21/08/2026

BIZ & FINANCE

FRIDAY | AUG 21, 2026

17

BIZ & FINANCE

US national debt exceeds US$40 trillion for first time o Lawmakers call for tighter controls on government spending

In 2017, Hui had a net worth of US$45.3 billion, the highest in Asia, according to Forbes. A Hong Kong court ordered Evergrande liquidated in 2024, and the Hong Kong Stock Exchange delisted it last year, bringing an end to a tumultuous boom-to-bust saga. The liquidation process has moved at a glacial pace, according to its liquidators, with only about US$255 million worth of assets sold as of last August, compared to creditors’ claims totalling US$45 billion. Outside mainland China, the liquidators are battling in court to freeze the offshore assets of Hui and his former spouse in a struggle to claw back US$6 billion in dividends and remuneration paid to the founder and other former executives. In 2024, China’s securities regulator fined Hui US$6.6 million and barred him from the securities market for life, after finding Evergrande’s flagship unit had inflated earnings and committed securities fraud. – Reuters Amazon to widen drone deliveries to 500 US locations SAN FRANCISCO: Amazon said on Wednesday it will expand its drone delivery service to reach hundreds of US cities and towns by year end, up from 11 locations where it currently operates serving multiple surrounding communities. The expansion comes more than a decade after founder Jeff Bezos showed off what he called octocopters, or unmanned drones, in 2013 and predicted that the service would be available within four to five years. Amazon currently delivers by drone from 11 locations including Papillion, Nebraska, and Ruskin, Florida. It is planning to expand to Syracuse, New York, and near Cleveland, among other areas. A single delivery hub can reach multiple towns within a roughly 7.5-mile radius. Amazon said its broad rollout will extend its reach to about 500 locales. Amazon has redesigned its Prime Air drone several times since 2013. Earlier models landed to drop off packages; the current version, known as the MK30, hovers a few feet above ground and releases them. It costs customers US$4.99 (RM20.24) for a drone delivery, but US$2 less for Prime members. The fee is waived on orders of at least US$50. Amazon announced the expansion after Reuters contacted the company on Tuesday about the service. The company will have to seek regulatory approval in each of the communities it plans to enter, often requiring local council hearings and feedback from residents. It has Federal Aviation Administration approval to fly them in most areas of the US, Amazon has said. For example, at a planning and zoning meeting in Nampa, Idaho, in May, Amazon executive Sam Bailey was questioned about noise, safety and drone logistics for about an hour and listened to residents who opposed the service for a variety of reasons, including bird safety. Ultimately, the board voted unanimously to approve the service’s rollout. Bailey said the drones would be audible for about 20 seconds while descending and then flying away at a noise level lower than that of a lawnmower. “It’s a brief experience,“ he said. “Albeit it’s a new innovation so it’s going to seem different but not any different than a delivery truck coming down your street.” He said drone delivery is useful for older adults, parents whose kids “popped a fever” and people who forgot ingredients for their home-cooked meals. Amazon has said that community concerns over privacy are unfounded, as the embedded cameras are used only for navigation. The drones have been involved in a few accidents, including in October when two of the vehicles collided with a crane in suburban Arizona. That incident is still under investigation by the National Transportation Safety Board.

WASHINGTON: The US gross national debt has surged past US$40 trillion (RM162 trillion) for the first time, government data showed Wednesday, outstripping earlier forecasts at a pace fuelled in part by President Donald Trump’s invalidated tariffs. The uptick in borrowing is a blow to Trump, who promised to cut public spending during his 2024 presidential campaign, and sparked a backlash from US representatives across the political field. The new record comes as longer-term US obligations linked to social security and health care have been growing, while interest payments have climbed as well. Total public debt outstanding stood at US$40.05 trillion at the close of business Tuesday, according to data released Wednesday by the Treasury Department. That surpasses an earlier forecast by the Congressional Budget Office that overall borrowing would hit US$39.4 trillion by the end of fiscal year 2026. Rising US debt comes as concerns over inflation and government spending have been driving investor worries, and the cost of borrowing has grown. The war in the Middle East has also piled pressure on Trump, costing the lives of 18 American service members and US$37.5 billion in military spending as the nearly six-month old conflict grinds on with little sign of resolution. Defense spending shows no sign of slowing, with the US House of Representatives narrowly passing an annual defense policy bill in July that would authorise a record US$1.15 trillion in funding for the Pentagon. Savings from Trump’s commission to slash the US federal workforce and agencies have also been hard to quantify, with independent observers insisting figures claimed by the US government – the Department of Government Efficiency (DOGE) website currently posts cuts of US$215 billion – fall short of actual savings. Trump’s mega-wealthy ally Elon Musk, who led the cost-cutting drive, said in 2025 he believed his stint was “a little bit successful”. Republican Senator Rick Scott joined a wave of lawmakers in condemning the debt surge, urging Congress to “get spending under control

Federal spending have grown amid rising interest costs, an ageing population and increased defence expenditure. – UNSPLASH PIX

and BALANCE THE BUDGET”. “Americans deserve better,” he wrote on X. Democratic Senator Mark Kelly, a retired US Navy combat pilot, accused Trump of enriching himself while running up the national debt. “The president said he’d pay off the debt in his first term. Well, we all knew that was a lie,” he posted. “Instead he ran it up to US$40 trillion while he and his family made billions.” Democratic Congressman Ted Lieu accused Trump of having “ushered in the Golden Age of Debt.” Yields on long-term Treasury bonds rose Tuesday to the highest level since 2007, reflecting growing price pressures due to war on Iran and anxiety over US deficit spending. The increase forces the US government to refinance debt at the highest rates since before the 2008 global financial crisis. But the US Treasury Department moved to steady the long-term bond market early Wednesday, sending yields lower. The federal government operates at a deficit and borrows money to help cover its obligations, including its war spending and tax cuts. “It’s been well-known for a while that the US government was on a pretty unsustainable path with deficits,” said Jessica Riedl, a budget and tax fellow at the Brookings Institution. “Over the last few years, the US has moved into roughly US$2 trillion deficits, even during peace and prosperity,” she added. While deficits of 3-4% of GDP used to worry financial markets, she noted that levels are

closer to 6-7% of GDP now. “That has made markets more nervous,” she said. As inflation pushed interest rates higher, interest costs on the debt have risen as well, and costs linked to an ageing population are pushing up deficits. Analysts note that there is no debt-to-GDP level that automatically triggers a crisis. Although the gross debt marks a symbolic threshold, many economists consider debt held by the public to be the most economically meaningful measure. “But psychologically, these are the landmarks that warn financial markets that they need to take another look at rising debt,” Riedl said. Federal borrowing surged during the Great Recession of 2007-2009 and increased following the government’s response to the downturn triggered by Covid-19, said Caleb Quakenbush, director of fiscal policy at the Bipartisan Policy Centre. But he told AFP that the trajectory of US budget spending has not been addressed by Congress or US administrations in a “meaningful or durable way.” He warned of uncertainty surrounding the “unprecedented levels of borrowing that we’re seeing now.” Bond markets could face steep challenges in a crisis scenario, he noted. But even outside that situation, the US could see higher borrowing costs for consumers and businesses, squeezing the economy.

China Evergrande founder sentenced to life in prison SHENZHEN: The founder of China Evergrande Group, the world’s most-indebted property developer, was sentenced to life in prison by a Chinese court yesterday, five years after the firm’s collapse shook the nation’s economy and financial markets. Evergrande’s domestic and foreign creditors. Evergrande’s liquidators declined to comment on the sentence. Reuters could not reach legal representatives for Hui, who had not been seen in public since Chinese authorities detained him in 2023, following Evergrande’s default. meant to protect him. If he comes out, his life is in jeopardy” and “What about our money?” In addition to Hui’s sentence, the court said it had fined Evergrande 8.82 billion yuan (RM5.3 billion) and its main subsidiary Hengda 7 billion yuan, and sentenced five other senior executives to fines and prison terms ranging from six to 18 years.

Hui Ka Yan, once Asia’s richest man, pleaded guilty in April to eight charges, including misuse of funds, fundraising fraud, illegally taking public deposits, illegally extending loans, fraudulently issuing securities and bribery. Evergrande, once China’s premier developer, has defaulted on most of its US$300 billion (RM1.2 trillion) in liabilities, its troubles symbolising a crisis in the property sector that has long dragged on the world’s second-biggest economy. The sentence in the southern city of Shenzhen, which included confiscating all of Hui’s personal property, ends his rags-to-riches story but is unlikely to bring much solace to

In pictures released by the court, a grey haired Hui, 67, stood flanked by two officers, wearing a long-sleeved, navy blue collared shirt, as the court read out his sentence. “The criminal acts of Evergrande Group, Hengda Real Estate, and Hui Ka Yan – involved particularly huge amounts and egregious circumstances, caused particularly significant economic losses and caused particularly serious social harm, and should be severely punished according to law,“ the court said in a statement. Comments by Evergrande homeowners in a social media group included: “All ordinary citizens have paid the cost,“ “Imprisonment is

Altogether, 56 people linked to Evergrande, other than Hui, received sentences yesterday, state media CCTV reported. The company’s failure to repay billions of dollars in wealth-management products triggered protests that threatened social stability after ordinary investors, many of them on lower incomes, saw their holdings wiped out. A former steel technician raised by his grandmother in a rural village in central Henan province, Hui founded Evergrande in 1996 and turned it into China’s biggest property developer by contracted sales, aggressively taking on debt.