The Power of the Purse: China Pleads For Spending
NEED TO KNOW
The Power of the Purse: China Pleads For Spending
CHINA
Pan Gongsheng, governor of the People’s Bank of China and secretary of the Chinese Communist Party Committee, recently gave a whatever-it-takes speech.
Pledging to cut interest rates, loosen lending standards, and support innovation, he said the central bank would stop at nothing to make sure China continues to prosper amid expectations of a global slowdown – that he blamed on President Donald Trump’s tariffs on Chinese goods that amount to as much as 45 percent, the South China Morning Post reported.
“We will utilize a range of monetary policy tools, including open market operations, to ensure ample liquidity and align money supply and social financing growth with economic and inflation targets,” he said.
However, in what might be a surprise to Americans and Europeans struggling with high prices, Gongsheng is confronting the opposite problem: deflation.
As Bloomberg explained, demand and prices of consumer goods in China have not recovered to post-pandemic levels, leaving many businesses in the lurch as consumers tightened their wallets. The same consumers have lost around $1 trillion in savings in the country’s real estate bust, according to CBS News’ 60 Minutes. American tariffs promise to squeeze more money out of the system.
The Chinese state appears ready to make nice with those on its blacklist for help.
Chinese President Xi Jinping recently appeared at a symposium with billionaire Jack Ma, founder of the Chinese online marketplace and service provider Alibaba. Ma “withdrew from public life” in 2020 after his worldwide popularity potentially made him a rival to Xi’s authority. And Alibaba was given a record fine. Now, Xi is asking Ma to help drive more economic growth to pump more money into the sputtering economy.
“China’s Communist Party has a history of purging and then welcoming back senior officials,” wrote the Economist. Now, however, he seems to be welcome once again.
In one sense, Xi’s economic plans unveiled a decade ago, which aimed to expand China’s reach in technology and establish world-class high-tech companies like Huawei, or Chinese artificial intelligence firm, DeepSeek, have been wildly successful. But Xi is still pursuing state-led, export-oriented industrial policies while ignoring reforms that might expand economic prosperity, wrote World Politics Review.
These problems spill onto the streets. Protests in China increased by more than 20 percent in the last quarter of 2024 compared with a year earlier, according to the Christian Science Monitor, citing figures affiliated with Freedom House, a US-based human rights advocacy group. Of the 7,000 incidents tracked since 2022, most stemmed from “economic grievances such as unpaid wages, housing disputes, and confiscation of rural land by local governments.”
Xi insists, meanwhile, that gross domestic product will grow by around 5 percent this year, noted British think tank Chatham House.
That won’t happen unless everyone starts importing more Chinese goods and Chinese consumers spend money to hit those targets.
Analysts said the newly released 30-point plan to increase domestic consumption was light on specifics and will do little to fix China’s bigger problems, namely deflation, unemployment, and low household income.
“The basic takeaway is that these are very incremental and limited steps,” Logan Wright, a partner at Rhodium Group, a research group focused on China’s economy, told the Washington Post. “These are structural problems that are not easily solved with a few subsidies here and there.”
THE WORLD, BRIEFLY
Fed Up: Palestinians Protest Hamas
ISRAEL/ WEST BANK & GAZA
Anti-war protests broke out in Gaza this week, with demonstrators openly criticizing Hamas in a rare public challenge, and demanding an end to the ongoing conflict with Israel that has ravaged the territory, the Associated Press reported.
The largest protest erupted Tuesday in the bombed-out town of Beit Lahiya, where a small crowd quickly grew to more than 2,000 people holding signs that read “Stop the war,” “Hamas get out,” and “We refuse to die.”
Eyewitnesses and videos posted online showed demonstrators waving white flags and calling on Hamas to release the hostages it holds in exchange for peace. Similar demonstrations took place on Tuesday and Wednesday in Gaza City’s Shijaiyah neighborhood and Jabaliya refugee camp.
While some participants voiced anger at Israel and international actors, much of the frustration was directed at Hamas, which many accuse of failing to protect civilians or deliver on promises of resistance.
“Hamas is not taking us into account,” one protester told NPR, while also calling for the release of the remaining Israeli hostages. “It has 2 million people in Gaza who need to live.”
Despite Hamas’s longstanding suppression of public dissent since it took over the enclave almost 20 years ago, it did not break up the demonstrations, possibly due to its diminished capacity following months of Israeli strikes. Some Gazans said they felt emboldened to speak out for the first time.
The rare outburst of dissent follows a resumption of Israel’s military campaign in Gaza after the collapse of a temporary ceasefire.
The war in the Palestinian enclave followed an attack by Hamas and its allies on southern Israel on Oct. 7, 2023, killing about 1,200 people and kidnapping 251 others. Israel’s response – an air and ground offensive aimed at eliminating Hamas and securing the release of hostages – has killed more than 50,000 people in Gaza, according to the Hamas-run health ministry.
The ministry does not distinguish between civilians and combatants.
Israel has vowed to continue the campaign until Hamas is dismantled and the 59 remaining hostages – 24 of whom are believed to be alive – are returned. Hamas has said it will only agree to a release in exchange for Palestinian prisoners, a permanent ceasefire, and Israeli withdrawal from Gaza.
Israeli Prime Minister Benjamin Netanyahu seized on the moment, telling lawmakers on Wednesday that the protests showed Israel’s policy was working.
“We have seen something the likes of which we have never seen … large, open protests in Gaza against Hamas rule,” he said.
Political analysts said the protests reflect the growing despair among Palestinians after 17 months of bloody conflict, with Israeli commentators suggesting that Israel should “seize the crack that has opened and widen it further and further.”
The Baby Exporter: South Korea’s Adoption Enterprise Hurt Kids
SOUTH KOREA
The South Korean government fabricated birth records, faked child abandonment notices, and failed to properly vet prospective adoptive parents in order to become the world’s “baby exporter,” according to a new investigation released Wednesday, CNN reported.
Struggling to recover from World War II and the Korean War, South Korea sent more than 200,000 babies overseas for adoption starting in the 1950s, paving the way for a large and lucrative adoption industry that peaked under consecutive military regimes in the 1970s and 1980s, the Associated Press wrote.
But the government-appointed Truth and Reconciliation Commission concluded the government bears responsibility for facilitating a foreign adoption program rife with fraud and abuse, driven by efforts to reduce welfare costs and enabled by private agencies that often manipulated children’s backgrounds and origins, the newswire added.
The allegations include the lack of parental consent for adoption, inadequate screening of adoptive parents, neglect of the children, and instances where foreign parents were pressured to pay to receive a child.
The landmark report followed a nearly three-year investigation into complaints from 367 adoptees in Europe, the United States, and Australia, who accused adoption agencies of coercion and deception, including forcibly taking them from their mothers in some cases.
The commission said it confirmed human rights violations in 56 of the complaints and aims to review the remaining cases before its mandate expires in late May.
However, some adoptees and a senior investigator on the commission, Sang Hoon Lee, criticized the report for being too cautious, admitting that investigative limitations prevented the commission from more clearly showing how much the government was actually involved.
For example, most of the babies were registered as abandoned even when that was not the case, which made it difficult to trace the roots of the adoptees.
Lee criticized the panel’s decision to delay evaluating 42 other cases, implying that some committee members were reluctant to consider instances where adoptees couldn’t fully prove the falsification of their adoption papers.
The commission said that it found that decades ago, the government believed sending babies abroad to be adopted was cheaper than building a social welfare system for children in need.
Moreover, Lee noted that most of the adoptions were run by private agencies that had extensive guardianship rights over children, were not overseen by the government, and depended on donations from the adoptive parents, which likely pressured the agencies to continue the foreign adoptions to fund their operations.
While there was extensive evidence that the adoption process was questionable, Western countries ignored the signs and even sometimes pressured South Korea to continue the adoptions to satisfy domestic demand for children.
The commission recommended that the government issue an official apology, conduct a thorough survey of adoptees’ citizenship status, and provide remedies for victims whose identities were falsified.
The Forever Transition: Niger Gets New ‘President’
NIGER
Niger’s military junta leader, Abdourahamane Tiani, was sworn in on Wednesday as the country’s president for a five-year transition period, a move that aims to halt attempts by the regional Economic Community of West African States (ECOWAS) to reinstate democracy following the country’s 2023 coup, France 24 wrote.
The five-year transition period, which also begins on Wednesday, remains “flexible,” said Mahamane Roufai, the secretary general of the government, speaking at a ceremony in the capital Niamey where the new transition charter was approved.
Tiani, an army veteran who led the soldiers who deposed Niger’s elected government in June 2023, was elevated to the highest military rank of army general, cementing the power he has held since the coup.
Following the coup, Niger’s junta had proposed a three-year transition period but when ECOWAS rejected the proposal and threatened to intervene with force, Niger left the bloc.
Neighboring Mali and Burkina Faso, both of which have had coups in recent years and are currently run by juntas, have also left ECOWAS. The two countries earlier this year joined forces with Niger to address security concerns in the central Sahel region, forming an alliance known as the Alliance of Sahel States (AES), explained Reuters.
Still, analysts say that Niger’s military government has failed to stop the jihadist violence it used as justification for seizing power. Instead, the insurgents have grown stronger.
DISCOVERIES
Some Like It Hot
Humans may struggle to survive in hot weather, but the planet does just fine.
In fact, the Earth existed in a greenhouse climate free of ice caps for much of its history and only developed its ice caps through a lucky coincidence.
A new study shows that ice caps formed due to a fortunate combination of low global volcanism and widely dispersed continents with large mountains, which facilitated global rainfall, and enhanced processes that remove carbon from the atmosphere, said researchers at the University of Adelaide in Australia.
“The important implication here is that the Earth’s natural climate regulation mechanism appears to favor a warm and high-CO2 world with no ice caps, not the partially glaciated and low-CO2 world we have today,” explained Andrew Merdith, lead author of the study.
Researchers believe Earth’s general tendency towards a warm climate has generally prevented catastrophic “snowball Earth” glaciations, allowing life to prosper.
Researchers have long tried to explain the cold intervals in Earth’s history by following clues such as decreased CO2 emissions from volcanoes, the reaction of CO2 with certain rocks, and increased carbon storage by forests.
Now, researchers were able to conduct the first comprehensive test of all these cooling processes using a new long-term 3D Earth model developed because of advances in computing.
The team concluded that no single process could create these cold climates and that the cooling was produced by the combined effects of several processes that took place at the same time.
“Over its long history, the Earth likes it hot, but our human society does not,” said co-author Benjamin Mills, adding that this study carries implications for global warming and that we should not always expect Earth to return to the cooler climate of the pre-industrial age.