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      China Unexpectedly Cuts Interest Rate as World Markets Sag

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      The central bank lowered a key rate in its latest effort to steady China’s economy, as Asian stock markets followed Wall Street down.China’s central bank on Thursday cut a key interest rate, in Beijing’s second move this week to try to offset a weakening economy and a housing market crisis.The unexpected action came as stock markets fell sharply across most of Asia in early trading, in an echo of Wall Street’s sharp drop the day before. Market indexes were down 1 to 3 percent in Australia, Japan, South Korea and Hong Kong.But share prices were down by less in Shanghai and Shenzhen. That could reflect a favorable response by investors to the central bank’s rate move, or a sign of intervention by the Chinese government, which plays an extensive role in the country’s stock markets.As markets opened in China on Thursday, the People’s Bank of China, the central bank, reduced its interest rate for one-year loans to commercial banks to 2.3 percent, from 2.5 percent. It was the biggest cut to that rate since a similar reduction in April 2020, when the Chinese economy was struggling because of a nearly national lockdown in the early days of the coronavirus pandemic.The one-year rate is important as a guide to commercial banks on the interest rates that they use for loans to corporate customers and also to the financing units of local governments. Beijing blocks local governments from borrowing directly from banks, but has allowed them to set up financial units that do so.Many of these financial units are now deep in debt, and the local governments that control them have been cutting the salaries of teachers and other civil servants to conserve cash.The reduction in the one-year interest rate followed moves by the central bank on Monday to lower other rates that it controls. The actions came after a conclave of the Communist Party’s leadership on economic policy last week that did not produce the broad course correction that many economists have recommended.The party reaffirmed its commitment to pursuing economic self-reliance through further investment in high-tech industries, instead of making a shift to greater consumer spending.Reducing rates now, instead of waiting for a possible cut by the U.S. Federal Reserve this autumn, runs the risk of prompting more Chinese companies and households to move money out of the country as they seek to earn more interest elsewhere. That could cause China’s currency, the renminbi, to weaken further against the dollar.Lower rates might also prompt a revival of speculative borrowing schemes that were a problem for Beijing several years ago.But Eswar Prasad, a Cornell University economist who specializes in China’s monetary policy, said that such concerns appeared to be secondary right now. “Supporting growth is taking precedence over other objectives, such as limiting financial risks or preventing currency depreciation,” he said. More

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      China Shows Few Signs of Tilting Economy Toward Consumers in New Plan

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      The Communist Party rebuffed calls from economists to shift away from investment-led growth and toward consumer spending.China engaged in a monthslong drumbeat of anticipation that a Communist Party leaders’ meeting would show the way to a new era of growth for the slowing economy.The outcome was a plan released on Sunday offering more than 300 steps on everything from taxes to religion. It echoed many familiar themes, like an emphasis on government investments in high-tech manufacturing and scientific innovation. There was little mention of anything that would directly address China’s plunging real estate prices or the millions of unfinished apartments left behind by failed developers.Many economists had called for a comprehensive effort to rebalance the Chinese economy away from investment and toward consumer spending. But the document — roughly 15,000 words in the English translation — made a brief and cautious call to “refine long-term mechanisms for expanding consumption.”The Communist Party’s Central Committee doubled down on industrial policy. The party promised to “promote the development of strategic industries” in eight sectors, from renewable energy to aerospace. Those were essentially the same industries as in the country’s decade-old Made in China 2025 plan to replace imports of high-tech goods with locally produced products, as part of a national push for self-reliance.A similar plan in 2013 had many provisions that have never been put into effect, such as a plan to roll out a nationwide property tax to raise money for local governments.Many of these local governments have fallen far into debt since then. Sunday’s plan proposed a different solution: The central government should become responsible for more of the country’s spending. It also called for expanding local tax revenues, but had only a bare mention of a real estate tax.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      China’s Economy Slows Sharply as Housing Troubles Squeeze Spending

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      After a strong start to the year, spending has slumped as a real estate downturn weighs on consumers. Communist Party leaders are meeting this week to discuss what to do about it.Economic growth slumped in China through the spring after a strong start this year, according to data released on Monday, as a real estate crash caused consumers to spend more cautiously.The latest growth statistics for the world’s second-largest economy, covering April through June, put further pressure on the Communist Party as its leaders gathered on Monday in Beijing for a four-day conclave to set a course for the country’s economic future.In a country known for strict controls on the flow of information, the Chinese government is maintaining a particularly tight grip ahead of the party gathering, known as the Third Plenum, which typically takes place every five years. China’s statistical bureau canceled its usual news conference that accompanies the release of economic data and Chinese companies are mostly avoiding the release of earnings reports this week.China’s National Bureau of Statistics said that the economy grew 0.7 percent in the second quarter over the previous three months, a little below the expectations of most economists in the West. When projected out for the entire year, the data indicates that China’s economy grew during the spring at an annual rate of about 2.8 percent — a little less than half its growth rate in the first three months of this year.The statistical bureau also revised down its estimate of growth in the first quarter. That growth rate, projected out for the full year, was about 6.1 percent, not the 6.6 percent rate that was disclosed in April.Xi Jinping, China’s top leader, is trying to win confidence in his policies at home and abroad as growth falters and the property market suffers.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      Los venezolanos en el exterior enfrentan dificultades para poder votar

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      El gobierno venezolano ha impuesto una serie de normas estrictas que hacen que inscribirse para votar sea complicado para millones de venezolanos que viven en el exterior.[Estamos en WhatsApp. Empieza a seguirnos ahora]La fila afuera del consulado de Venezuela en Madrid llegaba hasta el final de la cuadra. Mujeres embarazadas, familias con niños pequeños, personas mayores y con discapacidades llegaron incluso a las 4:00 a. m. —cinco horas antes de que la oficina abriera sus puertas— para intentar inscribirse para votar en las muy esperadas elecciones presidenciales de Venezuela.Adriana Rodríguez, de 47 años, que salió de Venezuela en 2018, llegó a las 8:00 a. m., dos días seguidos. En ambas oportunidades, esperó durante horas antes de llegar al principio de la fila, solo para terminar siendo rechazada, contó, siempre con la misma explicación: “Ya no se podía inscribir más gente”.Con el presidente autoritario de Venezuela, Nicolás Maduro, detrás en las encuestas por gran margen en vísperas de las elecciones del 28 de julio, el gobierno ha impuesto una serie de normas estrictas que hacen que inscribirse para votar sea casi imposible para millones de venezolanos que viven en el exterior, incluido Estados Unidos, España y otros países de América Latina.Muchos abandonaron su país natal debido a las duras condiciones económicas y políticas.Como resultado, expertos electorales afirman que las tácticas del gobierno equivalen a un fraude electoral generalizado, dado que hasta un 25 por ciento de los votantes elegibles de Venezuela viven fuera del país, y una gran cantidad de ellos muy probablemente no votaría por Maduro.Adriana Rodríguez, de 47 años, quien se fue de Venezuela en 2018, fue al consulado en Madrid dos días seguidos pero no pudo inscribirse para votar.Emilio Parra Doiztua para The New York TimesWe are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      France Warned by E.U. About ‘Excessive’ Deficit

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      The rebuke for breaking European Union rules that require strict financial discipline comes two weeks before French voters head to the polls for parliamentary elections.Add an entry to the list of troubles facing President Emmanuel Macron of France less than two weeks before pivotal legislative elections: potential financial penalties by the European Union for failure to rein in the nation’s ballooning deficit and debt.The reprimand, announced Wednesday in Brussels, highlighted France’s fragile finances at a moment of political turmoil, as the far right National Rally party, led by Marine Le Pen, and a left-wing coalition, the New Popular Front, appear increasingly positioned to form a new government that could weaken Mr. Macron’s grip on power.Mr. Macron threw French politics into disarray earlier this month by calling for snap parliamentary elections after his party was battered by the far right in European Parliament elections.The fiscal warning by E.U. authorities set the stage for a possible confrontation between Brussels and Paris. Both the National Rally and the New Popular Front have pledged to spend more on public services at a time when Mr. Macron is being forced to find deep budgetary cuts of up to 25 billion euros ($26.9 billion) this year to improve the nation’s finances. The opposition parties, however, are critical of E.U. institutions, and want to ease rather than tighten fiscal policy.France is in debt to the tune of around €3 trillion, or more than 110 percent of gross domestic product, and a deficit of €154 billion, representing 5.5 percent of economic output. The budget crunch comes after Mr. Macron spent heavily to support workers and businesses during pandemic lockdowns. His government also provided subsidies to help households cope with a jump in inflation after Russia’s invasion of Ukraine, which sent energy prices soaring.President Emmanuel Macron has called for snap parliamentary elections, throwing French politics into disarray.Hannah Mckay/ReutersWe are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      $29 Trillion: That’s How Much Debt Emerging Nations Are Facing

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      A decades-long crisis is getting worse, and now dozens of nations are spending more on interest payments than on health care or education.The Vatican’s meeting on the global debt crisis last week was not quite as celebrity-studded as the one that Pope John Paul II presided over 25 years ago, when he donned sunglasses given to him by Bono, U2’s lead singer.But the message that the current pope, Francis, delivered this time — to a roomful of bankers and economists instead of rock stars — was the same: The world’s poorest countries are being crushed by unmanageable debt and richer nations need to do more to help.Emerging nations are contending with a staggering $29 trillion in public debt. Fifteen countries are spending more on interest payments than they do on education, according to a new report from the United Nations Conference on Trade and Development; 46 spend more on debt payments than they do on health care.Unmanageable debts have been a recurring feature of the modern global economy, but the current wave may well be the worst so far. Overall, government debt worldwide is four times higher than what it was in 2000.Government overspending or mismanagement is one cause, but global events out of most nations’ control have pushed their debt problems into overdrive. The Covid-19 pandemic slashed business profits and worker incomes at the same time health care and relief costs were increasing. Violent conflicts in Ukraine and elsewhere contributed to rising energy and food prices. Central banks raised interest rates to combat soaring inflation. Global growth slowed.Pope Francis earlier this week in Rome.Fabio Frustaci/EPA, via ShutterstockWe are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      Why Are People So Down About the Economy? Theories Abound.

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      Things look strong on paper, but many Americans remain unconvinced. We asked economic officials, the woman who coined “vibecession” and Charlamagne Tha God what they think is happening.The U.S. economy has been an enigma over the past few years. The job market is booming, and consumers are still spending, which is usually a sign of optimism. But if you ask Americans, many will tell you that they feel bad about the economy and are unhappy about President Biden’s economic record.Call it the vibecession. Call it a mystery. Blame TikTok, media headlines or the long shadow of the pandemic. The gloom prevails. The University of Michigan consumer confidence index, which looked a little bit sunnier this year after a substantial slowdown in inflation over 2023, has again soured. And while a measure of sentiment produced by the Conference Board improved in May, the survey showed that expectations remained shaky.The negativity could end up mattering in the 2024 presidential election. More than half of registered voters in six battleground states rated the economy as “poor” in a recent poll by The New York Times, The Philadelphia Inquirer and Siena College. And 14 percent said the political and economic system needed to be torn down entirely.What’s going on here? We asked government officials and prominent analysts from the Federal Reserve, the White House, academia and the internet commentariat about what they think is happening. Here’s a summary of what they said.Kyla Scanlon, coiner of the term ‘Vibecession’Price levels matter, and people are also getting some facts wrong.The most common explanation for why people feel bad about the economy — one that every person interviewed for this article brought up — is simple. Prices jumped a lot when inflation was really rapid in 2021 and 2022. Now they aren’t climbing as quickly, but people are left contending with the reality that rent, cheeseburgers, running shoes and day care all cost more.“Inflation is a pressure cooker,” said Kyla Scanlon, who this week is releasing a book titled “In This Economy?” that explains common economic concepts. “It hurts over time. You had a couple of years of pretty high inflation, and people are really dealing with the aftermath of that.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      I.M.F. Is Upbeat on China’s Growth but Questions Industrial Policy

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      Surging exports and factory investment are buoying China’s output, but the housing market faces serious troubles and industrial policies may hurt other countries.Responding to China’s surging exports and extensive investments in new factories, the International Monetary Fund made sizable increases on Wednesday in how much it believes China’s economy will grow this year and next.The I.M.F. now estimates that China will grow 5 percent this year and 4.5 percent in 2025. That is 0.4 percentage points more for each year compared with the fund’s predictions just six weeks ago.China’s gross domestic output expanded 5.2 percent last year as the economy rebounded following nearly three years of stringent pandemic policies that included numerous municipal lockdowns and mandatory quarantines. Many economists, including at the I.M.F., had anticipated that growth would falter this year because of a severe contraction of China’s housing market and a slowdown in domestic spending.Yet while property prices continued to fall and retail sales grew sluggishly, China’s economy powered ahead instead in the first three months of this year, expanding at an annual rate of about 6.6 percent because of booming exports and strong factory investments.The Chinese government is taking steps to address the housing crash, but it faces enormous challenges. Years of overbuilding have resulted in four million new but unsold apartments and, by one conservative estimate, as many as 10 million that developers have sold but not finished building.Many owners of vacant apartments now find themselves facing years of hefty mortgage payments but little chance the apartments will appreciate significantly in value.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More