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TAIPEI, TAIWAN — The Lunar New Year, also called the Chinese New Year or the Spring Festival in China, is traditionally celebrated with tables piled with food and red envelopes filled with cash for children.

In past years, smoke from outdoor fire pits filled the air throughout the morning and afternoon, as people burned paper money to ensure that even the ancestors can feel the financial boon that the biggest holiday of the year usually brings to the living.

In recent years, however, China’s economic slowdown has altered the atmosphere of Chinese New Year. Facing increasing financial burdens, young people are reexamining long-held traditions as they welcome the Year of the Snake, opting for more frugal alternatives during this year’s eight-day-long national holiday.

A 30-year-old legal worker from Shanghai, who did not want to use his name for fear of reprisal, told VOA that stores selling trinkets and supplies for the holiday appeared unusually deserted.

He said people appear to be forgoing large purchases, which manifests mostly in the custom of giving money-filled red envelopes — the color symbolizes good luck and prosperity in the new year.

“As with goods purchased for the new year, red envelopes have become more simple and less thick,” the Shanghai resident said.

He told VOA he usually gives his niece an envelope with around $140 inside, but this year, he plans to give her $90.

Talk on social media

Frustration with the economy is being expressed on social media — young people are saturating online threads with images and comments describing the pressure and criticism they will encounter during the holiday.

An account on RedNote called “I don’t give a damn about the banana” posted a series of funny images detailing the levels of anxiety young, unmarried and unemployed people will face during the holiday.

“You haven’t earned any money but you still have to give the younger kids a red envelope,” the user wrote, over a picture of a woman giving a small bill to a cat.

Many others offer advice to ease fears of being scrutinized by the family.

“Unique-me” wrote on the Chinese social media platform Weibo: “Now the economy is not good, it’s good to just have an income. If you are in a difficult situation, you can admit that you don’t make much. There is no need to be generous. Just show your appreciation. Those who have opinions about you because of the size of your red envelope, let them have opinions.”

Faced with economic woes, some local governments are advocating frugality. Baise City, Guangxi, suggested that the amount of money in a red envelope should not exceed $3.

The initiative also encourages the younger generation to give their elders “blessing gifts” with commemorative significance or emotional value instead of red envelopes.

This move has attracted widespread attention, with many social media users expressing their support for the program’s positive impact on financial and mental health. Some suggested that blessing gifting be promoted nationwide.

Workplace anxiety

The size of red envelopes exchanged in the workplace and increasing leniency on new year vacation day allowances have stoked fears of job insecurity among employees.

“The economic downturn is not only reflected in my meager salary, but also in the red envelopes given by the boss every year,” “Life with Greed” said on Weibo.

A user called “Let’s try to be happy” commented on Weibo: “My company is in a slump. New Year gifts have not been issued. In previous years, the maximum New Year holiday was 20 days, but this year it was more than a month. I don’t know what it will be like next year. It feels like it is on the verge of bankruptcy.”

A 39-year-old government worker in Dalian, who spoke to VOA on the condition of anonymity because of security fears, said despite having a family and a stable job, she will limit her holiday spending.

“We have to reduce some unnecessary expenses, such as buying less candy and snacks, and we try to buy simple things outside when worshiping,” the wife and mother said.

The changes in Chinese Spring Festival customs are affected by many factors, but the economy is most critical, said Sun Guoxiang, a professor in the international affairs and business department at Nanhua University in Taiwan.

“The economic downturn has led to a decline in consumption capacity. Young people pay more attention to rational consumption and actual needs, which reduces the relatively high-cost parts of traditional Spring Festival customs,” Sun said, adding that pressure from family about issues that include work, marriage and education cannot be ignored as drivers of this trend.

He said the future of Chinese New Year and how it will be celebrated will depend heavily on China’s development and whether the country can overcome its current economic decline.
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Brussels, Belgium — The EU promised Thursday an “action plan” to help the bloc’s beleaguered auto sector, as it held talks with industry leaders who have sounded the alarm over emissions fines and Chinese competition. 

The European Union is under pressure to help a sector that employs 13 million people and accounts for about seven percent of the bloc’s GDP, as it seeks to revamp the continent’s lagging competitiveness. 

“The European automotive industry is at a pivotal moment, and we acknowledge the challenges it faces. That is why we are acting swiftly to address them,” EU chief Ursula von der Leyen said, promising an “action plan” by early March.  

Chaired by the European Commission president, the so-called “strategic dialogue” brought together carmakers, suppliers, civil society groups and trade unions. 

Representatives of 22 industry “players” including Volkswagen, BMW, Mercedes and Renault, were in attendance, the commission said. 

The get-together comes as the commission embarks on a pro-business shift, with firms complaining its focus on climate and business ethics has resulted in excessive regulations. 

On Wednesday, it unveiled a blueprint to revamp the bloc’s economic model, amid worries that low productivity, high energy prices, weak investments and other ills are leaving the EU behind the United States and China. 

The car industry has been plunged into crisis by high manufacturing costs, a stuttering switch to electric vehicles (EV) and increased competition from China. 

Announcements of possible job cuts have multiplied. Volkswagen plans to axe 35,000 positions across its German locations by 2030. 

Emissions fines 

Carmakers have been calling for “flexibility” on the steep emission fines they could face in 2025 — something the bloc’s new growth blueprint said should be in the cards. 

“Penalizing immediately the industry, financially, is not a good idea, because the industry is in trouble and… has to restructure itself, which will cost a lot of money,” Patrick Koller, CEO of French parts producer Forvia, said ahead of the meeting. 

“When you look back, we have heavy industries which disappeared from Europe completely, because of lack of competitiveness.”  

To combat climate change, the EU introduced a set of emission-reduction targets that should lead to the sale of fossil-fuel-burning cars, being phased out by 2035. 

About 16 percent of the planet-warming carbon dioxide (CO2) gas released into the atmosphere in Europe comes from cars’ exhaust pipes, the EU says. 

As of this year, carmakers have to lower the average CO2 emitted by all newly sold vehicles by 15 percent from 2021 levels, or pay a penalty — with tougher cuts further down the road, according to advocacy group Transport & Environment. 

The idea is to incentivize firms to increase the share of EVs, hybrids and small vehicles they sell compared to, for instance, diesel-guzzling SUVs.  

But some manufacturers complain that is proving harder than expected as consumers have yet to warm to EVs, which have higher upfront costs and lack an established used-vehicle market. 

“We want to stick to the objective… but we can smoothen the way,” von der Leyen said on Wednesday.  

Critics say lifting the fines would unfairly penalize producers who have invested to comply and remove a key incentive to speed up electric transitions.  

Sales and tariffs

EV sales slid 1.3 percent in Europe last year, accounting for 13.6 percent of all sales, according to the European Automobile Manufacturers’ Association (ACEA), an industry group. 

A senior EU official said incentives for businesses to buy electric are an option.  

“Company fleets” account for more than half of new cars purchased in Europe, the official said.  

The 27-nation bloc could also seek to improve a patchy charging network, modernize grids to allow for faster charging, bring down energy costs, cut regulations and loosen China’s grip on battery production, analysts say. 

Meanwhile, the market share of Chinese electric cars has ballooned in the EU, to reach 14 percent in the second quarter of 2024.  

Brussels has imposed extra import tariffs on China-made electric vehicles of up to 35.3 percent after concluding Beijing’s state support was unfairly undercutting European automakers. 

The move was opposed by Germany and other EU members, and it is the object of a lawsuit by BMW, Tesla and several Chinese automakers.             
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New York — Wall Street is tumbling Monday on fears the big U.S. companies that have feasted on the artificial-intelligence frenzy are under threat from a competitor in China that can do similar things for much cheaper.

The S&P 500 was down 1.9% in early trading. Big Tech stocks that have been the market’s biggest stars took the heaviest losses, with Nvidia down 11.5%, and they dragged the Nasdaq composite down 3.2%. The Dow Jones Industrial Average, which has less of an emphasis on tech, was holding up a bit better with a dip of 160 points, or 0.4%, as of 9:35 a.m. Eastern time.

The shock to financial markets came from China, where a company called DeepSeek said it had developed a large language model that can compete with U.S. giants but at a fraction of the cost. DeepSeek’s app had already hit the top of Apple’s App Store chart by early Monday morning, and analysts said such a feat would be particularly impressive given how the U.S. government has restricted Chinese access to top AI chips.

Skepticism, though, remains about how much DeepSeek’s announcement will ultimately shake the AI supply chain, from the chip makers making semiconductors to the utilities hoping to electrify vast data centers running those chips.

“It remains to be seen if DeepSeek found a way to work around these chip restrictions rules and what chips they ultimately used as there will be many skeptics around this issue given the information is coming from China,” according to Dan Ives, an analyst with Wedbush Securities.

DeepSeek’s disruption nevertheless rocked stock markets worldwide.

In Amsterdam, Dutch chip company ASML slid 8.9%. In Tokyo, Japan’s Softbank Group Corp. lost 8.3% and is nearly back to where it was before spurting on an announcement that it was joining a partnership trumpeted by the White House that would invest up to $500 billion in AI infrastructure.

And on Wall Street, shares of Constellation Energy sank 16.9%. The company has said it would restart the shuttered Three Mile Island nuclear power plant to supply power for Microsoft’s data centers.

All the worries sent a gauge of nervousness among investors holding U.S. stocks toward its biggest jump since August. They also sent investors toward bonds, which can be safer investments than any stock. The rush sent the yield of the 10-year Treasury down to 4.53% from 4.62% late Friday.

It’s a sharp turnaround for the AI winners, which had soared in recent years on hopes that all the investment pouring into the industry would lead to a possible remaking of the global economy.

Nvidia’s stock had soared from less than $20 to more than $140 in less than two years before Monday’s drop, for example.

Other Big Tech companies had also joined in the frenzy, and their stock prices had benefited too. It was just on Friday that Meta Platforms CEO Mark Zuckerberg was saying he expects to invest up to $65 billion this year, while talking up a massive data center it would build in Manhattan.

In stock markets abroad, movements for indexes across Europe and Asia weren’t as forceful as for the big U.S. tech stocks. France’s CAC 40 fell 0.6%, and Germany’s DAX lost 0.8%.

In Asia, stocks edged 0.1% lower in Shanghai after a survey of manufacturers showed export orders in China dropping to a five-month low.

The Federal Reserve holds its latest policy meeting later this week. Traders don’t expect recent weak data to push the Fed to cut its main interest rate. They’re virtually certain the central bank will hold steady, according to data from CME Group.
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China’s annual mass migration ahead of the Lunar New Year will peak with billions of trips anticipated during this year’s holiday, which begins Tuesday.

An estimated 9 billion trips are expected. This year’s holiday lasts from Jan. 28 through Feb. 4 and marks the arrival of the Year of the Snake. Authorities in China extended the annual break an extra day, so the public holiday will last eight days this year.

During the holiday, travel is expected to pick up domestically and internationally. The government said it expects trips by train to surpass 510 million, with 90 million more traveling by air. Inside the country, most will travel by car.

For trips overseas, travel to Southeast Asia has surged, with ticket volumes to Vietnam, Singapore and Indonesia rising by more than 50%, according to data from the World Travel and Tourism Council. Additionally, demand for travel to Hong Kong has nearly doubled, and Japan is seeing a 58% increase in airline ticket purchases.

While the Lunar New Year is known as a festive time characterized by colorful lanterns, parades and lion dances, it holds more than just cultural significance to Chinese authorities who see the period as an opportunity to boost a sluggish economy.

That is one key reason authorities increased the holiday to eight days. They also launched several efforts to help revive weak consumer spending, such as promoting winter-themed holiday destinations and ensuring affordable airfares, according to officials at a State Council press conference in Beijing.

Despite the efforts, Reuters reported businesses and consumers appear to be spending less than usual during the holiday season, citing concerns over a prolonged property slump and worries over job security.

Throughout the past year, China has implemented a series of measures aimed at addressing those concerns, including stimulus measures such as cutting interest rates, increasing pensions and widening trade-in programs for consumer goods.

One industry that appears to have gotten a boost from the festival season is cinema.

The film industry in China had struggled recently, seeing a 22.6% decrease in total box office revenue in 2024. However, according to data from Maoyan, a Chinese ticketing platform, movie tickets exceeded $55 million by Jan. 23, the fastest presales for the Lunar New Year season.

A large part of that increased demand has been from the film “Legends of the Condor Heroes,” starring Xiao Zhan, an actor and singer who is also a brand ambassador for luxury goods companies such as Gucci and Tod’s.

Shops and restaurants also hope to see an increase in spending that mirrors the film industry over the course of the holiday.

Some information in this report came from Reuters and The Associated Press.
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President Donald Trump laid out his approach to foreign investment to the world’s largest gathering of global business leaders, offering investors a take-it-or-leave-it deal to build in the U.S. or face stiff tariffs. VOA White House Correspondent Anita Powell reports.
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WASHINGTON — U.S. lawmakers introduced a bipartisan bill on Thursday that would revoke China’s preferential trade status with the United States, phase in steep tariffs and end the “de minimis” exemption for low-value Chinese imports.

The bill, introduced by John Moolenaar, the Republican chair of the House of Representatives select committee on China, comes after President Donald Trump issued a memo on Monday asking his cabinet to assess legislation on the Permanent Normal Trade Relations designation for Beijing.

Congress approved PNTR for China in 2000, paving the way for its entry into the World Trade Organization. But the U.S. has routinely found the large role of the state in China’s economy, including hefty government subsidies for strategic industries, to violate the global trade body’s rules.

Trump, who has railed against China’s vast trade surplus with the U.S., has vowed more duties on Chinese goods.

Moolenaar’s Restoring Trade Fairness Act was co-sponsored by Democratic Representative Tom Suozzi and introduced with a companion bill in the Senate. Moolenaar said granting China PNTR had ushered in waves of Chinese imports, depleted U.S. manufacturing and made the U.S. susceptible to economic coercion from its “foremost adversary.”

“This gamble failed,” Moolenaar said in a statement. “This legislation will safeguard U.S. national security, enhance supply chain resilience, and bring manufacturing jobs back to America and our allies.”

China’s embassy in Washington did not immediately respond to a request for comment.

The path for the bill to become law was not immediately clear, but Republicans hold majorities in both the House and Senate. Lawmakers from both parties say they want to increase U.S. companies’ ability to compete with China.

Waves of U.S. tariffs by Trump in his first term and by the Biden administration had effectively ended PNTR treatment for China.

Nonetheless, the proposed legislation would end annual recertification of the designation and codify minimum 35% tariffs for non-strategic goods and minimum 100% tariffs for strategic goods. The duties would be phased in over five years — 10% in the first year, 25% in the second year, 50% in year four and 100% by year five.

The bill would also end de minimis treatment for certain “covered nations,” including China.

Trump has called for changes to the $800 de minimis duty-free exemption for low-value shipments often blamed for illicit imports of fentanyl precursor chemicals from China.

Critics of de minimis say it contributes to the United States’ trade deficit with China — $279 billion in 2023, according to the U.S. Census Bureau.
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ABUJA, NIGERIA — Nigerian authorities said this week that the nation’s new partnership status with the BRICS bloc could unlock critical opportunities in trade, investment and agriculture.

Nigerian President Bola Tinubu’s special adviser told Lagos-based Channels Television that the partnership, which became official Friday, is pivotal to promoting trade, investment, food security, infrastructure development and energy security.

The adviser, Daniel Bwala, said the pact enables Nigeria to forge deeper strategic relationships with BRICS members beyond traditional bilateral partnerships.

BRICS — an acronym for the founding members of Brazil, Russia, India and China, with South Africa added a year later — is a political and economic bloc. BRICS introduced the “partner country” category in October. Partner nations are a step below full membership.

Economist Emeka Okengwu praised the arrangement.

“Look at the members of BRICS and the economies that they bring to the table. Brazil is probably the biggest producer of livestock and its products globally, then to aircraft, aviation and renewable energy,” Okengwu said. “Look at Russia, India, China and South Africa, Egypt and Ethiopia. These are big populations.

If you put them together, they probably bring 10 times the value of whatever Europe and America can give to you,” he said.

In total, the 10 BRICS member states make up 40% of the global economy and 55% of the global population.

In a statement, Nigeria’s Foreign Affairs Ministry said that the country’s participation in BRICS reflects its commitment to leveraging global economic opportunities to advance national development goals.

Last December, Nigeria intensified efforts to join not only BRICS but also the G20 organization of the world’s major economies and the BRICS New Development Bank.

Okengwu said the partnership will help Nigeria at “being productive, taking goods and services in there, being able to meet global standards and being competitive.”

“It would’ve been horrible if Nigeria was not in BRICS and then we would’ve been left hanging with all these challenges we’re having with our neighbors in the Sahel,” Okengwu said.

Despite the optimism, analysts say Nigeria faces significant hurdles.

The country’s struggling economy and inadequate infrastructure raise concerns about its capacity for meaningful growth through BRICS. There’s also concern about how Nigeria will balance its alliances with Western nations while deepening ties with BRICS.

However, Ndu Nwokolo, an economist with Nextier, suggested the challenge is manageable.

“It’s about how smart you are to benefit from everybody,” Nwokolo said. “With what we’re seeing by some of the pronouncements of [U.S.] President [Donald] Trump, Nigeria may benefit from it because already Trump is talking about increasing taxes [tariffs] even within ally states.

“So, if he’s going to do that with countries we think are traditional partners, so who’s telling you that he will not do more with countries that he considers outsiders,” he said. “So, we’re looking at a situation where countries that are not originally traditional allies of America will try to pull together, and Nigeria may benefit from that.”
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Many American voters are hopeful that President Donald Trump’s second term, which began on Jan. 20, will usher in a period of economic prosperity — much like they felt during his first term.

However, the economy he is inheriting this time around is markedly different from the one he inherited eight years ago, pre-pandemic. And he faces new challenges.

While former President Joe Biden has defended his handling of the country’s economic recovery — pointing to strong job growth and falling inflation — high prices persist. A large national debt, climate change and some of Trump’s own policy proposals may further complicate efforts to boost the economy.
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President Donald Trump will issue a broad trade memo on Monday that stops short of imposing new tariffs on his first day in office but directs federal agencies to evaluate U.S. trade relationships with China, Canada and Mexico, a Trump administration official said.

After weeks of intense global speculation over which duties Trump would impose immediately after being sworn in as U.S. president, news that Trump would take more time on tariffs drove a relief rally in global stocks and a dive in the dollar against major currencies.

Trump mentioned no specific tariff plans in his inaugural address but repeated his intention to create the External Revenue Service, a new agency to collect “massive amounts” of tariffs, duties and other revenues from foreign sources.  

“I will immediately begin the overhaul of our trade system to protect American workers and families,” Trump said. “Instead of taxing our citizens to enrich other countries, we will tariff and tax foreign countries to enrich our citizens.”

Trump added that his policies would make America “a manufacturing nation once again.”

During his election campaign, Trump vowed to impose steep tariffs of 10% to 20% on global imports into the U.S. and 60% on goods from China to help reduce a trade deficit that now tops $1 trillion annually.

He said after his November election that he would sign “all necessary documents” upon taking office to impose an immediate 25% import surcharge on imports from Canada and Mexico if they failed to clamp down on the flow of illicit drugs and migrants entering the U.S. illegally.

Such duties would tear up long-standing trade agreements, upend supply chains and raise costs, according to trade experts.  

The official, confirming a Wall Street Journal report that cited a summary of Trump’s memo, said the new president will instead direct agencies to investigate and remedy persistent trade deficits and address unfair trade and currency policies by other nations.  

The memo will single out China, Canada and Mexico for scrutiny but will not announce new tariffs, the official said. It will direct agencies to assess Beijing’s compliance with its 2020 trade deal with the U.S., as well as the status of the U.S.-Mexico-Canada Agreement, the official said.

Relief rally

The U.S. dollar slumped broadly on the news against a basket of major trading partners’ currencies, with particularly large upswings in the euro, Canadian dollar, Mexican peso and Chinese yuan. MSCI’s measure of global stock markets rose. U.S. financial markets are closed for the Martin Luther King Jr. Day holiday.

Some industry groups and trade lawyers in Washington had speculated that Trump would invoke the International Emergency Economic Powers Act, a law with sweeping powers to control imports in times of national emergency, to impose immediate tariffs.

But the forthcoming trade memo signals a more methodical approach that would likely involve trade investigations under other legal authorities such as the Section 232 national security trade law and the Section 301 unfair trade practices statute. Trump invoked these laws during his first term, and probes on steel and aluminum and Chinese imports took months to complete.

“It sounds like maybe he’s been listening to the people telling him that immediate tariffs would really hurt the financial markets,” said William Reinsch, a trade expert at the Center for Strategic and International Studies.

But Reinsch and other trade analysts say they still expect Trump to press ahead with a global tariff early in his administration.

“The universal tariff was a core part of the economic plan he ran on, and I think he’s going to do what he said he would,” said Kelly Ann Shaw, a former White House trade adviser during Trump’s first term.

“This is an idea he’s supported for a long time,” Shaw, now with the Hogan Lovells law firm, said in an interview last week.

Past trade playbook  

In his 2017-2021 first term, Trump’s administration used investigations to impose tariffs on steel and aluminum imports and launch duties on some $370 billion worth of Chinese imports, igniting a tit-for-tat tariff war between the world’s two largest economies.

The U.S. and China ended the conflict in 2020 with a deal for Beijing to boost its purchases of U.S. exports from farm goods to aircraft by $200 billion annually but never followed through as the pandemic hit. The forthcoming memo indicates that Trump’s administration will try to push China to keep those commitments.

Trump also had threatened to quit the 1994 North American Free Trade Agreement, blaming it for draining U.S. manufacturing jobs to Mexico and prompting a renegotiation of the trade pact with tighter rules of origin for autos and stronger labor and environmental standards.

Trump won a sunset provision in USMCA that will allow him to renegotiate it again in 2026, and the tariff threats against Mexico and Canada are seen by some trade analysts as a gambit to open those talks early. 
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BEIJING — China recorded one of its slowest rates of economic growth in decades last year, data showed Friday, as leaders nervously eye a potential trade standoff with incoming U.S. President-elect Donald Trump.

Beijing has in recent months announced its most aggressive support measures in years in a bid to reignite an economy that has suffered on multiple fronts, including a prolonged property market debt crisis and sluggish consumer spending.

But the economy grew 5% last year, official data from Beijing’s National Bureau of Statistics (NBS) showed Friday, slightly above the 4.9% forecast in an AFP survey of analysts.

Still, the figure was lower than the 5.2% recorded in 2023.

The growth took place in the face of a “complicated and severe environment with increasing external pressures and internal difficulties,” the NBS said.

The economy was still facing “difficulties and challenges,” officials admitted.

Retail sales, a key gauge of consumer sentiment, rose 3.5% — a major slump from the 7.2% growth seen in 2023 — though industrial output increased 5.8%, from 4.6% the previous year.

However, the 5.4% jump in economic growth seen in the final four months far outpaced the 5% forecast in a Bloomberg survey and was much better than the same period in 2023.

The data provided “mixed messages,” Zhiwei Zhang, president of Pinpoint Asset Management, said.

Beijing’s recent policy shift had “helped the economy to stabilize in (the fourth quarter), but it requires large and persistent policy stimulus to boost economic momentum and sustain the recovery,” he said.

Zichun Huang, China economist at Capital Economics, said she expected growth to “continue accelerating in the coming months.”

“The government’s property support measures seem to be providing some relief, with the pace of house price falls slowing and new home sales showing some recovery,” she said.

Trouble ahead?

The GDP growth rate is the lowest recorded by China since 1990, excluding the financially tumultuous years of the COVID-19 pandemic.

And the analysts surveyed by AFP estimated growth could fall to just 4.4% in 2025, and even drop below 4% the following year.

China has so far failed to rebound from the pandemic, with domestic spending mired in a slump and indebted local governments dragging on growth.

In a rare bright spot, official data showed earlier this week that exports reached a historic high last year.

But gathering storm clouds over the country’s massive trade surplus mean Beijing may not be able to count on overseas shipments to boost an otherwise lackluster economy.

Trump, who will begin his second term next week, has promised to unleash heavy sanctions on China.

“We still expect growth to slow for 2025 as a whole, with Trump likely to follow through on his tariff threats soon and persistent structural imbalances still weighing on the economy,” Huang said.

Beijing has introduced a series of measures in recent months to bolster the economy, including cutting key interest rates, easing local government debt and expanding subsidy programs for household goods.

Confidence ‘crisis’

Observers were closely watching Friday’s data release for signs those measures succeeded in reviving activity.

“With a package of incremental policies being timely rolled out … social confidence was effectively bolstered and the economy recovered remarkably,” the NBS said.

China’s central bank has indicated in recent weeks that 2025 will see it implement further rate cuts, part of a key shift characterized by a “moderately loose” monetary policy stance.

But analysts warn more efforts are needed to boost domestic consumption as the outlook for Chinese exports becomes more uncertain.

“Monetary policy support alone is unlikely to right the economy,” Harry Murphy Cruise of Moody’s Analytics told AFP.

“China is suffering from a crisis of confidence, not one of credit; families and firms do not have the confidence in the economy to warrant borrowing, regardless of how cheap it is to do so,” he wrote.

“To that end, fiscal supports are needed to grease the economy’s wheels.”

One component of Beijing’s newest policy toolbox is a subsidy scheme — now expanded to include more household items including rice cookers and microwave ovens — that it hopes will encourage spending.

But recent data shows that government efforts have not yet achieved a full rebound in consumer activity.

China narrowly avoided a slip into deflation in December, statistics authorities said last week, with prices rising at their slowest pace in nine months.

China emerged from a four-month period of deflation in February, a month after suffering the sharpest fall in prices for 14 years.

Deflation can pose a threat to the broader economy as consumers tend to postpone purchases under such conditions, hoping for further reductions. 
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ISLAMABAD — Pakistan confirmed on Wednesday that the World Bank has pledged to lend $20 billion over the next decade, commencing in 2026 under its Country Partnership Framework, to help address the impoverished country’s acute development challenges.

Prime Minister Shehbaz Sharif applauded what he described as the lender’s “first-ever” pledge of its kind, saying the program is intended to develop child nutrition, education, clean energy and climate resilience to boost private sector growth.

The Country Partnership Framework “reflects the World Bank’s confidence in Pakistan’s economic resilience and potential,” Sharif said on the social media platform X. “We look forward to strengthening our partnership as we align our efforts for creating lasting opportunities for our people.”

The cash-strapped South Asian nation has been struggling to tackle serious economic challenges for several years and is currently relying on a $7 billion bailout loan program from the International Monetary Fund. Persistent political instability in Pakistan, rising militant attacks, and devastating flooding in 2022 have further strained the troubled economy.

“Our new decadelong partnership framework for Pakistan represents a long-term anchor for our joint commitment with the government to address some of the most acute development challenges facing the country,” said World Bank Country Director Najy Benhassine.

The U.S.-based lender stated that the country’s annual commitments under the partnership “are expected to remain in the $1.5 billion to $2 billion range” from 2026 onward. It added that the loans will depend on available funding and the fulfillment of project requirements.

“The pace of economic growth and structural transformation has been long stunted by distortive policies that benefit only a few, who have historically coalesced to oppose growth-oriented reforms as well as increases in progressive public spending in human capital and basic services for the poorest,” the World Bank partnership documented stated.

It added that Pakistan must change its current development model to reduce poverty and achieve shared prosperity on a livable planet.

“We are focused on prioritizing investment and advisory interventions that will help crowd in much-needed private investment in sectors critical for Pakistan’s sustainable growth and job creation,” said Zeeshan Sheikh, International Finance Corporation country manager for Pakistan and Afghanistan.

The ouster of Prime Minister Imran Khan from power in 2022 and his subsequent imprisonment over contested corruption charges have plunged Pakistan into a political crisis that experts say is hampering government attempts to attract domestic and foreign investments.

The World Bank’s document highlights that the South Asian nation, home to over 240 million people, ranks among the top 10 countries most affected by climate change and natural disasters worldwide.

It noted that climate change will increasingly strain livelihoods, food security, productivity, and growth caused by rising extreme heat, air pollution, and altered water availability and precipitation.

“These risks can significantly compromise development in an already fiscally constrained environment and make sustained progress in poverty reduction and human development even more challenging than it is today,” the World Bank stated.
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Washington — President-elect Donald Trump on Tuesday announced plans to create a new agency called the External Revenue Service to collect tariffs and other revenues from foreign nations.

“We will begin charging those that make money off of us with Trade, and they will start paying,” Trump said Tuesday on his social media site, Truth Social. He compared his planned creation to the Internal Revenue Service, which is the nation’s domestic tax collector.

The creation of a new agency requires an act of Congress, and Republicans hold the majority of both the House and the Senate.

Trump, who has vowed to shrink the size of government, would be creating a new agency to perform functions already handled by existing agencies, including the Commerce Department and the Customs and Border Patrol, which collect duties and revenues from other nations.

The president-elect has tapped two business titans to lead his Department of Government Efficiency, or DOGE, a nongovernmental task force assigned to find ways to fire federal workers, cut programs and slash federal regulations, all part of what he calls his “Save America” agenda for a second term in the White House.

Billionaire Elon Musk and fellow entrepreneur Vivek Ramaswamy are leading the DOGE’s ambitious efforts to reduce the size and scope of the federal government.

Tariffs, with the threat of a potential 25% levy on all goods from allies like Canada and Mexico and 60% on goods from China, have become a benchmark of Trump’s economic agenda as he heads into his second term.

Economists have said the cost of the tariffs will be passed on to consumers, and are generally skeptical of them, considering them a mostly inefficient way for governments to raise money and promote prosperity.

Democratic lawmakers were quick to criticize the External Revenue Service plan.

“No amount of silly rebranding will hide the fact that Trump is planning a multi-trillion-dollar tax hike on American families and small businesses to pay for another round of tax handouts to the rich,” Oregon Sen. Ron Wyden, the top Democrat on the Senate Finance Committee, said in a statement.
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— U.S. President Joe Biden issued an executive order Tuesday directing the development of artificial intelligence data centers on six federal land sites, with a special focus on powering them with clean energy and upholding high labor standards. 

Biden said in a statement that the United States is the world leader in AI, but cannot take that lead for granted. 

“We will not let America be out-built when it comes to the technology that will define the future, nor should we sacrifice critical environmental standards and our shared efforts to protect clean air and clean water,” Biden said. 

The order calls for the Department of Defense and Department of Energy to each identify three suitable sites where private companies will lease the land, pay for the construction and operation of the data centers and ensure the supply of enough clean energy to fully power the sites. 

The developers will also have to buy “an appropriate share” of semiconductors produced in the United States to help ensure there is a “robust domestic semiconductor supply chain,” the White House said. 

In addition to identifying the sites, the federal government will also commit under the order to expedite the permitting process for the data center construction. 

Senior administration officials, in a phone call with journalists previewing the order, highlighted the national security need for the United States to have its own powerful AI infrastructure, both to protect it for its own use but also to prevent adversaries such as China from possessing those capabilities. 

“From the national security standpoint, it’s really critical to find a pathway for building the data centers and power infrastructure to support frontier AI operations here in the United States to ensure that the most powerful AI models continue to be trained and stored securely here in the United States,” an official said. 

A senior administration official cited the priority of making sure the AI industry had an anchor in the United States to avoid repeating the history of other technologies that moved offshore to areas with lower labor and environmental standards as well. 

AI chip restrictions 

Tuesday’s order comes a day after the Biden administration announced new restrictions on the export of the most advanced artificial intelligence chips and proprietary parameters used to govern the interactions of users with AI systems.    

The rule, which will undergo a 120-day period for public comments, comes in response to what administration officials described as a need to protect national security while also clarifying the rules under which companies in trusted partner countries could access the emerging technology in order to promote innovation.   

“Over the coming years, AI will become really ubiquitous in every business application in every industry around the world, with enormous potential for enhanced productivity and societal, health care and economic benefits,” Commerce Secretary Gina Raimondo told reporters. “That being said, as AI becomes more powerful, the risks to our national security become even more intense.”   

A senior administration official said the new rule will not include any restrictions on chip sales to Australia, Belgium, Canada, Denmark, Finland, France, Germany, Ireland, Italy, Japan, the Netherlands, New Zealand, Norway, South Korea, Spain, Sweden, Taiwan, the United Kingdom or the United States.   

The rules build on 2023 curbs limiting the export of certain AI chips to China, a strategic competitor in the production of advanced semiconductors. Beijing attacked the new U.S. AI edict as a “flagrant violation” of international trade rules.  

China’s Ministry of Commerce said the Biden administration announcement “is another example of the generalization of the concept of national security and the abuse of export control, and a flagrant violation of international multilateral economic and trade rules.”  

Beijing said it would “take necessary measures to firmly safeguard its legitimate rights and interests.” 

Countries that are under U.S. arms embargoes are already subject to export restrictions on advanced AI chips, but a senior administration official said they will now be under restrictions for the transfer of the most powerful closed weight AI models.    

The weights in an AI model determine how it processes the inputs from a user and determines what to provide the user as a response, according to the National Telecommunications and Information Administration. In a closed weight system, those parameters are secret, unlike with an open weight system in which users could see the settings the model is using to make its decisions.    

Most countries — those not included in the closed partner or arms embargo lists — will not face licensing requirements for obtaining the equivalent of 1,700 of the most advanced AI chips currently available, nor for any less advanced chips.   

Companies in the United States and allied countries will not face restrictions in using the most powerful closed weight AI systems, provided they are stored under adequate security, a senior administration official said. 

 
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A new industry report released Monday shows China made big strides last year toward an EV-driven future, as domestic sales of all types of electric vehicles rose by 40% in 2024. Sales of gasoline powered cars tumbled, including foreign imports.

In 2024, a total of 31.4 million total vehicles were sold in the world’s largest automobile market by sales, according to the China Association of Automobile Manufacturers. That marked a 4.5% rise compared with the previous year.

Despite the uptick in sales, foreign automobile importers are increasingly finding it hard to compete with local brands in China who have been offering a wide variety of affordable EVs and intensified market competition.

One example is German luxury car maker Porsche, who closed several of its physical stores in China in 2024. Porsche sales in China were down 29% year on year which marked the third consecutive year of decline.

In addition to Porsche, luxury carmakers BMW, Mercedes, and Audi each saw a drop in their vehicle sales in China in 2024 with BMW sales falling 13.4%, Mercedes sales by 7%, and Audi sales by 11%. 

Tai Chih-yen, an associate researcher at the Chung-Hua Institution for Economic Research in Taipei told VOA’s Mandarin service that a sense of patriotism and support for national brands has created additional pressures that have contributed to the struggles international automakers are facing. 

“Higher-end consumers have started to abandon foreign brands and are turning to comparatively better priced high-end domestic cars,” Tai told VOA. “This is not a so-called consumption downgrade, but more a reflection of the current situation, where many are choosing to be more discreet [in the kinds of cars they drive] and show their patriotism by driving domestic luxury brands.”

The industry report also noted that sales of traditional gasoline and diesel-powered vehicles in China sank 17% in 2024, from 14 million to 11.6 million, a slide that coincides with Beijing’s focus on transitioning to electric vehicles.

At the same time, Chinese vehicle exports were up 19.3% in 2024, according to the report. However, export growth is expected to cool with the report estimating only a 5.8% increase in 2025.

China faced a backlash in 2024 as it moved to expand EV sales overseas, with the U.S., Canada and EU unveiling steep tariffs to stop a flood of cheap electric vehicles into their markets. The U.S., Canada and EU have raised concerns about subsidies that the Chinese government provides EV makers that allows them to sell their cars for lower prices.

They have also voiced concerned that China has too much production of EVs and that cars are being dumped into foreign markets, allegations that Beijing has repeatedly denied. 

China argues that its EV subsidies are similar to those of other countries and that sales of electric vehicles help with climate change. China has filed a complaint at the World Trade Organization over the EU’s tariff decision.

Michael Baturin and VOA Mandarin Service reporter Nai-chuan Lin contributed to this report. Some information came from Reuters. 
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— The Biden administration announced Monday new restrictions on the export of the most advanced artificial intelligence chips and proprietary parameters used to govern the interactions of users with AI systems.

The rule, which will undergo a 120-day period for public comments, comes in response to what administration officials described as a need to protect national security while also clarifying the rules under which companies in trusted partner countries could access the emerging technology in order to promote innovation.

“Over the coming years, AI will become really ubiquitous in every business application in every industry around the world, with enormous potential for enhanced productivity and societal, healthcare and economic benefits,” Commerce Secretary Gina Raimondo told reporters. “That being said, as AI becomes more powerful, the risks to our national security become even more intense.”

A senior administration official said the new rule will not include any restrictions on chip sales to Australia, Belgium, Canada, Denmark, Finland, France, Germany, Ireland, Italy, Japan, the Netherlands, New Zealand, Norway, South Korea, Spain, Sweden, Taiwan, United Kingdom or the United States.

Countries that are under U.S. arms embargoes are already subject to export restrictions on advanced AI chips, but a senior administration official said they will now be under restrictions for the transfer of the most powerful closed weight AI models.

The weights in an AI model determine how it processes the inputs from a user and determines what to provide the user as a response, according to the National Telecommunications and Information Administration. In a closed weight system, those parameters are secret, unlike with an open weight system in which users could see the settings the model is using to make its decisions.

The majority of countries — those not included in the close partner or arms embargo lists — will not face licensing requirements for obtaining the equivalent of 1,700 of the most advanced AI chips currently available, nor for any less advanced chips.

Companies in the United States and allied countries will not face restrictions in using the most powerful closed weight AI systems, provided they are stored under adequate security, a senior administration official said.

“I think the key point I would underscore is that we identified really some of the closest security allies of the United States that have effectively implemented and have a well-documented record of upholding a robust AI technology protection regime, and generally have technology ecosystems that promote the use of AI and other advanced technologies consistent with our national security and foreign policy interests,” a senior administration official said.
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Ethiopia relaunched its stock exchange, the Ethiopian Securities Exchange, on Friday after a 50-year absence.

The operations of the Ethiopia Securities Exchange were stopped in 1974 following the takeover by a communist military government.

Prime Minister Abiy Ahmed described the relaunch as an “historic milestone” for Ethiopia’s economic and financial landscape.

“We have officially rung the bell to launch the Ethiopian Securities Exchange — the first stock exchange for our country. Invest in Ethiopia — a fast-growing economy with immense potential and a dynamic trajectory toward prosperity,” he posted on X.

The launch of the stock exchange means the government initiated a domestic stock market, starting with the state-owned Ethio Telecom, which is yet to commence an initial public offering of shares despite announcing the move in October.

Ethiopian officials announced Friday that Wegagen Bank, a private bank, was the first company to list on the exchange.

Ethiopian Insurance Corporation, Ethiopian Shipping and Logistics Services Enterprise, and Berhanena Selam Printing joined Ethiopia Telecom as founding members of the exchange, although they are not yet listed.

The list of investors also included foreign strategic investors, along with 16 domestic private commercial banks, 12 private insurance companies, and 17 other private domestic investors, according to a newsletter distributed during the event.

Based on the shareholding structure of the Ethiopian Securities Exchange, 75% of it is allocated to private investors and 25% is capped for public shareholding. This means the share company is a private-government partnership.

Abiy assured investors that all the necessary preparations had been made. Speaking in Amharic, Abiy said the government did extensive research, passed legislation and built more institutions and human capital over the past 2½ to “avoid failure.”

He also praised the country’s economy.

“Ethiopian economy means an economy that operates the biggest airline in Africa. Ethiopian economy means an economy that operates the largest telecom operator in Africa. Ethiopian economy means an economy that built the largest hydroelectric power plant in Africa,” he said touting Africa’s largest airline and the Grand Renaissance Dam, which is considered the biggest project of its type on the continent.

In July 2021, the Parliament established the Ethiopian Capital Market Authority and tasked it with ensuring the existence of an environment in which securities could be issued and traded in an “orderly, fair, efficient and transparent manner.”

Ethiopia’s economy heavily relies on agriculture, with coffee, oilseed, flowers and gold being the main export items. Last year, the government introduced financial reforms that included floating the Ethiopian currency, a move backed by international financial institutions.

But the market-based currency policy increased inflation and led to skyrocketing prices for imported food and fuel.

This week, the government announced an increase in the price of benzene from 73 cents to 82 cents per liter. Similarly, the price of white diesel jumped from 72 cents to 78 cents per liter, with corresponding increases applied to other fuel types, a move residents said will worsen the cost of living and transportation challenges.

Ethiopian economist and the executive director of Initiative Africa Kibur Gena said the Ethiopian stock exchange should align with the broader development goals of the country.

Ethiopia’s government “should approach the establishment of a stock exchange gradually and strategically,” he told VOA.

He argued that the government should also build strong institutions and a regulatory framework “so that it can attract foreign direct investment.”

The relaunch also comes at a time when the country is facing security challenges in the Amhara and Oromia regions.

Kibur said to attract foreign investors, there needs to be peace throughout the country.

“I suppose this government will sort of realize that if it wants to achieve its objectives, it will certainly address the peace issues,” he said.
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WASHINGTON — U.S. hiring picked up unexpectedly in December as employers added a strong 256,000 jobs, another sign of the economy’s resilience in the face of high interest rates. 

Job growth rose 212,000 last month from November, the Labor Department reported Friday. 

For all of 2024, the economy added 2.2 million jobs, a solid number but down from 3 million in 2023, 4.5 million in 2022 and a record 6.4 million in 2021 as the economy bounded back from massive pandemic layoffs. 

The monthly numbers beat forecasters’ expectations of around 155,000 new jobs and 4.2% unemployment. Health care companies added 46,000 jobs, retailers 43,000 and government agencies at the federal, state and local 33,000. But manufacturers cut 13,000 jobs. 

Labor Department revisions shaved 8,000 jobs from October and November payrolls. 

Average hourly wages rose 0.3% from November and 3.9% from a year earlier. The year-over-year wage gain was slightly less than economists had forecast. 

Stocks fell Friday morning on the expectations that the strong jobs report will make the Federal Reserve less likely to cut interest rates. The economy doesn’t seem to need help. “It seems pretty certain that the pace of Fed rate cuts is now going to slow down,” said Brian Coulton, chief economist at Fitch Ratings. 

Getting a clear view of the U.S. job market hasn’t been easy over the past few months. 

Hurricanes and a big strike at Boeing threw off the October jobs numbers, pushing them down and setting up a payback rebound in November that likely exaggerated the strength of hiring. 

Thomas Simons, chief U.S. economist at Jefferies, said that seasonal adjustments around the holidays may have affected the December numbers, but he added that nonetheless “it is hard to say anything negative about the details of this report.” 

Over the past few years, the economy and the job market have shown surprising resilience. Responding to inflation that hit a four-decade high two and a half years ago, the Fed raised its benchmark interest rate — the fed funds rate — 11 times in 2022 and 2023, taking it to the highest level in more than two decades. 

The higher borrowing costs were widely expected to cause a recession but didn’t. Companies kept hiring, consumers kept spending, and the economy kept rolling along. In fact, U.S. gross domestic product — the nation’s output of goods and services — has expanded at a robust annual pace of 3% or more in four of the last five quarters. 

Layoffs are running below the pre-pandemic trend. On Thursday, the Labor Department reported that 211,000 people applied for unemployment benefits last week, the fewest in nearly a year. 

Inflation has come down, too, from a peak of 9.1% in June 2022 to 2.7% in November. The drop in year-over-year price increases gave the Fed enough confidence to cut rates three times in the last four months of 2024. 

But Fed officials signaled at their December meeting that they planned to be more cautious about rate cuts this year. They now project just two rate reductions in 2025, down from the four they envisioned back in September. Progress against inflation has stalled in recent months, and it remains stuck above the Fed’s 2% target.
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