WSJ What’s News - Zelensky Floats Peace Deal in Exchange for NATO Membership

Episode Date: December 3, 2024

A.M. Edition for Dec. 3. Ukraine’s president shifts his rhetoric about what it would take to end the war with Russia, but the WSJ’s Laurence Norman says NATO is unlikely to offer Kyiv what it wants. Plus, a judge rejects Elon Musk’s multi-billion dollar Tesla pay package for a second time. And the WSJ’s Chun Han Wong explains how China’s Politburo is prescribing fewer meetings and less busywork to save the economy. Luke Vargas hosts. Sign up for the WSJ’s free What’s News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

Amazon Q Business is the generative AI assistant from AWS because business can be slow, like wading through mud. But Amazon Q helps streamline work. So tasks like summarizing monthly results can be done in no time. Learn what Amazon Q Business can do for you at AWS.com slash learn more. A judge rejects Elon Musk's multi-billion dollar Tesla pay package for a second time. Plus Ukraine's president signals he's open to negotiating with Russia in exchange for NATO membership. It's very tricky for Zelensky.

He is under pressure from Washington or Wilby to move to peace. But if he's seen as selling his country out in that piece, his political future is in trouble and the country is in trouble. And China's vast bureaucracy tries to free workers from red tape. It's Tuesday, December 3rd. I'm Luke Vargas for The Wall Street Journal and here is the AM edition of What's News, the top headlines and business stories moving your world today. A Delaware judge has again rejected Elon Musk's Tesla pay package, which is valued at more than $100 billion based on yesterday's close. Tesla argued that a shareholder vote approving the

package for a second time had addressed many of the court's criticisms that Musk's compensation deal had been flawed, partly because of insufficient disclosures to investors. However, the judge said there were no grounds to reverse her earlier decision to strike down the package. The ruling marks another setback for Tesla's directors, who have said that the record stock option deal to compensate Musk for a decade of work is necessary to ensure that he stays focused on the carmaker amid tough times for the auto sector. Tesla vowed to appeal the decision, while Musk said shareholders, not judges, should

control company votes. Tesla's shares are slipping in off-hours trading. Ukraine's president says he's open to accepting a ceasefire with Russia with conditions. In interviews and public statements in recent days, Volodymyr Zelensky has begun signaling an openness to stopping the fight to regain the roughly 20 percent of Ukrainian territory that's under Moscow's control in exchange for NATO membership. He had previously insisted that Ukraine would keep fighting until all land had been reclaimed. The Journal's Lawrence Norman was in Kiev over the weekend, and I asked

him how to interpret Zelensky's shifting stance. Well, what it signifies quite clearly is that Zelensky is listening to the language and the rhetoric that has come from President-elect Trump and his team, which is that he wants to stop the war. So we're seeing Zelensky pivot towards that message, but he is doing it tentatively and he is doing it conditionally. Tentatively because we don't actually know what Donald Trump's plan to end the war is, and conditionally because Zelensky's argument is that if Ukraine is going to settle for peace, then it needs to do so with guarantees that will deter Putin from invading his country again. Lawrence, a guarantee there that has been pretty elusive for Ukraine thus far. Is there

any reason to suggest that would change now? No, and this is the biggest problem that Ukraine has. In fact, it has two problems. One is that NATO is not realistically on the cards. The second is that no one knows if the Kremlin will stop fighting. They're gaining ground. They've shown high propensity for losses of their own people in this war. But it would be crazy for Zelensky to take off the table, the thing that he most wants before talks have begun. Could that shift? Could that end up being an ask for some kind of security guarantees, some kind of provision

of strategically important weapons in the future for Ukraine to deter Russia? It could. But his starting point is, right, I'm open to peace. We are exclusively reporting that BlackRock has agreed to buy private credit manager HPS investment partners in a deal valued at around $12 billion. Journal Europe Finance editor Alex Franco says BlackRock's all-stock deal for HPS is part of the broader push into private markets. What it does is what's called private credit, which is this pretty hot area on Wall Street where these big pools of capital lend to companies directly instead of through

the bond market or through a bank. And this is an area that's grown massively. The center of gravity, so to speak, in the finance world has shifted since the 2008 financial crisis from where the banks controlled everything. And now you have more of these private equity, private debt companies that are taking up a much bigger role in lending to all sorts of companies, big and small, risky, not risky. And BlackRock wants to get into this business because it's customers who normally invest in things like bonds are asking for these kind of more bespoke, sometimes higher yielding investments. And on deck today in markets, the latest Jolt's U.S. job openings reading for October is due

at 10 a.m. Eastern. Fed Governor Adriana Kugler is set to give an update on the labor market and the monetary policy outlook a little after 1230, and Salesforce will report earnings after the closing bell. The pioneer of software as a service and several of its peers are facing slowing growth rates and concerns that generative AI could begin to supplant pre-written software. Coming up, shorter reports and fewer meetings that could have been an email. Those are some of the targets of China's government as it embarks on a crusade against inefficiency to save its economy. We've got that story after the break.

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efforts to revitalize the world's second-largest economy is Journal reporter Chunhan Wang in Singapore. Chunhan, we've discussed on the program many of the measures that China is taking to stimulate economic growth, but I'm not sure we've spoken before about efforts to cut red tape within the government. How are those two things connected? Chun-han So it's not a secret that the Chinese economy has faced some significant headwinds over the past couple of years. And for a while, a lot of the focus has been on policy measures that can be rolled out. But there was a Politburo

meeting in July where they also tagged on this political edict, which is to fight red tape, to sort of a renewal of this longstanding campaign to go after excessive bureaucracy, excessive political rituals, which according to the Politburo was bogging down a lot of local officials. They've been talking about the need to fight formalism. Formalism is sort of this epithet that they use to describe this sort of box ticking, self-protecting behavior that officials follow because, you know, Chinese authoritarian system is a top-down system where people basically

try to satisfy their bosses. For example, you know, if the boss is wanting to clock in at work using an app, you do that. The bosses send you instructions on your WeChat messaging app. You respond immediately. But a lot of it's done for the sake of showing the boss you're doing something without actually thinking the next step and thinking whether the things you're doing actually benefit people on the ground. Could you just detail for us some of the specific bureaucratic reforms that are being pursued? And if you could kind of put this at ground level for us in a way that might seem familiar

to many workers as they hear it. So we saw in May, there was a spike up in formalism offenses being punished. And as the party defines them, they actually issued a set of regulations in August, which sort of tells people how to reduce busy work. Things like hold fewer meetings, make sure the meetings are only attended by people directly involved in the matter you're discussing. Because there's a longstanding practice where you fill the room with warm bodies. The word count set for certain documents, you should not under normal circumstances exceed how many thousand characters in writing these reports. Stop using or reduce the amount of usage of digital apps to track your workers' performance.

Did you speak to anyone during your reporting who thinks these are useful, transformative steps? And do we have a sense of how successful this campaign is likely to be? It's not the first time the Chinese government has tried to deal with this. So I've spoken to people in the past when previous campaigns have been rolled out. They're sort of resigned to the fact that the Chinese top-down authoritarian system, there will always be a level of this focus on performance that you have to show compliance to your superiors. Every time they try to reduce this vet tape, reduce excess bureaucracy, they sort of think of it as, oh, here we go again.

The entire campaign itself is almost thought of as performative. We need to show concern for burdens on grassroots officials and here's the center trying to demonstrate their concern by launching a fresh run of crackdowns on red tape. But in effect, you know, it comes and goes, this campaign would fade away again and then all those bad time-wasting rituals will come back. So there's not a lot of optimism that the latest campaign will actually change behavior meaningfully. And yet those inefficiencies are nothing to scoff at. I mean, this is a huge bureaucracy, right? Yes. So yeah, it's a very big bureaucracy. The Communist Party is about a hundred million

members currently. And yet it's very hard for them to make sure everyone's on board. So a lot of these campaigns are accompanied by a disciplinary crackdown to try to punish people who are caught committing these quote unquote formalism offenses. But at the same time, the top down system and the use of fear actually exacerbates this problem because you're now even more afraid of not complying with the center's directive. So you do even more to protect yourself. You do even more of these performative rituals. It's a kind of perverse incentive. The more that they crack down on this, they may actually be incentivizing more of this busy work that's designed to

portray compliance rather than actually delivering outcomes. I've been speaking to Wall Street Journal reporter Chun Han Wong in Singapore. Chun Han, thank you so much for the update. Thank you. And that's it for What's News for Tuesday morning. Today's show was produced by Daniel Bach with supervising producer Christina Rocca, and I'm Luke Vargas for The Wall Street Journal. We will be back tonight with a new show, and until then, thanks for listening.