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    China Returns to Davos With Clear Message: We’re Open for Business

    Emerging from coronavirus lockdown to a world changed by the war in Ukraine, China sought to convey reassurance about its economic health.DAVOS, Switzerland — China ventured back on to the global stage Tuesday, sending a delegation to the World Economic Forum to assure foreign investors that after three years in which the pandemic cut off their country from the world, life was back to normal.But the Chinese faced a wary audience at the annual event, attesting to both the dramatically changed geopolitical landscape after Russia’s war on Ukraine, as well as two data points that highlighted a worrisome shift in China’s own fortunes.Hours before a senior Chinese official, Liu He, spoke to this elite economic gathering in an Alpine ski resort, the government announced that China’s population shrank in 2022 for the first time in 61 years. A short time earlier, it confirmed that economic growth had slowed to 3 percent, well below the trend of the past decade.Against that backdrop, Mr. Liu sought to reassure his audience that China was still a good place to do business. “If we work hard enough, we are confident that growth will most likely return to its normal trend, and the Chinese economy will make a significant improvement in 2023,” he said.Mr. Liu, a well-traveled vice premier who is one of China’s most recognizable faces in the West, insisted that the Covid crisis was “steadying,” seven weeks after the government abruptly abandoned its policy of quarantines and lockdowns. China had passed the peak of infections, he said, and had sufficient hospital beds, doctors and nurses, and medicine to treat the millions who are sick.A clinic waiting room in Beijing in December. The Chinese government announced a broad rollback of its zero Covid rules earlier that month.Gilles Sabrie for The New York TimesHe did not mention the 60,000 fatalities linked to the coronavirus since the lockdowns were lifted, a huge spike in the official death toll that China announced three days ago.Mr. Liu’s mild words and modest tone were in stark contrast to those of his boss, President Xi Jinping, who came to Davos in 2017 to claim the mantle of global economic leadership in a world shaken up by the election of Donald J. Trump in the United States and Britain’s vote to leave the European Union.Since then, the United States and Europe have united to support Ukraine against Russia, leaving the Russians isolated with the Chinese among their few friends. Russia’s revanchist campaign has raised questions among Europeans about whether China might have similar designs on Taiwan, and escalated security concerns among the world’s democracies.Mr. Liu steered clear of political issues like the war in Ukraine or China’s tensions with the Biden administration. But he did say, “We have to abandon the Cold War mentality,” echoing a frequent Chinese criticism of the United States for attempting to contain China’s influence around the world.But it is China’s demographics and economic growth that are raising the biggest questions among businesspeople. The decline in population lays bare the country’s falling birthrate, a trend that experts said was exacerbated by the pandemic and will threaten its growth over the long term. The 3 percent growth rate, the second weakest since 1976, reflects the stifling effect of the government’s Covid policy.“The Chinese are worried, and they should be,” said Evan S. Medeiros, a professor of Asia studies at Georgetown University. “The entire international business community is way more negative about China over the long-term. A lot of people are asking, ‘Have we reached peak China?’”Children playing in the village square after school in Xiasha Village in Shenzhen, China, in November. China’s population has begun to shrink, the government announced on Tuesday.Qilai Shen for The New York TimesProfessor Medeiros, who served as a China adviser in the Obama administration, said, “For the past 20 years, China has benefited from both geoeconomic gravity and geopolitical momentum, but in the last year it has rapidly lost both.”The signposts of China’s economic weakness are everywhere: the government announced on Friday that exports fell 9.9 percent in December relative to a year earlier. “China has an export slowdown, construction is in crisis, and the local governments are running out of money,” said Jean-Pierre Cabestan, professor of political science at Hong Kong Baptist University. “China needs the world: to boost its economy, to accompany the return to more normalcy.”Mr. Liu laid out a familiar set of economic policies, from upholding the rule of law to pursuing “innovation-driven development.” He insisted that China was still attractive to foreign investors, who he said were integral to China’s plan to achieve the government’s goal of “common prosperity.”Lianyungang port in China’s eastern Jiangsu province. The government announced on Friday that exports fell 9.9 percent in December relative to a year earlier.Agence France-Presse — Getty Images“China’s national reality dictates that opening up to the world is a must, not an expediency,” Mr. Liu said. “We must open up wider and make it work better. We oppose unilateralism and protectionism.”But China’s delegation was a reminder of how the government has sidelined some of its own best-known entrepreneurs as it has reined in powerful technology companies. Jack Ma, a co-founder of the Alibaba Group, used to be one of the biggest celebrities at the World Economic Forum, holding court in a chalet on the outskirts of Davos. Now shunted out of power, Mr. Ma is absent from Davos.Instead, China sent less well-known executives from Ant Group, an affiliate of the Alibaba Group, as well as officials from China Energy Group and China Petrochemical Group. Unlike other countries, notably India and Saudi Arabia, which plastered buildings in Davos with advertisements for foreign investment, China has been low-key, holding meetings at the posh Belvedere Hotel.After his speech, Mr. Liu, who has a command of English and holds a graduate degree from Harvard, met privately with business executives. Some expected him to be more candid in that session about the challenges China has faced.Mr. Liu did not meet top American officials in Davos, though he will meet Treasury Secretary Janet Yellen in Zurich on Wednesday. Martin J. Walsh, the labor secretary who is at the conference, said he welcomed China’s return. “China’s in the world economy,” he said. “We need to engage with them.”Mr. Liu speaking on Tuesday.Fabrice Coffrini/Agence France-Presse — Getty ImagesThough Mr. Liu, 70, has a significant international profile — having led trade negotiations with the Trump administration — China experts noted that he is not in Mr. Xi’s innermost circle. He is also no longer a member of the Chinese government’s ruling Politburo, though analysts said he retained the trust of Mr. Xi.When he spoke at Davos in 2018, Mr. Liu’s speech was among the best attended of the conference. This year, however, about a quarter of the hall emptied before Mr. Liu spoke, after having been packed for a speech by Ursula von der Leyen, the president of the European Commission.The difference in crowd sizes reflected the reshuffled priorities of the West, now focused on exhibiting unity against Russian aggression.Ms. von der Leyen, who celebrated that solidarity in her remarks, did not exactly warm up the audience for Mr. Liu. She accused the Chinese government, in its drive to dominate the clean-energy industries of the future, of unfairly subsidizing its companies at the expense of Europe and the United States.“Climate change needs a global approach,” she said in a chiding tone, “but it needs to be a fair approach.”Mark Landler More

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    As Europe Piles Sanctions on Russia, Some Sacred Cows Are Spared

    The European Union has been severing economic ties with Moscow to support Ukraine, but some countries have lobbied to protect key sectors.BRUSSELS — Eight months into the war in Ukraine, and eight rounds of frantic negotiations later, Europe’s sanctions against Russia run hundreds of pages long and have in many places cut to the bone.Since February, the European Union has named 1,236 people and 155 companies for sanctions, freezing their assets and blocking their access to the bloc. It has banned the trade of products in nearly 1,000 categories and hundreds of subcategories. It has put in place a near-total embargo on Russian oil. About one-third of the bloc’s exports to Russia by value and two-thirds of imports have been banned.But even now some goods and sectors remain conspicuously exempted. A look at just a few items reveals the intense back-room bargaining and arm-twisting by some nations and by private industry to protect sectors they deem too valuable to give up — as well as the compromises the European Union has made to maintain consensus.The Belgians have shielded trade in Russian diamonds. The Greeks ship Russian oil unimpeded. France and several other nations still import Russian uranium for nuclear power generation.The net impact of these exemptions on the effectiveness of Europe’s penalties against Russia is hard to assess, but politically, they have allowed the 27 members of the bloc to pull together an otherwise vast sanctions regime with exceptional speed and unanimity.“Ultimately, this is the price of unanimity to hold together this coalition, and in the grander scheme of things the sanctions are really working,” said Jacob Kirkegaard, a senior fellow in the Brussels office of the research group the German Marshall Fund, citing Russia’s diminished access to military technology as evidence.A Lukoil gas station in Priolo Gargallo, Italy, last month. The European Union has put in place a near-total embargo on Russian oil, but some sectors of trade remain conspicuously exempt from sanctions.Gianni Cipriano for The New York Times“We would love to have everything included, diamonds and every other special interest hit, but I am of the opinion that, if sparing them is what it takes to keep everyone together, so be it,” he added.The Ukrainian government has criticized some of the exemptions, with President Volodymyr Zelensky chiding European nations for continuing to permit business with Russia, saying they are skirting sacrifices.“There are people for whom the diamonds sold in Antwerp are more important than the battle we are waging. Peace is worth much more than diamonds,” Mr. Zelensky said to the Belgian Parliament during an address by video link in late March.Keeping Diamonds ComingThe continued success of Belgium and the broad diamond sector in keeping the Russian diamond trade flowing exemplifies the sacred cows some E.U. nations refuse to sacrifice, even as their peers accept pain to punish the Kremlin.Exports of rough diamonds are very lucrative for Russia, and they flow to the Belgian port of Antwerp, a historically important diamond hub.The trade, worth 1.8 billion euros a year — about $1.75 billion — has been shielded in consecutive rounds of the bloc’s sanctions, despite being raised as a possible target soon after the Russian invasion of Ukraine in late February.The Belgian government has said that it has never asked the European Commission, the E.U. executive body that drafts the measures, to remove diamonds from any sanctions list and that if diamonds were added, it would go along.Diamonds being sorted in Mirny, Russia, at a facility operated by Alrosa, the Russian state-owned diamond company. Russian diamonds have been shielded in consecutive rounds of European sanctions.Maxim Babenko for The New York TimesTechnically speaking, that may be true. But the latest round of penalties, adopted this month, exposed the intensive interventions when a coordination error occurred among the various services in the bloc that are involved in the technical preparation of sanctions.The incident, described to The New York Times by several diplomats involved as “farcical,” shows how the lobbying works. The diplomats spoke anonymously in order to describe freely what happened.The European Commission over the course of September prepared the latest round of sanctions and left diamonds off that list.But the European External Action Service — the E.U.’s equivalent of a foreign service or state department, which works with the commission to prepare sanctions — did not get the memo that diamonds should remain exempted and included in its own draft listings Alrosa, the Russian state-owned diamonds company.Once Alrosa had been put on the draft document, removing it became difficult. Spotting the error, Poland and other hard-line pro-Ukraine countries in the bloc dragged out the negotiations over the package as much as they could on the basis that Alrosa should indeed face sanctions.In the end, the need for unanimity and speed prevailed, and Alrosa continues to export to the European Union, at least until the next round of sanctions is negotiated. In proposals for a fresh, ninth round of sanctions, presented by Poland and its allies last week, diamonds were again included, but formal talks on the new set of penalties have not yet begun.A spokesman for the European External Action Service declined to comment, saying it does not comment on internal procedures involved in preparing sanctions.The Tricastin nuclear power plant in the Drôme region of southeastern France. France is one of several E.U. countries that depend on Russian uranium to operate civil nuclear power facilities. Andrea Mantovani for The New York TimesNuclear PowerMost exemptions have not been as clear-cut as diamonds because they have involved more complex industries or services, or affected more than one country.Uranium exported from Russia for use in civil nuclear power production falls under this category. Nuclear power plants in France, Hungary, Slovakia, Finland and other countries depend on Russian civilian uranium exports.The trade is worth 200 million euros, or about $194 million, according to Greenpeace, which has been lobbying for its ban. Germany and other E.U. countries have supported the calls to ban civilian nuclear imports from Russia, making this another issue likely to come up in the next round of sanctions talks.In August, Mr. Zelensky also highlighted the persistent protection of the Russian nuclear exports to Europe just as Ukraine’s Zaporizhzhia nuclear power plant came under fire.Some supporters of keeping Russian uranium running say that France and the other countries’ ability to generate electricity by operating their nuclear power plants during an acute energy crisis is more important than the political or financial gains that could come from a ban through E.U. sanctions, at least for now.Tankers in the NightOne of the most complex and important lobbying efforts to protect a European industry from sanctions is the one mounted by Greek diplomats to allow Greek-owned tankers to transport Russian oil to non-European destinations.This has facilitated one of the Kremlin’s biggest revenue streams. More than half of the vessels transporting Russia’s oil are Greek-owned, according to information aggregated from MarineTraffic, a shipping data platform.Supporters of the Greek shipping industry say that if it pulled out of that business, others would step in to deliver Russian oil to places like India and China. Experts say lining up enough tankers to make up for a total Greek pullout would not be simple, considering the sheer size of Greek-interest fleets and their dominance in this trade.According to European diplomats involved in the negotiations, their Greek counterparts were able to exempt Greek shipping companies from the oil embargo in a tough round of talks last May and June.Since then, the E.U. has come around to a United States-led idea to keep facilitating the transport of Russian oil, in order to avert a global oil-market meltdown, but to do so at a capped price to limit Russia’s revenues.The Greeks saw an opening: They would continue to transport Russian oil, but at the capped price. The bloc offered them additional concessions, and Greece agreed that the shipping of Russian oil would be banned if the price cap was not observed.The Greek-flagged oil tanker Minerva Virgo. Greek diplomats have lobbied for Greek-owned tankers to be allowed to transport Russian oil to non-European destinations. Bjoern Kils/ReutersEven if the economic benefits of such exemptions are hard to define, from a political perspective, the continued protection of some goods and industries is creating bad blood among E.U. members.Governments that have readily taken big hits through sanctions to support Ukraine, sacrificing revenues and jobs, are embittered that their partners in the bloc continue to doggedly protect their own interests.The divisions deepen a sense of disconnect between those more hawkish pro-Ukraine E.U. nations nearer Ukraine and those farther away, although geographical proximity is far from the only determinant of countries’ attitudes toward the war.And given that the bloc is a constant negotiating arena on many issues, some warn that what goes around eventually will come around.“This may be a raw calculation of national interests, but it’s going to linger,” Mr. Kirkegaard said. “Whoever doesn’t contribute now through sacrifice, next time there’s a budget or some other debate, it’s going to come back and haunt them.” More

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    Elections Approaching, Erdogan Raises the Heat Again With Greece

    Turkey’s president suggested that troops “may suddenly arrive one night” in Greece. With inflation rampant and the lira sinking, a manufactured crisis might be just the thing he needs.ISTANBUL — Last week at a closed dinner in Prague, Prime Minister Kyriakos Mitsotakis of Greece was addressing 44 European leaders when President Recep Tayyip Erdogan of Turkey interrupted him and started a shouting match.Before stalking from the room, Mr. Erdogan accused Mr. Mitsotakis of insincerity about settling disputes in the eastern Aegean and blasted the European Union for siding with its members, Greece and Cyprus, according to a European diplomat and two senior European officials who were there.While the others, flabbergasted and annoyed, finished their dinners, Mr. Erdogan fulminated at a news conference against Greece and threatened invasion. “We may suddenly arrive one night,” he said. When a reporter asked if that meant he would attack Greece, the Turkish president said, “Actually you have understood.”The outburst was only the latest from Mr. Erdogan. As he faces mounting political and economic difficulties before elections in the spring, he has been ramping up the threats against his NATO ally since the summer, using language normally left to military hawks and ultranationalists.While few diplomats or analysts are predicting war, there is a growing sense among European diplomats that a politically threatened Mr. Erdogan is an increasingly dangerous one for his neighbors — and that accidents can happen.Mr. Erdogan needs crisis to buoy his shaky standing at home after nearly 20 years in power, a diplomat specializing in Turkey said, requesting anonymity. And if he is not provided one, the diplomat said, he may create one.The rising tensions between Greece and Turkey, both NATO members, now threaten to add a difficult new dimension to Europe’s efforts to maintain its unity in the face of Russia’s war in Ukraine and its accumulating economic fallout.Mr. Erdogan met President Vladimir V. Putin of Russia in Kazakhstan on Thursday.Pool photo by Vyacheslav ProkofyevAlready, Mr. Erdogan has made himself a troublesome and unpredictable ally for his NATO partners. His economic challenges and desire to carve out a stable security sphere for Turkey in a tough neighborhood have pushed him ever closer to President Vladimir V. Putin of Russia.Mr. Erdogan has earned some shelter from open criticism by allies because of his efforts to mediate between Russia and Ukraine, especially in the deal to allow Ukrainian grain exports.But he has refused to impose sanctions on Russia and continues to get Russian gas through the TurkStream pipeline, while asking Moscow to delay payment for energy.On Thursday, Mr. Erdogan met Mr. Putin in Kazakhstan, where they discussed using Turkey as an energy hub to export more Russian gas after the pipelines to Germany under the Baltic Sea have been damaged.But it is the escalating rhetoric against Greece that is now drawing special attention.Sinan Ulgen, the director of EDAM, an Istanbul-based research institution, said that of course there was an electoral aspect to Mr. Erdogan’s actions. But there were also deep-seated problems that foster chronic instability and dangerous tensions.“Turkey and Greece have a set of unresolved bilateral disputes,” he said, “and this creates a favorable environment whenever a politician in Ankara or Athens wants to raise tensions.”The two countries nearly went to war in the 1970s over energy exploration in the Aegean, in 1995-96 over disputed claims over an uninhabited rock formation in the eastern Mediterranean, and in 2020, again over energy exploration in disputed waters. “And now we’re at it again,” Mr. Ulgen said. “And why? Because of elections in Turkey and Greece.”Mr. Mitsotakis is also in campaign mode, with elections expected next summer, damaged by a continuing scandal over spyware planted in the phones of opposition politicians and journalists. As in Turkey, nothing appeals to Greek patriotism more than a good spat with an old foe.A Turkish drill in August off Mersin, Turkey. Turkey and Greece nearly went to war in 2020 over Turkish energy exploration in disputed waters.Adem Altan/Agence France-Presse — Getty ImagesHe has sought to appear firm without escalating. Confronted at the dinner in Prague, Mr. Mitsotakis retorted that leaders should solve problems and not create new ones, that he was prepared to discuss all issues but could not stay silent while Turkey threatened the sovereignty of Greek islands.“No, Mr. Erdogan — no to bullying,” he said in a recent policy speech. He told reporters that he was open to talks with Mr. Erdogan despite the vitriol, saying he thought military conflict unlikely. “I don’t believe this will ever happen,” he said. “And if, God forbid, it happened, Turkey would receive an absolutely devastating response.”He was referring to Greek military abilities that have been significantly bolstered recently as part of expanded defense agreements with France and the United States.Mr. Mitsotakis has also taken advantage of American annoyance with Mr. Erdogan’s relations with Russia and his delay in approving NATO enlargement to Finland and Sweden to boost ties with Washington. In May, he was the first Greek prime minister to address Congress and urged it to reconsider arms sales to Turkey.He has said Greece will buy F-35s, while Turkey, denied F-35s because of its purchase of a Russian air-defense system, is still pressing to get more F-16s and modernization kits, using NATO enlargement as leverage.But Mr. Erdogan is facing considerable problems at home, making tensions with Greece an easy and traditional way to divert attention and rally support.Mr. Erdogan is presiding over a disastrous economy, with inflation running officially at 83 percent a year — but most likely higher — and the currency depreciating. Turkish gross domestic product per capita, a measure of wealth, has dropped to about $7,500 from more than $12,600 in 2013, based on Turkey’s real population, which now includes some four million Syrian refugees, according to Bilge Yilmaz, a professor at the Wharton School of the University of Pennsylvania.Mr. Erdogan is presiding over a disastrous economy, with inflation running officially at 83 percent a year.Yasin Akgul/Agence France-Presse — Getty ImagesMr. Erdogan has kept cutting interest rates against conventional economic advice. “We need to reverse monetary policy,” said Mr. Yilmaz, who is touted as a likely finance minister should Mr. Erdogan lose the election. “A strong adjustment of the economy will not be easy.”There is also growing popular resentment of the continuing cost of the refugees, who were taken in by Mr. Erdogan as a generous gesture to fellow Muslims in difficulty.Still, Mr. Erdogan is thought to have a solid 30 percent of the vote as his base, and government-controlled media dominate, with numerous opposition journalists and politicians jailed or silenced.In a report on Wednesday, the European Union criticized “democratic backsliding” and said that “in the area of democracy, the rule of law and fundamental rights, Turkey needs to reverse the negative trend as a matter of priority with addressing the weakening of effective checks and balances in the political system.”Still, at this point, analysts think Mr. Erdogan could lose his majority in Parliament and might just lose the presidential election itself.That is an analysis firmly rejected by Mr. Erdogan’s Justice and Development Party, the AKP, said Volkan Bozkir, a former diplomat and member of Parliament, who says flatly that Mr. Erdogan and his party will be re-elected.Constantinos Filis, the director of the Institute of Global Affairs at the American College of Greece, believes that Mr. Erdogan is trying to keep all options open, “casting Greece as a convenient external threat and creating a dangerous framework within which he could justify a potential move against Greece in advance.”As for Washington, he said, they are telling Mr. Erdogan: “Thank you for what you did in Ukraine, of course you haven’t imposed sanctions on Russia, but OK, you’re in a difficult position, strategically, diplomatically, economically — but don’t dare to do something in the Aegean or the Eastern Mediterranean that will bring trouble to NATO.”Migrants at the border between Turkey and Greece in March 2020. There is growing popular resentment of the continuing cost of the refugees in Turkey, who include four million Syrians.The New York TimesMore likely, Mr. Filis said, Mr. Erdogan would again send migrants toward Europe, or launch another energy exploration in disputed areas off Cyprus or Crete, which produced near clashes in 2020, or intercept a Greek ship transporting military equipment to one of the Aegean Islands.Mr. Ulgen also does not expect armed conflict but would not be surprised. “It could happen; it’s not something we can rule out anymore,” he said. “But if it happens, it will be small-scale.”Niki Kitsantonis More

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    French Refineries Strike May Presage a Winter of Discontent for Europe

    Bitten by inflation, workers are demanding a greater share of the surging profits of energy giants. It’s the kind of unrest leaders fear as they struggle to keep a united front against Russia.LE HAVRE, France — The northern port city of Le Havre is less than 25 miles away from two major oil refineries. But on Friday, the pumps at many gas stations were wrapped in red and white tape, the electric price signs flashing all nines. Little gasoline was to be had.Across France, a third of stations are fully or partly dry, victims of a fast-widening strike that has spread to most of the country’s major refineries, as well as some nuclear plants and railways, offering a preview of a winter of discontent as inflation and energy shortages threaten to undercut Europe’s stability and its united front against Russia for its war in Ukraine.At the very least the strike — pitting refinery workers seeking a greater share of the surging profits against the oil giants TotalEnergies and Exxon Mobil — has already emerged as the first major social crisis of Emmanuel Macron’s second term as president, as calls grow for a general strike next Tuesday.“It’s going to become a general strike. You will see,” said Julien Lemmonier, 77, a retired factory worker stepping out of the supermarket in Le Havre on a gray and rainy morning. He warned that if the port workers followed suit, “It will be over.”Striking employees of the Total refinery on Thursday.Andrea Mantovani for The New York TimesThe widening social unrest is just what European leaders fear as inflation hits its highest level in decades, driven in part by snarls in post-pandemic global supply chains, but also by the mounting impact of the tit-for-tat economic battle between Europe and Russia over its invasion of Ukraine.Economic anxiety is palpable across Europe, driving large protests in Prague, Britain’s biggest railway strike in three decades, as well as walkouts by bus drivers, call center employees and criminal defense lawyers, and causing many governments to introduce relief measures to cushion the blow and ward off still more turbulence. Airline workers in Spain and Germany went on strike recently, demanding wage increases to reflect the rising cost of living.For France the strikes have touched a long-worn nerve of the growing disparity between the wealthy few and the growing struggling classes, as well as the gnawing worry about making ends meet in the cold winter ahead.Workers at half of the country’s eight refineries are continuing to picket for higher wages in line with inflation, as well as a cut of the sky-high profits their companies made over recent months, as the price of gasoline has surged.“The money exists, and it should be distributed,” said Pascal Morel, the regional head of Confédération Générale du Travail, or CGT, France’s second-largest union, which has been leading the strikes. “Rather than laying claim to the striking workers, we should lay claim to their profits.”Pascal Morel, the regional head of Confédération Générale du Travail, one of France’s largest unions, which has been leading the strikes. Andrea Mantovani for The New York TimesSlow to notice at first, the country was rudely awoken to the strike’s effect this week, when pumps across the country ran out of fuel, forcing frustrated motorists to hunt around and then line up — sometimes for hours — at stations that were still open. Nerves quickly frayed, and reports of fistfights between enraged drivers buzzed on the news.In Le Havre, as in the rest of the country, residents revealed mixed feelings about the strikes. Some expressed solidarity with the workers, while others complained about how a small group was holding the entire country hostage. On both sides of the divide, however, many feared the strike would spread.The State of the WarA Large-Scale Strike: President Vladimir V. Putin of Russia unleashed a series of missile strikes that hit at least 10 cities across Ukraine, including Kyiv, in a broad aerial assault against civilians and critical infrastructure that drew international condemnation and calls for de-escalation.Crimean Bridge Explosion: Mr. Putin said that the strikes were retaliation for a blast that hit a key Russian bridge over the weekend. The bridge, which links the Crimean Peninsula to Russia, is a primary supply route for Russian troops fighting in the south of Ukraine.Pressure on Putin: With his strikes on civilian targets in Ukraine, Mr. Putin appears to be responding to his critics at home, momentarily quieting the clamors of hard-liners furious with the Russian military’s humiliating setbacks on the battlefield.Arming Ukraine: The Russian strikes brought new pledges from the West to send in more arms to Ukraine, especially sophisticated air-defense systems. But Kyiv also needs the Russian-style weapons that its military is trained to use, and the global supply of them is running low.“It’s going to bring France to a standstill and I assure you it doesn’t need that,” said Fatma Zekri, 54, an out-of-work accountant.On Thursday, workers echoed the call for a general strike next Tuesday originally issued by the CGT and later supported by three other large unions. And a long-planned protest by left-wing parties over the rising cost of living scheduled for Sunday threatens to become even larger.For Mr. Macron, the strike holds obvious perils, with echoes of the social unrest of the Yellow Vest movement — a widespread series of protests that started as a revolt against higher taxes on fuel. The movement may have dissipated, but its anger has not.In Le Havre, residents revealed mixed feelings about the strikes. Some expressed solidarity with the workers, while others complained about how a small group was holding the entire country hostage.Andrea Mantovani for The New York TimesThe protests paralyzed France for months in 2018 and 2019, led by lower-middle class workers who took to the streets and roundabouts, raging against a climate change tax on gas that they felt was an insulting symbol of how little the government cared about them and their sliding quality of life.The current strikes illustrated a longstanding question that continues to torment many in the country, said Bruno Cautrès, a political analyst at the Center for Political Research at Sciences Po University — “Why do I live in a country that is rich and I am struggling?”Speaking of the president, Mr. Cautrès said, “He has not managed to answer this simple question.”After winning his re-election last April, Mr. Macron promised he would shed his reputation as a top-down ruler and govern the country in a more collaborative way.“The main risk is that he will not succeed in convincing people that the second term is dedicated to dialogue, to easing tensions,” Mr. Cautrès said.But even as he faced criticism that his government had allowed the crisis to get to this point, Mr. Macron sounded defiant on Wednesday night, saying in an interview with the French television channel France 2 that it was “not up to the president of the republic to negotiate with businesses.”The Total refinery, shuttered during a strike by workers.Andrea Mantovani for The New York TimesHis government has already forced some workers back to a refinery near Le Havre and a depot near Dunkirk.“I can’t believe that for one second, our ability to heat our homes, light our homes and go to the gas pump would be put at risk by French people who say, ‘No, to protect my interests, I will compromise those of the nation,’” he said.Still, Mr. Macron is treading a very fine line. The issue of “super profits” has become a charged one in Parliament, with opposition lawmakers from both the left and right demanding companies reaping windfalls be taxed, to benefit the greater population.Over the first half of the year, TotalEnergies made $10 billion in profit and Exxon Mobil raked in $18 billion. Western oil and gas companies have generated record profits thanks to booming energy prices, which have risen because of the war in Ukraine and allowed Russia to rake in billions in revenues even as it cuts oil and gas supplies to Europe. A recent OPEC Plus deal involving Saudi Arabia and Russia to cut production is likely to further raise prices.Earlier this week, Exxon Mobil announced that it had come to an agreement with two of four unions working at its sites, “out of a desire to urgently and responsibly to put an end to the strikes.” But the wage increase was one percentage point less than CGT had demanded, and half the bonus.In its own news release, TotalEnergies said the company continued to aim for “fair compensation for the employees” and to ensure they benefited “from the exceptional results generated” by the company.On Friday, two unions at TotalEnergies announced they had reached a deal for a 7 percent wage increase and a bonus. But CGT, which has demanded a 10 percent hike, walked out of the negotiation and said it would continue the strike.To date, Mr. Macron has been loath to tax the oil giants’ windfall profits, worrying it would tarnish the country’s investment appeal, and preferring instead that companies make what he termed a “contribution.”However, last week the government introduced an amendment to its finance bill, in keeping with new European Union measures, applying a temporary tax on oil, gas and coal producers that make 20 percent more in profit on their French operations than they did during recent years.On Thursday, France’s Finance Minister Bruno Le Maire also called on TotalEnergies to raise wages for salaried workers. And he announced that 1.7 billion euros, about $1.65 billion, would be earmarked to help motorists if fuel prices continued to rise.“It is a company that is now making significant profits,” Mr. Le Maire told RTL radio station on Thursday. “Total has paid dividends, so the sharing of value in France must be fair.”The pumps at gas stations were wrapped in red and white tape, the electric price signs flashing all nines. Andrea Mantovani for The New York TimesThe tangle of pipes and towering smokestacks of the hulking Total refinery in Gonfreville-l’Orcher, just outside of Le Havre, were eerily silent on Thursday, as union members burned wood pallets, hoisted flags and voted to continue the strike.Many believed their anger captured a building sentiment in the country, where even with generous government subsidies, people are struggling financially and are increasingly anxious about the winter of energy cutbacks. Inflation in France, though lower than in the rest of Europe, has surpassed 6 percent, jacking the prices of some basic supplies like frozen meat, pasta and tissues.“This era must end — the era of hogging for some, and rationing for others,” François Ruffin told the protesters on Thursday. Mr. Ruffin, a filmmaker turned elected official with the country’s hard-left France Unbowed party, rose to prominence with his satirical documentary film about France’s richest man, Bernard Arnault, and the loss of middle-class jobs to globalization.If anything should be requisitioned, it should be the profits of huge companies, not workers, many said at the protest sites.David Guillemard, a striker who has worked at the Total refinery for 22 years, said the back-to-work order had kicked a hornet’s nest. “Instead of calming people,” he said, “this has irritated them.” More

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    Your Friday Briefing: Heat Shakes China’s Economy

    Plus the U.S. and Taiwan will begin formal trade talks and Cambodia spars with the Metropolitan Museum of Art.Good morning. We’re covering overlapping global heat waves and coming formal trade talks between the U.S. and Taiwan.Tea farmers have covered their crops with nets in an effort to shield them from the scorching heat.CFOTO/Future Publishing via Getty ImagesHeat wave strains China’s economyFor more than two months, China has faced its most severe heat wave in six decades. The economy is suffering, and the heat wave is forecast to persist for at least another week. The southwest is particularly hard hit.A drought has shrunk rivers and disrupted the region’s supply of water and hydropower. Factories have been forced to close and the region is suffering from rolling blackouts. In two cities, office buildings were ordered to shut off their air conditioning to spare an overextended electrical grid.The intense heat is also expected to affect agriculture and significantly reduce the size of China’s rice harvest, because it has caused long periods of drought.Context: The economy has been headed toward its slowest pace of growth in years, dragged down by the country’s stringent Covid policies. Youth unemployment has reached a record high, while trouble in the real estate sector has set off an unusual surge of public discontentment.Europe: The dry summer has strained Europe’s energy supply, reducing hydropower, threatening nuclear reactors and crimping coal transport. Russian gas cuts could cause further complications.Despite Taiwan’s small size, it is the U.S.’s eighth-largest trading partner.Lam Yik Fei for The New York TimesU.S. and Taiwan to begin trade talksThe Biden administration will begin formal trade negotiations with Taiwan in the fall, deepening economic and technological ties.The talks, which were announced in June, will focus on 11 trade areas, U.S. officials said, including agriculture and digital industries. In an apparent nod to China, the governments said they would combat market distortions caused by state-owned enterprises.China, which claims the self-governed island as its own, responded to the news with displeasure. An official said that Beijing opposed “any form of official exchanges between any country and the Taiwan region of China.”Background: Relations between Washington and Beijing have deteriorated this summer. After top U.S. lawmakers visited Taiwan this month, China responded by ramping up military drills and firing missiles into the waters around the island. Yesterday, Taiwan held a drill simulating a response to a Chinese missile attack, The Associated Press reported.Region: The U.S. is conducting a separate trade negotiation with 13 Asian nations to form a pact known as the Indo-Pacific Economic Framework. Taiwan expressed interest in joining those talks, but given its contested status, it has not been invited.via The Metropolitan Museum of Art, New YorkDoes the Met have stolen Cambodian artifacts?The Metropolitan Museum of Art, in New York City, worked hard to build up its South and Southeast Asian collection. But 13 items came from a dealer who was later indicted as an illegal trafficker of Cambodian artifacts.Cambodian officials now say they believe many of those items were stolen. They also suspect that dozens of other artifacts were looted, and they believe the dealer, Douglas A.J. Latchford, who died in 2020, often sold stolen items to other dealers and donors before they ended up at the museum.They are now in a standoff with the Met. The Cambodians — who base their claim in part on the account of a reformed looter — have enlisted the U.S. Justice Department.But the Met has not seen the evidence, including the looter’s accounts, which it says it had “repeatedly requested.” The museum, which said it has a track record of returning looted items, has refused to show Cambodia internal documents that might buttress, or undermine, its title to the objects.Context: U.S. officials who regard the looter, Toek Tik, as credible have cited his testimony in three cases. Earlier this month, the U.S. attorney’s office for the Southern District of New York announced the return of 30 looted artifacts that had been sold by Latchford.THE LATEST NEWSAsia PacificMourners carrying the body of a victim of a mosque bombing in Kabul yesterday.Ebrahim Noroozi/Associated PressA bombing at a crowded mosque in Kabul killed at least 21 people during evening prayers, the BBC reports.Flash floods killed at least 40 people in Afghanistan, adding to overlapping crises.Vanuatu’s president dissolved Parliament yesterday after an attempt to oust the prime minister, Reuters reports.Hundreds of people evacuated their homes as days of torrential rains slammed parts of New Zealand, Reuters reports.The New Zealand police said human remains found in suitcases bought in a storage unit auction belonged to children, The Associated Press reports.The War in UkraineHere are live updates.António Guterres, the U.N. secretary general, is visiting Ukraine. Yesterday, he urged Moscow and Kyiv to continue to show the “spirit of compromise” that led to the grain deal. Today, he plans to visit Odesa, where grain is again flowing. Russia’s shelling of Kharkiv killed at least 15 people and destroyed a dormitory for deaf people. Local officials say more than 1,000 civilians have been killed in the war.The U.S. and Russia are competing for control of a sleepy Greek port, which the U.S. is using to send weapons to Ukraine. Turkey also senses a threat.Around the WorldA federal judge ordered the U.S. government to propose redactions to the affidavit the F.B.I. used to search Donald Trump’s home.A judge ruled that the body of José Eduardo dos Santos, Angola’s longtime ruler, can be returned from Spain. He died last month in Barcelona, setting off a dispute over where to bury him.Soldiers raided seven Palestinian human rights organizations that Israel has accused of having links to terrorism. The U.N. and rights groups criticized the move, saying it was meant to silence criticism of Israel.A Morning Read“As long as we have blood in our body we will fight,” a 70-year-old fighter said.In northern Afghanistan, hundreds of Shiite Muslims joined an uprising led by a former Taliban commander. Times journalists spent time with the rebels.Lives lived: Hanae Mori, a Japanese couturier, was the first Asian woman to join the ranks of French high fashion. She died at 96.ARTS AND IDEASA feud over the Zulu throneThe Zulus have a new king. But it’s not clear exactly who he is.South Africa’s largest nation has been gripped by a battle over the royal succession since King Goodwill Zwelithini’s death last year. This Saturday, Misuzulu Sinqobile Zulu is expected to perform a ritual that will be a precursor to his formal coronation. Last weekend, his brother Simakade ka Zwelithini carried out the same ritual.Misuzulu has already been recognized by the South African government and senior members of the royal family. But his right to the throne is being challenged by Simakade, King Zwelithini’s oldest living son. There has been a scuffle at the royal palace. At least one news outlet ran a poll asking readers to pick a king.During a televised court hearing that weighed custom and constitutional law, a judge ruled in favor of Misuzulu. But his detractors have refused to accept the decision. There’s more at stake than a royal title. The head of the Zulus will control a $3.9 million annual budget provided by the South African government.As the traditional leader of 14 million people, the Zulu king also has a politically influential position. — Lynsey Chutel, Briefings writer based in Johannesburg.PLAY, WATCH, EATWhat to CookJoe Lingeman for The New York TimesFor an easy weeknight pasta, try smoked almond pesto spaghetti.What to WatchHere are some unexpected streaming suggestions.What to ReadIn “Elizabeth Finch,” a rigorous new novel from Julian Barnes, an adult student nurses an obsession with his teacher.Now Time to PlayPlay today’s Mini Crossword, and a clue: “Ginormous” (four letters).Here are today’s Wordle and today’s Spelling Bee.You can find all our puzzles here.That’s it for today’s briefing. See you next time. — AmeliaP.S. The Times’s Video team won an Edward R. Murrow Award for its documentary about Jan. 6.The latest episode of “The Daily” is on documents at Mar-a-Lago.Lynsey Chutel wrote today’s Arts and Ideas. You can reach Amelia and the team at briefing@nytimes.com. More

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    Status Anxiety Is Blowing Wind Into Trump’s Sails

    What is the role of status discontent in the emergence of right-wing populism? If it does play a key role, does it matter more where someone stands at any given moment or whether someone is moving up the ladder or down?In the struggle for status, Michael Bang Petersen, a political scientist at Aarhus University, Denmark and the lead author of “Beyond Populism: The Psychology of Status-Seeking and Extreme Political Discontent,” argues thatEducation has emerged as a clear cleavage in addition to more traditional indicators of social class. The highly educated fare better in a more globalized world that puts a premium on human capital. Since the 1980s the highly educated left in the U.S. and elsewhere have been forging alliances with minority groups (e.g., racial, ethnic and sexual minorities), who also have been increasing their status in society. This, in turn, pushes those with lower education or those who feel challenged by the new emerging groups towards the right.It is hardly a secret that the white working class has struggled in recent decades — and clearly many factors play a role — but what happens to those without the skills and abilities needed to move up the education ladder to a position of prestige in an increasingly competitive world?Petersen’s answer: They have become populism’s frontline troops.Over the past six decades, according to Petersen, there has been a realignment of the parties in respect to their position as pro-establishment or anti-establishment: “In the 1960s and 1970s the left was associated with an anti-systemic stance but this position is now more aligned with the right-wing.”Those trapped in a downward spiral undergo a devastating experience.Lea Hartwich, a social psychologist at the Institute for Migration Research and Intercultural Studies at Osnabrueck University in Germany wrote in an email:Those falling behind face a serious threat to their self-worth and well-being: Not only are the societal markers of personal worth and status becoming unattainable but, according to the dominant cultural narrative of individual responsibility, this is supposedly the result of their own lack of hard work or merit.Instead of focusing on the economic system and its elites, Hartwich continued,Right-wing populists usually identify what they call liberal elites in culture, politics and the media as the “enemies of the people.” Combined with the rejection of marginalized groups like immigrants, this creates targets to blame for dissatisfaction with one’s personal situation or the state of society as a whole while leaving a highly unequal economic system intact. Right-wing populists’ focus on the so-called culture wars, the narrative that one’s culture is under attack from liberal elites, is very effective because culture can be an important source of identity and self-worth for people. It is also effective in organizing political conflicts along cultural, rather than economic lines.In a January 2021 paper — “Neoliberalism can reduce well-being by promoting a sense of social disconnection, competition, and loneliness” — Hartwich, Julia C. Becker, also of Osnabrueck, and S. Alexander Haslam of Queensland University found that “exposure to neoliberal ideology,” which they describe as the belief that “economies and societies should be organized along the principles of the free market,” results in “loneliness and, through this, decreases well-being. We found that exposure to neoliberal ideology increased loneliness and decreased well-being by reducing people’s sense of connection to others and by increasing perceptions of being in competition with others.”Diana Mutz, a political scientist at the University of Pennsylvania, described the political consequences of white status decline in her 2018 paper, “Status threat, not economic hardship, explains the 2016 presidential vote.”“Candidate preferences in 2016 reflected increasing anxiety among high-status groups,” Mutz wrote. “Both growing domestic racial diversity and globalization contributed to a sense that white Americans are under siege by these engines of change.”Mutz found that:Change in financial well-being had little impact on candidate preference. Instead, changing preferences were related to changes in the party’s positions on issues related to American global dominance and the rise of a majority-minority America: issues that threaten white Americans’ sense of dominant group status.In fact, status decline and economic decline, which have fueled the increasing conservatism of the Republican Party, are closely linked both psychologically and politically.Gordon Hanson, a professor of urban policy at Harvard and the author of “Economic and Political Consequences of Trade-Induced Manufacturing Decline,” emailed me that before the 2016 election, the assumption was that “the political consequences of regionally concentrated manufacturing job loss” would be that “left-leaning politicians” would be “the primary beneficiaries.” Trump’s victory “dramatically altered our thinking on the matter.”Instead, Hanson continued, “large scale job loss led to greater tribalism (as represented by the populist nationalism of Trump and his acolytes) rather than greater support for redistribution (as represented by your run-of-the-mill Democrat).” There was, in fact, “precedence for this outcome,” he wrote, citing a 2013 paper, “Political Extremism in the 1920s and 1930s: Do German Lessons Generalize?” by Alan de Bromhead, Barry Eichengreen and Kevin H. O’Rourke, economists at Queen’s University Belfast, Berkeley and N.Y.U. Abu Dhabi.The three economists wrote:Consistent with German experience, we find a link between right-wing political extremism and economic conditions, as captured by the change in G.D.P. Importantly, however, what mattered for right-wing anti-system party support was not just deterioration in economic conditions lasting a year or two, but economic conditions over the longer run.Many of the U.S. counties that moved toward Trump in 2016 and 2020 experienced long-run adverse economic conditions that began with the 2000 entry of China into the World Trade Organization, setbacks that continue to plague those regions decades later.Hanson and his co-authors, David Autor and David Dorn, economists at M.I.T. and the University of Zurich, found in their October 2021 paper “On the Persistence of the China Shock” thatLocal labor markets more exposed to import competition from China suffered larger declines in manufacturing jobs, employment-population ratios, and personal income per capita. These effects persist for nearly two decades beyond the intensification of the trade shock after 2001, and almost a decade beyond the shock reaching peak intensity.They go on:Even using higher-end estimates of the consumer benefits of rising trade with China, a substantial fraction of commuting zones appears to have suffered absolute declines in average real incomes.In their oft-cited 2020 paper, “Importing Political Polarization? The Electoral Consequences of Rising Trade Exposure,” Autor, Dorn, Hanson and Kaveh Majlesi, an economist at Monash University, found that in majority white regions, adverse economic developments resulting from trade imports produced a sharp shift to the right.Autor and his co-authors describe “an ideological realignment in trade-exposed local labor markets that commences prior to the divisive 2016 U.S. presidential election.” More specifically, “trade-impacted commuting zones or districts saw an increasing market share for the Fox News Channel, stronger ideological polarization in campaign contributions and a relative rise in the likelihood of electing a Republican to Congress.”Counties with a majority white population “became more likely to elect a G.O.P. conservative, while trade-exposed counties with an initial majority-minority population became more likely to elect a liberal Democrat,” Autor and his colleagues write.They continue:In presidential elections, counties with greater trade exposure shifted toward the Republican candidate. These results broadly support an emerging political economy literature that connects adverse economic shocks to sharp ideological realignments that cleave along racial and ethnic lines and induce discrete shifts in political preferences and economic policy.The trade-induced shift to the right has deeper roots dating back to at least the early 1990s.In “Local Economic and Political Effects of Trade Deals: Evidence from NAFTA,” Jiwon Choi and Ilyana Kuziemko, both of Princeton, Ebonya Washington of Yale and Gavin Wright of Stanford make the case that the enactment of the North American Free Trade Agreement in 1993 played a crucial role in pushing working class whites out of the Democratic Party and into the Republican Party:We demonstrate that counties whose 1990 employment depended on industries vulnerable to NAFTA suffered large and persistent employment losses relative to other counties. These losses begin in the mid-1990s and are only modestly offset by transfer programs. While exposed counties historically voted Democratic, in the mid-1990s they turn away from the party of the president (Bill Clinton) who ushered in the agreement and by 2000 vote majority Republican in House elections.The trade agreement with Mexico and Canada “led to lasting, negative effects on Democratic identification among regions and demographic groups that were once loyal to the party,” Choi and her co-authors write.Before enactment, the Republican share of the vote in NAFTA-exposed counties was 38 percent, well below the national average, but “by 1998, these once-solidly Democratic counties voted as or more Republican in House elections as the rest of the country,” according to Choi and her colleagues.Before NAFTA, the authors write, Democratic Party support for protectionist policies had been the glue binding millions of white working-class voters to the party, overcoming the appeal of the Republican Party on racial and cultural issues. Democratic support for the free trade agreement effectively broke that bond: “For many white Democrats in the 1980s, economic issues such as trade policy were key to their party loyalty because on social issues such as guns, affirmative action and abortion they sided with the G.O.P.”The consequences of trade shocks have been devastating both to whole regions and to the individuals living in them.Katheryn Russ — co-author along with Katherine Eriksson and Minfei Xu, economists at the University of California-Davis, Jay C. Shambaugh, an economist at George Washington University of the 2020 paper “Trade Shocks and the Shifting Landscape of U.S. Manufacturing” — wrote in an email that trade induced economic downturns “affect entire communities, as places with the lowest fractions of high-school or college-educated workers are finding themselves falling with increasing persistence into the set of counties with the highest unemployment rates.”Even worse, these counties “do not bounce back out with the same frequency that counties with the highest fraction of high-school and college-educated workers do. So we aren’t just talking about a phenomenon that may influence the self-perceived status of individual workers, but of entire communities.”Russ cited a separate 2017 study, “Trade Shocks and the Provision of Local Public Goods” by Leo Feler and Mine Z. Senses, economists at U.C.LA. and Johns Hopkins, which finds that “increased competition from Chinese imports negatively affects local finances and the provision of public services across US localities.”Specifically, “a $1,000 increase in Chinese imports per worker results in a relative decline in per capita expenditures on public welfare, 7.7 percent, on public transport, 2.4 percent, on public housing, 6.8 percent, and on public education, 0.9 percent.”These shortfalls emerge just as demand increases, Feler and Senses write: “The demand for local public goods such as education, public safety, and public welfare is increasing more in trade-affected localities when resources for these services are declining or remaining constant.”For example,Public safety expenditures remain constant at a time when local poverty and unemployment rates are rising, resulting in higher property crime rates by 3.5 percent. Similarly, a relative decline in education spending coincides with an increase in the demand for education as students respond to a deterioration in employment prospects for low-skilled workers by remaining in school longer.As if that were not enough,In localities that are more exposed to trade shocks, we also document an increase in the share of poor and low-income households, which tend to rely more on government services such as public housing and public transportation, both of which experience spending cuts.Eroded social standing, the loss of quality jobs, falling income and cultural marginalization have turned non-college white Americans into an ideal recruiting pool for Donald Trump — and stimulated the adoption of more authoritarian, anti-immigrant and anti-democratic policies.Rui Costa Lopes, a research fellow at the University of Lisbon, emailed in response to my inquiry about the roots of right-wing populism: “As we’re talking more about those who suffer from relative deprivation, status insecurity or powerlessness, then we’re talking more about the phenomenon of ‘politics of resentment’ and there is a link between those types of resentment and adhesion to right populist movements.”Lopes continued: “Recent research shows that the link between relative deprivation, status insecurity or powerlessness and political populist ideas (such as Euroscepticism) occurs through cultural (anti-immigrant) and political (anti-establishment) blame attributions.”“The promise of economic well-being achieved through meritocratic means lies at the very heart of Western liberal economies,” write three authors — Elena Cristina Mitrea of the University of Sibiu in Romania, Monika Mühlböck and Julia Warmuth, of the University of Vienna — in “Extreme Pessimists? Expected Socioeconomic Downward Mobility and the Political Attitudes of Young Adults.” In reality, “the experience of upward mobility has become less common, while the fear of downward mobility is no longer confined to the lower bound of the social strata, but pervades the whole society.”Status anxiety has become a driving force, Mitrea and her colleagues note: “It is not so much current economic standing, but rather anxiety concerning future socioeconomic decline and déclassement, that influences electoral behavior.”“Socially disadvantaged and economically insecure citizens are more susceptible to the appeals of the radical right,” Mitrea, Mühlböck and Warmuth observe, citing data showing “that far-right parties were able to increase their vote share by 30 percent in the aftermath of financial crises.Economic insecurity translates into support for the far-right through feelings of relative deprivation, which arise from negative comparisons drawn between actual economic well-being and one’s expectations or a social reference group. Coping with such feelings increases the likelihood of rejecting political elites and nurturing anti-foreign sentiments.The concentration of despair in the United States among low-income whites without college degrees compared with their Black and Hispanic counterparts is striking.Carol Graham, a Brookings senior fellow, and Sergio Pinto, a doctoral candidate at the University of Maryland’s School of Public Policy, document this divide in “The Geography of Desperation in America: Labor Force Participation, Mobility Trends, Place, and Well-being,” a paper presented at a 2019 conference sponsored by the Boston Federal Reserve:Poor blacks are by far the most optimistic group compared to poor whites: they are 0.9 points higher on the 0-10 scale (0.43 standard deviations). Poor blacks are also 14 percentage points (0.28 standard deviations) less likely to report stress the previous day, half as likely as poor whites to report stress in the previous day, while poor Hispanics fall somewhere in the middle.Graham and Pinto measured poll respondents’ sense of purpose, sense of community and their financial and social well-being and found “that blacks and Hispanics typically score higher than whites,” noting that “these findings highlight the remarkable levels of resilience among blacks living in precarious circumstances compared to their white counterparts.”Graham and Pinto write:The deepest desperation is among cohorts in the white working class who previously had privileged access to jobs (and places) that guaranteed stable, middle-class lives. Rather ironically, African Americans and Hispanics — the cohorts that historically faced high levels of discrimination — retain higher levels of well-being, especially hope for the future.The data suggest that a large segment of the white, non-college population lives day-by-day in a cauldron of dissatisfaction, a phenomenon that stands apart from the American tradition.This discontent drew many disaffected Americans to Donald Trump, and Trump’s defeat in 2020 has produced millions of still more disaffected voters who support his claim that the election was stolen.Michael Bang Petersen puts it this way:We know that humans essentially have two routes to acquire status: prestige and dominance. Prestige is earned respect from having skills that are useful to others. Dominance is status gained from intimidation and fear. Individuals who are high in the pursuit of dominance play a central role in political destabilization. They are more likely to commit political violence, to engage in hateful online interactions and to be motivated to share misinformation.That this is dangerous does not need repeating.The Times is committed to publishing a diversity of letters to the editor. We’d like to hear what you think about this or any of our articles. Here are some tips. And here’s our email: letters@nytimes.com.Follow The New York Times Opinion section on Facebook, Twitter (@NYTopinion) and Instagram. More

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    As Germany Election Nears, Merkel Leaves a Strong But Vulnerable Economy

    Chancellor Angela Merkel steered Europe through crises, and Germany has boomed during her tenure. But she has ducked changes needed to ensure the success lasts, analysts say.During her 16 years as Germany’s chancellor, Angela Merkel has become an international avatar of calm, reason and democratic values for the way she handled crises that included a near financial meltdown of the eurozone, the arrival of more than a million migrants and a pandemic.Today Germany is an economic colossus, the engine of Europe, enjoying prosperity and near full employment despite the pandemic. But can it last?That is the question looming as Ms. Merkel prepares to leave the political stage after national elections on Sept. 26. There are signs that Germany is economically vulnerable, losing competitiveness and unprepared for a future shaped by technology and the rivalry between the United States and China.During her tenure, economists say, Germany neglected to build world-class digital infrastructure, bungled a hasty exit from nuclear power, and became alarmingly dependent on China as a market for its autos and other exports.The China question is especially complex. Germany’s strong growth during Ms. Merkel’s tenure was largely a result of trade with China, which she helped promote. But, increasingly, China is becoming a competitor in areas like industrial machinery and electric vehicles.Economists say that Germany has not invested enough in education and in emerging technologies like artificial intelligence and electric vehicles. Germans pay some of the highest energy prices in the world because Ms. Merkel pushed to close nuclear power plants, without expanding the country’s network of renewable energy sources enough to cover the deficit.Ms. Merkel met President Xi Jinping of China, second right, in Beijing in 2019. Germany has grown strongly through trade with China, but they’re also increasingly competitors. Pool photo by Michael Kappeler“That is going to come back to haunt Germany in the next 10 years,” said Guntram Wolff, director of Bruegel, a research institute in Brussels.There was never much pressure on Ms. Merkel to focus on fundamental economic policy because the German economy has boomed during her tenure. Germany has recovered from the pandemic faster than other European countries like France or Italy.But the pandemic has also exposed Germany’s economic dependence on China.In 2005, China accounted for a fraction of German exports. Last year it surpassed the United States as Germany’s largest trading partner. China is the biggest market by far for the automakers Volkswagen, Mercedes-Benz and BMW. German companies have also thrived by equipping Chinese factories with machine tools and other industrial goods that made China an export powerhouse.Ms. Merkel abandoned her early emphasis on human rights in her relations with the Chinese government and instead encouraged ever deeper economic ties. She hosted Chinese leaders in Berlin and traveled 12 times to Beijing and other cities in China, often with delegations of German business managers. But Germany’s economic entanglement with China has made it increasingly vulnerable to pressure from China’s president, Xi Jinping.Late last year, while Germany took its official turn setting the agenda of the European Union, Ms. Merkel and President Emmanuel Macron of France pushed through an investment accord with China over the objections of the incoming Biden administration, largely bypassing other European allies.“German trade with China dwarfs all other member states, and Germany clearly drives policy on China in the E.U.,” said Theresa Fallon, director of the Center for Russia Europe Asia Studies in Brussels. Germany’s economic dependence on China “is driving a wedge in trans-Atlantic relations,” Ms. Fallon said.An electric Mercedes Benz at the International Motor Show in Munich this month. Germany has only recently moved to match U.S. incentives for buyers of electric cars.Felix Schmitt for The New York TimesIn recent years China has been using what it learned from German companies to compete with them. Chinese carmakers including Nio and BYD are beginning to sell electric vehicles in Europe. China has become the No. 2 exporter of industrial machinery, after Germany, according to the VDMA, which represents German engineering companies.Ms. Merkel’s supporters say that she has helped the German economy dodge some bullets. Her sharp political instincts proved valuable during a eurozone debt crisis that began in 2010 and nearly destroyed the currency that Germany shares with 18 other countries. Ms. Merkel arguably kept hard-liners in her own Christian Democratic Union in check as the European Central Bank printed money to help stricken countries like Greece, Italy and Spain.But her longtime finance minister, Wolfgang Schäuble, was also a leading enforcer of policies that protected German banks while imposing harsh austerity on southern Europe. At the time, Germany refused to back the idea of collective European debt — a position that Ms. Merkel abandoned last year, when faced with the fallout from a pandemic that threatened European unity.Ms. Merkel had some luck on her side, too. The former communist states of East Germany largely caught up during her tenure. And Ms. Merkel profited from reforms made by her predecessor, Gerhard Schröder, which made it easier for firms to hire and fire and put pressure on unemployed people to take low-wage jobs.Mr. Schröder’s economic overhaul led to a sharp decline in unemployment, from more than 11 percent when Ms. Merkel took office to less than 4 percent. But the changes were unpopular because they weakened regulations that shielded Germans from layoffs. They paved the way for Mr. Schröder’s defeat by Ms. Merkel in 2005.The lesson for German politicians was that it was better not to tamper with Germans’ privileges, and for the most part Ms. Merkel did not. Many of the jobs created were low wage and offered limited chances for upward mobility. The result has also been a rise in social disparity, with a rapidly aging population increasingly threatened by poverty.“Over the past 15 to 16 years we have seen a clear increase in the number of people who live below the poverty line and are threatened,” said Marcel Fratzscher, an economist at the D.I.W. research institute in Berlin. “Although the 2010 years were very economically successful, not everyone has benefited.”Ms. Merkel’s failure to invest more in infrastructure, research and education, despite her background as a doctor of physics, also reflects the German aversion to public debt. Mr. Schäuble, as finance minister, enforced fiscal discipline that prioritized budget surpluses over investment. The German Parliament, controlled by Ms. Merkel’s party, even enshrined balanced budgets in law, a so-called debt brake.A school in Berlin last year. Economists say that Germany has not invested enough in education and in emerging technologies.Lena Mucha for The New York TimesThe frugal policies were popular among Germans who associate deficit spending with runaway inflation. But they also let Germany fall behind other nations.Since 2016 Germany has slipped from 15th to 18th place in rankings of digital competitiveness by the Institute for Management and Development in Lausanne, Switzerland, which attributed the decline partly to inferior training and education as well as government regulations. Between 40 to 50 percent of all workers in Germany will need to retrain in digital skills to keep working within the next decade, according to the Labor Ministry. Most German schools lack broadband internet and teachers are reluctant to use digital learning tools — a situation that became woefully apparent during the coronavirus lockdowns.“Technology is strategic. It’s a key instrument in the systemic rivalry we have with China,” Omid Nouripour, a lawmaker who speaks for the Green Party on foreign affairs, said during an online discussion this month organized by Berenberg Bank. “We didn’t create enough awareness of that in the past.”The need for Germany to modernize has become more urgent as climate change has become more tangible, and as a shift to electric vehicles threatens the hegemony of German luxury automakers. Tesla has already taken significant market share from BMW, Mercedes-Benz and Audi, and is building a factory near Berlin to challenge them on their home turf. Until last year, the financial incentives that the German government offered to buyers of electric cars were substantially smaller than the tax credits available in the United States.Wind turbines, mining and coal power in Garzweiler, Germany. Ms. Merkel pushed the country away from nuclear energy, but without renewables quickly filling the gap.Ina Fassbender/Agence France-Presse — Getty Images“What is very important for Germany as an industrial nation, and also for Europe as a place for innovation, is a symbiosis between an ambitious climate policy and a very strong economic policy,” Ola Källenius, the chief executive of Daimler, told reporters at the IAA Mobility trade fair in Munich.Auto executives do not criticize Ms. Merkel, who has been a strong advocate for their interests in Berlin and abroad. But they implicitly fault her government’s sluggish response to the shift to electric vehicles. While Germany has more charging stations per capita than the United States, there are not enough to support increasing demand for electric vehicles.“The framework for this transition of the auto industry is not complete yet,” said Oliver Zipse, the chief executive of BMW and president of the European Automobile Manufacturers’ Association. “We need an industry policy framework that begins with charging infrastructure.”Said Mr. Källenius of Daimler, “We are in an economic competition with the United States, North America with China, with other strong Asian countries. We need an economic policy that ensures that Europe remains attractive for investment.” More

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    German Election: Who Is the Green Party's Annalena Baerbock?

    Annalena Baerbock, the 40-year-old candidate for the Green Party, is likely to have a say in Germany’s next government, no matter who wins this month’s election.BOCHUM, Germany — The woman who wants to replace Chancellor Angela Merkel strode onto the stage in sneakers and a leather jacket, behind her the steel skeleton of a disused coal mining tower, before her a sea of expectant faces. The warm-up act, a guy with an Elvis quiff draped in a rainbow flag, sang “Imagine.”Annalena Baerbock, the Green Party candidate for chancellor, is asking Germans to do just that. To imagine a country powered entirely by renewable energy. To imagine a relatively unknown and untested 40-year-old as their next chancellor. To imagine her party, which has never before run Germany, leading the government after next month’s election.“This election is not just about what happens in the next four years, it’s about our future,” Ms. Baerbock told the crowd, taking her case to a traditional coal region that closed its last mine three years ago.“We need change to preserve what we love and cherish,” she said in this not necessarily hostile, but skeptical, territory. “Change requires courage, and change is on the ballot on Sept. 26.”Just how much change Germans really want after 16 years of Ms. Merkel remains to be seen. The chancellor made herself indispensable by navigating innumerable crises — financial, migrant, populist and pandemic — and solidifying Germany’s leadership on the continent. Other candidates are competing to see who can be most like her.Ms. Baerbock, by contrast, aims to shake up the status quo. She is challenging Germans to deal with the crises that Ms. Merkel has left largely unattended: decarbonizing the powerful automobile sector; weaning the country off coal; rethinking trade relationships with strategic competitors like China and Russia.It is not always an easy sell. In an unusually close race, there is still an outside chance that the Greens will catch up with Germany’s two incumbent parties. But even if they do not, there is almost no combination of parties imaginable in the next coalition government that does not include them. That makes Ms. Baerbock, her ideas and her party of central importance to Germany’s future. But Germans are still getting to know her.“This election is not just about what happens in the next four years, it’s about our future,” Ms. Baerbock said during her election tour.Laetitia Vancon for The New York TimesA crowd gathered to listen to Ms. Baerbock in Duisburg, in western Germany.Laetitia Vancon for The New York TimesA competitive trampolinist in her youth who became a lawmaker at 32 and has two young daughters, Ms. Baerbock bolted onto Germany’s national political scene only three years ago when she was elected one of the Greens’ two leaders. “Annalena Who?” one newspaper asked at the time.After being nominated in April as the Greens’ first-ever chancellor candidate, Ms. Baerbock briefly surged past her rivals in Germany’s long-dominant parties: Armin Laschet, the leader of the Christian Democrats, and Olaf Scholz of the center-left Social Democrats, who now leads the race.But she fell behind after stumbling repeatedly. Rivals accused Ms. Baerbock of plagiarism after revelations that she had failed to attribute certain passages in a recently published book. Imprecise labeling of some of her memberships led to headlines about her padding her résumé.More recently, she and her party failed to seize on the deadly floods that killed more than 180 people in western Germany to energize her campaign, even as the catastrophe catapulted climate change — the Greens’ flagship issue — to the top of the political agenda.Hoping to reset her campaign, Ms. Baerbock, traveling in a bright green double-decker bus covered in solar panels, is taking her pitch to German voters in 45 cities and towns across the country.Ms. Baerbock in the campaign bus with her social media and logistics team.Laetitia Vancon for The New York TimesIt was no coincidence that her first stop was the industrial heartland of Germany, in the western state of North-Rhine Westphalia, which was badly hit by floods this summer and is run by Mr. Laschet, who has been criticized for mismanaging the disaster.“Climate change isn’t something that’s happening far away in other countries, climate change is with us here and now,” Ms. Baerbock told a crowd of a few hundred students, workers and young parents with their children in Bochum.“Rich people will always be able to buy their way out, but most people can’t,” she said. “That’s why climate change and social justice are two sides of the same coin for me.”Leaving the stage with her microphone, Ms. Baerbock then mingled with the audience and took questions on any range of topics — managing schools during the pandemic, cybersecurity — and apologized for her early missteps.“Yes, we’ve made mistakes, and I’m annoyed at myself,” she said. “But I know where I want to go.”Germany’s two traditional mainstream parties have seen their support shrink in recent years, while the Green Party has more than doubled its own.Laetitia Vancon for The New York TimesIf there is one thing that sets Ms. Baerbock apart from her rivals, it is this relative openness and youthful confidence combined with a bold vision. She is the next generation of a Green Party that has come a long way since its founding as a radical “anti-party party” four decades ago.In those early days, opposition, not governing, was the aim.For Ms. Baerbock, “governing is radical.”Her party’s evolution from a fringe protest movement to a serious contender to power in many ways reflects her own biography.Born in 1980, she is as old as her party. When she was a toddler, her parents took her to anti-NATO protests. By the time she joined the Greens as a student in 2005, the party had completed its first stint in government as the junior partner of the Social Democrats. By now, many voters have come to see the Greens as a party that has matured while remaining true to its principles. It is pro-environment, pro-Europe and unapologetically pro-immigration. Ms. Baerbock joined the Greens as a student in 2005.Laetitia Vancon for The New York TimesMs. Baerbock proposes spending 50 billion euros, about $59 billion, in green investments each year for a decade to bankroll Germany’s transformation to a carbon-neutral economy — and paying for it by scrapping the country’s strict balanced budget rule.She would raise taxes on top earners and put tariffs on imports that are not carbon neutral. She envisions solar panels on every rooftop, a world-class electric car industry, a higher minimum wage and climate subsidies for those with low incomes. She wants to team up with the United States to get tough on China and Russia.She is also committed to Germany’s growing diversity — the only candidate who has spoken of the country’s moral responsibility to take in some Afghan refugees, beyond those who helped Western troops. Ms. Baerbock’s ambitions to break taboos at home and abroad — and her rise as a serious challenger of the status quo — is catching voters’ attention as the election nears.It has also made her a target of online disinformation campaigns from the far right and others. A fake nude picture of her has circulated with the caption, “I needed the money.” Fake quotes have her saying she wants to ban all pets to minimize carbon emissions.Ms. Baerbock’s enemies in the mainstream conservative media have not held back either, exploiting every stumble she has made.Many of those who heard her speak in Bochum recently said they were impressed by her confident delivery (she spoke without notes) and willingness to engage with voters in front of rolling cameras.A supporter surprised Ms. Baerbock by offering her a heart-shaped balloon in Hildesheim, in northern Germany.Laetitia Vancon for The New York Times“She focused on issues and not emotions,” said Katharina Münch, a retired teacher. “She seems really solid.” Others were concerned about her young age and lack of experience.“What has she done to run for chancellor?” said Frank Neuer, 29, a sales clerk who had stopped by on his way to work. “I mean, it’s like me running for chancellor.”Political observers say the attacks against Ms. Baerbock have been disproportionate and revealing of a deeper phenomenon. Despite having a female chancellor for almost two decades, women still face tougher scrutiny and sometimes outright sexism in German politics.“My candidacy polarizes in a way that wasn’t imaginable for many women of my age,” Ms. Baerbock said, sitting in a bright wood-paneled cabin on the top level of her campaign bus between stops.“In some ways, what I’ve experienced is similar to what happened in the U.S. when Hillary Clinton ran,” she added. “I stand for renewal, the others stand for the status quo, and of course, those who have an interest in the status quo see my candidacy as a declaration of war.”Bochum was among the stops on Ms. Baerbock’s campaign swing.Laetitia Vancon for The New York TimesWhen Ms. Merkel first ran for office in 2005, at 51, she was routinely described as Chancellor Helmut Kohl’s “girl” and received not just endless commentary on her haircut, but relentless questions about her competence and readiness for office. Even allies in her own party dismissed her as an interim leader at the time.Ms. Baerbock’s answer to such challenges is not to hide her youth or motherhood, but rather to lean into them.“It’s up to me as a mother, up to us as a society, up to us adults to be prepared for the questions of our children: Did you act?” she said. “Did we do everything to secure the climate and with it the freedom of our children?”Ms. Baerbock talking with a group of young women at the end of a campaign day in Duisburg.Laetitia Vancon for The New York TimesChristopher F. Schuetze More