Commentary on Political Economy

Monday 22 April 2024

BEAT THESE FILTHY TRAITORS TO A PULP! MAKE THEM PLEAD FOR THEIR LIVES! THEN EXECUTE THEM!

 

The Ivy League’s Anti-Israel Protest Meltdown

At Columbia in New York City, pro-Palestinian demonstrators have surrounded Jewish students to push them from a protest camp dominating the campus lawn. “Attention Everyone,” a voice says in a campus video, “Can I get everyone to form a human chain, we have a Zionist at the entrance of our encampment.”

The “Zionist” was a Jewish student whose friend wore a necklace with a Star of David, according to News Israel correspondent Neria Kraus. The Palestinian crowd followed the order to “slowly walk and take a step forward so we can push them out of the camp.”

Many protesters on and near campus wear masks or kaffiyehs to disguise their identities. Students have to walk through a gauntlet to get to class. The protesters carry banners calling to “Honor the Martyrs of Palestine” and a sign pointing to pro-Israel counterprotesters as “al-Qasam’s next targets.” Al-Qassam is the military wing of Hamas. That’s a call to kill Jews.

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On Friday Columbia President Minouche Shafik invited police to clear the campus encampment after protesters refused to leave. About 100 were arrested. But the demonstrators returned with a vengeance, and it isn’t clear that Ms. Shafik has the fortitude to handle them.

In a statement on Monday she told students that “antisemitic language, like any other language that is used to hurt and frighten people, is unacceptable” and that “appropriate action will be taken.” The school moved all classes temporarily online to “reset” and “de-escalate the rancor” and to “consider next steps.”

But the protesters are winning if they’re allowed to shut down classroom instruction. Ms. Shafik’s statement notes “there is a terrible conflict raging in the Middle East” but doesn’t include a single mention of pro-Palestinian groups as the perpetrators of the campus harassment. Columbia also deactivated the university key card of Jewish professor Shai Davidai and told him he was “not permitted to enter the West Lawn” on grounds that his plan for a counterprotest was a safety risk.

Similar scenes unfolded over the weekend at Yale in New Haven, Conn., as Gabriel Diamond described Monday on these pages. Jewish students were harassed and one was hit in the eye with a flagpole and hospitalized. On Monday Yale finally called in police to arrest those who refused to leave a campus plaza.

This crisis in liberal education has been decades in the making. These schools have sown the intolerance their students are demonstrating by putting identity and left-wing politics above the free exchange of ideas. A progressive faculty monoculture has fueled divisive narratives blaming the Middle East’s ills on colonialism and imperialism.

Antisemitism has too often been tolerated within Near Eastern Studies departments. On Oct. 8, 2023, Columbia professor Joseph Massad praised the “awesome” scenes of the Oct. 7 massacre “witnessed by millions of jubilant Arabs.” In 2018 Columbia professor Hamid Dabashi posted on Twitter (now X) that “Every dirty treacherous ugly and pernicious act happening in the world” could soon be traced to “the ugly name of Israel.”

The liberal elites who run these institutions seem to lack the moral self-confidence to stand up to these student bullies. College presidents have to take charge, restore order and protect Jewish students, or the trustees should fire them and find someone who will.

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Wonder Land: College Presidents' spineless response to antisemitic protests are the culmination of academia’s plummet the past 50 years which has included grade inflation, speech codes, trigger warnings and ultimately cancel culture. Images: AP/AFP/Getty Images/Zuma Press Composite: Mark Kelly

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TIME TO DEAL WITH HAMAS BEASTS IN THE WEST

 

Who’s Behind the Anti-Israel Protests

Demonstrators rally before President Biden’s fundraiser in New York, March 28. Photo: Michael Nigro/Zuma Press

Protests against Israel expanded on college campuses last week, sometimes turning violent. At Columbia University, demonstrators chanted support for terrorist organizations, burning the American flag and waving Hezbollah’s. They called for Hamas’s Al-Qassam Brigades to attack again, and taunted Jewish students: “Never forget the 7th of October,” and “That will happen . . . 10,000 more times!”

It isn’t only on campuses. Three men interrupted the Easter vigil at St. Patrick’s Cathedral in New York, unfurling a banner and shouting “Free Palestine.” Since Oct. 7, countless religious and national, political and sports events have been disrupted by such demonstrations, whose organizers know how to maximize exposure and sway public perceptions. What is most discouraging is the lack of attention to what the protesters are demanding, which goes far beyond a cease-fire in the Israel-Hamas war.

Take the March 28 re-election fundraiser for President Biden in New York featuring Barack Obama and Bill Clinton, which was disrupted by shouting in the auditorium. That made headlines, yet the protesters’ chants, including “Down with the USA” and the “Al-Qassam are on their way,” a reference to Hamas’s miliary wing, received no coverage. Neither did their physical threats to attendees outside, a common tactic. Also ignored are the flags and posters of designated terrorist organizations—HamasHezbollahthe Popular Front for the Liberation of Palestine—displayed at protests in the U.S.Canada and the U.K.

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Major terror organizations have expressed support for these protests and disruptive actions, which have long been a key part of Hamas’s plan to win hearts and minds in the West. As early as a decade ago, during the July-August 2014 Israel-Gaza war, Hamas’s Interior Ministry issued guidelines to social-media activists on framing events for a Western audience.

It is no coincidence that official statements by Hamas and major jihadist groups about the protests are nearly identical. The statements seem like talking points for pressuring U.S. and Western decision makers. They appear to be working. On April 4 President Biden, under massive pressure for supporting Israel, warned Israel of major changes to U.S. policy if it didn’t ease its military campaign in Gaza. Hamas seized on the U.S.-Israel dispute with a statement calling on “all free people of the world” to protest.

A blatant example of jihadist talking points came from Hezbollah leader Hassan Nasrallah on March 13, when he lauded the political activity of American Muslims in Michigan as “very influential.” He said of the “many people demonstrating in America” that “we should salute them” and called the “uncommitted” primary campaign against Mr. Biden, which originated in Dearborn, Mich., “the most important means of pressure on the Biden administration.” Mr. Nasrallah had already cited the effect of protests “in Washington, New York, London, Paris and Western Europe” in a Nov. 11 speech, lauding their power to “apply pressure on their governments.”

Every senior Hamas leader has also acknowledged the importance of the protests and said that influencing U.S. and Western policy is part of the organization’s strategy for destroying Israel. Khaled Mashal, the Hamas leader abroad, on Oct. 10 urged supporters to protest “in cities everywhere.” On Oct. 31, he said that the organization’s friends “on the global left” were responding to its appeal. On March 27, he called for millions to take to the streets in protest, saying there had been an unprecedented shift in global public opinion.

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On Oct. 7, Hamas leader and former Palestinian Prime Minister Ismail Haniyeh alluded to this on Al Jazeera TV. He exhorted the “resistance abroad,” “strategic allies” and Muslims worldwide—all “partners in creating this great victory”—to “join this battle any way they can.” Hamas political bureau member Osama Hamdan underlined the “large impact” of the protests “in pressuring the decision makers in the world” in an interview on Nov. 12.

Six months after the attack on Israel, Hamas, Hezbollah, the Houthis and others aren’t merely cheering those protesting in the streets. They are working with and grooming activists in the U.S. and the West, through meetings, online interviews and podcasts.

Haytham Abdo, a PFLP representative, highlighted this cooperation in a Jan. 31 interview with Brian Becker, national coordinator of the Answer Coalition, a hard-left antiwar umbrella group. Mr. Abdo said this is the “first time” there has been such a “massive demonstration” of support in the U.S. Claiming that more than 50% of young Americans are now pro-Palestinian, he said, “We see that the Biden, or the American, administration, now, [is] affected by this transformation in the U.S. people.”

On March 25, the Columbia University Apartheid Divest student group hosted an event called “Resistance 101” on campus. It featured leaders of the PFLP-affiliated Samidoun, Within Our Lifetime and other extremist organizations. At the event, former PFLP official Khaled Barakat referred to his “friends and brothers in Hamas, Islamic Jihad [and] the PFLP in Gaza,” saying that particularly after Oct. 7, “when they see students organizing outside Palestine, they really feel that they are being backed as a resistance and they’re being supported.” On March 30 on Hezbollah’s Al-Manar TV, Mr. Barakat said “the vast majority” of young Americans and Canadians now “support armed resistance” because of “the introduction of colonialism, racism, and slavery studies into history curricula.”

At a Jan. 21 New York event held by the Marxist-Leninist Workers World Party, an official Hamas statement was read and videos were screened from PFLP, Palestinian Islamic Jihad, Hezbollah and Houthi officials. Ibrahim Mousawi, a Hezbollah member of Lebanon’s Parliament, underscored his organization’s support for the protests, saying they are “much needed and very much appreciated by our people here” and that “we really support this work.” Hezbollah and Western activists, he said, stand “together, one front” against Israel, against the U.S. and its “tyranny,” and against “Western hegemony and imperialism.” Houthi leader Nasreddine Aamir also thanked and commended the protesters in the West who “take a stand and participate in marches and go out in the streets.”

The collaboration between senior terrorists and their growing list of friends in the U.S. and the West has real-world consequences. These groups are designated terrorist for a reason. They don’t plan marches and rallies—they carry out terrorist attacks. And when the U.S. and Western activists, including college students, see that their marches and protests aren’t achieving their goals, they may consider their next steps—which will be influenced by the company they have been keeping.

Mr. Stalinsky is executive director of the Middle East Media Research Institute.

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Wonder Land: Joe Biden and Donald Trump know the details of the nation’s security threat. Does either have a plan to meet it? Images: AP/Reuters Composite: Mark Kelly

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Appeared in the April 23, 2024, print edition as 'Who’s Behind the Anti-Israel Protests'.

EXCELLENT REVIEW AT BLOOMBERG

 

Blinken Needs to Show China There’s a Way Out

There could be a real opportunity to mend strained ties between the two superpowers. But Beijing is feeling boxed in and that’s not helping. 

A lighter touch.
A lighter touch. Photographer: Greg Baker/AFP/Getty Images
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4:38

When the US Secretary of State Antony Blinken touches down in Shanghai and Beijing this week, he will have two important goals in mind: First, ensure that China plays ball and stops its companies funding Russia’s war in Ukraine. Second, convince President Xi Jinping to help de-escalate the Iran-Israel conflict.

But he’ll also have to manage an increasingly strained relationship with Beijing, which is under pressure on several fronts from Washington, as it ratchets up the pressure with fresh trade tariffs, enhanced security alliances and comments from President Joe Biden calling China “xenophobic.” A boxed-in Beijing will not be easy to negotiate with. If Washington is keen to work with the world’s second-largest economy to tackle some of the most pressing global issues, then some compromise and a lighter touch would go a long way.

The visit is part of the agreement to keep talking that Biden and Xi committed to when they met in San Francisco in 2023. They also spoke by phone earlier this month, in what was described as a “candid constructive” discussion that covered AI, fentanyl, climate change and other subjects. Since then, there’s been a visit by US Treasury Secretary Janet Yellen, where she outlined her tough stance on subsidies. Yellen castigated China for boosting its already huge manufacturing capacity as a way to drive domestic growth, saying that massive government spending on certain sectors will “lead to significant risk to workers and businesses in the United States and the rest of the world.”

Blinken will likely take a strong line, too, against fresh tariffs on imports of Chinese steel, which would see the US impose new 25% levies on certain products. China’s Commerce Ministry has blasted the decision, saying it was “full of false accusations” and “based on the need of domestic politics.”

To Beijing, everywhere it looks it sees the US seeking to limit China’s horizons. The annual joint military exercises between the Philippines and the US this week are the biggest ever — a clear sign to China that the lattice-like alliances Washington is building are strengthening. State media has said the drills threaten “regional peace and stability,” noting that the Australian Defense Force and the French Navy, for the first time, will also join as participants. Another 14 countries, including Japan and India, will take part as observers.

Then there is the TikTok divest-or-ban bill, which on Saturday came one step closer to becoming reality. The US House put legislation on a fast track to force ByteDance Ltd. to divest its ownership stake. All of this is convincing China that the US is not keen to engage, but rather to contain, and that means a far less productive conversation on the cards for Blinken.

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Beijing is already bristling about the trilateral summit on April 11 between the US, Japan and the Philippines. China’s Ministry of Foreign Affairs has asked whether the true purpose was to engage in “group politics” and form “exclusive groupings.” On the South China Sea, Beijing’s position is clear: “No provocation or coercion will deter China from safeguarding its sovereignty and rights and interests.”

China doesn’t make it easy for countries to cooperate with it. Beijing consistently advances its ownership claims in the South China Sea, and refuses to acknowledge the rights of other nations. It doesn’t believe the US should be anywhere near the contested waterway, seeing it as interference in its own backyard.

This has been the tenor of the US-China relationship for a while now, as Ryan Haas notes for the Brookings Institute. “At their core,” he writes, “both countries believe their governance and economic models are best equipped to meet the 21st century’s challenges. Both believe they are natural leaders in Asia and on the world stage.”

But this amount of conflict is unproductive and unsustainable. The China that the US is dealing with today is on the back foot economically, and as the pile of problems keeps growing there is a discernible crisis of confidence among citizens, particularly the youth who are now looking at a future that is likely to be nowhere near as fulfilling or successful as their parents’ generation.

There is nothing more important to the Chinese Communist Party than its survival. The pressures on Xi and his regime are mounting on multiple fronts. If the US really wants to get China on its side to work on resolving some of the most urgent issues of our time, like climate change, the war in Ukraine and a potentially explosive Middle East, then more cooperation rather than confrontation could help to achieve that. The US has put together a lot of compelling sticks lately that have got China’s attention. Now is the time to dangle some carrots — perhaps in the form of further AI collaboration, countering the illicit drug trade, and improving people-to-people ties. Blinken should keep that in mind this week.

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This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Karishma Vaswani is a Bloomberg Opinion columnist covering Asia politics with a special focus on China. Previously, she was the BBC's lead Asia presenter and worked for the BBC across Asia and South Asia for two decades.
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China Wants Everyone to Trade In Their Old Cars, Fridges to Help Save Its Economy

    A community event of exchanging old appliances for new ones in Shandong province in March 2024.
    A community event of exchanging old appliances for new ones in Shandong province in March 2024.Photographer: CFOTO/Future Publishing/Getty Images
    By Bloomberg News
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    6:14

    China’s world-beating electric vehicle industry, at the heart of growing trade tensions with the US and Europe, is set to receive a big boost from the government’s latest effort to accelerate growth.

    That’s one takeaway from what Beijing has revealed about its plan for incentives that will encourage Chinese businesses and households to adopt cleaner technologies. It’s widely expected to be one of this year’s main stimulus programs, though question-marks remain — including how much the government will spend.

    Four months after President Xi Jinping flagged a proposal to help households and businesses upgrade old machinery, details are still trickling out. At a briefing earlier this month officials from multiple departments announced the fullest version so far, and promised more to come.

    How Much Extra Demand From Trade-Ins, Upgrades?

    Goldman Sachs economists used similar Chinese programs of the past to estimate what take-up by households and businesses might be this year

    Source: Goldman Sachs, March 2024

    Trade-ins have the potential to speed up growth, currently forecast to fall a bit short of China’s target of about 5%. They can also make it less lopsided, by encouraging purchases at home to balance an export drive. That could ease some of the global concern about overcapacity in China’s factories.

    Local governments will be in charge of many practicalities. The city of Suzhou, in China’s wealthy Jiangsu province, already began — announcing subsidies worth 100 million yuan for cars (up to 6,000 yuan per buyer) and 20 million for appliances (a maximum 1,500 yuan for each machine) starting April 20.

    Here is what Beijing has announced and what investors are waiting to find out:

    1. What is China’s trade-in plan?

    The sweeping program aims to upgrade China’s stock of industrial and household equipment – taking older machines that use more energy or emit more pollution out of service, and giving a lift to consumer spending and business investment along the way.

    It covers everything from heavy industries like petrochemicals and steel, to installing new elevators in apartment buildings, to incentives for consumers to scrap their old washing machines and buy new ones that use less water.

    China’s top economic planning agency says investment on equipment upgrades in key industries was 4.9 trillion yuan ($680 billion) last year, and the goal is a 25% increase by 2027.

    2. How much will China’s latest stimulus plan cost?

    Beijing hasn’t specified how much cash it’s ready to provide, though officials have described some of the financing tools.

    On the household side, auto trade-ins look set to be the focus of fiscal support from the central government. Subsidies will be offered to consumers who buy new EVs or other energy-conserving cars. Local authorities will share some of the costs.

    For appliance upgrades regional governments — at least, the ones that aren’t too deep in debt trouble — are expected to shoulder all the burden, signaling it’s a lower priority for Beijing.

    China Auto Market Booms, Appliances Hit by Property Slump

    Monthly sales in yuan (1-year moving average)

    Source: National Bureau of Statistics

    Note: Data excludes Jan/Feb period where monthly numbers aren't published

    For industry there’ll be a mix of subsidies, government investment in new equipment, tax breaks for cleaner producers and discounted loans to help firms upgrade.

    There are sticks as well as carrots. New environmental standards for machinery “will force companies to get rid of some old equipment,” says Ding Shuang, chief economist for Greater China and North Asia at Standard Chartered Plc, calling that “the most distinctive feature” of the plan.

    3. How will the program help speed up China’s growth?

    Much of the spending may fall within existing budget proposals, and its impact is likely built into the official growth target, says Ding. “I don’t think it will lead to additional fiscal stimulus,” he adds, though it “will provide the government with more channels to fully spend” money already set aside.

    As for the extra consumer and business spending it will trigger, that’s hard to specify without the financing details, says Duncan Wrigley at Pantheon Economics. For now he’s estimating a total around 0.7 percentage point of China’s gross domestic product.

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    Economists at Citigroup Inc. said in a note that trade-ins under the plan could boost retail sales by about 0.5% this year, while equipment upgrades could increase China’s widest measure of investment by 0.4 percentage points through 2027. Last month, Goldman Sachs economists estimated a 0.6 percentage-point lift to GDP in 2024, with more than two-thirds coming from extra household spending, mostly on cars. That figure came before the State Council, China’s cabinet, released details.

    The immediate GDP boost isn’t the only objective, Wrigley says, contrasting the current program with the emergency stimulus China rolled out after the Global Financial Crisis. “The program sets targets for 2027, implying medium-term growth support for domestic demand to offset the drag from the slowly adjusting property market,” he says.

    4. Will it help rebalance the economy?

    Xi has called for a focus on advanced industries, and China’s EV success is a symbol of that government-guided effort. But China is accused by the US and Europe of flooding global markets with cheap goods and not doing enough to encourage local demand. The trade-in plan, by helping Chinese buyers, could go some way toward addressing that criticism.

    Growth Leans on Industry as Household Spending Lags

    Monthly factory output and retail sales (December 2019 = 100)

    Source: Bloomberg Economics based on National Bureau of Statistics

    For carmakers, who face likely countermeasures in the European Union this year, it offers a hedge against a potential slowdown in exports. More broadly, the way support is allocated between households and industry — which isn’t entirely clear yet — will reveal whether the program can help offset an over-reliance on investment versus consumption to drive economic growth.

    Another charge against Beijing, reiterated by German Chancellor Olaf Scholz during a visit last week, is that international firms suffer discrimination in Chinese markets. At the April 11 briefing, a Ministry of Commerce official emphasized foreign and domestic companies will get equal treatment under the trade-in plan.

    5. What will happen to the old stuff?

    By requiring higher standards for the recyclability of products like lithium batteries, the plan will help Chinese businesses expand in overseas markets, especially “regions that have high environment standards,” Ding says.

    The program includes investment in recycling networks, with 2,000 stations to be added across China this year, and logistical systems. E-commerce firms and appliance producers, for example, will be encouraged to collect old machines at the doorstep.

    As of last year, China had 336 million cars and more than 3 billion fridges, washing machines and air-conditioners, according to Beijing. Recycling even a small share would be a challenge.

    “China has repeatedly fallen short of its own car and appliance recycling targets,” says Wrigley at Pantheon. “Many supposedly recycled cars end up back on the road, despite being a safety hazard and highly polluting.”

    — With assistance from John Liu, Fran Wang, Lucille Liu, and Tom Hancock

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    The visit is part of the agreement to keep talking that Biden and Xi committed to when they met in San Francisco in 2023. They also spoke by phone earlier this month, in what was described as a “candid constructive” discussion that covered AI, fentanyl, climate change and other subjects. Since then, there’s been a visit by US Treasury Secretary Janet Yellen, where she outlined her tough stance on subsidies. Yellen castigated China for boosting its already huge manufacturing capacity as a way to drive domestic growth, saying that massive government spending on certain sectors will “lead to significant risk to workers and businesses in the United States and the rest of the world.”

    Blinken will likely take a strong line, too, against fresh tariffs on imports of Chinese steel, which would see the US impose new 25% levies on certain products. China’s Commerce Ministry has blasted the decision, saying it was “full of false accusations” and “based on the need of domestic politics.”

    To Beijing, everywhere it looks it sees the US seeking to limit China’s horizons. The annual joint military exercises between the Philippines and the US this week are the biggest ever — a clear sign to China that the lattice-like alliances Washington is building are strengthening. State media has said the drills threaten “regional peace and stability,” noting that the Australian Defense Force and the French Navy, for the first time, will also join as participants. Another 14 countries, including Japan and India, will take part as observers.

    Then there is the TikTok divest-or-ban bill, which on Saturday came one step closer to becoming reality. The US House put legislation on a fast track to force ByteDance Ltd. to divest its ownership stake. All of this is convincing China that the US is not keen to engage, but rather to contain, and that means a far less productive conversation on the cards for Blinken.

    Beijing is already bristling about the trilateral summit on April 11 between the US, Japan and the Philippines. China’s Ministry of Foreign Affairs has asked whether the true purpose was to engage in “group politics” and form “exclusive groupings.” On the South China Sea, Beijing’s position is clear: “No provocation or coercion will deter China from safeguarding its sovereignty and rights and interests.”

    China doesn’t make it easy for countries to cooperate with it. Beijing consistently advances its ownership claims in the South China Sea, and refuses to acknowledge the rights of other nations. It doesn’t believe the US should be anywhere near the contested waterway, seeing it as interference in its own backyard.

    This has been the tenor of the US-China relationship for a while now, as Ryan Haas notes for the Brookings Institute. “At their core,” he writes, “both countries believe their governance and economic models are best equipped to meet the 21st century’s challenges. Both believe they are natural leaders in Asia and on the world stage.”

    But this amount of conflict is unproductive and unsustainable. The China that the US is dealing with today is on the back foot economically, and as the pile of problems keeps growing there is a discernible crisis of confidence among citizens, particularly the youth who are now looking at a future that is likely to be nowhere near as fulfilling or successful as their parents’ generation.

    There is nothing more important to the Chinese Communist Party than its survival. The pressures on Xi and his regime are mounting on multiple fronts. If the US really wants to get China on its side to work on resolving some of the most urgent issues of our time, like climate change, the war in Ukraine and a potentially explosive Middle East, then more cooperation rather than confrontation could help to achieve that. The US has put together a lot of compelling sticks lately that have got China’s attention. Now is the time to dangle some carrots — perhaps in the form of further AI collaboration, countering the illicit drug trade, and improving people-to-people ties. Blinken should keep that in mind this week.

    More From Bloomberg Opinion:

    Want more Bloomberg Opinion? OPIN <GO> . Or you can subscribe to our daily newsletter .

    This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

    Karishma Vaswani is a Bloomberg Opinion columnist covering Asia politics with a special focus on China. Previously, she was the BBC's lead Asia presenter and worked for the BBC across Asia and South Asia for two decades.
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    WE HAVE ARGUED THIS FOR A WHILE

     The overstimulated superpower


    The writer is chair of Rockefeller International Ruchir Sharma · 22 Apr 2024


    When the US reports gross domestic product growth later this month, it is expected to come in at a solid pace of at least 2 per cent for the seventh quarter in a row, defying the once universal expectation that Federal Reserve rate rises would trigger a recession. First economists dialled those forecasts back to a “soft landing”, now they are talking about “no landing”.

    Conventional f orecasting models have been more off the mark than usual in this post-pandemic recovery. But why? Perhaps the most overlooked explanation for American resilience is that, far more than other developed countries, the US kept stimulating its economy well after the recession of 2020 was over.

    Some of that fiscal and monetary stimulus is still coursing through the system, keeping growth artificially high and inflating both consumer and asset prices.

    After the pandemic struck, presidents Donald Trump and Joe Biden unleashed about $10tn in new spending, $8tn of that after the brief, lockdown-induced recession of early 2020 was over. US government spending has been running at a yearly level about $2tn higher than its pre-pandemic norm, and is on course to set records as a share of GDP.

    Meanwhile, the rest of the developed world has been heading in a different direction. In the years since the start of the pandemic, rising deficits amounted to a cumulative 40 per cent of GDP in the US, twice the average in Europe, and a third higher than in the UK.

    By some estimates, fiscal stimulus accounted for more than a third of US growth in 2023; without it, the US would not look like such a marvel compared with other developed economies.

    Even more under appreciated than the boost from runaway government spending is the way monetary growth has been supercharging the economy and the financial markets. The Fed created so much money during the pandemic that by some measures the excess has still not been fully absorbed by the economy.

    The broad measure of money supply known as M2, which includes cash held in money market accounts and bank deposits, as well as other forms of savings, is still well above its pre-pandemic trend. In Europe and the UK, where monetary stimulus was less aggressive, M2 has fallen back below trend.

    This liquidity hangover has countered Fed interest rate rises and helps explain the current behaviour of asset prices. Corporate earnings are up, on strong GDP growth, but prices for stocks — not to mention bitcoin, gold and much else — have been rising even faster. This odd combination — higher stock valuations despite higher rates — has not happened in any period of Fed tightening going back to the late 1950s.

    A similar levitation act is visible in the US housing market; despite higher mortgages rates, prices have risen steadily and faster than in other developed nations. Since 2020, the total net worth of US households has risen by nearly $40tn to $157tn, driven by home and stock prices.

    For the better off, this “wealth effect” is a happy turn. More Americans plan to vacation abroad this summer than at any time since records begin in the 1960s. For the less well off, who summer locally, do not own a home and tend to be younger, these conditions are less felicitous.

    There are, of course, other reasonable explanations for US resilience, including the surge in immigration and the AI boom. Moreover, many American debtors are paying fixed rates and won’t get hit by hikes until they need to refinance their loans. New government incentives are drawing billions in investment to subsidised industries, from green tech to computer chips.

    But this much seems clear: with both consumer prices and asset prices more elevated in the US than its peers, the economy is overheated and the Fed has less room to cut rates than expected. As long as interest rates remain higher for longer, the US will be asking for worse trouble if it keeps running deficits close to 6 per cent of GDP; that is twice the pre-pandemic average for the US, and six times the median for western Europe. The US cannot sustain such aggressive stimulus indefinitely, and government spending is already slowing.

    Economics though is far from an exact science, and it is hard to know when exactly the sugar rush from the past stimulus will wear off. But once it does, the landing may come faster than any conventional model suggests now.

    Sunday 21 April 2024

    China spying laws prompt warning from pharma groups


    ARJUN NEIL ALIM — FRANKFURT OLIVER BARNES — NEW YORK IAN JOHNSTON — LONDON · 22 Apr 2024


    Western pharmaceutical groups are warning of worsening disruption to supply chains because of problems certifying manufacturing sites in China, with some factory inspectors refusing to visit the country over fears of arrest for spying and others denied entry to facilities.

    China is one of the world’s largest makers of active pharmaceutical ingredients and antibiotics and an important supplier of drugs to the EU and US.

    However, a tightening of anti-espionage laws by Beijing has led to concerns that foreign citizens gathering data on Chinese sites could be deemed spies.

    Many inspectors from Germany, Europe’s largest inspectorate, are refusing to visit China for fear of arrest, said Fatima Bicane, manager of pharmaceutical technology at the German Medicines Manufacturers’ Association.

    Meanwhile, official data seen by the Financial Times shows some US Food and Drug Administration inspectors have been refused entry to Chinese production sites since the pandemic.

    This has led to western pharmaceutical regulators struggling to enforce oversight of Chinese manufacturers.

    Drugs made in third countries and imported into the EU or US require certification by government inspectors and audits of production sites.

    Disruption to inspections raises the risk of Chinese production sites losing their certification for western markets, exacerbating an already strained supply chain for generic pharmaceuticals.

    “The big issue . . . is that our member companies, in order to bring active ingredients and finished drug products from China to the EU, need certification from certain authorities,” Bicane said. “But a large number of German inspectors are afraid to travel to China because of the new national security law.”

    No western pharmaceutical inspectors have been arrested under China’s tightened laws. But a Japanese executive from Astellas Pharma was arrested last year in China on suspicion of espionage.

    China’s Ministry of Foreign Affairs said: “China is a country ruled by law. All Chinese law enforcement and judicial activities are carried out based on facts and the law. As long as one abides by Chinese laws and regulations, there is no need to worry.”

    RATS RATS RATS RATS

     

    Top Chinese Swimmers Tested Positive for Banned Drug, Then Won Olympic Gold

    Three swimmers are seen racing in different lanes from an underwater view.
    Zhang Yufei, center, was one of 23 top Chinese swimmers who tested positive for a performance-enhancing drug months before the Tokyo Olympic Games. Credit... Manan Vatsyayana/Agence France-Presse — Getty Images

    The case, involving multiple swimmers who seven months later won medals at the 2021 Games, prompted accusations of a cover-up and concerns over why antidoping regulators chose not to intervene.

    Michael S. SchmidtTariq Panja

    Twenty-three top Chinese swimmers tested positive for the same powerful banned substance seven months before the Tokyo Olympic Games in 2021 but were allowed to escape public scrutiny and continue to compete after top Chinese officials secretly cleared them of doping and the global authority charged with policing drugs in sports chose not to intervene.

    Several of the athletes who tested positive — including nearly half of the swimming team that China sent to the Tokyo Games — went on to win medals, including three golds. Many still compete for China and several, including the two-time gold medalist Zhang Yufei, are expected to contend for medals again at this year’s Summer Games in Paris.

    China acknowledged the positive tests in a report by its antidoping regulator, saying that the swimmers had ingested the banned substance unwittingly and in tiny amounts, and that no action against them was warranted.

    But an examination by The New York Times found that the previously unreported episode sharply divided the antidoping world, where China’s record has long been a flashpoint. American officials and other experts said the swimmers should have been suspended or publicly identified pending further investigation, and they suggested that the failure to do so rested with Chinese sports officials; swimming’s international governing body, World Aquatics; and the World Anti-Doping Agency, the global authority that oversees national drug-testing programs.

    Those authorities decided not to act despite an email exchange between a Chinese antidoping official and a top world swimming official appearing to indicate that a violation may have taken place and would, at the least, have to be publicly acknowledged.

    Even after other national and international antidoping officials repeatedly provided the global regulator, known as WADA, with intelligence suggesting a cover-up and doping by Chinese swimmers, the agency chose not to try to hold the athletes accountable, asserting “a lack of any credible evidence” to challenge China’s version of events. WADA defended its decision not to take action, calling the criticism unsubstantiated.

    The F.B.I. learned in the past year about the positive tests, the Chinese rationale for clearing the athletes of wrongdoing, and the inaction by WADA, according to two people familiar with the matter and a document examined by The Times.

    Federal investigators have taken steps in recent weeks to learn more about what occurred. A spokesman for the F.B.I. declined to comment. Any inquiry by the American authorities would come with a powerful new tool: a law passed in 2020 giving the Justice Department powers to criminally prosecute attempts to corrupt international sports events through doping, no matter where they take place.

    In a statement in response to questions from The Times, the United States Anti-Doping Agency accused WADA, its global counterpart, of failing in its mission.

    “This appears to be a devastating stab in the back of clean athletes and a deep betrayal of all the athletes who compete fairly and follow the rules,” said the U.S. antidoping agency’s chief executive officer, Travis T. Tygart, who acknowledged providing WADA with allegations of doping in Chinese swimming multiple times since 2020. “All of those with dirty hands in burying these positives and suppressing the voices of courageous whistle-blowers must be held accountable to the fullest extent of the rules and law.”

    Video player loading
    Months before the Tokyo 2021 Olympics, 23 Chinese swimmers tested positive for the same powerful banned substance. Michael Schmidt, an investigative reporter at The New York Times, explains.

    This article is based on a review of confidential documents and emails — including a report compiled by the Chinese antidoping agency and submitted to WADA — and interviews with people involved in antidoping efforts around the world. Some interviews were conducted on the basis that sources not be identified because they were not authorized to speak publicly or had concerns about retaliation.

    During the course of the reporting for this article, journalists for The Times learned that a team from ARD, Germany’s public broadcaster, was also examining the episode. ARD shared some of its reporting and video footage with The Times and the two news organizations agreed to coordinate publication of their findings, which were arrived at independently.

    Experts in antidoping, drug-testing and compliance interviewed by The Times said the handling of the case of the Chinese swimmers and the lack of disclosure about the positive tests ran counter to long-established precedents meant to ensure transparency, accountability and competitive fairness in elite sports.

    The episode also exposes shortcomings in the system set up to police doping in sports, with one of the world’s most powerful countries able to send athletes who had recently tested positive for a banned drug to the world’s highest-profile athletic competition, where they set world and Olympic records without any public disclosure.

    An investigation by the Chinese antidoping agency, known as Chinada, suggested that the incident stemmed from a tainted food supply, a finding that some experts considered implausible.

    In their report, Chinese investigators described how many of the country’s best swimmers were staying at the same hotel for a domestic meet in the final days of 2020 and the first days of 2021. Two months after the swimmers tested positive for the banned substance — a prescription heart drug that can enhance performance — Chinese investigators reported finding trace amounts of the substance in the hotel’s kitchen.

    More on China

    Their report offered no evidence of how the drug got there, despite enlisting the help of China’s national police. But they concluded that the swimmers had unwittingly ingested it in small amounts.

    WADA confirmed in a statement that it had “carefully reviewed the decision” made by the Chinese and chose not to act after consulting scientists and external legal counsel “to thoroughly test the contamination theory presented by Chinada.”

    “Ultimately, we concluded that there was no concrete basis to challenge the asserted contamination,” WADA’s senior director of science and medicine, Olivier Rabin, said in the statement.

    In contrast to WADA’s position, the International Testing Agency, a group based in Switzerland that was created after an earlier Russian doping scandal to provide an extra layer of independent oversight for global athletic competition, said its own assessment of the case remained ongoing.

    Chinada said in a statement that it determined its athletes had not violated any antidoping laws and therefore it was not obliged to publish any details related to the case without the athletes’ consent.

    The Chinese Swimming Association did not reply to a fax seeking comment on the tests.

    Swimming’s governing body confirmed that the cases had been reviewed by a doping control board and been subjected to independent expert scrutiny, without providing further details. “World Aquatics is confident that these A.A.F.s were handled diligently and professionally, and in accordance with all applicable antidoping regulations, including the World Anti-Doping Code,” it said, referring to adverse analytical findings, the term for positive tests.

    The story that the swimmers had ingested the substance unknowingly provided a rationale for the Chinese authorities to break with normal antidoping protocols. Those would typically involve a public declaration that the athletes in question were being temporarily suspended pending further investigation, particularly if a finding of food contamination had not yet been established.

    The handling of the matter by the Chinese authorities and the global regulators came at an especially sensitive moment. The swimmers were planning to compete in just a few months at the Summer Games in Tokyo, and China, battered by the pandemic, was to host the Winter Games the following year.

    WADA’s handling of the positives involving the Chinese swimmers stood in stark contrast to how it acted less than a year later when faced with a strikingly similar episode involving a Russian figure skater who tested positive for the same banned heart drug, trimetazidine, just before the 2022 Beijing Winter Olympic Games. That skater, Kamila Valieva, blamed contaminated food and tested for relatively low levels of the substance.

    A figure skater dressed in purple performs a turn on the ice.
    The Russian figure skater Kamila Valieva was suspended for four years after testing positive for trimetazidine, or TMZ. Russian antidoping officials had initially cleared her. Credit... Doug Mills/The New York Times

    In that case, WADA swiftly and successfully appealed the Russian antidoping agency’s decision to clear her, and the top court in sports eventually barred her from international competition for four years.

    The Valieva case came after WADA was accused of ignoring clues to Russia’s systematic doping for years. Since that scandal, some antidoping authorities have agitated for reform at the agency, hoping to ensure that the world’s doping watchdog would never again defer to a nation to investigate itself. Now it appears to be facing similar questions.

    National Pride

    The Olympic Games are a point of pride for the Chinese government, as a way to project the country’s strength and competence. In recent years, China has focused in particular on sports — marquee ones like swimming, but also minor ones like women’s weight lifting — where it can collect medals in bulk.

    But the Games are also hugely popular among the broader population, and the sudden rise of Chinese athletes in swimming — a source of great success but also great scandal — has only increased the sport’s profile. The state news media is already forecasting “glory” at the Paris Olympics.

    The story of the positive tests began unfolding a year into the coronavirus pandemic, a period when antidoping authorities feared that travel bans and closed borders in many countries would make it easier to cheat. Those restrictions would reduce the opportunities for testing at international events and lead to an almost total reliance on national antidoping agencies.

    The roughly two dozen positive tests involving Chinese swimmers were collected at a New Year’s event held over four days in December 2020 and January 2021 in Shijiazhuang, a provincial city of about 11 million people a few hours southwest of Beijing.

    The meet, hosted by China’s national swimming association, was designed to be a competitive warm-up for 200 of the country’s top athletes, a group that had been training in seclusion during the pandemic but that was then only months away from the national qualifying event for the Summer Olympic Games, which were set to open in late July in Tokyo.

    At the meet, as is typical at such competitions, Chinada tested the top two finishers in each event and a couple of others from each of the 29 races.

    Swimmers dive off the starting blocks at the start of a race.
    Zhang Yufei, center, at the meet where she tested positive for a banned substance in January 2021. Months later, she won four medals, including two golds, at the Tokyo Olympic Games. Credit... Lintao Zhang/Getty Images

    Samples are supposed to be immediately sent to an accredited laboratory, analyzed and reported to WADA and World Aquatics, the association that governs world swimming. But for reasons that remain unclear, the results of the tests in Shijiazhuang were not reported to the computer management system that tracks all testing of athletes until March 15, 2021, two and a half months later. Chinada said that WADA had allowed it to freeze the tests for a month after they were collected because of the pandemic.

    Ultimately, according to the 61-page investigative report compiled by Chinada and reviewed by The Times, a total of 60 tests were conducted on 39 swimmers. Those urine samples produced 28 positives involving 23 of the meet’s competitors — a shockingly high failure rate. All of the samples tested positive for the same drug, trimetazidine, known as TMZ.

    TMZ is a prescription medication designed to help people with heart disease. It is included in a category of performance-enhancing drugs that come with the harshest penalties. It can help athletes increase stamina and endurance and hasten recovery times, and is difficult to detect because it quickly clears through the body.

    In the court ruling explaining the decision to ban Ms. Valieva, the Russian figure skater who tested positive for the same substance, arbitrators referred to scientific studies that state TMZ “is widely recommended in elite sport in particular in support of the heart in connection with heavy training.”

    Chinada’s testing lab reported finding only trace amounts of TMZ in the samples of its swimmers. But any amount is enough to register as a failed test and prompt an immediate temporary suspension except in the rarest circumstances — including the one explanation China offered.

    No such suspensions were imposed, no public disclosure was made, and the swimmers were able to go on to the Olympic qualifying meet months later, and then the Tokyo Games, without any attempts by WADA to block their participation. Had any of them been suspended even temporarily, that most likely would have endangered their ability to compete at the qualifying meet, not to mention subjecting China to international scrutiny and criticism.

    Contrary to claims in the Chinada report, TMZ would not have been an unfamiliar drug in Chinese swimming circles. In 2014, the country’s greatest and most famous swimmer, the Olympic champion Sun Yang, was suspended for three months after testing positive for the drug at a major meet. (He is currently serving an eight-year doping ban from a different episode, which was reduced to four years on appeal.)

    This time, the testers collected positive results from an even larger group of Olympians, including such stars as:

    • Ms. Zhang, who would go on to win four medals in Tokyo, including two golds, and help set a world record with her freestyle relay teammates

    • Wang Shun, who in winning the 200 individual medley at the Olympics became only the second Chinese man to win an individual swimming gold

    • Qin Haiyang, who last year became the world-record holder in the 200-meter breaststroke

    All would have been subject to testing at the Olympics, and there were no reports of positive results there.

    From left, Ms. Zhang, Wang Shun and Qin Haiyang. They are among China’s best hopes for swimming medals at this year’s Summer Games in Paris.
    Credit...
    EPA, via Shutterstock; Reuters

    The final report by the Chinese said investigators had discovered traces of TMZ in sink drains, spice containers and cooktop vents in the kitchen of the Huayang Holiday Hotel in Shijiazhuang, where most of the swimmers and coaches at the meet had stayed. But at no time did they claim to have found it in any food eaten by the swimmers.

    The report said that the Chinese investigators went so far as to conduct human experiments to see how the body processed TMZ. Video surveillance tapes were scoured. All of the athletes were questioned. But they did not identify where the drug came from or why it was in a kitchen.

    There is also evidence that the Chinese antidoping authorities knew on March 15, 2021, the day they reported the positive tests, that they faced the possibility of having to publicly disclose the names of the swimmers. That day, the top legal official at Chinada wrote an email to her counterpart at the world swimming association that an “initial review and preliminary investigation shows that these are not normal” positive tests.

    “We are doing our best to conduct investigation on these cases at the moment,” the official, Lin Haiyan, wrote.

    At the same time, Ms. Lin cited existing rules and asked that “in order to protect athletes’ privacy and cooperate with the investigation, please keep athletes’ information and the case strictly confidential until it is publicly disclosed by Chinada.”

    Emails obtained by The Times also show that by April 2021, at least two of WADA’s top officials — the most senior executive at the agency and its top legal officer — had been informed that the Chinese swimmers had tested positive.

    In their report, filed in June 2021, Chinese investigators ruled out contaminated supplements or sabotage as reasons for the positive tests. They offered no explanation, however, for how a prescription drug available only in pill form had contaminated an entire kitchen.

    Cars sit parked outside a Chinese hotel with a pagoda-style entrance.
    The Huayang Holiday Hotel in Shijiazhuang, where swimmers stayed for an Olympic qualifying meet and Chinese antidoping investigators reported finding traces of a banned drug in the kitchen. Credit... ARD German Television

    WADA said “the contamination scenario was further supported” by the low concentrations of the drug and the fluctuation of test results between positive and negative.

    The Chinese pointed to low concentrations of TMZ in the urine samples to conclude intentional doping was “impossible.”

    That claim was rejected by five independent experts who discussed the matter with The Times. The low concentrations, they said, could just as easily have meant the athletes had been at the end of the excretion period for the drug.

    According to antidoping rules, procedures that would lead to provisional suspensions for athletes found to have tested positive for the type of drug found in the Chinese swimmers’ samples could be waived only in the rarest circumstances and after meeting a high bar — usually only when accidental food contamination can be proven.

    In that way, the theory advanced but not proved by the Chinese report — tainted food — offered a potential path to clearing the swimmers without punishment.

    Global Concerns

    The global antidoping system is in many ways built on trust, since WADA must rely on a network of national antidoping officials to police each country’s own athletes. The failure of national bodies to carry out their responsibilities, as the world found after revelations of a large-scale state-sponsored doping program orchestrated by Russia a decade ago, can corrupt entire sports and the results of the Olympic Games and other world championships.

    To reduce that risk, WADA is expected to step in whenever doubts emerge, or if national bodies appear to have favored their own athletes.

    A large cluster of positive tests and an unusual claim of mass contamination through tainted food, then, might have merited a deeper, and independent, investigation.

    A man in a gray suit stands in front of a green backdrop bearing the name and logo of the World Anti-Doping Agency.
    WADA’s president, Witold Banka. Credit... Valentin Flauraud/EPA, via Shutterstock

    Word of the positive tests, though, began leaking out.

    The International Testing Agency received whistle-blower evidence about the episode around the same time as the Tokyo Olympic Games, and later did its own examination that challenged China’s findings.

    “In parallel to a full assessment of the information received that remains active, the I.T.A. conducted many targeted follow-up testing missions in 2021, 2022, 2023 and up until today,” the agency said in a statement.

    In the United States, antidoping officials collected and passed on multiple tips to WADA from its own whistle-blowers, who accused China of covering up not just the nearly two dozen tests in question. Some of the swimmers identified by the whistle-blowers matched those who tested positive.

    In response to one tip passed on by the Americans, World Anti-Doping Agency officials told their U.S. agency counterpart that “they remember the allegations quite well,” that they held “the same intelligence in the summer of 2021” and that “there was no impetus for WADA to investigate,” USADA said in response to questions from the The Times.

    That decision bothered several scientists and experts with years of experience on sports doping cases who were interviewed by The Times. They all rejected the Chinese report’s claim that low concentrations of the drug found in athletes’ samples meant that intentional doping was all but impossible, but were divided over the possibility that contamination was the most likely cause of the positive tests.

    David Cowan, one of the world’s leading experts on drugs in sports and the former longtime director of Britain’s WADA-accredited laboratory, said he could not come to a conclusion on whether there had been “a contamination or a pharmacologically effective dose.”

    But even the experts’ discord revealed a common thread: They all agreed that the high number of positives in one place and the stakes — for China, for the antidoping movement, and for the looming Tokyo and Beijing Olympic Games — should have prompted WADA or World Aquatics to act far more aggressively.

    Photographed from below, a Chinese swimmer in a pink swim cap and mirrored goggles enters the water.
    Qin Haiyang broke the world record in the 200-meter breaststroke last year at the world swimming championships in Japan. Credit... Manan Vatsyayana/Agence France-Presse — Getty Images

    What is known is that WADA’s own data shows a spike in the number of TMZ cases in 2021. A year earlier, there had been only three positive tests worldwide. A year later, there were 18. But in 2021, there were 37.

    David Howman, a former director general of WADA, said he had seen the Chinada report. He described the situation as “shocking.”

    “My concern is intense,” said Mr. Howman, who is now the chairman of track and field’s independent antidoping body, the Athletics Integrity Unit. Important processes that should have been followed after the discovery of the positive tests, he said, appeared not to have been.

    “What it would say to me immediately is that perhaps there was some form of program in this sport to ‘prepare’ swimmers for the Tokyo Olympics,” Mr. Howman said.

    Mr. Howman spoke in an interview on the sidelines of an annual symposium hosted by WADA in Lausanne, Switzerland. On its final night, the organization held a gala evening bringing together more than 1,000 officials to celebrate 25 years in existence.

    Celebratory speeches were made, including one by Thomas Bach, the president of the International Olympic Committee. In it, he lauded WADA’s role in taking on drug cheats.

    Reporting and research were contributed by Claire Fu from Seoul; Alexandra Stevenson and Zixu Wang from Hong Kong; and Matthew Cullen from Washington.

    Michael S. Schmidt is an investigative reporter for The Times covering Washington. His work focuses on tracking and explaining high-profile federal investigations. More about Michael S. Schmidt

    Tariq Panja is a global sports correspondent, focusing on stories where money, geopolitics and crime intersect with the sports world. More about Tariq Panja

    A version of this article appears in print on April 21, 2024, Section A, Page 1 of the New York edition with the headline: Swimmers Tested Positive, Then Won Olympic GoldOrder Reprints | Today’s Paper | Subscribe