Russia-Ukraine: Two years of war
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Italian PM Giorgia Meloni during a press conference on a visit to Poland.

Attila Husejnow / SOPA Images/Sipa USA via Reuters Connect

Biden and Italy’s Meloni talk China … and Beijing is watching

US President Joe Biden and Italian Prime Minister Giorgia Meloni will have plenty to discuss when they meet at the White House on Thursday, but no topic will be more important to both sides than Italy’s complex relationship with China.

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Logos of FTX and Binance, crypto exchange competitors.

Reuters

What We're Watching: Crypto chaos, China-El Salvador trade, inflation across the Atlantic, Biden-Xi meeting

Is this crypto’s Lehman moment?

The crypto market’s bad run got even worse this week after FTX, a major crypto exchange, imploded. Headed by billionaire crypto-star Sam Bankman-Fried, FTX was revealed to be in a dire financial position earlier this week, and Binance, the largest exchange and an FTX competitor, considered bailing FTX out, but dropped the idea at the eleventh hour when it became clear FTX was insolvent and its customers couldn’t withdraw assets. Federal investigators are now looking at Bankman-Fried to find out whether his company violated financial regulations. Not only did Bankman-Fried lose more than 90% of his $16 billion fortune in mere days, but the news also sent the broader crypto and stock markets into a tailspin. Bankman-Fried, a big Democratic donor, had been making inroads in recent months with lawmakers on Capitol Hill to shape regulation with favorable terms for the crypto industry. But lawmakers and other crypto lobbyists will now want to distance themselves from the crypto king facing serious allegations of financial impropriety.

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Paige Fusco

What We’re Watching: Global stagflation warning, food fight at the UN, China in Cambodia

World Bank issues stark stagflation warning

The war in Ukraine has frustrated attempts to revive the pandemic-battered global economy, creating an endless loop of bad news. That trend continued Tuesday when the World Bank slashed its global growth forecast to 2.9% – down from a January prediction of 4.1%. (It was 5.7% in 2021.) What’s more, the body warned that “subdued growth” will likely continue throughout the decade and could give rise to 1970s-style stagflation – the double whammy of a stagnant economy coupled with double-digit inflation. But the impacts of the lingering global economic crisis won’t be felt equally. The World Bank says that while wealthy countries like the US and China will experience slower-than-usual growth, developing countries will be hardest hit as borrowing costs rise. This is already playing out: Cash-strapped Sri Lanka was recently forced to default on its sovereign debt for the first time. Crucially, the World Bank also warned that the deepening food crisis could cause social upheaval in import-reliant countries in the near-term.

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The Graphic Truth: Where is China investing?

For nearly a decade, Beijing has been investing heavily in middle- and low-income economies to boost China’s economic and political clout. The Belt and Road Initiative, one of the most ambitious infrastructure projects ever, is helping China expand its geopolitical reach and rival America’s influence in Asia, Latin America, Africa, and the Middle East. Here we look at where China has been investing its yuan since 2015.

What We’re Watching: Global Gateways vs Belt and Road, US-Russia tit-for-tat, Germany’s COVID challenge

The EU rivals China’s Belt and Road Initiative. The European Commission has unveiled its Global Gateways plan, which aims to invest €300 billion globally in infrastructure projects by 2027. Indeed, Brussels is positioning its plan as a better alternative to China’s ambitious Belt and Road Initiative. This announcement comes as Beijing has been steadily upping its investment in the Global South, including a pledge this week to supply Africa with an additional 1 billion COVID vaccine doses over the next three years, as well as doling out $10 billion of trade finance to support African exports. But European Commission President Ursula Von der Leyen points to several advantages for the European plan. One, Global Gateway focuses both on physical infrastructure – like fiber-optic cables, transportation, healthcare and clean energy resources – as well as investment in research and education. And unlike Beijing’s plan, which saddles recipient countries with debt, the EU will provide cash “under fair and favorable terms.” Its plan will also include buy-in from Europe’s robust private sector. Beijing has not commented on the development, but the Chinese foreign minister’s visit to Ethiopia on Wednesday was likely intended to signal Beijing’s enduring commitment to the region.

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China and Latin America must use BRI to deepen cooperation: China Daily contributor

November 17, 2020 11:45 AM

The writer says that for China, Latin America is playing a more fundamental role in industrial and supply chains.

Xi's BRI shoe has a Pakistani stone in it

July 03, 2020 5:00 AM

For years now we've heard China-Pakistan ties described in rapturous terms - as close as lips and teeth, as senior Chinese officials sometimes put it.

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