The right way to stabilize China stock markets – Asia Times

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China’s most recent initiative to show leaders that it is serious about stabilizing falling equities is now showing signs of serious growth.

Investors have purchased stocks in everything from Alibaba Group to Meituan to Tencent to Ping A Group, to Hong Kong Exchanges and Clearing as a result of information that the China Securities Regulatory Commission will act in areas to stop sharp fluctuations in property prices. Bloomberg reports that Tuesday, February 6, the CSI 300 standard closed 3.5 % higher, marking its best moment since soon 2022. &nbsp,

The CSRC did lead medium and long-term funds into the stock market via a massive stabilization fund while limiting short-selling and dealing that is thought to involve insider trading, even though the specifics of the bourse-boosting strategy are unknown.

And it was undoubtedly no accident that Beijing revealed on Tuesday that President Xi Jinping is scheduled to receive a lecture from authorities on the state of the second-largest market’s troubled financial marketplaces.

China’s stocks has start rising right away, according to impulses from the CSRC. The state-led initiative was launched one month after Vice Premier He Lifeng demanded “improvements in the performance and profitability of listed companies,” adding that “healthy firms are a crucial “microeconomic bedrock.”

” We view this as a sign that the central government has started to sprout afraid of the stock market sell-off and is looking to put the floor in order to increase confidence,” says Economist Carlos&nbsp, Casanova, at Union Bancaire Privée.

A ground under shares may be created as a result of the movements. The Chinese and Hong Kong stock markets have lost at least$ 7 trillion since their peak in 2021. However, the administration’s response has n’t yet addressed underlying issues that are causing severe economic unpredictability and a general lack of confidence.

Beijing’s patchy approach to date, however, will only be successful in the long run if it is accompanied by a daring and trustworthy housing-related plan. Here, the majority of economists see China Evergrande Group‘s debt problems as a result of the 1990s negative mortgage crisis in Japan.

There are many similarities, of course, including a maturing economy shifting growth engines to manufacturing-based services, an impasse in asset values brought on by unknowable amounts of bad debt, and aging demographics endangering future financial prospects.

Then there is the slow speed with which policymakers in Beijing now and Tokyo back then are addressing the economy’s glaring flaws.

According to Henry Hoyle, a senior scholar in the Asia-Pacific section of the International Monetary Fund, “key house industry vulnerabilities have yet to be addressed, suggesting ongoing dangers to sustainability.”

The 1980s Savings and Loan ( S&amp, L) Crisis in America, which was brought on by a real estate value crash that sent shockwaves through already shaky banks, could, however, serve as an even more useful benchmark.

As luck would have it, US officials will be in Beijing this week to exchange opinions on the country’s economical problems both now and in the future. China’s dynamic threat will probably be less on US Treasury Department officials ‘ minds when they arrive than its weaknesses.

The real estate crisis is getting worse, the Chinese stock market is sputtering madly, negative risks are growing, and there are ominous regulatory crackdowns on tech, finance, also due diligence firms, all of which are making investors nervous.

The US Treasury’s secretary for foreign affairs, Jay Schambaugh, will lead a delegation that will be interested in learning more about the strategy China is using to stabilize the largest economy in Asia.

Picking Treasury authorities ‘ thoughts about the more recent global financial crisis in 2008–2009 might be one immediate desire.

Many investors could n’t help but wonder if last week’s news that China Evergrande Group, a major real estate juggernaut, had been forced to be liquidated in Hong Kong.

Even if a judge in mainland China recognizes the Hong Kong court order, Beijing’s more violent stance to have risk as well as prospective political considerations means the fallout will likely be somewhat contained, according to Commerzbank analysts.

Evergrande constructed residential properties in Yuanyang in January 2022. Online photo

According to Shehzad Qazi, an analyst at advisory China Beige Book, Xi’s team basically controls every aspect of the financial system, making it nearly impossible for supply, lending, or borrowing dynamics to collapse in the Lehman fashion fashion.

Because of this, the S&amp, L assessment is probably more appropriate. The Financial Institutions Reform, Recovery, and Enforcement Act was enacted by US lawmakers in 1989 to rid a sector of unprofitable property.

While putting thrifts ‘ insurance under the Federal Deposit Insurance Corporation ( FDIC ), the legislation established the Office of Thrift Supervision.

The Resolution Trust Corporation (RTC ) was arguably the most significant development to take the remaining troubled S&amp, Es to heel. The RTC closed 747 S&amp, Init with property worth more than$ 407 billion at the time.

After successfully repairing the economic structure, the RTC was shut down by 1995. Not that the US had a lesson to learn. A few years later, Congress may make a mistake when they repealed the Glass-Steagall Act of 1933, which established barriers between banks ‘ business, purchase, and savings operations.

The” Lehman shock” of 2008 probably would not have occurred if that Depression-era law had n’t been repealed. The same was true of the Silicon Valley Bank explosion from the previous year, which served as a reminder to many of how problems in two mid-tier banks that some investors were even aware of could quickly turn into symbiotic risks.

These comparisons are important in 2024 because of how America’s S&amp, L problems started and persisted beneath the surface until it was too soon.

Laws of finance “always work,” according to Adrian Blundell-Wignall, a former analyst for Organization for Economic Cooperation and Development and present columnist for the Australian Financial Review. However, history is rife with the mistakes made by institutions trying to get away from them.

According to Blundell-Wignall, “it’s not only authoritarian governments that misallocate resources through state funding and money, capital controls, subsidies, and the problem that often travels with these elements.”

Problems will arise wherever money is raised with an explicit or implicit assurance. The Evergrande crises and nbsp in China make me think of the S&amp and L crises, but with the distinction that the latter is both a property developer and an intermediary. a triple risk.

Imagine &nbsp, Blundell- Wignall contends, a hybrid between an investment bank, private equity firm, and engineer. China, he contends, “has all the totalitarian regime issues and, where it permits proper well-connected private individuals to raise funds with an implicit promise to create residence, it ties onto this risk the S&amp, L-like problems squared.”

Several US Treasury officers attempted to sell Tokyo on the RTC rulebook in the 1990s. In the end, the organization had been successful in setting up the auction of bad loans as a way to draw in greedy investors and, in turn, strengthen public confidence in the system.

Could Xi’s team be more susceptible than Chinese officials making decisions in the middle to later 1990s? Only time will reveal. However, it would be wise for Premier Li Qiang and Xi to keep in mind that time is not on their part. &nbsp,

A file photo shows Chinese President Xi Jinping ( L ) and Premier Li Qiang ( R ) as time passes. NTV / Screengrab picture

The biggest lessons from Japan is that disposing of poor assets in a glacial manner leads to the very negative attitude that Japan still struggles with 25 decades later.

According to IMF economist and nbsp Hoyle, “many programmers have become non-viable but have avoided debt thanks in part to rules that allow borrowers to postpone recognizing their terrible mortgages, which has helped muffle spillovers to real estate prices and bank balance sheets.” Due to some places ‘ efforts to contain price drops through regulations and recommendations on listing prices, home prices have also decreased only slightly.

In other words, China is still addressing its problems ‘ indications rather than its root causes, just like Japan did in the past.

According to Hoyle,” China’s housing market faces more pressures in coming years from fundamental factors, in specific demographic change.”

” As the population falls and industrialisation slows, there will be less need for new housing in the coming times.” Millions of people moved to newer cover from older buildings devoid of modern facilities thanks to significant public subsidies in the previous ten years. As local government governmental restrictions have been tightened by declining land sale revenues and fewer residents are living in older housing, for demand will probably be more constrained, according to Hoyle.

Xi and Li do, in fact, have choices. The IMF suggests a quicker and easier move for the real estate industry. This entails allowing more market-based price changes and taking swift action to rebuild bankrupt developers.

This, according to the IMF, would eliminate the burden of inventories and allay concerns that prices will keep steadily falling. According to IMF leaders, regulations allowing banks to minimize recognition and nbsp of bad funding to developers also need to be phased out.

Beijing could take action to maintain top-line economic development in the 5 % collection over the course of both the short- and long-term.

The People’s Bank of China, the central bank, announced last month that it would release about 1 trillion yuan ($ 140 billion ) in long-term capital by reducing the reserve requirement ratio by 50 basis points.

According to economist Tao Wang at UBS Investment Bank,” The most recent PBOC behavior may be interpreted as the start of a policy tilt from previous sensitive and wholesale measures by investors, and they will continue to look for further signs and acts of policy help.”

China might be about to make a coverage change. Online Screengrab photo

According to Chris Metcalfe, chief investment officer at IBOSS Asset Management, “property companies continue to act as a lead weight on investment attitude despite several methods to help increase the cash available to home developers.”

These actions, he continues,” may help relieve the lingering cash crunch for Taiwanese developers who have been the target of Beijing’s crackdown to address the sector inflated debt levels.”

Beijing’s final solution to the home issue, however, is more significant than rising asset prices. Owners can only hope that Beijing’s sudden flurry of activity is a sign that the time has come.

William Pesek can be reached at @WilliamPess on X.

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SOLS Energy introduces Home Solar Subscription with zero upfront costs in Malaysia

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Business promotes its ground-breaking renewable energy strategy for homeowners.Instant discounts for subscribers eliminate the need for protracted revenge times.With the introduction of SOLS Energy’s ground-breaking Home Solar Subscription software, powered by Gentari, householders will now have a new way to obtain solar power for their homes, supporting the Madani Government in…Continue Reading

Bright, shining promise of China’s solar revolution – Asia Times

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The moon is about to rise, doo- dou’doo.

The moon is approaching, and I say

It’s fine.

– The Beatles

China demonstrated its capabilities in 2023 by achieving one of the most exciting industrial-technological feats in years. The jaw-dropping performance, which has been in the works for a while, portends many years of even more remarkable performances and an economy that is about to undergo complete change.

Of course, the majority of Western media and analysts missed it in their magnificent obscurity and began 2024 by busy reducing China’s reported 5.2 % GDP growth using some “feelzy” amazing approach. These are the same individuals who were shocked in 2023! …by China’s increasing auto imports.

What precisely did China would in 2023, then? It increased the potential of thermal manufacturing and generation by more than 200GW. China also made major advancements in nuclear and wind power, but come ignore those since they will eventually lead to round mistakes.

based on a thorough investigation by Lauri Myllyvirta of CarbonBrief. In 2023, clean energy industries accounted for 40 % of China’s GDP growth. While the world was enthralled by China’s electric vehicle ( EV ) revolution, the consumer-facing segment is only one of the “new three” —solar, batteries, and EVs—that will revolutionize the Chinese economy over the next few decades. &nbsp,

President Xi Jinping declared in September 2020 that China’s CO2 emissions will reach a top before 2030 and that the nation had become carbon neutral by 2060. With a projected 2030 generation capacity of 1, 200 GW, wind and solar may be significant. The maximum for fuel use is anticipated in 2025, and it will gradually phase out over time. The following are: &nbsp, , SVP, NBP,

Over six times ahead of schedule, China did reach 1, 200 GW of wind/solar generating power at some point this season. Participants in the COP28 Conference of the United Nations agreed to triple the output of alternative energy by 2030, mostly as a result of China’s expanding solar supply chain.

Estimates for China’s renewable energy capacity in 2030 range widely, from 2, 400 GW ( tripling that of year-end 2023 ) to 3, 300 from Goldman Sachs to 5, 000 by prolific X ( Twitter ) analysts Glenn Luk and TP Huang. What matters is where China hills, not the exact number on the hyperbolic part of the s-curve in 2030.

Renewable energy sources can produce 75 % of the energy produced by fuel in 2023, assuming Goldman Sachs ‘ 3, 300 Facebook forecast and a efficiency factor of 15 %. It is 114 % at 5, 000GW. Given fast developing safe-keeping technology and new industries that you capitalize on changed energy economics, the greatest plateau of suitable solar power is anticipated to be higher—possibly much, much higher.

Prices for solar photovoltaic ( PV ) modules decreased by almost 50 % year over year in 2023, according to the International Energy Agency ( IEA ). Since 2021, the capacity to manufacture PV has tripled, with China accounting for almost all of this growth.

By the end of 2024, the global manufacturing capacity for PV modules will rise by another 40 % to 1, 100 GW, with China continuing to hold a supply chain share between 80 and 95 % ( depending on the manufacturing segment ).

China’s clean electricity plan has abruptly accelerated, demonstrating its proper adaptability. Nothing was certain how energy technologies and economy would fare when the 2030 solar target was set in 2020. China had wagers placed on wind, solar, nuclear, storage, and electric vehicles ( EVs ).

All of the chips and other components were moved into the solar and industrial/technology stack required to milk it for maximum benefit, including batteries, ultra-high voltage ( UHV ) transmission, and EVs, once it became clear that the cost of PV panels could be buried.

For opportunistic power generation ( i .e. when the sun is shining ), solar is now less expensive than coal. For baseload power, renewable and storage—the capacity to conserve energy in substance chargers for cloudy days—are about to surpass coal in price.

While new calcium ion systems promises to be even more affordable, lithium batteries are already available. A national network that changes for local weather and seasonal variations in power demand must now be scaled and built out.

The narrative begins farther up. China is a fighter in MMA who has been quietly honing innovative techniques since the mid-2000s. Combat supporters believed that the new fashion was prepared for the 2017 hexagon, which would put an end to the building of new coal-fired power plants.

It turned out too soon. The fighter switched back to the old style ( mass coal buildout ) but still suffered humiliating defeats ( rolling brownouts in 2021 ). By 2019 it was clear the new style was n’t winning matches ( PV prices were still too high, limited wind scalability ). &nbsp,

However, the training persisted, and improvements were made ( rapidly lowering PV and battery prices ), and now it is truly prepared for display. Everyone is mesmerized by the novel, fancy takedowns (electric cars ), but what they see is only a small portion of the larger Brazilian ground game of jujitsu. &nbsp,

A PV and storage-based energy generation system will produce sporadic but predictable bursts of “free energy” that new industries can digest at full working capacity with appropriate redundancies. By 2030, 5, 000 GW of solar capacity should be able to remove all baseload coal, barring storage. Any more solar power would be sauce. In addition, &nbsp,

Magical things like large distillation, indoor grain production, and” costless” environmentally friendly metal smelting take place here. Given the speed of the buildout, we may begin to see some of this revolutionary stuff happening within five years.

Primary energy consumption ( oil, coal, gas, nuclear, renewables, biomass, etc. ) quadrupled after China entered the rapid urbanization and infrastructure buildout phase of its development at the turn of the century. China consumes 75 % more major power than the US. But, it is 60 % less per person.

As China’s economy becomes more service and consumption-oriented, it is anticipated that its main energy consumption does plain like the US. Although estimates vary, the majority of analysts predict that China’s primary energy consumption will plateau at OECD per capita levels around 2030, significantly below the US ( with its propensity for monster trucks and gas-guzzling SUVs ).

That might not be the situation. How small can energy prices drop with renewable economics being driven by China-sized scaling? Will massive electric vehicles ( EVs ) gain the same level of popularity in China as heavy-duty pickup trucks do in the US? What novel energy applications, if any, may novel economics justify? Desalination? extremely affordable manure jet energy based on hydrogen How great does China’s output of renewable energy reach? The following are: &nbsp, , SNP, BSP, NBP, ABNBSP, TBS, and NBSPS,

The speed of power innovation and the expansion of grid infrastructure will determine the answers to the aforementioned questions. The cost of installing PV modules has decreased to the point where it is now the constraint in some economy. If comparable changes in storage and transfer can be attained, next China’s economy—if not the entire world—will change.

Net income is the most crucial line on the money speech in bourgeois finance. The series to increase is that. Theoretically, increased societal welfare will be achieved through the combined efforts of individuals motivated to increase online income.

Cost of goods sold ( COGS ) is the most crucial line on the income statement in communist accounting. Maximizing COGS, in theory, stops capital from hoarding resources by either overspending clients or paying employees. Maximizing COGS in the USSR actually discouraged development and, over time, slowed efficiency.

China is attempting to get both methods. It might even be successful. China encouraged investment in the EV, power, and PV sectors two decades ago by providing ample grants and tax advantages to all takers ( at least all private ones ).

As a result, there were hordes of market participants who fiercely competed with one another, innovating desperately, and driving down prices ( as well as online revenue ). Underpinned by China’s enormous market, little profitable industries never only aggressively scaled up but were also compelled to innovate by the fierce competition. &nbsp,

Of course, this has n’t always been successful, and the model changes occasionally. Despite years of government aid, China is also several generations behind in the semiconductor industry. Professional aircraft is such a complicated project that numerous market participants cannot be encouraged. With only one small local rival (ZTE), Huawei rose to the top of the market for telecommunications equipment.

Nevertheless, China has managed to run the snail and rabbit approach in change in the EV, battery, and PV spaces, where no legacy player had an established lead. Scale up so quickly and deep that catching away is difficult. The tortoise method is the only choice in sectors with established leaders, such as semiconductors, industrial aircraft, and biotech, where China got its start.

What does disappointment look like if success is the complete transformation of China’s market, with distillation plants irrigating inside solar-powered fruit farms and Chinese families cruising around in US$ 15, 000 Hummer-sized EVs?

Grid-level storage may never be commercially viable due to battery technology. The Xinjiang deserts are not terraformed into solar farms, and scaled UHV tranny could prove to be an impossible engineering challenge.

Even then, with coal power plants serving as a backup, renewable energy may still be able to completely eliminate coal-fired electricity era in China, which would be extremely advantageous for the country’s air quality and climate objectives.

We would like to go back to our regularly scheduled programming for China’s clean-adjusted GDP growth in 2023, which was 1.5 % with investments, government spending, household consumption, and net exports all contributing 2 % and 0.5 %, respectively.

Everything here is based on the “feelz.” Bloomberg articles, appalling stock market performance, and displeased fuel lords and real estate developers who relocated to Singapore are all well known.

We may also switch the channel and find out that China is so politically unbalanced that it has no option but to spend needlessly and can create GDP growth whatever it wants by dialing debts up and down.

The second-highest growth in household consumption since the financial crisis ( deep bow to Uzbekistan ) could not possibly have been achieved by one massive Ponzi scheme.

China’s returns from “uneconomic” investment in infrastructure and urbanization ( housing, high-speed rail, roads, and bridges ) are exactly what you are looking at in the above chart. Investment in EVs, batteries, and solar infrastructure has been and probably wo n’t be any different.

In China, it is a fool’s errand to look for results in company financial statements or even entire industries. Everything is in the effects. in the quantity of cities that is then stake a claim to first-tier status. in the second-tier cities, which are now cooler than first, in their own crazy approach. in the roughly 70 % of university graduates who will graduate this time.

And if everything goes according to plan, Greta Thunberg and Al Gore will be driven through Shanghai’s roads in enormous electric vehicles with designs the size of living rooms.

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China can now monitor government-funded projects 24/7

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A surveillance camera outside the Shenzhen Stock Exchange building.shabby graphics
Written by Annabelle Liang
journalist for company

According to official regulations that went into effect this quarter, some Chinese developers may now install tracking gear at their projects.

Companies that have received at least 30 million yuan ($ 4.2 million, £3.3 million ) in government funding are subject to the rules.

It comes as officials take action to assist China’s struggling real estate market.

The cover department of the nation announced in January that it would provide more rescue loans to debt-stricken developers due to a decline in demand.

The National Development and Reform Commission ( NDRC ) stated in a statement that it was moving to “regulate the implementation of projects and the use of funding” when it announced the new surveillance rules in January.

It continued,” These steps are crucial to improve government funding effectiveness and improve investment supervision.”

According to Ben Harburg from the investment company MSA Capital, the rules are a part of the Chinese government’s attempts to make sure that “funds being used to prop up struggling property developers are used for their intended purposes.”

Foreign developers have “broken the trust of the Chinese government in the past by taking money designated for project completion to pay off a discount or even for specific use,” he claimed.

If circumstances permit, projects must be monitored using security devices, such as security cameras, drones, or perhaps satellite products, according to the measures.

Some of the most scrutinized individuals in the world are those of China. According to estimates, China is home to hundreds of millions of security cameras, or half of the country’s total.

China wants to create what it refers to as” the world’s biggest camera surveillance network” as a result of all of this.

Some cameras employ artificial intelligence, such as facial recognition systems.

Although there is some desperation on the part of the government to oversee state-sponsored jobs, David Goodman, a teacher of Chinese politicians at The University of Sydney, said he does not view the new regulations as” creepy.”

He continued,” It’s likely to produce some outcomes, some of which might actually be beneficial to ensuring performance and social achievement.”

Given “widespread security across the country,” senior fellow Mareike Ohlberg at the think-tank German Marshall Fund of the United States stated that she “does never expect a move that is- at least in theory– geared towards monitoring how common funds are spent to create much backlash.”

According to the NDRC, project designers should also use other solutions, such as big data, to rapidly identify issues.

For reply, the BBC contacted a number of well-known Chinese builders, including Evergrande, Country Garden, Sunac, and Longfor. No one has yet replied.

This year, a judge in Hong Kong ordered the liquidation of debt-laden creator Evergrande, drawing attention to the serious issues engulfing China’s real estate market.

Like many of its competitors, Evergrande borrowed billions of dollars as it violently expanded.

But, regulations were put in place in 2020 to limit the amount that big real estate companies could use. That contributed to the crisis’s onset, which the sector is also working to resolve.

This poses a significant problem for the Chinese government because the property sector makes up about 25 % of the second-largest economy in the world.

” The real estate industry is the foundation of the Foreign business.” Municipal governments relied on the industry to generate jobs and achieve growth objectives. To allay some international concerns, the Chinese government must strengthen this industry, according to Mr. Harburg.

Evergrande Palace project, developed by China Evergrande Group, in Beijing.

shabby graphics

In “in view of the current funding difficulties of some real estate projects,” the housing ministry of China announced plans to offer more bailout loans to developers earlier this year.

The housing ministry of China’s formal newspaper reported that local governments had also been asked to submit a list of projects in need of support.

Chinese politicians have likewise urged businesses to keep lending to struggling designers after lending the real estate industry close to 10 trillion yuan next year.

China’s central banks made the biggest reduction to necessary resources for businesses in more than two times in January to help free up funds to support the business.

The financial sector had an “unshirkable duty” to property developers, according to a senior national the day after the move.

At a press conference in Beijing, Xiao Yuanqi of the National Financial Regulatory Administration stated that we should n’t irrationally remove or reduce funding for projects that are in trouble but whose money can become balanced.

” Through the extension of current funding, modification of payment terms, and addition of new money,” we should offer more support.

Thousands of vacant units are dispersed across the nation as a result of problems in the real estate industry, which have also prevented developers from finishing jobs.

In a nation where real estate makes up about 70 % of personal success, the crisis has already left many home buyers waiting for their new homes.

According to Ms. Ohlberg,” That might have an impact on economic growth and possibly the economic system’s balance.”

People have used Chinese social media sites like Weibo to express their concerns with programmers, so Beijing has previously tried to quell public concerns.

” Housing has an impact on social security. Many people will be very upset if they purchase properties that are n’t built, she continued.

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China economic slowdown to persist through 2028: IMF

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BEIJING: China’s economic slowdown is likely to persist in the coming years as the Asian giant struggles with sagging productivity and a rapidly ageing population, the International Monetary Fund (IMF) said Friday (Feb 2). The world’s second-largest economy last year saw some of its slowest growth in decades, as aContinue Reading

Ex-Afghan special forces to have UK relocation claims re-examined

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An Afghan soldier seen from behind looking through the sight of a rifle, wearing a combat helmetBenjamin Tagart
By Joe Inwood
BBC Newsnight

Former Afghan special forces who served alongside the British but were denied relocation to the UK will have their cases re-examined, the government says.

Armed Forces Minister James Heappey said ineligible applications with credible claims of links to Afghan specialist units would be reassessed.

The so-called “Triples” were elite units set up, funded and run by the UK.

But hundreds had their relocation claims denied following the Taliban takeover of Afghanistan in 2021.

Campaigners have been fighting for them ever since the Taliban swept into Kabul in August 2021, with one describing the government announcement as “a momentous decision and a life-changing day.”

The Afghan Relocations and Assistance Policy (ARAP) was launched in April 2021 for Afghan citizens who worked for or with the UK government in “exposed or meaningful” roles.

Those eligible may relocate to the UK with a partner, dependent children and additional family members who are also deemed eligible, the scheme says.

Last month, BBC Newsnight revealed that more than 200 former members of the Triples who had fled to Pakistan were facing deportation, and that many of the character references given to them by British soldiers had not been followed up.

In a House of Commons statement, Mr Heappey said a review had found inconsistencies in the application of ARAP criteria and “necessary steps” would be taken to rectify this.

He said a new, independent team within the Ministry of Defence (MoD) would carry out the reassessments, adding the UK “owes a debt of gratitude to these brave individuals” who served for, with or alongside British forces in Afghanistan.

‘Duplicitous or incompetent’

Commando Force 333 and Afghan Territorial Force 444 were said to be the elite of the Afghan military.

They were established by the British during the 20-year operation in the country, working “shoulder-to-shoulder” with UK special forces. They were also paid by the British over many years, according to former senior officers who spoke to BBC Newsnight.

When Kabul fell to the Taliban, the Triples were among the last Afghan units standing, even helping to protect British citizens as they fled the capital.

A group of Afghan soldiers, seemingly working at night

Benjamin Taggart

Some managed to escape the country as part of the chaotic evacuation process, but many did not. They had assumed their long association with the British would mean they would be automatically helped under the ARAP scheme, but hundreds of former Triples have ended up stuck in a process described as “a huge miscarriage of justice”.

One campaigner told the BBC it had been “literally hellish”.

“They were so certain they would be taken care of, but to have to go into hiding and see colleagues murdered and not to have received any response or be rejected, was utterly heartbreaking,” they said.

“We failed in our duty of care to these people. These decisions were unlawful. The MoD knew they were unlawful but have just tried to delay the inevitable. They’ve been duplicitous.”

Gen Sir Richard Barrons, who served in the British Army in Afghanistan for over 12 years, previously described the failure of the UK to relocate these soldiers as “a disgrace, because it reflects that either we’re duplicitous as a nation or incompetent”.

Their plight has been the subject of a long-running campaign, with many high-profile military, legal, political and diplomatic supporters. Despite this, the government had until now resisted calls to re-examine their cases.

Just last month, the armed forces minister told the MPs that identification was an issue. Mr Heappey said it was hard to “verify the service of those who just served in the unit rather than explicitly alongside UK personnel”.

That was met with a furious response by former soldiers, who told the BBC they had tried to give references but been ignored.

‘Not all will make it’

While Thursday’s news has been welcomed by campaigners, supporters of the Triples say the delay has cost lives. The exact number is not known, but there are extensive reports of former Triples being attacked, tortured and killed by the Taliban.

“We have lost a number already, not all of them will make it, but for those who do this is the end of two-and-a-half years in hiding. This is finally a ray of hope for them, with the potential to have a life for them and their families.”

A members of the Triples pictured front on with his head in shot. He is wearing a combat helmet, sunglasses, and his mouth is covered

Benjamin Taggart

Mr Heappey said assessing eligibility presented a “unique set of challenges” as the government did not hold employment records and comprehensive information about them.

But he added: “Understanding the depth of feeling ARAP evokes across this place and beyond, we thank members for their ongoing advocacy and support for ARAP. We have that same depth of feeling in the MoD and in government, and we will now work quickly to deliver it.”

Despite Thursday’s announcement, supporters of the Triples who have spoken to the BBC say questions remain about the speed at which those deemed eligible will be brought over, as well as the reason it took so long for the government to change a policy they say was a “shameful betrayal”.

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China shows Japan the way to tackle rural bank risks – Asia Times

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TOKYO — Economists churn out mountains of reports on what China must learn from Japan’s decades of policy failure. This week, Beijing flipped the script with plans to merge hundreds of rural lenders with US$6.7 trillion of assets.

The last 12 months have been humbling for analysts predicting the Bank of Japan would end quantitative easing (QE). Oddly, many are clinging stubbornly to bets the BOJ will be hiking interest rates by April.

Hardly. One reason is the Silicon Valley Bank (SVB) risks hiding in plain sight as Japan skirts recession. Across this aging nation of 126 million people are 100-plus regional financial institutions serving less economically vibrant regions.

Reluctant to consolidate and averse to the digitalization trends disrupting the globe despite dwindling profits, these banks have fallen on hard times. As demographics gray and the corporate exodus to Tokyo accelerates, there’s less demand for loans from rural lenders. And the trauma from 20-plus years of deflation has made mid-size Japanese lenders more conservative than ever.

All too many spent the last decade investing BOJ liquidity that Tokyo hoped would increase lending activity instead into government and corporate bonds. This pivot will sound familiar to students of last year’s SVB collapse in California.

At the time, many global investors rushed to Google to learn about non-household-name US financial institutions like First Republic Bank and Signature Bank. This dynamic is alive and well in Japan, where risks facing regional banks are bursting back onto the radar screen.

Among the BOJ’s biggest worries about hiking rates is pushing scores of fragile rural lenders toward insolvency as longer-term yields skyrocket, SVB-style. And yet, Japanese Prime Minister Fumio Kishida’s team is doing less than zero to prod regional lenders to merge, diversify or embrace technological change to limit and head off risks.

China is, though. This week, Xi Jinping’s Communist Party announced its biggest-ever banking consolidation effort amid growing signs of financial stress.

Though the full contours of the plan are still trickling out, Beijing wants to merge hundreds of rural lenders into regional giants. The merging could affect about 2,100 rural banks and recalibrate financial incentives across Asia’s biggest economy.

It’s been a challenging few years for China’s banking industry as slowing growth and slumping property markets hurt balance sheets. As of the end of 2022, bad loan ratios among the banks considered part of China’s “rural cooperative system” averaged nearly 3.5%, more than twice the nation’s broader financial sector.

Since 2022, Xi’s regulators have executed mergers of rural commercial banks and cooperatives in at least seven provinces. It now appears set on supersizing the push. Between 2016 and 2022, Xi’s team has disposed of bad bank debts equivalent to roughly 13% of China’s gross domestic product (GDP).

The People’s Bank of China, the central bank, reports that as of last June Beijing’s efforts to modernize the financial system halved the number of severely weak lenders to 337. About 96% of these institutions were rural credit cooperatives and commercial banks. Some were county and village banks.

Analysts agree it’s high time to accelerate the process to repair a major crack in the financial system. Yulia Wan, an analyst at Moody’s Investors Service, reckons that urban and rural commercial banks and regional lenders more broadly hold 25% of mainland banking system assets – a concentration that could become a growing risk to local government finances, property and manufacturing.

Jason Bedford, a former analyst with Bridgewater Associates, told Bloomberg in December that China’s $2.9 trillion trust industry also remains “deeply distressed, potentially with their capital solvency at risk.”

Bedford noted that “while some have a future, the era of high-interest rate lending to real estate developers, which has long been a mainstay for many trust companies, appears over.”

Questions are swirling around the solvency of China’s trust industry. Image: Twitter Screengrab

For Xi’s government, acting faster is becoming a bigger political imperative since 2022, when hundreds of people protested over a multi-billion dollar local bank lending scandal in Henan province.

These banking cooperatives were created in the early 1950s, led by farmers connecting to socialist communes. In the decades that followed, they morphed into rural commercial banks. Today, they’re fighting for business and relevance as smartphone apps allow customers to make payments.

Of course, consolidation – or turning rural lenders into regional behemoths – only benefits a broader economy when done competently and according to free-market conventions.

Exhibit A: a 2021 operation that created Liaoshen Bank Co to cluster roughly a dozen weak lenders. A year later, its bad-loan ratio was more than double the industry average.

Yet revitalizing a network that plays a vital role in supporting underdeveloped areas could have a powerful GDP multiplier effect, especially at a time when Xi’s party has struggled to channel more credit to small and medium-sized enterprises.

In 2023, Chinese provinces injected $31 billion of fresh capital into shaky regional banks via “special-purpose bonds,” an effort that speaks to growing concern over the broader financial system. The risk, says Sherry Zhao, an analyst at Fitch Ratings, is that these special-purpose bonds “are likely to deteriorate if financing terms do not improve as the revenue model shifts.”

That has local governments “tightening their monitoring of local government financing vehicles’ liquidity issues,” Zhao says.

“More have set up liquidity pools to provide emergency funding to LGFVs, especially in regions less favored by investors. We believe this is beneficial as a bridging solution but may not reduce credit risk fundamentally if the pool is funded mainly by regional financial resources,” she adds.

Another financial crack getting renewed attention is China’s shadow banking system. Recently, one of its best-known conglomerates, Zhongzhi Enterprise Group, filed for bankruptcy liquidation because it was unable to service debt as real estate values plunged.

“While the firm’s creditors are mostly wealthy individuals rather than financial institutions, its collapse could nevertheless hurt general market confidence,” analysts at Commerzbank wrote in a note. “It could also renew concerns over the trust industry and whether it would have broader and significant implications for the ailing real estate industry.”

All the more reason for Xi’s team to build a more stable underlying financial system. The pressure is on given the insolvency proceedings enveloping China Evergrande Group, the poster child of mainland default risks.

Chinese property developer Evergrande’s Jiangsu branch. Photo: Handout

“The wind-up of a major property developer like Evergrande could complicate the Chinese government’s efforts to support the property sector and ensure the timely delivery of pre-sold homes,” says Fern Wang, a researcher at KT Capital Group.

Of course, the liquidation at the behest of a Hong Kong court could do the opposite: catalyze Beijing to get serious about ending the property crisis once and for all.

“A court-ordered liquidation of Evergrande marks the symbolic end to property’s dominance of the Chinese economy,” says Diana Choyleva at Enodo Economics. “It ensures a cleaner break from the issues dragging on growth, as policymakers draw up plans to get the economy going again in 2024.”

That said, the “development will no doubt deepen the prevailing sense of pessimism among investors, particularly with creditors foreseeing a modest 3% recovery rate at best,” Choyleva says.

“But it is crucial to acknowledge the broader implications. With Beijing having repeatedly blocked Evergrande’s proposed restructuring plans, the outcome appears to have the central government’s tacit approval. Moreover, it is necessary in the broader context of rectifying the imbalances within China’s property sector,” she says.

One reason creating bigger regional players makes sense is to increase their financial firepower to support growth. As Fitch analysts point out in a recent report, “large state banks are likely to assume a larger role in supporting the economic recovery by channeling more funds to sectors closely aligned with the policy agenda, including the property sector.”

Fitch finds it notable that Beijing regulators have “mentioned the importance of more equal funding access between publicly and privately owned developers. Smaller regional banks, meanwhile, are likely to focus on supporting their local businesses or resolving asset risks which are already elevated.”

To be sure, it’s early days for China’s regional bank reforms. There’s considerable heavy lifting to be done. But accelerating the effort now could cheer global investors fleeing China – and vastly reduce the odds of an SVB-like crisis.

Japan, not so much. In October, Japan’s Financial Services Agency moved to stress-test at least 20 banks for any SVB-like financial landmines. The backdrop for the probe was widespread expectations Governor Kazuo Ueda would soon exit the BOJ’s 23-year-old QE experiment.

Among the wildcards: how regional banks overloaded with government bonds can withstand yields hitting 2%, 3% or higher in short order.

Japanese banks may be holding precarious amounts of government bonds. Photo: Asia Times Files / AFP

Clearly, comparisons of midsize US and Japanese banks aren’t ideal. As SMBC Nikko analyst Masahiko Sato notes, the average threat to capital ratios is lower because Japan’s regional lenders tend to prioritize bonds that can be sold, rather than holding to maturity. Therefore, Sato does not think potential losses “are on a scale with systemic implications.”

But BOJ tapering or even a rate hike or two could change this calculus, and fast. If regional banks face profit pressures with rates at zero, the fallout from a big rate pivot by Japan’s central bank could be extreme.

Given these risks and the “Japanification” chatter that irks officials in Beijing, it’s wise for Xi’s government to head off any SVB-like threats to China’s future. If only Japan would, too.

Follow William Pesek on X at @WilliamPesek

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Sri Lanka’s controversial Internet safety law comes into force

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Activists hold placards during a protest against the proposed online safety act near the parliament complex in Colombo, Sri Lanka, 24 January 2024.EPA
By Kelly Ng
BBC News

Sri Lanka’s draconian law to regulate online content has come into force, in a move rights groups say is aimed at stifling freedom of speech.

The Online Safety Act gives a government commission broad powers to assess and remove “prohibited” content.

Authorities said it would help fight cybercrime, but critics say it suppresses dissent ahead of elections.

Social media had a key role in protests during an economic crisis in 2022, which ousted the then president.

The act was passed on 24 January by 108-62 votes – sparking protests outside parliament – and came into effect on Thursday after the Speaker endorsed it.

The wide-ranging law prohibit “false statements about incidents in Sri Lanka”, statements with “an express intention of hurting religious feelings” and the misuse of bots, among other things.

A five-member commission appointed by the president will be given powers to assess these statements, to direct their removal, and to impose penalties on the people who made those statements.

The legislation will also make social media platforms liable for messages on their platforms.

Publicity Security Minister Tiran Alles, who introduced the draft legislation in parliament, said it was necessary to tackle offences associated with online fraud and statements that threaten national stability.

More than 8,000 complaints related to cybercrimes were filed last year, he noted.

A Sri Lankan pro-democracy group said on Thursday that the government’s “adamant pursuit” of the legislation was a “clear indication of its intention to silent dissent and suppress civic activism” as the country was still reeling from the consequences of its worst economic crisis.

Food prices and inflation have reached record levels since the country declared bankruptcy in April 2022 with more than $83bn in debt. Then president Gotabaya Rajapaksa was forced to step down and leave the country after thousands of anti-government protesters stormed into his residence.

“While the citizens silently suffer amidst escalating cost of living and unmanageable hunger, it is crucial for the rulers to recognise that this silence does not equate to obedience… It is the precursor to a major backlash against the government’s coercive rule,” said the group known as the March 12 Movement.

Rights group Amnesty International said the act’s broad provisions and vague wording would restrict people’s rights to freedom of expression and privacy online.

“[It] is the newest weapon in the government’s arsenal of tools that could be used to undermine freedom of expression and suppress dissent,” said Thyagi Ruwanpathirana, the group’s regional researcher for South Asia.

Last October, the UN’s human rights office raised concerns against the draft law saying that it would give authorities “unfettered discretion to label and restrict expressions they disagree with as ‘false statements'”,

Sri Lanka’s next presidential elections are expected to be held later this year or early next year.

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Cambodia: Fast fashion helps fuel blazing kilns where workers faint from heat

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Workers load bricks on a truck in a kiln located in Kandal province.Thomas Cristofoletti/ BBC
By Laura Bicker
in Phnom Penh, Cambodia

Chantrea drags an electric fan the size of a large door into the airless chamber where she works every day.

It is her only respite from the heat inside the brick kiln that looks more like a dimly lit tomb.

“It’s like working inside a burning prison,” the 47-year-old says as she stacks the dried bricks, which will be moved to a warehouse. “I have asked the owners to provide us with more fans. But they won’t because it will cost more money.”

The fan she does have slowly clunks as it starts, eventually whirring into action. It barely creates a breeze.

How hot is too hot to work? It is a question researchers have found the answer to here, in Cambodia’s brick kilns, where people toil in some of the hottest working conditions in the world, fuelled in part by the scraps of fast fashion.

The BBC spoke to several workers who said they sweat so much through the day that it felt like they were in a hot bath. Fainting is common too, possibly because they become dehydrated. Their names have been changed because they fear reprisals from their employers.

In a first-of-its-kind study, researchers have tried to document how this sustained exposure to extreme heat is affecting workers’ health.

Special sensors recorded the core temperature of 30 workers at these kilns over a week and showed that they all had heat stress, or core temperatures of more than 38C. This can cause fatigue, dizziness, nausea and headaches.

A healthy body temperature usually ranges from 36.1C to 37.2C. Body temperature over 38C is symptomatic of a fever. Some workers had core temperatures of 40C, which can lead to heat stroke, resulting in convulsions, eventual loss of consciousness and even death, if not treated early.

A worker stacking bricks inside the kiln

Thomas Cristofoletti/BBC

One worker told researchers that he had suffered from heart failure due to the heat. But he eventually returned to work because this was the only way he knew to earn a living.

This is only made worse by a warming climate and Cambodia’s own weather – last May it hit a new high with 41.6C during the hottest year on record. As global temperatures soar, even a small increase could mean the difference between life and death for the tens of thousands of brick kiln workers across Asia.

“One of the big narratives that I hear again and again is that we’re all in this [climate change] together. But that’s absolutely not true. Some of us are a lot more in it than others,” said Laurie Parsons at Royal Holloway University, who authored the study.

Clothes carrying toxic traces

It’s a humid afternoon outside the kiln, on the outskirts of Cambodia’s capital, Phnom Penh. Inside, where Chantrea is stacking bricks, it is stifling.

But she is covered from head to toe in clothes that hang off her tiny frame – her only shield against the searing heat and dust. If the bricks are too hot, her skin blisters.

The kilns themselves are enclosed by brick walls and sealed. Workers stay outside and feed wood though a hatch to keep the fire hot enough, usually around 1500C to set the clay bricks. Once that happens, they stop fuelling the flames and when the heat seems less unbearable, they enter the chamber.

There is no data on the average temperature inside the kilns as it is hard for researchers to gain access. It’s also hard to know how many workers fall ill or worse because of the heat.

Injuries from falling bricks are not uncommon, according to Chantrea. And workers told the researchers from the UK that the bricks often burn them, even through the gloves.

Outside the kiln, Kosal, a father of two, scoops up a mix of fabric, plastic and rubber that he shoves into the hatch before shutting it quickly. Black smoke seeps through the cracks as children – his and other kiln workers’ – run past.

A woman feed the fire in the kiln

Thomas Cristofoletti/ BBC

“I am used to the black smoke. I don’t notice it any more,” he says. “I have to keep these fires burning for 24 hours. My wife and I split the work between us.”

The children crawl over bags bulging with clothing offcuts – more fuel for the kiln from Cambodia’s $6bn garment industry.

But what may initially appear a solution to the unwanted scraps of the country’s 1,300 garment factories is actually hiding its own deadly secret.

According to a 2018 report – Blood Bricks – by UK academics at Royal Holloway, these scraps have traces of chlorine bleach, formaldehyde and ammonia, as well as heavy metals, PVC and resins used in the dyeing and printing processes. The report also found that brick factory workers reported regular migraines, nosebleeds and other illnesses.

Kosal’s three-year-old girl, her hair caked in dust, skips past a pile of Disney-labelled clothing. Most are flannel pyjamas embossed with images of Anna and Elsa from Frozen. They are made for children living in colder climates.

Most Western fashion labels have strict codes of conduct to stop this from happening. A Disney spokesperson told the BBC that the company was investigating the claim and that it “did not condone the conditions alleged in this situation”.

The BBC also found labels from Clarks shoes and H&M among others. Clarks called on the Cambodian ministry of environment to investigate and also invited other affected companies to join forces “in working together with the relevant authorities in Cambodia to eradicate this problem”.

H&M acknowledged that traceability is still an issue in Cambodia but said they did have their own waste management guidelines to ensure that fabric waste isn’t used as a fuel source by factories, or sent to a landfill.

Scraps of Disney-labelled clothing show a sliver of Elsa, from the hit film Frozen

Cambodia’s brick kilns have long been accused of unsafe and unfair working conditions – and they employ some of the world’s poorest people. Now, climate change is only exacerbating those inequalities, experts say.

“What we need to do is to consider how climate change impacts people through the lens of labour and inequality, and recognise that labour exploitation is a major factor in the worst impacts of climate change,” Mr Parsons said.

The heat trap

However toxic or difficult the job is, workers like Chantrea and Kosal can never leave. Victims of climate change, they are trapped in a cycle of heat.

The majority of those who work in Cambodia’s brick kilns were farmers. Chantrea used to grow rice. But sparse rainfall in recent years has made it difficult to manage a single harvest.

“We borrowed a lot of money after our crops failed. But when they kept failing, we ended up with a lot of debt,” she says.

Eventually she had no choice but to migrate to Phnom Penh in the hope of finding a job to repay the loans. More than two million of Cambodia’s 10 million adults have outstanding micro-loans, according to the Cambodian Microfinance Association. On average, they each owe $3,320 (£1,955).

This financial insecurity has supplied the vulnerable labour for brick kilns. Owners offer to pay off the loan but, in return, the worker is bonded to the kiln.

Often whole families are bonded to the kiln. The BBC saw children helping their parents in the kiln despite efforts by the Cambodian government to prevent child labour.

Aerial view of a recently built gated community “borey” on the outskirts of the capital Phnom Penh

Thomas Cristofoletti/ BBC

“If we leave, we are afraid of being arrested and imprisoned,” Chantrea says. “So we must struggle here. If they ask us to enter the fire, we will do even that just so we can earn more money for food and to pay off our debt.”

But the wages are too low for the debt to ever be repaid. Chantrea earns 10,000 Cambodian riel (£1.92; $2.45) for stacking around 500 bricks.

With this she has to pay for food, electricity and water. Her home is a tin shack on the edge of the kiln and she supports a boy she found alone on the street and adopted. When they are hungry, they forage together for snails.

“After several years, I have never paid the owner back,” Chantrea says. The debt, she adds, has only increased.

Cambodia’s kilns have fed the capital’s construction boom. It has drawn foreign investors, including the UK, which has invested one billion pounds, according to researchers from Royal Holloway University.

But as Phnom Penh reaches toward the sky, with tower after tower of air conditioned apartments, the city is leaving behind those who’ve helped to build it.

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