Your Wednesday briefing: China’s billions in bailouts

China steps in with bailouts

For decades, the International Monetary Fund and the United States have been the world’s lenders of last resort. Now China is stepping in to provide more emergency loans to countries like Turkey, Argentina and Sri Lanka.

While China still lags behind the IMF in terms of cash disbursed, it is catching up fast. In 2021, emergency funding provided by Beijing amounted to $40.5 billion, up from $10 billion in 2014 and zero in 2010, according to a new study by US and European experts that relied on statistics from AidData, a research institute in the United States. The IMF lent $68.6 billion to countries in financial difficulty in 2021.

In many ways, China has replaced the United States as the go-to source for bailouts. The last major bailout loan from the United States to a middle-income country was a $1.5 billion credit to Uruguay in 2002. China often prioritizes countries that are either strategically important or many natural resources.

Debt trap: Many countries that borrowed heavily from Beijing for years to pay for their infrastructure are now struggling to repay their debts. U.S. officials have accused China of engaging in “debt trap diplomacy” by burdening excessively indebted countries for construction projects carried out by Chinese companies.

Higher rates: China charges somewhat high interest rates for emergency credit to distressed middle-income countries, typically 5%. That compares to 2% for IMF loans, according to the new study. China’s emergency loans have gone almost entirely to middle-income countries that owe China’s state-controlled banks a lot of money.

Domestic concerns: China could soon face its own debt crisis, writes our New New World columnist. Chinese local governments that have borrowed heavily for big infrastructure projects are in financial disarray, their coffers depleted by the enforcement of China’s tough pandemic policies. Yet they continue to spend.

The move reflects government concerns about the power of Chinese tech giants. Alibaba was a cautionary tale about the risks of challenging the country’s ruling Communist Party, which has worked to rein in big business.

Context: The government appears to be easing its regulatory grip on the tech sector after three tumultuous years – a period marked by the disappearance of multi-billionaire Alibaba founder Jack Ma from the public eye.

This week he returned to mainland China after a year-long absence, after criticizing Chinese regulators in 2020 for stifling innovation. Regulators fined Alibaba $2.8 billion in 2021 for abusing its dominant position, among other penalties.

To take with: As the Chinese economy struggles to regain momentum after Covid zero, Beijing wants to show that it is focused on reviving the economy.

The city of push levels of eastern Russia

The shelling barely stops in Avdiivka, a town in eastern Ukraine where residents huddle in basements.

Russian efforts to capture Avdiivka, which began more than a year ago, have intensified in recent weeks. A team of reporters from the New York Times went there just hours before the Ukrainian army declared it off-limits to journalists. They found a vacant lot.

Of a pre-war population of 30,000, locals say only hundreds still live in Avdiivka.

Other developments of the war:

• The head of the UN’s nuclear watchdog has sounded the alarm over security risks at the Zaporizhzhia nuclear power plant, which is controlled by Russian forces. He plans to visit the facility this week. Read an insider’s account of the unrest inside the factory.

• Belarus, a close Russian ally that borders Ukraine, is ready to welcome Russian nuclear weapons, the country’s foreign ministry has said.

• The International Olympic Committee has declined to decide whether athletes from Russia and Belarus will be allowed to compete in the 2024 Games.

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The latest viral trend on TikTok is defending TikTok. After US lawmakers grilled the platform’s chief executive, Shou Chew, last week, TikTok users rallied and argued that the app shouldn’t be banned in the US. chew that he devoured,” reads one.

Revisiting Tomb Sweeping Day

For the annual Qingming holiday, known as Tomb Sweeping Day in English, extended families gather to honor the graves of deceased ancestors and clean and feast on a Chinese folk practice that dates back 2,500 years.

But sweeping the graves becomes obsolete as the graves themselves are gradually removed. In recent decades, governments in East and Southeast Asia have pushed for cremation to replace burials in tombs. Others razed cemeteries. The change is particularly prevalent in Taiwan and beach towns like Hong Kong, where burial sites are scarce and graves are expensive. Most families now house ashes in columbariums, structures that can store thousands of cremation urns in a small space.

In a columbarium, there is little to sweep and not enough space for elaborate altar stalls. A traditional whole roast pig becomes a single slice of crispy pork belly. It is now common to see packaged food and even fast food on these altars.

But for some members of the older generation, it’s important to make an effort with home-cooked meals. “McDonald’s isn’t going to cut it,” said Nancy Fam, 93. “Spirits will be tortured.”

PLAY, WATCH, EAT

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This creamy Meyer lemon pasta uses the whole fruit.

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What to read

“The Great Reclamation” is a breathtaking historical fiction set against the backdrop of Singapore’s struggle for independence.