The New York Times - 12.09.2019

THE NEW YORK TIMES BUSINESSTHURSDAY, SEPTEMBER 12, 2019 0 N B3

MARKETS | GAMES | TRADE

billion worth of American goods in
retaliation.
Tensions between the two sides
have eased slightly in recent
weeks, with Chinese officials
agreeing to travel to the United
States in October for the next
round of talks. On Wednesday,
China published a short list of
American products that would be
exempt from its new tariffs, and
said it would announce more ex-
emptions in coming weeks. The
exemptions included cancer
drugs and certain chemicals that
China does not produce domesti-
cally, but it did not include Ameri-
can exports like pork and soy-
beans, which have been targeted
by Beijing as punishment for Mr.
Trump’s tariffs.
In remarks in the Oval Office on
Wednesday, Mr. Trump greeted
the exemptions as a sign that
China would soon compromise,
saying that the trade war “was
only going to get worse” and “they
want to make a deal.”
“They took tariffs off, certain
types,” he said. “I think it was a
gesture. It was a big move. People
were shocked. I wasn’t shocked.”
On other fronts, the Trump ad-
ministration continues to move
ahead with more stringent treat-
ment of China. The administration
has drafted an executive order
that would increase inspections of
mailed packages, in an effort to
crack down on shipments of coun-
terfeit goods and deadly drugs
from foreign nations including
China.
The order would empower the
United States Postal Service to in-
crease inspections of small pack-

ages that arrive in the country by

air, according to several people fa-

miliar with the draft, who declined

to be named because they were

not authorized to speak publicly.

That would help to close a loop-

hole that has allowed dangerous

drugs like the opioid fentanyl and

other contraband to pass into the

United States unchecked.

The measure is not aimed spe-

cifically at China. But Mr. Trump

has often accused China of failing

to stop shipments of fentanyl from

flowing into the United States. Mr.

Trump said late last month that he

was directing the Postal Service

and private American companies

like FedEx, Amazon and UPS to

search packages from China for

fentanyl and refuse delivery. On

Sept. 1, Mr. Trump placed more

tariffs on Chinese imports as pun-

ishment for Beijing’s failure to

stop fentanyl shipments and its

refusal to buy more agricultural

goods from the United States.

“Fentanyl kills 100,000 Ameri-

cans a year. President Xi said this

would stop — it didn’t,” Mr. Trump

said in a tweet last month, refer-

ring to Xi Jinping, China’s presi-

dent.

The executive order would ap-

ply solely to the Postal Service,

not private companies like FedEx

or UPS. The order is drafted to ap-

ply to all countries, though the ef-

fects would fall most heavily on

China, a major source of both

counterfeit products and fentanyl

as well as small packages shipped

into the United States.

Regarding the trade talks,

China and the United States ap-

pear to still have substantive dif-

ferences. Chinese officials have

emphasized recent changes they

have made to laws governing for-

eign investment and intellectual

property, rather than discussing

the more significant changes the

Trump administration has de-

manded.

Mr. Trump has ordered Ameri-

can companies out of China and

expressed satisfaction at the dam-

age his tariffs are wreaking on its

economy.

Business leaders say they are

already struggling under the tar-

iffs, and predict lower profits and

wage cuts if further levies — more

are set for December — go into

place. A poll by the American

Chamber of Commerce in Shang-

hai published Wednesday said the

trade war was weighing on its

members’ projections for revenue

growth, optimism about the future

and future investment plans.

Moody’s Analytics estimates that

the trade war has already cost

300,000 American jobs, a toll that

could increase to nearly 450,000

by the end of this year and nearly

900,000 jobs by the end of next

year, assuming Mr. Trump’s

planned tariff increases go into ef-

fect.

In recent months, some of the

focus has shifted away from the

terms of the trade deal itself to

whether there can be an interim

agreement that would involve

Chinese purchases of American

agricultural products and smooth

over relations between the coun-

tries.

Chinese officials and their con-

tacts have floated the idea of re-

starting agricultural purchases, in

return for the United States post-

poning further tariff increases

and offering some relief for

Huawei, the Chinese telecom gi-

ant that has been blacklisted from

buying American products, sev-

eral people familiar with the mat-

ter said.

Mr. Trump has been deeply

frustrated by China’s refusal to

purchase American agricultural

products in recent months. The

move would help the president by

buoying a constituency that is im-

portant for him politically and also

increasingly opposed to the trade

war.

But such an interim agreement

has also proved elusive. The presi-

dent and his advisers are increas-

ingly aware of the national securi-

ty risk posed by Huawei, and cog-

nizant that they would face criti-

cism from Democrats and

Republicans alike if they relent.

Companies have submitted more

than 120 applications to the Com-

merce Department to supply cer-

tain nonsensitive products to

Huawei, but no applications have

yet been approved.

American officials may con-

sider removing some tariffs in re-

turn for economic concessions

from China, but they are unlikely

to do so for agricultural pur-

chases, Mr. Trump’s allies say.

The Chinese, meanwhile, know

that agricultural purchases would

reduce the political pressure on

Mr. Trump and potentially in-

crease his chances of re-election,

and they are not likely to trade

away this source of leverage easi-

ly, people familiar with their think-

ing said.

At a Senate hearing Tuesday,

Treasury Secretary Steven

Mnuchin said the two countries

were discussing soybean pur-

chases, but pushed back on sug-

gestions that the United States

would be easily bought off.

“I’ve been accused at times of

just wanting to sell soybeans.

That’s not what we’re trying to

do,” Mr. Mnuchin told lawmakers

in the hearing. “We want to make

sure that China treats our farmers

fairly and doesn’t retaliate against

the farmers in an unfair way.”

“As part of any discussion, we

are talking about ag purchases,”

he told reporters after the hear-

ing. “That’s very important to us,

defending our farmers.”

Alan Rappeport contributed report-

ing from Washington, and Alexandra

Stevenson from Beijing.

In a ‘Gesture of Good Will,’ Trump Delays New China Tariffs

Containers being loaded onto a cargo ship in Nantong, China, last month.

CHINATOPIX, VIA ASSOCIATED PRESS

Negotiators could

meet before the new

measures take effect.

FROM FIRST BUSINESS PAGE

LONDON — Europe’s modest ranks
of huge public technology compa-
nies gained an unusual new en-
trant on Wednesday: a unit of the
South African giant Naspers
whose main asset is a major stake
in Tencent, the Chinese e-com-
merce, social media and gaming
behemoth.
Shares in that unit, Prosus,
made their debut on Wednesday
on the Euronext exchange in Am-
sterdam, where they soared more
than 25 percent. Prosus ended the
session with a market value of
around 120.5 billion pounds, or
nearly $133 billion.
That made Prosus, which
earned $4.2 billion in profits in the
fiscal year that ended March 31,
Europe’s biggest consumer inter-
net company, with holdings that
include a global collection of on-
line marketplaces, payment sys-
tems and food-delivery start-ups.
But the most valuable piece in
Prosus’ portfolio is its 31 percent
slice of Tencent. Naspers paid $32
million for a 46.5 percent stake in
2001, in the Chinese company’s
early stages. On Wednesday, the
Tencent stake, since diluted, was
valued at around $131 billion.
The question now is whether
Naspers, through its new publicly
traded vehicle, can follow that
blockbuster bet with other invest-
ments that deliver smashing re-
turns.
In spinning off the unit, Naspers
hoped to establish Prosus — Latin
for “forward” — as a tech giant in
its own right, and to draw in a
more diverse crowd of sharehold-
ers than it currently has. With a
debut that left Prosus trailing only
SAP in market value among tech
companies listed in Europe,
Naspers leaders feel their goal is

within reach.

“If you’re a portfolio manager

with a European mandate, and

you’re looking for something at

scale, there’s not really anything

else,” Bob van Dijk, group chief

executive of Naspers and Prosus,

said in an interview.

Another reason for the move

was that Naspers, which retains a

73 percent stake in Prosus, had es-

sentially outgrown its home on

the Johannesburg exchange. It ac-

counts for about 25 percent of the

market’s entire value, an outsize

presence that has often forced in-

vestors to sell Naspers shares to

avoid having too much exposure

to one stock.

Naspers began in 1915 as a

newspaper publisher affiliated

with South Africa’s then-dominant

white National Party. The compa-

ny’s name is a shortening of “De

Nasionale Pers,” Afrikaans for

“The National Press.” Naspers

apologized in 2015 for “complicity

in a morally indefensible moral re-

gime,” namely apartheid.

An investment on pay-TV in

South Africa in the 1980s gave the

company the money it needed to

diversify and to start investing

abroad.

One of the overseas invest-

ments was the stake in Tencent,

which was struck under Mr. van

Dijk’s predecessor, Koos Bekker.

Among the most lucrative invest-

ments of all time, it echoes the

Japanese conglomerate Soft-

Bank’s success with its early in-

vestment in Alibaba, another Chi-

nese internet giant. In some ways,

the Amsterdam listing is meant to

position Naspers as a European

version of SoftBank, which has be-

come one of the world’s biggest in-

vestors in technology companies.

Buoyed by its Tencent experi-

ence, Naspers began to invest

elsewhere around the world, par-

ticularly in emerging markets

where the cost of buying was low

and the chance of another break-

out gain was high.

In 2007, it invested $166 million

for about a third of Mail.ru, which

owns what is now Russia’s most

popular social network. Naspers’

stake is now worth about $1.4 bil-

lion.

In 2012, it bought an 11 percent

stake in Flipkart, the fast-growing

e-commerce company, for $616

million. When Walmart bought

control of Flipkart last year,

Naspers sold its stake to the

American retailer for $2.2 billion.

Since 2017, Naspers has partici-

pated in investment rounds of at

least $100 million in eight start-

ups, according to data from the re-

search firm CB Insights. The big-

gest was its $1 billion investment

in Swiggy, an Indian food-delivery

start-up.

The company’s holdings are di-

vided into three main areas: clas-

sified ad companies, including

OLX and Letgo; payment sys-

tems and technology; and food-

delivery firms like iFood of Brazil

and Delivery Hero of Germany in

addition to Swiggy. (Prosus also

has a venture capital team, which

has taken smaller stakes in start-

ups focused on areas like educa-

tion technology.)

Naspers executives cite the

global nature of the company’s

business as one of its main

strengths. The PayU payments

business, for example, operates in

18 markets, including India, Rus-

sia, South America and Turkey. Its

classified ad unit is one of the big-

gest in markets like Brazil, Indo-

nesia and Poland. It also competes

with Craigslist in the United

States.

Michal Borkowski, the founder

and chief executive of the online

education company Brainly,

which is based in Krakow, Poland,

said in an interview that it was

Naspers’ long-term view that per-

suaded him to take an initial $15

million investment from the com-

pany’s venture arm.

Naspers has now led two

rounds of investment in Brainly,

helping the company grow to

more than 150 million monthly us-

ers in over 35 countries, Mr.

Borkowski said.

“They understand consumer

businesses really well,” he said.

Naspers executives acknowl-

edge that Prosus is unlikely to

ever duplicate the astronomical

return generated by the Tencent

stake. They are also aware that

being so reliant on one investment

could leave Prosus vulnerable to

weaknesses in the Chinese com-

pany’s performance, as happened

last year when Tencent was af-

fected by a government crack-

down on its games.

But Mr. van Dijk insisted that

Naspers had shown it was capable

of creating durable, fast-growing

operations in classifieds and pay-

ments in addition to having made

a smart move, enhanced by a bit of

luck, with its early bet on what be-

came a superstar company.

“We’ve proved with two of our

focuses that we can build prof-

itable businesses at scale,” he

said.

Prosus made its debut on the Euronext exchange in Amsterdam on Wednesday. The company ended the session with a market value of nearly $133 billion.

PIROSCHKA VAN DE WOUW/REUTERS

A New Euro Tech Titan, Just Like That

By MICHAEL J. de la MERCED

Spun off from

Naspers with a large

stake in Tencent.

There’s a new version of Monop-

oly coming, one that celebrates

women by paying female players

more than men.

The game, Ms. Monopoly, is the

first to feature a new character —

an advocate for investing in fe-

male entrepreneurs — on its

cover, according to a news release

from Hasbro, the entertainment

giant that owns the game.

Ms. Monopoly celebrates fe-

male inventors, but one was con-

spicuously missing from the an-

nouncement: Elizabeth Magie, a

progressive and feminist whose

role in developing Monopoly itself

has long been diminished.

“I think if Hasbro was serious

about women’s empowerment,

they could start by admitting that

a woman invented the game,” said

Mary Pilon, a former reporter for

The Wall Street Journal and The

New York Times, and the author

of “The Monopolists,” a 2015 his-

tory of the board game.

Monopoly’s invention is often

credited to Charles Darrow, who

sold the game to Parker Brothers

in 1935, but Ms. Pilon and others

argue that he and Hasbro owe it all

to Magie.

In 1904, Magie, also known as

Lizzie, received a patent for an in-

vention, The Landlord’s Game.

Like modern Monopoly, players in

the game roll dice to advance

along a path composed of 40

spaces around a square board, ac-

cording to the patent. They pur-

chase property along the way and

there are utilities, railroads and a

bank. A corner square instructs

players to “go to jail,” and a trip

around the board earns each $100.

The goal was to amass wealth.

But the game’s purpose was politi-

cal. Magie’s views were shaped by

Henry George, a progressive who

argued for a single land tax to

keep the wealthy few from mo-

nopolizing resources, according to

the book. The game was designed

to make a case for reform.

“It is a practical demonstration

of the present system of land-

grabbing with all its usual out-

comes and consequences,” Magie

wrote in The Single Tax Review, a

journal dedicated to the idea.

Magie was something of a femi-

nist and progressive pioneer, ac-

cording to the book. By the early

1900s, she owned a home of her

own in Washington, D.C., worked

as a stenographer and acted and

wrote in her spare time. In addi-

tion to inventing several games,

Magie was also an amateur engi-

neer and held a patent on a tool to

more easily pass paper through

typewriter rollers.

In 1906, she made headlines

around the world when she put

herself up for sale as a “young

woman American slave” in an ef-

fort to raise awareness about gen-

der inequality. The stunt landed

Magie a meeting with the writer

Upton Sinclair and a temporary

newspaper job. And as Magie

gained fame, so, too, did her game.

“It kind of goes viral in the way

things did in 1904, which is to say

more slowly and kind of all over,

but it becomes a favorite game

among left-wing intellectuals,”

Ms. Pilon said.

Ms. Pilon traced the game’s

slow path to a Quaker community

in Atlantic City, where homemade

copies were created with the prop-

erty names replaced by local land-

marks, such as Pennsylvania Ave-

nue, Virginia Avenue, Ventnor Av-

enue and Boardwalk. Eventually,

Darrow was introduced to the

game by a man who attended a

Quaker school with his wife.

Darrow made changes and

tweaks to Monopoly. He began to

market it locally and pitched it to

Milton Bradley and Parker Broth-

ers. Both rejected it, but as the

game grew in popularity, Parker

Brothers had a change of heart

and bought it in 1935.

The company then set out to

neutralize any threats to its new

game. It secured a patent on Mo-

nopoly, and bought up similar

board games or sued their mak-

ers. George Parker, the company’s

founder, persuaded Magie to sell

the patent for The Landlord’s

Game in exchange for $500 and a

promise to publish it and two

other games of her design.

None of the games took off, and

when Magie died in 1948, her obit-

uary made no mention of her role

in the development of Monopoly.

In a statement and in the box of

Ms. Monopoly, Hasbro acknowl-

edges Magie, but stops short of

giving her credit for the game.

“The Monopoly game as we

know it was invented by Charles

Darrow, who sold his idea to

Parker Brothers in 1935,” the com-

pany said in the statement. “How-

ever, there have been a number of

popular property trading games

throughout history. In fact, Eliza-

beth Magie — a writer, inventor,

and feminist — was one of the pio-

neers of land-grabbing games.”

Do Not Pass Go, Hasbro.

You’re Forgetting Someone.

By NIRAJ CHOKSHI

Ms. Monopoly celebrates women. But what about the one behind the original?

HASBRO