How the U.S., the EU, and Japan Are Trying to Rein in China’s State Capitalism
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On November 12, the United States, European Union, and Japan will submit a package of proposals to the World Trade Organization’s Council on Trade in Goods that would significantly help curb China’s practices of heavily subsidizing its state-owned enterprises. They are also discussing ways to prevent China from forcing Western companies to transfer technology to Chinese firms. Hopefully, the Trump administration’s threat to escalate the tariffs war with China will persuade China to accept such reforms.

Subsidies. China announced it planned to provide $350 billion in subsidies to 10 key industries of the future such as robotics, electric vehicles and EV batteries, advance computers, and mobile devices under its ‘Made in China 2025’ policy. (Unlike economy-wide supports such as an R&D tax credit, WTO rules prohibit subsidies to specific companies because of the competitive advantage they confer.)  But under WTO rules, no country can obtain any remedy such as duties to offset the subsidies without hard evidence documenting these subsidies.

Although WTO members are obligated to give “notice immediately” when each subsidy program is created, the reality is many don’t. China has disclosed only a small fraction of its subsidies, usually several years after they were created. Moreover, China’s subsidies are shielded by unpublished government budgets, internal instructions, oral directives, and a law that allows commercial information to be treated as “state secrets.”

The U.S., EU, and Japan have already agreed to propose two changes aimed at pressuring abusers to disclose the subsidies:

Revise the rules to stipulate that a failure to give to give timely notice of subsidies would result in a presumption that the subsidy causes injury, which would make it far easier for the affected country to seek damages in a much shorter time frame Introduce a system of escalating administrative sanctions that would reduce the offending member’s influence in the WTO and its access to information

The three have also agreed to seek an expansion of the WTO’s existing list of prohibited subsidies to state-owned enterprises (SOEs) to include the unlimited guarantees of financial obligations, subsidies to insolvent or failing companies with no credible restructuring plan, and preferential pricing for inputs such as raw materials and components.

Although the U.S., EU, and Japan are still trying to agree on the details, they also intend to seek “targeted remedies against subsidies to maintain or expand capacity beyond commercial consideration.” These subsidies are a major problem. For example, China is the largest producer and exporter of steel and the largest source of excess steelmaking capacity. Its excess capacity alone exceeds the total U.S. steelmaking capacity and, in an average month, China’s steel output equals total annual U.S. production.

SOEs themselves frequently provide subsidies to Chinese companies in the same manner as the government does. The U.S., EU, and Japan want to make such practices subject to the same rules as government subsidies to SOEs and to private firms but are still trying to reach a consensus on the best ways to do that.

The EU is proposing a clarification of the WTO rules to determine what constitutes a “public body,” which would help establish whether an SOE is performing a government function or is furthering a government policy, and the adoption of criteria for establishing whether a member country exercises meaningful control over an SOE.

The U.S. is suggesting rules that would force SOEs to provide detailed disclosures that could facilitate challenges by injured members. These include a listing of all SOEs on a public website and disclosure of the percentage of government shareholding in the SOE, titles of government officials who are officers or on the board of the SOE, annual SOE revenues, and detailed facts on any policy or program that provides subsidies to the SOE.

Either option would significantly increase opportunities to restrain SOE abuses.

Forced technology transfers and theft. The U.S., EU, and Japan are also tackling steps inside and outside the WTO to combat forced technology transfers both in China’s domestic market and, through mergers and acquisitions, abroad.

For the Chinese market, the group favors limits to requirements that foreign companies form joint ventures with a Chinese partner, foreign equity caps, administrative reviews based on unclear rules with wide discretion, and pressure on foreign companies to license their technologies to Chinese companies on bargain terms.

Because WTO rules on cross-border investments are limited, the U.S. is sharing information with the EU and Japan on U.S. laws for screening foreign investments. For example, the Foreign Investment Risk Review Modernization Act (FIRRMA), which became law last August, mandates that the U.S. government conduct far-reaching inquiries into the impact of such investments on national security. Twelve of the European Union’s 28 member states currently lack any system for reviewing foreign investments.

The EU has recently proposed a new screening mechanism that would clarify the scope of each member’s review of incoming investment. It would help spot SOE investments that are problematic.

These measures would be useful steps.

Now let’s turn to the forced transfers or theft of digital technologies. In May, the U.S., EU and Japanese trade ministers issued a strong statement condemning “government actions that support…theft from computer networks of foreign companies of commercial information and trade secrets” to use them  for commercial gain. The three also agreed to seek a rule that would stop WTO members from requiring companies to disclose their source codes, highly competitive core technology that is produced at great expense. While the ministers have not yet agreed on tools to achieve these goals, their accord to pursue them is promising.

Expansion. The U.S., EU, and Japan agree that the expansion of their group is essential. The most likely candidates to join soon are Australia, New Zealand, Canada, and Mexico. Among the many reasons I think the Trump administration should ease up on its attacks on the WTO is the fact that they are making it more difficult to recruit developing-country members, even though many share U.S. concerns about China. Indeed, China has missed no opportunity to use the U.S. attacks to portray itself as a defender of the WTO trade system.

The U.S., EU, and Japan should also lobby China to join their reform process. That might seem like a wild idea, but given that any single WTO member can block proposed rule changes, it would be far better to involve China early in these efforts.

Why would China ever agree to such reforms? One reason is it cannot afford to be isolated from the major industrial economies: It depends on access to their technology to achieve its Made in China goals. Another is increased isolation could kill the trade goose that enables China’s leaders to produce the prosperity on which their legitimacy depends.

China’s subsidies and tech-transfer practices pose a major threat to the global trade order. They must be reined in. If ultimately adopted by the WTO, the proposals that the U.S., EU, and Japan have agreed to or are hammering out would represent a big step toward achieving that end. As one savvy senior EU trade official recently told me, the U.S. should exploit the leverage from the tariffs war to bring China to the table.

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An all-star team is making headway with a new initiative that could alter the future of the organization. Spirits are optimistic and the team is successfully maneuvering through new, yet very promising, territory. Then, the results begin taking longer than anticipated to prove, and after too much time spent outside of their comfort zones, the team of high-achieving employees can’t seem to execute within the uncertain environment.

The team’s outlook shifts and it becomes clear that the group will not be able to weather the storm of uncertainty needed to realize this new organizational opportunity.

How could such a capable team fail?

At the heart of many organizations is a deeper problem that blocks transformation: product/function organizational structure. This structure works in well-understood environments, where maximizing delivery of a product or service is the goal, but transformative projects require the organization to return to a more malleable state. This challenge requires teams that are formed through a re-matching of resources and employee capabilities.

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Transformation-capable teams are made up of people who are not only high performers, but who hold a unique balance of skills and mindsets that allow them to sustain focus, agility, and optimism in the face of uncertainty for prolonged periods of time. Ultimately, not all top-performing employees are equipped for this.

In our book, Leading Transformation: How to Take Charge of Your Company’s Future, we highlight certain capabilities to search for and cultivate while building a transformative team. Specifically, there are three unique characteristics that will play critical roles as a team takes on a breakthrough initiative.

Negative capability: being comfortable with uncertainty

The term “negative capability” was coined by the poet John Keats while describing writers like Shakespeare who were able to work within uncertainty and doubt. Keats was describing the ability to accept not having an immediate answer and to remain willing to explore how something may evolve before there is a clear outcome.

In the modern context, negative capability can be thought of as the ability to be comfortable with uncertainty, even to entertain it, rather than to become so anxious by its presence that you have to prematurely race to a more certain, yet suboptimal, conclusion. Whereas many people cannot stand the fuzziness of uncertainty, those who demonstrate negative capabilities can facilitate the exploration of new terrain and the discovery of an adjacent possible opportunity.

Individuals with negative capability remain curious and focused even when your project is far from the end goal. Chances are, they will even find this point of the project enthralling, rather than overwhelming, which is exactly what you want. They will also be able to suspend judgement about an end result and stay open to many possible outcomes, rather than become fixed early on to one version of success.

Chaos pilots: leading and executing in unfamiliar territory  

In 1991, Danish politician and social worker Uffe Elbæk took out a $100,000 personal loan to open an unusual business school called Kaospilot. The vision of the business school was inspired by a previous project of Elbæk’s, where he observed a new skill set in students for navigating uncertain problems and saw the opportunity to teach these skills to business leaders who needed to do the same. Chaos pilot is a perfect label for a specific persona needed on a transformative team.

Chaos pilots are people who can creatively lead a project through uncertainty. They have negative capability, but they also have other critical skills, such as the ability to create structure within chaos and take action. Leaders who are chaos pilots are able to drive a team forward on a project even as the environment around them fluctuates.

Although it may sound glamorous to be such a person, being a chaos pilot is hard — they are the colleagues working on ambiguous projects and frequently getting beat up in the process. People who aren’t capable of being chaos pilots quickly flounder when the environment around the project gets shaky.

Chaos pilots often care more about creating meaningful change than about climbing a corporate ladder or getting another star on their charts. Finding chaos pilots to join you can be challenging and requires observation and experimentation, though there are a few fertile places to look for good candidates.

For example, look for people who are getting mixed performance reviews, but who are still highly prized by the organization. Often, these people are getting mixed reviews because they make those around them uncomfortable — because the potential candidates often challenge the status quo — but they continue to succeed, because they perform so well.

Divergent thinking, convergent action, and influential communication

Finally, there are three neuropsychological traits to seek while building a transformative team. These three traits — divergent thinking, convergent action, and influential communication — all play a crucial role to succeeding in innovation and transformation. While many individuals hold one or two of these skills, finding a person with all three is more challenging, yet optimal.

The first of the three, divergent thinking, is the ability to uniquely connect new information, ideas, and concepts that are usually held far apart. People with this skill can match dissimilar concepts in novel and meaningful ways and uncover new opportunities that others may overlooked.

Convergent action, the second trait, is the ability to execute on these new ideas in order to create something tangible. Though many people can come up with great ideas, it is often those with convergent action who will move that new concept from idea to product. Last, having the ability to communicate ideas in a coherent, compelling, and influential way is paramount. This trait will inspire other leaders and decision-makers to believe, support, and act on a novel idea or opportunity.

Similar to how many transformative business opportunities are found in unlikely places, the same is true about where you may find the best-suited team members to drive forward a promising new initiative.

Each organizational project represents a moment of potential transformation, and each successful project helps an organization self-correct away from becoming a calloused machine executing on routine, and instead become what they need to survive: a malleable organization capable of capturing new opportunities.

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In health care today, the conversation around transparency centers on the consumer. The consumer is empowered to ask for treatment options and costs, potential treatment risks, realistic outcomes, and much more. Health care providers must respond with as much information as possible to ensure appropriate care is delivered, quality and safety are top of mind, and patients and their care team can make thoughtful care decisions.

I believe it is impossible to have complete transparency with patients without first developing a strong culture of internal transparency — among all team members, at all levels, on all issues — throughout the health care organization itself.

When team members are open and honest with each other, without fear, it leads to mutual trust, collaboration, and sharing of best practices across disciplines. Patients are the ultimate beneficiaries.

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Shining a Light: Safer Health Care Through Transparency, a 2015 report by the National Patient Safety Foundation’s Lucian Leape Institute, states that “if transparency were a medication, it would be a blockbuster, with billions of dollars in sales and accolades the world over.” The report defines transparency as the free, uninhibited flow of information that is open to the scrutiny of others.

Barriers to internal transparency. A culture of internal transparency does not come about overnight. There can be many barriers, some of which can be quite complex. For example, employees may be reluctant to report safety issues or errors for fear of being reprimanded by their managers or shunned by their colleagues.

The Lucian Leape Institute report states that “from the quality and safety perspective, transparency is foundational for learning from mistakes and for creating a supportive environment for patients and health care workers.”

At Virginia Mason Medical Center in Seattle, for example, every employee is considered a safety inspector regardless of job or title. All our team members are expected and encouraged to file a patient safety alert whenever he or she sees anything that poses an immediate or potential safety risk. This level of internal transparency is necessary because leaders and team members cannot correct problems unless they know they exist.

Internal transparency is hindered when lessons learned aren’t shared freely across the enterprise. While many organizations have routine team huddles, it is critical to prioritize multidisciplinary huddles and encourage clinicians to break through silos by sharing information with their colleagues in other specialties and departments.

Providers are often hesitant to disclose mistakes to their patients even though a 2006 study in the Journal of General Internal Medicine concluded that full disclosure is associated with a lower likelihood of changing physicians, higher satisfaction, and greater trust.

Leaders must create a no-blame culture. The most effective way to build a culture of transparency begins with those in leadership positions. It is the responsibility of the leadership team to develop an atmosphere in which there is balanced accountability and continuous improvement and this is everyone’s shared duty. Leaders must lead by example.

A 2013 article in The Ochsner Journal, titled “Just Culture: A Foundation for Balanced Accountability and Patient Safety,” concluded that “a fair and just culture improves patient safety by empowering employees to proactively monitor the workplace and participate in safety efforts in the work environment.”

A new paradigm. When something isn’t working in health care, it can take a long time to change, but providers can reach their own unique breakthrough moment that serves as the catalyst for long-term transformation.

At Virginia Mason, we began nearly 20 years ago to create a culture in which our team members could believe zero-defect care is possible and have the tools to make this happen. We recognized that to achieve such a transformation, a paradigm shift was needed. Our management approach at the time was not nimble enough to keep up with the changing health care environment: We needed to eliminate wasteful elements from patient care, and we wanted to empower our employees to be stewards of patient safety, regardless of their job title.

To find an innovative way forward, we looked beyond our own industry because traditional approaches in health care management had not evolved much over the previous decades. In 2002, we implemented the Virginia Mason Production System (VMPS), a management method that employs basic principles of the Toyota Production System for eliminating waste (i.e., anything that lacks value from the patient’s perspective), improving quality and safety, and controlling cost.

This change did not happen easily. There were doubters and naysayers, as well as enthusiasts who were open-minded about exploring a new path. Some team members adopted a wait-and-see attitude. A few decided to leave our organization. There was a mix of optimism and a feeling of loss as it became clear that doing things as we’d always done them was no longer good enough.

By openly sharing information in employee forums and during one-on-one conversations over several months, we worked to help our team members understand that change was necessary for the future of the organization. We developed compacts with our physicians, board members, and leaders at all levels that clarified organizational expectations and what, in turn, they could expect from the organization. Our leaders — including department directors and managers — are required to practice VMPS methods and teach them to their teams. Completing a course in VMPS basics is an important part of the onboarding process for newly hired employees.  The result is a safer environment for patients and staff.

I believe all of us in health care have a moral imperative to make health care better and more affordable. Safety is the foundation of quality.

In 2004, one of our patients, Mary McClinton, died because of an avoidable error while she was in our care. That mistake shook us to our core as an organization. It also served as an inspiration to create an environment that is safe for every patient and team member, and to be open with our patients, staff, and the community about our work to continually improve safety. To honor Mrs. McClinton’s legacy, we created an annual award that recognizes a team that improves quality and safety through innovation. Their projects are shared broadly across the Virginia Mason organization so everyone understands how patients and care givers will benefit from the award-winning initiatives. Members of Mrs. McClinton’s family attend the award ceremony that is named for her.

In the United States, we have more information than ever about how to provide appropriate, high-quality care and keep patients safe. Transparency with internal and external stakeholders is essential for quality, safety, accountability, and informed decision making. As the Lucian Leape Institute report explains, transparency between clinicians and patients, among clinicians and health care organizations, and between health care organizations and the public produces safer care, better outcomes and more trust among all the involved parties.

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It was the last race of the ski season. My son Daniel, 10 years old, was at the starting gate in his speed suit, helmet and goggles, waiting for the signal.

“3… 2… 1…” The gate keeper called out and he was gone in a flash, pushing off his ski poles to gain momentum. One by one, each gate smacked to the ground when he brushed by. As he neared the end, he crouched into an aerodynamic tuck to shave a few milliseconds from his time. He crossed the finish line —48.37 seconds after the start — breathing hard. We cheered and gave him hugs.

But he wasn’t smiling.

48.37 seconds put him solidly in the middle of the pack.

I had coaching ideas. Ways I could help him get faster. While I am an executive and leadership coach, I coach skiing on the weekends and I was a ski racer myself at his age. But I held back my feedback, hugged him again and told him I loved him. That’s what he needed in that moment.

Later though, I asked him how he felt about the race.

“I never get in the top 10.”

This is delicate terrain — coaching your own kids — and I chose my words carefully.

“I have two questions for you,” I said. “One: Do you want to do better?”

If the answer is “no,” then to attempt to coach would be a fool’s errand (a mistake I have made in the past).

“Yeah” he said.

“Here’s my second question: Are you willing to feel the discomfort of putting in more effort and trying new things that will feel weird and different and won’t work right away?”

He was silent for a while and I let the silence just hang there. Silence is good. It’s the sound of thinking. And this was an important question for Daniel to think about.

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I believe — and my experience coaching hundreds of leaders in hundreds of different circumstances proves — that anyone can get better at anything. But in order to get better — and in order to be coached productively — you need to honestly answer “yes” to both those questions.

Maybe you want to be a more inspiring leader. Or connect more with others. Maybe you want to be more productive or more influential. Maybe you want to be a better communicator, a more impactful presenter, or a better listener. Maybe you want to lead more effectively, take more risks, or become a stronger manager.

Whatever it is, you can become better at it. But here’s the thing I know just as clearly as I know you can get better at anything: you will not get better if 1) you don’t want to and 2) you aren’t willing to feel the discomfort of doing things differently.

One senior leader I worked with became defensive when people gave him feedback or criticized his decisions. He wanted to get better, he told me, and he was willing to feel the discomfort. So I gave him very specific instructions (learned from my friend Marshall Goldsmith): Meet with each member of your team and acknowledge that you have struggled with accepting feedback and tell them that you are committed to getting better. Then ask for feedback — especially ways you can be a better leader — and take notes. Don’t say anything other than “Thank you.”

“It took every restraint muscle in my body not to get into a conversation about their comments,” he told me afterwards. “Especially because I felt they misunderstood me at times. It was beyond uncomfortable. And I messed up a few times and had to apologize. But I did it — and they haven’t stopped talking about what a welcome change it’s been.”

Learning anything new is, by its nature, uncomfortable. You will need to act in ways that are unfamiliar. Take risks that are new. Try things that, in may cases, will be initially frustrating because they won’t work the first time. You are guaranteed to feel awkward. You will make mistakes. You may be embarrassed or even feel shame, especially if you are used to succeeding a lot —and all my clients are used to succeeding a lot.

If you remain committed through all of that, you’ll get better.

I now ask those two questions before committing to coach any CEO or senior leader. It’s a prerequisite to growth.

I sat silently with Daniel for long enough that I thought he might have forgotten my question. Sitting in the discomfort of that moment, I realized that this was a new behavior for me too. I’m used to jumping in and trying to help him. Now, I was sincerely asking him whether he wanted my help. I was honestly OK with whatever answer he gave me — and it felt a little weird. But the more I settled into the silence, the more comfortable I got with just sitting with him — which I found I loved doing.

Finally, he spoke up.

“I think so” he said, “but it’s the end of the season. Can we talk about it at the beginning of next season?”

“Sure,” I said, “I’ll ask you again then.”
Hiring for the Holidays? 10 Ways to Find Great Hourly Workers

The holiday season is fast approaching. It doesn’t matter what business you’re in, profits are going to soar, and as a result, you’re going to need to hire new hourly employees to keep up with demand. Luckily, there is no shortage of ways for you to get new employees on board.

As you’re looking for people to join your team, make sure you always look for quality and experience. Even if you are offering a part-time, holiday position, you don’t want to sacrifice quality for fast employees.

Below are 10 of the best ways you can find great hourly workers for your business. 

Post on Relevant Job Boards

If you have an open position, one of the first things you should do is post your job opening on relevant job boards. There are hundreds of different websites that let employers post their job for potential hires to apply and interact with the hiring company. Some of the more popular job boards include Indeed, Monster, and Zip Recruiter. You can post both remote and local positions on these platforms. You’ll get the ability to look through everyone who applies before contacting them. What makes this method ideal is the fact that you can set up “deal breaker” questions on the application to save you time. If someone answers a question wrong on the application, they will be filtered into a separate group so can put all of the good applications “on top.”

Use Social Media

In 2018, almost every business has a social media page. You can use your social media presence to entice followers to apply if you have an opening. A benefit of this method is that the people who are applying to the job are already familiar with your product or service. They follow your brand because they’re interested in what you sell or your brand’s identity -- meaning they may be more likely to catch on if you decide to hire them.

You can also advertise your opening on LinkedIn, a business social media site. There are many ways you can advertise your position, such as adding a “Now Hiring” tag to your banner.”

Create an Employee Referral Program

Even if you’re looking for remote workers, you can create an incentive for your employees to help you find someone who can fill the positions at your company.

When most companies set up a referral program, they usually offer a cash reward to get new hires -- with stipulations of course. For example, if you get an employee to refer someone new and that new employee works there for 60 days, both the new hire and employee that gave the referral get a $75 dollar bonus.

Employers prefer this method because they know their employees better than anyone. If a superior employee offers a referral, they can have confidence that the person they referred to them is also a good worker.

Reach Out to Colleges

Most students leave college with a degree and no job. There are plenty of colleges that will happily advertise your job to their students as a means for them to get an internship or a potential hire after their graduation.

Some colleges offer programs for students even if they graduated years ago. The students can come back to the college with their experience, and see if there are any job advertisements. This is the perfect chance for you to reach out to fresh-faced potential employees with lots of energy.

Use CraigsList

CraigsList has turned in to a great place to find hourly employees. As it turns out, people check this platform on an almost daily basis for various reasons.

It takes just a few minutes to get online and post an advertisement every morning. Make it a routine until you fill the positions you have available.

Wake up in the morning, get on your smartphone while you drink your coffee or orange juice, and post a quick ad letting people know that your company is looking for either seasonal or permanent employees.

Consider Previous Employees

You’re going to have people who quit your company without notice. However, in many cases, employees leave on good terms because they found a new job, are going through personal issues, or various other reasons.

If you still have contact information of previous employees (and you should!) consider making phone calls to these employees to see if they would consider coming back to work on a part-time basis.

If former employees return, you could potentially save money on training time because they already know how the company works. A refresher course is a much less time-consuming process than a full training routine.

Contact Job Agencies

Job agencies are good for both remote and physical employees. They are basically companies that have a Rolodex of potential employees who are looking for part-time jobs.

You can contact companies like Adecco or Career One Stop and see if they have employees that fit your needs. They can look into their files and find out if they have people who match your required skill set.

Some people don’t like the fact that they have to work through a middleman. However, some prefer this method because it gives them a chance to look at the potential hires without directly contacting them. You get to pick the person you think best fits your needs.


If you’re looking for remote workers, a billboard might seem impractical, but if you need a number of employees, it’s still a great idea!

The fact is, if you put your billboard in a high traffic area in a big city, people from all around are going to see it. All you have to do is include the fact that you’re offering remote positions, and the people who are interested will contact you. When you consider that hundreds of thousands of people live in moderate-large cities, you can totally get people to apply for your position if you put your billboard somewhere smart, such s a busy intersection.

Advertise on Your Website

Odds are, you have a business website -- especially if you’re looking for remote workers. There are two ways to advertise your job openings online.

The most common method is by adding a “We are hiring!” button to your homepage. If a potential employee lands on your page, they can click the button and get right to the application and apply.

You can also add a “Careers” page to your sitemap. If you’re constantly hiring, this is a great choice. As job opportunities become available, you can upload them to your careers page and hopeful employees can see what jobs are opening, requirements, and access the application.

Hire Internally

Do you have multiple employees who work on an “as is” basis? Perhaps they get online and take care of your social media. Maybe you have an employee who just manages your customer care emails for a flat rate every month. Look to these dedicated employees to see if they would be interested in coming aboard full time as hourly employees. If these people are juggling multiple small jobs, they may be interested in working at your company for hourly pay to cut down on their overall work time -- especially if you make the pay worth it.

When it comes time to hire this holiday season, make sure you take advantage of all of these different opportunities. There are benefits and disadvantages to all of these methods, it all comes down to your business model and how many people you want to hire. Before your next round of hiring, consider the hiring technique that will save you time, and find you the best employee. There are plenty of qualified candidates out there. All that’s left is to go out and find them!



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