COLOMBO:  , Sri Lanka’s president will travel to the island’s largest bilateral lender China next week ahead of his first national budget, the information minister said on Tuesday ( Jan 7 ). The attend comes one month before President Anura Kumara Dissanayake’s first funds, which is expected to describe hisContinue Reading
Getty ImagesGuangzhou FC, China’s most effective side, will certainly play appropriately next season because they are unable to pay off enough of their significant debt.
The Chinese Football Association has forbid the eight-time champions of China Super League ( CSL ) play in domestic football when the new campaign kicks off.
It is a stunning fall from grace that ends a luxurious lifestyle that saw them win two AFC Champions League titles in 2013 and 2015 in three decades.
They won the Club World Cup in that powerful time, agreed an university partnership with True Madrid, and disclosed plans for a 100, 000-capacity venue.
Guangzhou’s swift development began when China Evergrande, a company that developed real estate, purchased the team in 2010 for the Foreign second-tier.
The fresh ownership team renamed the Guangzhou Evergrande side and made significant investments both on and off the ball, in line with Xi Jinping’s plan to make China a sports powerhouse that may host and win the World Cup.
In 2012, Marcello Lippi, the country’s champion manager, won three CSL names, a Taiwanese FA Cup, and the AFC Champions League. He was appointed as Italy’s manager.
Luiz Felipe Scolari, who led Brazil to World Cup splendor in 2002, was even more powerful, winning seven medals in two-and-a-half times.
Past Colombian forward Jackson Martinez, former midfielder for Tottenham and Barcelona, and former international striker Alberto Gilardino for big transfer fees and extremely high salaries were among the foreign stars signing.
However, Guangzhou were not the only ones who spent so much.
As the CSL sought to contend with powerhouses like the Premier League, La Liga, Serie A, and Bundesliga, an abundance of foreign players relocated to China.
Brazil scorer Hulk joined Shanghai SIPG, who were managed by previous England director Sven-Goran Eriksson, for £46m.
Former Manchester City and United winger Carlos Tevez moved to Shanghai Shenhua for a alleged$ 40 million while former Chelsea playmaker Oscar followed for$ 60 million.
All of the players were paid incredibly high salaries, and Chelsea director Antonio Conte stated in 2016 that the money spent on people by Chinese leagues was a “danger for all teams in the world.”
Arsene Wenger, the manager of Arsenal, stated that” China appears to have the financial resources to transfer a total European league to China.”
Gareth Bale, who was once the most costly player in the world, was linked with a walk to Jiangsu Suning for £1m per week in 2019.
But issues immediately began to change. The Chinese Football Association, afraid of the spiralling investing, introduced a’ extravagance taxes’ that made big-money transfers excessively cheap.
Additionally, a salary cap was established, and partners were prohibited from renaming their own clubs, giving Guangzhou Evergrande the name Guangzhou FC.
By that point, Evergrande was already in financial trouble, and in 2021, they made default payments as a result of a wider Chinai real estate problems that was made worse by the effects of the Covid-19 epidemic.
Guangzhou went into issue in 2022 after the company declared bankruptcy. Their idealistic stadium renovation plans were abandoned, and players were sold, leading to fall later that year.
Due to their continued financial difficulties, Guangzhou was given the opportunity to compete in the forthcoming campaign after just missing out on advertising in the 2024 season.
Nonetheless, the team continues to be optimistic about having some form of existence.
We regret that we were unable to achieve it, so we offer our sincere condolences to enthusiasts and the supporters of the club from all walks of life,” Guangzhou said in a statement.
” We will not transform our original intention, and we will do our best to handle the aftermath and contribute to the growth of Guangdong and Guangzhou football.”
As 2025 begins, some central banks classmates envy the tug of war facing Women’s Bank of China Governor Pan , Gongsheng.
Forex traders are pulling one area, predicting that Beijing will react to Donald Trump’s upcoming industry war with a weaker yuan. Chinese President Xi Jinping, who has previously opposed creating a lower transfer charge, is on the other side.
By setting the yuan’s regular reference rate even higher than the psychologically significant 7,2 per dollar level, Pan’s team once more signaled its support for a stable yuan this week. The yuan’s decline, which came after it was 7.3 % per dollar, caused it to decline.
Although the yuan is trading at its lowest level in 17 years, Beijing’s upward pressure on trade costs extends far beyond that region. Most major Asian region currencies fell on Monday ( 6 January ), as the US dollar traded at two-year highs.
” Trump’s business plan ideas are driving renewed anticipation of a stronger-for-longer US money”, writes BMI, a Fitch Solutions business, in a statement. ” This has the ability to deliver prices lower” in China.
Along with” Trump business” relationships strengthening the money, investors are responding to ideas from the US Federal Reserve that price reductions may be infrequent in 2025.
For one thing, US prices isn’t receding when fast as hoped. For one thing, the American labour market continues to have unmatched vigor yet as international repercussions increase.
Nothing is greater than the potent Chinese demand suffocating collapsing property markets. Depreciation is being caused by the resulting decline in confidence and retail sales.
” With deflationary pressures mounting despite expectations for more aggressive policy easing, the Chinese 10-year yield has dropped below 1.6 %, signaling a flight to safety”, says Carlos , Casanova, economist at Union Bancaire Privée.
This situation, Casanova adds,” could be similar to Japan’s experience in the early 1990s, with the potential for a considerable carry trade involving borrowing in renminbi to invest in higher-yielding U.S. assets,” which has significant implications for US risk assets, specially if policymakers permit the yuan to diminish in 2025.
The good news is that new statistics indicate that China is regaining some ground. Private business activity in the services sector reached a seven-month deep in December. The Caixin companies buying professionals ‘ index from S&, P Global rose to 52.2 from 51.5 in November.
However, challenges are intensifying, says Wang Zhe at Caixin Insight Group. The “external atmosphere”, the scholar warns, is poised to be “more difficult” in 2025, requiring “early” policy approaches and” sharp responses”.
Beijing officials met on Monday to comfort jittery investors selling Shanghai and Shenzhen stock. Leaders at both markets stressed that” solid fundamentals and resilience” support China’s US$ 17 trillion market. They likewise said they’re positively working” to solicit ideas and ideas” from international organizations.
Part of this effort, Casanova observes, is for many big cities to offer usage tickets. Coastal cities like Shanghai are focusing on companies such as dining and entertainment, while inland towns in Hubei and Sichuan are targeting industries like furniture, cars, and technology.
It’s tempting to observe Beijing show “greater determination to implement more measures”, he says.
One of them is the PBOC’s decision to increase funding for creativity. The plan, as the central banks puts it, is to devise ways to promote “high-quality international cash” to invest in China’s battered technology sector.
Above all, though, Pan’s team is pledging to keep the currency stable. According to the pro-PBOC publication Financial News, China’s central bank will “resolutely guard against the risk of exchange rate overshooting and maintain the fundamental stability” of the yuan.
It notes that past “experience of multiple rounds of appreciation and depreciation” proved , Pan has” sufficient” tools to keep the exchange rate “basically stable”.
Only time will tell. The yuan’s declines are frequently closely related to the yuan’s decline in China’s stock markets.
Since the beginning of December, Gavekal Research’s economist Louis Gave has noted that the US and China benchmark financing costs have increased by about 80 basis points.
This reinforces the market narrative of a remarkable — and likely inflationary — US economy that is about to enter a new growth phase, while China is scurrying over the threshold of a deflationary lost decade, according to Gave. The phrase “message from equity markets, with Chinese stocks having a funk the entire year” is what follows.
However, according to Gave, a “broader look at asset markets in China and the US tells a different story, as Chinese equities outperformed the seemingly all-conquering US stock market in 2024.” Heading into 2025, Gave notes that despite China’s challenges, underlying fundamentals may favor the valuations of Chinese equities.
That’s partly due to the PBOC’s increased commitment to stabilizing Asia’s largest economy.
As of now, says Mohamed , El-Erian, chief advisor at Allianz, the “implosion” of yields on Chinese government bonds is fueling “what could become self-fulfilling worries about the Japanification of the economy”. This “yield phenomenon has intensified” in recent days, he adds.
Fred Neumann, chief Asia economist at HSBC, notes that” after many fits and starts over the past year, greater evidence is needed that China’s economy is responding to stabilization measures“.
There are indications that more powerful action is in order. The annual Central Economic Work Conference last month gave stock and property markets a higher priority than it did last month.
Analysts at Goldman Sachs speculate that policymakers ‘ “pain threshold” regarding growth and asset prices may have been reached. However, policy implementation is required to increase equity in 2025.
There’s not a moment to waste, says Homin Lee, senior macro strategist at Lombard Odier. Lee notes that” the underlying momentum for China continues to be quite fragile,” and that it will take some efforts from the authorities to change the conversation about the country’s deflationary dangers in the medium term.
Of course, there’s ample reason to worry that the dollar’s best days are behind it as investors home in on Washington’s$ 36 trillion debt load. Meanwhile, Team Trump has made hints about plans to slack the dollar in order to gain a competitive advantage over China and the rest of Asia. Trump also has threatened to reduce the Fed’s autonomy, giving his White House a direct say in US rate decisions.
Even so, many economists believe a dollar reversal might take longer than the bears would like.
According to Kit Juckes, chief FX strategist at Societe Generale,” the dollar may be vulnerable, but only if the US data confounds market expectations that the Fed doesn’t cut rates more than once in the first half of this year, and not by more than 50 basis points throughout 2025 .”
Although” there’s a good chance of that happening,” Juckes asserts, “it seems very unlikely that cracks in US growth will appear early in the year; hence my preference is to take any bearish dollar thoughts with me into hibernation until the weather improves.”
The PBOC is a source of contention in part. There are a number of reasons why neither Pan nor Xi want to see the yuan decline sharply.
For one, a weaker yuan would make it more difficult for highly indebted individuals, such as property developers, to pay off their offshore debt, increasing the risk of default in Asia’s largest economy. Seeing# ChinaEvergrande or# ChinaVanke , trending again in cyberspace is the last thing Xi’s Communist Party wants.
For one thing, the monetary easing needed to keep the yuan’s declines could stymie Xi’s deleveraging efforts over the past five years. Beijing has made significant strides in lowering China’s financial woes and raising the national’s gross domestic product’s quality.
As a result, Xi and Premier Li Qiang have been reluctant to let the PBOC slash rates more assertively, even as deflation clouds China’s outlook.
The most significant reform accomplishment of Xi may be increasing the yuan’s use in finance and trade. In 2016, China won a place for the yuan in the International Monetary Fund’s” special drawing rights” basket joining the dollar, yen, euro and pound.
Since then, the currency’s use in trade and finance has soared. Excessive easing now might dent trust in the yuan, slowing its progression to reserve-currency status.
A weaker yuan could also lead to a wider Asian currency war that is not everyone’s best interest. Tokyo might be all-in on a much weaker yen, entice South Korea into the fray.
Memories of 2015 are clearly entering into Beijing’s equation. China’s decision to devalue the yuan by nearly 3 % a decade ago led to a destabilizing capital flight that still bothers Communist Party leaders. Over the next year, Xi’s team had to draw down Beijing’s foreign exchange reserves by$ 1 trillion to restore calm.
For now, the” PBOC is signaling that it wants a stable RMB, probably dashing the hopes of those betting that RMB will continue to devalue meaningfully against the US dollar”, says longtime China watcher , Bill , Bishop, who writes the Sinocism newsletter.  ,
Robin Brooks, economist at the Brookings Institution, says that “medium-term, this does raise the risk of capital flight out of China, especially if the US imposes tariffs”. Generally speaking, Brooks believes, a falling yuan won’t necessarily shake up the global economy because” the yuan is heavily manipulated and isn’t moving”.
Still, risks abound. China could become a more contentious issue in US politics as a scheinbar anti-China administration ascends to power.
They include hardliners like Peter Navarro, co-author of a book titled” Death by China”, as top trade adviser. Marco Rubio, criticized by China as Trump’s secretary of state, is also in the same boat. or adding Jamieson Greer and Robert Lighthizer to Trump’s team of trade negotators.
There’s hope that Trump’s pick for Treasury Secretary, Scott Bessent, can ensure that cooler heads prevail. Bessent, it’s believed, would represent the camp in Trump World making sure Trump’s tariff talk is merely a negotiating tactic to achieve a giant trade deal with Beijing.
Either way, Team Xi might want to avoid drawing Trump’s ire. These [risks ], in our opinion, indicate that the PBOC would like to control the rate of yuan depreciation against the dollar and prevent a sharp depreciation prior to the US tariff announcement, according to Goldman’s economists.
Only Pan and Xi know for sure, though. Asia’s markets will be glued to Beijing’s yuan policy for the entire year as it addresses both domestic and global risks in 2025.
Follow William Pesek on X at @WilliamPesek
Trump’s potential presidential candidate receives too little consideration, and not enough of it is what he ( or any other president of the United States ) needs to do.
Serious trade deficits have given the United States a disproportionately large share of global trade desire over the past 30 times. Each year, the United States sells assets, most of which are now multinational stocks, to pay off its trillion-dollar trade deficit. Some people believe that Trump places too much emphasis on the US trade deficit, or that his preferred approach ( tariffs ) may not be the best solution to the issue. However, it may stop what is not sustainable. This may alter how the United States behaves, which will have significant effects on China.
The US current account deficit of$ 800 billion is in line with Japan, China, and Germany’s trade surpluses. To be sure, China’s direct exports to the US have fallen from 8 % of GDP in 2007 to just 2.3 % last year ( in dollar terms ). China exports more to the global South now than all developed nations combined, but a large portion of its exports to the world South depend on those nations ‘ US imports.
The United States, out of the nations above, has the biggest current account deficit. The horizontal axis is the information for 2023, in billions of US dollars ,.
The U. S. net foreign investment place, the difference between foreign assets owned by Americans and U. S. property owned by foreigners, is then unfavorable$ 24 trillion, compared with unfavorable$ 18 trillion when Trump left office. However, the national debt has grown to$ 35 trillion, larger than the government’s GDP. Both trends are representative of the Biden administration’s tried borrowing strategy to promote consumption and swell imports. Under Biden, the U. S. gross international funding status has fallen at a record rate.
The US net foreign investment position ( blue line ) and the federal government debt have changed historically. System: trillion US dollars.
National users have long been the primary source of global demand. That is untenable, no matter who is in the White House. The United States has largely sold stocks to other countries over the past few years to pay off its trade deficits. In 2012, international standard institutions stopped purchasing U.S. Treasury bonds. Since 2020, most of the new national debt has been financed by U. S. economic institutions, a possible fragile design. A reduction in U. S. stocks may make U. S. property less attractive to foreigners, and U. S. economic institutions cannot compensate for a federal deficit of 6 % of GDP long.
What does this mean for China?
Seasonally adjusted comparison of China’s exports to the Global South ( blue line ) and U. S. imports from the Global South ( excluding China ) ( red line ). Unit: million USD/month.
As mentioned above, China’s direct dependence on the US market has been greatly reduced, and China’s exports have shifted to the global South, but China’s indirect dependence on the US market is still very large. The chart shows that from 2020 to 2023, China’s exports to the global South increased from about US$ 60 billion per month to US$ 120 billion per month, an astonishing increase. However, US imports from the global South also increased from about US$ 40 billion per month in 2020 to about US$ 80 billion per month in 2023. The global South’s exports to the United States affect a sizable portion of China’s exports there. Vietnam’s situation largely reflects this, with exports to the US making up a quarter of Vietnam’s own GDP, whereas the cases of Indonesia and Brazil are less well known.
the changes in each nation’s GDP over time in terms of the share of exports to the United States. The dark blue dotted line represents Vietnam, the dark green represents Brazil, and the light blue dotted line represents Indonesia.
Everything depends on how much trade is recouped by the US. If Trump imposes high tariffs, as he hinted during the campaign, prices in the United States will rise and consumption will collapse. The purpose of tariffs is to raise domestic prices to encourage domestic production. Shrinking US demand will in turn depress growth in Europe, Japan, and the global South, and China will also be affected. According to my calculations, the United States now imports most of its capital goods. If tariffs cause the cost of capital goods to go up, domestic manufacturers ‘ benefits may far outweigh the negative effects of higher prices. No matter what steps the government takes, in this situation, China’s economic growth will decline, even though domestic stimulus measures can partially address this issue.
Is it possible to lessen the United States ‘ reliance on imports without stifling economic growth? Personal consumption expenditures made up 84 % of the US GDP growth over the past ten years. There have been booms in both the consumption and investment sectors in the United States. In fact, since 2000, the capital stock of US manufacturing equipment has not changed in real terms.
As can be seen in the figure below, U.S. retail sales and imports ( both shown as deflating series ) have synchronized over the past 20 years, with each increase in consumption corresponding to an increase in imports.
Comparison of the latest U. S. retail sales and food services ( blue line, corresponding to the right vertical axis, unit: million, 1982-1984 consumer price index adjusted US dollars ) and actual goods imports ( green dashed line, corresponding to the left vertical axis, unit: billion, 2017 chained US dollars ).  , Data source: Federal Reserve Bank of St. Louis, Bureau of Economic Analysis, U. S. Department of Commerce.
Some production may be moved to the United States from abroad. Trump has repeatedly asked Chinese electric vehicle manufacturers to set up factories in the US to produce goods for the country. This is a solution to some extent, but it is very difficult to implement. Due to a lack of qualified talent, equipment, and infrastructure, the Biden administration has given semiconductor manufacturers enormous subsidies, but the result of the boom in factory construction has resulted in a 30 % increase in the cost of new industrial plants in the United States between 2022 and 2023. Trump may also demand that Chinese-produced electric vehicles in the United States use American chips.
America needs a new manufacturing culture. Once great manufacturing companies such as Boeing and Intel have failed many times, but America’s ability to adapt should not be underestimated. Before establishing a factory in Shanghai, Tesla also made cars in California. However, it will take time for American manufacturing to recover. The Federal Reserve’s industrial production index peaked at 106 in 2008 and is now only 99. America needs to resurrect its infrastructure, train talented technical workers, and create a new generation of business owners.
As President Trump suggested in 2019, China might agree to purchase more American goods, including agricultural products and hydrocarbons. Trump has argued in recent weeks that China has “failed to live up to” its commitments to purchase American goods. China would be wise to accept this offer if he makes it again. Whatever the cost of growing American soybeans is, it will be much less expensive than the other options. However, the most likely scenario is that the US will impose severe tariffs on Chinese and other imports.
The United States will continue to implement export controls on semiconductor equipment and development tools in the future because it still has a competitive advantage in some technological fields. The effectiveness of this policy is increasingly uncertain among American analysts, but Washington’s political climate does not allow for a relaxation of export controls.
China will have to adjust to the declining US demand for its manufactured goods, just like Europe and Japan. The Global South, with its 7 billion people, also has a huge demand for manufactured goods, but challenges and opportunities exist. Exports from the Global South to the United States account for a large portion of China’s export success, as previously mentioned. The Global South faces a number of challenges, including the lack of infrastructure and technology, as well as the country’s poor governance and political challenges, in order to realize its growth potential. The greater challenge facing the Global South is developing an endogenous growth model in contrast to export-driven economic growth.
To a considerable extent, China’s export industries have contributed to long-term productivity gains in its trading partners. Infrastructure in the telecommunications industry is a good illustration. According to the International Labour Organization ( ILO ), the so-called informal sector employs 60 % of the world’s workforce. These people do not pay taxes, have little access to government services, and most do not have access to banking. Mobile broadband supports the creation of businesses, formal employment, and integration into the financial system. Infrastructure in the digital sector can significantly improve productivity and governance, just like it can in the physical sector. Not all of the Belt and Road Initiative investments will yield such significant benefits, and China will need to make wise decisions about their investment priorities in the future.
Western economists urge China to resuscitate the Biden administration and increase consumption by reducing debt. This may temporarily increase output, but it is not a long-term solution. The main issue is that the world’s largest economies, including China, are lacking in young people. The only realistic solution is to boost the productivity of young people in the global South, unless current demographic trends can be reversed.
This article first appeared on The Observer ( guancha.cn ), a Chinese news and opinion website. It is republished with permission.
Getty ImagesA 70-year-old producer president in India has been on a hunger reach for more than 40 days to pressure the federal government to take demands from producers in protest.
Doctors say that Jagjit Singh Dallewal’s health has deteriorated and that he is “unable to speak”, but he and his supporters have refused medical aid so far.
Next month, India’s Supreme Court had ordered the state of Punjab condition- where Dallewal is from- to transition him to a clinic. The prosecutor has been hearing a number of requests related to the subject.
The hunger strike by Dallewal is a part of a rally that started in February of last year when thousands of farmers gathered at the border between the state of Punjab and Haryana. Their demands include guaranteed prices for some plants, discounts of loans, and financial aid for farmers ‘ families who lost during earlier demonstrations.
They have since attempted to move to Delhi’s cash, but security forces have since stopped them at the border.
Not the first time India’s farmers staged a huge protest to raise awareness of their problems.
They pleaded for the reform of three farm laws introduced by Prime Minister Narendra Modi’s government for decades in Delhi’s territories in the year 2020.
Farmers argued that the laws may open the market for agricultural produce to exploitation, despite the government’s claim that the regulations may improve the community’s purchasing power.
The regulations were finally overturned, but farmers in protest have claimed that the government has never fulfilled all of their needs made in 2020.
Dallewal is from Punjab, which heavily relies on agriculture for work but has seen a steady decrease in land incomes, which has resulted in debts, suicides, and migration.
He is the head of a landowners ‘ organization that is lightly associated with Samyukta Kisan Morcha, a coalition of lots of organizations that organized the protests in 2020.
He had previously led demonstrations against terrain acquisition in Punjab and demanded payment for farmers who passed away by death. He led a convoy of trucks heading for Delhi in 2018 to demand that the government panel’s recommendations of a year prior suggest remuneration for producers ‘ produce and a waiver of farm debt be implemented.
In November, before Dallewal started his present hunger strike, he was taken to a doctor by the express authorities for a check-up. However, he quickly returned to the opposition page, claiming that he had been detained at the doctor.
He stated in a letter to Modi that he is willing to” sacrifice his life” in order to stop farmers ‘ deaths.
Getty ImagesIn terms of needs, not much has changed from earlier rallies. The farmers are urging the government to fulfill their unfilled demands, including a legal promise for the lowest minimum support prices, a mortgage loan cancellation, pensions for both farmers and agricultural laborers, no increase in electricity tariffs, the restoration of a property consolidation regulation, and compensation for the families of farmers who died during past protests.
However, according to experts, Modi’s administration’s strategy appears to have changed since this round of demonstrations.
The federal government had engaged in numerous negotiations with the producers during the demonstrations in 2020. Major officials, including India’s next agriculture and food officials, were part of the negotiations.
Important national officials met with their leaders in February to discuss their plans to move to Delhi, but there was no agreement on a deal.
However, the federal government appears to have gotten away from the demonstrations since then. When reporters asked Agriculture Minister Shivraj Singh Chouhan to confirm his intentions for inviting protesting farmers for talks last week, he claimed the government may adopt any orders issued by the major court.
According to experts, this time around, the state is being careful to stop a repeat of what transpired in 2020. A crucial meeting between the next agriculture minister and farmers ‘ organisations in October that year had a disastrous outcome and sparked the year-long opposition that followed.
Getty ImagesIn September, the Supreme Court ordered that a council get set up to look into the farmers ‘ needs.
The commission submitted an interim statement in November, which documented the severe problems faced by India’s landowners. The review also noted the astronomically lower wages farmers earn and the enormous debts they are currently battling.
More than 400, 000 farmers and farm employees have died by suicide since 1995, according to the report, which was released by India’s National Crime Record Bureau.
Additionally, the committee suggested giving farmers primary income support.
According to reports, the screen is apparently looking into ways to improve farm income. It was scheduled to speak with several producers ‘ organizations in January.
Some organizations, however, have turned down their meeting, claiming that the commission does work to create a secure haven for protests.
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Hindayana said the money would get an estimated 6.7 million tons of rice, 1.2 million loads of meat, 500, 000 tons of meat, 1 million tons of tuna, vegetable and fruit, and 4 million kiloliters of cheese, and at least 5, 000 kitchens may be set up across the country.Continue Reading
BBCMore Asian attempted small-boat Channel bridges in the first quarter of 2024 than any other ethnicity. Yet they are coming from one of the country’s fastest-growing economy. Why, therefore, are so many risking their lives to achieve Britain?
Phuong questioned whether she should move in after looking at the tiny inflatable boat. The boat was small in the water, with 70 people inside. She recalls the anxiety, stress, and despair on their heads. There weren’t enough lifejackets to go around.
But Phuong was desperate. She says she had been stuck in France for two months, after travelling there from Vietnam via Hungary, sleeping in tents in a scrubby forest.
She had already turned down three trips in the middle of the Channel because it appeared extremely overcrowded, and she had previously been turned around due to bad weather or motor failure three times.
Her sister, Hien, lives in London, and recalls that Phuong used to telephone her from France in grief. She had to choose between anxiety and determination to continue.
Getty Images” But she had borrowed therefore many- around £25, 000- to account this trip. Turning up wasn’t an opportunity. ” But, she climbed on board.
Now Phuong lives in London with her girl, without any legal status. She was very apprehensive to speak directly to us, and Phuong is certainly her real name. She left it to her sister, who is now a UK citizen, to explain her experience.
With 2, 248 landings in the UK in the six weeks to June, Asian accounted for the most of all recorded small vessel immigrants in the UK, far exceeding those from nations with well-known human rights issues, including Afghanistan and Iran.
The incredible work of Asian immigrants to enter Britain are well documented, and in 2024 the BBC reported on Asian syndicates ‘ successful people-smuggling activities.
It is not without significant risks. Some Vietnamese migrants end up being trafficked into sex work or illegal marijuana farms. They make up more than one-tenth of those in the UK filing official claims that they are victims of modern slavery.
And still Vietnam is a fast-growing business, acclaimed as a” mini-China” for its manufacturing skills. Eight days as much as it was 20 years back in terms of per capita income. Add to that the subtropical beaches, beauty and value, which have made it a magnet for visitors.
What is it that causes so many people to be desperate to leave?
Vietnam, a one-party Communist state, sits near the bottom of most human rights and freedom indexes. No political opposition is permitted. The few dissidents who raise their voices are harassed and jailed.
But the majority of Vietnamese have come to accept the ruling party, which has a history of development that lends legitimacy to its existence. Really some who go to Britain are fleeing persecution.
Additionally, refugees don’t typically flee hunger. Vietnam has been praised by the World Bank for its practically unmatched track record of reducing hunger among its 100 million residents.
Instead, they are trying to avoid what some call” equivalent deprivation”.
Getty ImagesVietnam’s economy, despite its amazing record, was far behind most of its Asian neighbors, with growth just beginning to emerge shortly after the Cold War ended in 1989. As a result, regular salary, at around £230 a fortnight, are significantly lower than in adjacent countries like Thailand, and three-quarters of the 55-million-strong labor are in informal work, with no security or social security.
Nguyen Khac Giang, a Taiwanese educational at the Institute of South East Asian Studies-Yusof Ishak Institute in Singapore, notes that there is a significant gap between large settlements like Hanoi and remote locations. For a majority of employees with limited abilities, there is a crystal roof. Even if you work 14 hours per day, you can’t keep enough to establish a home or raise a family.
This was what Phuong felt, despite coming from Haiphong, Vietnam’s third-largest capital.
Her girl Hien had made it to Britain nine years earlier, smuggled inside a shipping container. She worked long hours in restaurants and nail shops, and it had cost her around £22, 000, but she was able to pay it back in two decades. Hien married a Taiwanese person who already had American citizenship, and they had a girl, all three are presently UK residents.
In Haiphong, work were limited after the pandemic and at 38 years older, Phuong wanted what her sister had in London: the ability to save money and start a family.
” She may live in Vietnam, but she wanted a house, a better life, with more stability, “explains Hien.
Getty ImagesLan An Hoang, a teacher in creation studies at Melbourne University, has spent years studying movement habits”. Twenty to thirty years back, the urge to travel abroad was not as strong, because everyone was bad,” she says”. One bison, one motorcycle, and three meals per day made people happy.
” Immediately, a select few people emigrated to countries like Germany or the UK to work on cannabis fields or open nail salons. They began to take a lot of money home. They feel poor in comparison to all these people with immigrants who work in Europe, despite the fact that their financial circumstances have not changed.
Following the defeat of US troops in the north, Vietnam joined forces with the Soviet Union, which has a history of seeking better livelihoods abroad.
The state-led sector had hit rock bottom. Thousands were poor, some places suffered food shortfalls. In eastern union nations like Poland, East Germany, and Hungary, there are still tens of thousands of people working.
800, 000 boat people, mostly from China, escaped the communist party’s oppressive policies by sailing dangerously across the South China Sea before finally settling in the USA, Australia, or Europe.
Getty ImagesThe economic hardships of that time threatened the legitimacy of the communist party, and in 1986 it made an abrupt turn, abandoning the attempt to build a socialist system and throwing the doors open to global markets. The new theme of Vietnam’s national story was to catch up, and get rich, any way possible. For many Vietnamese, that meant going abroad.
” Money is God in Vietnam”, says Lan An Hoang. The ability to accumulate wealth is a determining factor in the meaning of” the good life.” In northern Vietnam, helping your family is also a top priority, especially for the elderly.
Because they believe they can take up large sums of money and help the movement of different people, the entire extended family uses resources to fund the migration of one fresh person.
Nghe An, one of Vietnam’s poorer regions north of Hanoi, is a country where big, new homes with gilded walls can now be found in large, new homes with smooth rice fields and a few flat rice fields. More are under construction, thanks, in part, to money earned in the West.
Returnees who have done well abroad can be acquainted with the new houses because they represent a powerful indicator of success.
Getty ImagesSince Vietnam is viewed as a viable alternative to China for businesses looking to diversify their supply chains, it is now receiving significant foreign investment flows. Even this investment is gaining ground in places like Nghe An.
One of the many foreign companies building factories in Nghe An, Foxconn, a corporate giant that produces iPhones, is one of the many that create thousands of new jobs.
However, unskilled workers ‘ monthly salaries only reach around £300, even with overtime. That is insufficient to compete with the captivating tales of the money that can be made in the UK, as told by the people smugglers.
The business of organising the travel for those wishing to leave the province is now a very profitable one. Publicly, companies present themselves as either travel agents or brokers for officially-approved overseas labour contracts, but in practice many also offer to smuggle people to the UK via other European countries. They usually paint a rosy picture of life in Britain, and say little about the risks and hardships they will face.
” Brokers “typically charge between £15, 000 and £35, 000 for the trip to the UK. Because Hungary offers Vietnamese passport holders guest-worker visas, it is a popular entry point into the EU. The higher the price, the easier and faster the journey.
ShutterstockThe communist authorities in Vietnam have been urged by the US, the UK and UN agencies to do more to control the smuggling business.
Vietnam receives about £13 billion annually from remittances from abroad, and the government has a policy encouraging migration for employment, though only legally, primarily to wealthy Asian nations.
More than 130, 000 Vietnamese workers left in 2024 under the official scheme. However, the costs for these contracts can be high, and the salaries are much lower than what they can expect to make in Britain.
The huge risks of the illicit routes used to reach the UK were brought home in 2019, when 39 Vietnamese people were found dead in Essex, having suffocated while being transported inside a sealed container across the Channel.
Yet this has not noticeably reduced demand for the smugglers’ services. The increased scrutiny of container traffic has, however, pushed them to find alternative Channel crossings, which helps explain the sharp rise in Vietnamese people using small boats.
“The tragedy of the 39 deaths in 2019 is almost forgotten,” says the cousin of one of the victims, Le Van Ha. He left behind a wife, two young children and a large debt from the cost of the journey. His cousin, who does not want to be named, says attitudes in their community have not changed.
” People hardly care anymore. It’s a sad reality, but it is the truth.
” I see the trend of leaving continuing to grow, not diminish. For people here, the success stories still outweigh the risks”.
Getty ImagesThree of the victims came from the agricultural province of Quang Binh. The headteacher of a secondary school in the region, who also asked not to be named, says that 80% of his students who graduate soon plan to go overseas.
” Most parents here come from low-income backgrounds”, he explains. The idea of encouraging their child to expand their knowledge and advance their skills is not a priority.
” For them, sending a child abroad is largely about earning money quickly, and getting it sent back home to improve the family’s living standards.”
In March the UK Home Office started a social media campaign to deter Vietnamese people from illegal migration. Some efforts were also made by the Vietnamese government to alert people to the risks of using people-smugglers. But until there are more appealing economic opportunities in those provinces, it is likely the campaigns will have little impact.
” They cannot run these campaigns just once, “argues Diep Vuong, co-founder of Pacific Links, an anti-trafficking organisation”. It’s a constant investment in education that’s needed.”
She has first-hand experience, leaving Vietnam to the US in 1980 as part of the exodus of Vietnamese boat people.
” In Vietnam, people believe they have to work hard, to do everything for their families. That is similar to a chain from which they are unable to easily escape. However, they might start to change this attitude with more reliable information forthcoming over time.
But the campaigns are up against a powerful narrative. Those who go overseas and fail – and many do – are often ashamed, and keep quiet about what went wrong. Those who succeed come back to places like Nghe An and flaunt their new-found wealth. As for the tragedy of the 39 people who died in a shipping container, the prevailing view in Nghe An is still that they were just unlucky.
Top image credit: Getty Images
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PUBLISHED: 3 Jan 2025 at 13: 14
According to the National Anti-Corruption Commission ( NACC), Prime Minister Paetongtarn” Ung Ing” Shinawatra and her husband Pitaka Suksawat have combined wealth worth 13.9 billion baht, which includes two houses in London and two land plots on Japan’s Hokkaido island, and have debts totaling about 4.4 billion baht.
Following the Constitutional Court’s treatment of Srettha Thavisin as prime minister on August 14, the NACC announced on Friday the property and liability declaration of Ms. Paetongtarn, who became the 31st excellent chancellor on September 6, 2013.
The charter indicated that the child’s property totalled 13.99 billion baht — with Ms Paetongtarn’s property valued at 13.84 billion ringgit and Mr Pitaka’s at 141.11 million ringgit. Their kids hold property for 500, 000 ringgit.
The couple’s overall bill was 4.44 billion rmb, including Ms Paetongtarn’s 4.43 billion ringgit and Mr Pitaka’s 1.17 billion baht.
The prime minister, 38, reported an annual salary of 265 million baht, including a salary of 3.40 million baht, income of 259.26 million baht, fascination of 2 million baht and fee of 890, 000 baht. Her monthly expenses totaled 57.72 million baht, with 7 million baht for household expenses and 45 million ringgit for specific expenses.
Among Ms Paetongtarn’s goods are:
Ms Paetongtarn, who is the youngest child of former top Thaksin Shinawatra, holds money in several foreign currencies, payments across 29 banks accounts and investments in 32 funds and companies.
Prime Minister Paetongtarn Shinawatra, heart, and her 42-year-old father Pitaka Suksawat, left, at Government House, Bangkok. ( File photo: Chanat Katanyu )
She purchased 12 area plots for 15 million dollars each on December 15, 2019, including three in Pathum Thani province, which are valued at 9.9 million dollars. She even owns two rental properties in London— one fair 111.61 million baht and the other for 208.34 million ringgit — as well as five apartments in Bangkok, two homes in Nonthaburi and Bangkok, and industrial buildings in Phetchaburi.
A Bentley for 10.6 million ringgit and a Rolls-Royce Phantom worth 6.7 million baht are just two examples of Ms Paetongtarn’s 23 cars from different luxury brands.
Her other assets include golden bars for about 3 million baht, 75 luxury watches estimated to be worth about 162 million ringgit, nine Bearbrick collectable figures for 1.9 million ringgit, and 217 comfort bags worth 76.65 million ringgit.
The figures released by the local press were confirmed by a representative from the judgement Pheu Thai Party.
The primary leader’s papa and father Thaksin– who previously owned Manchester City football club– has a shield worth of US$ 2.1 billion, according to Forbes, making him the 11th richest person in Thailand.
Thaksin used the wealth generated by his Shin Corp telecommunications empire to launch his political career, and his family has remained influential despite his years in exile following his ouster on September 19, 2006, in a military coup.
International investors spent much of 2024 fussing over China’s problems with a home crisis and depreciation. In the year ahead, it’s America’s switch on the warm seat.
Donald Trump’s business battle is making headlines, but it’s the gaping gap between US net foreign investment and national bill that’s quickly escalating.
forcing the approaching Treasury Department crew to come up with a strategy to maintain US finances, so that the world’s largest economy won’t suffer from higher prices from both investors and funds rating agencies.
Washington has so far been able to avoid a judgment and live madly beyond its means. However, during the Trump 2.0 age, the current bill imbalance may become more difficult to finance.
One reason is that Washington’s persistent apathy is catching up with it. As more immigrants show less interest in US resources, President Biden’s post-Covid-19 borrowing binge is about to come due. Another risk is that Trump’s designed supersized tariffs will bring about.
At the same time as the US federal debt buyers are reluctant to boost their exposure to a fragile US dollar, these two dynamics are about to collide in stunning and unexpected ways.
As Biden prepares to pass the baton again to President-elect Trump, he leaves the incoming administration with a US national loan topping US$ 36 trillion. Trump pushing to make the$ 1 trillion-plus tax breaks from his first 2017-2021 word permanent and add new ones may exacerbate the problem.
The US net foreign investment location, or the difference between overseas assets that Americans own and those that are owned overseas, is nearly the size of the US GDP at the moment. Compared to the$ 18 trillion it was when Trump took office in 2021, it is bad$ 24 trillion.
On Trump 2.0’s view, though, the US will face a knife in the economic road: press its excesses further into the dark or design a strategy to minimize Washington’s dependency on imports.
Team Trump appears to be more inclined to go the original way than the latter so much. The impact of additional tax breaks on China, Japan, and the developing world’s developing countries ‘ benefits may grow. His tariffs and trade restrictions would reduce use and improve US inflation.
At a time when Beijing is facing poor retail revenue and recession, that could mean slower US expansion and lessening the need for Chinese products. Chinese families might not have the funds to purchase US items as much. Additionally, it may cause a huge dollar war to start if China weakens the yuan to maintain export competition.
” Beyond alienating friends and colleagues, Trump’s taxes will probably refuse to advance his obvious goal of reducing the US business imbalance”, says Takatoshi Ito, a Columbia University , economist who served as Japan’s assistant vice minister of finance.
Ito goes on to say that “global trade may also drop” if other nations impose punitive tariffs. Also, large US tariffs may fuel regional inflation, forcing the Federal Reserve to raise interest rates, which would likely cause the US dollar to appreciate, causing exports to fall and imports to rise”.
Trump, Ito warns, is also set to increase America’s fiscal deficit, as he has promised sweeping tax breaks without identifying saving cuts that do make up for the lost income. As fiscal deficits undermine regional savings and investment, the trade deficit, too, will increase. ” In other words”, he notes, “like President Ronald Reagan in the 1980s, Trump is likely to rule over twin imbalances”.
James Knightley, key international scholar at ING Bank, says the “increase in the cost of items, coupled with possible supply-side boundaries in the labour market as a result of Trump’s proposed emigration policies, could , even result to a one percentage point increase in inflation”.
Naturally, Trump will point the finger elsewhere, accusing Washington’s trading partners of “dumping” goods or maintaining artificially low exchange rates.
” Some observers, including myself, speculate that Trump’s pick for Treasury Secretary, Scott Bessent, might even call for a special G20 meeting to pressure other countries to revalue their currencies vis-a-vis the dollar, a move that would recall the 1985 Plaza Accord“, Ito explains.
Ito comes to the conclusion that, unless Trump takes a prudent approach to tariffs on imports from the rest of the world, the US will be restrained in terms of both economic dynamism and global influence.
Thickening the plot, Trump has hinted at engineering a weaker dollar exchange rate and commandeering the Federal Reserve’s decision-making authority. The outlook for global inflation, America’s credit rating, or investor confidence in the dollar are all in jeopardy.
As 2025 begins, all eyes are on Moody’s Investors Service, the only major credit rating company to still grade the US AAA. If the upcoming US Congress evades the debt ceiling or shuts down the government to gain political advantage, that may change quickly.
All of this comes in view of the declining international demand for US government debt. Foreign official organizations have been reducing the value of US Treasury securities for more than ten years. The void has been filled by domestic financial institutions.
Problem is that domestic funds could be in the red if US stocks dropped precipitously, making American assets less appealing to foreign investors. That would make it even more improbable that US financial institutions could fund a government deficit of 6 % of GDP.
Economists all agree on how America needs to stop being dependent on imported goods. The key is increasing productivity, rekindling innovation and creating a new manufacturing model. That includes boosting training, encouraging a new generation of industrial entrepreneurs, and improving infrastructure.
It also means investing more in semiconductors, artificial intelligence and other sectors to raise America’s innovative game. Washington should be scrambling to revitalize corporate America given the ways in which Boeing, General Motors, Intel, and other ground-breaking brands run the risk of becoming also-rans.
Biden made a slight switch in order to increase his domestic economic muscle. The Trump 1.0 era was about tripping China on the racecourse. Biden concentrated more on limbering up to compete with China in a natural way.
Case in point: the , CHIPS and Science Act , that Biden signed into law in 2022. It deployed$ 300 billion to strengthen domestic research and development. Biden took other steps to incentivize innovation, raise America’s semiconductor capabilities and increase productivity.
A$ 1.7 trillion tax cut, whose main focus, did little to boost domestic capacity or competitiveness, marked a radical change from the Trump era. Had Trump’s tax scheme boosted innovation and productivity, US inflation might not be rising at a 2.7 % year-on-year rate.
The London School of Economics ‘ Economist, Ken Heydon, warns of the “risks of regulatory capture,” whereby regulations are influenced by specific industries rather than the public good.
Biden, he explains, retained most of Trump 1.0’s trade restrictions, which he calculates are reducing US GDP by$ 55.7 billion, decreasing wages and costing full-time equivalent jobs.
” As for’ fixing’ the trade imbalance, over Trump’s first presidency the US trade deficit soared to its highest level since 2008, increasing from$ 481 billion to$ 679 billion”, Heydon says.
Washington’s fiscal expansion policies mean the US will continue to spend more than it produces, perpetuating the “underlying reason for the trade deficit”, in the first place, Heydon adds. He argues that a tax on imports is thus, in effect, a tax on exports.
The impact, Heydon notes, is both direct through raising the cost of inputs, stifling productivity-enhancing competition and prompting retaliation and worsening of trade conditions, as well as indirect through currency appreciation and permitting wage increases in the import-competing industries, which then spill over to the broader economy.
Unfortunately, neither Trump 1.0 nor Biden rolled out credible plans to rival Beijing’s multi-trillion-dollar effort to lead the future of electric vehicles, robotics, semiconductors, renewable energy, artificial intelligence, biotechnology, aviation, high-speed rail and other sectors.
Instead, Biden also resorted to tariffs, joining Trump back to the 1980s, when such policies might have worked. Trump has long been confined to that time, a time when Japan played the nemesis role that China still does today.
Between 2017 and 2021, Trump’s advisors tried to make 1980s-style trickle-down economics great again. They failed, just as Trump’s top Asia ally in Tokyo did. Then-Prime Minister , Shinzo Abe , also thought the recipe for greater prosperity was surging stocks. Wages didn’t rise much, though, undermining the broader economy.
Trump’s current barrage of tariffs may occur as his incoming administration has what Chatham House economist David Lubin refers to as” a dollar problem.” According to Laubin, Trump has shown a” clear preference” for a weaker exchange rate in recent months to boost US export competition and help the country’s trade deficit.
And yet”, as the market has sensed since the US election,” Lubin says”, the much more likely outcome is that his policies end up strengthening the greenback. The risk is that the US dollar, which is already expensive, becomes more overvalued, which could lead to more global financial instability.
Since it is not overvalued at the moment, the dollar, Lubin adds, probably has a good deal of room to keep rising.
The US current account deficit, which is the broadest indicator of a nation’s trade deficit and a rough but useful indicator of financial vulnerability, was just under 3 % of GDP last year. This is roughly half what it was before the global financial crisis in 2006, which heightened the risks associated with an overvalued dollar for the final few years of Trump’s second term.
The global economy can often benefit from a rising dollar. According to Lun, it “has a tendency to depress global trade growth, restrain developing nations ‘ access to international capital markets, and make it more difficult for nations whose currencies will be weakening to keep inflation under control.”
” If and when the dollar becomes unsustainably expensive, a further problem will present itself: how to deal with an overvalued currency without risking a lot of financial dislocation, “he adds.
How Trump’s desire for a weaker dollar might turn out and what it might mean for Asia in 2025 are undetermined. China may find itself in danger as a result of Washington’s decades of American extortion during the Trump 2.0 era as a result.
Follow William Pesek on X at @WilliamPesek
Getty ImagesThe political landscape in Sri Lanka has been transformed by magnificent election victories by a fresh left-leaning president and his party, but the island’s fresh rulers are realizing that campaign promises are simpler to make than to keep.
Anura Kumara Dissanayake’s remarkable victory in the presidential election in September was swiftly followed by a landslide for his National People’s Power (NPP) alliance in parliamentary elections.
He and his supporters want the country’s attempt to recover from a disastrous economic problems and years of mismanagement as the new year approaches.
However, they only have a limited amount of room to maneuver in order to fulfill promises made to voters, whose expectations for the new government are higher.
Sri Lanka is not far from the trees, and the financial recovery has been unstable since the economic collapse of 2022.
In November, the NPP won 159 votes in the 225-member assembly, giving Dissanayake a broad authority to pass significant economic and constitutional changes.
The new president had to get ready for a meeting with a visiting delegation from the International Monetary Fund ( IMF), with whom the departed government had negotiated a$ 2.9 billion ( £2.31 billion ) bailout package, even as the results were being released.
The IMF deal became contentious because it severed austerity measures, income increases, and electricity subsidies were implemented, severely hurting the common people.
Dissanayake and his group promised to re-negotiate elements of the IMF deal during the promotion.
But in his address to the new legislature, he performed a U-turn.
” The market is in such a condition that it cannot take the slightest jolt… There’s no room to make errors”, Dissanayake said.
” This is not the time to talk about whether the IMF loan’s conditions are favorable or negative, or whether the deal favors us or not,” he said. We don’t start over from scratch, and the operation had taken about two centuries.
Getty ImagesThe voters’ overwhelming verdict for the NPP is seen as the culmination of a people’s uprising triggered by the economic crisis. The uprising toppled president Gotabaya Rajapaksa in the summer of 2022, when Sri Lanka ran out of foreign currency and struggled to import food and fuel.
The nation had previously declared bankruptcy after defaulting on about$ 46 billion in additional debt. Among the countries that have approved billions of dollars are India, China, and Japan.
The latest election results also showed how angry people are with proven political parties led by former presidents Ranil Wickremesinghe and others because they failed to deal with the global economic crisis.
” Due to the excessive tax and the cost-of-living problems, one of Dissanayake’s top priorities is to provide some financial relief to the people.” Another significant challenge is debt management, according to senior political analyst Prof. Jayadeva Uyangoda to the BBC.
So far the huge social shifts don’t seem to have had any impact on people like Niluka Dilrukshi, a mother-of-four who lives in a neighborhood of the money Colombo. The home still struggles to get by because her husband works on a daily basis.
The BBC spoke to her about the soaring cost of living in January 2022, months before mass protests erupted.
She claimed that because of the high cost of fish and meat, her family was simply giving their children vegetables and rice and only two meals per day instead of three.
Everything has changed, despite our ongoing struggles to make ends meet. The price of corn, which is the cornerstone food, has increased more. We are not getting any pleasure from the state”, Mrs Dilrukshi says.
Folks like her like the new government to take immediate action to lower the price of essential goods. Sri Lanka is an import-dependent society, and it needs foreign money to bring in items like food and medicine.
Colombo is allowed to hold on to its dollar reserves for the time being because it has suspended its loan repayments.
According to researchers, the real battle will begin when it begins to pay its debts in the next three or four years.
If there isn’t a noticeable change in person’s standard of living in the next two or three years, the notion of President Dissanayake and his new state may change.
” People have given him a huge authority. The IMF does regard that by allowing him to alleviate some suffering through social welfare programs, according to Prof. Uyangoda.
Getty ImagesDissanayake also has to argue with China and India, both of which are battling for dominance in Sri Lanka, where both have made significant investments in recent years.
” Both China and India did make an effort to provide Colombo under their purview.” I think the new government’s foreign plan will be very rational without aligning with anyone”, says Prof Uyangoda.
In a cautious political move, Dissanayake chose Delhi as his first official overseas place in mid-December. India made promises during the visit to provide Sri Lankan strength plants with liquefied natural gas and to work toward long-term connections between the two nations ‘ power grid.
China’s increasing foothold in Sri Lanka, specifically calls by Taiwanese “research” vessels to the island’s ports- so near to India’s southwestern tip- has induced concern in Delhi.
After speaking with Narendra Modi, Dissanayake told the prime minister of India that he would not let our area to be used in any way in a way that would harm India’s interests.
Delhi will undoubtedly be pleased with the assurance, but Dissanayake may learn what Beijing anticipates when he travels to China in the middle of January.
