05 million exemption for small start-ups. As the debate unfolded, Harris again mentioned these proposals, as well as proposals aimed at lowering housing costs.

Trump denies that his tariff proposal is equivalent to a sales tax, stating that it is China and other countries that pay the tariffs. Economists generally regard this view as incorrect.

Tariffs are essentially taxes imposed on imported goods from certain countries. By increasing the cost of imports, tariffs can enhance the competitiveness of domestic producers in the United States, allowing them to charge higher prices to American consumers.

Foreign producers sometimes offset part of their costs by reducing their own prices, but most of the tariffs are passed on to American individuals and companies who purchase foreign goods.

Last week, Trump announced that he would impose 100% tariffs on countries that do not use the US dollar. Trump also stated that he would impose 60% or higher tariffs on all Chinese imports and 10% tariffs on all goods imported into the United States.

Harris and the Biden administration also support imposing tariffs on countries like China, but the tax rates would be much lower and the scope of goods targeted would be much smaller.

Taxation

Tax reform is likely to be a decisive legislative battle in the United States in 2025, and this issue has been repeatedly mentioned in the debates.

After Harris outlined her proposal for tax breaks for children and small businesses, Trump talked about his own tax plan.

Trump said, 'Everyone knows what I want to do...a big tax cut, creating a strong economy like I did before.'

In 2017, Trump signed a tax bill aimed at reducing corporate and individual income taxes. The individual income tax cuts are set to expire at the end of next year, making tax reform one of the top priorities on the White House agenda in January.

Trump hopes to extend the implementation of all tax reduction measures and further reduce taxes in certain cases. Earlier in September, Trump promised to reduce the tax rate for companies producing products in the United States from 21% to 15%, but he did not articulate his plan clearly, leaving some analysts confused about how this plan will be implemented.

Harris wants to extend tax cuts for Americans with annual incomes below $400,000, but she would increase other tax rates. She proposes raising the capital gains tax from 20% to 28%, which is lower than Biden's proposed 39.6%. Like Biden, Harris also hopes to tax unrealized capital gains in certain cases. Some economists believe that this measure would be difficult to implement and could harm industries such as real estate and venture capital.

Immigration

Trump almost always steers the debate back to immigration issues and border crises when answering any question. Polls show that apart from economic issues, immigration is one of the most important topics for voters.

Trump said, "What they are doing is destroying the fabric of our country." Trump insists that the number of illegal immigrants is higher than what official statistics show.

Trump has pledged to launch the "largest expulsion campaign in American history." In addition to continuing to build the border wall, he has proposed using the military to stop illegal immigration and cancelling birthright citizenship for children of illegal immigrants. Trump links illegal immigration to other pain points for voters, such as inflation and high housing prices, but some economists believe that immigration is one of the reasons why the United States can grow faster than other developed countries with lower inflation rates.

Harris supports the bipartisan immigration bill negotiated earlier this year between the Biden administration and Republicans. The bill would block asylum seekers from seeking refuge and provide funding for new border security measures. Trump opposes this bill.

Critics of Harris say that her support for this bill contradicts her stance expressed during the 2019 presidential primaries when she denounced the border wall as a waste of money.

The company completed the 100% equity swap of Shihezi Guoneng Energy Investment Co., Ltd.'s wholly-owned subsidiary Manus County Kenswert Hydropower Co., Ltd. with the full equity of Xinjiang Tianfu Garbage Incineration Power Generation Co., Ltd. ("Garbage Power Generation") in November 2019. According to the equity swap agreement signed by both parties, the profits and losses generated by Garbage Power Generation after September 1, 2019 shall be owned by Guoneng Investment. Therefore, based on the power generation volume of Garbage Power Generation from January to August 2019, the actual renewable energy electricity price supplemental subsidy received was 1.7593 million yuan.

Energy policy is another angle of attack by Trump against Harris, with Trump saying Harris intends to ban hydraulic fracturing. Hydraulic fracturing is a hot topic in swing states like Pennsylvania, where this method of extracting natural gas and oil has become a new economic sector.

In 2019, Harris had expressed support for a ban on hydraulic fracturing, but now she says she does not support this ban.

In this debate, this topic is obviously very sensitive. When the moderator moved on to the next topic, Harris still tried to refute Trump's claims that she supports the ban. Trump reiterated in his conclusion that he believes Harris will ban hydraulic fracturing, emphasizing that his campaign team sees this as a potential weakness for Harris in Pennsylvania.

Both candidates did not disclose important policies that they have not discussed during the campaign process. Tuesday's debate will not have a significant impact like the debate in June that led to Biden dropping out. Investors still need to observe whether Trump's or Harris' performance will change the direction of the campaign.

Rising from behind?How to Invest in 'Harris Trade'?>>

Editor/rice