Domestic tourism soars in China but foreigners stay away

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A popular thing to do in Wuzhen is to pose for photos dressed in traditional hanfu clothing
By Stephen McDonell
China editor

With the Chinese economy facing huge obstacles, there have been concerns over its development possible, at least in the fast coming.

Local hospitality is one of the few notable exceptions that are emerging.

According to statistics released by the Ministry of Culture and Tourism, 295 million journeys were made within China during next week’s five-day public holiday to indicate Labor Day. This was 28 % higher than the 2019 pre-pandemic images.

The Transport Ministry’s figures are even remarkable: 92 million road trips, almost 10 million atmosphere outings and 1.25 billion bridge journeys.

However, this comes as international visitors continue to trail, with foreigners already entering China at little 30 % of 2019 levels. Why the gap?

Wuzhen is considered one of China's top visitor sites

The lovely historic river town of Wuzhen, a little push from Shanghai, is considered one of China’s major user places for tourists of all kinds.

Customers flocked to the small waterways’ small pathways and old bridges when we arrived.

Posing for photos in conventional Hanfu attire is a popular activity in Wuzhen, as if you had been transported back in time by centuries.

Two 20-year-old people who have been friends since high institution are coming to visit from northern Jilin Province.

They spend an hour getting their hair done in the complex imperial-era style and are praised for Wuzhen’s classic beauty after arriving.

We inquire as to whether some of their friends and family have been on a lot of travel since Covid’s entry.

Woman selling traditional snacks

” Of course, after the pandemic, we’re all visiting different sites”.

Local business owner who sells ice creams in the local area also claims that tourist numbers have not decreased significantly recently.

As good as before Covid?

” About the same”, he replies.

Wang Ying, a storekeeper of conventional snacks, shares this attitude with a happy experience.

” Business is going well, and it’ll only get better”.

All of this will be welcomed by the Chinese authorities. It has been suggested that a boost to home use would help to stabilize the country’s fragile economy.

Major players in the once-mighty property industry are struggling to stay afloat, regional government loan is rising, and unqualified graduates from highly-qualified universities are uncertain of their future.

Amid all these issues, the Communist Party has set a target of “around 5 %” GDP growth for this year. Academics are also curious about how such a goal can be reached, in any real feeling, in 2024 without significant additional stimulus, despite the fact that analysts have long questioned the accuracy of the nation’s official growth numbers.

A Hilton hotel in Huzhou city

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A more upbeat go picture could be the only lifeline, opening up new business opportunities and employment in the service sector.

According to Schubert Lou, chief operating officer of travel agency Trip.com, “we’ve seen very strong domestic travel demand, with search volumes in hotels rising by 67 % from last year and flying by 80 %.”

Travel Daily’s Peng Han, a specialist for the hospitality industry, is following the investment landscape to learn how the sector’s potentials are actually perceived.

” With prominent global resort brands- like Intercontinental, Marriott and Hilton- you just have to appear at their progress in China in 2023″, he says. Check the performance targets for these sizable hotel chains in 2024, which have also been set reasonably high. They are very optimistic about the Chinese market’s potential for growth, according to this.

However, Mr. Peng does raise the issue of per capita consumption, which is persistently low, despite the increase in local traveler volume.

Tourists visit the Lujiazui complex across the Huangpu River on the Bund in Shanghai, China,

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He claims that people are searching for good value options because of the Chinese economy’s general uncertainty. They are spending money on vacation and paying for things, but they also do so much more sparingly.

An increase in foreigners ‘ big spending might be a good thing for this.

They simply do n’t travel to China in the same numbers as they once did. In 2019, nearly 98 million international visitors came to the country. Last year it was only 35 million- including business trips, students and the like.

The domestic and international markets are “uneven,” according to Mr. Lou.

For many in the tourism industry here specialising in services for foreign travellers, “uneven” would be an understatement.

Immigration from other nations decreased after three years of harsh Covid prevention measures, but that alone cannot account for the current situation.

Huang Songshan, the head of the Centre for Tourism Research in the School of Business and Law at Australia’s Edith Cowan University, blames this weakness in part to” the shifting geopolitical landscape globally”.

Chinese performer

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He cited a 2023 survey conducted by the Pew Research Center in his peer-reviewed East Asia Forum, which stated that” Most people in Western nations have unfavorable views toward China. Travelers from other countries may find the Chinese government’s tightening grip on societal regulations unsettling.

Official travel advice from some governments echo this sentiment, at times quite harshly.

Washington advises potential travelers to “revisit travel to Mainland China because of the arbitrary enforcement of local laws, including those relating to exit bans, and the possibility of wrongful detentions.”

Australia advises” a high degree of caution,” warning that” Australians may be at risk of arbitrary detention or harsh enforcement of local laws, including broadly defined National Security Laws.”

Flight availability and cost have also been affected by the political environment.

Particularly relevant are connections to and from North America. Last month’s 332 scheduled round trips between China and the US contrasts with 1, 506 in April 2019.

Finding seats on a direct flight can be very challenging, and those that are are also very expensive.

Flight availability and cost have also been affected by the political environment.

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Last November, President Xi Jinping addressed this issue during a dinner held on the occasion of the Asia-Pacific Economic Cooperation conference in San Francisco.

” Today, President Biden and I reached important consensus”, he told the crowd.

” Our two countries will introduce more steps to facilitate travel and promote people-to-people exchanges, including launching direct passenger flights, holding a high-level dialogue on tourism, and streamlining visa application procedures. In the new era, our two countries will make more visits, exchanges, and visits. We also hope to find new friendship stories.

Since then, Washington has reduced the number of flights on Chinese airlines from 35 per week to 50. It is still well short of the 150 weekly trips pre- Covid.

The Biden administration is coming under pressure from unions and US airlines to not increase this any further because, they argue, Chinese airlines have an unfair advantage over them as they have state support, do n’t face the same onerous Chinese regulations, and, crucially, can fly over Russian airspace, making trips shorter and cheaper.

A letter to the US government from the Chair of the House Committee on China, Mike Gallagher, and the committee’s top Democrat representative, Raja Krishnamoorthi, reads:” Should the US- China passenger carrier market expand without the US government addressing these significant issues, US aviation workers, travellers and airlines will pay a hefty price tag”.

According to Mr. Lou, international flight connections are definitely occurring more frequently.

” What we are seeing right now, based on civil aviation data, is that inbound flight capacity wo n’t get back to even 80 % of 2019]levels ] by the end of 2024″.

People try to touch a lion mask during a lion dance performance at a temple fair on the sixth day of the Lunar New Year of the Dragon in Beijing on 15 February, 2024.

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Additionally, there are other potential drawbacks for those who are considering visiting China, such as the country’s state-of-the-art phone app payment and booking systems, which are simple for Chinese residents and residents but can be a real pain if they have just arrived.

There are certain sites, transport options, and purchases which can only be accessed via Chinese electronic apps which are, at times, only available in Chinese.

Expert on China’s tourism economy is Professor Chen Yong of the Swiss EHL Hospitality Business School. He believes that difficulties can arise from apps for booking and payment.

” Technologies such as social network websites, online maps, payment apps, among others, which foreigners have long been accustomed to using, are either unavailable or inaccessible when they travel to China”, he says.

” On the other hand, due to language barriers and user preferences, Chinese alternatives to these technologies are still accessible to foreigners.” Because of how severely it impacts the tourism sector, we must bridge this gap.

There are still a few foreign faces in the crowd, but they are much smaller than in previous years when international travelers arrive in Wuzhen.

An Italian couple says the process of linking up to and using China’s payment apps was a challenge but that it was not insurmountable, though they add, with a laugh, that it is “much, much, much easier” if you have a Chinese friend to help you.

Woman and child pose for selfies

Californian Eliseo claims he has trouble making payments to local businesses that no longer deal with cash and do n’t accept credit cards. His home bank, which has blocked some payments and flagged them as potentially fraudulent coming from China, has also created an additional challenge for him.

Chinese officials have acknowledged that there are n’t as many foreign travelers, but they are now attempting to change this.

Increase the number of nations where citizens who do n’t require a visa to enter is one way they’re trying to draw in more foreign visitors.

According to Trip.com, this led to a nearly immediate rise in Southeast Asian arrivals.

Transit travelers from more than 50 nations can also stay for a few days visa-free in 23 Chinese cities with an onward ticket.

Hotels with three-star hotels in Shanghai have been instructed to prepare for dealing with foreign credit cards, and a first batch of 50 taxis has also begun accepting them.

However, Professor Chen says “it would be too optimistic to envision a long- term growth in China’s inbound tourism”.

The trick is to create a culture that adapts to the needs of foreign tourists. They should picture themselves as a foreigner who has access to payment apps, mobile devices, and other forms of communication without having a Chinese phone number or native language.

He says that the culture around this ca n’t be changed overnight.

However, in places like Wuzhen, where locals have already returned, tourism companies are hoping that foreigners will eventually find their incredible sites to be too much.

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Korea’s economy headed nowhere fast under Yoon – Asia Times

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Yoon Suk Yeol, president of South Korea for two years, is ringing in the vodka, but it’s not quite flowing.

Yoon’s government has no plans to address the stagnant wages and near-record-high household debt that are causing the Korean wo n’s inflation.

Yoon’s Korea has instead accepted the role of a Japan-like squat by allowing the central bank to spur growth and reduce risks.

According to KB Securities economist Gweon Heejin,” the fact that online exports are the main driver of growth with the largest contribution will remain constant as inflation continues to pressure households and their real purchasing power will remain insufficient.”

Yet it’s not Yoon’s second 730 time in strength that worry some of South Korea’s 51 million people. It’s the next 1, 095.

Yoon, who has been plagued by scandals, bickering, and plan paralysis, runs the risk of being remembered as the second government to promise significant socioeconomic change but to achieve much in 20 years.

As China captures more market share in Asia, each has given the impression of necessity. Seoul’s strong activities are rare, even if they are uncommon.

Yoon’s leadership is proving to be equally incompetent in terms of both short- and long-term issues. He has, for instance, been anxious to assist consumers in managing their own spending habits in the face of persistent price pressures. Otherwise, he’s prioritized public loan consolidation.

Yoon has n’t been particularly proactive about low-hanging fruit changes, such as pursuing initiatives to improve workplace gender equality, or providing detailed recommendations for reducing bureaucracy, loosing labour markets, and increasing efficiency.

But the actual problem is how Yoon, like his forebears, is shying apart from curbing the power of the household- owned companies, or chaebols, that tower over Asia’s third- biggest market.

Until he does, much of what Yoon may do on financial revamping is treating the symptoms of Korea’s problems, not the main causes.

Yoon’s first press conference on Thursday ( May 9 ) was held in an effort to resurrect his conservative government on the same day. It comes a few weeks after Yoon’s Citizens Power Party suffered a significant battle in legislative elections, which was a loud and piercing rebuke from the electorate.

For Yoon to “achieve much of its economic reform agenda in the remaining three years of its term,” according to Jeremy Zook, chairman of Asia-Pacific monarchs at Fitch Ratings.

According to Zook, sustained policy gridlock may limit the ability of structural changes to counteract the country’s medium-term development perspective because it reduces its upside potential.

That’s a bigger problem than meets the attention. It’s “among the highest of advanced economies worldwide as a reveal of GDP,” according to Zook, despite a slight decline in new rooms for Korean households.

At the same time, he adds, “elevated interest rates have pushed loan services prices higher, which has weakened the intake outlook”.

Seoul does n’t want it because “domestic demand is likely to remain subdued for much of this year, despite the first quarter GDP showing a positive surprise, as interest rates remain high,” Zook claims.

Higher loan service fees have slowed home use, according to the report. However, headwinds in the property market are likely to inhibit the expense outlook”, he adds.

Yoon’s reported effort to improve the outlook for investment is also unfavorable. In February, his Financial Services Commission unveiled a” Business Worth- Up Program” to nudge Korea Inc to improve efficiency, extend boardrooms and boost shareholder returns.

Yoon’s rapid drive to improve governance came the day after the Nikkei 225 Stock Average reached its highest level in 1989, despite the fact that he did not name-check Japan.

After ten years of attempts by former prime minister Shinzo Abe’s group to encourage CEOs to raise their capital profits and increase shareholder participation, Japan’s property rose.

Yoon’s wish to journey Tokyo’s accomplishments makes eminent sense as he takes a swing at ending the” Korea cheap” that’s plagued Seoul for years. However, just as Japan’s transformation efforts need troops, Yoon’s system lacks specifics or a discernable timetable.

” Given the similarity of Korea’s challenges to those faced by Japan, it is little shock” that the value- up prepare “was part of Yoon’s election pitch to voters]that ] borrows strongly from Japan’s extended- running top- down corporate governance reform campaign”, says Udith Sikand, analyst at Gavekal Research.

Yet, Sikand adds,” the problem is that, like Japan’s initial set of reforms”, it “lacks teeth. The majority of the proposed changes are voluntary and run the risk of becoming box-ticking exercises. Nearly ten years after the start of Abenomics, Japanese policymakers began using more coercive tactics to persuade resolute corporate managers to change their ways.

Of course, Sikand cautions that “hope springs eternal” that Korean policymakers will not have to wait as long as their Japanese counterparts do, because sticking a stick with dangling carrots is best when done simultaneously.

For instance, 2025 Japanese companies that do n’t make announcements to raise their valuations could face delisting.

According to Sikand,” Korea’s equities would enter the kind of bull market that has seen Japan’s Topix rise by 280 % in local currency terms since late 2012,” even if it were to push through effective corporate governance reforms in the near future. Because of its deeper roots than the theme of corporate governance, Japan’s stock market rally is notable.

The yen’s weakness also contributed to Japanese companies becoming more competitive with their global competitors. Meanwhile, Japan’s exit from deflation signals an end to the private sector’s deleveraging pressure.

Plus, monetary policy is set to remain accommodative, despite the Bank of Japan’s exit from negative interest rates and yield curve control.

Can Yoon’s economy fare better? The payoff could be significant. If we assume that the deep-value sectors of Korea lose at least 25 % of their value, HSBC analysts wrote in a client note.

All of this places the pressure on Yoon to increase domestic demand and advance Korea’s competitiveness. With three years left in his term, Yoon’s party appears to be a lame duck due to the shocking defeat they suffered in the parliamentary election.

It will make it even more difficult for his party to pass policies to level the playing field in order to lessen the chaebols ‘ influence.

Over the last two decades, a succession of governments pledged to wrestle power away from Samsung, Daewoo, Hyundai, LG, Lotte, SK and other corporate behemoths.

For young entrepreneurs starting new businesses to have the economic juice to create new, well-paying jobs, it is crucial to reduce their economic stranglehold.

Korea does indeed have a vibrant startup scene. Chaebols can purchase, demolish, or marginalize any new business that they perceive to be a budding threat due to the lack of antitrust enforcement.

Will Yoon’s administration be the most recent to put forth the necessary efforts to remake Korea in response to China‘s resurgence?

What’s needed are bold and take action to reduce red tape, promote innovation and productivity, phase out seniority-based promotions and pay scales, empower women, and lower family conglomerates by a few pegs.

Top-down Korea can find its niche in the new Chinese era only by developing more economic energy from the ground up.

If Yoon is going to increase competitiveness, he’ll need to display a level of gumption and independence he has n’t shown thus far.

Unsurprisingly, if Yoon’s team increases their pace, the corporate reform campaign’s positive stock market momentum could “temporarily weaken for the next several months and only become viable again” in the second half of this year, according to Citigroup strategist Jinwook Kim.

In order to boost domestic demand, the first order of business is to increase domestic demand. Exports accounted for the country’s 1.3 % growth rate in the January-March quarter, which was the fastest rate in more than two years.

According to economist Kelvin Lam of Pantheon Macroeconomics, “part of the reason is that the economic recovery has remained remarkably strong even with stringent interest rate restrictions,”

Dave Chia, economist at Moody’s Analytics, adds that “export growth will likely remain the main driver of growth this quarter amid the strong demand for semiconductors. The main force behind growth is likely to be export growth.

This engine could sputter, though, as Chinese demand disappoints, US bond yields stay high for longer than expected, Japan grows 0.5 % at the most and Europe walks in place. In the months to come, global inflation will overshadow forecasts in the same way.

The solution is to stifle a country’s economic recovery that has avoided it for more than two decades. If Yoon’s is the administration to do it, there’s not a second to waste.

Follow William Pesek on X at @WilliamPesek&nbsp,

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India’s Modi banks on 0bn cash splurge to win election

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Y Saraswati, VizagBimal Thankachan
By Soutik Biswas
India correspondent

Balaram Bhallavi and his family might finally get a proper roof over their heads.

For years, a tiled shanty in a sun-drenched village in India’s central Madhya Pradesh state has been home to Mr Bhallavi, his wife, and their four school-going children. A strip of a mud-floored foyer packs in a kitchen, a few plastic chairs, two rope beds and fraying clotheslines.

After a three-year wait, the Bhallavi family received 120,000 rupees ($1,445; £1,136) from a programme run by Prime Minister Narendra Modi’s government last year, allowing them to start building a new home.

More than 25 million homes have been built since 2016 under the rural public housing programme, called the Pradhan Mantri Awas Yojana (Prime Minister’s Housing Scheme). It is one of the more than 300 federal schemes that Mr Modi is leaning on to bolster support for his Bharatiya Janata Party (BJP) during the general election as he eyes a record-equalling third term in office.

“Life is tough. But I am grateful to get money from the government to build my first house,” Mr Bhallavi, 42, told the BBC.

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After coming to power in 2014, Mr Modi has expanded India’s welfare programmes, targeting women and farmers in particular. This includes providing cooking gas, free grain, houses, toilets, piped water, electricity and bank accounts, and beefing up a long-running jobs guarantee programme.

Many benefits – pensions, subsidies, loans and scholarships – are delivered through cash transfers to bank accounts linked to biometric identity cards held by over a billion Indians. Giant posters of Mr Modi promoting these schemes as his personal “guarantees” dominate the landscape.

Mr Modi says his government has spent more than 34 trillion rupees ($400bn; £316bn) in the past decade, delivering direct cash benefits to low-income households and reaching over 900 million people. A yearly handout of 6,000 rupees to more than 110 million farmers constitutes one of the world’s largest cash transfer programmes. The transfers, officials claim, have cut corruption and slashed costs.

Economist Arvind Subramanian calls this Mr Modi’s “New Welfarism”, funding essential private items like toilets, rather than expanding public goods such as primary education and healthcare.

To be sure, “New Welfarism” stands apart from the traditional welfare models in Europe or the US.

While the US tends to favour smaller government and lower taxes, resulting in modest social transfers, European welfare states have been more generous. Social democracies such as those in Scandinavia have favoured higher social spending, supported by higher taxes.

Following Mr Modi’s cue, all parties in India have caught what Devesh Kapur of Johns Hopkins University calls the “virus of cash transfers with numerous schemes across states and political parties”.

The country’s state governments now operate more than 2,000 cash transfer programmes. “Every party in India knows that welfare matters for votes,” says Mr Kapur.

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Soma Das uses the little money she gets from benefits to stitch clothes and sell from her joint family home in Bishnupur. She's seen here with her daughter in their village home. Case study of West Bengal benefits.

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On a recent balmy morning in Bishnupur in West Bengal state, more than a hundred men, women and children gathered under a blue-and-white tent in a school courtyard. The event had a festive air about it.

Except this was a welfare delivery camp organised by the ruling Trinamool Congress party, led by Mamata Banerjee, a charismatic regional leader who has so far repelled Mr Modi’s BJP in the eastern state, home to over 100 million people.

Serving her third term, Ms Banerjee has prioritised welfare initiatives, running some three dozen schemes. These include free bicycles to get to school, scholarships for girls, financial aid, pensions for women, the elderly and the disabled, alongside universal health insurance.

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“We are giving welfare benefits here from birth to death,” Naziruddin Sarkar, a senior district official, said.

To ease the burden of travelling to distant government offices and dealing with unhelpful officials, Ms Banerjee’s government operates a benefits outreach programme called ‘Duare Sarkar’, meaning ‘government at your doorstep’. In the last three years alone, over 100 million people have registered for welfare benefits across different schemes at more than 650,000 such camps in 23 districts, according to official data.

The camp in Bishnupur offers a snapshot of the livelihoods of beneficiaries.

Shobha Mondal says she is using her widow’s pension to send her son to school. Monika Tithi uses three separate pensions – as a farmer, tribesperson and woman – to run a village grocery. Dipali Mondal, another widow, uses her pension to make and sell street-side snacks.

“When old or widowed women get money, they are respected more in their household. Pensions give them dignity,” Choten Dhendup Lama, a senior official, said.

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Y Laxmi (second, left) says a $180 annual handout helps her educate her two sons (third and fourth, left) TREATED PICTURE

BIMAL tHANKACHAN

Hundreds of miles away in the coastal city of Visakhapatnam in southern India’s Andhra Pradesh state, Y Laxmi pins her hopes on welfare to secure a brighter future for her children.

She lives with her deaf and speech-impaired husband, their two school-going sons, and her widowed mother-in-law. They rely on handouts totalling 6,000 rupees every month, from her husband’s disability and her mother-in-law’s widow’s pensions, to run the household.

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The state government under YS Jagan Mohan Reddy, leader of the YSR Congress Party, funds more than two dozen welfare programmes. They include aid for women’s self-help groups, even monthly payments to kidney patients for dialysis.

The potential game-changer is the Amma Vodi or Mother’s Lap scheme which provides support of 15,000 rupees annually, that mothers like Ms Laxmi get to send children to school. Her 17-year-old son, Vamsi, aspires to go to the Indian Institute of Technology, the country’s top engineering school.

“The money from the government will hopefully help in realising his dream,” Ms Laxmi said.

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Mr Modi inherited India’s welfare system – free food, electricity and farm subsidies, rural housing and a rural jobs programme – and made it bigger.

Surveys show voters identify welfare programmes with the ruling parties, and that the number of households reporting using clean cooking fuel, toilets and women’s access to bank accounts has increased since Mr Modi came to power a decade ago. Distributing free bicycles to girls attending schools and colleges in various states has increased access to education.

Mallika Kar (seated, middle) with her family in Bishnupur, West Bengal. Kar is a widow. On her left is her daughter Manisha Kar and on her right is her mother Premlata Dhara. Standing behind is her sister in law Barnali Dhara and her son, Noel Dhara - West Bengal welfare case study

Swastik Pal

But evidence of welfare translating to votes is more mixed. Victories in Indian elections aren’t solely determined by a single factor – caste, demography and religious identity are other key predictors of support for a party.

In 2019, a survey by polling group Lokniti-CSDS, found that the BJP had attracted more women voters in that year’s general elections, because of a rise in Mr Modi’s popularity and the impact of welfare schemes. Yet, a recent study in West Bengal concluded that “ideology and identity politics” outweighed welfare considerations in explaining the growing popularity of the BJP in the state.

Last year, amidst mounting allegations of corruption, the BJP lost elections in Karnataka despite a slew of welfare programmes. In Andhra Pradesh, a state known for its high social mobility, there’s scepticism whether welfare initiatives alone will suffice for Mr Reddy to win this summer, given a lack of jobs and poor infrastructure. Many grumble that welfare undermines work ethic.

“Leaders have benefited politically from the programmes. But over time, there are diminishing returns. Governance and other things begin to matter more,” Mr Subramanian said.

He also cautions against “competitive populism”, emphasising the strain of too many welfare schemes on public funds. India’s public debt – of federal and state governments – exceeds more than 80% of GDP, according to IMF data. Last December, in a report, the IMF flagged India’s “elevated public debt levels and contingent liability risks”.

“States are playing with fire,” said Mr Subramanian. “These schemes have become permanent entitlements. I don’t know how this will end.”

The jury is still out on whether ‘New Welfarism’ is hurting the exchequer. And experts also warn that these schemes aren’t enough to lift people out of poverty; investments in healthcare and education are also essential.

Then there are slippages in the much-hyped programmes. In Visakhapatnam, despite receiving ample handouts, Ms Laxmi’s family spends a fortune buying drinking water because of the lack of a water connection, and go to a neighbour’s apartment to use the toilet because they have none.

Also, inflation and falling incomes could often mean that welfare has its limits. Mr Bhallavi, who got a handout to build his house in Madhya Pradesh, earns 500 rupees daily making brick homes. Despite owning a farm, freak weather and high fertiliser prices have made farming unviable.

He said he would also need to top up the housing handout and borrow an additional 80,000 rupees at a 12% annual rate from the village money lender to construct his house, underscoring the continuing challenge of accessing affordable formal credit.

Lakhpati Bai Bhallabi - Madhya Pradesh

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His wife, Lakhpati Bai, said that despite benefiting from subsidised cooking gas for two years, they struggle to refill their free cylinder due to rising gas prices. “We do most of our cooking on the clay stove,” she said.

In 2022, India’s Home Minister Amit Shah defended his government’s approach to welfare.

“We have given gas connections, power connections and it’s up to them [people] to pay their bills. We have made toilets for them but they have to maintain them… What we did was to provide help to upgrade their lives – this is empowerment,” Mr Shah told The Indian Express newspaper.

India spends less than 1% of its GDP on health, and spending on education has been slashed. Extending the free grain programme to over 800 million people until 2028 also points to a struggling rural economy. Mr Kapur believes cash transfers have “become an easy short-term solution and harder long-term solutions like investing adequately in agriculture, education and healthcare are being neglected”.

“All that requires institution building, which is a hard slog. So while there is much that is commendable about the New Welfarism, one worries that it might be at the cost of building systems that matter for long-term productivity and growth,” he said. Most Indians would agree.

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Commentary: A surprise South Korean boom is going unnoticed

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Hopes OF A Economy HAVE DIMINISHED

Economists had a year ago confidently predicted multiple cuts beginning in the late 2023, but it did n’t look that way. There was even a possibility of crisis.

Hopes of such a downturn have considerably diminished. The central bank is concerned that the prices is getting more and more persistent, and that a protracted greenback has weakened Korea’s fought, its currency. This unfortunate outcome of strong economic conditions in America and a decline in the Fed’s willingness to make first cuts have a ripple effect across global markets.

” I would n’t call it starting from scratch”, Bank of Korea Governor Rhee Chang- yong told reporters recently. ” But the situation has changed”.

This financial boom has no benefit to President Yoon Suk Yeol, either. Voters in Yoon’s hard-right laws drew a disproportionate blow to his party in parliamentary elections next month. Social scientists declared his principle over with only a few years left in his name because of how devastating the bloc was.

Investor- pleasant policies championed by Yoon, like strong cuts in funds- gains tax and union busting, may struggle to find traction. The typical Korean has yet to go through a better time. On either side of the divide, a consumer sentiment score that measures the dominance of optimism or pessimism, has remained undetermined.

Not necessarily translating to joy on the streets for Samsung Electronics and Stat Hynix. Higher levels of debt and worries about injustice have accompanied the country’s progress in new decades- and inspired Netflix’s hit Squid Game and, a dozen year’s earlier, the Oscar- successful film Parasite.

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PM tries to talk unhappy minister out of quitting

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After the reshuffle, deputy finance minister Krisada apparently found herself dissatisfied with her new job.

PUBLISHED: 8 May 2024 at 17: 49

PM tries to talk unhappy minister out of quitting
At the Bangkok Post Forum on November 8, 2023, Deputy Finance Minister Krisada Chinavicharana addresses. ( Photo: Nutthawat Wichieanbut )

Srettha Thavisin, the deputy finance secretary, pleaded with Krisada Chinavicharana to reevaluate his resignation on Wednesday in an immediate visit from Prime Minister.

Mr. Srettha claimed to have called Mr. Krisada prior to the resignation letter so that the disgruntled secretary could consider the decision for a second time.

According to reports, Mr. Krisada apparently made the decision to leave because he believed he was unsatisfied with Pichai Chunhavajira’s recently appointed responsibilities.

The Public Debt Management Office is apparently headed by Mr. Krisada, a former government continuous director.

His appointment in the Pheu Thai-led coalition was made within the United Thai Nation Party’s social allotment last year.

Mr Krisada is not the only minister to experience slighted&nbsp, in the new cabinet reshuffle. Parnpree Bahiddha-Nukara, the deputy prime minister, resigned last year due to his disappointment over losing the place he also held.

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Xi’s big adventure to keep Europe open and onside – Asia Times

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When Chinese President Xi Jinping next visited Europe, the world economy is now a much different area than it was five years ago.

Since 2019, a pandemic wreaked havoc, Joe Biden was sworn in as US president, Russia invaded Ukraine ( which Beijing tacitly backed ), German Chancellor Angela Merkel stepped aside, the US Federal Reserve carried out its most aggressive tightening cycle since the mid- 1990s and the European Union ( EU) is threatening new tariffs on Asia’s biggest economy’s exports.

With all of this, Xi has performed one of his most difficult balancing acts in his ten years in power. His swing through France, Serbia and Hungary comes as concerns about Beijing fueling Russia’s war machine collide with Xi’s need to tap Europe’s electric vehicle ( EV ) market, convince the West that Chinese “overcapacity” concerns are overdone and that China’s property crisis wo n’t be the cause of the next global financial crisis.

All of this while avoiding falling into a wider trade dispute with a crucial economic union due to China’s post-Covid recovery’s producing boom.

But there has been a significant change over the past five decades. When Xi last visited, China’s gross domestic product ( GDP ) was roughly the same size as the EU in US dollar terms. Today, it’s about 15 % bigger.

” The cyclical setting of Europe and China items to the business balance turning in China’s prefer”, says Cedric Gemehl, scientist at Gavekal Dragonomics.

At the same time, nevertheless, EU place demand is showing signs of recovery, which could be a benefit for China- made merchandise purchases.

The eu economy ultimately experienced some significant development in the first quarter of 2024, according to ING Bank economist Bert Colijn, following a long period of stagnation since the power crisis first started in the second quarter of 2022. A more robust power source and a significantly lower cost of ownership, which in turn lower inflation, make up the economy. Pay growth, in turn, has accelerated to make up for lost buying energy, which is now benefiting consumers”.

The EU has the upper hand, according to some economists, as China is under more US force, including restrictions on investments in island companies.

One great disclaimer: the EU’s 27 people are all over the place on China relationships. Some people complain about Beijing supporting Russia’s military business, people about China’s subsidies for EVs and clean energy industries, and still others about human rights concerns. All of the above are irritable to some.

It’s no accident that Xi’s timetable begins in France. Xi met with French President Emmanuel Macron, who may appear to be a fellow traveller, three days after German Chancellor Olaf Scholz made a trip to China.

Macron’s need for Europe not to become a “vassal position” of the US makes him Xi’s best guess for cajoling the legislation course in Brussels. A significant overlap in the Venn diagram for Beijing and Paris is the argument that Macron made frequently and first for” proper freedom” from Biden’s Washington.

But challenges abound. One is Macron’s desire to protect France’s economy from a wave of low island products and exports of EVs and other natural products, which Brussels claims are funded by “unfair” authorities subsidies.

Another: Xi’s attempts to downplay China’s support for Vladimir Putin’s exploits in Ukraine ( Macron has floated the possibility of a French deployment there ).

” Xi will use his day with Macron to downplay China’s continued support for Putin’s war machine”, said Matt Geraci, an associate producer at the Atlantic Council’s Global China Hub.

Russian President Vladimir Putin and Chinese President Xi Jinping pancakes one another. Photo: Asia Times Files / AFP / Zuma

Macron also is n’t thrilled by Xi’s choice of stops after France. According to reports from Western media outlets, Macron hoped to maintain the focus on Franco-Chinese ties rather than Serbia and Hungary, which are Russia-friendly.

Eastern European powers, including Macron and Scholz, are concerned that Xi’s time spent in pro-Kremlin lines, which he claims, violates broader EU legislation signals. The problem, of course, is the extent to which those prevents squander any kindness Xi may acquire in Paris.

Of course, Xi can be quite talented at pitting Western countries against one another in front of the wider EU union. Take, for example, the Germanic party’s April trip to China, notes Rolf Langhammer, top scientist at the Kiel Institute. ” Scholz largely followed the quarrels of European business”, Langhammer says.

” For instance, that low-cost Chinese upstream items offer both cost advantages for domestic business and encourage European consumers and processors to get environmentally friendly goods,” for instance. European businesses worry about reprisal if China is subject to import tariffs from the EU, he added.

These arguments, according to Langhammer, are natural from a macro perspective. However, they disregard the well-founded issues raised by the EU Commission regarding the anticipated surge of Chinese imports into the EU’s single market, which is currently the only available market in the world.

Of Xi’s vacation this year, Mathieu Duchatel, senior colleague at the Institut Montaigne, observes that “diplomacy only is unlikely to produce substantial outcomes in EU- China relations, as this explore may once again underscore. Those looking for a more realistic way to address trade, technology, and investment relations between the EU and China should turn their attention to the EU’s evolving economic security agenda.

According to Duchatel,” a lot still needs to be done.” Without economic intelligence, the difficulty of developing a European economic security agenda is demonstrated by the difficulty of establishing a supply chain resilience challenge. Successive crises have exposed weaknesses in Europe’s supply chains. Private companies and individual member states have primarily taken steps to reduce these risks, though.

The European Union’s efforts to address supply chain flaws have not yet produced significant results, according to Duchatel, despite its own economic intelligence capability. The European Commission must combine and analyze strategic information on a scale greater than that of individual member states and private entities in order to effectively address this challenge. The Commission would gain from all EU countries and European businesses by becoming a key player in supply chain resilience decisions.

In the interim, EU President&nbsp, Ursula von der Leyen is&nbsp, raising the temperature with a slew of trade restrictions against Xi’s Communist Party. In part, the effort aims to fulfill her commitment to improve Brussels ‘ impact on the world. Part is aimed at assessing the broader costs of China’s subsidies for EVs and its support for wind parks, solar manufacturers, railway firms and medical devices.

” We recognize what we see as the Chinese playbook” ,&nbsp, Margrethe Vestager, the EU’s competition chief, tells Bloomberg. Knowing that you have been played teaches you to be much more watchful and take better actions.

Vestager says that” we are fully utilizing our trade tools and our tools that come with the foreign subsidies regulation to restore fair competition.”

The so-called “external subsidies regulations” are intended to protect against state funding that causes unfair competition for public tenders and deals to the detriment of European businesses.

Last month, Vestager’s team unveiled a subsidy investigation into China’s involvement in wind parks in Bulgaria, France, Greece, Romania and Spain.

The extreme uncertainty surrounding geopolitical tensions, according to economist Maartje Wijffelaars of Rabobank International, has made the year 2024 even more precarious.

” The main question is”, says Wijffelaars, “where will it end? Solar panels, wind turbines and medical devices have also’ recently’ caught Europe’s attention”. China is essential for its desperately needed energy transition, but also because it needs both as an export market and as a resource.

In Yantai, China, a worker installs polycrystalline silicon solar panels as terrestrial photovoltaic power. Photo: Twitter Screengrab

Yet Xi’s real challenge, let’s not forget, is China’s economy back home. At a time when youth unemployment is at its highest level, the cratering property sector is still putting downward pressure on deflation. Municipalities, meanwhile, face crushing debt loads, including US$ 9 trillion of so- called local government financing vehicles ( LGFVs ). That’s double the size of Germany’s economy.

The trade concerns will “undoubtedly” be a key discussion point, particularly since China is grappling with a slowing economy, says Leonie Allard, a visiting fellow at the Atlantic Council’s Europe Center.

The weak yen also makes Xi’s 2024 difficult to read. The currency’s 10 % drop this year is affording Tokyo a trade advantage that China is n’t enjoying. Xi’s economy could, of course, embolden the People’s Bank of China to push the exchange rate lower.

It would be a risky gambit, triggering a broader currency war. A decade of efforts to increase the yuan’s use in trade and finance may be slowed down by doing so.

Property developers who have a lot of offshore debt might face higher default risks as a result of a weaker yuan. In the run-up to November 5, China might become a bigger issue in the US election.

The key is addressing the real estate crisis, strengthening capital markets, boosting private sector size in comparison to state-owned companies, and creating bigger social safety nets to encourage more money and saving it.

Premier Li Qiang is back in Beijing as Xi rounds the European markets, leading efforts to improve China’s economic standing. and overcoming difficulties, albeit temporarily, that Xi might find appealing because of his isolation.

Follow William Pesek on X at @WilliamPesek

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PM denies seeking to curb power of BoT chief

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PUBLISHED: 7 Does 2024 at 04: 29

PM denies seeking to curb power of BoT chief
Bank of Thailand Governor Sethaput Suthiwartnarueput, left, and Prime Minister Srettha Thavisin at a meeting to discuss financial plan on Oct 2, 2023. ( Photo: Government House )

Following a disagreement over the central bank’s position on interest rates, Prime Minister Srettha Thavisin objected to amending a law to limit the authority of the Bank of Thailand ( BoT ) governor.

Mr. Srettha said it had not crossed his mind when asked if the government would change the Bank of Thailand Act to restrain the BoT president’s authority.

” It is the Finance Ministry’s process to handle the matter. Never did I request that the BoT government retire. He always felt any pressure. But I do n’t know what will happen in the future. You must ask the Finance Minister]Pichai Chunhavajira ]”, Mr Srettha said on Monday.

” I do n’t want to talk to the BoT governor directly,” he said. He suggested that the State Enterprise Police Office of the Finance Ministry does work with the government to integrate with the BoT. I have acted on his suggestion”, the excellent minister said.

” I am not in discord with the BoT government. I am fighting against people’s hunger. High interest rates contribute to hunger. That’s all I may suggest. Politicians, MPs, government officials and the BoT all have good purposes for the land, but we approach problems differently”, Mr Srettha said.

He had previously stated that he would meet with the newly elected finance minister to explore ways to integrate and collaborate with the central bank more effectively.

Earlier, Mr Srettha stood by Pheu Thai head Paetongtarn Shinawatra, who recently criticised the main company’s stance on interest rates.

Ms. Paetongtarn criticized the BoT, which has been under constant strain to lower interest rates, at an event held last Friday at Pheu Thai’s office.

She said the laws, which prevents the Bank of Thailand from being governed by the state, is a issue and a big obstacle to financial problems.

According to Ms. Paetongtarn, the nation has heavily relied on fiscal policy to stabilize its business, which has led to a high public debt and finances deficit.

” If the BoT does n’t understand and cooperate with the government]in its efforts to tackle economic problems], we ca n’t ]win ]”, she said.

In an effort to boost the economy, the government has repeatedly urged the BoT to think about changing its interest charge legislation and lowering the standard rate. The public is being harmed and the current rate of 2.5 %, which is a 10-year high, is further compounded by Mr. Srettha’s earlier assertions.

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Fed independence key, despite Trump advisors’ view – Asia Times

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Let’s face it: every senator aspires to the Fed’s authority to set interest rates. Let’s get real before we discuss the ideas Trump officials are hatching to abandon that authority.

Donald Trump would n’t be the first to attempt to snag some of that power. Harry Truman, Lyndon Johnson, and Richard Nixon were his forebears in the creation of the initiative.

Yet those president who sat silently while the central bank raised or declined to raise interest rates certainly winced. High interest rates may lose votes. No leader wants them.

Neither would farmers, ranchers and various business loans. If taking away the Fed’s independence keeps interest rates low, then, is n’t that a good thing?

Let’s start by acknowledging that the Fed is n’t completely independent. Congress created it in 1913 and what Congress does, Congress can remove. In 1978, Congress changed the Fed’s going orders, mandating that it do peak work as well as price security.

Also, elected leaders determine who serves on the Federal Reserve Board. The Senate confirms the governors ‘ appointments, and the senator nominates them.

But previously confirmed the rulers serve 14- yr terms, which gives them a substantial degree of independence. They can only be removed for a specific reason, and not because the leader or Congress disagree with their plan choices.

And that’s not the Fed’s just protection from elections. The Federal Open Market Committee, the agency that determines monetary policy, has another structure. The FOMC’s seven administrators are elected by private businesses that are Federal Reserve System members, and they are presided over by five president of the 12 Federal Reserve institutions.

Politicians can and do show their differences with the available- market committee’s decisions, occasionally in warmed terms. But that’s all they can accomplish, aside from the nuclear option, to drastically alter the entire central banks program. Our financial politicians have the freedom to make controversial decisions without having to lose their jobs.

Why does the US protect its social decision-makers from political meddling on this basis? Often high interest rates are important, without them inflation may spin out of control.

But even when they are needed, imposing them requires a degree of political confidence not ordinarily required of those who must face the public every two, four, or six years. Better to assign their 14-year words to appointed professionals.

It’s not just the US that has come to this conclusion. For the same grounds, the majority of nations have quasi-uniform key banks.

What Trump’s officials are allegedly considering falls under the nuclear-options umbrella.

According to The Wall Street Journal’s Fed writer Nick Timiraos, the president had been consulted on attention- level decisions. White House assessment of final restrictions would be done. The Treasury do monitor the Fed’s choices regarding emergency lending.

Oh, and Trump did take Jerome Powell’s place before his 2026 expression as head of the Fed. Powell was appointed chairman by Trump, but he expressed disappointment at the Fed’s subsequent rate increases during his administration.

Unless Congress went on, the propriety of all this is controversial. There would almost certainly been dispute. It would n’t be surprising if the courts derailed the proposals.

The first step may likely be in the financial industry. They’d put a meltdown. To know why, it’s good to join four information:

  • The Fed sets brief- term interest costs. Long-term charges are determined by supply and demand in the bond business.
  • Tie costs and bond yields move inversely. For example: If you’ve bought a$ 1, 000 bond with a 5 % interest rate, your interest income is$ 50 a year. If the market price of the bond falls to$ 500, the buyer still gets$ 50 a year, but$ 50 is n’t 5 % of$ 500. It’s 10 %. As the grant’s rate falls its supply rises.
  • Inflation is good for consumers and terrible for collectors, because the loan ( friendship, in this case ) gets repaid in depreciated money.
  • When the relationship industry sniffs inflation, the resulting pullback may cause economic chaos. Among other things, stocks often plummet, also– the higher yields create bonds more beautiful as expense vehicles– and the higher yields make the government’s debt jump.

Investors see reckless economic policy as a barrier because of the Fed’s independence. They worry that even when economic conditions demand that interest rates be set at a high, politicians will continue to set them small. Fugitive inflation is a serious danger, that is, if lawmakers are setting interest charges.

Odds are higher, in other words, that an attack on the Fed’s independence had really cause a lengthy- term bond selloff.

This is why these proposals are n’t a good thing, even for business loans. They fail to account for the crucial role that the businesses play in determining interest rates. The White House would probably remove them due to financial chaos. For producers and landowners, there’s also the problem that when bond yields jump higher, but would mortgage rates.

According to Timiraos, the proposals Trump’s advisors are plotting have n’t yet received the candidate’s blessing. It will be better for the economy, owners, the national debt and business loans if they never do.

Past lifelong Wall Street Journal Asia journalist and editor&nbsp, Urban Lehner&nbsp, is writer professor of DTN/The Progressive Farmer.

This&nbsp, content, &nbsp, initially published on May 3&nbsp, by the latter news business and then republished by Asia Times with authority, is © Copyright 2024 DTN/The Progressive Farmer. All rights reserved. Follow&nbsp, Urban Lehner&nbsp, on&nbsp, X @urbanize

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PM vows action on debt, drugs and drought

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PUBLISHED: 5 May 2024 at 18: 01

PM vows action on debt, drugs and drought
Prime Minister Srettha Thavisin receives a warm welcome in Phayakkhaphumphisai area, Maha Sarakham, on Sunday. ( Photo: Government House )

MAHA SARAKHAM: The state is stepping up efforts to address the country’s casual debt, drought and cocaine issues, Prime Minister Srettha Thavisin said in Maha Sarakham’s Phayakkhaphum Phisai neighborhood on Sunday.

At a party’s coordination center’s event in the northern province, the prime minister, who was wearing a red shirt, addressed Pheu Thai supporters on stage.

He assured them that the guaranteed third quarter of the government’s online budget handout program would be implemented.

He claimed that low-income people still face a significant issue with casual loan.

” The government has previously held a meeting]to seek answers ]”, he said. ” Anyone who has a debt problem has been urged to seek help from regional authorities under the president’s debt negotiation programme”, he said.

According to the Interior Ministry, 153, 400 people signed up to the president’s debt settlement program between Dec 1 to Feb 29, with payments totalling about 12 billion ringgit.

As of March 29, the Department of Provincial Administration said 41, 686 had entered the bill renewal operation, while 25, 408 had previously settled their debt with lenders.

He continued, claiming that substance abuse has been caused by debts issues.

The government has recognized the extent of the drug issue. He claimed that we have seized drug-related goods and increased border security to stop smuggling.

The PM claimed that there are numerous drug users in nearby villages who need treatment for addiction and should be treated differently from pirates.

He said,” I’ve given security organizations, the public health department, and the justice department instructions to address the issue and promote their social reintegration.”

According to Mr. Srettha, the rainfall has also had an impact on local producers and the agricultural industry, and he has requested that the Interior Ministry and the Agriculture and Cooperatives Ministry make sure there are enough water supplies for the farmers who have been affected by the drought.

” These three issues — casual debts, drought and drug — are national interests. The primary minister reassured the public that all work would be made quickly.

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