If the leaks and rumors are true, Beijing stands ready to launch a new and radical solution to the economy’s property crisis – a government takeover. What the authorities refer to as “a new model” would replace the old emphasis on ownership with more rentals and use government funds to buy up bankrupt properties so that in time the government’s role in real estate would rise from 5% of the market at present to 30%. Such an act would surely take the nation back to its communist roots if not quite the days of Mao Zedong. If it would veil the property crisis for a time, it would in the long run do tremendous damage to China’s economic prospects. It is not yet entirely clear what Xi Jinping and the CCP have planned. Indeed, Beijing has admitted that it has not yet worked out all the details. These, the authorities assure all, will be ironed out in time. From what material is presently available, Beijing will commit the equivalent of $280 billion a year for five years to buy up distressed private residential real estate developments and repurpose them as rental units. The plans also mention building still more units, some subsidized rentals, for a total of six million new units in 35 cities over the next five years. Beijing would impose severe restrictions on who could buy these apartments and would forbid purchasers from trading their units on the open market. Vice Premier He Lifeng, Xi’s chief economic policy aid, claims that the resulting enlarged government role in the area would help in two ways. It would allow Beijing to control excess supply, he claims, and put a floor under residential real estate prices. There is much room for doubts here. For one, it is far from apparent that Beijing has the financial resources to execute such plans or even the will to do so if it could find the resources. For another, China already has some seven million empty housing units, and the population is shrinking, leaving open the question of how six million additional units – rentals or otherwise – would control supply or put a floor under prices. Beijing’s ability to manage real estate also comes into question after considering how poorly the authorities have managed things to date. Prior to 2020, Beijing actively encouraged residential real estate development, pushing local authorities to get involved and ensuring easy credit terms for both developers and homebuyers. Private builders and speculators responded actively, taking on debt and pursuing increasingly dubious projects so that even as China was meeting its housing needs, such development reached the astronomical level of some 30% of China’s economy. Then in 2020, Beijing abruptly removed all this support. Not surprisingly, the highly leveraged and extended developers began failing almost immediately. Had Beijing known its business, it would have removed the support gradually so that developers, homebuyers, and local governments could adjust. It also would have provided liquidity to financial markets immediately after the first of these failures, which was the giant developer Evergrande. That could have blunted the ill effects of so much questionable debt on the books of bond holders and financial institutions. By providing special credits to developers, not to bail them out but to enable them to complete apartments for which they had contracted and already received payment, Beijing could have saved the investments of literally millions of Chinese households who had pre-bought apartments. Such a move would have bolstered the confidence of both Chines homeowners and homebuyers. Beijing’s ability to manage real estate also comes into question after considering how poorly the authorities have managed things to date. Prior to 2020, Beijing actively encouraged residential real estate development, pushing local authorities to get involved and ensuring easy credit terms for both developers and homebuyers. Private builders and speculators responded actively, taking on debt and pursuing increasingly dubious projects so that even as China was meeting its housing needs, such development reached the astronomical level of some 30% of China’s economy. Then in 2020, Beijing abruptly removed all this support. Not surprisingly, the highly leveraged and extended developers began failing almost immediately. Had Beijing known its business, it would have removed the support gradually so that developers, homebuyers, and local governments could adjust. It also would have provided liquidity to financial markets immediately after the first of these failures, which was the giant developer Evergrande. That could have blunted the ill effects of so much questionable debt on the books of bond holders and financial institutions. By providing special credits to developers, not to bail them out but to enable them to complete apartments for which they had contracted and already received payment, Beijing could have saved the investments of literally millions of Chinese households who had pre-bought apartments. Such a move would have bolstered the confidence of both Chines homeowners and homebuyers. After two years of zero effort, Beijing, late in 2023, offered tentative and inadequate palliatives, and now in the opening months of 2024 seems to have settled on a truly communist solution. Beijing’s gross mismanagement of the situation so far leaves little to no confidence in its plan to control a large portion of China’s housing stock. No doubt the huge amounts of cash involved, if Beijing can put it to work, will cloak the immediate effects of the property crisis, but otherwise, these plans will hamstring China’s growth model fundamentally and perhaps permanently. Wealth is the key consideration. In many ways homeownership provided the basis of China’s boom after Deng Xiaoping first opened the economy some 50 years ago. In Chinese culture but also globally, real estate constitutes the bulwark of household wealth. The dream of amassing it in China provided great motivation after the opening, and once that wealth began to grow, it encouraged spending and the use of credit, both of which spurred what turned out to be a truly outstanding record of economic growth. The importance of homeownership and the impetus it has provided is evident in the fact that more than 80% of Chinese households own their own home, a far higher percentage than in most developed economies, including the United States, where the figure is about 66%. The CCP’s seeming plan to emphasize rentals threatens this engine of growth and wealth creation. Even when permitting purchases, Beijing’s plan detracts from the wealth creation by forbidding trading the new units on the open market. Practically speaking, this policy makes those units less like home ownership and family wealth and more like a rental with a very long lease. If these plans go into effect and still worse if Beijing builds on them, China will face much worse economic problems in the future than it does today. Xi and his cronies in the Forbidden City will have shut down a critical engine of economic motivation and growth.  

Amid the economic crisis, Chinese exports saw a downfall for the first time since 2016 after global demand for Chinese-made goods slowed in 2023, CNN reported citing the Customs data released on Friday. According to CNN, the Chinese economy is struggling to stem deflationary pressures and consumer price inflation in 2023 was the weakest it has been in 14 years. Chinese exports were measured at USD 3.38 trillion in 2023, down by 4.6 per cent compared to the year before. In 2022, Chinese exports increased by 7 per cent from the year earlier. The last time China registered a decline in overseas shipments was in 2016 when exports fell 7.7 per cent. Imports also fell last year, by 5.5 per cent to USD 2.56 trillion, CNN reported, adding that it left the world's second-largest economy with a trade surplus of USD 823 billion. "The global economic recovery has been weak in the past year," Lyu Daliang, a spokesperson for the General Administration of Customs, told a Friday press conference in Beijing, adding, "Sluggish external demand has hit China's exports." He added that he expects China to continue facing 'difficulties' on export markets as global demand is likely to remain weak and "protectionism and unilateralism" hinder growth. The consumer price index for December improved slightly from November, but was down 0.3 per cent on the same month in 2022, the National Bureau of Statistics said Friday. For 2023 as a whole, prices were up by just 0.2 per cent over 2022, the weakest reading since 2009, when CPI fell by 0.7 per cent as a global recession hit. China is suffering a double-whammy of weak demand at home and abroad. December was the third month in a row that the consumer inflation gauge has fallen year-on-year, marking the longest run of declines since 2009. Food prices, especially the prices of pork, were a major drag. "Ongoing low core CPI inflation likely reflects dampened domestic demand due to the ongoing property downturn and stressed labour market," Goldman Sachs analysts said on Friday. According to CNN, the factory-gate prices were also subdued. The Producer Price Index dropped 2.7 per cent in December from the same period in 2022, the 15th consecutive month of declines. For 2023, the PPI fell 0.3 per cent. Looking ahead, analysts from Capital Economics expect core inflation to rise slightly, helped by a cyclical recovery in the Chinese economy. But deflationary pressures won't go away. "Weak global growth and continued over-investment in China means that deflation risks will continue to hang over its economy for some time," said analysts from Capital Economics on Friday. At USD 240 billion, trade with Russia hit a new record high in 2023, up 26 per cent from the previous year. Overall, it made up 4 per cent of China's total trade. The United States remained China's largest single-country trading partner in 2023, accounting for 11.2 per cent of total trade. However, that represented a drop in 2022 -- the first fall since 2019, when Washington and Beijing were in the middle of a prolonged trade war. ASEAN, the 10-member bloc in Southeast Asia, and the European Union accounted for 15.4 per cent and 13.2 per cent of total trade with China, the Chinese customs figures showed. The country also registered a 69 per cent surge in the total value of automobile exports last year, the highest among all categories, CNN reported. By volume, China shipped 5.22 million vehicles in 2023, up 57 per cent from 2022. That's in part thanks to surging growth in electric vehicles, said Lyu. "One out of every three cars exported by China is an electric passenger vehicle," he said at the press conference. "Looking to the future, we believe that China's auto industry still has a strong comprehensive competitive advantage and can continue to provide more and better innovative products to meet the needs of global consumers," he added. Earlier this week, a major Chinese car industry group said the country is "certain" to have surpassed Japan to become the world's largest car exporter last year, driven by strong demand in Russia and growing global appetite for EVs. The rankings will be confirmed once Japan's official annual figures are released, which are expected in the next few weeks.

On Tuesday Prime Minister Sheikh Hasina called for International support for the countries affected worst due to climate displacement, suggesting five things need to be addressed on human mobility to protect them from human crisis. "Most climate displacements take place within national borders and across borders in some dire situations. The worst-affected countries need international support and solidarity to prevent such situations from turning into a humanitarian crisis," she said. The premier made the remarks in a video statement that broadcast at the high-level segment on "Climate Impact on Human Mobility: A Global Call for Solutions" in the three-day 114th Session of the International Organisation for Migration (IOM) Council at its headquarters at Geneva in Switzerland. The Prime Minister said those who displaced or trapped due to climate change need to have access to basic services, social protection, and livelihood options. "The adverse impacts on their host communities also need to be addressed in an inclusive manner," she said. It is estimated that climate change could displace 216 million people by 2050, Sheikh Hasina said, adding that among these, 40 million alone would be in South Asia. In Bangladesh, 20 per cent of our population lives along the coastal belt. "Sea-level rise, salinity intrusion, frequent floods, and severe cyclones make them vulnerable to forced displacement. Such displacements are happening at a faster pace than we think," she warned. Bangladesh's coastal district of Cox's Bazar now hosts 1.2 million forcibly displaced Rohingyas from Myanmar, the premier said. "Some of these people fall victim to trafficking networks with security risks for the entire region. Such mixed migration flows make the issue of climate mobility even more problematic," she added. The Prime Minister mentioned that Bangladesh believes that the impact of climate change on human mobility should be placed high on the international agenda. She also said that Bangladesh is working together with IOM and other partners to highlight the need for effective solutions. "I feel assured that many Small Island Developing states are also taking leadership on this. We are pleased that COP-28, GFMD, and other international forums are attaching due importance to it," Sheikh Hasina said. In Bangladesh, she said that the government has started taking special initiatives for climate migrants within our modest resources. "Under my flagship Ashrayan project, we are constructing 139 multi-storey buildings in Cox's Bazar to provide safe housing to 4,400 families displaced due to a severe cyclone," the premier said. She also said that this world's largest climate rehabilitation project is expected to become a local fishing, tourism, and wind power hub. The Prime Minister offered five suggestions to address the issue of impact of climate change on human mobility. These are: First, we need to address the climate impact of human mobility in a rights-based manner in line with the Global Compact on Safe, Orderly, and Regular Migration; Second, we should consider the situation of climate migrants through the lens of climate justice to find context-specific solutions for the loss and damage they suffer. Third, we must get prepared at local, national, and international levels for looking at migration as a climate adaptation strategy where it proves to be the best possible solution; Fourth, we need to review the existing international protection standards to repurpose them for climate migrants, especially women, children, and other vulnerable groups; and Fifth, we should invest in well-researched data and evidence on the impact of climate change on human mobility to build an objective case for it beyond narrow political considerations. Source: BSS

German Chancellor Olaf Scholz is addressing lawmakers about his coalition government's budget crisis. Ministers must fill a hole in state finances after a bombshell Constitutional Court ruling on borrowing. Germany's lower house of parliament, the Bundestag, was set to debate the budget shortfall on Tuesday after Chancellor Olaf Scholz's statement to lawmakers. A gap in government finances emerged after the Constitutional Court earlier this month ruled that unused pandemic funds could not be repurposed for climate and green industry projects. The court said the state could not rechannel reserve emergency loans for separate post-pandemic projects because this did not meet the constitutional requirements for emergency borrowing — blowing a hole in the government's budget. Scholz said the ruling would have an impact on Germany's various levels of government from this time on.  "This ruling creates a new reality — for the federal Government and for all current and future governments, federal and state. A reality that, however, it makes important and widely shared goals more difficult for our country to achieve." The German government's three-way ruling coalition on Monday said it would temporarily extend the lifting of constitutionally enshrined restrictions on borrowing as part of a supplementary budget. The plan included a credit of around €45 billion ($49 billion) to cover funds that had already been spent in 2023. The budget must still be approved by the Bundestag. Why is the budget revision necessary? The Karlsruhe-based Constitutional Court's ruling effectively vetoed government plans to funnel €60 billion that was borrowed for a pandemic fund into the Climate and Transformation Fund (KTF). The gap in finances has posed one of the biggest challenges so far for the coalition of Chancellor Olaf Scholz's center-left Social Democrats, the environmentalist Green Party, and the business-focused Free Democrats. It had already been expected that the 2023 supplementary budget would see Germany suspend the debt brake for a fourth year in succession. The debt brake is part of the German constitution and limits the federal government's structural net borrowing to 0.35% of gross domestic product. It was first adopted in 2009 after the financial crash. The brake was suspended from 2020 to 2022 during the pandemic and energy crisis but was set to come back into force this year. Finance Minister Christian Lindner last week said he would declare 2023 a year of emergency so as to put the existing spending plans on a "firm constitutional footing." The court's decision has also cast doubt over the government's 2024 budget, which Scholz on Friday promised would also be finalized by the end of this year.

Germany's budget crisis, the Middle East and climate change topped the agenda at the Green Party's 2023 convention. The Green Party's four-day convention in Karlsruhe was intense. Never before has a convention held by the German environmental party attracted so many visitors — 4,000 this year, including journalists. Despite the high numbers, the conference room was unusually quiet. Even the foyer, which is normally filled with people hotly discussing the latest issues, was relatively calm. This perhaps comes as no surprise. From Russia's war on Ukraine and Israel's war on Hamas to inflation, high energy costs, social polarization in Germany, antisemitism and hostility towards migrants, the many crises faced by the Green Party domestically and internationally require a high degree of concentration. Any of these topics could have dominated an entire party conference on its own. This year, they are all being debated at the same time. On top of these come Germany's budget woes, as well as a crisis of the governing coalition made up of the Greens, the center-left Social Democrats (SPD) and the neoliberal Free Democrats (FDP). Leading Green politician Robert Habeck, Germany's vice chancellor and economy minister, is particularly affected by the budget crisis. He is the one who has to decide what direction Germany will take now its Constitutional Court has vetoed government plans to use €60 billion (ca. $65 billion) in reallocated COVID funds to tackle climate change. At the party convention, Vice Chancellor Habeck was on the defensive. But that isn't where he wants to remain. 'CDU: Party of yesterday' Habeck said that countries all over the world were investing in a sustainable future and pointed out that the United States alone had allocated what he called an astronomical sum of $400 billion. Yet, in Germany, the opposition wants the government to save. After all, it was the conservative opposition bloc of Christian Democrats and Christian Social Union (CDU/CSU) who filed the lawsuit that led to the overturning of the government's climate funding plans.

The leaders from nine Mediterranean and southern European countries met Friday in Malta to discuss migration with European Commission President Ursula von der Leyen. The meeting came a day after the EU failed to agree on changes to the bloc's migration laws. Some 186,000 people have already arrived in Europe via the Mediterranean Sea between January and September 24 of this year, according to the United Nations Refugee Agency (UNHCR) Of this, 130,000 have arrived in Italy, an 83% increase compared to last year. Disagreements over solutions to migrant crisis The continuous arrival of boats has put political pressure on the group, which includes Malta, France, Greece, Italy, Croatia, Cyprus, Portugal, Slovenia and Spain. But even among the nine countries, there are disagreements on how to deal with the crisis. Von der Leyen would hold a separate meeting with Italian Prime Minister Giorgia Meloni and French President Emmanuel Macron on the sidelines of the Malta summit. They will discuss a plan which includes the possible expansion of naval missions in the Mediterranean. Deadly Mediterranean route Separately, the UN's children's agency, UNICEF, warned that  at least 990 people died or went missing in the dangerous central Mediterranean route between northern Africa and Europe, That was three times the number 334, recorded in the same period last year. The agency said 11,600 unaccompanied minors had been among the migrants trying to get to Italy on makeshift vessels between January and September.

Prime Minister Sheikh Hasina today said the world major economies should exercise honesty about climate change to avoid impending crisis. “We expect the world’s major economies to remain honest about climate change and do their fair share to avert the impending crisis," she said. (BSS Reports) The prime minister made the remarks in a" High Level Thematic Session of Climate Ambition Summit on “Delivering Climate Justice: Accelerating Ambition and Implementation on Adaptation and Early Warnings for All" at ECOSOC Chamber here. She arrived in New York on September 17 to attend the 78th United Nations General Assembly (UNGA). The premier said Bangladesh’s experience demonstrated that investing in adaptation and early warning makes perfect sense. "We hope our development partners will seize these opportunities to deliver climate justice," she said. Sheikh Hasina said that Bangladesh has joined this session to lend support to two initiatives by the UN secretary general. As a climate justice advocate, she said Bangladesh stands ready to align with any constructive move that advances the agenda.

Water delivery in the city was hampered on Monday due to a power outage at Karachi's Dhabeji pumping station, ARY News reported. The Dhabeji pumping station, which is responsible for supplying water to all of Karachi, experienced a power outage, which means that Karachi's residents may face water scarcity. According to a Water Corporation spokesperson, the 72-inch diameter line, known as line number 5, is impacted by the power outage, according to ARY News. According to the spokesperson, representatives from the water corporation are on the scene and thoroughly inspecting the affected line in an effort to pinpoint the source of the issue. Bulkwater Corporation's chief engineer confirmed that actions are being taken to repair the damaged pipe in order to mitigate any potential inconvenience for city residents caused by the water supply outage, as reported by ARY News. The city's water supply has been switched to alternative lines, according to the chief engineer, while the damaged pipe is being repaired. Pakistan, which is already reeling from a power crisis, will now face a water crisis in parts of Karachi.

Water delivery in the city was hampered on Monday due to a power outage at Karachi's Dhabeji pumping station, ARY News reported. The Dhabeji pumping station, which is responsible for supplying water to all of Karachi, experienced a power outage, which means that Karachi's residents may face water scarcity. According to a Water Corporation spokesperson, the 72-inch diameter line, known as line number 5, is impacted by the power outage, according to ARY News. According to the spokesperson, representatives from the water corporation are on the scene and thoroughly inspecting the affected line in an effort to pinpoint the source of the issue. Bulkwater Corporation's chief engineer confirmed that actions are being taken to repair the damaged pipe in order to mitigate any potential inconvenience for city residents caused by the water supply outage, as reported by ARY News. The city's water supply has been switched to alternative lines, according to the chief engineer, while the damaged pipe is being repaired. Pakistan, which is already reeling from a power crisis, will now face a water crisis in parts of Karachi.

Imagine a scene, where a set of solar-powered batteries automatically takes over when the electricity supply from the public grid stops. Sounds fanciful, especially in a place like Nagaland, but it is possible and more importantly, it works.  A home is quite literally basking in the free energy of the sun, successfully demonstrating a low carbon, in this case, a solar solution to the perpetual ‘load-shedding’ crisis in Nagaland.   The house, located in Mokokchung, is distinguished by a rooftop solar plant with a capacity for generating 3 kW (3000 watts) of electricity, enough to power a standard “Domestic category” household with water pump, fans, fridge, TV, computer, lighting and other appliances.    The person behind this low carbon initiative wished not be named but agreed to share with The Morung Express his triumphant tryst with solar energy. A retired science educator living in Mokokchung with his family, he wished to be known only as AB, the initials of his name.   He said that he was captivated by the idea of solar energy, from an early age, closely following the developments in photovoltaic cells. As an electronics hobbyist, “I thought it will be smart to use solar energy. As my career progressed, I was able to save some money to install one,” AB said, who also owns an EV or electric car. The installation was phased, gradually upgrading to a system that now has 3 kW solar panels and 6 kW inverter and battery backup. A higher backup rating implies the capacity of the solar panels can be augmented without having to upgrade the inverter. The cost factor, however, remains a major barrier to mass transition to renewable solar energy.  Having invested around Rs 4.5 lakh for the existing rooftop system, which was upgraded in 2019, he said that the long-term advantages outweigh the installation costs.    He asserted, “I can say that I am not wasting the solar energy that my roof gets. Moreover, my bills become less.”  Cost-benefit According to AB, the most visible benefit has been independence from “the horrendous power cuts” that Nagaland has come accustomed to. But a more important aspect has been a sense of psychological contentment. “Solar energy has a comparatively low carbon footprint and so there is a feel good factor to it,” he said, not forgetting reduced energy bills.  The initial investment would be hard on the pocket but he maintained that it would eventually break-even. He tipped the break-even point at around 6 years, narrowing further if one opts for a grid-connected system.  “If you go for a grid-tied rooftop solar system of about 10 kW, the investment may be recovered within 2-3 years,” he said. As the name would suggest, a grid-tied or grid-connected solar plant enables two-way energy flow enabling exporting of energy generated by the plant to the local grid; vice versa on cloudy days or night time. Such a bidirectional system also allows for exporting excess energy, generated by the rooftop plant, to the grid offsetting drawal costs. In such a system, a home-owner need not invest in backup battery, which generally accounts for half of the total costs for a rooftop solar plant.  While stating that his rooftop system has also switched to a grid-tied system, he said, “It brings down the cost (electricity bill) a lot.” He approximated his normal electricity consumption to be equivalent to around Rs 3000 a month, as per the Department of Power Nagaland (DoPN) tariff. “But since it is now a grid-tied system, I may reduce my bills to around Rs 700-800,” he added.  He made the proposal for the switchover in the month of May, this year. According to him, the Department was happy to let him know that there already was a government scheme for incentivizing domestic solar plants.  Solar subsidy A scheme, known as “Phase-II of Grid Connected Rooftop Solar Programme,” was sanctioned in 2019 by the Union Government. At the time, the target was to achieve “cumulative capacity of 40,000 MW from Rooftop Solar (RTS) Projects by the year 2022” through Central Financial Assistance (CFA) for the residential sector. It outlined a subsidy of 40 percent for RTS systems up to 3 kW capacity and 20 percent for systems beyond 3 kW and up to 10 kW.  It envisaged implementation of the RTS projects through increased involvement of DISCOMs (power distribution companies) and in Nagaland’s case, through the DoPN.  As disclosed by DoPN officials, the scheme became operational in the state sometime in April-May 2022. Deficient, rather non-existent, promotional effort has reportedly had potential clients unaware of the scheme.  A 1 kW rooftop system is said to cost approximately Rs 52,000. Under the scheme’s 40 percent subsidy, the cost cuts down to around Rs 31200 alongwith 5 years free maintenance and net metering. A 3 kW system can be installed at less than a lakh, one of the DoPN officials said. The solar panels provided via the scheme are said to be sensitive enough to work even under cloudy skies, though not on full capacity.  Air pollution also impacts the output of solar plants but according to AB, air pollution level is relatively low in Nagaland making it ideal for photovoltaic panels. “In fact, people can embark on setting up solar energy farms and have, more or less, a passive income source. This will also help in solving the energy crisis of the state to a significant level,” he said.  Source: www.morungexpress.com