(Bloomberg) — Ray Dalio warned that China should cut its debt and ease monetary policy or face “a lost decade.”
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The billionaire founder of Bridgewater Associates said in a nearly 5,000-word post on LinkedIn that he agrees with Chinese President Xi Jinping’s warning of a 100-year period of unprecedented change and recommends the country take steps to manage its debt problem.
The hedge fund titan was referring to the Chinese Communist Party’s political slogan of “great changes unseen in a century,” used to describe the future trajectory of international order. While the phrase was first used by Chinese academics following the 2008 recession, it was adopted by the party in 2017 and since used in diplomatic contexts.
“When there is a lot of debt and big wealth gaps at the same time as there are great domestic and international power conflicts, and/or great disruptive changes in nature, and great changes in technology, there is an increased likelihood of a ‘100-year big storm,’” he wrote.
He added that China-US tensions are causing foreign investors to diversify or leave China for fear of being discriminated against. That’s causing China to face difficulties obtaining investments, and without a reconciliation of economic and cultural clashes, the chance of a war in the next 10 years is high.
Dalio has a long history of involvement with Chinese officials and has expressed admiration for some of Beijing’s economic policies, while also building up his business there. He’s warned about the risks of conflict between US and China for years.
To manage its debt problem, Dalio recommends that China engineer a deleveraging and an easing of monetary policy at the same time, but acknowledges that such a move would be difficult and politically dangerous as it would lead to big changes in wealth levels.
“No one knows how far the pendulum will swing back toward the more Maoist/Marxist ways of doing things,” Dalio wrote. “The impediment is that communicating more directly is not the Chinese leadership’s traditional way of doing things, which, as China goes back toward the more traditional ways of doing things, is understandable.”
He won power by promising to end corruption – but try telling that to the people begging him for jobs.
“A lot of people come into government believing they are there to enrich themselves,” says Liberia’s President Joseph Boakai.
“They don’t understand what public service is about.”
In the three months since he defeated President George Weah and took the reins, Mr Boakai says he has been “very selective” about who he brings along with him because he blames corruption ‘”for all the crises we’ve had”.
The 79-year-old is a former prime minister but does not hail from a political dynasty.
“I never really had a childhood,” he tells BBC Africa Daily in a wide-ranging interview. “My ambition was just to live a normal life”.
As one of five sons born to a disabled, poor mother and an absent father, he went on to work as a school janitor and rubber tapper.
It was gruelling work – causing him pain because he didn’t realise he was meant to carry rubber on his shoulders instead of his head – but it gave him the grit a politician needs, he tells the BBC.
Those early jobs paid for two pairs of smart trousers, two shirts and a one-way ticket to the capital city of Monrovia.
After gaining a place at the city’s College of West Africa, he could only see his mother one week each year as he had to work within the college to pay for his tuition and upkeep.
Now approaching his 80s, Mr Boakai acknowledges he’s the age of most of the electorate’s grandparents – but sees his role as rooting out deep-seated problems and handing over a well-managed Liberia to the next generation.
“I am here only to guide a process to bring this country to where it should be and then they can take it over.”
So how successful has he been so far?
“Liberians have heard this all before – where a head of state comes in and makes these large, far-ranging proclamations about the fact they’re going to make corruption public enemy number-one,” says author and activist Robtel Neajai Pailey.
However, she adds, President Boakai declared his own assets as soon as he came in and made his appointees do the same. Mr Boakai has also asked for an audit of the presidential office, and beefed up integrity institutions such as the General Auditing Commission and the Liberia Anti-Corruption Commission.
“This is a way of signalling to the Liberian people that it won’t be business as usual,” says Dr Neajai Pailey, “and now members of the judiciary and legislature are following suit”.
There is still a long way to go.
Liberians have lost patience over recent years and mounted mass protests – accusing the previous government of mismanaging funds and corruption while the cost of living has spiralled for normal people.
More than a fifth of the population lives on less than $2.15 (£1.70) a day.
Last year, when Mr Weah was still at the helm, Liberia was ranked 145th out of 180 countries on Transparency International’s Corruption Perceptions Index.
The ex-footballer’s time in office saw a number of scandals, with three government officials sanctioned by the US Treasury and subsequently resigning – they have still not been prosecuted.
President Boakai too has his critics.
A judge recently accused Mr Boakai of cronyism – claiming he favouring people from his home area of Lofa County for top jobs. The presidency tells the BBC this is not true.
“The president is not appointing based on tribe – he is putting competence above anything else,” says presidential press secretary Kula Fofana. Pressed to confirm how many officials were appointed from the president’s native Lofa, he declined to say, “because we are not appointing by counties”.
‘We can feed the world’
With his past on Liberia’s rubber plantations and a stint in the 1980s as agricultural minister, President Boakai sees huge growth opportunities in the county’s soil.
“In Africa, we’re not going to manufacture new aircraft or new automobiles but we can feed the world,” he tells BBC Africa Daily.
“We have the water, we have the soil, we have the land. We don’t need to import the amount of rice we’re importing. We can feed ourselves if we cut down corruption and use our resources properly – we can feed ourselves and even export.”
He also campaigned on a pledge to improve Liberia’s sorry road network.
“Based on my own experience, year after year, cars are stuck in the mud, people can’t move,” he says. “You know the impact that has on health, education, on people’s movement and the prices of goods.
“So what I’ve said is that in at least the first 100 days we should be able to make all vehicles move on our roads… That’s what I said and that’s what I’m working on.”
He has his work cut out for him, he knows, but still finds some moments to relax.
“I never have time for too much fun but I love all kinds of music – jazz, African music, and I’m a lover of sport.
“I’m an Arsenal fan – I’ve been to the Emirates twice and I get all their souvenirs!”
(Bloomberg) — Two days is all President Xi Jinping has spent outside his country this year, as mounting domestic problems from a faltering economy to rare political scandals demand the Chinese leader’s attention at home.
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Xi’s border hop to visit Russian President Vladimir Putin in March has been his sole trip abroad, representing the shortest amount of time he’s spent overseas in the first half of a year since taking power, excluding the pandemic.
That’s a major shift from his pre-Covid schedule, when Xi traveled more often and for longer than his US counterpart. The Chinese leader made an average of 14 overseas trips annually between 2013 and 2019, according to a Bloomberg News analysis of government readouts of Xi’s diplomatic meetings.
By comparison, US President Donald Trump averaged 12 during his time in office, according to data compiled by the Eurasia Group.
Now, Xi is making foreign dignitaries come to him. He’s met representatives from 36 nations including France, Eritrea and the US in Beijing so far this year. Before the pandemic, Xi hosted an average of 48 dignitaries annually in the same period, meaning his overall in-person dialogue is in decline.
And, unlike in the pandemic, he’s not supplementing meetings with video calls: The Chinese leader has had just one this year with the Czech Republic.
His reduction in face-time with global leaders could handicap Beijing’s ability to compete with Washington for global influence. That comes at a time when international perceptions of China are souring over its foreign policy, according to a survey released last month by the Pew Research Center.
Wen-Ti Sung, non-resident fellow at the Washington-based Atlantic Council’s Global China Hub, said it could be that Xi has more pressing priorities right now than diplomacy. China’s economy is fending off deflation, his protege Foreign Minister Qin Gang has been removed and he’s ousted top leaders of the nation’s nuclear missile force amid rumors of a corruption probe.
“China simply has more urgent domestic priorities,” said Sung, noting that Xi’s centralization of power means his presence is increasingly required to deal with such problems. “As the opportunity cost of his absence rises, Xi will naturally become even more selective about going on extended visits abroad and he will go abroad less frequently.”
Xi was expected to resume a busy global schedule once pandemic controls that kept him inside China for nearly 1,000 days — the longest Covid isolation of any Group of Twenty leader — were lifted at the beginning of this year.
By the end of 2022, he’d already started traveling to countries including Uzbekistan, Indonesia and Saudi Arabia, even though China’s borders remained closed. Since then, however, he’s barely set foot outside his nation.
Scheduling could be partly to blame. Indian Prime Minister Narendra Modi hosted a two-day Shanghai Cooperation Organization meeting by video in July, whereas last year’s summit saw Xi travel to Kazakhstan — his first trip outside China since January 2020.
Other major international summits, such as the G-20 and Asia-Pacific Economic Cooperation, fall in the second half of this year.
The Chinese leader is expected to attend a summit of emerging economy leaders in Johannesburg this month. While Putin will participate in that event virtually, to excuse South Africa from having to execute an International Criminal Court arrest warrant for him, Modi has confirmed his in-person presence.
The White House’s reported plan to blacklist Hong Kong’s John Lee from the APEC leaders’ summit in San Francisco this November, however, could deter Xi from attending. Lee is sanctioned for his role in diminishing Hong Kong’s autonomy under a security law imposed by Xi. The Chinese leader’s absence would remove an opportunity for his first state visit to the US since Joe Biden became president in 2021.
China’s worsening global image has made it harder for democratic leaders to host Xi, according to Neil Thomas, a fellow for Chinese politics at Asia Society Policy Institute’s Center for China Analysis. Xi’s handling of the pandemic, alleged human rights abuses in Xinjiang and refusal to condemn Putin’s war in Ukraine have all damaged ties with the West.
“Elected leaders in the West are more likely to attract criticism than win praise for meeting with Xi,” he added. “It’s bad politically to meet with Xi.”
Before the pandemic, European guests accounted for at least 14% of Xi’s annual visiting delegations, hitting 20% in 2019. This year, that figure is at just 8%.
British Prime Minister Rishi Sunak is highly unlikely to travel to China before the UK’s next general election, Bloomberg News reported in June, as he faces increasingly skeptical views of China at home.
Xi’s next major opportunity to host a group of world leaders will come in October at the Belt and Road Initiative summit. That event attracted nearly 39 heads of states in 2019, 10 more than the first summit in 2017.
But it’s still unclear who will attend. European nations including France, Germany, Greece and the Czech Republic plan to the forum, the Wall Street Journal reported last week. Italy, the only Group of Seven nation to have signed on to the pact, is planning to exit the controversial agreement.
While Xi called for “meticulous efforts” to prepare for the forum last month, he’s unlikely to pay too much attention to the guest list.
“The priority of his third term is security and securing his ruling internally,” said Alfred Wu, an associate professor at the Lee Kuan Yew School of Public Policy in Singapore. “Xi’s probably quite confident about his status as world No. 2, so he’d expect others to come to China to visit him.”
–With assistance from Jill Disis.
(Updates with Indian Prime Minister Narendra Modi’s attendance of BRICS summit in 13th paragraph.)
TAIPEI, Taiwan — In the years since China’s leader, Xi Jinping, transformed the People’s Liberation Army, one of his crowning creations has been the Rocket Force, the custodian of China’s expanding nuclear arsenal. The force, with its array of missiles and launch silos, embodied Xi’s ambitions to elevate his country as a respected, and feared, great power ready to counter American supremacy in the region.
But this week, Xi abruptly replaced the Rocket Force’s two top commanders with outsiders with no experience in the nuclear force. It was the highest-level upheaval in China’s military in over five years. The move comes as China is also dealing with questions about the fate of its former foreign minister, Qin Gang, who disappeared from public view in late June before being replaced without explanation.
The shake-up in the rocket force indicated that the force’s expansion has been accompanied by serious problems in its top ranks. Suspicions of corruption or disloyalty to Xi may slow or complicate China’s upgrade of its conventional and nuclear missiles, several experts said.
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“I imagine this could disrupt the modernization,” said David C. Logan, an assistant professor at the Fletcher School of Tufts University who studies the Rocket Force and China’s nuclear weapons modernization. “Instability at senior levels is never good when you’re carrying out large-scale changes, and the shifts taking place in the Rocket Force are significant. Plus, its senior leadership now appears to have little relevant experience with the missile forces.”
The reasons for the removal of the former commanders of the Chinese rocket force — Gen. Li Yuchao and his deputy, Gen. Liu Guangbin — are unclear. The force is extremely tight-lipped, even for the opaque Chinese military. The two men have not appeared in official media reports for months.
Their absence has set off a flurry of speculation, including rumors that one or both were recruited as spies, and allegations of corruption which were reported last week in the South China Morning Post, a Hong Kong newspaper. Several analysts said that graft involving the force’s big spending on missiles, silos and technology seemed the most plausible cause for the downfall of the two leaders.
“There is a lot of money going to the People’s Liberation Army Rocket Force right now as they built up their infrastructure, particularly their nuclear silos,” said Matt Bruzzese, an analyst at BluePath Labs, a consultancy firm in Washington, who wrote a recent study of the Rocket Force. “Historically, contracting has been one major avenue for PLA corruption.”
Aside from the disappearance of Li and Liu, word of the death of Wu Guohua, a former deputy commander in the force, also fanned the speculation about corruption investigations in the force. A Chinese news website issued a report that Wu had died of cancer, but the report was taken down, inspiring more uncorroborated speculation that his death was suspicious. And last week, too, the procurement office for the Chinese military issued a call for information about possible corruption in contracts dating back to 2017.
Whatever the cause, Xi’s move to replace the force’s leadership suggests that he is anxious to reinforce his dominance over it.
He installed its two new leaders on Monday: The new commander, Wang Houbin, was a deputy commander in the navy; the new second-in-charge, Xu Xisheng — the force’s political commissar who oversees discipline and personnel issues — came from the air force.
“When both of them come from outside the Rocket Force together on the heels of a purge, it is clearly a sign that Xi feels the rot runs deep and he can’t trust any of the Rocket Force’s deputies to take over,” Bruzzese said.
The possibility of corruption or disloyalty at the top the Rocket Force is likely to be particularly stinging for Xi. After coming to power in 2012, he made it a priority of his leadership to clean out brazen corruption in the military, and claimed that effort as one of his signature successes.
Now such misconduct may have resurfaced, and in a particularly sensitive arm of the military. Doubts about the integrity of the Rocket Force’s commanders could lead to questions about whether China’s nuclear missiles and infrastructure have been compromised.
“Such a dramatic personnel change is very abnormal,” said Ying Yu Lin, an assistant professor at Tamkang University in Taiwan, who studies the Chinese military. Xi, he added, had seen how Russia’s failures in its invasion of Ukraine in part reflected corruption and false bravado among Russia’s generals. “As the Rocket Force comes under fresh scrutiny, will they discover more and more problems too?”
Xi unveiled the Rocket Force on the last day of 2015, part of a sweeping effort to make the People’s Liberation Army more capable of projecting China’s power outward and more answerable to Xi, who is chair of the military, as well as leader of the ruling Communist Party. The predecessor of the Rocket Force — the Secondary Artillery Corps — was founded in 1966 to oversee China’s budding nuclear arsenal, and Xi’s move to elevate the unit’s status indicated that he wanted it to play a bigger role.
“The rocket force is a core force of our national strategic deterrent,” Xi said during the ceremony in 2015, when he handed over a red banner to the new commanders. Their mission, he said, included “enhancing a credible and reliable nuclear deterrent and nuclear counter-strike capability, and strengthening medium and long-range precision strike forces.”
The People’s Liberation Army now bristles with one of the world’s largest and most sophisticated missile arsenals, posing a potential threat to U.S. forces in Asia and to Taiwan, the democratically ruled island that Beijing claims as its territory. In 2021, China launched 135 ballistic missiles for tests and training, more than the rest of the world combined, outside of war zones, the Pentagon’s 2022 assessment of the People’s Liberation Army said.
The Rocket Force also controls nearly all of China’s growing number of nuclear weapons. Beijing does not disclose the size of its nuclear force, but the Pentagon has estimated that China has more 400 warheads, and could have 1,000 by 2030, bringing it closer to the numbers of warheads deployed by the United States and Russia.
The Rocket Force brandished its nuclear expansion by building around 300 launch silos for ballistic missiles across three arid expanses of northern China. Chinese officials have not publicly acknowledged the silos, but Xi has made clear that he wants a more potent “strategic deterrent.”
Those ambitions may have been temporarily undercut by the turbulence in the Rocket Force command.
Unusually, Xu, the new commissar of the rocket force, is politically higher ranked than the new highest commander, Wang. Xu is a full, voting member of the Central Committee, a council of several hundred senior Communist Party officials, while Wang is not on the committee at all.
Xu is poised to chair the powerful party committee of the Rocket Force, said Phillip C. Saunders, the director of the Center for the Study of Chinese Military Affairs at the National Defense University in Washington.
“In this case, they may have needed a set of politically reliable hands from outside the rocket force,” Saunders said. China has kept more of its missiles on a more alert footing said. “This makes the reliability of rocket force personnel increasingly important, and the commander and political commissar set the tone for the force,” he said.
Federal investigators renewed their recommendation that major freight railroads equip every locomotive with the kind of autonomous sensors that could have caught the track flaws that caused a fatal 2021 Amtrak derailment in northern Montana.
But installing the sensors on the tens of thousands of locomotives in the fleet could be cost prohibitive, and it’s not entirely clear if one would have caught the combination of rail flaws that the National Transportation Safety Board said caused the crash near Joplin, Montana, that killed three people and injured 49 others. And rail unions caution that no technology should be a substitute for human inspectors.
The NTSB report laid blame in part on BNSF railroad, which owns the tracks, and “a shortcoming in its safety culture.” But it noted that even if track inspections had been more frequent, the severity of the problems may not have been noticed the day of the crash without devices and technology designed to enhance the inspections.
“It is unlikely that the track deviations would have been detected through the current track inspection process,” the board concluded in the report released Thursday. But “autonomous monitoring systems … have the ability to monitor track conditions and provide real-time condition monitoring that could be used for early identification and mitigation of unsafe track conditions.”
BNSF defends its safety record and said it already employs a number of the sensors that the NTSB is recommending. Spokeswoman Lena Kent said BNSF inspections meet all federal requirements, and the Fort Worth, Texas-based railroad is committed to timely maintenance, repair and replacement whenever issues or potential issues are detected.
But track problems have long been a safety concern for the NTSB, which can recommend but not mandate changes. In a 2021 report on the Joplin derailment, it attributed 592 U.S. derailments over a decade-long timespan to “track geometry,” which includes the distance between the rails and their horizontal and vertical alignment. Those issues were the second-leading cause of derailment in 2021.
Railroad safety expert Dave Clarke, the former director of University of Tennesse’s Center for Transportation Research, said it is important to remember that the NTSB doesn’t do any kind of cost-benefit analysis on its recommendations.
“If they think something is a good idea for safety they put it out there. In the real world there may be no way to economically or practically do everything NTSB recommends,” Clarke said.
Clarke said it’s also not clear that these sensors would have definitely caught the problems that caused the Montana derailment because none of the individual factors was severe enough to be considered a defect under Federal Railroad Administration rules. The NTSB said it was the combination of all those factors that caused the derailment.
The major freight railroads have more than 23,000 locomotives in their fleets, including thousands that have been put into storage in recent years as the railroads have overhauled their operations to rely more on longer trains that don’t need as many locomotives.
It would require a major investment to add detectors to every locomotive, although the Association of American Railroads trade group couldn’t immediately provide an estimate of how much each sensor costs. BNSF and the five other major U.S. freight railroads already spend roughly $23 billion every year on improving and maintaining their networks and investing in new equipment.
But attorney Jeff Goodman, who represented family members of the three passengers who died in the derailment, said he believes his clients would have lived if trains that had passed through the area before the Amtrak train had been equipped with these sensors.
Tracks will always bend or get out of sync because they’re exposed to the elements, but monitoring allows trains to know when to slow down and prevent accidents, he said.
“If the recommendations that the NTSB issued today were implemented prior to this tragedy, Zach Scheider and Don and Marjorie Varnadoe would all be alive today,” he said, naming the deceased family members of his clients.
Railroads have long resisted new regulations, Although there aren’t any rules requiring these automated inspection sensors or the thousands of trackside detectors they employ, railroads have spent millions developing the technology and installed them voluntarily to improve safety. But regulators are considering drafting rules for them in the wake of recent derailments.
An AAR trade group spokeswoman said that the type of sensors the NTSB singled out measure the force a locomotive exerts on the track and hasn’t proven as useful as other kinds of sensors railroads have developed.
“This technology has been difficult to maintain in real-world operations and lacks a strong correlation to track geometry defects,” Jessica Kahanek said.
Railroads are experimenting with a variety of technologies to find the best way to spot problems.
Another kind of autonomous sensor that can be installed on locomotives as well as the trucks inspectors use to ride along the rails can spot problems like misaligned track and wear on the rails by testing the track continuously.
Vehicle track interaction systems, like the ones the NTSB singled out, must be mounted on locomotives because they measure the force a train puts on the tracks.
Both kinds of sensors can help identify areas of concern for a human inspector to follow up on after computers analyze the data they generate. But the VTI sensors tend to be so sensitive that they flag areas where there aren’t true defects.
In the past, BNSF and other railroads have even petitioned the Federal Railroad Administration to get a waiver releasing them from some inspection requirements because they believe the track geometry sensors provide enough information that the frequency of human inspections can be safely reduced.
Federal officials approved a waiver allowing BNSF to reduce inspections on a couple of areas of its more than 30,000-mile (48,000-kilometer) network after the railroad successfully tested the devices for several years, but later declined to let the railroad expand that practice, including its tracks that cross Montana. BNSF took the FRA to court over that decision and the dispute is still pending.
Rail unions have opposed the waivers. They argue that while the new technology is helpful, it shouldn’t replace human inspections. Even with an interest in preserving jobs, they say safety is their primary concern.
Already, the unions say the widespread job cuts the major railroads have made — eliminating nearly one-third of all rail jobs over the past six years — have made it difficult for employees to keep up with inspection demands and meet all FRA requirements. The NTSB pointed out that the inspector responsible for the territory where the Montana derailment happened had worked an average of 13 hours a day in the four weeks prior to the crash.
Former NTSB director Bob Chipkevich, who spent years investigating rail crashes, said it often takes multiple derailments to force railroads to implement new safety technology.
One of the biggest recent advances in rail safety came after a commuter train collided head-on with a freight train near Los Angeles in 2008, killing 25 people and injuring more than 100. Congress mandated a $15 billion automatic braking system that stops trains when they’re in danger of colliding, derailing and other situations — but it took 12 years to complete.
“When there are safety issues that have been raised after multiple accidents that occurred again and again, the question is to the industry,” Chipkevich said. “Why haven’t you done it after all these years?”
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Funk reported from Omaha, Nebraska, and Metz reported from Salt Lake City.
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Follow Josh Funk on Twitter at www.twitter.com/funkwrite
