China steps in with bailouts
For decades, the International Monetary Fund and the United States were the world’s lenders of last resort. Now China is stepping in to provide more emergency loans to countries, including Turkey, Argentina and Sri Lanka.
While China still lags the I.M.F. in terms of cash disbursed, it is catching up fast. In 2021, emergency financing provided by Beijing totaled $40.5 billion, up from $10 billion in 2014 and zero in 2010, according to a new study by American and European experts who drew on statistics from AidData, a research institute in the U.S. For comparison, the I.M.F. lent $68.6 billion to countries in financial distress in 2021.
In many ways, China has replaced the U.S. as the go-to source for bailouts. The last sizable U.S. rescue loan to a middle-income country was a $1.5 billion credit to Uruguay in 2002. China often prioritizes countries that have either strategic significance or numerous natural resources.
Debt trap: Many countries that have been borrowing heavily from Beijing for years to pay for infrastructure are now struggling to pay their debts. American officials have accused China of engaging in “debt trap diplomacy” by saddling countries with excessive debt for construction projects carried out by Chinese companies.
Higher rates: China charges somewhat high interest rates for emergency credit to middle-income countries in distress, typically 5 percent. That compares with 2 percent for loans from the I.M.F., the new study found. China’s emergency loans have gone almost entirely to middle-income countries that owe a lot of money to state-controlled Chinese banks.
Domestic worries: China may soon face a debt crisis of its own, our New New World columnist writes. Chinese local governments that have borrowed heavily for big infrastructure projects are in financial disarray, their coffers depleted from enforcing China’s strict pandemic policies. Still, they keep spending.
The move reflects the government’s concerns about the power of China’s tech giants. Alibaba has been a cautionary tale about the risks of challenging the country’s ruling Communist Party, which has worked to bring large companies to heel.
Context: The government appears to be relaxing its regulatory stronghold on the technology sector after a tumultuous three years — a period marked by the disappearance of Alibaba’s multibillionaire founder, Jack Ma, from the public eye.
This week he returned to mainland China after a yearlong absence, after criticizing Chinese regulators in 2020 for stifling innovation. Regulators fined Alibaba $2.8 billion in 2021 for abusing its dominance, among other penalties.
Takeaway: As China’s economy struggles to regain momentum post-zero Covid, Beijing wants to show it is focused on jump-starting the economy.
Russia’s eastern push levels city
The shelling barely stops in Avdiivka, a city in eastern Ukraine where residents huddle in basements.
Russian efforts to capture Avdiivka, which began over a year ago, have escalated in recent weeks. A team of New York Times reporters traveled there just hours before the Ukrainian military declared it off-limits to journalists. They found a wasteland.
Out of a prewar population of 30,000 people, residents say only hundreds still live in Avdiivka.
Other developments from the war:
The head of the U.N. nuclear watchdog has raised alarm about the safety risks at the Zaporizhzhia Nuclear Power Plant, which is controlled by Russian forces. He plans to visit the facility this week. Read an insider’s account of the turmoil inside the plant.
Belarus, a close ally to Russia that borders Ukraine, is willing to host Russian nuclear weapons, the country’s Foreign Ministry said.
The International Olympic Committee declined to make a decision on whether Russian and Belarusian athletes will be allowed to compete in the 2024 Games.
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The latest viral trend on TikTok is defending TikTok. After U.S. lawmakers grilled the platform’s chief executive, Shou Chew, last week, TikTok users rallied and argued that the app should not be banned in the U.S. “Fancams” of Chew have appeared along with messages of support: “shou zi chew didn’t chew he devoured,” read one.
Revisiting Tomb Sweeping Day
For the annual holiday of Qingming, known as Tomb Sweeping Day in English, extended families gather to honor the departed, clean ancestors’ graves and feast in a Chinese folk practice that dates back 2,500 years.
But the act of sweeping tombs is becoming obsolete as the tombs themselves are being phased out. In recent decades, governments across East and Southeast Asia have pushed for cremation to replace tomb burials. Others have razed cemeteries. The shift is especially prevalent in Taiwan and seaside cities like Hong Kong, where burial land is scarce and tombs are expensive. Most families now house ashes inside columbariums, structures that can store thousands of cremation urns inside a small space.
At a columbarium, there is little to sweep and not enough space for elaborate altar spreads. A traditional whole roasted pig becomes a single slab of crispy pork belly. It’s now common to see packaged food and even fast food on these altars.
But for some of the older generation, it’s important to make an effort with home-cooked offerings. “McDonald’s is not going to cut it,” said Nancy Fam, 93. “The spirits will be tortured.”
PLAY, WATCH, EAT
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