Growing pressure on Xi as China’s economic woes mount

Nick Beams

Pressure is mounting on the Xi Jinping regime to take emergency action as China’s economic and financial problems daily go from bad to worse.

Chinese President Xi Jinping speaks on the state of the COVID-19 crisis, December 31, 2022. [Photo: CGTN]

China is being hit by two interconnected developments: a worsening property market, and an accelerating liquidity crisis in the shadow banking system that has the potential to spread more broadly.

In addition, there are the growing sanctions by the US impacting the Chinese high-tech sector, which is crucial for future economic growth, and the restrictions on US investment in China due to come into effect at the start of next year.

The latest stage in the property and finance turmoil has been set off by the marked slowdown of the Chinese economy in recent months, following a brief uptick at the start of the year following the lifting of COVID safety measures, reflected in the emergence of a deflationary environment.

The Chinese government has pledged to take action to support the economy. This week the People’s Bank of China lowered its interest rate by 15 basis points, the most significant cut in three years. But these measures are seen as inadequate.

The Financial Times (FT) reported earlier this week that foreign investors dumped Chinese stocks and bonds in the Hong King market. This almost completely reverses the $7.4 billion in net purchases made after a July 24 statement by the Chinese Communist Party Politburo to increase support for the economy.

The attitude of the market was summed up by Mohammed Apabhai, head of Asia strategy at Citigroup.

“The measures taken so far appear to have disappointed the market. There is increasing frustration and concern from investors about the lack of any solid policy action,” he told the FT.

Growth estimates for the Chinese economy are being downgraded. The official target for this year is 5 percent, the lowest level in three decades, but there are growing doubts it will be achieved. JP Morgan has lowered its growth estimate for this year to 4.8 per cent, after predicting 6.4 percent growth as recently as May. Barclays has cut its projection to 4.5 percent.

JP Morgan cited the worsening property market as a key factor in its downgrade. “The deterioration in housing market outlook, especially another year of big decline in land purchase and new home starts” tended to increase the drag on the economy, it said.

The woes of the real estate sector came into view this week with the news that Country Garden, one of the China’s largest developers, had missed two international bond payments. It was something of a shock because amid the failure of many Chinese property firms over the past two years, Country Garden had been promoted by authorities as being soundly managed.

Worse news was to come with the revelation that Zhongrong International Trust, an offshoot of the Zhongzhi Enterprise Group, a major private wealth manager, had missed payments on two of its investment products.

It then emerged that in late July Zhonghzi had hired the global accounting and financial advisory firm KPMG to assess its balance sheet and advise on how to deal with what has been described as a worsening liquidity crunch.

Financial authorities are also concerned about the possibility of contagion—problems at Zhongzhi flowing to other parts of the shadow banking system—and have set up a task force to carry out a risk assessment.

As new problems emerged in the property sector, older ones continued to play out. The Evergrande group filed for Chapter 15 bankruptcy in the US aimed protecting its American assets from creditors while it works out a restructuring deal.

When Evergrande defaulted on a bond in December 2021, it might have been hoped that the problems of the Chinese real estate sector it revealed could be contained. However, in the period since, they have continued to grow, steadily reaching into the shadow banking system because of its critical role in financing property development.

The sensitivity of the government to the problems at Zhongzhi is highlighted by a Bloomberg report that investors who put money into the shadow banks had been visited by police at their homes advising them not to join public protests.

Earlier this week, about two dozen people in Beijing gathered outside the company’s offices demanding to know why they had not been paid the money they were owed.

According to the Bloomberg report, “dozens of people” who had invested in Zhongzhi received “what they described as cordial visits from police in recent weeks.” The visits covered a large area including Beijing, the southwest province of Sichuan and the coastal area of Jiangsu and Shandong.

There are two motivations for the action by authorities. The investors in wealth management firms such as Zhongzhi are wealthy members of an upper-middle class stratum that forms a vital prop for the Xi regime.

Another, more significant reason, for the police action is the fear that protests by these more privileged layers could set off a much more dangerous movement from below, especially from urban youth, many of them well educated, who face a record unemployment rate of 21.3 percent.

The regime’s nervousness over such a development and its effect on the broader working class is indicated by the clampdown on media comments about the problems of the Chinese economy and the decision by the National Statistics Bureau to no longer release youth unemployment data.

Another indication of the growing financial and debt problems is the decision by China’s state council to send teams of officials to ten of the country’s financially weakest provinces to examine their books.

According to an article in the FT, the working groups involved in the debt resolution effort will report to Premier Li Qiang.

“The enormous debts accumulated by China’s provinces had become an urgent problem for policymakers as they try to end the country’s long reliance on a debt-fueled infrastructure binge to drive economic growth,” it said.

Goldman Sachs has estimated that total local government debt, held directly and off balance sheet by local government funding vehicles, comes in at $13 trillion.

The worsening economic and financial travails of China, the world’s second largest economy, are starting to have significant international consequences.

In the decade and a half since the global financial crisis of 2008, China has been far and away the biggest single contributor to global growth, adding the equivalent of almost three Germanys, the world fourth largest economy, in that time.

Now it has entered a period of stagnation, the global effects of which are starting to show up.

It was reported this week that Japanese exports in July fell for the first time since February 2021, largely as a result of falling Chinese demand, with shipments to that destination down by 13.4 percent.

This week the Commonwealth Bank of Australia warned that the Australian currency could drop to below 60 US cents, after falling from around 67 cents to 63, because of the weakening Chinese economy on which Australia is dependent.

The problems are extending. US Treasury Secretary Janet Yellen said this week that the Chinese problems were a “risk factor” for the US. In an expression of the ever-more strident America first and the devil take the hindmost line of the administration, she said while there would be “spillovers” for the US, “China’s slowdown will have the largest impact on its Asian neighbours.”

Survey shows majority of New Zealanders struggling financially

John Braddock

Research published this week shows 55 percent of New Zealanders are struggling with their financial situation—up 17 percent compared with February 2021.

Out of those surveyed, 51 percent said they are “starting to sink” or are “treading water” and a further 3.5 percent are “sinking badly.” The survey found 61 percent of women, 60 percent of Māori and 58 percent of Pacific Islands peoples were struggling. Those aged 18-34, i.e., young wage earners, were also more likely to experience financial stress.

Reserve Bank of New Zealand in Wellington [Photo: Facebook]

The research was commissioned by Te Ara Ahunga Ora Retirement Commission and carried out by consultancy The Research Agency (TRA). It surveyed 4,000 people over 18 years old and was nationally representative of New Zealand based on age, gender and region.

A full-frontal assault on living standards is underway, with persistently high inflation, currently 6 percent and at that level or higher for seven quarters. Household living costs surged 7.2 percent in the 12 months to June, according to Statistics NZ—with higher costs for working people driven by interest rates which rose by 28.8 percent and food prices up 13.2 percent.

One woman, Elizabeth, told Stuff that in 2018 she and her family, which includes six children, were spending $360 a week on rent in the regional city of Whangārei. Now they are spending $720, taking up most of her partner’s salary. “We live on bare basics and usually if a big unexpected payment comes up it comes out of grocery money,” she said, citing $200 for a recent school camp.

Budget advisors report that more “middle income” households are struggling. Anne told Stuff she works part-time in administration and her partner is a port worker. Together, they make about $120,000 a year, but lately “things have got tough.” Mortgage payments have gone up by $1,550 a month so food has been cut “and luxuries like Sky, Netflix, Spotify, since power, rates and insurance have increased too.”

Making matters worse, on Monday the Labour government scrapped all remaining COVID-19 public health measures, including financial support for businesses and self-employed people for COVID-related leave. Half-price public transport was recently ended, along with a 15-month fuel excise tax cut, pushing petrol back up to $3 per litre.

The intractable financial plight facing working people is the product of deliberate class policies. On Wednesday the Reserve Bank (RBNZ) delivered a Monetary Policy Statement which left the official cash rate (OCR) “on hold” at 5.5 percent—but warned the rate would need to remain “restrictive” for the foreseeable future, with the likelihood of a further hike in the fourth quarter.

The RBNZ told a parliamentary committee last November that it was deliberately engineering a recession. In May, the central bank raised the official cash rate by 25 basis points to 5.5 percent, the latest in 12 consecutive rate rises since October 2021.

The bank forecasts the economy will enter a “double-dip” recession in the third quarter following the recession from October 2022 to March 2023. RBNZ head Adrian Orr outlined a “double-edged risk” to the economy, with persistent inflation and a sharper slowdown looming. Headline inflation and inflation “expectations” had declined but “measures of core inflation remain too high.”

House prices, already among the highest in the OECD in Auckland, are expected to again rise sharply. Compared to the central bank’s previous forecast of a 0.4 percent increase, it now expects prices to rise by 3.2 percent by September 2024 and 9.5 percent to the end of 2025.

As is the case internationally, the ruling elite is responding to the economic crisis, triggered by the pandemic and worsened by the US-NATO war with Russia in Ukraine, by imposing the full burden on the working class. The RBNZ will continue with high interest rates as long as necessary to increase unemployment and beat back a developing movement in the working class for substantial wage increases.

The Labour-led government used the COVID pandemic to transfer tens of billions of dollars to big business, in the form of tax relief, direct bailouts and so-called wage subsidies. During 2020–21, the RBNZ printed $53.5 billion ($US34 billion) to buy up government bonds from the commercial banks, boosting their profits to record levels and contributing to rampant inflation.

The working class is now confronted with an escalating class war agenda to pay for the bailouts.

Job advertisements in July declined for the fourth consecutive month and were 25.8 percent lower than a year earlier, indicating a sharp “cooling” in the labour market. Unemployment has been under 4 percent for over two years, dipping to a 3.2 percent low, but in the June quarter it jumped back to 3.6 percent. Auckland job ads are running at lower levels than before COVID hit.

The parasitic financial sector has benefited enormously from the government’s policies. The four major retail banks made a record $NZ7.18 billion in 2022, a net profit after tax that was $1 billion higher than the year prior and equated to $1 million an hour, according to KPMG. The banks are more profitable than the electricity sector, the supermarkets, and the construction companies put together.

In an attempt to quash growing outrage over the banks’ predatory practices, which includes clamping down on credit availability while raising mortgage, credit card and other loan rates, the government last week directed the Commerce Commission to conduct an inquiry. Unconcerned, the Banking Association welcomed the inquiry and hoped “it will ease concerns about competition and innovation in the sector.”

The emerging movement by the working class for better wages and against austerity is being met with open hostility in the business and media elite. Statistics NZ recently revealed that median weekly earnings were up 7.1 percent in the year to June, the second largest increase since 1998, but still barely above the current official inflation figure. The Labour Cost Index, however, which takes account of all wages paid, only increased 4.3 percent—well below inflation.

This was too much for Tauranga Chamber of Commerce chief executive Matt Cowley, who told Newstalk ZB on August 16: “it’s a win for wage earners—but it’s tough for employers.” He falsely claimed “persistent” wage increases “feed the inflation spiral which impacts everyone.”

Prominent right-wing talkback host Mike Hosking, one the country’s highest paid media figures, fulminated that the wage increases are “inflationary,” “aren’t healthy” and “come at a cost.” In fact there is clear evidence that profit gouging, not wage increases, is the main driver of inflation internationally.

The ruling class and crisis-ridden Labour-led government are depending on the trade unions to suppress workers’ struggles. The NZ Nurses’ Organisation and Post-Primary Teachers’ Association recently cancelled industrial action and pushed through below-inflation pay deals affecting tens of thousands of nurses and teachers. The teachers’ settlement was imposed at the direction of a state arbitration panel which ruled they should get a 14.5 percent pay rise over three years—that is, a pay cut.

Global conditions, including the escalating war in the Ukraine, will intensify economic pressures. Concerns are growing about the impact on commodity prices of a slowdown in China, which accounts for over a quarter of NZ’s exports. Dairy prices slumped by 7.4 percent at last week’s Global Dairy Trade auction, led by a 10.9 percent fall in whole milk powder to $US2,548 a tonne, its lowest point in almost five years.

Scientists raise alarm over global spread of new highly-mutated COVID-19 variant

Evan Blake

Over the past few days, scientists throughout the world have increasingly sounded the alarm over the emergence of a new variant of SARS-CoV-2, the virus that causes COVID-19. Identified as BA.2.86 and given the nickname “Pirola,” the variant has 35 mutations on the spike protein that distinguish it from Omicron XBB.1.5, the most recent variant that was dominant globally and for which the next iteration of vaccines have been designed.

After first being detected in Israel on Sunday, Pirola was sequenced in Denmark and then the United States, with England announcing a case on Friday. The detection of Pirola in four countries on three continents indicates that it is a fit variant that has likely begun spreading globally undetected for some time.

Commenting on the evident community spread in different parts of Denmark, molecular virologist Dr. Marc Johnson tweeted Friday, “The three Denmark cases were from different parts of the country and had no known contact with one another. This is looking more and more like an avalanche.”

Healthcare workers treating a patient amid a surge of COVID-19 cases in Mumbai, India, Monday, April 10, 2023. [AP Photo/Rafiq Maqbool]

The genomic difference between Pirola and XBB.1.5 is comparable to that between the first Omicron variant and the original strain of the virus. The large number of mutations on the spike protein first enabled Omicron to circumvent antibodies generated by the vaccines and prior infections, causing the largest global wave of infections, including breakthrough and reinfections, at any point in the pandemic. 

Despite a relentless propaganda campaign falsely claiming that Omicron was “mild,” it caused millions of deaths globally and likely the largest wave of Long COVID of the entire pandemic. Scientists are warning that Pirola could potentially cause a similar “Omicron-type” event, in which billions of people globally become infected or reinfected with COVID-19. Whether or not Pirola is more likely to hospitalize or kill patients will not be known for weeks or months, as these are lagging indicators.

While independent scientists are fighting to educate the public on the emergence of the Pirola variant, capitalist politicians throughout the world and almost every corporate media outlet have remained criminally silent.

The growing concern about this new variant comes amid what is already clearly a major new global wave of the pandemic, predominantly fueled by the EG.5 variant nicknamed “Eris,” which now accounts for over 30 percent of sequenced cases globally.

The latest wastewater data from the US released Thursday show that over the past eight weeks, the level of viral transmission has increased by 227 percent nationally, or more than tripling. At present, an estimated nearly 610,000 Americans are being infected each day, and 6 million are currently sick with COVID-19, near the peak levels reached during the Delta wave in 2021. This surge is largely being driven by Eris, which became dominant last week and now accounts for 20.6 percent of sequenced cases.

COVID-19 hospitalizations are also quickly rising throughout the world. Across the US, hospitalizations rose 60 percent between July 8 and August 5, the most recent date for which data are available. In recent weeks, hospitalizations and intensive care unit (ICU) admissions have more than doubled in New York, often a bellwether for the rest of the country.

Significant surges are also taking place in South Korea, Japan, Italy, the UK, Spain and other countries. There are already concerns that China is beginning a third wave of the pandemic after lifting its Zero-COVID elimination strategy last winter, which led to two catastrophic pandemic waves that likely killed upwards of 3 million people. 

As summer and winter breaks end throughout the world, hundreds of millions of children are returning to schools globally at present. This will only add fuel to an already raging fire, as schools have been known throughout the pandemic to be key centers of viral transmission.

The ongoing global wave of mass infection and the dangers of this being compounded by the Pirola variant take place just three months after the World Health Organization (WHO) and the Biden administration ended their COVID-19 public health emergency (PHE) declarations in early May. These unscientific decisions prompted the total collapse of already ruined pandemic surveillance systems globally.

Testing, contact tracing and the reporting of cases are now nonexistent throughout much of the world. Genomic surveillance, which is necessary to track the evolution of SARS-CoV-2 and the global spread of new variants like Eris and Pirola, has drastically declined over the past year, in particular after the scrapping of the PHEs.

But perhaps the most significant result of these regressive policy decisions, which have been accompanied by an unrelenting propaganda campaign in the corporate media, is that the vast majority of the world’s population has been misled into believing that the pandemic is over. Billions of people are now totally unprepared for the next stage of the pandemic, which is quickly sweeping over global society.

On Thursday, tailing the independent citizen scientists who discovered Pirola, the WHO and US Centers for Disease Control and Prevention (CDC) both announced that they are tracking the spread of the new variant. These announcements were largely aimed at damage control, as both institutions stand thoroughly discredited for their role in covering up the ongoing dangers of the pandemic.

It is not yet known whether Pirola will take off globally or if it is more likely to cause severe disease and death, but these outcomes are entirely possible. In fact, such dangers are only increasing as the virus is allowed to spread freely and mutate in billions of hosts.

The capitalist response to the COVID-19 pandemic has amounted to an unending stream of lies, misinformation and homicidal policies designed to maximize the production of profits and subject the population to perpetual waves of infection, death and debilitation with Long COVID. 

While unlimited resources are provided to the imperialist war machines and bank bailouts, a pittance is allocated to scientific research into next-generation COVID-19 vaccines, therapeutics and renovating infrastructure to prevent airborne transmission. High quality masks, accurate tests, treatments and now even vaccines are all unaffordable or inaccessible to billions of people internationally.

The financial oligarchy that runs society is thoroughly hostile to the social interests and well-being of the great mass of the population. As capitalism descends into the barbarism of world war, the fascist mantra of “survival of the fittest” once again reverberates through the halls of power.

French troops ordered out of Niger

Athiyan Silva & Thomas Scripps

The military junta headed by General Abdourahmane Tchiani announced last Monday that all French troops in Niger, a former French colony, must leave the country by early September.

This announcement comes after Colonel Major Amadou Abdramane, spokesman for the CNSP (The National Council for the Safeguard of the Homeland), announced August 3 the official cancellation of five military cooperation agreements signed with France between 1977 and 2020.

French soldiers disembark from a U.S. Air Force C130 cargo plane at Niamey, Niger base, on June 9, 2021. [AP Photo]

France has already been forced to withdraw 2,400 soldiers from Mali and 400 from Burkina Faso following military coups in May 2021 and September 2022, drastically reducing its military presence in its former colonial territories. Chad now hosts the imperialist country’s last military base in the Sahel region of Africa, a belt of land below the Sahara Desert stretching from the Atlantic Ocean to the Red Sea.

The scale of the crisis for French imperialism was highlighted by a public argument between French President Emanuel Macron and Bernard Emie, the head of the DGSE intelligence service. Multiple sources reported the president telling Emie, “We can see that the DGSE’s way of functioning is not satisfactory. When you don’t see anything coming, there’s a problem.” Emie responded that he had warned Macron, with material leaked to the press to confirm this.

French forces have been carrying out military operations in the region under the banner of the “war on terror” for years, fighting jihadist militias with origins in the imperialist proxy war waged against Libya in 2011. Roughly 1,500 soldiers are based in Niger, whose capital Niamey hosts a French air base at Diori-Hamani International Airport. Several Mirage 2000D fighter jets, attack helicopters, MQ-9 Reaper drones, military vehicles and equipment are stationed at the base.

The role of the French military across the Sahel, plus economic exploitation, have fueled widespread popular hostility, which the coup leaders in Mali, Burkina and now Niger have sought to mobilise in their support. On July 30, protests were held outside the French embassy, during which a door was set on fire. On August 11, thousands of people protested outside the French air base.

The French government has been bellicose. Macron’s office responded to the embassy protest with the statement, “Should anyone attack French nationals, the army, diplomats, and French interests, they will see France respond in an immediate and intractable manner, French president Emmanuel Macron will not tolerate it.”

On August 9, Abdramane accused France of destabilizing the country by violating Niger’s closed airspace and releasing 16 terrorists in the Tillaberi region, who he said were being mobilized to plan attacks on Nigerien military positions in the border areas.

He added that a unit of the National Guard was attacked by jihadis at Bourkou Bourkou, about 30 kilometers from the Samira gold mine operated by a Canadian and Moroccan company in the Tillaberi region.

A series of bloody attacks have been launched on the military since the coup. On Tuesday, 17 soldiers were killed and 20 wounded in an attack by an armed group near the border with Mali in Koutougou.

Although the French government immediately denied the allegations, it and the other Western imperialist powers are notorious for using Islamist proxies for their own ends, as in the devastating wars in Libya and Syria.

France has also refused to accept the demand for the withdrawal of its troops, responding that “the legal framework for its cooperation with Niger in the area of defense is based on agreements that have been concluded with the legitimate Niger authorities… These are the only ones that France, and the entire international community, recognizes.”

The French government is inclined to be more reckless because it feels that its nominal imperialist allies have abandoned it, while rushing to secure their own positions.

Le Figaro reported Sunday, “After the putsch in Niger, France fears being overtaken by its American ally”. Based on comments from a French diplomat, the paper reported the US “did the exact opposite of what we thought they would do,” by sending Acting Deputy Secretary of State Victoria Nuland to meet with the coup leaders. The article begins with the line, “With allies like that, we don’t need enemies.”

The paper summarized its source’s view that the “Americans simply want to keep their bases in the region above all else. Washington will not hesitate to drop a demand for what he called constitutional legality to achieve this goal…

“The United States, like all our allies for that matter, has a habit of letting us take the hits.”

This assessment found support in a CNN article Thursday which reported, “The Biden administration is searching for ways to keep US forces and assets in Niger to continue anti-terror operations, even as it becomes increasingly unlikely that the military junta that overthrew the country’s government last month will cede power back to the democratically elected president.”

CNN added that Brigadier General Moussa Barmou, currently occupying the role of chief of defence and trained by the US military, was “a key variable”. It quotes the United States’s former commander of Special Operations Command Africa Major General J. Marcus Hicks’s opinion that Barmou was “not anti-western” and a friend to a lot of us in the US military… I have no sense that they want us to leave.” Nuland met Barmou during her visit.

So far, the military in Niger have made no request to US forces to leave the country, nor Italian and German.

The coup leaders are tapping into a well of anti-French sentiment. But the ongoing negotiations with US forces behind the scenes expose any anti-imperialist pretensions on the part of the government.

While the US has chosen its words more carefully than France, it has still declared its support for the Economic Community of West African States (ECOWAS), which is making preparations for what would be a catastrophic military intervention in Niger as a “last resort”. ECOWAS leaders are meeting Thursday-Friday in Accra, the capital of Ghana, to discuss plans.

The Russian government is also pitching itself as an anti-imperialist force in the region, as it has done throughout Africa to help curry favour with its governments.

Putin told participants in the 11th Moscow Conference on International Security on August 15, “There is no doubt that those behind these conflicts are seeking to benefit from human tragedy by pitching nations against one another, subjugating states into feudal obedience within a neo-colonial system and exploiting their resources without mercy.”

Russian Defense Minister Sergei Shoigu accused the West of “maintaining centers of conflict” on the African continent to profit from the natural resources of its former colonies. He added that the Russian Defense Ministry will “continue to strengthen its military and technical cooperation with African countries in the fight against neo-colonialism and the threat of terrorism.”

But Russia has nothing to offer on either front. Mali and Burkina Faso, where Russia’s Wagner mercenary group is operating, are still ravaged by armed militias, still at the mercy of international finance capital, and now threatened by an imperialist-sponsored war centered on Niger which would plunge their societies into chaos.

Ukrainian government persecutes pacifist, while Zelensky meets with neo-Nazi leader

Jason Melanovski

Yurii Sheliazhenko

The NATO-backed government of President Volodymyr Zelensky has officially charged Ukrainian peace activist Yurii Sheliazhenko with “justification of Russian aggression.” After the country’s Security Service (SBU) raided his Kiev apartment earlier this month, Sheliazhenko has been interrogated and placed under nightly house arrest as he awaits prosecution.

Sheliazhenko currently serves as the executive secretary of the Ukrainian Pacifist Movement, which is a member of the European Bureau for Conscientious Objection and World BEYOND War.

The charge against Sheliazhenko is specifically based on a pacifist document taken by the SBU in their raid titled “Peace Agenda for Ukraine and the World.” The document, which was adopted by Sheliazhenko’s organization in September and sent to Zelensky’s office, calls “for peace, condemns the Russian aggression, urges protection of the human right to refuse to kill and appeals for a peaceful solution of the armed conflict.” 

Speaking with Democracy Now! Sheliazhenko recounted that during his interrogation he realized that the Zelensky government had begun surveilling him over a year ago after he had published a document titled “A Human Right to Conscientious Objection to Military Service.”

He recalled, “During this interrogation, the investigator provided me a copy of the request to the court. He asked the court to apply to me home arrest. He released some materials disclosed, and I must say that from this pile of papers, I saw that, indeed, surveillance was started a year ago, and it was started when I published, as a human rights defender, a legal aid document that called human right [the right] to conscientious objection to military service. And they considered it a threat to national security. They considered it as a threat to the mobilization of the Armed Forces of Ukraine. And they started to surveil me.”

Despite facing prison time and potential violence from the SBU and infamous fascist militias, Sheliazhenko has vowed to remain in the country to fight the patently undemocratic charges against him. 

“I will not run from my home and country,” wrote Shelizhenko on August 6. “If I will be sent to prison for pacifism, I will find a way to be useful for peace-loving Ukraine in prison too.”

The prosecution of Sheliazhenko is part of a broad crackdown on individuals and groups viewed as insufficiently loyal to the pro-NATO Kiev regime that came to power in the 2014 coup, which was organized by the EU and United States, working in tandem with the country’s far right.

The campaign to hunt down, arrest and prosecute or even kill “traitors” and “collaborators” accelerated following the beginning of the open war in February 2022 with the Russian invasion.

In addition to banning the country’s opposition political parties in May of last year, it is estimated that by the start of this year SBU had initiated 2,500 criminal cases against supposed “collaborators” and detained 600 foreign agents and spies.

Among the more notable cases are the prosecution of peace activist Ruslan Kotsaba and the arrest and prosecution of the anti-fascist brothers Alexander and Mikhail Kononovich. 

While antiwar activists such as Sheliazhenko are being prosecuted, Zelensky found the time to meet with Andriy Biletsky, the neo-Nazi founder of the far-right Azov Battalion. Biletsky has made no secret about his neo-Nazi views and in 2010 stated that he believed the “national purpose” was to “lead the white races of the world in a final crusade … against Semite-led Untermenschen [subhumans].”

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After months in which the Western media fraudulently tried to portray the Azov Battalion as having abandoned its neo-Nazi roots, Zelensky is now openly meeting with the fascist founder of this organization. On his official Telegram channel, Zelensky captioned the video of the meeting with the words, “The command post of the 3rd separate assault brigade, which is performing combat missions as part of the Khortytsia operational and strategic group of troops in the Bakhmut sector. During the open conversation, we discussed the most pressing issues.

“I am grateful to everyone who defends our country and people who bring our victory closer.”

The intensified crackdown on dissent and evermore open reliance on neo-Nazi forces comes amid a deepening crisis of the government whose NATO-backed counteroffensive has been a bloody disaster. It is estimated that over 300,000 Ukrainians have been killed in the ongoing war. Tens of thousands of Ukrainian soldiers have been senselessly massacred just in the past two and a half months alone, which has failed to produce any military advances for Ukraine. 

Despite this horrific death toll, unseen in Europe since World War II, the NATO-backed Zelensky government is deploying all means at its disposal to continue the war, effectively kidnapping people off the streets and forcing them to the front. 

The high probability of being killed at the front has motivated thousands of men to flee the country. Those who can afford it offer bribes to Ukrainian officials in order to avoid military service.

Under conditions where a renewed wave of mobilization is being prepared, with some Ukrainian politicians demanding that as many as 400,000 more men be mobilized, Zelensky on Friday announced the firing of all of Ukraine’s regional military recruitment chiefs.

Last month, it was revealed that military officials had accepted bribes in cash and cryptocurrency in exchange for falsified documents and the exemption of men from military conscription. In some cases, officials collected $10,000 per person, a huge amount in a country where the average monthly income is just $400 a month. In other words, those who were able to bribe themselves out of military service were wealthier layers, whereas working class Ukrainians were the first to be forced to die in the NATO-backed counteroffensive.

Zelensky feigned indignation at the scandal, stating in a social media post that “the system should be run by people who know exactly what war is and why cynicism and bribery during war is treason.” In a separate statement he claimed that the scandal remained a secret until, “during the inspection of the territorial recruitment centers, law enforcement agencies exposed cases of corruption.” In reality, the fact that wealthy Ukrainians are avoiding the draft has been well known since the war first began.

As even the New York Times highlighted in its coverage of the scandal  “…Andriy, an officer in the Territorial Defense Force, said corruption in recruitment centers was well known, and that rooting out some of those responsible was unlikely to have a big effect on mobilization. Andriy, who discussed political matters on the condition that his surname not be used, said, ‘Those who would like to avoid would do that anyway.’”

By arresting the military recruitment officers, Zelensky no doubt seeks to assuage immense social anger both in the civilian population and among rank-and-file soldiers about the flagrant draft evasion by the wealthy and the war profiteering in sections of the military leadership. But the principal purpose is to create conditions for the ongoing mobilization of even more Ukrainian men as cannon fodder for the imperialist war against Russia. Earlier this week, the Biden administration approved another $200 million in weapons, the 44th shipment to date, which will be used to fund the continuation of the slaughter.

Australian rental crisis hitting workers

Max Boddy

The Anglicare Australia charity released a report on Monday which provides an insight into the dire situation facing renters. It is a supplementary report to Anglicare’s annual “Rental Affordability Snapshot,” released in April, which found housing had never been less affordable.

Suburban housing in Hobart, the Tasmanian capital, Australia. [Photo by Graeme Bartlett / CC BY-SA 3.0]

The Snapshot gives an indicative overview of the housing crisis, taking a record of all the rental properties listed on a given day in the year and comparing the asking prices to average incomes and welfare payments.

The Snapshot bases its assessment of whether a property is affordable for a given cohort on a maximum threshold of 30 percent of household expenditure going to housing costs.

On March 17 Anglicare reviewed 45,895 rental property listing all over the country. It noted that this is the lowest number of listings in the 14 years the report has been released, reflecting Australia’s record low vacancy rate of just 0.8 percent.

It found that just 78 rentals, or 0.2 percent, were affordable for couples out of work, single parents on welfare and those receiving the Disability Support Pension (DSP). A single person on the aged care pension could only afford 162 of the properties and those on the minimum-wage 345.

Skyrocketing rent increases have fueled the lack of affordable dwellings.

Average overall rents increased by 11 percent in the twelve months prior to the report, from $570 per week in March 2022 to $633 per week a year later. In four years, rents have increased by almost 40 percent overall from $459 per week in August 2020 to $642 per week in August this year according to SQM research.

Monday’s supplementary report focused on 16 categories of essential workers whose net earnings were calculated based on guidance from the Australian Taxation Office. The results assumed that the workers were single and earning the full-time minimum wage. They did not consider variables such as casualisation, part-time work or overtime.

The report found that of the 45,992 listings, not a single of the wage-earning cohorts among “essential workers” could afford more than 1,600 of them. School teachers and firefighters, among the highest earners of “essential workers,” could afford only 1,507 and 1,459 respectively.

For those on the lowest wages the situation is disastrous. For an early childcare educator on the minimum weekly rate of $878, their weekly affordability threshold is $263.40. This means they could afford just 428 of the listed properties, or 0.9 percent. This same situation faces hospitality workers and meat packers. For enrolled nurses on the minimum weekly rate of $1013.40 just 666 of the properties were affordable.

Speaking to the Guardian, Colleen Carina, a 60-year-old assistant nurse, explained that she had been forced into homelessness. “I’ve got a little camper van I was staying in,” she said, “But when I’m working it’s quite difficult.” Carina was offered a permanent job at an aged care facility in Coffs Harbour, New South Wales (NSW), but was given casual hours once it was discovered she didn’t have a rental.

“There’s just no housing,” she said, “I’m looking at rentals at $460 a week. Say I’m making my average wage, maybe $600 or $700 a week, by the time you pay for fuel, you put money away for electricity, or even a car account, how do you live?”

The unaffordable rental prices are compounded by declining wages and rising inflation. There has been a significant decline in disposable income, with a poll conducted by Nine media recently finding that 51 percent of Australians would struggle financially if they had to cover the costs of an unexpected major expense such as the repair of a car or replacing a fridge.

This is driving a flood of requests for assistance from homelessness services. A report published by Homelessness Australia in early August revealed demand increased by 7.5 percent in four months, from 89,109 requesting assistance in December 2022, to 95,767 by March 2023.

“A 7.5% increase in demand in just four months is unheard of,” Kate Colvin chief executive of Homelessness Australia told the Guardian. “It forces homelessness services to make extremely tough decisions about who gets assistance,” she said. An average of 71,962 people are turned away per year, according to the report, 80 percent of whom are women and children. This does not include people who cannot reach a service over the phone.

The situation is concentrated in the most populated states with Victoria seeing 32,733 requests for service in March and NSW 27,730. The other states are witnessing spikes in requests with Queensland increasing to 16,225 requests in March, a 12.9 percent rise from December last year.

The housing crisis is an indictment of the policies pursued by successive Labor and Liberal-National governments which have overseen decades of cuts to public housing. At the same time they have funneled money into the coffers of private property developers who rush to build cheap and dangerous apartments, cashing in on Australia’s housing bubble.

The federal Labor government, which scraped into office last year based on promises of a “better future,” has offered nothing but sham relief. Its much touted $10 billion “future fund” will purportedly build 30,000 social housing dwellings over the next five years. Even if this comes to pass, it is a drop in the ocean compared to the predicted 47,000 new social and affordable homes needed each year for the next two decades to meet demands.

A “National Cabinet” meeting called by Labor on Wednesday did not outline a single policy that would address the skyrocketing rents. Instead its focus was on various subsidies to property developers, and an onslaught on regulation, to further fuel the housing bubble.

While nothing is being provided to working families, the Labor government has launched a savage offensive against workers through cuts to health, education and public spending, while pumping billions into the military and tax cuts for the rich.

Thousands of refugees dying amid fascistic European anti-migrant campaign

Thomas Scripps

The European working class must oppose the vicious anti-migrant campaign raging in every country on the continent.

Migrants from Eritrea, Libya and Sudan crowd the hold of a wooden boat in the Mediterranean sea, about 30 miles north of Libya, Saturday, June 17, 2023. [AP Photo/Joan Mateu Parra]

Language historically associated with the fascist right has become commonplace in Europe’s parliaments and media, portraying desperate people seeking work and safety as an invasion to be repelled at all costs.

Fascistic individuals and organisations like Italy’s Mussolini-admiring Giorgia Meloni, Marine Le Pen in France, Spain’s Francoist Vox party and the AfD in Germany are being welcomed into mainstream bourgeois politics. They are setting the tone for levels of xenophobia not seen in Europe in decades.

This week, the Polish government announced a foul, provocative referendum in response to the European Union’s new migrant allocation mechanism on the question, “Do you support the admission of thousands of illegal immigrants from the Middle East and Africa?”

The British government is demonising not only migrants—being herded into legionnaires-infected prison ships—but even the lawyers who represent them.

Everywhere, the traditional right-wing parties are joined in their anti-migrant policies by social democratic and pseudo-left governments or can count on their support from opposition.

European governments are the architects of an anti-migrant infrastructure unprecedented anywhere on the planet: a system of heavily policed walls, fences and razor-wire, detention camps, and agreements with brutal militias and regimes on the continent’s periphery, combined to create a “Fortress Europe.”

The military term is appropriate. The European ruling class is at war with the mass of humanity deprived of the most basic conditions of life by imperialist violence and capitalist inequality.

Among the significantly increased numbers of people who began applying for asylum in Europe in 2015 and 2016, the largest national groups were from Syria, Iraq and Afghanistan, fleeing imperialist wars and proxy wars which have destroyed their societies. Others fled grinding poverty, repressive governments, violent internal conflicts and the destruction wrought by climate change.

To this nightmare scenario has since been added rising food prices driven by the NATO-Russia war in Ukraine, itself the source of four million Ukrainian refugees, and emerging debt crises and massive social cutbacks exacerbated by the pandemic and global interest rate rises.

As the number of people attempting the journey to Europe grows again, they confront a multi-billion-euro apparatus across a vast geographical front, running from the west coast of Morocco to Turkey, the borders of Europe to the southern Sahara.

The recent coup in Niger and the threat of a regional war has highlighted the first line of defence in the Sahel region of Africa—what the EU’s High Representative for the Sahel, Ángel Losada, called Europe’s “forward border.” Here and in Sudan—two gateways to the Sahara—European money cynically labelled as “humanitarian aid” funds border controls which have forced migrants to take more dangerous routes, policed by forces with proven records of human rights abuses.

The United Nations has previously suggested the number of refugee deaths in the Sahara is likely to be at least double that in the Mediterranean, which currently stands at 27,845 since 2014, according to the International Organization for Migration’s admittedly conservative estimate.

Even more money is given to Turkey and North Africa to stop crossings into Europe. A €6 billion deal was agreed between the EU and the Turkish government in 2016 for increased border security and the blanket deportation of asylum seekers out of Europe to Turkey.

Funding agreements with Libya and Tunisia see lawless militias employed as border guards. NGOs attempting to rescue ships in distress are shot at by the coastguard. Captured migrants are beaten and electrocuted, robbed if there is anything left to steal, taken back to land and kept in a shadowy network of internment camp where torture, extortion, forced labour and slavery are rife. Many are deported south and left stranded in the desert.

Ships bound for Europe attempt ever more dangerous crossings to avoid this fate, turning the Mediterranean and stretches of the North African coastline into graveyards. Europe’s Frontex border force plays its part, illegally pushing migrant ships out of EU waters, while southern European states pass laws to impede humanitarian organisations and threaten their staff with legal charges.

On the European mainland, each country is strengthening its borders against its neighbours, creating a gauntlet of barbed wire, metal fencing and violent patrols. Where migrants succeed in crossing one border, they are frequently herded on to the next, passing through a series of makeshift camps.

Reinforcing these policies, the EU agreed a new migration plan in Luxembourg this June providing for fast-track deportations, including to countries with which failed asylum seekers have the most tenuous connection—including states travelled through on the journey to Europe. The UK’s efforts to deport asylum seekers to Rwanda follow the same policy.

No crime is too great. This June, more than 600 migrants travelling in a fishing vessel were drowned as a result of the actions of the Greek coastguard. Though they attempted to cover it up, investigations have proved the Greek authorities had attempted to unsafely tow the boat out of their national waters, causing it to capsize.

This story and others like it barely break the surface of corporate news reporting. And when mass drownings occur, this only fuels the xenophobic demands of the media and political establishment to “Stop the Boats!”

These killings are only the visible tip of an iceberg of human suffering.

A fraction of the world’s 108 million-plus forcibly displaced people ever makes it near Europe or any rich country. Fully 70 percent never get further than a neighbouring state. Most live in hellish conditions in slums and refugee camps throughout Africa and Asia.

Amid this social catastrophe, European politicians are tearing up their legal commitments to human rights laws and conventions, passed following the Second World War and in the shadow of the Holocaust, like so many pieces of scrap paper.

Europe’s ruthless war on migrants is the spearhead of a right-wing assault by the bourgeoisie aimed at the entire working class. The violent deprivation of masses of people of their most basic democratic and social rights is being normalised and will become more widespread as the Ukraine war and economic crises deepen. The argument that a society riddled with millionaires and billionaires somehow “cannot afford” to take in another migrant worker is used to cut social services and support for native workers.