Deepening problems for the Chinese financial system

Nick Beams

The Chinese financial system is running into major problems with analysts saying that a “vicious cycle” could be set off. The warning has been triggered by a significant downturn in the property market, the renewed threat of debt defaults and the failure of a large investment trust to make payments on two of its products.

Construction cranes near central business district office buildings in Beijing, Wednesday, March 15, 2023. [AP Photo/Andy Wong]

The property market has been of concern for at least five years as exemplified by the parlous position of the major developer Evergrande since 2021. Its access to cheap money, the basis of its business model, dried up because of tighter government regulations aimed at trying to control of the growth of debt.

At the start of this year, with the scrapping of all measures to contain COVID, the property market appeared to be picking up as part of a general upturn in the Chinese economy. That proved to be very short lived with all the major economic indicators turning down amid the onset of a deflationary environment.

Now property market woes have returned with a vengeance, exemplified by the fact that they have hit Country Garden, a 31-year-old firm and the largest survivor in the market. It had been held up by Chinese financial authorities as a model for others.

Its troubles surfaced at the beginning of the month when it failed to make interest payments of $22.5 million on two securities with a total face value of $1 billion.

The fact that the company was struggling just to make an interest payment, rather than the full repayment of a bond, was seen by analysts as indicating “a very tight liquidity” situation.

With a 30-day grace period, the company has until September 6 to make the payments before bond holders can send it a notice of default.

It may well find the cash in the short-term but longer-term problems continue to grow, not least how it will deal with its $300 billion debt load in conditions of a rapidly falling market.

The company has said it expects to record its biggest loss since going public 16 years ago. The loss could be around $7.6 billion for the first half of year, under conditions where its contracted sales fell 60 percent in July from a year earlier.

One of the Country Garden bonds in question matures next month. Earlier this week the bond was reported to be trading at 27 cents on the dollar, compared to being close to par at the start of the year and 50 cents a few weeks ago.

The worsening situation in the property market has been compounded by the news that a company linked to the financial conglomerate Zhongzhi had missed payments on investment products.

The investment products were managed by Zhongrong International Trust in which Zhongzhi has a “strategic stake.” KBC Corporation, part of a semiconductor supply chain, and Nacity Property Service Group said they had not received payments of 60 million yuan ($US8.4 million) and 30 million yuan respectively.

Bloomberg reported yesterday that there was a protest of about two dozen people outside Zhongrong’s offices demanding payment on the high-yield investments they had made.

Zhongrong is one of the biggest operators in China’s $2.9 trillion trust industry. It pools savings from corporations and wealthy individuals and uses them to make loans and invest in commodities, stocks, bonds and real estate.

According to Bloomberg Economics, the trust sector has about 10 percent of its assets in real estate.

“The big danger is that a negative feedback loop kicks in, with property stress causing strains in the financial system, undermining credit expansion and depressing growth, which, in turn exacerbates the slump in the property sector,” it said.

JP Morgan analysts have warned that as much as 13 percent of total assets across the investment trust sector, in which Zongzhi is involved, could be at risk.

According to analyst Katherine Le: “The trust defaults may set off a vicious cycle on [privately owned property] developers’ onshore debt.” The rising concern of developer defaults weakened “investment sentiment and, as a result, trust companies may not be able or willing to roll over existing real estate-related products.”

Such assessments are becoming more widespread. Brock Silvers, chief investment officer at a Hong Kong private equity firm told the Wall Street Journal (WSJ): “The market is now substantially uninvestable. The systemic risks are dramatically larger than previously estimated.”

Zhaopeng Xing told the WSJ: “The drag on the economy from the real-estate sector is expected to persist, and, at present, there’s no sign of the free fall on the developers’ end slowing down.”

The latest data show that new construction starts were down by 25 percent in the year to July with property investment falling 8.5 percent for year, compared to 7.9 percent for the first half.

Dickie Wong, head of research at Kingston Research in Hong Kong, told the Financial Times the next 30 days would be “really critical” for Country Garden. He could have added the same holds for the property sector as a whole if it fails to come up with the payments it is owing.

“Two weeks ago, the government insisted it was going to support the property market and that simply isn’t happening,” he said.

The People’s Bank of China has announced a 15-basis point cut in its interest rate to 2.5 percent, the biggest drop since the start of the pandemic. The cut was made in the wake of official data on Tuesday which shows retail sales rose by only 2.5 percent for July year-on-year while industrial production expanded by 3.7 percent, both figures below those for June.

The new measures have generally been regarded as having little nor no effect. In fact, the main response of the authorities has been to clamp down on what are seen as “negative” comments on the state of the economy.

The bureaucratic suppression was underscored by the decision of the National Bureau of Statistics not to publish figures on urban youth unemployment, covering those aged between 16 and 24, which showed a rise to a record high of 21.3 percent for June, and a doubling of the rate from 2019.

A spokesperson for the bureau said labour statistics need to be “advanced and optimised.” But the growing problems confronting the ruling regime are not going to be resolved either by suppression of analysis or by changing definitions. They are rooted in objective conditions—above all the exhaustion of a growth model based on property and infrastructure financed by stimulus measures and the expansion of credit.

As the property sector confronts deepening financial problems so too do local government authorities whose spending on infrastructure projects has formed a vital component of Chinese economic growth over the past decade and more.

The International Monetary Fund has estimated that 66 trillion yuan ($9.1 trillion) is held by Local Government Funding Vehicles which raised the money to finance their operations through land sales. But with revenues from this area declining, they are being characterised by some analysts as the “black holes” of the financial system.

The suppression of adverse economic commentary and analysis, followed by the decision not to publish youth unemployment data, points to the underlying fears of the regime. Sooner rather than later the mounting economic and financial problems are going to lead to social and class struggle by youth and the working class more broadly.

Over 1,000 people still missing as Maui fire death toll, and social anger, continue to rise

Jacob Crosse

As many as 1,300 people are still missing more than a week after an inferno, sparked by downed power lines and fueled by climate change, ripped through the Hawaiian island of Maui, killing at least 110 people and destroying the historic town of Lahaina.

Homes consumed in recent wildfires are seen in Lahaina, Hawaii, Wednesday, Aug. 16, 2023. [AP Photo/Jae C. Hong]

Fires continue to burn on the island, threatening residents in the Upcountry town of Kula, located 25 miles to the east of Lahaina. As of this writing over 2,200 structures, overwhelmingly private residences, have been destroyed in Lahaina along with nearly two dozen homes in Kula, leaving thousands of people with no long-term housing.

In addition to the ongoing fire danger, residents in West Maui and Kula have been directed not drink or even boil the tap water in their homes due to contamination from the inferno. Last week, August 11, the Maui County government warned the fire “may have” caused “harmful contaminants, including benzene and other volatile organic chemicals, [to] enter the water system,” and that residents, thousands without homes or power, should instead use only bottled water.

The historic disaster in Maui is just one manifestation of the worsening global climate crisis for which the capitalist system is responsible and has no answer. Over the last couple days in the upper regions of the Northwest Territories (NWT) of Canada, wildfires have threatened the cities of Yellowknife and Hay River and destroyed the community of Enterprise.

Across Canada a record-shattering wildfire season has seen 33 million acres incinerated, “an area equivalent to Alabama or nine Connecticuts,” according to the Washington Post. Choking black smoke from the fires has once again fouled the air across North America, descending as far south as Yellowstone National Park.

In contrast to Lahaina, evacuation orders have already been issued for several First Nation communities and towns near Yellowknife, the capital city of the NWT and home to some 20,000 people. The outer edge of the fire is currently 10 kilometers west of the city, with officials warning it could reach the city by the weekend.

In Maui, there is little hope that most, or even a fraction, of the 1,300 missing will be found alive. Speaking at a press conference at the White House Wednesday, Federal Emergency Management Agency (FEMA) administrator Deanne Criswell revealed that the agency had deployed more than 40 cadaver sniffing dogs to search the area. The dogs were joined by a mobile mortuary unit and several refrigerated trucks, which will be used to store human remains. Not even half of the affected area has been searched yet.

In an attempt to quell massive anger over the indifferent government response to the disaster, White House Press Secretary Karine Jean-Pierre confirmed on Wednesday that President Joe Biden, who previously offered “no comment,” would be flying to the island next week to meet with local government officials.

After an initial statement last Thursday on the fire, Biden refused to comment for four days as the scope and scale of the disaster and government indifference came into view. In an interview with the New York Post, Jay Awan, a cook and tiki carver, said he did not want Biden to come to the island. “He’s just coming to Maui to look good in front of the cameras.”

Among the dead in Maui are expected to be hundreds of children and elderly, who were given no warning about the impending disaster they faced. Lahaina children were sent home from school early the same day of the blaze due to dangers posed by the high winds produced by Hurricane Dora, one of several warnings that went unheeded by the power company Hawaiian Electric, whose downed power lines were instrumental in starting the blaze.

In an Instagram video posted to his account 72 hours after the fires broke out, Leomana Turalde, a search and rescue volunteer in Lahaina and former Marine, detailed some of the massive failures in the lead up to and after the fire, as he and others were trying to help those affected.

“Where were the alarms?” Turalde asked. “Where was the National Guard? Where was the search and rescue on day number 1? Where are the drones up in the air? Why is it more important to put out the building fires in the middle of the town when they are already. ... Human life was not the priority, to me. That’s what I hear, that’s what I saw, that’s what I see, and that’s what I feel.

“I called Civil Defense and asked, ‘There was two hours, how come there was no leadership in the town to understand and recognize that a f***ing disaster was hitting?’ The whole town burned down, and you guys never sounded the alarm? Even after. Like not at all, period. We have a tsunami f***ing warning system that sounds every first of the month. And you guys couldn’t sound it at all, period? You guys can sound it for fake f***ing bombs ... but not when the whole entire town burns down? And then the guy that lives there is taking bodies out of the water and that guy is telling you, ‘Where the f*ck is the help?’”

Turalde explained that he talked to his “grandma today, her best friend is still missing. They never had any warnings, and the fire took over Lahaina in about two hours.”

In an interview with NewsNation, Maui resident Mike Cicchino confirmed that despite the fact that Hawaii has a multi-island-wide tsunami warning system, there were “No sirens, no text messages, no police, no firemen coming by. The only reason I knew there was a fire is because I saw people running for their lives.”

Cicchino recalled that he “happened to go outside to check the power lines, and I noticed the whole neighborhood was on fire.” At that point Cicchino, his wife and their dogs tried to drive out of Lahaina. “The radio station we were listening to was just saying to evacuate. No information. No warning at all. I really feel like this could have been prevented.

“I wish there was more communication when the fire started. That fire started early that morning, and we were told at noon that the fire was out, and the firemen were going home and that everything was safe.”

Downed power poles, over 30 per Hawaii News as of August 8, led to not only several fires but forced the closure of the major roads in and out of Lahaina.

“Unfortunately, all of our routes were basically blocked by police, and it pigeonholed and forced us down into Lahaina town on Front Street, which is an absolute deathtrap,” Cicchino explained. “They were directing us to where the fire was going to end up.”

Cicchino explained that while attempting to evacuate, he, his wife and their dogs were caught in traffic forcing them to flee to the ocean for safety. For the next five to six hours until after 1:00 a.m., Cicchino and his wife struggled to survive as they were surrounded by fire, smoke and cooling ocean water, while the Coast Guard and US Navy were nowhere to be found.

“I saw babies out there that I never saw again. When I came back, when I was doing a headcount of the kids, the babies weren’t there anymore,” Cicchino recalled.

Canada’s ruling class and medically assisted death—a new form of euthanasia?

Laurent Guttierrez

Earlier this year, a funeral home on Montreal’s South Shore announced a macabre “turnkey package” for those undergoing medical aid in dying (MAID). For $700, someone suffering from a terminal illness or condemned to a life of torment due to acute pain can meet up with their loved ones at the funeral home to say their farewells, then undergo the procedure. The package also includes preparation of the deceased’s body for their funeral.

While medically assisted deaths have expanded dramatically across Canada since they were legalized in initially very limited circumstances in 2016, the funeral home denied that it was being “opportunistic,” only offering a cheap alternative.

The National Post, the mouthpiece of the most avowedly right-wing sections of the Canadian ruling class, published an article in May promoting the positions of two University of Toronto bioethicists who argue that denying medical aid in dying to poor people who, due to their want of money, can’t access the health care and support they desperately need is wrong and unjust.

“To force people who are already in unjust social circumstances to have to wait until those social circumstances improve, or for the possibility of public charity that sometimes but unreliably occurs when particularly distressing cases become public, is unacceptable,” wrote Ph.D. candidate Kayla Wiebe, and Amy Mullin, a University of Toronto a professor and bioethicist, in the Journal of Medical Ethics.

“A harm reduction approach acknowledges that the recommended solution is necessarily an imperfect one: a ‘lesser evil’ between two or more less-than-ideal options.”

MAID was introduced in response to a real and heart-wrenching problem—the plight of people forced to live in agony as they await a slow torturous death from a terminal illness. But under contemporary capitalism such “reforms” are immediately subject to the compulsions of the profit motive and a ruling class sinking ever deeper into reaction and outright barbarism.  

A generously-funded, high-quality public health system, including home care, retirement homes for the elderly, palliative care for the terminally ill, adequate provision of pain medication—in short, everything that would make it easier to live through old age or illness—is seen as a drain on profits and therefore denied to millions of people.

A decades-long assault on wages, pensions and public services to enrich a tiny minority at the top has been accompanied by an ideological assault on the very concept of the preservation of human life. This reactionary campaign, as the article published in the National Post shows, is increasingly reminiscent of the eugenics of the Nazi regime and the darkest chapters in human history.

All those from whom no surplus value can be extracted are deemed worthless. The resources and care that must be mobilized for them are presented as a burden that 'costs society dearly.”

In 2017, researchers at the University of Calgary published a study suggesting that Canada could save $139 million a year in end-of-life care by legalizing medical aid in dying, in particular by “saving” on palliative care.

The authors of the study concluded that medical aid in dying should not be a financial burden on the healthcare system, and could become a source of substantial savings.

The Canadian government, for its part, has meticulously counted the “savings” achieved with MAID. In 2020, the Parliamentary Budget Officer published a report showing, in cold accounting language, the “net reduction in health spending” from the old, more restrictive MAID regime for the year 2021: $86.9 million. With the considerable expansion of access to MAID contained in Bill C-7, the same report estimates additional annual 'net expenditure savings' of $62 million.

The number of MAID deaths in Canada has risen dramatically. From just over 1,000 in 2016, when assisted dying in Canada was officially legalized, it rose to a total of 31,644 by the end of 2021. More than 10,000 people died by MAID in 2021 alone, and it now accounts for 3.3 percent of all deaths in Canada.

The idea endlessly repeated by the capitalist media and politicians that the use of MAID simply represents a “choice” made by individuals and their families is a monumental fraud. Such 'choices,' including whether or not to continue living, are made within a definite social, historical and ideological context.

Is it really a coincidence that, on the one hand, social programs have been bled dry for decades under the pretext that there's “no money” and social conditions are increasingly difficult for the poorest 90 percent of society, and that, on the other, more and more Canadians are making the “choice” of medical aid in dying?

The COVID-19 pandemic has exposed the indifference of the world's ruling classes to human life. Preoccupied solely with maintaining their profits, they removed all health barriers to resume economic activities as quickly as possible, causing the premature death of millions of human beings and exposing tens of millions more to the increased risk of serious illnesses associated with Long COVID.

Similarly, the US ruling class, supported by Canada and the other imperialist powers, is wasting enormous human and financial resources in its war against Russia—a war that has nothing to do with defending “Ukrainian democracy,” but rather with Washington’s attempt to secure control over a region of the world rich in energy and mineral resources, that it considers vital to its geopolitical interests.

The American ruling class and its Canadian ally could not be more indifferent to the lives of millions of Russians and Ukrainians, hundreds of thousands of whom have died since the conflict began. Washington and Ottawa are striving to escalate the conflict by sending ever more lethal weapons to Ukraine, bringing the world closer to a nuclear conflagration every day.

As the social and ideological assault on the working class continues, the criteria for eligibility for MAID are constantly being widened by capitalist politicians from all parties. In Canada, medical aid in dying was previously reserved for people whose natural death was rapidly foreseeable. In 2021, this assistance was extended to people who are not at imminent risk of dying, but whose illness, disability or disease is causing them lasting suffering that is difficult to bear.

Last month, the Quebec government amended its legislation on the subject. Within two years, the law will allow Quebecers suffering from Alzheimer's to request assisted-dying care before symptoms become too disabling. It will also make people affected by a “severe physical impairment resulting in significant and persistent incapacity” eligible. In 2024, Canada wants to make MAID possible for people suffering exclusively from mental illness.

This sustained ideological campaign has had some impact on the population. According to polls, around half of Canadians would agree to allow adults to apply for MAID because of an inability to receive medical treatment or a disability. Just over a quarter would be in favor of extending medical assistance to die to include homelessness or poverty.

Strong opposition, however, has come from organizations defending the rights of disabled persons. “Our biggest fear has always been that having a disability would become an acceptable reason for state-provided suicide,” says Krista Carr, vice-president of Inclusion Canada. There's the case of Roger Foley, a 47-year-old Ontarian with a neuro-degenerative disease, hospitalized and unable to move or care for himself. He recounted how he was denied home care and pressured to request medical assistance in dying. In court, he is demanding the right to “medical aid to live.”

After decades in which the working class has been paralyzed by a pro-capitalist union bureaucracy that sabotages its struggles for better public services and working conditions, the campaign by the capitalist media and politicians for MAID is creating a political opening for the religious right. Those elements reject the right to abortion in the name of the 'sanctity of life,' while at the same time being among the staunchest supporters of the dismantling of social programs and imperialist war that causes mass casualties.

Fascistic candidate wins Argentine presidential primaries

Rafael Azul & Andrea Lobo

In Sunday’s primaries in Argentina, fascistic presidential candidate Javier Milei placed first with 30 percent of the vote, exposing the profound crisis gripping the South American country’s entire political setup.

Far-right candidate Javier Milei with US Ambassador to Argentina Marc R. Stanley. [Photo: US Embassy, Argentina]

Forty years after the US-backed military dictatorship that unleashed a wave of fascist terror that involved the torture and killing of tens of thousands of left-wing workers, peasants, and intellectuals, Milei’s Liberty Advances, a far-right party that has whitewashed and defended the crimes of the dictatorship, threatens to come to power. Milei has also expressed sympathies for the fascistic former presidents Jair Bolsonaro of Brazil and Donald Trump of the United States.

The results, however, don’t signify the emergence of a mass base of support for fascism. Not only was the abstention rate historically high—over 35 percent abstained or casted blank or null ballots—but most media reports acknowledge that Milei’s actual proposals for the dollarization of the economy, abolishing the Central Bank, a “shock therapy” of even more aggressive social austerity and privatizations, radical anti-abortion legislation, among others, are overwhelmingly unpopular. 

Instead, the Milei victory reflects above all the enormous popular anger and lack of a genuine left-wing alternative to those responsible for the intensified destruction of the living standards of workers. This has intensified sharply with the end of the commodities boom in 2014-15, the murderous policy of mass COVID-19 infections and deaths, and the growing repression against workers’ struggles.

At the same time, the rise of the far right in Argentina is part of a global process where the ruling elites are employing the media and parliamentary politics to elevate fascist forces in preparation for a brutal crackdown against the escalating class struggle. 

The leading Peronist wing under former president and current Vice-President Cristina Fernández de Kirchner, their coalition partners and the Peronist trade union bureaucracies, have enforced these attacks. 

The coalition of the ruling Peronist parties, which have represented the preferred form of bourgeois rule by the Argentine ruling class and imperialism since the dictatorship, saw their vote plummet from 47.65 percent in 2019 to 27.27 percent today. Their presidential candidate will be the hated Economy Minister Sergio Massa, who has been the face of the International Monetary Fund’s austerity program under the incumbent President Alberto Fernández.

The right-wing coalition Together for Change received 28.7 percent of the vote and its presidential candidate will be Patricia Bullrich, who represents the most conservative, law-and-order wing of the coalition. As security minister under President Mauricio Macri, she oversaw repeated operations to repress mass strikes and protests, including illegal spying on public employees.  

Two other tickets qualified for the General Elections that will take place on October 22. Juan Schiaretti will represent On our Country’s Behalf, an amalgam of dissident Peronists, the Socialist Party, and Christian Democrats.

Finally, Myriam Bergman of the Morenoite Socialist Workers Party (PTS) won the presidential nomination for the so-called Left Workers Front-Unity (FIT-U). Despite the massive increase in poverty—affecting over 40 percent of the population and 60 percent of children—and the ongoing wave of strikes and protests largely in opposition to the Peronist union bureaucracy and in opposition to the traditional ruling parties, the pseudo-left saw its share of the vote drop from 2.86 percent in 2019 to 2.65 percent. 

In a recap of the PASO election, Bergman attributed Milei’s frontrunner status entirely to the Fernández government. “It is the Peronists who must explain,” she said. In reality, the FIT-U’s inability to capitalize on mass social opposition reflects the fact that masses of workers and youth see through its radical populist phraseology and see it as just a satellite of the Peronist parties and union bureaucracies. 

By blocking the way for a left-wing alternative in the form of a genuine Trotskyist leadership in the working class, the FIT-U is mainly to blame politically for the electoral emergence of Milei. And in response, to the far-right threat, the FIT-U is only doubling down on their efforts to channel opposition behind Peronism and the trade union bureaucracy by promoting nationalist sentiments and identity politics, which will only facilitate the growth of the far-right.

Facing the prospect of a major escalation of the attacks against living standards and social services, Bregman declared on Sunday, “We women have a special challenge facing so much patriarchal reaction, facing so many candidates that have erased us.”

In Argentina today, with negative reserves in its Central Bank, accelerating inflation, now estimated at 116 percent per year, and with its finances effectively controlled by the International Monetary Fund, the working class is increasingly taking to the streets. So far this year there have been mass strikes and protests by teachers, health workers, transit workers, dockworkers, steel and tire workers.

Just the week before the primaries, dockworkers in Buenos Aires Terminal 5 protested and denounced their union for making a deal with Maersk for allowing the use of temps and other contingency workers. 

And the national and provincial governments of every stripe have demonstrated time and time again that their only response will be police state measures and further social austerity. Thousands marched and rallied last Friday in downtown Buenos Aires against the death of Facundo Molares. Molares, a 47-year-old political activist, journalist and former guerrilla fighter in Colombia, was suffocated similarly to George Floyd by the Buenos Aires police at a peaceful political rally last week.

Even while the vote counting was taking place, in Jujuy Province a gang of police attacked a campground of protesters campaigning against lithium contracts being negotiated by the government. The police took their possessions and destroyed much of their equipment. The day after the balloting, a wildcat strike by baggage handlers paralyzed airports in Buenos Aires, Cordoba, and Mendoza.

The election took place in the midst of the imposition by the International Monetary Fund of a new conditional agreement backed by the Biden administration but yet to be fully vetted. Argentina is to receive 7.5 billion US dollars after the primaries, which will in part be used to pay a 3.5 billion debt that is overdue. 

The agreement obligates the Fernandez administration to cut government deficits to 1.9 percent of yearly GDP (down from 2.6 percent), which will require a ‘hardening’ of fiscal policies in the remaining months of this year. To achieve this goal, the IMF ‘recommends’ raising electric and gas bills and controls on social spending, with cuts to provinces and to government enterprises. 

Milei, Bullrich, and Massa, whatever their tactical differences, agree on the main strategy demanded by the IMF: to make the working class pay for the terminal crisis of Argentine capitalism.

Record rainfall leads to massive flooding in northern China

Lily Zhao

Sixteen cities and provinces in northeastern China have experienced record rainfall and flooding since July 29 as a result of Typhoon Doksuri. The huge downpour has already caused 62 deaths with another 34 reported missing. It has wreaked havoc on the lives of hundreds of millions, many of whom had no power or water for days, were stranded on roof tops or had their homes and properties ruined.

A man washes his clothes in a stream near debris left over after flood waters devastated the village of Nanxinfang on the outskirts of Beijing, Friday, Aug. 4, 2023. [AP Photo/Ng Han Guan]

As the flooding continues, the still unfolding catastrophe is yet another warning about the initial but already disastrous consequences of climate change.

From July 29 to August 2, unprecedented levels of rainfall deluged Beijing, the adjacent municipal city of Tianjin and Hebei Province that surrounds both cities. Beijing experienced the heaviest rainfall in 140 years. The precipitation over 83 hours exceeded 60 percent of that for a year under normal conditions; the maximum hourly precipitation in Tianjin reached 54.8 mm (2.16 inches); and Hebei experienced 1,003mm (39.5 inches) of rain in just three days.

Typhoon Doksuri then moved further north to the northeastern provinces of Heilongjiang and Jilin. Shulan, one of the hardest hit cities in Jilin Province, recorded 489 mm (19.3 inches) of precipitation. The rising water levels of more than 25 rivers in Heilongjiang Province have triggered alarming overflows.

Social media videos showed cars pushed around and bumping into each other in the torrential water. In many places, the muddy water almost reached the top of trucks and trees. When waters receded, there were scenes of devastation: the debris of crushed cars, fallen branches, bricks and mud everywhere on the streets. Many paved roads were unusable as portions had been washed away.

One resident in Zhuozhou, one of the hardest hit cities in Hebei, explained: “Only my grandfather and I were at home. Everyone else was stranded too, so no one could come and help me. We were without power, water or phone service for three days and three nights. My neighborhood felt like an isolated island in the sea, surrounded by nothing but water. There were inflated boats on the street. The water level was about to immerse the traffic lights. Only empty shelves were left in every store.”

A man walks by damaged vehicles left over with the floods debris clogged on a street in the aftermath of flood waters from an overflowing river in the Mentougou district on the outskirts of Beijing on Monday, August 7, 2023. [AP Photo/Andy Wong]

The scope of damage is enormous. According to a Beijing government press conference on August 9, 1.29 million people were affected by the flooding, 59,000 houses collapsed, 147,000 more houses were severely damaged, and 225,000 mu (37,000 acres) of agricultural products were destroyed. The worst affected areas of Beijing are the more rural Mentougou, Fangshan and Changping districts in the western and mountainous side of the city.

Due to landslides, three trains inbound for Beijing with 2,831 passengers and staff were stranded in the mountains for more than four days. In the city, Beijing’s government hotline received more than 33,000 calls during the storm from July 29 to August 1.

In most affected cities, tens of thousands, in some cases hundreds of thousands, of people had to be evacuated. Contact was lost with dozens of villages for days, as landslides either destroyed or blocked the few paved access roads. Re-establishing contact and rescuing stranded residents has been extremely difficult.

In Changping, a team of 15 firefighters were only able to reach 583 stranded villagers after trekking through mountains on foot and crossing rivers by rope. In other cases, helicopters had to drop critical supplies to trapped residents. One resident from Hebei posted on social media: “All our houses were built beneath the mountain. Many small villages were completely washed away by the flood and the mud-and-stone flow. One of our doctors had to walk to [another village] to find service to send out a signal asking for help.”

Zhuozhou, a city in Hebei with more than 600,000 people, was one of the worst affected. Downstream from three overflowing rivers, most streets and towns in Zhuozhou were submerged with water levels reaching two to three metres. In some cases, the second floor of apartment buildings flooded. Most of Zhuozhou has been without any power or water. In some areas, water has still not been restored.

As with every other so-called natural disaster, it is workers and peasants who are impacted hardest. Almost without any exceptions, the worst affected have been rural villages, where houses were destroyed, crops inundated, and stock washed away.

One person from Fangshan district in Beijing, stranded for more than six days, returned home to collect a few essentials to find the house destroyed: “At first I thought I was living in a nightmare. I wanted to cry but could not make out a sound. In the debris of the collapsed house, we flipped and moved stones and stones in the mud. We were trying to find valuables like cameras and phones, running the risk of a second collapse of the house… Upon hearing the deaths and casualties from the village next door, I could only feel grief and thought that I survived only because of sheer luck.”

The damage to property is vast. Insurance companies across the 16 affected cities and provinces have so far received 189,100 claims worth 6.241 billion RMB ($862.4 million). Most involve damaged cars, corporate properties and agricultural products. More than 40,000 houses collapsed in Hebei Province, while another 155,500 were severely damaged.

Crops of grains, oil seed, vegetables, fruit and medical herbs suffered the heaviest damage. The city of Wuchang in Heilongjiang Province, a major supplier of grain, has about 2.5 million mu (412,000 acres) of rice, but more than 1 million were inundated. In Hebei, 319,700 acres were affected.

Reconstruction work will take years, not months. The city government of Beijing has estimated it will take a whole year to repair and restore infrastructure, reconstruct the collapsed houses and carry out necessary relevant public health measures. In the case of Hebei, the provincial government declared that two years would be needed to restore damaged buildings and facilities.

A man looks over a swollen river flooding crops at a village in Langfang in Hebei province, China, Wednesday, August 2, 2023. [AP Photo/Andy Wong]

In the course of the flooding, it has been working people who have demonstrated immense courage and selflessness in helping others. Across many affected neighborhoods, volunteers have run community kitchens and temporary clinics. Volunteer squads were organized to rescue stranded residents. Tens of thousands of ordinary working people have made donations and some set up a free food station near a base for rescue teams. Social media reported that drivers in Heilongjiang had parked their heavy trucks along the road to form a barrier against the flood waters.

Two volunteers from Blue Sky Rescue, a non-government rescue team, Wang Hongchun, 41, and Liu Jianmin, 47, were drowned in flood waters as they attempted to rescue a young mother and her three-year-old child stranded after their home was inundated.

Train K396 to Beijing was stranded at a station during the storm near the rural town of Luopoling for more than four days. The food on board ran out within hours and the tiny town organized dozens of small grocery and convenience stores to provide food for the 900 passengers. With the road to the train blocked by landslides, train staff trekked miles in torrential rain, as high voltage wires dangled overhead, to bring back food. The list could go on.

By contrast, the response of the government has been limited to date. The state-owned media has been full of praise for the state’s emergency efforts. By August 11, the Ministry of Finance and the Ministry of Emergency Management had allocated just 1.46 billion RMB ($200 million) from the government disaster fund to provide relief, restore infrastructure and production and begin reconstruction.

On August 6, Xinhua News Agency published a glowing special editorial declaring, “General Secretary Xi Jinping immediately made important instructions on flood prevention work,” urging relevant ministries and departments to “make every effort to carry out rescue and disaster relief work.” The editorial was written at Xi’s direction.

Such platitudes are issued after every natural disaster. However, critical questions are raised about what had been done to prevent this catastrophe from happening. The Beijing city government claimed to have issued a “red” warning about expected heavy rainfall, urging residents “not to go outside unless necessary” and “not to go to work unless necessary.” But without any binding force, many people, especially in the private sector, were required to show up to work.

Limited measures were taken to evacuate people and shut down construction sites. According to Beijing officials, 42,000 were relocated in advance and 3,554 construction projects stopped. However, many complaints on social media indicate that residents in rural areas were not notified in advance.

As for Hebei Province, the official press conference made no mention about warnings or measures to mitigate the impact prior to the floods, which is a damning indictment by itself.

Even though flooding in northern China is not as common as in the southeast, serious floods have repeatedly occurred. These include a massive flooding in the eastern coastal province of Shandong in 2018; in Henan Province in July 2021 causing 300 deaths; and in Hebei’s city of Xingtai in 2016 leaving more than 100 dead.

For many Beijing residents, the memory of the record storm in July 2012 remains vivid. Fangshan District was the hardest hit when the rain triggered landslides. Of the 79 killed in the disaster, 38 were from Fangshan. Nevertheless, more than a decade later, the measures put into place are still very inadequate. In the working-class neighborhoods, one can still see broken or naked wires dangling as workers wade through knee deep water during the storm season every summer, running the risk of electric shocks.

The severity of the latest record rainfall and flooding is yet another demonstration of the destructiveness of climate change and global warming. Scientists have warned for decades that more intense rainfalls will be triggered as greater levels of moisture accumulate in the heated atmosphere. It is not a coincidence that the current flooding disaster was preceded by the worst heat wave on record across China with many cities experiencing temperatures over 40ºC (104ºF).

Extreme weather is becoming more frequent and more severe. What northern China has experienced is part of a global issue, as the Earth’s ecosystem is destroyed by the irrational profit-driven capitalist system. Just in the past month, floods have devastated Slovenia, Austria, South Korea, and the states of Vermont and New York in the US. At the same time, massive mountain fires are raging across Canada; extreme heat waves hit Europe, northern Africa and North America. The latest disaster is the Maui wildfires in Hawaii.

Climate change is a global disaster that can only be resolved through a scientifically grounded, internationally coordinated plan. However, the global climate change fora have manifestly failed to take adequate measures as capitalist governments, including that of China, pursue their own narrow national economic and political interests.

Within China, the Chinese Communist Party has set long-term goals that clearly fail to stop and reverse the emission of greenhouse gases that are the major factor in climate change. The “peak carbon dioxide emission by 2030” campaign, heavily promoted as its commitment to a green economy, only slows greenhouse gas emission but does not reduce it until at least into the next decade.

The latest heat waves and disastrous flooding in China is further evidence that, as numbers of climate scientists have warned, climate change is reaching, or may have already reached, an irreversible tipping point that foreshadows even greater climate catastrophes.

Biden offers contemptible $700 per household for survivors of Maui wildfires

Kevin Reed

As more facts about the death and destruction and what caused the Maui wildfires are emerging and amid growing public outrage of the US government’s criminally inadequate response, President Joe Biden boasted on Tuesday of an outrageously pathetic plan for “one-time payments of $700 per household” for those who have lost everything in the disaster.

President Joe Biden speaks at Ingeteam Inc. Tuesday, August 15, 2023, in Milwaukee. [AP Photo/Morry Gash]

Authorities reported on Tuesday that one-third of the burn area in the town of Lahaina had been searched for victims, and the number of confirmed dead had risen to 101. Hawaii Governor Josh Green told CNN on Monday evening that the number of confirmed deaths could double over the next 10 days.

Maui County reported that just four of the sets of remains found have been identified so far. The identities of these individuals will be released after families have been notified.

Among those who died were four members of the same family who tried to escape the flames, according to a statement released to CNN affiliate Hawaii News Now. “On behalf of our family, we bid aloha to our beloved parents, Faaso and Malui Fonua Tone, as well as our dear sister Salote Takafua and her son, Tony Takafua.”

Another victim Franklin “Frankie” Trejos, 68, who had lived in Lahaina for 30 years, had tried to save his property along with his friend and roommate, Perez Grant. Grant escaped the blaze, suffering burns only to discover the remains of his friend several blocks away.

The painstaking process of identifying the dead was highlighted when county investigators reported that they had obtained the DNA profiles of 13 more people, and a total of 41 DNA samples had been obtained from the family members of those who are unaccounted for. Meanwhile, there are still more than 1,000 people missing, and thousands more have been left homeless.

Three climate change-fueled wildfires which began on August 8 were whipped up into a firestorm by winds from passing Hurricane Dora destroying the town of Lahaina. So far an estimated 4.45 square miles has been burned. Two of the three fires are still burning, with firefighters working by ground and air to contain the blazes and looking for hot spots and flare-ups.

Fire officials said the Lahaina fire, the largest of the three at 3.39 square miles, had been 85 percent contained by Tuesday. The Upcountry/Kula fire, which has burned just over a square mile and destroyed 19 homes, was 65 percent contained.

On Tuesday, President Biden, who refused to comment on the devastation in Maui on Monday, expressed the indifference of the White House to the disaster while speaking to the media at a previously scheduled event in Milwaukee, Wisconsin.

Fumbling his way through an overview of the thoroughly inadequate response of federal authorities to the crisis on the Hawaiian island, Biden said FEMA authorized “one-time payments of $700 per household to those who have been displaced so they can do the immediate things” like obtain the medications they need. He then announced that he and his wife would eventually travel to Maui to survey the damage but gave no firm date for a trip.

On a Twitter/X post earlier in the day, Biden claimed the administration was “laser-focused” on providing aid to survivors of the Maui wildfire, including the one-time payment “during an unimaginably difficult time.”

Biden’s post was roundly denounced on social media, with many people calling it “insulting” and “outrageous” and others contrasting it to the commitment of resources by the US government to the proxy war against Russia in Ukraine.

One tweet pointed out that $700 per 3,500 households destroyed is approximately $2.5 million, and one M1 Abrams tank costs $13 million. The US government sent 31 of these tanks to Ukraine.

Media reports on Tuesday said that evidence exists showing that the island’s electric utility was the immediate source of some of the fires on Maui. The Washington Post reported that at 10:47 p.m. on Monday, August 7, “a security camera at the Maui Bird Conservation Center captured a bright flash in the woods, illuminating the trees swaying in the wind.”

According to Jennifer Pribble, a senior research coordinator at the center, that was the moment when a tree fell on a power line. Pribble posted on Instagram, “The power goes out, our generator kicks in, the camera comes back online, and then the forest is on fire.” This is likely one of the sources of the fire in Maui’s Upcountry.

In Lahaina, the Post report says, “About 38 miles away from the bird sanctuary on Aug. 8, in Lahaina, a young woman named La’i woke up suddenly around 3 a.m. Something bright had flashed outside her second-story window, coming from the power poles and Hawaiian Electric substation right up the hill from her family’s home next to Lahainaluna Road. Then it was dark again. Before falling back asleep, she couldn’t believe how strong the wind sounded, said La’i, whose parents asked that her full name not be used.”

The New York Times interviewed Lahaina resident Shane Treu on Tuesday, who said, “The wind is still blowing super strong and I hear a pop. I look and the line is just arcing, laying on the ground and sparking.” Treu said the power line was “like a fuse” as it lay in the grass, it blackened the ground and began to ignite the grass in yards nearby.

The Times report went on, “It was precisely the location where the brush fire that would eventually engulf much of Lahaina was initially reported, at 6:37 a.m., a Times analysis of video and satellite imagery shows.”

World Health Organization reports 80 percent rise in global COVID infections

Benjamin Mateus

The World Health Organization’s (WHO) weekly update on the global COVID-19 pandemic found that in the last four weeks, there was an 80 percent rise in infections with 1.5 million new COVID-19 cases reported. 

Most of these cases come from South Korea, which is an outlier, not so much in the intensity of the pandemic, as in collecting and reporting statistics on it. The WHO cautions, “Currently, reported cases do not accurately represent infection rates due to the reduction in testing and reporting globally. During this 28-day period, 44 percent of countries reported at least one case to WHO—a proportion that has been declining since mid-2022.”

In effect, the WHO is suggesting that the 56 percent of countries not reporting any cases are simply not bothering to count COVID infections, while those reporting small numbers are only going through the motions.

According to the international public health agency, global cumulative cases reported to the WHO are approaching 770 million. COVID deaths are approaching seven million. However, including excess deaths over the number expected based on historical trends, a more accurate figure, particularly for countries with poorly functioning health reporting, the accepted estimate stands at a catastrophic 24.6 million deaths or 3.5 times the official figures. 

The disparity may be even greater: when one compares today’s figures to those from one year ago, while there have been a little more than half a million COVID deaths officially reported worldwide, there have been 4.2 million excess deaths, or a difference that is more than eight-fold higher.

Since last month, even though reported COVID deaths have fallen as low as seven per day, excess deaths have nearly doubled, with more than 11,400 per day. The ludicrous disparity in these figures only underscores the tremendous efforts made by every government across the globe to hide the damning reality from their populations.

During the August 9 WHO coronavirus press brief, Director-General Tedros Adhanom Ghebreyesus noted that since the agency officially ended the emergency phase of the COVID pandemic, only 25 percent of countries and territories have reported death numbers to the WHO and only 11 percent have reported hospitalization and ICU admission figures, which are currently on the rise as the summer COVID wave is surging throughout the northern hemisphere.

World Health Organization Director-General Dr Tedros Adhanom Ghebreyesus (center) declaring the coronavirus pandemic a Public Health emergency of International Concern in March 2020. [Photo: Fabrice Coffrini]

He said, “WHO continues to assess the risk of COVID-19 to the global public as high. The virus continues to circulate in all countries, continues to kill and continues to change.” On the emergence of the latest variant of interest, EG.5 (accounting for 17 percent of all global cases), and other highly mutated strains, he cautioned, “The risk remains of a more dangerous variant emerging that could cause a sudden increase in cases and deaths … Today, on the advice of the [review] committee, I am issuing standing recommendations for countries in seven major areas. These recommendations reinforce the advice that the WHO has provided to countries in its COVID-19 Strategic Preparedness and Response Plan published in May.” 

These recommendations include tracking and testing for COVID-19 in the population, implementing measures to reduce the risk of transmission, collaborating with national public health agencies to track new strains, reporting on vaccine effectiveness, and conducting critical research in understanding the causes of and treatment for post-viral syndromes. Additionally, the WHO has called for reporting trends in infection rates, severity of disease and deaths. Most importantly, they call for the equitable distribution of vaccines and access to proven treatments in light of the ongoing pandemic though they are careful not to use that term.

A major danger is that the current wave is intersecting with the return to K-12 schools and universities by tens of millions of children, youth and young adults. A recent report published in Journal of the American Medical Association found that more than 70 percent of household COVID-19 transmissions originated with a child after they attended in-person school. 

As the authors noted, “Once US schools reopened in fall 2020, children contributed more to inferred within-household transmission when they were in school, and less during summer and winter breaks, a pattern consistent for two consecutive school years.” This means that the SARS-CoV-2 virus, which is estimated to infect around a half a million new people per day, could very well find human fuel to skyrocket even higher, with the added risk of viral evolution finding newer mechanisms to evade immunity and grow more transmissible. 

School officials are seeking to dispel the fully justified fears raised in many communities as school reopening gets underway. Los Angeles Schools Superintendent Alberto Carvalho, for example, has openly urged students to return even if they are sick, claiming their mental health would be better addressed if they attended school, regardless of the threat they posed to other students, teachers and the community as a whole. 

Attempting to calm skeptical parents, Carvalho said during a press conference last Friday, “I understand the surprise of some parents, but we have always been informed as a school system by the expert voices of medical entities. Times have changed. Conditions have changed and the recommendations of protocols have shifted as well.”

A report in Fortune found that across the country student absenteeism has been on the rise at record rates. Many of these students cite illness, economic distress, and a hostile school environment that is a byproduct of school staffing shortages, and a general sense of community anxiety and depression where schools feel like unwelcome places. 

On top of the social crisis that has impacted schools through chronic underfunding and low wages for teachers and ancillary staff, the impact of infection and reinfection on the well-being of youth is a major negative. In a Lancet study published in July, the researchers found that cognitive deficits following SARS-CoV-2 infection were detectable almost two years afterwards in a subset of the people they were studying. 

Among children and youth with Long COVID, severe sleep disturbances, extreme fatigue from exercise, difficulty remembering things, inability to find the right words or work with math and numbers were common. They also complained of persistent ringing in their ears, absent-mindedness, chest pain and feeling pain in their joints.

A recent population study from Australia in highly vaccinated people found that one in five respondents reported Long COVID symptoms three months after a confirmed Omicron infection. Another study by researchers from the National Institute of Health (NIH) said that POTS [Postural Orthostatic Tachycardia Syndrome], a condition that leads to rapid heart rate, dizziness, weakness and cognitive impairment when sitting up or standing, can appear six to eight months after a COVID-19 infection. 

The ending of the pandemic was motivated by political decisions based solely on the economic interests of the ruling elites. Not only is the COVID pandemic continuing at a dangerous pace, raising the specter of a virus evolving to evade every vaccine and treatment available in the anemic arsenals of the health care system, but it is also spawning a chronic mass disabling event on which the public health agencies and entire political apparatus have turned their backs.

New Zealand Labour government scraps remaining COVID public health measures

Tom Peters

On Monday, New Zealand Prime Minister Chris Hipkins announced that the government was ending the requirement for people with COVID-19 to isolate at home for seven days, and to wear masks in hospitals and other healthcare settings. Subsidies for COVID-related sick leave have been removed.

New Zealand Prime Minister Chris Hipkins. [AP Photo/Frank Augstein, File]

These were the last remaining mitigation measures to slow the spread of the potentially deadly and debilitating coronavirus. In late 2021, the Labour Party government ended its zero-COVID policy, which used border quarantine and temporary lockdowns to eliminate the virus from the community.

Schools and businesses were fully reopened and mask and vaccine mandates lifted in 2022, as the government adopted the same homicidal profits-over-lives agenda that has now killed around 25 million people worldwide.

By July 2022 New Zealand was leading the world in per capita weekly COVID-19 infections and deaths. The country’s total COVID-19 death toll surged from about 30 in October 2021—among the lowest in the world—to 3,249 according to the Ministry of Health’s latest figures.

The real number is probably higher: another 140 deaths are unconfirmed but likely due to COVID. There are 1,385 more people who died within four weeks of testing positive for COVID, but the Ministry asserts that these were not caused by the virus. New Zealand’s all-cause mortality increased by 10 percent in 2022, with 3,642 more deaths than 2021.

At a press conference, Hipkins and Health Minister Ayesha Verrall did not hide their enthusiasm for ditching all measures to reduce the spread of COVID, with the prime minister saying he had “longed for this particular day.”

The event was almost like an election rally. With voting scheduled for October 14, Labour is running a right-wing campaign with pledges to boost spending on the military, tougher law-and-order measures, and now the complete evisceration of COVID-19 protections.

Verrall declared: “While our case numbers will continue to fluctuate, we have not seen the dramatic peaks that characterised COVID-19 rates last year. This, paired with the population’s immunity levels, means Cabinet and I am advised we’re positioned to safely remove the remaining COVID-19 requirements.”

Hipkins and Verrall did not mention the fact that every week dozens of people are dying from COVID-19 and hospitalisations are rising. Another 29 deaths were added last week and 171 people were in hospital with the virus on Sunday night—up from 116 in hospital two weeks earlier.

They remained silent on the current surge in COVID-19 infections and hospital admissions in the US, Britain and across the northern hemisphere, fueled in part by the new and even more infectious EG.5 or Eris variant. New Zealand will inevitably be hit by a similar surge.

Notwithstanding Verrall’s statements, immunity from vaccination, while it can decrease the severity of COVID cases, is not enough to stop the spread of the virus. Nor does it prevent Long COVID, which can be potentially debilitating. The risk of developing Long COVID, a condition that affects the brain, heart and lungs, increases with every repeat infection.

The government’s pretence of being guided by health advice is farcical.

Microbiologist Dr Siouxsie Wiles, a former advisor to the government’s pandemic response, wrote on Twitter: “Gutted by today’s news that masking in healthcare settings and mandatory isolation are [gone].”

Writing in the Post, she pointed out that immuno-compromised people would be at significant risk from the removal of restrictions. Drawing attention to the danger posed by Eris, Wiles noted: “In the last month, Ireland has seen a five-fold increase in the number of outbreaks in hospitals and nursing and care homes—from five to 30—and a six-fold increase in the number of people in hospital with Covid—from 63 to 378.”

Epidemiologists Nick Wilson and Michael Baker—both former government advisors—also criticised the announcement. Wilson told Stuff: “The government is so keen to pretend it’s all over, despite people dying daily in hospital. It’s not trivial.”

Baker pointed out to Radio NZ that COVID “is still, in New Zealand, amongst the infectious diseases, the leading cause of death and hospitalisation.”

Kelvin Ward, the urgent care physician who began a health workers’ petition in March 2020 calling for a lockdown, wrote on Twitter: “I am dumbfounded. How on earth do you expect ‘healthcare workers’ to continue to want to work in an increasingly stressed healthcare system, when your government makes a conscious choice not to limit transmission of an infection that causes death, morbidity and long term disability… which WILL increasingly put more and more stress on the health system.”

Ward added: “This decision shows disdain for the vulnerable and the marginalised. The death of public health and collective responsibility.”

On the other hand, according to Stuff, business groups such as the Canterbury Employers’ Chamber of Commerce welcomed the end of self-isolation: “Chamber boss Leann Watson said the leave requirements had added extra cost to business owners and exacerbated workforce pressures.”

As far as the business elite and the government are concerned, people with COVID-19 should be compelled to go to work where they can infect others, otherwise profits will suffer. Last year it was revealed that government officials deliberately sought to reduce COVID testing because positive test results would take people “out of the available workforce.”

The Labour government has always been guided first and foremost by the needs of big business. The initial lockdown in March-April 2020, which reduced cases to zero, was imposed by then Prime Minister Jacinda Ardern because the government was afraid of mass action by thousands of healthcare workers and others demanding a scientific public health response to protect lives. These demands emerged outside of the unions, which opposed lockdowns.

As soon as it was able to, the government began lifting restrictions and forcing workers back to work and children back to school. This could not have been done without the assistance of the trade unions, which act as a police force for the working class and have not lifted a finger to stop the infection of millions of people by COVID-19.