Haiti gang leader ‘Barbecue’ would take part in peace talks but resist foreign peacekeepers


The gang leader who has become the face of Haiti’s descent into lawlessness and violence has said he would consider calling a ceasefire only if his consortium of armed gangs was included in international talks on the country’s future.

Jimmy Chérizier, the former police officer better known via his nomme de guerre “Barbecue,” spoke to Stuart Ramsay, the chief correspondent for the U.K.’s Sky News, which like NBC News is owned by Comcast.

He warned that a foreign peacekeeping force would be treated as enemy fighters and meet armed resistance, and that a recent pause in violence was merely a technical halt.

“There is nothing calm, but when you’re fighting you have to know when to advance and when to retreat,” Chérizier said in the interview, which aired Friday.

“I think every day that passes we are coming up with a new strategy so we can advance, but there’s nothing calm. In the days that are coming things will get worse than they are now,” he said.

Chérizier leads the G9 collective of gangs but also leads Viv Ansanm, meaning “Living Together,” a revolutionary gang alliance.

Haiti Experiences Surge Of Gang Violence
Haitian Gang Leader Jimmy ‘Barbecue’ Chérizier is flanked by his henchmen in Port-au-Prince on Feb. 22, 2024.Giles Clarke / Getty Images

As much of 80% of the capital, Port-au-Prince, is now in the control of gangs after Prime Minister Ariel Henry announced he would stand down on March 12 following months of unrest. The United Nations said an estimated 1,500 people have been killed in gang violence this year so far, and 4,500 last year, in a report released Thursday.

At least 450 U.S. nationals have been evacuated from Haiti since March 17, with efforts ongoing to airlift the remaining Americans there, the State Department said in a briefing Thursday.

The pan-Caribbean CARICOM group of nations and the United States pledged to help form a transitional government leading to a democratic nation — but for now the gangs still rule the streets.

Chérizier was dismissive of this process, but said he respected CARICOM and left open the possibility of taking part in a peace deal.

“If the international community comes with a detailed plan where we can sit together and talk, but they do not impose on us what we should decide, I think that the weapons could be lowered,” he said.

“We don’t believe in killing people and massacring people, we believe in dialogue, we have weapons in our hand and it’s with the weapons that we must liberate this country,” Chérizier added.

The consortium of armed gangs Chérizier leads says that Haiti has been controlled by corrupt politicians, dating back at least to the devastating earthquake in 2010 that killed about 220,000 people and left 1.5 million homeless. Many in Haiti believe that international aid money for reconstruction was mishandled.

Seen by some as a revolutionary leader, Chreizier has been accused of brutal violence for years, including the killing of at least 71 civilians and torching of some 400 homes in Port-au-Prince in 2018. That was at the time Haiti’s worst massacre in a decade and led to him being branded a human rights abuser by the U.S. Treasury.

Sky News had to travel along a deserted freeway with abandoned, burnt-out vehicles to reach the man known as Barbecue, who was surrounded by armed guards and carrying two weapons himself.

“We were told that their snipers were watching us, and to drive slowly, and follow our guide’s every move,” Ramsay wrote in his report. He described this once busy route into the capital as “a barricaded battlefield.”

The area claimed by Chérizier’s group was relatively calm and stable — food and water distribution is taking place, with orderly lines of people, he said.

But Chérizier made it clear that any foreign peacekeeping force sent in would face armed resistance.

Kenya has pledged to send 1,000 troops to coordinate a U.N.-backed alliance, but the plan is now on hold. Chérizier said the Kenyans would commit atrocities and he would not allow it.

“It’s evolving. If the Kenyan military or Kenyan police come, whatever, I will consider them as aggressors, we will consider them as invaders, and we do not have to collaborate with any invaders that have come to walk over our independence,” he said.

Chérizier predicted there would be a Haiti “where there are no kidnappings, without raping and killing people,” but this would require “corrupt politicians and the corrupt oligarchs” leaving.



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Smelly, invasive ‘stinknet’ plant closes part of Arizona national monument



Take an invasive plant, already a threat to ecosystems, and add insult to injury: Stinknet, which smells as pleasant as it sounds, has forced the temporary closure of a picnic area at Arizona’s Casa Grande Ruins National Monument.

The plant, also known as globe chamomile, smells like turpentine when it is crushed, and it can cause respiratory or allergic reactions, according to the University of Arizona.

The plant’s presence by the picnic area in Casa Grande Ruins National Monument means part of the monument will be closed until a solution is found, the monument staff announced Wednesday.

The invasive plant, which has already taken root in the Phoenix area, was first found and collected in the state in 1997, according to the university.

The plant then spread south along the Interstate 10 corridor and into Pinal County, which is where the national monument is.

“We also ask that visitors avoid walking near or stepping on this flowering weed in other areas of the park to avoid spreading it,” national monument staff said in a statement.

Invasive plants crowd out native plants and can damage ecosystems.

Stinknet, which is native to South Africa, poses a serious threat to the Sonoran Desert, Arizona State Parks and Trails says on its website. The state agency lists the plant in its top eight invasive weeds and grasses.

“This aggressive plant has rapidly spread across the desert landscape, displacing native vegetation and altering fragile ecosystems,” the agency said — let alone its unpleasant smell and rashes. It also becomes a wildfire hazard in summer.

Homeowners, if they see them, are encouraged to carefully and bag the weeds, preferably before they produce flowers that contain hundreds of seeds, Arizona State Parks and Trails says.

Stinknet is established now in parts of Southern California, Arizona and northern Mexico, and it was reported growing in southern Nevada in 2018, according to the University of California Statewide Integrated Pest Management System.

Casa Grande Ruins National Monument, near Coolidge, contains structures from the Ancestral Sonoran Desert People.



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90% of some of the world’s traditional wine regions could be gone in decades. It’s part of a larger problem.


Your favorite wines may soon cease to exist. Some of the world’s traditional wine regions, from Europe to Southern California, are at risk of almost completely disappearing within decades, researchers found, as the conditions necessary to produce their grapes grow more unfruitful due to climate change

As humans continue to burn fossil fuels, the planet is getting warmer. And those increasing temperatures — which impact everything from the water cycle to locations where people can safely live — are fueling more extreme weather. In a new literature review published in Nature Reviews Earth & Environment on Tuesday, scientists found that climate change’s impact in the coastal and lowland regions of Spain, Italy, Greece and Southern California — all home to some of the world’s most traditional wine producers — is significant. 

By the end of the century — just 76 years — they found roughly 90% of these specific regions “could be at risk of disappearing.” Specifically, they found that excessive drought and more frequent heat waves fueled by climate change are responsible for the threat. An area’s temperature, precipitation, humidity, radiation and carbon dioxide levels are also vital components of wine production, and are all altered by climate change. 

Overall, the study says, “We estimate a substantial risk of unsuitability (ranging from moderate to high) for 49-70% of existing wine regions, contingent on the degree of global warming.”

Southern California, for example, has a moderate risk of being unsuitable for producing wine with 2 degrees Celsius of global warming, compared to pre-industrial levels. if average temperatures rise between 2 and 4 degrees, however, the region faces a “high risk of unsuitability.” This could pose a major problem for the U.S. West Coast, which produces most of the wine in North America and 10% of the global supply. 

“Overall, the net suitable ara for wine production in California could decline by up to 50% by the end of the 21st century,” researchers said. “Similar risks exist for Mexico, the southwestern United States and those regions of the east coast south of New Jersey.” 

That shift is seen across much of southern Europe as well. 

43017-2024-521-fig1-html.jpg
Current suitability across continental regions is noted by the green shading of the hexagons, from less suitable (light green) to more suitable (darker green). Future suitability change in these regions is noted by the colour of the dots within the hexagons according to the key; the left dot represents the change for a scenario in which there is global warming (GW) of up to 2 °C and the right dot the change for warming of 2-4 °C. The size of the dot represents the confidence of the assessment.

Cornelis van Leeuwen, Giovanni Sgubin, et al/Nature Reviews Earth and Environment


But all hope isn’t lost for wine itself. The rising temperatures may make other regions more suitable for growing the grapes, such as Washington State, Oregon, Tasmania and Northern France. That suitability, however, will “strongly” depend on how much temperatures rise, the researchers say, and there may be risks to environmental preservation. And even though it could bring a new form of economic growth to those areas, people will still be facing extreme weather and its costly impacts. 

A changing climate also brings the risk of areas experiencing new pathogens and insects that can impact agriculture and overall environmental and human health. Drier conditions would make some grapevine issues, like downy mildew, less likely, but when it does happen, the outbreak would likely occur earlier and spread faster, the study found.

As with all elements of climate change, adaptation is “mandatory,” researchers said. Wine producers will need to consider grape varieties that are better suited for their changing regions and harvest times. It’s not just essential for global supply, but for overall wine quality

For example, climate factors affect the levels of pH, alcohol content and acidity, researchers found. While the alcohol and pH levels are increasing in wines, the acidity levels are decreasing, which makes the microbiology within the beverage more unstable. That can lead to “increased risk of microbiological spoilage,” researchers said, and lead to an “overripe and/or cooked fruit aroma.” 

Scientists have warned that current global efforts to slow global warming are not enough. Last year was the warmest on record, and the beginning of 2024 has already seen record-breaking heat as well as weather extremes ranging from unusually large blizzards to out-of-season warmth. 

Already, global temperatures are 1.35 degrees Celsius above the pre-industrial average overall. And the world just recently surpassed for the first time 12 consecutive months where the global average was 2 degrees Celsius above the pre-industrial average — a fact that doesn’t mean we’ve permanently crossed the critical 2-degree Celsius threshold that experts warn could have disastrous implications, but means we are well on the way there. 

“One thing is certain,” researchers say in the end of their analysis, “climate change will drive major changes in global wine production in the near future. Having the flexibility to adapt to these changes will be essential.” 



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Vodafone Germany cutting 2,000 jobs as part of savings programme


Vodafone Germany is cutting and relocating around 2,000 jobs in a bid to save €400 million ($434 million) in the next two years, the company announced on Tuesday.

Vodafone currently employs around 15,000 people in Germany, which means that 13% of employees would be affected by the cuts.

In addition to job cuts, Vodafone Germany plans to reduce material and operating costs, the head of the company, Philipp Rogge, said in a speech to employees.

The measures affect, for example, systems that are outdated or duplicated following company takeovers.

Rogge is leaving the company at the end of March.

Vodafone Germany has been undergoing a process of change for years. Under Rogge’s predecessor Hannes Ametsreiter, many customers recently complained that Vodafone was not able to fulfil its bold advertising promises when it came to landline connections, for example.

Rogge on Tuesday explained that Vodafone has begun to realign itself – and has returned to growth with improved networks and offers in recent quarters. “Over the next two years, Vodafone therefore wants to become even simpler, faster, leaner and therefore more powerful,” Rogge said.

As part of the restructuring, “simpler products and services” are to be developed in future, Vodafone said. Costs are to be reduced primarily by dismantling complex structures and modernizing network elements and IT systems.

Rogge, who only took over the chief executive’s position from Ametsreiter in July 2022, promised that Vodafone would make the personnel changes in a socially responsible manner.

Certain manual activities will be carried out through increased automation in future, he said. However, Vodafone also wants to hire new people in other areas.

Growth areas such as the cloud business and “customer-facing positions, especially in the corporate customer segment” are to be strengthened with experts, Rogge said.



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Large part of Baltimore’s Francis Scott Key Bridge collapses after ship collision


Large part of Baltimore’s Francis Scott Key Bridge collapses after ship collision – CBS News

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“The bridge is gone”: Video from an eyewitness shows a central span of the Francis Scott Key Bridge in Baltimore completely missing early Tuesday after authorities said it was hit by a large container ship.

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Ukraine is winning a crucial part of the land war. It’s nuclear button time for Putin – again


Dmitry Medvedev is afraid. He’s afraid because his boss, Vladimir Putin, is also afraid.

Former Russian president Medvedev, now deputy chairman of Russia’s security council – which autocrat Putin chairs – is a useful mouthpiece for Putin. A proxy who’s just far enough removed from Putin to say things even Putin should not say, but close enough that we can sense Putin silently mouthing the words coming from Medvedev’s mouth.

So when Medvedev threatens for the umpteenth time to nuke Ukraine, we may as well attribute those words to Putin. And when we smell Medvedev’s fear – the feeling soaking every syllable of his apocalyptic utterances – we can whiff if wafting off Putin, too.

Medvedev is afraid. Two months into Ukraine’s long-anticipated counteroffensive, Ukrainian brigades have advanced only a few miles along three or four critical axes across Kherson, Zaporizhzhia, Donetsk and Luhansk Oblasts in southern and eastern Ukraine. And they’ve paid in blood for every yard.

But there’s a reason the Ukrainians are moving slowly. Kyiv’s fast-improving artillery corps, exquisitely supplied by NATO countries, is destroying three or four Russian howitzers for every one Ukrainian howitzer the Russians destroy. And, in stark defiance of history’s preference for defending armies, the attacking Ukrainian army is killing as many Russians as the Russians are killing Ukrainians.

Kyiv’s forces are moving slowly because they’re letting their artillery lead the way. And the big guns are working methodically, grinding up one Russian echelon at a time.

Medvedev is afraid because Putin is afraid. And Putin is afraid because, 18 months into Russia’s wider attack on Ukraine, his army of more than a million people still can’t beat the Ukrainian army, which is half that size and has fewer of everything. 

It’s Putin’s fear that feeds his worst impulse: to threaten, through Medvedev, the nuclear annihilation of human civilization. The virtual destruction of the only sentient species we know to exist anywhere in the vast cosmos. Make no mistake, when Medvedev says Russia might use nuclear weapons – as he did again on July 30 – he’s saying that Putin is saying that ending everything is a better outcome, for Russia, than losing a regional war of choice.

“Imagine if the … offensive, which is backed by Nato, was a success and they tore off a part of our land,” Medvedev seethed on his official social media accounts. “Then we would be forced to use a nuclear weapon according to the rules of a decree from the president of Russia.”

“There would simply be no other option,” Medvedev said. “So our enemies should pray for our warriors. They are making sure that a global nuclear fire is not ignited.”

He’s bluffing. Because he and his boss are afraid and because the bluff is all they have left as Russia’s disastrous wider war grinds into its 18th month, with no sign that Ukraine or its allies are giving up. If he weren’t bluffing, we’d know. We’d know because we – well, a vanishing few of us, maybe – would already be living in an irradiated post-apocalyptic wasteland. 

In the spring of 2022, Ukrainian brigades defeated Russia’s assault on Kyiv and forced the Russian survivors back to the fringes of eastern and southern Ukraine. Six months later, eager Ukrainian brigades exploited gaps in Russian lines and pushed back the Russians even farther. And eight months after that, the Ukrainians kicked off their current counteroffensive. 

And all the while, Ukrainian rockets, drones, saboteurs and assassins have killed Russian officials, shot down Russian warplanes, sunk Russian warships and blown up military sites in Russian air space, in Russian waters and on Russian soil. 

Putin didn’t trigger a nuke then. He won’t trigger a nuke now. Because even as wicked, craven and cruel as Putin is, he’s not insane. And he doesn’t want to die in the retaliatory nuclear strike that surely would follow any atomic attack on Ukraine.

And even if there’s an edge of insanity in Putin’s deepening desperation, the United States and its NATO allies shouldn’t bow to nuclear threats. If Putin could merely say, through Medvedev, the word “nuclear” and get his way, he would say “nuclear” all the time – and march his army across Eastern Europe, its troops shielded by their leaders’ atomic threats.

Medvedev is afraid. Because Putin is afraid. That fear makes them reckless with their words. But it doesn’t make them suicidal.

And if I’m wrong, it won’t matter. If I’m wrong, then Putin was ready to end the world after any defeat. And if that defeat didn’t come in Ukraine, it would eventually come somewhere else. Which means Armageddon has been inevitable since 1999.



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Ukraine is winning a crucial part of the land war. It’s nuclear button time for Putin – again


Ukrainian soldiers fighting the land war with heavy artillery

Ukrainian heavy artillery in action on the front line near Donetsk – Libkos/AP

Dmitry Medvedev is afraid. He’s afraid because his boss, Vladimir Putin, is also afraid.

Former Russian president Medvedev, now deputy chairman of Russia’s security council – which autocrat Putin chairs – is a useful mouthpiece for Putin. A proxy who’s just far enough removed from Putin to say things even Putin should not say, but close enough that we can sense Putin silently mouthing the words coming from Medvedev’s mouth.

So when Medvedev threatens for the umpteenth time to nuke Ukraine, we may as well attribute those words to Putin. And when we smell Medvedev’s fear – the feeling soaking every syllable of his apocalyptic utterances – we can whiff if wafting off Putin, too.

Medvedev is afraid. Two months into Ukraine’s long-anticipated counteroffensive, Ukrainian brigades have advanced only a few miles along three or four critical axes across Kherson, Zaporizhzhia, Donetsk and Luhansk Oblasts in southern and eastern Ukraine. And they’ve paid in blood for every yard.

But there’s a reason the Ukrainians are moving slowly. Kyiv’s fast-improving artillery corps, exquisitely supplied by NATO countries, is destroying three or four Russian howitzers for every one Ukrainian howitzer the Russians destroy. And, in stark defiance of history’s preference for defending armies, the attacking Ukrainian army is killing as many Russians as the Russians are killing Ukrainians.

Kyiv’s forces are moving slowly because they’re letting their artillery lead the way. And the big guns are working methodically, grinding up one Russian echelon at a time.

Medvedev is afraid because Putin is afraid. And Putin is afraid because, 18 months into Russia’s wider attack on Ukraine, his army of more than a million people still can’t beat the Ukrainian army, which is half that size and has fewer of everything.

It’s Putin’s fear that feeds his worst impulse: to threaten, through Medvedev, the nuclear annihilation of human civilization. The virtual destruction of the only sentient species we know to exist anywhere in the vast cosmos. Make no mistake, when Medvedev says Russia might use nuclear weapons – as he did again on July 30 – he’s saying that Putin is saying that ending everything is a better outcome, for Russia, than losing a regional war of choice.

“Imagine if the … offensive, which is backed by Nato, was a success and they tore off a part of our land,” Medvedev seethed on his official social media accounts. “Then we would be forced to use a nuclear weapon according to the rules of a decree from the president of Russia.”

“There would simply be no other option,” Medvedev said. “So our enemies should pray for our warriors. They are making sure that a global nuclear fire is not ignited.”

He’s bluffing. Because he and his boss are afraid and because the bluff is all they have left as Russia’s disastrous wider war grinds into its 18th month, with no sign that Ukraine or its allies are giving up. If he weren’t bluffing, we’d know. We’d know because we – well, a vanishing few of us, maybe – would already be living in an irradiated post-apocalyptic wasteland.

In the spring of 2022, Ukrainian brigades defeated Russia’s assault on Kyiv and forced the Russian survivors back to the fringes of eastern and southern Ukraine. Six months later, eager Ukrainian brigades exploited gaps in Russian lines and pushed back the Russians even farther. And eight months after that, the Ukrainians kicked off their current counteroffensive.

And all the while, Ukrainian rockets, drones, saboteurs and assassins have killed Russian officials, shot down Russian warplanes, sunk Russian warships and blown up military sites in Russian air space, in Russian waters and on Russian soil.

Putin didn’t trigger a nuke then. He won’t trigger a nuke now. Because even as wicked, craven and cruel as Putin is, he’s not insane. And he doesn’t want to die in the retaliatory nuclear strike that surely would follow any atomic attack on Ukraine.

And even if there’s an edge of insanity in Putin’s deepening desperation, the United States and its NATO allies shouldn’t bow to nuclear threats. If Putin could merely say, through Medvedev, the word “nuclear” and get his way, he would say “nuclear” all the time – and march his army across Eastern Europe, its troops shielded by their leaders’ atomic threats.

Medvedev is afraid. Because Putin is afraid. That fear makes them reckless with their words. But it doesn’t make them suicidal.

And if I’m wrong, it won’t matter. If I’m wrong, then Putin was ready to end the world after any defeat. And if that defeat didn’t come in Ukraine, it would eventually come somewhere else. Which means Armageddon has been inevitable since 1999.

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The most interesting part of China’s stimulus announcement was the omission of a key phrase that ignited the 2020 crackdown on the real-estate sector


Local residents look at a model of a Poly Real Estate Group housing project at a real estate showroom on May 25, 2023 in Sanya, Hainan Province of China.

China’s once free-spending property buyers are now cautious about their real-estate purchases amid the country’s post-COVID economic slump.VCG/Getty Images

  • China’s property market is a huge part of the economy, but it’s now in a deep slump.

  • Beijing has been cracking down on excessive debt and speculation in the property market since 2020.

  • Authorities are now trying to boost the property market by encouraging consumption.

When Chinese President Xi Jinping proclaimed, “Houses are for living in and not for speculation,” in October 2017, the statement was met with stupendous applause in a red-hot real-estate market.

The mantra popularized by Xi has been an official fixture in major official communications since 2016, when Beijing was seeking to cool the sizzling property market, according to Bloomberg. Since 2019, the slogan has been present at every review of China’s top leadership, per the outlet.

Today, China’s property sector is so deep in the dumps that Beijing omitted a reference to Xi’s phrase at a key economic meeting in end-July that preceded a round of economic stimulus to revive the country’s economy.

The exclusion of the phrase is a big deal.

And while stark, the omission is in line with other major U-turns China pulled since the end of last year when it was starting to exit on-off COVID-19 lockdowns.

Beijing has tried to rein in property prices for years and succeeded in 2021 — but it crashed the market

The slogan “Houses are for living in and not for speculation” first appeared in an official statement after China’s top economic leaders met in December 2016.

To understand it, we need to rewind to the late 1990s when China started witnessing a decades-long boom in its real-estate sector.

The sector got so big that it — along with related industries — contributes as much as 30% to the country’s GDP, per a report from Spain’s Caixa Bank in January 2022.

But the property craze was also fueled by debt. The market was so hot that Chinese developers were taking on huge borrowings to build apartments ahead of demand. In fact, property developers built so many apartments that one-fifth of the homes in China were empty, Insider’s Lina Batarags reported in October 2021.

Expectedly, Beijing has tried to cool the frothy market for years — and it did seem as if the sector would get some respite when it experienced a downturn in 2014.

However, Chinese home prices started climbing persistently from 2015 onward, fuelling renewed concerns over an asset bubble that was making property prices unaffordable for ordinary people .

To manage risks and affordability, Beijing started cracking down on the sector by introducing the so-called “three red lines” policy regulating debt ratios for property developers. This measure was introduced in August 2020 to limit the amount of money property developers could borrow.

The debt ratios worked — but it started sending the property sector into a crisis in 2021 when property giant Evergrande ran into a debt spiral. Other Chinese real-estate developers ran into similar issues, and the sector started to default on its bond payments.

In the background, there were concerns that China’s property crisis could spill over into the broader domestic and global economy.

“There are only a handful of private sector players in the housing market that are left surviving, meaning they have not defaulted on their bonds,” Bo Zhuang, a senior sovereign analyst at Loomis Sayles, told Insider.

“So I will say the private sector has overly deleveraged in a short period of time,” he added.

Now, China’s trying to reverse years of crackdowns to boost its flagging economy

It didn’t help that China’s real-estate slowdown also came at a time when the country was still grappling with on-off COVID-19 lockdowns, which hit growth. In 2022, China’s economy grew 3% — well below its official 5.5% target, intensifying the drag on the property sector.

And the overall market slump has begun to seep into the property sector. The situation is so dire now that a developer in eastern China offered free gold bars to homebuyers. Another project in the same region is also offering a BOGO deal for those buying an entire floor of apartments, Nikkei reported on Wednesday.

Now Beijing’s primarily looking to stabilize the property market through consumption rather than stimulating supply. This pivot is because it needs to shore up the sector but wants to prevent the “Japanification” of its real-asset sector, Zhuang told Insider, referring to Japan’s economic stagnation since an asset bubble burst in the early 1990s.

To that end, Chinese authorities are trying to rev up consumers’ demand instead.

Last weekend, China’s largest cities — including Beijing and Shenzhen — said they would implement measures to meet the needs of homebuyers, hoping this would support the property sector, per Reuters.

On July 31, Beijing released a plan targeting the automobile, real estate, and services sectors that aim to “give full play to the fundamental role of consumption in economic development,” according to Insider’s translation of an official statement from the country’s top planning agency. They include subsidies for smart green home appliances and building materials in rural areas.

However, “the steps have been timid, and the road map is still not quite clear,” Nomura economists wrote in a July 31 note seen by Insider.

“While the recent moves by Beijing should be encouraged, markets need to curb their enthusiasm regarding the scale and impact of these easing measures,” the note said.

Consumers are also unlikely to be clamoring for new apartments amid broad economic uncertainty and record-high youth unemployment rate and slower economic growth.

“Households have lost the ‘animal spirit’ because they are not willing to invest or speculate their future in the housing sector anymore. I will say they have permanent COVID scarring,” said Loomis Sayles’ Zhuang.

Read the original article on Business Insider



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The most interesting part of China’s stimulus announcement was the omission of a key phrase that ignited the 2020 crackdown on the real-estate sector


Local residents look at a model of a Poly Real Estate Group housing project at a real estate showroom on May 25, 2023 in Sanya, Hainan Province of China.

China’s once free-spending property buyers are now cautious about their real-estate purchases amid the country’s post-COVID economic slump.VCG/Getty Images

  • China’s property market is a huge part of the economy, but it’s now in a deep slump.

  • Beijing has been cracking down on excessive debt and speculation in the property market since 2020.

  • Authorities are now trying to boost the property market by encouraging consumption.

When Chinese President Xi Jinping proclaimed, “Houses are for living in and not for speculation,” in October 2017, the statement was met with stupendous applause in a red-hot real-estate market.

The mantra popularized by Xi has been an official fixture in major official communications since 2016, when Beijing was seeking to cool the sizzling property market, according to Bloomberg. Since 2019, the slogan has been present at every review of China’s top leadership, per the outlet.

Today, China’s property sector is so deep in the dumps that Beijing omitted a reference to Xi’s phrase at a key economic meeting in end-July that preceded a round of economic stimulus to revive the country’s economy.

The exclusion of the phrase is a big deal.

And while stark, the omission is in line with other major U-turns China pulled since the end of last year when it was starting to exit on-off COVID-19 lockdowns.

Beijing has tried to rein in property prices for years and succeeded in 2021 — but it crashed the market

The slogan “Houses are for living in and not for speculation” first appeared in an official statement after China’s top economic leaders met in December 2016.

To understand it, we need to rewind to the late 1990s when China started witnessing a decades-long boom in its real-estate sector.

The sector got so big that it — along with related industries — contributes as much as 30% to the country’s GDP, per a report from Spain’s Caixa Bank in January 2022.

But the property craze was also fueled by debt. The market was so hot that Chinese developers were taking on huge borrowings to build apartments ahead of demand. In fact, property developers built so many apartments that one-fifth of the homes in China were empty, Insider’s Lina Batarags reported in October 2021.

Expectedly, Beijing has tried to cool the frothy market for years — and it did seem as if the sector would get some respite when it experienced a downturn in 2014.

However, Chinese home prices started climbing persistently from 2015 onward, fuelling renewed concerns over an asset bubble that was making property prices unaffordable for ordinary people .

To manage risks and affordability, Beijing started cracking down on the sector by introducing the so-called “three red lines” policy regulating debt ratios for property developers. This measure was introduced in August 2020 to limit the amount of money property developers could borrow.

The debt ratios worked — but it started sending the property sector into a crisis in 2021 when property giant Evergrande ran into a debt spiral. Other Chinese real-estate developers ran into similar issues, and the sector started to default on its bond payments.

In the background, there were concerns that China’s property crisis could spill over into the broader domestic and global economy.

“There are only a handful of private sector players in the housing market that are left surviving, meaning they have not defaulted on their bonds,” Bo Zhuang, a senior sovereign analyst at Loomis Sayles, told Insider.

“So I will say the private sector has overly deleveraged in a short period of time,” he added.

Now, China’s trying to reverse years of crackdowns to boost its flagging economy

It didn’t help that China’s real-estate slowdown also came at a time when the country was still grappling with on-off COVID-19 lockdowns, which hit growth. In 2022, China’s economy grew 3% — well below its official 5.5% target, intensifying the drag on the property sector.

And the overall market slump has begun to seep into the property sector. The situation is so dire now that a developer in eastern China offered free gold bars to homebuyers. Another project in the same region is also offering a BOGO deal for those buying an entire floor of apartments, Nikkei reported on Wednesday.

Now Beijing’s primarily looking to stabilize the property market through consumption rather than stimulating supply. This pivot is because it needs to shore up the sector but wants to prevent the “Japanification” of its real-asset sector, Zhuang told Insider, referring to Japan’s economic stagnation since an asset bubble burst in the early 1990s.

To that end, Chinese authorities are trying to rev up consumers’ demand instead.

Last weekend, China’s largest cities — including Beijing and Shenzhen — said they would implement measures to meet the needs of homebuyers, hoping this would support the property sector, per Reuters.

On July 31, Beijing released a plan targeting the automobile, real estate, and services sectors that aim to “give full play to the fundamental role of consumption in economic development,” according to Insider’s translation of an official statement from the country’s top planning agency. They include subsidies for smart green home appliances and building materials in rural areas.

However, “the steps have been timid, and the road map is still not quite clear,” Nomura economists wrote in a July 31 note seen by Insider.

“While the recent moves by Beijing should be encouraged, markets need to curb their enthusiasm regarding the scale and impact of these easing measures,” the note said.

Consumers are also unlikely to be clamoring for new apartments amid broad economic uncertainty and record-high youth unemployment rate and slower economic growth.

“Households have lost the ‘animal spirit’ because they are not willing to invest or speculate their future in the housing sector anymore. I will say they have permanent COVID scarring,” said Loomis Sayles’ Zhuang.

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