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Biden fears China’s economic problems are ‘ticking time bomb’ posing danger to world

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President Joe Biden blasted China’s economic problems as a “ticking time bomb” and referred to Communist Party leaders as “bad folks,” his latest barb against President Xi Jinping’s government even as his administration seeks to improve overall ties with Beijing.

In comments that included several major inaccuracies about the world’s second-largest economy, Biden said at a political fundraiser Aug. 11 that China was in “trouble” because its growth has slowed and it had the “highest unemployment rate going.” He also blasted Xi’s signature Belt and Road Initiative as the “debt and noose,” because of the high levels of lending to developing economies associated with the global investment program.

“China was growing at eight per cent a year to maintain growth, now close to two per cent a year,” he told donors in Park City, Utah, misstating China’s rate of expansion. “It’s in a position where the number of people who are of retirement age is larger than the number of people of working age,” he added, a statement that was not only incorrect but also off by hundreds of millions of people.

“So they got some problems,” he added. “That’s not good because when bad folks have problems, they do bad things.”

Josef Gregory Mahoney, a politics and international relations professor at Shanghai’s East China Normal University, said Beijing was unlikely to be “baited” into responding to Biden’s latest barbs. “Beijing knows Biden will resort increasingly to anti-China dog whistle tactics to rally popular support at home,” he said. “But it’s also important to remember that Beijing heard a lot worse from Trump.”

China’s Foreign Ministry did not respond to a request for comment.

Biden’s comments are some of his most direct criticisms yet about the U.S.’s top geopolitical and economic rival. The president has sought to walk a fine line between using trade curbs to deter China’s high-tech military advancement, while achieving a diplomatic rapprochement with Chinese leaders that could pave the way for a potential meeting this year with Xi, who is expected to visit the U.S. in November to attend the APEC summit.

It’s unclear yet whether that will materialize, particularly after reports the White House will bar sanctioned Hong Kong leader John Lee from the meeting of 21 Asia-Pacific economies. While Biden said on Aug. 10 that Washington isn’t looking for a fight with Beijing, a range of issues threaten to derail the relationship yet again, from new investment curbs approved by the U.S. this week to military tensions over Taiwan, which will send Vice-President Lai Ching-te — the leading presidential candidate in a January election — to stop in New York and San Francisco in the coming days.

It’s not the first time Biden has made off-the-cuff remarks that threaten to undercut the work of his administration to stabilize ties. In June, just a day after U.S. Secretary of State Antony Blinken completed a trip to Beijing to ease tensions, Biden likened Xi to a “dictator” and questioned the Chinese leader’s control over his country and its military.

It’s unclear how Beijing will react to Biden’s latest remarks. China largely shrugged off his reference to Xi as a dictator, welcoming U.S. Treasury Secretary Janet Yellen and U.S. climate envoy John Kerry on separate trips weeks later. Commerce Secretary Gina Raimondo, who is slated to visit China this month, on Aug. 10 touted an agreement by China to lift restrictions on group travel to the U.S. as a win for engagement between the world’s two biggest economies.

Chinese Premier Li Qiang shakes hands with U.S. Treasury Secretary Janet Yellen
Chinese Premier Li Qiang shakes hands with U.S. Treasury Secretary Janet Yellen during a meeting at The Great Hall of the People in Beijing on July 7, 2023. Photo by MARK SCHIEFELBEIN/POOL/AFP via Getty Images

Still, Biden’s swipes at China’s US$18 trillion economy come at a particularly sensitive time for Xi. Although Biden misrepresented key statistics about China, the overall outlook remains grim. China’s gross domestic product grew at a slower-than-expected pace of 5.5 per cent in the first half of the year, compared with a year earlier, leading to worries about ripple effects for the global economy.

China slid into deflation in July, and is battling slowing exports, high youth unemployment and a slumping property market highlighted by a debt crisis for Country Garden Holdings Co. Once the country’s largest private-sector developer by sales, the company is in danger of defaulting amid an industry cash crunch.

Xi’s government has sought to silence negative economic news, with officials warning mainland economists to avoid the word “deflation” when referring to price pressures. Discussions of sensitive topics such as private sector reform have been scrubbed from social media platforms, and authorities this week told internet firms to deal quickly with defamatory comments targeting companies online.

At the same time, Biden’s remarks contained factual inaccuracies and overstated some of China’s problems. While China’s population shrank for the first time in six decades last year, the Asian giant still had 876 million people of working age versus 280 million people 60 years or older, according to official statistics.

China’s economy is on track to grow by 5.2 per cent this year, according to a Bloomberg survey of economists in July, even after weak consumption and a property market slump. By comparison, the U.S. economy is forecast to grow 1.6 per cent this year, according to economists.

Although China’s annual economic growth has slowed significantly from the breakneck pace of above 10 per cent seen in the 2000s, authorities have said they want “high quality” development in a pivot away from an infrastructure and property-reliant growth model that fuelled high debt levels. That’s weighed on short-term growth, but may mean more sustainable development.

China’s official urban jobless rate has hovered around 5.2 per cent in recent months, compared with the 6.4 per cent jobless rate recorded in the Euro zone in June. Youth unemployment in China, though, is at a record high of more than 20 per cent.

— with assistance from Yujing Liu, Jenni Marsh and Colum Murphy

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Minimum wage to hire higher-paid temporary foreign workers set to increase

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OTTAWA – The federal government is expected to boost the minimum hourly wage that must be paid to temporary foreign workers in the high-wage stream as a way to encourage employers to hire more Canadian staff.

Under the current program’s high-wage labour market impact assessment (LMIA) stream, an employer must pay at least the median income in their province to qualify for a permit. A government official, who The Canadian Press is not naming because they are not authorized to speak publicly about the change, said Employment Minister Randy Boissonnault will announce Tuesday that the threshold will increase to 20 per cent above the provincial median hourly wage.

The change is scheduled to come into force on Nov. 8.

As with previous changes to the Temporary Foreign Worker program, the government’s goal is to encourage employers to hire more Canadian workers. The Liberal government has faced criticism for increasing the number of temporary residents allowed into Canada, which many have linked to housing shortages and a higher cost of living.

The program has also come under fire for allegations of mistreatment of workers.

A LMIA is required for an employer to hire a temporary foreign worker, and is used to demonstrate there aren’t enough Canadian workers to fill the positions they are filling.

In Ontario, the median hourly wage is $28.39 for the high-wage bracket, so once the change takes effect an employer will need to pay at least $34.07 per hour.

The government official estimates this change will affect up to 34,000 workers under the LMIA high-wage stream. Existing work permits will not be affected, but the official said the planned change will affect their renewals.

According to public data from Immigration, Refugees and Citizenship Canada, 183,820 temporary foreign worker permits became effective in 2023. That was up from 98,025 in 2019 — an 88 per cent increase.

The upcoming change is the latest in a series of moves to tighten eligibility rules in order to limit temporary residents, including international students and foreign workers. Those changes include imposing caps on the percentage of low-wage foreign workers in some sectors and ending permits in metropolitan areas with high unemployment rates.

Temporary foreign workers in the agriculture sector are not affected by past rule changes.

This report by The Canadian Press was first published Oct. 21, 2024.

— With files from Nojoud Al Mallees

The Canadian Press. All rights reserved.

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PBO projects deficit exceeded Liberals’ $40B pledge, economy to rebound in 2025

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OTTAWA – The parliamentary budget officer says the federal government likely failed to keep its deficit below its promised $40 billion cap in the last fiscal year.

However the PBO also projects in its latest economic and fiscal outlook today that weak economic growth this year will begin to rebound in 2025.

The budget watchdog estimates in its report that the federal government posted a $46.8 billion deficit for the 2023-24 fiscal year.

Finance Minister Chrystia Freeland pledged a year ago to keep the deficit capped at $40 billion and in her spring budget said the deficit for 2023-24 stayed in line with that promise.

The final tally of the last year’s deficit will be confirmed when the government publishes its annual public accounts report this fall.

The PBO says economic growth will remain tepid this year but will rebound in 2025 as the Bank of Canada’s interest rate cuts stimulate spending and business investment.

This report by The Canadian Press was first published Oct. 17, 2024.

The Canadian Press. All rights reserved.

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Economy

Statistics Canada says levels of food insecurity rose in 2022

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OTTAWA – Statistics Canada says the level of food insecurity increased in 2022 as inflation hit peak levels.

In a report using data from the Canadian community health survey, the agency says 15.6 per cent of households experienced some level of food insecurity in 2022 after being relatively stable from 2017 to 2021.

The reading was up from 9.6 per cent in 2017 and 11.6 per cent in 2018.

Statistics Canada says the prevalence of household food insecurity was slightly lower and stable during the pandemic years as it fell to 8.5 per cent in the fall of 2020 and 9.1 per cent in 2021.

In addition to an increase in the prevalence of food insecurity in 2022, the agency says there was an increase in the severity as more households reported moderate or severe food insecurity.

It also noted an increase in the number of Canadians living in moderately or severely food insecure households was also seen in the Canadian income survey data collected in the first half of 2023.

This report by The Canadian Press was first published Oct 16, 2024.

The Canadian Press. All rights reserved.

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