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washington — The International Monetary Fund says China’s economic decline is likely to continue over the next four years as the world’s second largest economy deals with a range of challenges from a rapidly aging population, higher unemployment and a property crisis.

In a report released on Friday, the global financial policy body – also known as the IMF – projected China’s economic growth would drop to 4.6% this year, down from its 5.2% growth in 2023, and fall further to 3.4% by 2028.

The property market, which has historically represented about a quarter of China’s GDP, has been a particular area of trouble for the Chinese economy lately, with a Hong Kong court on Monday ordering Chinese property giant China Evergrande, mired in more than $300 billion of debt, to liquidate.

An IMF analysis released Friday predicted real estate investment is likely to fall 30% to 60% in the next ten years relative to 2022 levels.

“Absent a comprehensive restructuring policy package for the troubled property sector, real estate investment could drop more than expected, and for longer, with negative implications for domestic growth and trading partners,” the IMF report read.

However, Zhang Zhengxin, the IMF’s executive director for China, disagreed with the fund’s findings in a January 10 statement included in the report.

“The Report warns of the risks in China’s real estate market, but staff’s estimate is, to some extent, too pessimistic,” Zhang wrote. “Since August 2023, the real estate market transactions have experienced general improvement, which has gradually strengthened market confidence.”

The real estate crisis is closely linked to Chinese consumers’ spending habits, according to Christopher Tang, Senior Associate Dean of Global Initiatives at the University of California Los Angeles Anderson School and Faculty Director of the UCLA Center for Global Management.

“As they see their equity in their home investment declining, they spend less on everything – lower consumer spending, the demand falls which reduces production and hence slower economic growth,” Tang told VOA in an emailed response. “There is a domino effect when the real estate market is so huge and intertwined with decades of aggressive housing development and easy lending from banks.”

Ali Wyne, the senior research and advocacy adviser for U.S.-China at the think tank International Crisis Group, said local government debt and tensions between China and Western democracies also factor into predictions of an economic downturn.

“The evidence thus far does not suggest that a hard landing is in the offing, but it does suggest that China’s growth headwinds are more intractable than they were a decade ago or even at the outset of the 2020s,” Wyne told VOA in an email.

The IMF recommended that the Chinese government encourage its citizens to find new means of investment and pursue market-oriented reforms, among other means, to boost the country’s economy, according to the report.

Tang said China needs to promote new demand-side economic policies and loosen market regulations.

“China needs to promote a freer market to support market competition that can stimulate jobs through entrepreneurship and new startups and reduce its focus on state-owned enterprises that lack incentive to innovate and to compete,” Tang wrote.
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WASHINGTON — The nation’s employers delivered a stunning burst of hiring to begin 2024, adding 353,000 jobs in January in the latest sign of the economy’s continuing ability to shrug off the highest interest rates in two decades.

Friday’s government report showed that last month’s job gain — far above what economists had predicted — topped the December gain of 333,000, a figure that was itself revised sharply higher. The unemployment rate stayed at 3.7%, just above a half-century low.

Wages rose unexpectedly fast in January, too. Average hourly pay climbed a sharp 0.6% from December, the fastest monthly gain in nearly two years, and 4.5% from January 2023. The strong hiring and wage growth could complicate or delay the Federal Reserve’s intention to start cutting interest rates later this year.

The latest gains showcased employers’ willingness to keep hiring to meet steady consumer spending. It comes as the intensifying presidential campaign is pivoting in no small part on views of President Joe Biden’s economic stewardship. Public polls show widespread dissatisfaction largely because even though inflation has sharply slowed, most prices remain well above pre-pandemic levels. Some recent surveys, though, show public approval gradually improving.

This week, the Fed took note of the economy’s durability, with Chair Jerome Powell saying “the economy is performing well, the labor market remains strong.” The central bank made clear that while it’s nearing a long-awaited shift toward cutting interest rates, it’s in no hurry to do so.

The details in Friday’s jobs report pointed to broad hiring gains across the economy. Professional and business services, a category that includes managers and technical workers, added 74,000 jobs. Healthcare companies added 70,000, retailers 45,000, governments at all levels 36,000 and manufacturers 23,000.

The unemployment rate has now come in below 4% for two straight years, the longest such streak since the 1960s.

“Overall, the labor market remains strong and continues to defy expectations of a softening,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics. “For Fed officials, these data strongly support patience on rate cuts. Policymakers will be in no rush to lower rates if job and wage growth continue to be robust over coming months.”

To fight inflation, the Fed raised its benchmark rate 11 times beginning in March 2022. The higher borrowing costs were widely expected to boost unemployment and likely cause a recession. Yet the economy has managed to deliver enough job growth to avoid a downturn without accelerating inflation pressures. Inflation cooled throughout 2023, making it likelier that the Fed would achieve a “soft landing” — taming inflation without derailing the economy.

A series of high-profile layoff announcements, from the likes of UPS, Google and Amazon, have raised some concerns about whether they might herald the start of a wave of job cuts. Yet measured against the nation’s vast labor force, the recent layoffs haven’t been significant enough to make a dent in the overall job market. Historically speaking, layoffs are still relatively low, hiring is still solid and the unemployment rate is still consistent with a healthy economy.

Consumers as a whole have proved more resilient than expected in the face of the Fed’s rate hikes. Having socked away savings during the pandemic, most were willing to spend it as the economy reopened. And a wave of early retirements, some of them related to COVID-19, limited the number of people available for work and contributed to a tight labor market.

The gradual improvement in public confidence has emerged in a series of recent surveys. A measure of consumer sentiment by the University of Michigan has jumped in the past two months by the most since 1991. A survey by the Federal Reserve Bank of New York found that Americans’ inflation expectations have reached their lowest point in nearly three years. And a new poll from The Associated Press-NORC Center for Public Affairs Research found that 35% of U.S. adults call the national economy good, up from 30% who said so late last year.

The rate at which Americans are quitting their jobs, considered a reliable predictor of wage trends, has slowed to pre-pandemic levels. That suggests that workers have grown somewhat less confident of finding a better job elsewhere. Employers, as a result, may be less likely to feel pressure to raise wages to keep them — and to increase their prices to make up for their higher labor costs. That cycle can perpetuate inflation.
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Taipei, Taiwan — A new report finds that some global carmakers are applying weaker human rights and responsible-sourcing standards to their joint ventures in China due to pressure from the Chinese government.

The lax standards increase the risk of exposing supply chains to forced labor from China’s Xinjiang Autonomous Region, where more than 1 million Uyghurs and other ethnic minorities have been subject to mass internment and other forms of persecution.

According to the report from Human Rights Watch, titled Asleep at the Wheel, several major global carmakers, including Volkswagen, Tesla, General Motors and Toyota, have failed to minimize the risk of Uyghur forced labor being used in their aluminum supply chain, an important material for automotive parts.

“The aluminum supply chain operates with multiple layers between the car company and the aluminum producer, and these layers create an opaqueness that kind of benefits the car industry because carmakers can buy material without knowing its origin and without knowing the risks to a context like Xinjiang,” Jim Wormington, a senior researcher at HRW and author of the report, told VOA by phone.

In recent years, several international investigations have found evidence of forced labor in Xinjiang. Some research warns that the supply chains of certain industries, such as the solar panel and auto industries, may be exposed to forced labor from Xinjiang.

With about 15% of the aluminum produced in China being sourced from Xinjiang, HRW found evidence through Chinese state media articles, company reports and government statements that aluminum producers in the region are participating in labor transfers.

“The link between Xinjiang, the aluminum industry, and forced labor is Chinese government-backed labor transfer programs, which coerce Uyghurs and members of other Turkic Muslim communities into jobs in Xinjiang and other regions,” the report said. It added that evidence from Chinese government sources shows that aluminum smelters in Xinjiang participated in labor transfers.

Since most aluminum from Xinjiang is mixed with other metals to make aluminum alloys in other parts of China, it’s difficult to determine how much aluminum came from Xinjiang. “Aluminum ingots from Xinjiang are brought and sold by commodities traders, further obscuring the links between Xinjiang and supply chains,” the report said.

At least three aluminum producers or smelters in Xinjiang, including Xinjiang East Hope Nonferrous Metals, Tianshan Aluminum and Xinfa Group Xinjiang, have been identified as either receiving labor transfers targeting Uyghurs and other ethnic minorities or are being closely linked to Xinjiang Production Construction Corps, which plays a key role in the repression of Uyghurs in Xinjiang, according to previous research and investigations.

In response to criticism of facilitating forced labor in Xinjiang, the Chinese Embassy in Washington said the accusation is “a lie of the century fabricated to smear China.”

“The people in Xinjiang have their workers’ rights concretely guaranteed,” a spokesperson from the embassy told VOA in a written response. “This falsehood only proves that some in the United States are using human rights to disadvantage China, disrupt international trade rules and undercut the stability of international industrial and supply chains.”

Despite Beijing’s efforts to push back against accusations related to forced labor in Xinjiang, Human Rights Watch said global carmakers have a responsibility to identify, prevent, and mitigate the presence of forced labor in their supply chains under regulations mandated by the United Nations.

Some carmakers, including Volkswagen and Tesla, told HRW they have limited capacity to address their Chinese joint ventures’ supply chain links to Xinjiang.

Volkswagen, which holds 50% of the equity of its joint venture in China with Chinese automaker SAIC, claimed they are “not legally responsible” for human rights impacts in its joint venture’s supply chain because Germany’s supply chain law “only covers subsidiaries in which companies have decisive influence.”

When asked about the potential links between their Chinese joint venture and an aluminum producer in Xinjiang, Volkswagen admitted they have “no transparency about the supplier relationships” of their Chinese joint ventures.

Despite the difficulty of conducting audits in China and fear of retaliation from the Chinese authorities, Wormington from HRW said there are ways for carmakers to demand more information from Chinese suppliers about the supply chain.

“[While] some carmakers really fear retaliation, since Chinese carmakers want access to global markets, global carmakers can ask their suppliers to get more information on their supply chain,” he told VOA. “There are things that carmakers can do, but in the context where they can’t ask suppliers about human rights issues, that becomes extremely difficult.”

Some foreign jurisdictions, including the United States and European Union, have enacted or are planning to pass laws that require businesses to disclose their supply chains and identify potential links to human rights abuses. Some governments have also imposed import restrictions to prevent products connected to forced labor from entering their countries.

Despite efforts by governments to prevent supply chains from being exposed to elements of forced labor from Xinjiang, some analysts think businesses need to clearly express their concerns to Beijing.

“In an ideal world, businesses would make clear at the highest level to the Chinese government that this is going to be a problem unless businesses can have their staff conduct due diligence freely to ensure there isn’t forced labor in their supply chains,” said William Nee, research and advocacy coordinator at Chinese Human Rights Defenders, a U.S.-based activist network, in a telephone interview.

Yalkun Uluyol, a researcher at Sheffield Hallam University, said companies “must stop directly or indirectly sourcing anything made in the Uyghur region, in part or whole, to ensure their products are free of Uyghur forced labor.”

The companies should make public commitments to such a policy, he added in a written response to VOA.
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Indigenous African grains such as millet and sorghum are known to be nutritious but are not popular with many, especially the Gen Zers who view the grains as food for the poor. To change this narrative, a Kenyan entrepreneur is using the grains to make snacks and breakfast cereals to promote consumption of indigenous grains and foster environmental sustainability, as Juma Majanga reports from Nairobi. Video by Amos Wangwa.
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The Biden administration’s push for clean energy solutions has turned a rural Washington state town into a hub for electric vehicle battery production. VOA’s Natasha Mozgovaya reports from Moses Lake.
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