Connect with us


Xi Puts Ideology Before Economy With Market-Busting Lockdowns – BNN



(Bloomberg) — China’s worst equity selloff since early 2020 reflects a growing concern about President Xi Jinping: He can’t afford the political costs of shifting from a Covid Zero strategy that is pummeling the economy. 

In Shanghai, a weekslong Covid-19 lockdown got even worse, with workers in hazmat suits fanning out over the weekend to install steel fences around buildings with positive cases. In Beijing, the process is just getting started, as authorities on Monday began shutting down a bustling district in the capital to quash fresh outbreaks. 

The threat of paralyzing China’s two largest and wealthiest cities with a strategy abandoned by most countries helped push the CSI 300 down 4.9%, the gauge’s steepest one-day drop since the first such lockdown in Wuhan two years ago. The spreading lockdowns have investors worried that Xi is sacrificing the Communist Party’s reputation for pragmatic economic management to defend a political narrative that portrays him as the world’s most successful virus-fighter.

“This Covid situation is really putting China into a very dark moment, perhaps the darkest moment in economic terms for the last couple of decades,” Junheng Li, JL Warren Capital founder and chief executive officer, said of the Shanghai lockdown during an interview on Bloomberg TV. “It’s a confidence crisis in a sense that you’ve got the most affluent city in China with this consensus disappointment and resentfulness towards a very non-sensible policy.”

“People really don’t know, what’s a clear path to get China out of this Covid situation,” Li said. 

Pressure is building as Xi prepares for a twice-a-decade leadership reshuffle later this year that’s expected to secure him a precedent-breaking third term in power. Maintaining Xi’s reputation for strong decision-making appears increasingly central to that process, even if it comes at the expense of the economic growth that has helped underline the Communist Party’s legitimacy since China started opening to the world more than 40 years ago.

Economists surveyed by Bloomberg last week lowered annual growth forecasts for China to 4.9%, betting against the government’s official target of about 5.5%. Overseas investors offloaded 4.4 billion yuan ($7 billion) of stocks Monday, taking monthly inflows negative this month. The onshore yuan slumped to its weakest level in 17 months on concerns about rising capital outflows. 

China’s outgoing premier, Li Keqiang, has in recent weeks called for a “sense of urgency” in implementing stimulus measures and — according to one local newspaper report — urged entrepreneurs and experts at a forum last month to “tell the truth” and offer proposals rather than talking up achievements. Still, the party has increasingly signaled that “Covid Zero” is not one of the things up for debate, despite the emergence of the more contagious omicron strain.

Ma Xiaowei, director of National Health Commission, credited Xi with “setting the tone” on the country’s anti-epidemic policy in a front-page commentary in the party’s Study Times journal, making it riskier to challenge the strategy. Ma called for “taking a clear-cut stance in opposing the wrongful thoughts of living with virus.”

Over the weekend, Chinese internet users fought to evade censors to spread a six-minute video titled “The Sound of April,” which included a montage of clips illustrating Shanghai’s struggle under more than a month of lockdowns. Some users compared the outpouring of support for the video to the night two years ago when Wuhan doctor Li Wenliang — who delivered one of the first public warnings about a new SARS-like illness — was hailed as a hero after dying of the disease. 

For Xi, China’s ability to quash the first coronavirus outbreak in Wuhan provided a powerful response to criticism from the U.S. and other Western democracies, where debates over masks, vaccines and lockdown measures have been blamed for catastrophic virus surges. China has so far acknowledged less than 5,000 deaths, compared with almost 1 million in the U.S., a fact trumpeted daily by diplomats and state media editorials.

But Beijing has yet to approve for use the highly effective mRNA vaccines pioneered by companies such as Pfizer Inc. and Moderna Inc., a step which could be viewed as an acknowledgment of Western scientific victory. China has also failed to vaccinate much of its elderly population, raising the costs of any effort to let the virus circulate. 

That risk was driven home by an outbreak in Hong Kong earlier this year that saw the Asian financial hub spiral from a Covid safe haven to the place with the highest death rate of the pandemic. A monthlong Chinese outbreak could result in 31,000 deaths to a quarter of a million deaths, according to Bloomberg Intelligence calculations.

“Even though China has lauded its Covid approach over the haphazard handling of Covid in the United States, China has now also politicized the virus,” said Mary Gallagher, a political science professor at the University of Michigan. “This makes a policy change very difficult because it will imply a previous policy mistake. That is simply something that Xi is unwilling to do in the year that he is potentially up for an unprecedented third term as president and head of the party.”

China has similarly prioritized ideological struggles with the West over short-term economic pressures in its decision to defend President Vladimir Putin’s rationale for invading Ukraine. The position has prompted threats of secondary sanctions from the U.S. and warnings from European officials that Beijing risks undermining its relationship with Brussels. 

Last week, Xi defended both his efforts to push back against U.S. “hegemony” and his approach to the virus in a video address to the Boao Forum for Asia. “For humanity to clinch the final victory against the Covid-19 pandemic, more hard efforts are needed,” he said. 

A district-level official in Shanghai carried the war metaphor further in an April 15 speech explaining the virus fight. “This is a military order,” Baoshan party secretary Chen Jie said in remarks widely circulated online. “There is no room for bargaining, we can only grit our teeth and fight for victory. It can also be said this is a total attack, a last-ditch battle to reverse the trend of the epidemic.” 

Such rhetoric has been used to justify ever-more extreme steps to control people’s movements in Shanghai, which reported 19,000 cases and 51 fatalities Sunday. More than a month into the city’s outbreak, some residents in buildings with positive cases found themselves penned in by green chain-link fences outside their exits, according to photos and posts shared on Chinese social media platform Weibo.

Meanwhile, a surge in cases in Beijing’s Chaoyang district — an area of 3.5 million people, including many expats, the central business district and most foreign embassies — raised concerns that the capital could soon see its first major lockdown. Beijing municipal government spokesman Xu Hejian said late on Friday that the current outbreak was “complex and stealthy.”

Changing policy now would be represent and enormous loss of face for Xi, and could be worse in the short term, as the virus spreads and more people die, said Richard McGregor, author of the “The Party: The Secret World of China’s Communist Rulers.”

“They have been boasting for years that their system is superior to Western democracies, but suddenly, it looks like it isn’t after all,” said McGregor, who’s also a senior fellow at the Lowy Institute in Sydney. “Who is going to dare to tell Xi Jinping that?”

©2022 Bloomberg L.P.

Adblock test (Why?)

Source link

Continue Reading


Rural development grants to spark Nicola Valley economy – Global News



The province announced on Friday a series of rural development grants in the Nicola Valley to support economic development and diversification.

This is the next step in the StrongerBC Economic Plan and the ongoing recovery efforts in Merritt following the floods in November last year.

“People in Merritt have been through a lot in the past year, and they know how important business recovery is for community rebuilding,” said parliamentary secretary for rural and regional development Roly Russell in a press release.

The provincial government is providing a $1-million rural development grant to the Small-Scale Meat Producers Association to build a community abattoir in the Merritt area.

Read more:

B.C. announces $228M to help farmers, ranchers impacted by floods

This will provide meat processing and cut-and-wrap services to local farmers and ranchers.

“This project represents significant job and economic opportunities for the region, while ensuring local ranches, abattoirs and businesses are part of a strong, resilient B.C. food system,” said minister of agriculture and food Lana Popham in a press release.

“With the recent changes to B.C.’s meat-licensing system and investments in facilities like the Nicola Valley community abattoir, this revitalization of the small-scale meat industry makes it easier to produce, buy and sell B.C. meat in our rural communities, and helps strengthen our food security and food resiliency.”

The abattoir will be a government-inspected licensed facility with a full range of services to process red meat.

According to the province, local producers have been impacted by the lack of processing capacity. Julia Smith who is a pork and beef producer in Merrit is hopeful this new facility will help her business as well as other local producers.

“My partner and I moved to the Nicola Valley in 2016 planning to expand our business to meet the growing demand for well-raised, local meat. But we soon found that the processors we relied upon were not able to keep up with our production and we had to scale the business back instead of growing it.”

Click to play video: 'More than 900 people still displaced following Merritt flooding last fall'

More than 900 people still displaced following Merritt flooding last fall

More than 900 people still displaced following Merritt flooding last fall – Feb 25, 2022

“We were on the verge of giving up. But now we are ready to press on, because this facility will allow us, and other local family farms and ranches, to grow and thrive while providing greater food security for the community.”

The province is providing a $1-million rural development grant to the Scw’exmx Tribal Council toward Gateway 286 in Merritt.

“After an unbelievable year of fires, floods, and a pandemic, we welcome the B.C. government’s $1-million grant that will bolster our rural community, support good-paying jobs and much-needed economic development,” said Spayum Holdings LP director and Scw’exmx Tribal Council Terrence (Lee) Spahan in a press release.

“The Gateway 286 project is a 30-plus-year vision of past and present Nicola Valley Indigenous Chiefs and these monies will take our commercial and tourism development one more step closer to reality. This project will enhance the experience of the [traveling] public by providing much-needed services, and it will provide good-paying jobs and entrepreneurial opportunities for the residents of the Nicola Valley.”

Meanwhile, the City of Merritt is receiving a $500,000 grant related to economic recovery for communities that were affected by the flooding. The grant will go towards completing economic development projects and initiatives to support long-term economic recovery.

This is in addition to $329,000 in provincial funding for the City of Merritt to update flood-hazard mapping and develop new flood-mitigation plans.

Click to play video: 'Anger grows over Merritt evacuations'

Anger grows over Merritt evacuations

Anger grows over Merritt evacuations – Nov 28, 2021

Adblock test (Why?)

Source link

Continue Reading


China's Economy Contracts Sharply as Covid Zero Cuts Output – BNN



(Bloomberg) — China’s economy contracted in April, with Covid outbreaks and lockdowns dragging the industrial and consumer sectors down to the weakest levels since early 2020 as millions of residents were confined to their homes and factories were forced to halt production. 

Industrial output fell 2.9% in April from a year ago, worse than the median estimate of a 0.5% increase in a Bloomberg survey of economists. Retail sales contracted 11.1% in the period, weaker than a projected 6.6% drop. The unemployment rate climbed to 6.1%, higher than the forecast of 6%.

China’s economy has taken an enormous toll from the government’s stringent efforts to keep the virus at bay. Beijing has insisted on sticking with its Covid Zero strategy to curb infections, even though the high transmissibility of omicron puts cities at greater risk of repeatedly locking down and reopening compared to earlier strains. 

“Covid outbreaks in April had a big impact on the economy, but the impact is short-term,” the National Bureau of Statistics said in a statement. “With progress in Covid controls and policies to stabilize the economy taking effect, the economy is likely to recover gradually.”

China’s benchmark CSI 300 stock index was down 0.3% as of 10:04 am local time. The onshore yuan was little changed at 6.7917 per dollar. The yield on the 10-year government bonds rose 1 basis point to 2.83%.

Fixed-asset investment increased 6.8% in the first four months of the year, largely in line with projected growth of 7%, likely supported by the government’s push to expand infrastructure spending.

The economic shocks from the zero-tolerance policy have pushed China’s ambitious full-year growth target of around 5.5% further out of reach, and is weighing on the global growth outlook. 

Beijing has signaled that policy makers will step up support for the economy, with Premier Li Keqiang recently urging officials to ensure stability through fiscal and monetary policy.

The People’s Bank of China took steps on Sunday to ease a housing crunch by reducing mortgage rates for first-time homebuyers. It left the interest rate on one-year policy loans unchanged on Monday, as inflation pressure and worries about capital outflows reduce the scope for more easing.  

Monetary stimulus is proving less effective because of the stringent virus restrictions, with data on Friday showing businesses and consumers had little appetite to borrow in April. Credit growth weakened sharply last month, with new yuan loans sinking to the lowest level since December 2017.

(Updates with comment from statistics office)

©2022 Bloomberg L.P.

Adblock test (Why?)

Source link

Continue Reading


Potential of Seaweed on Economy Being Explored in Upcoming Webinar – VOCM



A webinar on the potential of seaweed as an economic driver is coming later this month.

The webinar, put together by The Laurentic Forum Consortium, will look at how coastal communities can use an abundance of seaweed to boost the economy, as seaweed is being used as fertilizer, diet supplements, bioplastics, animal feed, pharmaceutical products, and much more.

Webinar moderator and the executive director of the Canadian Centre for Fisheries Innovation, Keith Hutchings, says seaweed farming could provide opportunities in Newfoundland and Labrador.

He says if utilized correctly, communities and regions can add one more industry to help sustain them.

The webinar is taking place May 19.

Adblock test (Why?)

Source link

Continue Reading