Xi Jinping

More stories

  • 138 Shares199 Views

    in Economy

    China’s Record Drought is Drying Rivers and Feeding Its Coal Habit

    by

    Dry weather in southwestern China has crippled huge hydroelectric dams, forcing cities to impose rolling blackouts and driving up the country’s use of coal.HONG KONG — Car assembly plants and electronics factories in southwestern China have closed for lack of power. Owners of electric cars are waiting overnight at charging stations to recharge their vehicles. Rivers are so low there that ships can no longer carry supplies.A record-setting drought and an 11-week heat wave are causing broad disruption in a region that depends on dams for more than three-quarters of its electricity generation. The factory shutdowns and logistical delays are hindering China’s efforts to revive its economy as the country’s leader, Xi Jinping, prepares to claim a third term in power this autumn.The ruling Communist Party is already struggling to reverse a slowdown in China, the world’s second largest economy, caused by the country’s strict Covid lockdowns and a slumping real estate market. Young people are finding it hard to get jobs, while uncertainty over the economic outlook is compelling residents to save instead of spend, and to hold off on buying new homes.Now, the extreme heat is adding to frustration by snarling power supplies, threatening crops and setting off wildfires. Reduced electricity from hydroelectric dams has prompted China to burn more coal, a large contributor to air pollution and to greenhouse gas emissions that cause global warming.Many cities around the country have been forced to impose rolling blackouts or limit energy use. In Chengdu, the capital of Sichuan Province, several neighborhoods went without electricity for more than 10 hours a day.An electronic billboard shut down to save energy in Chengdu, China.Agence France-Presse — Getty ImagesVera Wang, a Chengdu resident, said that just to charge her electric car, her boyfriend waited in a long line overnight at a charging station that was only partly operating. It was 4 a.m. by the time he reached the front of the line.“The line was so long that it extended from the underground parking lot to the road outside,” she said.The heat wave has scorched China for more than two months, stretching from Sichuan in the southwest to the country’s eastern coast and sending the mercury above 104 degrees on many days. In Chongqing, a sprawling metropolis in the southwest with around 20 million people, the temperature soared to 113 degrees last week, the first time such a high reading had been recorded in a Chinese city outside the western desert region of Xinjiang.The searing heat set off wildfires in the mountains and forests on Chongqing’s outskirts, where thousands of firefighters and volunteers have worked to put out blazes. Residents said the air smelled of acrid smoke.The drought has dried up dozens of rivers and reservoirs in the region and cut Sichuan’s hydropower generation capacity by half, hurting industrial production. Volkswagen closed its sprawling, 6,000-employee factory in Chengdu for the past week and a half, and Toyota also temporarily suspended operations at its assembly plant.A villager attempting to put out a bush fire with a mop in his field during a drought in Xinyao, a village in Jiangxi Province, on Thursday.Thomas Peter/ReutersFoxconn, the giant Taiwanese electronics manufacturer, and CATL, the world’s largest maker of electric car batteries, have both curtailed production at factories in the vicinity.In Ezhou, a city in central China near Wuhan, the Yangtze River is now at its lowest level for this time of year since record-keeping began there in 1865. People’s Daily, the main newspaper of the Communist Party, reported on Aug. 19 that the Yangtze River had fallen to the same average level it normally reaches at the end of the winter dry season.Read More About Extreme WeatherRelics of the Past: As a drought starves Europe’s rivers and brings water levels down, shipwrecks, bombs and objects dating back thousands of years are turning up at the water’s surface.Preparing for Disaster: With the cost and frequency of weather-driven disasters on the rise,  taking steps to be ready financially is more crucial than ever. Here are some tips.Wildfires Out West: California and other Western states are particularly prone to increasingly catastrophic blazes. There are four key factors.Colorado River: With water levels near their lowest point ever, Arizona and Nevada faced new restrictions on the amount of water they can pump out of the river.But the disruptions from the hydropower shortfall are being felt far from the southwest, including in China’s eastern cities, which are buyers of hydropower. Some factories and commercial buildings in cities like Hangzhou and Shanghai are rationing electricity.Kevin Ni, an online marketing worker in Hangzhou, said that his office was stifling because few air-conditioners were allowed to run.“We have to eat ice pops and drink iced drinks,” he said. “I just put my hands on the ice pops, that cools me the most.”A satellite image showing the Yangtze River last August between Huanggang and Ezhou, in Hubei Province, China.Planet LabsThe same view this month, showing how much lower the water levels are than in the previous year.Planet LabsThe falling water levels in major rivers that serve the region’s main transport hubs have also led to delays elsewhere in the supply chain. The Yangtze River has receded so much that many oceangoing ships can no longer reach upstream ports. The upper Yangtze basin normally gets half its entire annual rainfall just in July and August, so the failure of this year’s rains may mean a long wait for more water.That is forcing China to divert large numbers of trucks to carry their cargo. A single ship can require 500 or more trucks to move its cargo.“We’re losing a few months of really efficient shipping,” said Even Rogers Pay, a food and agriculture analyst at Trivium, a Beijing consulting firm.The heat wave and drought are also starting to drive food prices higher in China, especially for fruit and vegetables. Farmers’ fields and orchards are wilting. Sichuan is a leading grower in China of apples, plums and other fruit, and fruit trees that die could take five years to replace. The price of bok choy, a popular cabbage, has nearly doubled in Wuhan this month.“That’s going to create more economic pain, which is the last thing the leadership wants to see,” Ms. Pay said.Ships sailing on the Yangtze River in Jiujiang, Jiangxi Province, on Tuesday. The Yangtze River has receded so low that many oceangoing ships can no longer reach upstream ports.Alex Plavevski/EPA, via ShutterstockThe Ministry of Agriculture and Rural Affairs and four other departments issued an emergency notice warning on Tuesday that the drought posed a “severe threat” to China’s autumn harvest. China’s cabinet on Wednesday approved $1.5 billion for disaster relief and assistance to rice farmers and another $1.5 billion for overall farm subsidies.The government has urged local officials to seek out more water sources and allocate more electricity to support farmers and promote the planting of leafy vegetables, which are highly perishable, in big cities. Fire trucks have been used to spray water on fields and deliver water to pig farms.The extreme weather sweeping across China also has potential implications for the world’s efforts to halt climate change. Beijing has sought to offset at least part of the lost hydropower from the drought by ramping up the use of coal-fired power plants. China’s domestic mining of coal has been at or near record levels, and customs data shows that its imports of coal from Russia reached a new high last month.But China’s reliance on the fossil fuel raises questions about its commitment to slowing the growth of its carbon emissions.“In the short term in China, the very, very painful realization is that only coal can serve as the base” for the electricity supply, said Ma Jun, the director of the Institute of Public and Environmental Affairs, a Beijing environmental group. Sichuan Province has lured energy-intensive industries like chemical manufacturing for many years with extremely low electricity prices, he said, and some of these industries have squandered power through inefficiency.A dry vegetable plot at a farm in Longquan, a village in Chongqing.Mark Schiefelbein/Associated PressMr. Ma struck an optimistic note, however, about the direction of China’s climate strategy, saying that in the medium term, “China is very committed to carbon targets and renewable energy.”The government has sought to mitigate the effects of global warming on its economy. The National Development and Reform Commission, China’s top economic planning ministry, set up a working group last winter to analyze the effects of climate change on water-related industries like hydroelectric dams.While such efforts may help China preserve the viability of renewable energy programs, they may not prompt China to limit the burning of coal this year as a quick fix, said Ed Cunningham, the director of the Asia Energy and Sustainability Initiative at the Harvard Kennedy School.“They’re much more comfortable with coal,” Mr. Cunningham said, “and the reality is that when there’s a shortage of hydro, they use coal.”Muyi Xiao More

  • 125 Shares199 Views

    in Economy

    Ukraine War and Pandemic Force Nations to Retreat From Globalization

    by

    WASHINGTON — When the Cold War ended, governments and companies believed that stronger global economic ties would lead to greater stability. But the Ukraine war and the pandemic are pushing the world in the opposite direction and upending those ideas.Important parts of the integrated economy are unwinding. American and European officials are now using sanctions to sever major parts of the Russian economy — the 11th largest in the world — from global commerce, and hundreds of Western companies have halted operations in Russia on their own. Amid the pandemic, companies are reorganizing how they obtain their goods because of soaring costs and unpredictable delays in global supply chains.Western officials and executives are also rethinking how they do business with China, the world’s second-largest economy, as geopolitical tensions and the Chinese Communist Party’s human rights abuses and use of advanced technology to reinforce autocratic control make corporate dealings more fraught.The moves reverse core tenets of post-Cold War economic and foreign policies forged by the United States and its allies that were even adopted by rivals like Russia and China.“What we’re headed toward is a more divided world economically that will mirror what is clearly a more divided world politically,” said Edward Alden, a senior fellow at the Council on Foreign Relations. “I don’t think economic integration survives a period of political disintegration.”“Does globalization and economic interdependence reduce conflict?” he added. “I think the answer is yes, until it doesn’t.”Opposition to globalization gained momentum with the Trump administration’s trade policies and “America First” drive, and as the progressive left became more powerful. But the pandemic and President Vladimir V. Putin’s invasion of Ukraine have brought into sharp relief the uncertainty of the existing economic order.President Biden warned President Xi Jinping of China on Friday that there would be “consequences” if Beijing gave material aid to Russia for the war in Ukraine, an implicit threat of sanctions. China has criticized sanctions on Russia, and Le Yucheng, the vice foreign minister, said in a speech on Saturday that “globalization should not be weaponized.” Yet China increasingly has imposed economic punishments — Lithuania, Norway, Australia, Japan and South Korea have been among the targets.The result of all the disruptions may well be a fracturing of the world into economic blocs, as countries and companies gravitate to ideological corners with distinct markets and pools of labor, as they did in much of the 20th century.Mr. Biden already frames his foreign policy in ideological terms, as a mission of unifying democracies against autocracies. Mr. Biden also says he is enacting a foreign policy for middle-class Americans, and central to that is getting companies to move critical supply chains and manufacturing out of China.The goal is given urgency by the hobbling of those global links over two years of the pandemic, which has brought about a realization among the world’s most powerful companies that they need to focus on not just efficiency and cost, but also resiliency. This month, lockdowns China imposed to contain Covid-19 outbreaks have once again threatened to stall global supply chains.The Chinese city of Shenzhen was shut down due to Covid concerns last week, threatening the global supply chain.Kin Cheung/Associated PressThe economic impact of such a change is highly uncertain. The emergence of new economic blocs could accelerate a massive reorganization in financial flows and supply chains, potentially slowing growth, leading to some shortages and raising prices for consumers in the short term. But the longer-term effects on global growth, worker wages and supplies of goods are harder to assess.The war has set in motion “deglobalization forces that could have profound and unpredictable effects,” said Laurence Boone, the chief economist of the Organization for Economic Cooperation and Development.For decades, executives have pushed for globalization to expand their markets and to exploit cheap labor and lax environmental standards. China especially has benefited from this, while Russia profits from its exports of minerals and energy. They tap into enormous economies: The Group of 7 industrialized nations make up more than 50 percent of the global economy, while China and Russia together account for about 20 percent.Trade and business ties between the United States and China are still robust, despite steadily worsening relations. But with the new Western sanctions on Russia, many nations that are not staunch partners of America are now more aware of the perils of being economically tied to the United States and its allies.If Mr. Xi and Mr. Putin organize their own economic coalition, they could bring in other nations seeking to shield themselves from Western sanctions — a tool that all recent U.S. presidents have used.“Your interdependence can be weaponized against you,” said Dani Rodrik, a professor of international political economy at Harvard Kennedy School. “That’s a lesson that I imagine many countries are beginning to internalize.”The Ukraine war, he added, has “probably put a nail in the coffin of hyperglobalization.”China and, increasingly, Russia have taken steps to wall off their societies, including erecting strict censorship mechanisms on their internet networks, which have cut off their citizens from foreign perspectives and some commerce. China is on a drive to make critical industries self-sufficient, including for technologies like semiconductors.And China has been in talks with Saudi Arabia to pay for some oil purchases in China’s currency, the renminbi, The Wall Street Journal reported; Russia was in similar discussions with India. The efforts show a desire by those governments to move away from dollar-based transactions, a foundation of American global economic power.For decades, prominent U.S. officials and strategists asserted that a globalized economy was a pillar of what they call the rules-based international order, and that trade and financial ties would prevent major powers from going to war. The United States helped usher China into the World Trade Organization in 2001 in a bid to bring its economic behavior — and, some officials hoped, its political system — more in line with the West. Russia joined the organization in 2012.But Mr. Putin’s war and China’s recent aggressive actions in Asia have challenged those notions.“The whole idea of the liberal international order was that economic interdependence would prevent conflict of this kind,” said Alina Polyakova, president of the Center for European Policy Analysis, a research group in Washington. “If you tie yourselves to each other, which was the European model after the Second World War, the disincentives would be so painful if you went to war that no one in their right mind would do it. Well, we’ve seen now that has proven to be false.”“Putin’s actions have shown us that might have been the world we’ve been living in, but that’s not the world he or China have been living in,” she said.The United States and its partners have blocked Russia from much of the international financial system by banning transactions with the Russian central bank. They have also cut Russia off from the global bank messaging system called SWIFT, frozen the assets of Russian leaders and oligarchs, and banned the export from the United States and other nations of advanced technology to Russia. Russia has answered with its own export bans on food, cars and timber.The penalties can lead to odd decouplings: British and European sanctions on Roman Abramovich, the Russian oligarch who owns the Chelsea soccer team in Britain, prevent the club from selling tickets or merchandise.Ticket sales for Chelsea Football Club games were stopped after Britain and the European Union imposed sanctions on the club’s owner, Roman Abramovich, a Putin ally. Andy Rain/EPA, via ShutterstockAbout 400 companies have chosen to suspend or withdraw operations from Russia, including iconic brands of global consumerism such as Apple, Ikea and Rolex.Russia-Ukraine War: Key DevelopmentsCard 1 of 4Russia’s shrinking force. More

  • 175 Shares169 Views

    in Economy

    Russia Asked China for Military and Economic Aid for Ukraine War, U.S. Officials Say

    by

    WASHINGTON — Russia asked China to give it military equipment and support for the war in Ukraine after President Vladimir V. Putin began a full-scale invasion last month, according to U.S. officials.Russia has also asked China for additional economic assistance, to help counteract the battering its economy has taken from broad sanctions imposed by the United States and European and Asian nations, according to an official.American officials, determined to keep secret their means of collecting the intelligence on Russia’s requests, declined to describe further the kind of military weapons or aid that Moscow is seeking. The officials also declined to discuss any reaction by China to the requests.President Xi Jinping of China has strengthened a partnership with Mr. Putin and has stood by him as Russia has stepped up its military campaign in Ukraine, destroying cities and killing hundreds or thousands of civilians. American officials are watching China closely to see whether it will act on any requests of aid from Russia. Jake Sullivan, the White House national security adviser, is scheduled to meet on Monday in Rome with Yang Jiechi, a member of the Chinese Communist Party’s elite Politburo and director of the party’s Central Foreign Affairs Commission.Mr. Sullivan intends to warn Mr. Yang about any future Chinese efforts to bolster Russia in its war or undercut Ukraine, the United States and their partners.“We are communicating directly, privately to Beijing that there will absolutely be consequences for large-scale sanctions evasion efforts or support to Russia to backfill them,” Mr. Sullivan said on CNN on Sunday.“We will not allow that to go forward and allow there to be a lifeline to Russia from these economic sanctions from any country, anywhere in the world,” he said.Mr. Sullivan did not make any explicit mention of potential military support from China, but other U.S. officials spoke about the request from Russia on the condition of anonymity because of the sensitivity of diplomatic and intelligence matters.Liu Pengyu, a spokesman for the Chinese Embassy in Washington, said he had never heard of the request from Russia. “The current situation in Ukraine is indeed disconcerting,” he said, adding that Beijing wants to see a peaceful settlement. “The high priority now is to prevent the tense situation from escalating or even getting out of control.”The Biden administration is seeking to lay out for China the consequences of its alignment with Russia and penalties it will incur if it continues or increases its support. Some U.S. officials argue it might be possible to dissuade Beijing from ramping up its assistance to Moscow. Chinese leaders may be content to offer rhetorical support for Moscow and may not want to further enmesh themselves with Mr. Putin by providing military support for the war, those U.S. officials say.Mr. Sullivan said China “was aware before the invasion took place that Vladimir Putin was planning something,” but added that the Chinese might not have known the full extent of the Russian leader’s plans. “It’s very possible that Putin lied to them, the same way he lied to Europeans and others,” he said.Mr. Xi has met with Mr. Putin 38 times as national leaders, more than with any other head of state, and the two share a drive to weaken American power.Traditionally, China has bought military equipment from Russia rather than the other way around. Russia has increased its sales of weaponry to China in recent years. But China has advanced missile and drone capabilities that Russia could use in its Ukraine campaign.Although Russia on Sunday launched a missile barrage on a military training ground in western Ukraine that killed at least 35 people, there has been some evidence that Russian missile supplies have been running low, according to independent analysts.Last week, the White House criticized China for helping spread Kremlin disinformation about the United States and Ukraine. In recent days, Chinese diplomats, state media organizations and government agencies have used a range of platforms and official social media accounts to amplify a conspiracy theory that says the Pentagon has been financing biological and chemical weapons labs in Ukraine. Right-wing political figures in the United States have also promoted the theory.On Friday, Russia called a United Nations Security Council meeting to present its claims about the labs, and the Chinese ambassador to the U.N., Zhang Jun, supported his Russian counterpart.“Now that Russia has made these false claims, and China has seemingly endorsed this propaganda, we should all be on the lookout for Russia to possibly use chemical or biological weapons in Ukraine, or to create a false flag operation using them,” Jen Psaki, the White House press secretary, wrote on Twitter last Wednesday.China is also involved in the Iran nuclear negotiations, which have stalled because of new demands from Russia on relief from the sanctions imposed by Western nations in response to the Ukraine war.American officials are trying to determine to what degree China would support Russia’s position in those talks. Before Russia raised the requests, officials from the nations involved had been close to clinching a return to a version of the Obama-era nuclear limits agreement from which President Donald J. Trump withdrew. Mr. Sullivan might bring up Iran with Mr. Yang on Monday.Current and former U.S. officials say the Rome meeting is important, given the lives at stake in the Ukraine war and the possibility of Russia and China presenting a geopolitical united front against the United States and its allies in the years ahead.“This meeting is critical and possibly a defining moment in the relationship,” said Evan Medeiros, a Georgetown University professor who was a senior Asia director on the National Security Council during the Obama administration.“I think what the U.S. is probably going to do is lay out the costs and consequences of China’s complicity and possible enabling of Russia’s invasion,” he said. “I don’t think anyone in the administration has illusions that the U.S. can pull China away from Russia.”Some U.S. officials are looking for ways to compel Mr. Xi to distance himself from Mr. Putin on the war. Others see Mr. Xi as a lost cause and prefer to treat China and Russia as committed partners, hoping that might galvanize policies and coordination among Asian and European allies to contain them both.Chinese officials have consistently voiced sympathy for Russia during the Ukraine war by reiterating Mr. Putin’s criticism of NATO and blaming the United States for starting the conflict. They have refrained from any mention of a Russian “war” or “invasion,” even as they express general concern for the humanitarian crisis.They mention support for “sovereignty and territorial integrity,” a common catchphrase in Chinese diplomacy, but do not say explicitly which nation’s sovereignty they support — meaning the phrase could be interpreted as backing for Ukraine or an endorsement of Mr. Putin’s claims to restoring the territory of imperial Russia.Russia-Ukraine War: Key Things to KnowCard 1 of 3Expanding the war. More

  • 113 Shares149 Views

    in Economy

    Before Ukraine Invasion, Russia and China Cemented Economic Ties

    by

    Facing a wary United States and worried about depending on imports by sea, China is buying more energy and food from its northern neighbor.BEIJING — As Russia wreaks havoc in Ukraine, Moscow has a powerful economic ally to help it resist Western sanctions: China.Chinese purchases of oil from Russia in December surpassed its purchases from Saudi Arabia. Six days before the military campaign began, Russia announced a yearslong deal to sell 100 million tons of coal to China — a contract worth more than $20 billion. And hours before Russia began bombing Ukraine, China agreed to buy Russian wheat despite concerns about plant diseases.In a throwback to the 1950s, when Mao Zedong worked closely with Joseph Stalin and then Nikita Khrushchev, China is again drawing close to Russia. As the United States and the European Union have become wary of China, Beijing’s leaders have decided that their best geopolitical prospects lie in marrying their vast industrial might with Russia’s formidable natural resources.Recent food and energy deals are just the latest signals of China’s economic alignment with Russia.“What happened up to now is only a beginning for both the Russian expansionism by force and the Chinese economic and financial support to Russia,” Shi Yinhong, a professor of international relations at Renmin University in Beijing, said in a text message. “This does not mean that China directly supports in any degree that expansionism — this only means that Beijing strongly feels the necessity to maintain and boost strategic partnership with Moscow.”The United States and the European Union are hoping that sanctions force Russia to reconsider its policies. But Wang Wenbin, the Chinese foreign ministry’s spokesman, said at a briefing on Friday that China opposed the use of sanctions.“Sanctions are never an effective way to solve the problems,” he said. “I hope relevant parties will still try to solve the problem through dialogue and consultation.”At the same time, Russia’s invasion of Ukraine has imposed an awkward diplomatic quandary on China by violating the principle of national sovereignty that the Chinese leaders regard as sacrosanct. While President Xi Jinping of China has not criticized Russia publicly, he could use his country’s economic relationship with its northern neighbor as leverage to persuade the Russians to resolve the crisis quickly.Mr. Xi and President Vladimir V. Putin of Russia spoke by phone on Friday. An official Chinese statement said afterward that Mr. Xi had expressed support for Russia in negotiating an agreement with Ukraine — a stance that Mr. Putin has also favored, provided that Ukraine accepts his terms.Until now, much of China’s energy and food imports came across seas patrolled by the U.S. or Indian navies. As China’s leaders have focused lately on the possibility of conflict, with military spending last year growing four times as fast as other government spending, they have emphasized greater reliance on Russia for crucial supplies.China and Russia share a nearly 2,700-mile border, and in recent years China has become Russia’s largest source of imports and the biggest destination for its exports.“Given the geopolitical tensions, Russia is a very natural geopolitical partner,” said Andy Mok, a senior research fellow at the Center for China and Globalization in Beijing.Initial Western sanctions on Russia have focused on limiting technology exports and imposing financial penalties. For now, U.S. officials have avoided targeting consumer goods, agricultural products and energy, to try to avoid harming ordinary people and further fueling inflation.China is the world’s dominant manufacturer of electronics, machinery and other manufactured goods, and has been supplying them to Russia in exchange for food and energy.A train carrying coal in Yekaterinburg, Russia, in 2020. China’s imports of Russian coal have more than doubled in the past three years.Maxim Babenko for The New York TimesThe new cornerstone of relations between China and Russia is the Sino-Russian nonaggression pact concluded in Beijing on Feb. 4. Mr. Xi and Mr. Putin reached the deal hours before the opening ceremony of the Beijing Winter Olympics and issued a statement saying the countries’ friendship “has no bounds.”The pact freed Mr. Putin to move troops and military equipment from Russia’s border with China to its border with Ukraine while ushering in closer economic cooperation.“The joint statement is strong and has lasting consequences for the new world order,” said Jean-Pierre Cabestan, a research professor of political science at Hong Kong Baptist University.The Chinese and Russian governments share many values, particularly their antipathy to sanctions the West imposes on human-rights grounds. “The two sides firmly believe that defending democracy and human rights should not be used as a tool to exert pressure on other countries,” their pact on Feb. 4 said.When the Obama administration imposed sanctions on Russia after its invasion of Ukraine’s Crimea region in 2014, China helped Russia evade them.It is not clear if China will help Russia evade sanctions put in place this week. On Tuesday, the Biden administration added to previous measures by announcing sanctions against Russia’s two largest financial institutions and sweeping restrictions on advanced technologies that can be exported to Russia. The technological curbs, when taken in concert with allies, would block roughly a fifth of Russian imports, the administration said.Chinese companies that circumvent those rules could face escalating punishment by the United States, including criminal and civil penalties, said Martin Chorzempa, a senior fellow at the Peterson Institute for International Economics. Those businesses could also be cut off from American technology and the financial system.ZTE and Huawei, two Chinese firms that were barred from receiving American technological exports, attracted the attention of the U.S. government in part for evading sanctions on Iran.“The interesting question is: Is China going to comply with this?” Mr. Chorzempa said. China also has a law designed to penalize companies for following extraterritorial sanctions by countries like the United States, he said, all factors that “could put companies in a real bind.”“If they don’t comply with the U.S., they’re in trouble with the U.S., but if they don’t comply with China, they could also face penalties in China,” he said.Of course, collecting fines from companies that are unwilling to pay and monitoring whether businesses comply with the rules could be difficult, Mr. Chorzempa added. “It’s already proving difficult to monitor the things that are already controlled, and if you expand that list, that’s going to be a real challenge to verify what’s going to Russia,” he said.Russia’s Attack on Ukraine and the Global EconomyCard 1 of 6A rising concern. More

  • 113 Shares99 Views

    in Economy

    For China, Hosting the Olympics Is Worth Every Billion

    by

    For many cities, the Games make no economic sense. National pride and an enthusiasm for building transportation infrastructure change the equation for Beijing.ZHANGJIAKOU, China — To make an Olympic ski jump, China clad a hillside in steel and blanketed it with artificial snow. To construct a high-speed rail line linking the venues and Beijing, engineers blasted tunnels through the surrounding mountains. And to keep the coronavirus at bay, workers are conducting tens of thousands of P.C.R. tests on Games participants every day.Hosting the Winter Olympics is costing China billions of dollars, a scale of expenditure that has made the event less appealing to many cities around the world in recent years. More and more of them have concluded that the Games are not worth being left with a hefty bill, white elephant stadiums and fewer benefits from tourism than they had hoped.But China looks at the Games with a different calculus. Beijing has long relied on heavy investments in building railway lines, highways and other infrastructure to provide millions of jobs to its citizens and reduce transportation costs. With the 2022 Games, it also hopes to nurture an abiding interest in skiing, curling, ice hockey and other winter sports that could increase consumer spending, particularly in the country’s chilly and economically struggling northeast.The Zhangjiakou National Ski Jumping Center for the 2022 Winter Olympics. Beijing hopes the Games will nurture interest in skiing and other winter sports that could boost consumer spending.Hiroko Masuike/The New York TimesPerhaps most important of all to China’s leader, Xi Jinping, the Olympics are a chance to demonstrate to the world his country’s unity and confidence under his leadership.“For China’s international image, prestige, and face, as the Chinese would say, nothing is too expensive,” said Jean-Pierre Cabestan, a political scientist at Hong Kong Baptist University.Still, with China’s economy already slowing, and a dimming outlook for global growth, as well as concerns that the Omicron variant of the coronavirus would lead to more shutdowns and choking of global supply chains, Beijing has been wary of spiraling costs. Even Mr. Xi acknowledged the event had to be streamlined, saying last year that the aim was to hold a “simple, safe, splendid” event.Making hockey skates at Hongwei Sports Goods Company’s facilities in Zhangjiakou.Kevin Frayer/Getty ImagesPractically every Olympic Games in recent years has triggered disputes over cost overruns. A study at Oxford University had found that the operating costs of Olympics held since 1960 have averaged nearly three times what the host cities originally bid.The city of Sochi in Russia, which hosted the Winter Olympics in 2014, spent and invested more than $50 billion — half of which was on infrastructure. When Beijing hosted the Summer Olympics in 2008, it said it had spent $6.8 billion, but that did not include the tens of billions more it used to build roads, stadiums, subway lines and an airport terminal.Names to WatchKamila Valieva: The doping case surrounding the Russian figure skater, who will be allowed to compete but won’t be able to receive medals, echoes another dark Olympic era.Kaillie Humphries: The bobsledder, who left Canada after accusing her coach of mental abuse, won gold for the U.S. in monobob.Erin Jackson: The speedskater’s gold ended a U.S. drought and made her the first African American to medal in the sport.Chris Corning: The American snowboarder, who is more calculating and quiet than his competitors, thinks his sport has an image problem. He wants to fix it.This time, China has set a budget of about $3 billion, a figure that includes the building of competition venues, but not projects like a $1 billion high-speed rail line and a $5 billion expressway.Yang Qian, an Olympic sport shooter, during the Winter Olympics torch relay at the Badaling Great Wall on Feb. 3 in Beijing. One way China saved money was by shortening the torch relay.Kevin Frayer/Getty ImagesThe pandemic is making the Games even more expensive. The bill for last summer’s Olympics in Tokyo included $2.8 billion in coronavirus prevention costs alone. China’s “zero Covid” strategy, which focuses on eradicating outbreaks, has meant infection control measures are much more elaborate.China’s concerns about the pandemic have dashed hopes that the Games would draw tourists. Organizers said last autumn that they would not sell tickets to foreign spectators. Then they announced last month that most Chinese residents would not get to go, either, prompting a last-minute rush by hotel managers in Beijing to cut drastically the high room rates they had set for February.Despite these difficulties, Chinese authorities have insisted that they have stayed within the operating budget.Officials have said the lack of spectators has meant fewer employees are needed at the Games. China also saved money by canceling a welcoming ceremony for foreign visitors and shortening the torch relay to just three days, the Beijing organizing committee said in an emailed reply to questions. Beijing has also been able to reuse competition venues, a giant media center and other facilities built for the 2008 Summer Olympics.The National Stadium, also known as the Bird’s Nest. Hosting the Winter Olympics is costing China billions of dollars, a scale of expenditure that has made the event less appealing to many cities.Hiroko Masuike/The New York TimesAt $3.1 billion, China’s operating budget is comparable to the average, inflation-adjusted cost of hosting previous Winter Olympics, according to the University of Oxford researchers.“Judging by the cost of previous Winter Olympics, that should be enough to cover the cost, especially when you consider that many of the facilities have already been built,” said one of the experts, Bent Flyvbjerg, a professor of major program management at Oxford.But it is hard to assess what portion of the coronavirus prevention costs, if any, is being included in the budget, Mr. Flyvbjerg said. Chinese accounting is often opaque, and there are many budgets in which health spending can be counted, he said.The government has also pressed businesses to take on more of the cost of hosting the Games. Other host cities of previous Olympics spent heavily to build lodging for athletes and journalists and a media center. China has taken a different approach.In Zhangjiakou, an area near Beijing where some competitions are being held, the Chinese authorities have temporarily taken over the Malaysian-owned Genting Secret Garden ski resort. The resort expanded its capacity to 3,800 rooms and vacation apartments, up from 380 before China won its Olympic bid. Lim Chee Wah, the founder and a co-owner of the resort, said in an interview that he had not been told how much the government would compensate him for the use of the resort for most of the winter season, but that he trusted it would be fair.Apartments at the Genting Secret Garden ski resort in 2019. The resort is near the venue for some of the events at the 2022 Games.Greg Baker/Agence France-Presse — Getty Images“We said, fine, thank you, but we’ll negotiate how to do the compensation — that will be done later,” he said.China also doesn’t count long-term infrastructure investments made in the years before the Games.The national government spent $2 billion building an expressway from northwest Beijing to Yanqing, where Olympic sliding and Alpine skiing events are being held, and an additional $3.6 billion to extend the expressway to the Taizicheng valley, where the ski resorts are.Before Beijing won its bid to host the 2022 Olympics, the government began spending $8.4 billion on a high-speed rail line that whisks travelers from Beijing toward Inner Mongolia at speeds of up to 217 miles per hour. After winning the Olympics, Beijing added $1 billion to that project to build an extra segment that peels off the main line and goes up into the mountains to Taizicheng.“The Chinese are not counting any of that — they say they would have built that anyway,” said Andrew Zimbalist, a professor at Smith College who has published three books about the economics of the Olympics. “I question whether they were going to do it anyway, and if they were going to do it anyway, why do they have to host the Olympics.”Big Air Shougang, the location of the freestyle skiing and snowboarding events.Hiroko Masuike/The New York TimesResort owners like Mr. Lim of Genting hope the new infrastructure will help develop the industry. In expanding the resort 10-fold ahead of the Olympics, he said, he had been told to expect that the national rail service would run 15 or 20 trains a day to the Taizicheng valley.In an email reply to questions, China’s national railway said it ran 15 bullet trains daily in each direction when the line opened at the end of 2019. But the schedule was cut drastically just a month later when the pandemic began, to five trains on most days, and an extra five on peak travel days.China regards the Olympics as transforming Beijing, which gets only a foot of natural snow most winters, into a global destination for winter sports.“The success in opening the Winter Olympics has brought positive economic benefits and created new sources of growth for the local economy,” said the top spokesman for the city of Beijing, Xu Hejian.Liu Yi More

  • 125 Shares99 Views

    in Economy

    China’s Economy Is Slowing, a Worrying Sign for the World

    by

    Economic output climbed 4 percent in the last quarter of 2021, slowing from the previous quarter. Growth has faltered as home buyers and consumers become cautious.BEIJING — Construction and property sales have slumped. Small businesses have shut because of rising costs and weak sales. Debt-laden local governments are cutting the pay of civil servants.China’s economy slowed markedly in the final months of last year as government measures to limit real estate speculation hurt other sectors as well. Lockdowns and travel restrictions to contain the coronavirus also dented consumer spending. Stringent regulations on everything from internet businesses to after-school tutoring companies have set off a wave of layoffs.China’s National Bureau of Statistics said Monday that economic output from October through December was only 4 percent higher than during the same period a year earlier. That represented a further deceleration from the 4.9 percent growth in the third quarter, July through September.The world’s demand for consumer electronics, furniture and other home comforts during the pandemic has produced record-setting exports for China, preventing its growth from stalling. Over all of last year, China’s economic output was 8.1 percent higher than in 2020, the government said. But much of the growth was in the first half of last year.A port in Qingdao, in China’s eastern Shandong Province, earlier this month. China’s exports have remained strong.CHINATOPIX, via Associated PressThe snapshot of China’s economy, the main locomotive of global growth in the last few years, adds to expectations that the broader world economic outlook is beginning to dim. Making matters worse, the Omicron variant of the coronavirus is now starting to spread in China, leading to more restrictions around the country and raising fears of renewed disruption of supply chains.The slowing economy poses a dilemma for China’s leaders. The measures they have imposed to address income inequality and rein in companies are part of a long-term plan to protect the economy and national security. But officials are wary of causing short-term economic instability, particularly in a year of unusual political importance.Next month, China hosts the Winter Olympics in Beijing, which will focus an international spotlight on the country’s performance. In the fall, Xi Jinping, China’s leader, is expected to claim a third five-year term at a Communist Party congress.Mr. Xi has sought to strike an optimistic note. “We have every confidence in the future of China’s economy,” he said in a speech on Monday to a virtual session of the World Economic Forum.But with growth in his country slowing, demand slackening and debt still at near-record levels, Mr. Xi could face some of the biggest economic challenges since Deng Xiaoping began lifting the country out of its Maoist straitjacket four decades ago.“I’m afraid that the operation and development of China’s economy in the next several years may be relatively difficult,” Li Daokui, a prominent economist and Chinese government adviser, said in a speech late last month. “Looking at the five years as a whole, it may be the most difficult period since our reform and opening up 40 years ago.”China also faces the problem of a rapidly aging population, which could create an even greater burden on China’s economy and its labor force. The National Bureau of Statistics said on Monday that China’s birthrate fell sharply last year and is now barely higher than the death rate. Private Sector StrugglesAs costs for many raw materials have risen and the pandemic has prompted some consumers to stay home, millions of private businesses have crumbled, most of them small and family owned.That is a big concern because private companies are the backbone of the Chinese economy, accounting for three-fifths of output and four-fifths of urban employment.Kang Shiqing invested much of his savings nearly three years ago to open a women’s clothing store in Nanping, a river town in Fujian Province in the southeast. But when the pandemic hit a year later, the number of customers dropped drastically and never recovered.As in many countries, there has been a broad shift in China toward online shopping, which can undercut stores by using less labor and operating from inexpensive warehouses. Mr. Kang was stuck paying high rent for his store despite the pandemic. He finally closed it in June.“We can hardly survive,” he said.Another persistent difficulty for small businesses in China is the high cost of borrowing, often at double-digit interest rates from private lenders.Chinese leaders are aware of the challenges private companies face. Premier Li Keqiang has promised further cuts in taxes and fees to help the country’s many struggling small businesses.On Monday, China’s central bank made a small move to reduce interest rates, which could help reduce slightly the interest costs of the country’s heavily indebted real estate developers. The central bank pushed down by about a tenth of a percentage point its interest rate benchmarks for one-week and one-year lending.Construction StallsThe building and fitting out of new homes has represented a quarter of China’s economy. Heavy lending and widespread speculation have helped the country erect the equivalent of 140 square feet of new housing for every urban resident in the past two decades.This autumn, the sector faltered. The government wants to limit speculation and deflate a bubble that had made new homes unaffordable for young families.China Evergrande Group is only the largest and most visible of a lengthening list of real estate developers in China that have run into severe financial difficulty lately. Kaisa Group, China Aoyuan Property Group and Fantasia are among other developers that have struggled to make payments as bond investors become more wary of lending money to China’s real estate sector.An idle construction site for a China Evergrande residential project in Taiyuan, in China’s northern Shanxi Province.Gilles Sabrié for The New York TimesAs real estate companies try to conserve cash, they are starting fewer construction projects. And that has been a big problem for the economy. The price of steel reinforcing bars for the concrete in apartment towers, for example, dropped by a quarter in October and November before stabilizing at a much lower level in December.Understand the Evergrande CrisisCard 1 of 6What is Evergrande? More

  • 125 Shares199 Views

    in Economy

    China's Parents Say For-Profit Tutoring Ban Helps Only the Rich

    by

    Many families and experts say Beijing’s education overhaul will help the rich and make the system even more competitive for those who can barely afford it.Zhang Hongchun worries that his 10-year-old daughter isn’t getting enough sleep. Between school, homework and after-school guitar, clarinet and calligraphy practice, most nights she doesn’t get to bed before 11. Some of her classmates keep going until midnight.“Everyone wants to follow suit,” Mr. Zhang said. “No one wants to lose at the starting line.”In China, the competitive pursuit of education — and the better life it promises — is relentless. So are the financial pressures it adds to families already dealing with climbing house prices, caring for aging parents and costly health care.The burden of this pursuit has caught the attention of officials who want couples to have more children. China’s ruling Communist Party has tried to slow the education treadmill. It has banned homework, curbed livestreaming hours of online tutors and created more coveted slots at top universities.Last week, it tried something bigger: barring private companies that offer after-school tutoring and targeting China’s $100 billion for-profit test-prep industry. The first limits are set to take place during the coming year, to be carried out by local governments.The move, which will require companies that offer curriculum tutoring to register as nonprofits, is aimed at making life easier for parents who are overwhelmed by the financial pressures of educating their children. Yet parents and experts are skeptical it will work. The wealthy, they point out, will simply hire expensive private tutors, making education even more competitive and ultimately widening China’s yawning wealth gap.For Mr. Zhang, who sells chemistry lab equipment in the southern Chinese city of Kunming, banning after-school tutoring does little to address his broader concerns. “As long as there is competition, parents will still have their anxiety,” he said.Children in Beijing’s Chaoyang Park. In May, China changed its two-child policy to allow married couples to have three children.Gilles Sabrié for The New York TimesBeijing’s crackdown on private education is a new facet of its campaign to toughen regulation on corporate China, an effort driven in part by the party’s desire to show its most powerful technology giants who is boss.Regulators have slammed the industry for being “hijacked by capital.” China’s top leader, Xi Jinping, has attacked it as a “malady,” and said parents faced a dilemma in balancing the health and happiness of their children with the demands of a competitive system, which is too focused on testing and scores.The education overhaul is also part of the country’s effort to encourage an overwhelmingly reluctant population to have bigger families and address a looming demographic crisis. In May, China changed its two-child policy to allow married couples to have three children. It promised to increase maternity leave and ease workplace pressures.Tackling soaring education costs is seen as the latest sweetener. But Mr. Zhang said having a second child was out of the question for him and his wife because of the time, energy and financial resources that China’s test-score-obsessed culture has placed on them.Parental focus on education in China can sometimes make American helicopter parenting seem quaint. Exam preparation courses begin in kindergarten. Young children are enrolled in “early M.B.A.” courses. No expense is spared, whether the family is rich or poor.“Everyone is pushed into this vicious cycle. You spend what you can on education,” said Siqi Tu, a postdoctoral research fellow at the Max Planck Institute for the Study of Religious and Ethnic Diversity in Göttingen, Germany. For Chinese students hoping to get a spot at a prestigious university, everything hinges on the gaokao, a single exam that many children are primed for before they even learn how to write.A boy with a school backpack in Haidian during summer break. Parental focus on education in China can sometimes make American helicopter parenting seem quaint.Gilles Sabrié for The New York Times“If this criteria for selecting students doesn’t change, it’s hard to change specific practices,” said Ms. Tu, whose research is focused on wealth and education in China. Parents often describe being pressured into finding tutors who will teach their children next year’s curriculum well before the semester begins, she said.Much of the competition comes from a culture of parenting known colloquially in China as “chicken parenting,” which refers to the obsessive involvement of parents in their children’s lives and education. The term “jiwa” or “chicken baby” has trended on Chinese social media in recent days.Officials have blamed private educators for preying on parents’ fears associated with the jiwa culture. While banning tutoring services is meant to eliminate some of the anxiety, parents said the new rule would simply create new pressures, especially for families that depended on the after-school programs for child care.“After-school tutoring was expensive, but at least it was a solution. Now China has taken away an easy solution for parents without changing the problem,” said Lenora Chu, the author of “Little Soldiers: An American Boy, a Chinese School, and the Global Race to Achieve.” In her book, Ms. Chu wrote about her experience putting her toddler son through China’s education system and recounted how her son’s friend was enrolled in “early M.B.A.” classes..css-1xzcza9{list-style-type:disc;padding-inline-start:1em;}.css-3btd0c{font-family:nyt-franklin,helvetica,arial,sans-serif;font-size:1rem;line-height:1.375rem;color:#333;margin-bottom:0.78125rem;}@media (min-width:740px){.css-3btd0c{font-size:1.0625rem;line-height:1.5rem;margin-bottom:0.9375rem;}}.css-3btd0c strong{font-weight:600;}.css-3btd0c em{font-style:italic;}.css-w739ur{margin:0 auto 5px;font-family:nyt-franklin,helvetica,arial,sans-serif;font-weight:700;font-size:1.125rem;line-height:1.3125rem;color:#121212;}#NYT_BELOW_MAIN_CONTENT_REGION .css-w739ur{font-family:nyt-cheltenham,georgia,’times new roman’,times,serif;font-weight:700;font-size:1.375rem;line-height:1.625rem;}@media (min-width:740px){#NYT_BELOW_MAIN_CONTENT_REGION .css-w739ur{font-size:1.6875rem;line-height:1.875rem;}}@media (min-width:740px){.css-w739ur{font-size:1.25rem;line-height:1.4375rem;}}.css-9s9ecg{margin-bottom:15px;}.css-uf1ume{display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-box-pack:justify;-webkit-justify-content:space-between;-ms-flex-pack:justify;justify-content:space-between;}.css-wxi1cx{display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-flex-direction:column;-ms-flex-direction:column;flex-direction:column;-webkit-align-self:flex-end;-ms-flex-item-align:end;align-self:flex-end;}.css-12vbvwq{background-color:white;border:1px solid #e2e2e2;width:calc(100% – 40px);max-width:600px;margin:1.5rem auto 1.9rem;padding:15px;box-sizing:border-box;}@media (min-width:740px){.css-12vbvwq{padding:20px;width:100%;}}.css-12vbvwq:focus{outline:1px solid #e2e2e2;}#NYT_BELOW_MAIN_CONTENT_REGION .css-12vbvwq{border:none;padding:10px 0 0;border-top:2px solid #121212;}.css-12vbvwq[data-truncated] .css-rdoyk0{-webkit-transform:rotate(0deg);-ms-transform:rotate(0deg);transform:rotate(0deg);}.css-12vbvwq[data-truncated] .css-eb027h{max-height:300px;overflow:hidden;-webkit-transition:none;transition:none;}.css-12vbvwq[data-truncated] .css-5gimkt:after{content:’See more’;}.css-12vbvwq[data-truncated] .css-6mllg9{opacity:1;}.css-qjk116{margin:0 auto;overflow:hidden;}.css-qjk116 strong{font-weight:700;}.css-qjk116 em{font-style:italic;}.css-qjk116 a{color:#326891;-webkit-text-decoration:underline;text-decoration:underline;text-underline-offset:1px;-webkit-text-decoration-thickness:1px;text-decoration-thickness:1px;-webkit-text-decoration-color:#326891;text-decoration-color:#326891;}.css-qjk116 a:visited{color:#326891;-webkit-text-decoration-color:#326891;text-decoration-color:#326891;}.css-qjk116 a:hover{-webkit-text-decoration:none;text-decoration:none;}“If you don’t have the money or the means or the know-how, what are you left with?” she said. “Why would this compel you to have another child? No way.”The new regulation has created some confusion for many small after-school businesses that are unsure if it will affect them. Others wondered how the rules would be enforced.Jasmine Zhang, the school master at an English training school in southern China, said she hadn’t heard from local officials about the new rules. She said she hoped that rather than shutting institutions down, the government would provide more guidance on how to run programs like hers, which provide educators with jobs.“We pay our teachers social insurance,” Ms. Zhang said. “If we are ordered to close suddenly, we still have to pay rent and salaries.”While she waits to learn more about the new rules, some for-profit educators outside China see an opportunity.“Now students will come to people like us,” said Kevin Ferrone, an academic dean at Crimson Global Academy, an online school. “The industry is going to shift to online, and payments will be made through foreign payment systems” to evade the new rules, he said.For now, the industry is facing an existential crisis. Companies like Koolearn Technology, which provides online classes and test-preparation courses, have said the rules will have a direct and devastating impact on their business models. Analysts have questioned whether they can survive.Global investors who once flooded publicly listed Chinese education companies ran for the exits last week, knocking tens of billions off the industry in recent days.Scott Yang, who lives in the eastern city of Wenzhou, wondered if his 8-year-old son’s after-school program would continue next semester. He has already paid the tuition, and he and his wife depend on the program for child care. Each day, someone picks up his son from school and takes him to a facility for courses in table tennis, recreational mathematics, calligraphy and building with Legos.Banning after-school classes will allow only families that can afford private tutors to give their children an edge, Mr. Yang said. Instead of alleviating any burden, the ban will add to it.“It makes it harder,” he said, “for kids of poor families to succeed.” More