Chinese leadership meets amid mounting economic problems

Nick Beams

Significant problems are confronting the Xi Jinping regime as the third plenum of the Central Committee of the Chinese Communist Party meets this week to discuss the direction of the economy.

The meeting, which began on Monday and concludes on Thursday, did not get off to a good start, with the release of data showing that growth had slowed in the second quarter compared to the first three months of the year.

Chinese President Xi Jinping walks to cast his vote during a session of China’s National People’s Congress (NPC) in Beijing, March 12, 2023. [AP Photo/Andy Wong]

China’s GDP rose by 5.3 percent in the first quarter and economists had predicted it would increase by 5.1 percent in the second, but the figure came in at 4.7 percent.

A breakdown of the data underscores some of the key issues confronting the Chinese political leadership. Industrial production was up by 5.3 percent in June, beating expectations and reflecting the official policy to promote the development of “new productive forces” but retail sales rose by only 2 percent for the month, well short of predictions.

In a sign of deflationary pressures, consumer prices rose by only 0.2 percent in the year to June. In housing and real estate, which has been a mainstay of Chinese economic growth, the downward pressure was clearly evident.

New home prices fell by 4.5 percent in the year to June which, according to calculations by Reuters, was the largest decline in nine years. New construction starts were down by 23.7 percent in the first half of the year while property investment fell by 10.1`percent over the same period.

The latest data express deep going structural problems in the economy which now confront the government as it tries to change the course of policy under intense financial, economic and social pressures, both internally and externally.

In the wake of the global financial crisis of 2008, which had a major impact on the Chinese economy leading to the loss of an estimated 23 million jobs, a massive housing and infrastructure program was initiated such that real estate and property development, and its related industries, accounted for as much 25-30 percent of the Chinese economy.

While stimulus was provided by the central government, this expansion was financed in the main by local government authorities which borrowed large amounts of money through so-called local government financing vehicles (LGFVs).

The debt used to fund major infrastructure projects was financed through the sale of land for real estate and housing development.

The sharp slump in the property market, which began three years ago and has seen a host of companies go under—the most well-known of which was the collapse of the property giant Evergrande—meant that local governments and their LGFVs lost a major source of revenue.

A recent article in the Wall Street Journal highlighted the extent of the financing of LGFVs. It said economists had estimated the size of their debts at between $7 trillion and $11 trillion, about twice the size of central government debt.

“The total amount isn’t known—likely not even to Beijing, say bankers and economists—because of the opaqueness surrounding the financial arrangements that allowed the debt to balloon,” it said.

It is estimated that around $800 billion of the LGFV debt is classified at high risk of default.

The Journal article cited analysis by the Rhodium Group, a research firm, which found that only a fifth of nearly 2,900 LGFVs it reviewed last year had enough cash to cover their short-term debt obligations and interest payments.”

The prescription offered by economists, internationally and some within China, is that the government should initiate a stimulus package to boost consumption spending in order to maintain economic growth.

As Cornell University economics professor Eswar Prasad, a long-time analyst of the Chinese economy, noted in a recent comment piece in the Financial Times: “The government is resisting the clamour for monetary and fiscal stimulus, for fear of creating financial risks and adding to its debt burden.”

Some measures had been taken by the government and the central banks but “getting households [mainly in the middle classes] to consume more, when their confidence is at a low ebb and they see their homes and stock market investments falling in value, has proven a tougher proposition,” he wrote.

The main thrust of government policy is the development of what Xi has called “highly quality productive forces.” The focus is on the manufacture of high-tech products, of which a major component is so-called green technology goods such as electric vehicles, solar panels and batteries as well as medical equipment.

China is already a world leader in many of these areas, both in regard to technical efficiency, able to draw upon a vast pool of graduates from scientific institutions, and in terms of cost because of innovations in production methods.

Here the perspective of the Xi regime has run into a major obstacle—the determination of the United States to crush Chinese economic development which it regards as the greatest threat to its continued economic hegemony.

Starting under the Trump administration and continued and deepened under Biden, it has imposed a series of sanctions and constrictions on the export of high-tech components as well as imposing tariffs on its exports of electric vehicles and other green technology products which the European Union has joined.

The claim is made that so-called state subsidies are the reason for Chinese dominance in these areas and so its exports must be restricted on the grounds that they are “unfair competition” in global markets. Such claims are shot through with hypocrisy given the massive subsidies being provided to corporations by the Biden administration under the Inflation Reduction Act and the CHIPS Act.

For the Xi regime, the development of a new economic paradigm is an existential question. It sits atop a massive working class, estimated to be 400 million strong, and a vastly expanded urban population.

Having long ago abandoned any commitment to socialism, its sole basis of political legitimacy among the broad mass of the population is that it can continue to provide economic growth and an increase in living standards.

The turn to a new economic model and its impact on older industries, particularly construction, and the refusal of the government to lift spending on social welfare measures, which Xi has criticised in the past as a trap leading to “lazy people,” is generating major social tensions.

Some of these were reported in a major article in the FT this week entitled “Can Xi keep a lid on social strains?”

It noted that across the country “multiple indicators of social stress are flashing red as weakness in parts of the economy takes its toll. Official and unofficial data show rises in everything from labour market stress and housing foreclosures to labour protests, suicides, crime and random violence.”

Ever since the Tiananmen Square massacre of June 1989, it noted, the Xi regime had suppressed social unrest while economic growth gave the regime so-called “performance legitimacy.”

That is now being called into question. The downturn in property and construction is already having an impact with about 10 million workers leaving the construction industry in 2022 and 2023.

The article reported on a conference in China last year comprising delegates from municipalities and provinces which heard that perceptions about inequality “between rich and poor, cadres and the masses, have become general beliefs.”

The China Labour Bulletin in Hong Kong, which provides a limited coverage of labour unrest, has reported that there were almost 1,800 “incidents” in China last year, more than double that of 2022 and exceeding levels before the pandemic, with the construction industry the major source followed by manufacturing.

The article cited the results of a survey in social attitudes pointing to the shift from optimism to pessimism.

Survey results in 2004, 2009 and 2014 noted that most ordinary people were not “overly concerned” with income gaps, most were optimistic about their family prospects and many believed that upward mobility depended on merit.

The 2023 survey showed a marked change with respondents seeing “non-merit-based features of the social order, such as unequal opportunities, discrimination, and relying on connections, as relatively more important determinants of whether one is poor or rich.”

The authors of the report said the results did not suggest that popular anger over inequality was “likely to explode in a social volcano of protest activity.”

“They do suggest, however, that the performance legitimacy accumulated by the leadership through decades of sustained economic growth and improved living standards appears to be beginning to be undermined.”

Minxin Pei, a professor of governance at a California college and the author of a book on the surveillance and social control methods of the Xi regime, told the FT these measures had worked so far in a relatively tranquil environment, but that could change and there will be “lot more incidents of instability or unrest.”

He said if there was a prolonged period of low economic growth the CCP would enter uncharted waters with few precedents since Deng Xiaoping opened China up the market development at the end of the 1970s.

Rising unemployment and poverty in New Zealand

Tom Peters

There are numerous indications of deepening social inequality and collapsing living standards in New Zealand, as tens of thousands of people lose their jobs and the National Party-led coalition government imposes a drastic program of austerity to make workers pay for the economic crisis.

Kindness Collective Foundation appeal billboard in New Zealand, July 2024 [Photo: Instagram/kindnesscollectivefoundation]

The economy is barely expanding at a rate of 0.3 percent in the 12 months to March, and most people’s purchasing power has gone backwards. On a per capita basis, gross domestic product (GDP) contracted 2.3 percent in the past year and 4 percent since September 2022.

Unemployment was officially 4.3 percent in the March quarter, up from 3.4 percent a year earlier. The underutilisation rate—which includes unemployed people and those who cannot find enough work—rose by about twice as much, from 9.1 to 11.2 percent.

The situation is worse for young workers. For people aged 15 to 19, unemployment increased from 17 percent a year ago to 23 percent. For 20- to 24-year-olds, unemployment increased from 6 to almost 10 percent.

Stuff reports that in the week ending June 30, there were 113,415 people receiving the Jobseeker unemployment benefit, an increase of 14.9 percent or 14,709 from a year ago.

ANZ Bank is forecasting another 40,000 job losses nationwide by 2025. According to credit bureau Centrix, “There were 269 company insolvencies in May 2024—compared to 161 in May 2023.” Nearly a quarter of these were in the construction industry, which has shed thousands of jobs in recent months.

Significantly, the number of people receiving Jobseeker Support Health Condition or Disability benefits also increased by 11 percent in the past year, from 73,836 to 82,482—a sharp rise in the number of people who are too sick to work. This undoubtedly includes many suffering from long-term illness due to COVID-19, after the removal of all public health measures to stop the spread of the virus in 2022.

Roughly one in five children—more than 200,000—are living in poverty. The Kindness Collective, one of the country’s biggest charities, told the New Zealand Herald on June 23 it was aware of many children and teenagers “resorting to stealing to meet basic needs such as food and clothing.”

Food prices fell 0.3 percent in the 12 months to June 2024, but this negligible drop follows increases of 12.5 percent in the previous 12 months and 6.6 percent the year before that.

With about half a million people, 10 percent of the population, now dependent on food banks to survive, the government is cutting funding for these charities. One major provider, the Salvation Army, said on July 4 that it could no longer keep up with demand and has been forced to cut its food bank services by 25 percent. Auckland City Mission recently reported it would have to slash the number of food parcels it provides, from 50,000 to 20,000 a year.

The cuts to food banks were a particularly vicious component of the government’s austerity budget in May, which also chopped funding for the school lunches program, resulting in lower-quality meals for hundreds of thousands of children.

Along with funding cuts for healthcare and education, the government has so far slashed more than 6,200 public sector jobs across dozens of departments, fueling the rise in unemployment. These redundancies are being imposed with the crucial collaboration of the trade union bureaucracy, which acts as the enforcers for big business and the state, insisting that workers have no alternative but to sacrifice their jobs and living conditions.

Growing numbers of people now face crippling levels of debt, made worse by the Reserve Bank’s repeated increases to official interest rates, which have risen from 0.25 percent three years ago to 5.5 percent. The central bank’s aim was to trigger a recession, drive up unemployment and put downward pressure on wages. According to credit bureau Centrix, in May there were 474,000 people in debt arrears—more than 1 in 10 adults—which is 8.2 percent more than last year and 25.9 percent more than in 2021.

While mortgage rates have increased, so has the national median rent, which rose 6.2 percent in 2023 to reach $600 a week. Two percent of New Zealanders, about 100,000 people, are either homeless or living in severe housing insecurity.

Another sign of the financial crisis facing working people is the sharp increase in emergency withdrawals of retirement savings from the national KiwiSaver scheme. In April alone, 3,700 people withdrew savings for financial hardship reasons, compared with 1,820 such withdrawals last April.

Workers are making drastic spending cuts to make ends meet. According to Stats NZ, retail spending has fallen by 4.9 percent in the past year. Radio NZ reported on July 4 that, according to Infometrics, official figures show that since the last peak in the June 2021 quarter there has been a 12.6 percent decline in quarterly sales volumes per capita, seasonally adjusted. This is greater than the 10.3 percent drop in spending that followed the 2008 global financial crisis.

Consumer NZ estimates that in 2023, 40,000 households, about 2 percent of the population, had their electricity disconnected for non-payment. According to the New Zealand Herald, the four biggest power companies made a combined net profit after tax of $520 million in the same period.

Dr Kimberley O’Sullivan of the University of Otago told the newspaper that her research had found that between 16 and 30 percent of households cannot afford to properly heat their homes during the winter, depending on the measure used. This is far higher than the government’s official finding that 110,000 households, 5.8 percent, suffer from “energy hardship.”

All the parliamentary parties bear responsibility for the worsening social disaster. The opposition Labour Party lost the October 2023 election by a landslide after leading the government for six years, with the support of the Green Party, and overseeing an increase in child poverty. Labour’s 2017 pledge to solve the housing crisis by building affordable homes was exposed as an utter fraud.

Labour repeatedly refused to raise taxes on the super-rich, who benefited from billions of dollars in subsidies, low interest rates and quantitative easing during the first years of the COVID-19 pandemic.

50,000 foreclosures expected to be enforced in Greece this year

John Vassilopoulos

There has been a sharp upturn in electronic foreclosures in Greece, with 50,000 expected to take place this year. Electronic foreclosure is the process by which the assets of people with bank debt arrears or outstanding tax liabilities are forcibly auctioned off in specially created internet platforms. Last year saw 35,401 auctions.

Alongside the introduction of electronic foreclosures has been the systematic offloading of “non-performing loans” (NPLs) from the ledgers of Greek banks through the so-called Hercules Scheme.

Athens with the Acropolis (centre) [Photo by George E. Koronaios / CC BY-SA 4.0]

Initially introduced in October 2019 at the behest of the European Commission (EC), the scheme oversaw the transfer of bad loans by Greek banks to funds who in turn packaged the loans and sold them to investors as securities. Third-party entities acting on behalf of the funds, known as “servicers”, were set up to aggressively pursue debtors for the funder to make good on their acquisitions. By the end of 2022, the proportion of non-performing loans held by Greek banks was reduced from 42 percent to 8.2 percent.

According to recent figures, the NPL industry in Greece is managing 90 billion euros worth of loans which correspond to 2.4 million debtors—amounting to over a fifth of the country’s population! In the last five years only 800,000 debtors have come to a financial arrangement while more than a million are reportedly avoiding all contact with the servicer companies.

Electronic foreclosures have failed so far to deliver for the banks since being introduced in 2017.

In its Post-Programme Surveillance report for Spring 2024 published last month, the EC bemoaned the slow pace of foreclosures, stating that it “remains a difficult and laborious task.” In particular, it cited the backlog of foreclosures due to “low recoveries from collateral liquidations owing to the suspension of enforcement proceedings during the COVID-19 pandemic.” The EC complained of “delays in court procedures, a high ratio of unsuccessful auctions and the illiquid secondary market for NPLs are also slowing down the process.”

Konstantinos Mitsotakis’ conservative New Democracy (ND) government introduced legislation late last year to address these concerns. The laws formalised last year’s decision of Greece’s Supreme Court to allow servicers to be able to foreclose on properties even though they are not formally the debt titleholders. Prior to this ruling many legal challenges hinged on this point.

The new legislation built upon ND’s bankruptcy law passed in 2020, which did away with previous protections against a household’s primary residence being foreclosed.

At the last minute the new law was even amended so as not to incorporate the token provisions under the 2020 law for so-called “vulnerable households”. These were set at woefully paltry levels€7,000 euros or less for a single person with an additional €3,500 euros for each child up to a maximum of €21,000 euros. Even then the property is still essentially foreclosed with the family only able to remain in the property for a maximum of 12 years in exchange for paying rent. Even this was considered too big a burden on the profits of the NPL industry.

Countless stories in the media over the past few years have laid bare the devastation these foreclosures have wrought upon Greek working-class families. In May, a 49-year-old mother of two committed suicide after three attempts to foreclose on her house. A further attempt to auction the dead woman’s house off at the beginning of June was cancelled after the local outcry.

In an interview with the weekly satirical newspaper To Pontiki, lawyer Katerina Fragkaki laid bare the outright criminality with which foreclosures are carried out: “There are many instances where someone is officially certified as vulnerable, their property is auctioned off illegally and they insist on putting a vulnerable person out on the street. I have one such case. At the same time there are instances where they poison a family dog because when there is a dog at the property it makes the process harder to remove it.”

Fragkaki’s worst experience was with an 85-year-old bedridden woman: “When the officers of the court turned up at [her property] with the police I asked them for a delay due to the circumstances. They told me that the previous week they had evicted a cancer patient who was taken away in an ambulance.”

The most high-profile eviction case was that of Ioanna Kolovou, a retired journalist. She was evicted from her home along with her 28-year-old disabled son at the end of January this year. According to reports a large crowd gathered outside her home which was attacked with tear gas by the riot police who then arrested Kolovou and her son.

Previous attempts to evict her were forestalled, most notably in November 2022 after court officials and police were faced with protests.

At that time former Syriza (Coalition of the Radical Left) leader Alexis Tsipras visited Kolovou and cynically told her, “You’re holding on strong. The best security door is the solidarity of simple people.” He added, “we will see this sort of thing all the time because of the Mitsotakis government’s bankruptcy law,” while claiming that “during the bailout programme period, despite facing pressure from the troika, people’s first homes were protected.”

The exact opposite is true. Syriza’s tenure in power under Tsipras between 2015 and 2019 set the stage for the devastating attacks currently carried out by ND. Having been swept to power in January 2015 on an anti-austerity ticket, Syriza junked its mandate and signed a new austerity package in summer of 2015. In coalition with the far-right Independent Greeks for the next four years, Syriza went on to impose successive rounds of austerity even more brutal than its conservative and social democratic predecessors. This included junking their pre-election pledge of “No homes in the hands of bankers.”

A law passed by Syriza in 2015 set the ball rolling in phasing out the legislation that offered protection against foreclosures on primary residences by a deadline of December 31, 2018 for anyone seeking to apply for protection under that legislation. After that the protection ceased to apply to any new debtors while the protection afforded to cases pre-dating the cut-off point was only extended until the end of 2019.

By this time Syriza’s collaboration with the banks in seizing people’s homes was so pervasive that an estimated up to 1 million people—some of the poorest and amounting to one in 10 of the national population population—were impacted and further pauperised.

The same applies to electronic foreclosures, first introduced in 2017 at the behest of the EU and International Monetary Fund as part of the austerity package signed by Syriza.

Praising the measure in November of that year Syriza’s Finance Minister Euclid Tsakalotos stated: “electronic auctions are important, not just so we have good functioning banks but also for development and social reasons. For instance if banks can’t lend to small and medium sized businesses we have a problem. If banks can’t give money and new loans to young couples we have a social problem.”

The real “social problem” Tsakalotos had in mind was the fact that electronic foreclosures would minimise the disruption of real time auctions. Around the same time as Tsakalotos made his remarks riot police were called to a court in Athens to attack protesters disrupting repossessed properties from being auctioned off.

Syriza’s commitment to the offloading of non-performing loans to the mafia funds was made clear in September 2016, with then Finance Minister Giorgos Stathakis declaring that “the deregulation of the ‘red’ loans market was an explicit commitment in the memorandum agreement in August. To say otherwise would therefore be misleading.”

Zelensky government prepares further social cuts ahead of new debt negotiations

Jason Melanovski

The far-right, crisis-plagued government of President Volodymyr Zelensky is preparing to renegotiate its $20 billion debt with Eurobond holders as the pause on its payments following the outbreak of the NATO proxy war against Russia in February 2022 is set to end on August 1.

Ukraine President Volodymyr Zelensky speaks during a meeting with U.S. Secretary of State Antony Blinken in Kiev, Ukraine, Tuesday, May 14, 2024. [AP Photo/Ukrainian Presidential Press Office]

As the Kyiv Post reported, initial negotiations already took place June 3-14 between the Ukrainian government and its creditors, but they did not go well. Bondholders were reportedly unhappy with a cut of up to 60 percent of the original agreement. Should negotiations fail, after August 1, Ukraine will be forced to pay $3.75 billion by the end of 2024.

The various major bondholders are using the name Ad Hoc Creditor Committee during negotiations. The Committee consists of Amundi, BlackRock and Amia Capital, according to Bloomberg. PJT Partners Ltd. and Weil, Gotshal & Manges LLP are participating as the group’s financial and legal advisors. These giant hedge funds as well as banks like JP Morgan Chase are deeply involved in the so called “reconstruction” effort in Ukraine, whose fundamental aim is to subordinate the economy and its working class directly to the predatory interests of finance capital. 

If negotiations do not end in Ukraine’s favor, the impoverished country of 32 million will greatly increase its chances of defaulting on foreign debt, threatening both the continuation of the imperialist-provoked war with Russia and the Zelensky government itself whose popularity ratings are already tanking due to a highly unpopular mobilization law passed earlier this year. As the Wilson Center think tank noted, while default is not certain “it is obvious that the longer the war drags on, the closer Ukraine will come to defaulting. Already in 2025, the national debt is projected to exceed 100 percent of Ukraine’s GDP.”

As a result of previous loan agreements with the International Monetary Fund (IMF), the Zelensky government is unable to offer any more favorable terms to its creditors, “otherwise International Monetary Fund (IMF) debt sustainability targets risk not being reached” the Kyiv Post reported. As a result, the government has been forced into a corner during negotiations as it must pay interest on its Eurobonds for three years all at once.

Last week, Ukraine received another $2.2 billion from the IMF as part of its participation in the Extended Fund Facility (EFF) program which lasts 48 months and will loan the country approximately $16 billion. Ukraine is now the second largest debtor to the IMF after Egypt. 

These agreements entail mass privatizations, further reductions in already minimal social spending and various anti-corruption “reforms” demanded by Western imperialism. Despite their title, such “anti-corruption” efforts are essentially a means to insert Western elites into dictating the social and economic decisions of the indebted governments.

The severity of the debt crisis is shaking up the already crisis-ridden NATO-backed Zelensky government and threatens to undermine the war effort. For the past year, the Zelensky regime has been dealing with a severe manpower and ammunition shortage at the front as it continues to lose territory to Russia.

Earlier this week, the Ukrainska Pravda reported that Zelensky would soon replace the country’s Prime Minister Denis Shmigal, who had taken a leading role in negotiating with the IMF and assuring Ukraine’s compliance with its various agreements.

The longest-serving Prime Minister in post-Soviet Ukraine, Shmigal was first appointed Prime Minister in 2020 following the resignation of Oleksiy Honcharuk, who made international news in October 2019 when he attended a neo-Nazi rock concert in Kiev.

While much of the article attributed Shmigal’s potential dismissal to mere personality and power conflicts between him and Zelensky, it also cited a sense of great nervousness within the Zelensky regime over the implications of a number of “reform” agreements with both the International Monetary Fund (IMF) and the United States.

According to Ukrainska Pravda, it was Shmigal’s “government that signed memorandums of commitment with the IMF and other international structures. And what’s bad is that the government was the addressee of the so-called ‘reform plan’ that the White House sent to donors and the government of Ukraine.”

It went on to add that by sacrificing Shmigal, the Zelensky government hopes its foreign creditors will be more open to new negotiations.

Shmigal is likely to be replaced by First Deputy Prime Minister Yulia Sviridenko who is reportedly close to Zelensky’s wife. Sviridenko is also viewed as “100 percent loyal” by Zelensky’s powerful aide Andriy Yermak. Reports suggested that Yermak already played a major role in forcing out the former Ukrainian commander in chief, Valery Zaluzhny in February.

The infighting within the Zelensky regime is fundamentally a symptom of the ongoing NATO proxy war in Ukraine, which has cost the lives of hundreds of thousands of Ukrainian soldiers and created over 6 million refugees, while devastating the economy already ranked as Europe’s poorest prior to the war.

The extent to which the war has further impoverished Ukrainian society was underlined last week by the head of the Ukrainian parliament’s Committee on Social Policy and Veterans’ Rights, Galyna Tretiakova.

In a rare official acknowledgement of the social disaster in Ukraine, Tretiakova stated, “We have a catastrophic ratio of people who are considered poor. In fact, the war has thrown us back 16 years in terms of overcoming the problem of poverty.” A World Bank report released last month indicated that the number of people living in poverty in Ukraine had grown by about 1.8 million since 2020, increasing to almost a third of the entire population at 29 percent.

In total, 9 million Ukrainians were living in poverty as of last year, while the country’s overall population has dropped precipitously from 40 million to 32 million. These figures do not take into account the immense loss of life among Ukrainian soldiers, which is estimated at well over half a million now.

The report also showed that the increase in poverty was driven by skyrocketing unemployment. A fifth of working adults have lost their jobs following the outbreak of full-scale war in February 2022. One in four Ukrainians surveyed did not have enough money to buy food at some point in June 2023, according to the World Bank report.

Amidst this social disaster, the Zelensky government, seeking to both finance the war effort and placate its international creditors, is preparing further cuts to social spending. Ukraine’s Minister of Social Policy Oksana Zholnovych declared last week, “We have taken on an excessive number of social obligations, social payments, which cannot always be supported by financial resources. And this imbalance entails a huge number of judgments that cannot be fulfilled in terms of the economy’s ability to cover such expenses.”

Already, Ukraine spends more on its military than on social spending, but, according to Zholnovych, the government now has to further “revise the philosophy of social payments” and “optimize” them. 

While it is as yet unclear exactly how the Zelensky regime plans to cut social spending further, Zholnovych told UNN that a draft law had already been prepared to revise social payments as Ukraine continues its necessary “reforms” to fulfill its obligations to the IMF and Western imperialism.

UAE imposes life sentences on 43 defendants in second-largest trial in its history

Jean Shaoul

On Wednesday, a court in the United Arab Emirates (UAE), following a mass trial of 84 defendants, sentenced 43 dissidents to life in prison for operating what it said was a Muslim Brotherhood group that aimed to commit attacks in the country.

The Abu Dhabi Federal Court of Appeal handed down lesser sentences of 10 to 15 years to 10 others, dismissed the cases against 24 and acquitted just one person. The fate of the remaining defendants remains unclear. It convicted six companies of money laundering to support a terrorist organisation.

Abu Dhabi Federal Court of Appeal [Photo: UAE Ministry of Justice]

Many of the 84 defendants, now in in their 50s, 60s and older, include a senior member of the ruling family in the northern emirate of Ras Al-Khaimah, lawyers, academics, writers, former government employees, a television presenter and activists known as the “UAE84”. They were convicted a decade ago in the UAE’s largest-ever mass trial held in the aftermath of the 2011 Arab Spring.

The court, in that earlier trial in 2013 of 94 people who had called in an open letter for democratic reforms, including an elected Parliament with legislative powers, had sentenced them to 10 years imprisonment. In 2014, a United Nations working group found that their convictions had been “based on charges of acts that would fall under the rights to freedom of expression and of assembly,” and that their detention had been “arbitrary.”

Due for release last year, the defendants were charged with new offences relating to the same events under legislation passed in 2014, using new legislation retrogressively based on double jeopardy—trying people for the same offence twice. Confident that it had the support of the US and other major powers, the UAE announced the new charges during COP28, the UN climate talks held in Dubai last November-December.

The trial was a travesty of justice. The defendants had restricted access to case material and information and limited legal assistance, with the defence lawyers banned from sharing the details of the indictment even with their own clients. The trial judges directed witness testimony and held the hearings in secrecy. There were credible allegations of serious abuse and ill-treatment. Some of the defendants had protested prolonged solitary confinement and other abusive detention conditions, including assaults and the failure to provide them with prescribed medications.

Family members told Amnesty International, “Nobody has read the court files. Nobody has seen them. We’re forbidden from attending. And the attorneys are under strict order not to cooperate with the prisoners or their families, and not to give them full, transparent information.”

Joey Shea, UAE researcher at Human Rights Watch (HRW), said, “This unfair mass trial is a farce, and the allegations of torture and gross fair trial violations lay bare the UAE’s hollow rule of law and utter lack of access to justice.” She made a forlorn appeal for the UAE’s imperialist allies, the US, UK and the European Union, to “urgently call for an end to these abuses and for the release of human rights activists.”

This sham trial has attracted little publicity in the international media. One can only imagine the furore that would have erupted if this had happened in Iran, with the Biden administration and its allies spreading the news far and wide. But the UAE has close political and economic relations with Washington, which rarely criticises its atrocious human rights record.

Abu Dhabi has installed a vast surveillance system across the city purchased from an Israeli-owned security company. Its Falcon Eye surveillance system “links thousands of cameras spread across the city, as well as thousands of other cameras installed at facilities and buildings in the emirate.”

UAE citizens, less than 15 percent of the 9.7 million population, have no political rights. The government clamps down on freedom of speech and freedom of the press. Local media are censored to prevent criticism of the government, government officials or royal families governing the seven states that constitute the UAE. Anyone who dares criticise the unelected government is detained and imprisoned, and their families subject to harassment by the state security apparatus. The Emirati authorities hold at least 26 prisoners of conscience.

The state maintains capital punishment and discriminates against women, migrants and LGBT individuals. Earlier this week, Tori Towey, a 28-year-old Irish woman from Ireland who works in the UAE as an airline cabin crew member, was charged with “attempting suicide” and abusing alcohol after she was attacked and left with severe bruising and other injuries in a violent incident. She was only released and allowed to leave the country after the Irish government intervened on her behalf.

The 8.2 million non-nationals have even fewer rights. Most are labourers working without the protection of a minimum wage and under the laxest safety standards for outdoor work in the Gulf region. In the peak summer months, the Emirati government limits its protection measures to a ban on outdoor physical labour during just 2.5 hours in mid-afternoon, even though evidence shows that outdoor workers face significant health dangers from the heat for at least half the year.

The UAE plays a crucial role in American imperialism’s plans to undermine Iran and dominate the resource-rich region as “a long-established partner in security and intelligence matters,” while helping the US stave off Chinese dominance in Africa by outspending Beijing in return for diplomatic protection at the United Nations. Abu Dhabi joined the NATO-led intervention to topple Colonel Muammar Gaddafi in Libya, where it continues to support the forces of General Khalifa Hiftar in the Benghazi region in opposition to the UN-recognized government in Tripoli. It financed, sponsored and trained proxy forces to overthrow the regime of President Bashar al-Assad in Syria.

But the UAE is increasingly, along with Saudi Arabia, pursuing its own interests that on occasion conflict with those of the imperialist and regional powers. Their joint opposition to the Muslim Brotherhood, shared by Egypt’s brutal dictator, Abdel Fattah al-Sisi, set them against Qatar—showing sympathy with Qatar became punishable by up to 15 years in jail—and Turkey, which hosts Egyptian members of the Muslim Brotherhood and other Islamist exiles, although relations have improved since 2021.  The UAE provided the ground forces for the Saudi-sponsored war against the Houthi rebels in Yemen in 2015 before pulling out of the coalition in 2020 to support the Southern Transitional Council, a secessionist organization in Southern Yemen.

In June last year, the UAE president welcomed Iran’s visiting foreign minister to Abu Dhabi in an indication of the warming relations between the Gulf states and Iran, despite having signed up to Washington’s Abraham Accords with Israel in an anti-Iran alliance. It followed the announcement the previous month that the UAE would no longer take part in a US-led task force protecting Gulf shipping. The UAE, along with Saudi Arabia and Egypt, has also refused to join the multinational naval alliance in the Red Sea led by the US against Yemen’s Houthi rebels who have pledged to disrupt shipping to Israel during its war on Gaza.

Sudan, which has witnessed a horrific, 15-month long civil war by rival army factions that has displaced 10 million people and brought the country to the brink of famine, has become the most recent focus for Gulf rivalries. The UAE is backing the Rapid Support Forces (RSF) of the former Sudanese deputy army chief Mohamed Hamdan Dagalo, which is accused of carrying out war crimes in Darfur. Egypt, Saudi Arabia and Iran are backing the Sudanese army led by General Abdel Fattah al-Burhan, while Russia has switched sides to support Burhan in a bid to secure a Red Sea naval base. The war threatens to spillover and destabilise Libya, Chad and other parts of the Sahel.

This week, the UAE is holding joint military training exercises—dubbed Falcon Shield—with China in the mainly Muslim province of Xinjiang. The exercise, which follows one last year, indicates deepening defence ties between the two countries, giving rise to growing US concerns. China was the UAE’s largest trading partner in 2022, while the UAE was China’s biggest partner in the Arab world, exporting $17.4 billion in crude petroleum and $4.12 billion in petroleum gas to China in 2022. Last year, China paid for its purchase of liquefied natural gas from the UAE in yuan instead of dollars for the first time. In 2022, the UAE’s Defence Ministry announced it was buying 12 L-15 light attack planes from the China National Aero-Technology Import & Export Corporation.

The summer surge of COVID in the US and the implications of the anti-public health policy

Benjamin Mateus

The US is in the midst of an accelerating summer COVID wave, the ninth such wave since March 2020. The current epicenters are located in the West (one in 37 infected) and the South (one in 43) of the country. Given the complete abandonment of all public health measures, including vaccination, this development is being driven more by waning population immunity coming off the winter peak and less by any unusual “seasonality” patterns to SARS-CoV-2.

It also underscores the important fact that we are not in any long-term, low-level endemic phase, a lie that has been perpetuated by every national and international public health official. The virus remains a pandemic pathogen. Its inherent viral characteristics indicate that it will continue to evolve and adapt, given the wide berth provided it by the political elites, whose primary concern is to do the bidding of the financial oligarchs.

COVID’s persistence is intimately tied to the nature of a beleaguered globalized capitalism that has placed the profits of a few thousand people over the lives of a working class population numbering in the billions.

According to two data websites that model COVID concentrations found in wastewater, those of JPWeiland and Professor Mike Hoerger, the rates of daily COVID infections have risen four-fold since the lows in mid-May. Currently, somewhere between 620,000 and 720,000 Americans are being infected each day, or one in 50 to 70 people.

This also means that somewhere between 36,000 and 144,000 people can expect to develop Long COVID. The surge in infections is being driven by the latest variants of SARS-CoV-2, the FliRT subvariants of Omicron, KP.3 and KP.2, which account for 61 percent of all strains, and the LB.1, which accounts for just over 10 percent.

One year ago at this time, the daily case rates were at 150,000 infections, indicating that we are not only seeing the summer wave peak earlier than before, but that the lows from one summer to the next are growing higher. And, leaving aside the Omicron peak in late 2021, the peak-to-peak incidence for each winter wave has also grown higher throughout the pandemic.

No principled public health figure has ever defined an endemic state as a perpetual saturation of the population with a viral pathogen as is the current situation.

Professor Hoerger, the program director of health psychiatry at Tulane University, who runs the top public US COVID forecasting dashboard, warned:

Assume co-workers will be working sick or out sick, many people with new “allergies” and “summer colds,” camp closures, delays in auto repairs, sickness after medical and dental visits, flight delays, fender benders, longer wait times, covering other people’s work obligations, missed deadlines, errors and mistakes, sick politicians, increased geopolitical instability, angry outbursts, athletes dropping out of the Olympics and other sporting events, music concert cancelations, nonsensical email, more poorly managed weather events, last minute cancellations, brief small business closures, more conversations about specialty medical appointments, reliving conversations that have already happened but the person forgot, and more co-workers retiring early.

These observations are corroborated by the limited data that remains available on the dashboards of the Centers for Disease Control and Prevention (CDC). In the last six months, more than 25,000 people have succumbed to infections. The number of fatalities week to week is climbing again. However, these figures must be viewed as undercounts, given the changes in hospital reporting and dismantling of COVID trackers that have placed the country in a mandated blackout. The undercounting is corroborated by the rise in test positivity, emergency department visits and hospitalizations.

Given the dangers associated with chronic debility and the long-term health consequences even with asymptomatic infections, the insistence on a “forever COVID” policy is simply criminal and insane.

One example is a recent television interview by Dr. Ashish Jha with Christopher Cuomo. Jha is the dean of the Brown University School of Public Health and a former White House COVID-19 coordinator in the Biden administration. Jha dismissed calls for people to continue to mask indoors as a “fringe” position of the “left” comparable to right-wing conspiracy theories about the pandemic and its origins. He said:

There are a lot of loud fringe voices from the left and the right. The left that is convinced that the pandemic is just as bad as ever and we all should still be masking indoors, and the right with, you know, all of its conspiracy theories as well.

He made no attempt to square this with data that show the pandemic remains virulent and that masking is an effective protective measure against infection. More than this, his comments run counter to alerts being issued by the CDC and public health agencies about the rise in COVID cases and the need to consider taking mitigation measures to avoid catching the virus.

By equating masking with conspiracy theories, Jha lends credence to efforts by governors, Democratic as well as Republican, to criminalize masking in public in response to legitimate protests by people who choose to protect themselves from infection, under conditions where, on average, every American has been infected at least three times in the course of the pandemic.

Nassau County on Long Island, New York may become the first jurisdiction in the tri-state region to ban face masks, with violators potentially facing fines of up to $1,000 and possible jail time. The proposed bill, by legislator Mazi Pilip, could be voted into law as early as next month.

One must assume that Violet Affleck, who last week addressed the Los Angeles County Board of Supervisors wearing an N95 respirator, could face judicial repercussions were she to repeat such an action if and when such bans are made law and enforced. Notably, despite the high rates of COVID infections in California, no one on the panel was wearing any face covering.

What she had to say to the board, including the excerpt cited below, was of immense importance. Assuming she was under a time constraint, she spoke quickly:

Hi, Violet Affleck, Los Angeles resident, first-time voter. I’m 18. I contracted a post-viral condition in 2019. I’m okay now, but I saw first-hand that medicine does not always have answers to the consequences of even minor viruses. The COVID-19 pandemic has thrown [this] into sharp relief. One in 10 infections leads to Long COVID, which is a devastating neurological, cardiovascular illness that can take away people’s ability to work, move, see, and even think, and stands to exacerbate our homelessness crisis as well as the suffering of many people in our city.

It hits communities of color, disabled people, elderly people, trans people, women and anyone in a public-facing essential job the hardest. To confront the Long COVID crisis, I demand mask availability, air filtration, and far-UVC light in government facilities, including jails [and] detention centers, and mask mandates in county medical facilities. We must expand the availability of high-quality free tests and treatment.

And most importantly, the county must oppose mask bans for any reason. They do not keep us safer. They make them—vulnerable members of our community—less safe and make anyone less able to participate in Los Angeles together.

Even as the ruling class minimizes the ongoing and devastating impact of COVID-19, it spares no effort to use the pandemic as a political weapon to blame the Chinese authorities for the devastation wrought on the world’s population. Efforts to legitimize the Wuhan lab leak conspiracy theory are being expanded in order to foment anti-Chinese sentiment and beat the war drums for a confrontation with China.

A report by the far-right Heritage Foundation, which propagates what is a real fringe conspiracy theory—the baseless claim that SARS-CoV-2 originated in the Wuhan Institute of Virology—has been promoted by politicians of both parties to blame China for the deaths of over 1.1 million Americans, as well as 28 million global excess deaths and more than $18 trillion in economic losses.

The House Select Subcommittee on the Coronavirus Pandemic in recent hearings has made use of the report to witch-hunt scientists who reject the Wuhan Lab theory and oppose the “forever COVID” policy of the government and both capitalist parties. With the compliance of the Democrats and the Biden administration, the anti-China libel has become the semi-official pandemic narrative.

China experiencing torrential rain and major floods

Ben McGrath

Since the beginning of the rainy season on April 1, China has experienced heavy rainfall, causing 20 floods in major rivers around the country. Dozens have been killed, tens of thousands have been forced to evacuate, and countless more have been impacted. These types of extreme weather events and floods have become the annual norm in recent years amid ongoing climate change.

Flooding in Meizhou, Guangdong, China, June 20, 2024 [Photo by China News Service / CC BY 3.0]

As of Sunday night, 31 rivers had surpassed their warning levels with flooding expected to continue into August. The Ministry of Water Resources and the China Meteorological Administration (CMA) expect significant mountain flooding near the cities of Bazhong and Guangyuan in Sichuan Province on Sunday and Monday.

Also on Sunday, China’s National Meteorological Center (NMC), a subordinate body of the CMA, re-issued a “yellow” alert for rainstorms for the province-level administrations of Shaanxi, Sichuan, Hubei, Henan, Anhui, Jiangsu and Inner Mongolia. On Sunday and Monday, the regions were expected to experience torrential rains of up to 80mm an hour as well as thunderstorms and gales. China uses a four-tier colour warning system starting with blue and rising in severity to yellow, orange and red.

Beijing’s Ministry of Water Resources has also issued a warning for flooding at Lake Tai as water levels rose to 3.9 metres on Saturday, 0.1 meters above the warning level. The lake is located in the Yangtze River Delta in Jiangsu Province and is one of the largest lakes in the country. It experienced its first flood of the year on June 30.

The Yangtze River and its tributaries are particularly prone to flooding. Last Wednesday, the flood discharge gates on the Three Gorges Dam were opened for the first time this year as continuous rain was expected for the next week and a half in Sichuan Province and the city of Chongqing, which sit further upriver along the Yangtze. The NMC predicted that some areas of the Sichuan Basin would receive 50 to 90 percent more rain than usual for this time of year while the Three Gorges Reservoir had risen to 161.1 meters, or more than 15 metres above its usual level. It is a record high for July.

Last week, major flooding took place in Chongqing’s Dianjiang county, which received 269.2mm of rain in a single day alone, setting a record for the county. As a result, at least six people were killed. Chongqing is a direct-administered municipality in southwestern China with a population of 32 million people. The rains also damaged 1,800 hectares of crops and has so far caused an estimated 82 million yuan ($US11.3 million) in damages. The rain caused a highway to collapse in the city’s Kaizhou district.

Public anger over the government’s response to the flooding could develop into broader social unrest, particularly when combined with other issues such as workers’ declining economic conditions and the COVID-19 pandemic. Aware of this, Chongqing’s Mayor Hu Henghua said last Thursday, “As flood preparedness and response enter a critical period, we should strengthen warnings and monitoring, and timely evacuate people in areas at risk of geological disasters. It’s better to be extra careful to prevent any potential losses.”

President Xi Jinping has also emphasized this point, telling rescue workers in June that they should “guarantee the security of people’s lives and property, and overall social stability.”

China is no stranger to flooding. Following the Chinese Revolution, the Chinese Communist Party (CCP) drew legitimacy from the ability to mitigate the damage from floods that the previous Kuomintang government was unable to address as a result of corruption and indifference. For many people, the memories of massive floods in 1931, for example, that killed as many as two million people, were still fresh in people’s minds. The party began a campaign to build dams and other flood prevention measures throughout the country while also prominently celebrating its achievements.

Today, there are approximately 98,000 dams in China as well as 320,000km of dykes. However, many dams were built between the 1950s and 1970s, and due to poor upkeep, are at risk of collapsing. In 2020, Beijing stated it would spend $US15 billion to fix 200 large dams and 8,000 smaller dams that were described as “sick and dangerous.” Dykes are in equally bad condition. A report released in April of last year stated that 70 percent of dykes in just the Hai River Basin, which includes Beijing, were in danger of collapse.

Now, under the impact of climate change, extreme weather events are growing in intensity. Higher temperatures increase evaporation and the moisture in the air, which leads to more intense rain storms. At the same time, areas that typically receive less precipitation face the increasing likelihood of heatwaves and droughts.

The NMC on Sunday also issued a heat warning, raising its warning level within its three-tier temperature warning system to yellow, with orange and red more severe levels. Some regions of China are expected to see temperatures as high as 39 degrees Celsius.

On July 5, the CMA introduced its new blue book on climate change in China, writing, “Extreme weather and climate events tend to be more frequent and severe. In China, extreme high temperatures and heavy precipitation events tend to be more frequent and severe while extreme low-temperature events have generally declined… And the average intensity of typhoons that have made landfall in China has fluctuated and strengthened since the late 1990s.”

The first serious flood this year occurred on April 7 in the Bei River in the Pearl River Basin. It was the earliest since 1998 when Beijing began numbering floods. Later that month, Guangdong, which is located in the basin, began receiving a large amount of rain and flooding, leading to 52 deaths. Another 47 people died in Guangdong in June from continued flooding.

At the end of June, Pingjiang County in Hunan Province experienced some of the worst flooding since 1954. The Miluo River, which runs through the county and joins with the Yangtze River, reached 77.7 meters, exceeding the alert level by seven metres. One-third of Pingjiang’s old town and one-half of its new town were under water by July 2 and more than 5,300 people were forced to evacuate. Pingjiang is a county in the city of Yueyang, a city in Hunan’s northeast. It is home to 1.15 million people.

Torrential rains caused a dyke along the Miluo River to burst. Pingjiang received 759.6mm of rain between June 18 and July 2, the most since 1961 when recordkeeping began. The county’s Flood Control and Drought Relief Headquarters compared it to a “wartime” situation.