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China’s factory activity in September recorded its first expansion in six months, an official survey said Saturday, providing another sign that the world’s second-largest economy is gradually improving after its post-pandemic malaise.

According to the government statistics bureau and an official industry group, the monthly purchasing managers’ index rose to 50.2 this month from 49.7 in August measured on a 100-point scale. Numbers above 50 indicate activity is increasing.

Measures of production, new orders and employment all rose from August, the National Bureau of Statistics and the China Federation of Logistics & Purchasing said. But the bureau’s senior statistician, Zhao Qinghe, said the manufacturing industry still faces some difficulties in its recovery and development.

Since China lifted its tough COVID-19 restrictions, its leaders have been trying to boost the economy with a series of measures and promising to support entrepreneurs who generate jobs and wealth.

Performances in some sectors have shown improvements, including in factory output and retail sales. But China’s property crisis is still dragging on its economic growth.

Official data says the index measuring nonmanufacturing commercial activities grew to 51.7 from August’s 51. The composite index rose to 52 from 51.3.

Zhao said the improvement indicated by the latest indexes suggests the level of economic activity is rebounding. As government policies take effect, positive economic factors are increasing, he said.

However, China’s economic rebound remained uneven. Real estate developers are struggling to repay heavy debts in a time of slack demand. Last month, investment in real estate fell 8.8% from the year before.

The heavily indebted Chinese property developer China Evergrande Group Investment suspended trading in its shares Thursday in Hong Kong. It said authorities had informed it that its chairman, Hui Ka Yan, was subjected to “mandatory measures in accordance with the law due to suspicion of illegal crimes.”

Observers are watching how other near-term data will play out, including those on consumer spending during the eight-day autumn holiday period that began Friday. The break — which covered the Mid-Autumn Festival Friday and includes National Day on Sunday — is the longest week of public holidays since COVID rules were eased in December.

China State Railway Group Co. recorded a record daily high of 20 million passenger rail trips Friday, official news agency Xinhua reported.

China’s economy grew at a 6.3% annual pace in the second quarter of 2023, much slower than the 7%-plus growth that analysts had forecast based on the anemic pace of activity the year before. Roughly 1 in 5 young workers is unemployed — a record high that adds to pressures on consumer spending.
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The United States is on the brink of a federal government shutdown after hard-right Republicans in Congress rejected a longshot effort to keep offices open as they fight for steep spending cuts and strict border security measures that Democrats and the White House say are too extreme.

With no deal in place by midnight Saturday, federal workers will face furloughs, more than 2 million active-duty and reserve military troops will work without pay and programs and services that Americans rely on from coast to coast will begin to face shutdown disruptions.

The Senate will be in for a rare Saturday session to advance its own bipartisan package that is supported by Democrats and Republicans and would fund the government for the short-term, through November 17.

But even if the Senate can rush to wrap up its work this weekend to pass the bill, which also includes money for Ukraine aid and U.S. disaster assistance, it won’t prevent an almost certain shutdown amid the chaos in the House. On Friday, a massive hard-right revolt left Speaker Kevin McCarthy’s latest plan to collapse.

“Congress has only one option to avoid a shutdown — bipartisanship,” said Senate Majority Leader Chuck Schumer, a Democrat from New York.

Senate Republican leader Mitch McConnell of Kentucky echoed the sentiment, warning his own hard-right colleagues there is nothing to gain by shutting down the federal government.

“It heaps unnecessary hardships on the American people, as well as the brave men and women who keep us safe,” McConnell said.

The federal government is heading straight into a shutdown that poses grave uncertainty for federal workers in states all across America and the people who depend on them — from troops to border control agents to office workers, scientists and others.

Families that rely on Head Start for children, food benefits and countless other programs large and small are confronting potential interruptions or outright closures. At the airports, Transportation Security Administration officers and air traffic controllers are expected to work without pay, but travelers could face delays in updating their U.S. passports or other travel documents.

Congress has been unable to fund the federal agencies or pass a temporary bill in time to keep offices open for the start of the new budget year Sunday in large part because McCarthy, a Republican from California, has faced unsurmountable resistance from right-flank Republicans who are refusing to run government as usual.

McCarthy’s last-ditch plan to keep the federal government temporarily open collapsed in dramatic fashion Friday as a robust faction of 21 hard-right holdouts opposed the package, despite steep spending cuts of nearly 30% to many agencies and severe border security provisions, calling it insufficient.

The White House and Democrats rejected the Republican approach as too extreme. The Democrats voted against it.

The House bill’s failure a day before Saturday’s deadline to fund the government leaves few options to prevent a shutdown.

“It’s not the end yet; I’ve got other ideas,” McCarthy told reporters.

Later Friday, after a heated closed-door meeting of House Republicans that pushed into the evening, McCarthy said he was considering options — among them, a two-week stopgap funding measure similar to the effort from hard-right senators that would be certain to exclude any help for Ukraine in the war against Russia.

Even though the House bill already cut routine Ukraine aid, an intensifying Republican resistance to the war effort means the Senate’s plan to attach $6 billion that Ukraine’s president, Volodymyr Zelenskyy, is seeking from the U.S. may have support from Democrats but not from most of McCarthy’s Republicans.

Republican Senator Rand Paul of Kentucky is working to stop that aid in the Senate package.

The White House has brushed aside McCarthy’s overtures to meet with President Joe Biden after the speaker walked away from the debt deal they brokered earlier this year that set budget levels.

Catering to his hard-right flank, McCarthy had returned to the spending limits the conservatives demanded back in January as part of the deal-making to help him become the House speaker.

The House package would not have cut the Defense, Veterans or Homeland Security departments but would have slashed almost all other agencies by up to 30% — steep hits to a vast array of programs, services and departments Americans routinely depend on.

It also added strict new border security provisions that would kickstart building a wall at the southern border with Mexico, among other measures. Additionally, the package would have set up a bipartisan debt commission to address the nation’s mounting debt load.

As soon as the floor debate began, McCarthy’s chief Republican critic, Representative Matt Gaetz of Florida, announced he would vote against the package, urging his colleagues to “not surrender.”

Gaetz said afterward that the speaker’s bill “went down in flames as I’ve told you all week it would.”

He and others rejecting the temporary measure want the House to keep pushing through the 12 individual spending bills needed to fund the government, typically a weekslong process, as they pursue their conservative priorities.

Republican leaders announced later Friday that the House would stay in session next week, rather than return home, to keep working on some of the 12 spending bills.

Some of the Republican holdouts, including Gaetz, are allies of former President Donald Trump, who is Biden’s chief rival in the 2024 race. Trump has been encouraging the Republicans to fight hard for their priorities and even to “shut it down.”

The hard right, led by Gaetz, has been threatening McCarthy’s ouster, with a looming vote to try to remove him from the speaker’s office unless he meets the conservative demands. Still, it’s unclear if any other Republican would have support from the House majority to lead the party.

Late Friday, Trump turned his ire to McConnell on social media, complaining the Republican leader and other GOP senators are “weak and ineffective” and making compromises with Democrats. He urged them, “Don’t do it!”
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How do you cook a meal when a staple ingredient is unaffordable? 

This question is playing out in households around the world as they face shortages of essential foods like rice, cooking oil and onions. That is because countries have imposed restrictions on the food they export to protect their own supplies from the combined effect of the war in Ukraine, El Nino’s threat to food production and increasing damage from climate change. 

For Caroline Kyalo, a 28-year-old who works in a salon in Kenya’s capital of Nairobi, it was a question of trying to figure out how to cook for her two children without onions. Restrictions on the export of the vegetable by neighboring Tanzania has led prices to triple. 

Kyalo initially tried to use spring onions instead, but those also got too expensive. As did the prices of other necessities, like cooking oil and corn flour. 

“I just decided to be cooking once a day,” she said. 

Despite the East African country’s fertile lands and large workforce, the high cost of growing and transporting produce and the worst drought in decades led to a drop in local production. Plus, people preferred red onions from Tanzania because they were cheaper and lasted longer. By 2014, Kenya was getting half of its onions from its neighbor, according to a U.N. Food Agriculture Organization report. 

At Nairobi’s major food market, Wakulima, the prices for onions from Tanzania were the highest in seven years, seller Timothy Kinyua said. 

Some traders have adjusted by getting produce from Ethiopia, and others have switched to selling other vegetables, but Kinyua is sticking to onions. 

“It’s something we can’t cook without,” he said. 

Tanzania’s onion limits this year are part of the “contagion” of food restrictions from countries spooked by supply shortages and increased demand for their produce, said Joseph Glauber, senior research fellow at the International Food Policy Research Institute. 

Globally, 41 food export restrictions from 19 countries are in effect, ranging from outright bans to taxes, according to the institute. 

India banned shipments of some rice earlier this year, resulting in a shortfall of roughly a fifth of global exports. Neighboring Myanmar, the world’s fifth-biggest rice supplier, responded by stopping some exports of the grain. 

India also restricted shipments of onions after erratic rainfall — fueled by climate change — damaged crops. This sent prices in neighboring Bangladesh soaring, and authorities are scrambling to find new sources for the vegetable. 

Elsewhere, a drought in Spain took its toll on olive oil production. As European buyers turned to Turkey, olive oil prices soared in the Mediterranean country, prompting authorities there to restrict exports. Morocco, also coping with a drought ahead of its recent deadly earthquake, stopped exporting onions, potatoes and tomatoes in February. 

This isn’t the first time food prices have been in a tumult. Prices for staples like rice and wheat more than doubled in 2007-2008, but the world had ample food stocks it could draw on and was able to replenish those in subsequent years. 

But that cushion has shrunk in the past two years, and climate change means food supplies could very quickly run short of demand and spike prices, said Glauber, former chief economist at the U.S. Department of Agriculture. 

“I think increased volatility is certainly the new normal,” he said. 

Food prices worldwide, experts say, will be determined by the interplay of three factors: how El Nino plays out and how long it lasts, whether bad weather damages crops and prompts more export restrictions, and the future of Russia’s war in Ukraine. 

The warring nations are both major global suppliers of wheat, barley, sunflower oil and other food, especially to developing nations where food prices have risen and people are going hungry. 

An El Nino is a natural phenomenon that shifts global weather patterns and can result in extreme weather, ranging from drought to flooding. While scientists believe climate change is making this El Nino stronger, its exact impact on food production is impossible to glean until after it’s occurred. 

The early signs are worrying. 

India experienced its driest August in a century, and Thailand is facing a drought that has sparked fears about the world’s sugar supplies. The two are the largest exporters of sugar after Brazil. 

Less rainfall in India also dashed food exporters’ hopes that the new rice harvest in October would end the trade restrictions and stabilize prices. 

“It doesn’t look like [rice] prices will be coming down anytime soon,” said Aman Julka, director of Wesderby India Private Limited. 

Most at risk are nations that rely heavily on food imports. The Philippines, for instance, imports 14% of its food, according to the World Bank, and storm damage to crops could mean further shortfalls. Rice prices surged 8.7% in August from a year earlier, more than doubling from 4.2% in July. 

Food store owners in the capital of Manila are losing money, with prices increasing rapidly since September 1 and customers who used to snap up supplies in bulk buying smaller quantities. 

“We cannot save money anymore. It is like we just work so that we can have food daily,” said Charina Em, 32, who owns a store in the Trabajo market. 

Cynthia Esguerra, 66, has had to choose between food or medicine for her high cholesterol, gallstones and urinary issues. Even then, she can only buy half a kilo of rice at a time — insufficient for her and her husband. 

“I just don’t worry about my sickness. I leave it up to God. I don’t buy medicines anymore, I just put it there to buy food, our loans,” she said. 

The climate risks aren’t limited to rice but apply to anything that needs stable rainfall to thrive, including livestock, said Elyssa Kaur Ludher, a food security researcher at the ISEAS-Yusof Ishak Institute in Singapore. Vegetables, fruit trees and chickens will all face heat stress, raising the risk that food will spoil, she said. 

This constricts food supplies further, and if grain exports from Ukraine aren’t resolved, there will be additional shortages in feed for livestock and fertilizer, Ludher said. 

Russia’s July withdrawal from a wartime agreement that ensured ships could safely transport Ukrainian grain through the Black Sea was a blow to global food security, largely leaving only expensive and divisive routes through Europe for the war-torn country’s exports. 

The conflict also has hurt Ukraine’s agricultural production, with analysts saying farmers aren’t planting nearly as much corn and wheat. 

“This will affect those who already feel food affordability stresses,” Ludher said. 
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Low-income Kenyans have been hit hardest by high inflation, a new report says.

Low-income households experienced a challenging 2022 because of the increased cost of living, said Rose Ngugi, director of the Kenya Institute for Public Policy Research and Analysis, or KIPPRA.

“When food inflation is going up, then everybody is affected, and more so the low-income households, who spend about 60% of their income on food,” Ngugi said. “So, anytime food prices go up, then the cost-of-living increases, and the low-income earners are hit or bear a heavy burden.”

KIPPRA recently released the Kenya Economic Report 2023, which said officials tried this year to reduce 2022’s inflation rate of 9.6% to a range of 2.5% to 7.5%, the targeted range of Kenya’s Central Bank.

The report said 77% of workers earned less than the minimum wage, which covers approximately half of living costs.

Kenyan Finance Minister Njuguna Ndung’u blamed companies’ appetite for monopoly and dominance, which reduces market competition.

“The new administration is concerned with the problems that have led many Kenyans to sink into abject poverty,” Ndung’u said. “One of the identified problems is the market capture, so that those at the bottom of the pyramid do not get returns for their sweat and investment.”

After years of borrowing to finance infrastructure projects such as roads and railways, Kenya now struggles to repay the debt. The current government under President William Ruto emphasizes the importance of robust revenue collection to service the country’s debt and economic development.

Samuel Nyandemo, an economics lecturer at the University of Nairobi, said the government needs to support citizens by reducing taxes on basic commodities.

“The president means well for this country,” Nyandemo said. “He needs to come out of the box and put away this appetite of borrowing with a view of raising revenue, removing subsidies gradually and, more importantly, reducing certain taxes — particularly taxes relating to increasing the cost of living.

“We need to see the gradual removal of subsidies on maize flour, on oil products, cooking oil and, more importantly, on fuel,” he said.

Kenya had record-high fuel prices in September, with gasoline reaching $1.42 per liter. That price heightened concerns among an already financially burdened population.

The government has asked its creditors, particularly China, for more time to restore economic stability after 10 years of borrowing.
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At sunset, Bangkok’s Huai Khwang district comes alive with Chinese-speaking pedestrians bustling to their favorite hot pot restaurants among the many lining Pracharat Bamphen Road.

The hungry parade is just one indication of how an influx of Chinese residents is transforming the 15-square-kilometer (5.8-square-mile) neighborhood in the city’s eastern reaches, with new arrivals restoring the pre-pandemic inflow.

With the Chinese Embassy in nearby Din Daeng exerting a magnet-like force for Huai Khwang, local Thais now call the area “New Chinatown.” Some refer to it as a special administration region of China, akin to Hong Kong or Macao, dubbing it the “Taiguo.”

And although Thailand celebrates the new year, or Songkran, on April 13, Huai Khwang district officials held a Lunar New Year celebration on January 19 this year to recognize the changing demographics.

The changes are coming with challenges, analysts say. Rising rents and prices for residential and commercial properties reflect the arrival of Chinese emigrants who are willing, and able, to pay more than local Thais, many of whom now face a housing affordability crunch.

Patcharee Pabua, a 42-year-old employee of a nonprofit organization, has lived and worked in Huai Khwang for more than seven years. She has seen the neighborhood change in real time — before, during and after the pandemic — as the area transformed from a Thai neighborhood to a Chinese enclave.

“When COVID-19 initially hit, many Chinese individuals returned to China, and Chinese-owned businesses closed down,” she said. “However, they returned once the COVID situation improved. Now, it’s difficult to spot Thai restaurants along Pracharat Bamphen street. It’s predominantly Chinese restaurants.”

The arrival of so many Chinese businesses, almost every one of them with a Thai partner to meet restrictions on foreign ownership, has driven up land rental prices.

Unable to compete with deep-pocketed Chinese expats, many Thai business owners who can’t afford the higher rents go out of business. Only local Thais who operate food stalls that don’t require rented land are surviving, according to longtime Huai Khwang residents.

Pabua said that the rising prices are centered on condominium costs. Lower-tier apartments are still relatively affordable for Thais, with monthly rents ranging from 3,000 to 10,000 baht, she said, or about $82 to $273.

This price range suits many Thais, whose average monthly income is around $382, according to the Department of Employment’s statistics. Those prices also attract Chinese nationals, who make up roughly 50% of the residents in her apartment complex, Pabua estimated.

Bangkok condo rents, which decreased during the pandemic, have now surged to new highs. Data from The List, a real estate site, from February 2020, show a median monthly rent in Huai Khwang of $409. As of May 1, 2023, the rental prices for all condominiums in Huai Khwang averaged around $622, according to property aggregator Dotproperty.

Former real estate agent Chitipat Inna, who specializes in representing properties in Huai Khwang and nearby areas, said that most of his rental clients are Chinese, often seeking short-term leases of three to six months.

Chinese buyers appear undeterred by the rising prices.

Pabua, whose apartment in Huai Kwang costs $136 per month, said, “It’s no surprise that most condo renters are Chinese, as they often have a larger accommodation budget. Many Thais simply can’t afford such rents.”
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