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Hello and welcome to World Today.
I'm Zhao Ying. Coming up, China and the U .S. have wrapped up two days of trade talks in Stockholm.
What are the key outcomes?
The IMF has raised its economic growth forecast for China this year.
What's driving this revision?
vision. China has unveiled childcare subsidies to boost its birth rate.
How effective could the policy be?
A senior Chinese trade official says China and the U .S. have agreed to push for the extension of the pause regarding Washington's so -called 24 % reciprocal tariffs as well as China's countermeasures.
China's Vice Commerce Minister Li Chenggang said the two sides held in -depth, candid and constructive discussions in Stockholm.
Chinese Vice Premier He Li -Fung led the talks with U .S. Treasury Secretary Scott Benson and Trade Representative Jameson Greer.
The vice premier called for reducing misunderstanding, strengthening cooperation, further deepening dialogue and consultations, and striving for more win -win outcomes.
The U .S. team said a stable economic and trade relationship is of great significance to the economies of both countries and the world.
Vincent reiterated that Washington does not want to decouple with Beijing.
For more, we are joined by Liu Baocheng, director of the Center for International Business Ethics at University of International Business and Economics.
What is your main takeaway from the latest round of China -US trade talks in Stockholm?
I think it turns out after the Geneva Geneva talk, London talk, the dust is almost settled on basic principles that is set forth by China and accepted by the United States with regard to the mutual respect, peaceful co -existence, and win -win situation.
Now, the framework is basically there, but much more details needs to be ironed out, So the Stockholm Talk is there to explore the possibility, which is likely, the extension of such a truce so that both sides can be better prepared to come to a more constructive agreement.
And it was also described as rather the in -depth, meaning that it is not only a superficial exchange of tariff reduction versus some relaxation of certain products, but rather it's there And it's there to cover some broad issues, like the market access, like industrial capacity and trade balance, and together with some of the geopolitical concerns.
Instead of really building a sort of a general and a sweeping agreement, I think both sides will agree that as long as they engage and make efforts to de -escalate the trade tension, they exercise their responsible leadership in the global economy, and a more balanced and fair trade can be achieved through further negotiation.
And hopefully this prepares the way for eventually the presidential meeting somewhere late October or early November.
And then both sides can really put to the end of such a sort of apprehensive tension.
Well, China described the meeting as in -depth, candid and constructive.
In diplomatic language, how should we make of those words?
In depth is considered to be the two sides engaged beyond some of the future superficial principles.
And they cover some complex and even sensitive issues.
They may not really build agreement, but they try to seek a better understanding of each other's position.
To be candid, it means that there are some disagreements that are directly discussed without rupture and again, without necessary agreement.
Constructive indicates that the tasks are not really hostile and they also lead to incremental progress, even if some of the key issues remain to be discussed.
So these phrases suggest a positive atmosphere, but with limited outcome.
It's a diplomatic way of saying that we don't agree on everything, but we're still engaging in dialogue, trying to seek a better agreement within the limit of acceptance on either side.
Okay. So what exactly are those major unresolved issues between the two sides, despite this constructive tone of the talks?
And do you see any sign that either side is interested in moving beyond such short term pauses toward a more permanent or institutionalized trade framework?
I think that's a very significant question.
Some outstanding issues remain there because because tariff has been reduced from the triple digit.
Now both sides engage in more of the rational and cool -minded talks instead of the emotional retaliation anymore.
But the tariff structure is still there that needs to be further discussed because 55 or even 59 % of tariff is totally unacceptable on the Chinese side.
And both sides also disagree on whether the tariff should be reduced or institutionalized, you know, based on, you know, what type of conditions.
So the U .S. has been seeking the sort of trade balance, but what type of balance can really be there?
Does it mean, does it mean that we have a total equilibrium of imports and exports on both sides?
Related with technology, like some of the events, the chips and the equipment restrictions, China demands that they need further relaxation because that's against the market rule, that's against the commitment to WTO.
And on the other hand, the U .S. wanted to ensure that the Rare Earths and some of the critical materials need to have a very smooth flow to the United States.
So they want some guarantee, and remove any conditional restrictions whatsoever.
so ever so and then they also pointed out okay China needs further reform and to reform or industrial policy to address the overcapacity issue by converting more of the domestic conception and then you know China stands is on its own sovereign decisions so the China may diversify its market but it doesn't doesn't mean that China will have to listen to the the US, and lastly I think the geographical and also the geopolitical issues with regard to the purchase of energy, be it gas, be it oil, from Russia.
So there are vast different understanding over the trade sanctions issues, over even the nature of the military conflict between Ukraine and Russia.
Russia. So, to resort to trade embargo or the secondary tariff is not really something that China would be able to consider.
Not to mention, to accept.
OK, so as you said, one of the U .S. demands was for China to shift toward a more consumer driven economy.
Does that somehow align with China's long term economic goals?
Or do you few Washington is pushing too far into Beijing's domestic policy space?
Well, China does really want it to shift to more of domestic conception as its growth driver, but China doesn't want to be told by any third party, as to what proportion, in what sector should we convert more to domestic conception.
But what the U .S. referring is that the Chinese Japanese -made products are gloating the global marketplace, reduce the competitive edge of other economies, particularly the U .S. companies.
But that's a matter of market competition.
So China does really consider to move onto a high -quality development and to shift more more of a skill driven, to innovation driven economic growth model, but that comes along with a slow process.
China took the globalization drive over the past almost half a century, and we benefit a great deal by spreading out into our global marketplace, either from sourcing or to the end marketing, setting.
But that's something that China will continue to do.
But then to boost the domestic consumption, we also need a gradual but a steady, fast process as how to enhance the purchase capacity of domestic consumers by giving them more opportunities of their earning power, by giving more opportunities of decent employment, and and to address some of the human capacity issues.
So this is a gradual process, but I do not think the U .S. really comes from this angle to discuss with China as how they can deal with the domestic consumption.
Well, the IMF recently flagged a potential rebound in tariff rates as a major risk to global growth.
So how do the outcomes of these talks potentially impact the global economy?
Being the biggest economy in the world, the United States is sending quite a turmoil to the whole world by disrupting the global supply chain and also by sending high uncertainty for any business plan through not only with the tariff, but also with policy to reshore, to offshore.
control, all those protectionist measures.
So therefore, right now it seems that the security consideration overrides efficiency consideration for both politicians and also for business leaders, and this is their distort, the cross -border exchange based on comparative advantage.
I think more severely is that WTO is totally being pushed aside because, based on the commitment of the United States to WTO, they are only bonded to 3 .4 percent of the tariff.
Now he's waving his magic wand of reciprocal tariffs against the whole world by a blanket 10 % and then to negotiate above with different major trading partners even among their allies.
So this is something that sends quite a thrill over the international community as how to respond.
Some come to terms with capitulation, but China as a second largest economy will not not really follow this type of boilerplate set forth by the United States.
So higher tariff, buy more American goods, and invest more into the United States because China is in a totally different position, whereas the existing agreements that a White House has already agreed with some of their partners like Japan, like EU, like Britain or Indonesia.
There is Liu Baocheng with University of International Business and Economics.
The International Monetary Fund has lifted its forecast for China in 2025 to 4 .8%, up 0 .8 points compared to its forecast in April.
It says the revision reflects stronger than expected activity in the first half of the year and a significant reduction in U .S.-China tariffs.
For more, Zhao Yang spoke with Dr. Zhou Mi, Senior Research Fellow with Chinese Academy Academy of International Trade and Economic Cooperation.
So, Dr. Zhou -Mei, thank you very much for joining us.
First of all, what do you make of the IMF's sharp upward revision of China's GDP forecast for this year to 4 .8 percent?
What are the main reasons?
I mean, the IMF is projecting the growth of the economies by order related to each, especially the main major economies in the world.
So it has an upgrade of variation.
I think that the reason based are because that china's have a pretty good performance economic performance for the first half of this year so according to the data i think that imf has changed its prediction about the total growth of this year by china and also they look about the different indicators coming from the investment from the consumption and also international trade so based on this kind of new and latest data imf has made some revision and they are really hoping that China can do more or better in this year's performance of the economy.
And as you mentioned, we've seen China's economy grew by 5 .3 percent in the first half of this year.
So what are the main factors that contributed to this better than expected growth?
Well, it is true that China is under the pressure of the global rest construction of the global supply chains.
But the Chinese government is really firm to support the economies by trying to make the better energy of the market development so in the first six months of the year we have seen that the growth of the of the GDP in China is actually speeding up so when are talking about the first quarter and the second quarter the second quarter is performance much better than the first quarter I mean that is coming from the activities of the comments and also the response by the enterprises they really believe that the economy is going to have a better performance by more closer integration of the different
resources and also interactions between us and our trading partners.
And exports have been a driver for China's growth in the first half of this year.
China's exports jumped by 5 .9 % from a year earlier.
So can this tell us that China's exports can remain resilient in the face of the U .S. tariff or tariff stress?
Why or why not? Definitely.
In my understanding the exports are depending on two factors.
The first one is the demand from our trading partners who are going to import the things from us.
We see that the world is recovering and a lot of economies are really thinking that they should try to import more things to support their targets or goal of the development.
and they are also are worrying about you know the reconstruction of the global supply chains so they have to find more things from the other part of the world and China is definitely one of the most best choices for them to import from well the second I think that is also coming from the practices of the China's garment we have put a lot of facilitation measurements to improve the trade and reduce the cost of doing businesses with other countries.
So by the two sides, I think that they are together to support the export of China.
And well, if we're looking at the structure of the exports, a lot of things are focused on the machineries and electronics, which is China's advantages.
And it has a very complete supply chains who are able to meet the different and diversify demand by different countries.
And what about domestic consumption's role in our economic rebound in the first half of this year?
The consumption is our priority for China's government.
I think it's a really important one for us to make a stronger consumption because we are such a huge country with so many populations.
So our task is trying to give the consumers better welfare by buying the different things.
So we are creating a different kind of scenarios and trying to give some coupons to the consumers as they can buy things from.
So, uh, it's a candle of policies.
I think this message has been well received by the consumers.
So the consumption are playing a very important role in China's economic development and, I mean, it's not only about the goods, also a lot of services, consumption are happening and the people are able to go to other cities for the tourism and they also are trying to have a better entertainment by going to the cinemas or enjoy the delicious foods in some other places.
So all these things are helpful for us to have a better and more sustainable development of the consumption.
And it is going to support the recovery of the economy and make it an even stronger position of development.
And for the global economy, the IMF chief economist said risks remain tilted to the downside.
A breakdown in trade talks or renewed protectionism protectionism could dampen the growth globally and fuel inflation in some countries, while on the upside, breakthroughs in trade negotiations could boost confidence and structural reforms could lift long -term productivity.
So what's your take on that?
Well, it's worth to address the challenges because the challenges of the tariffs are still there.
And maybe in the coming future, we will see more tariffs coming.
I think that is definitely our cause when we are going to do the business with our trading partners we have to pay more for the tariffs and the retainers who are going to buy the things from other countries they have to pay more so I'm worried about not only about this tariff I worry about the future of the actions of other countries if they are just following the styles they may also increase their tariffs and that will make the world become a very difficult place to do business so for the trade I think that it's natural for us to believe that that the trade should be fair.
I think that there's no doubt about that, but in which way can we make it fair?
I think one of the best things is that we made some promises in the multilateral system, in WTO, to reduce our tariffs together instead of just to do some things asymmetrically like when you are import something, you put some tariffs, you want to also go something, you want other countries to reduce a tariff.
It's unfair, indeed.
So in my understanding, that will also change the logic of the collaboration between the countries and make the cooperation based on an untrusted basis.
And the IMF also raises global growth forecast for this year to 3%, citing stronger than expected activity and improved financial conditions.
So how do you explain that?
I mean, that is not a very interesting topic when we're trying to talk about the trade itself.
Well, I think that because the last prediction is in April, April is a very uncertain time when Donald Trump raised this kind of so -called reciprocal target.
But after several years, I think that something has come back to the track.
The negotiations are happening, and the United States is trying to negotiate with the trading partners about the so -called treaties.
So IMF are trying to change these predictions about the uncertainties.
They want to improve the certainties.
I think that is also some kind of things we should bear in mind.
Maybe the certainty is coming back.
But in which way? Should we just think about our higher cost of doing the similar things?
Or should we try to do something to reduce the uncertainties and also the costs?
And now China and the U .S. have agreed to push for the extension of the terrorist pause.
So what does it mean for not only China and the United States, but also the global supply chain and the global economy?
China and the United States, we are the largest economies in the world.
So it means that we are depending on the global trade.
I think that's the trade between our two countries are really benefiting all the related stakeholders.
So if we can continue this certainty of, you know, maybe not that high tariffs between our two countries, trade can still be there and it can still push the innovation based on the demand and the supply.
So the trade between these two countries are really having many impacts on other related stakeholders.
The ripple effect will change in the waves if we're not able to control that.
So I think that the negotiation has got some more time for both of us to try to discuss these complicated issues and maybe we can try to find out some consensus and put forward for the agreements or possible agreements in the future.
And the IMF report warns that tariff hikes could shave 0 .2 percentage points off the global growth.
How serious is this risk?
I mean, that is a very important or a large impact, although it's not only even 0 .5 percent.
But I believe that, you know, every 0 .1 percent, meaning a lot for the countries, especially the small and medium -sized countries.
So we should try to take care of the opportunities that we have worked so hard to achieve.
I think that should we bear in mind that we need to do more to help those countries who are not able to do everything by itself.
We need to change our, you know, advantages based on the international trade.
And the IMF calls for pragmatic cooperation and clearer trade rules.
So is multilateralism still effective in managing the global trade frictions?
I mean, in my understanding, I wish it can still be very effective but now I think that we are seeing some unilateralism some protagonism but in many countries and many people's hearts they still believe in a multilateral system so we may think about how can we deal with these uncertainties of the making some new trust based international trade we have to respect some already there principles and multilateral system is one of these principles so we can still believe in that but they have one condition the condition is that everyone of us should trying to follow our heart and also we need to do
some action instead of just you know follow the principle of the jungles that is dr zhoumi senior research fellow with chinese academy of international trade and Economic Cooperation, speaking with my colleague Zhao Yang.
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I'm Zhao Ying. British Prime Minister Keir Starmer has announced that London will recognize a Palestinian state by September unless Israel commits to peace in Gaza.
Stammer says he has long supported negotiations to establish a Palestinian state alongside Israel, adding that the two -state solution is now under threat.
Stammer also called on Hamas to release the remaining Israeli hostages.
The announcement comes as international alarm is growing over starvation and deaths in Gaza.
Last week, French President Emmanuel Macron said Paris plans to recognize Palestinian state in September at the United Nations General Assembly.
Joining us now in the studio is my colleague Ding Heng.
Thanks for being here.
Hello, Zhao Ying. So first of all, does Keir Starmer's announcement represent a significant shift in Britain's approach to the Gaza crisis?
Arguably, this represents a significant shift, because immediately after the outbreak of Israel's war in Gaza in October 2023, Britain's initial response was quite the same as the response from the United States.
It has supported Israel diplomatically, for example, at the UN Security Council, and it has allowed, for example, the sales of arms to Israel's military.
On the other hand, though, both Rishi Sunak's conservative government and Keir Starmer's labor governments have called for a ceasefire in Gaza, have called for a two -state solution, and provided humanitarian aid to Gaza.
I think over time, Britain indeed became more critical of Israel.
For example, in this May, the British government issued quite a number of statements condemning Israel and calling on Israel to immediately allow humanitarian aid into Gaza.
But with regard to recognizing Palestinian statehood, Prime Minister Starmer has held out against this idea for quite some time.
He had walked a delicate line, let's put it this way.
He said he was committed to the two -state solution in principle.
But in the meantime, he argued that the time was not yet right and that it must be part of a broader, wider peace process.
Now that the British Prime Minister has openly outlined the time for official recognition, like you mentioned, by September, we can of course argue that this is yet another turning point in the British approach. Then what do you think has made the British leader make this announcement?
Well, I think there can be multiple factors.
Diplomatically, Stalmer has been building momentum in this regard recently.
For example, over the past weekend, he signed an agreement to work towards lasting peace in Gaza with the French President Emmanuel Macron and German Chancellor Friedrich Merz.
And with the French government having already taken a step, like you mentioned earlier, Stormer could well argue that he is simply following the step of Paris, right?
Gaza was also a key issue in this Monday meeting between Stormer and U .S. President Donald Trump in Scotland.
And my take on this meeting between Trump and Starmer is that I think Trump has essentially, you know, removed a key barrier to the UK recognizing a Palestinian statehood.
Because after the meeting, he signaled that he doesn't care.
He doesn't care about the position of the UK.
And he also signaled that the United States would not oppose such a move.
Then domestically, I think Stalmer was also facing mounting pressure.
According to a recent polling in the UK, Britons are in favor of recognition by more than three to one.
49 % of the surveyed people are in favor, compared with only 13 % that are in opposition.
It also suggested that by a margin of almost 5 to 1, people wanted the UK government to be more critical of Israel's action in Gaza.
In the meantime, British media has also reported that Prime Minister Stalmer was under pressure from the ministers within his own government, including his Deputy Prime Minister, his Home Secretary and Health Secretary, etc., etc., to immediately recognize Palestine as a state.
And also, last but not least, more than a third of the labor lawmakers in the UK UK have signed a letter backing recognition.
These are some of the basic facts we are aware of.
Well, more than 140 countries, including several in Europe, have already recognized Palestinian statehood.
So if Britain and France join these countries, how much difference does that really make?
Well, Britain and France will be the biggest Western power to do so, so far, and forced a member of the G7 to do so.
So with that in mind, I guess they can make some difference.
For example, they can prompt more countries to follow suit.
Some countries, for example, Australia, they are closely following the policy direction of the UK.
And this also tells us that the two -state solution represents the overwhelming voice of the international community, that's for sure.
And putting aside how much difference they're going to make, a point I want to make here is that for the UK, for example, I think Britain really bears a historical burden of responsibility to back a two -state solution in the international community.
because really history tells us that Britain's imperialism played a significant role in the formation of this Israel -Palestine conflict.
We can, of course, think about the British occupation of Palestine from 1917 to 1948, following the downfall of the former Ottoman Empire, as well as the British issued a Balfour Declaration that essentially supported the establishment of a Jewish state in Palestine.
Well, a US State Department spokesperson has described Keir Starmer's decision as a slap in the face to the victims of October 7, and saying it awards Hamas.
Do you think recognition of the Palestinian statehood will become an issue of contention in the U .S.-UK relationship.
Well, this can indeed become a point of disagreement between London and Washington, I think, but probably things will not be too contentious because, for example, after French President Emmanuel Macron announced his decision that Paris would recognize the statehood of the Palestinians, We saw US Secretary of State Marco Rubio coming out and criticizing France over this very particular decision.
But this time, so far, we have only seen criticism of the UK's decision from a US State Department spokesperson, a much lower level official, meaning somehow things are more harmonious.
Let's put it this way, between the U .S. and Britain, then between Washington and Paris.
And as a matter of fact, it is well known that Prime Minister Stalmer has a desire to maintain good relations with U .S. President Donald Trump.
Trump. Actually, the main reason why he had previously kept walking a fine line on whether to recognize the Palestinian statehood was also the main reason was also he didn't want to offend Washington.
So I guess we need to wait and see how the UK prime minister is going to balance between recognition and maintaining good relations with Washington, I assume things will always be changing.
Things are in dynamics.
Okay, thank you, Ding Hong.
This is World Today.
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I'm Zhao Ying. U .S. President Donald Trump has said Russia must agree to a ceasefire in Ukraine by August 8th.
or risk sanctions. Trump set a 50 -day deadline for the agreement earlier this month, but on Monday during his meeting with UK Prime Minister Keir Starmer, he said he was shortening this deadline to 10 or 12 days.
And then on Tuesday, on his way back to the U .S., Trump said the clock was ticking and it was 10 days from today.
Ukrainian leaders welcomed Trump's latest announcement.
The Kremlin said they took note of Trump's accelerated deadline, adding that they remain remain committed to the peace process to resolve the conflict.
For more, we are joined by Kamal Mikhail Aliyev, associate professor at the School of Global Studies at University of Gothenburg.
Thanks for joining us.
Thanks for having me.
Well, we know that Trump often positions himself as a dealmaker and peacemaker.
Then what should we make of this decision to accelerate the ceasefire deadline?
Does it reflect his real confidence or his impatience?
or maybe simply a political need to appear decisive?
Well, I think the President Trump's decision to slash the previous 50 -day window to a now 10 -day ultimatum signals a kind of combination of different elements of what you've been describing.
It of course signals impatience and frustration.
I think he has seen continued violence despite early deadlines that he has been setting up.
And his move reflects like the slowing faith in diplomatic process and growing his aspiration with Putin's inactions.
So that's one side of this.
But it's also a political image -making that Trump is trying to project.
The shorter timeline bolsters his self -betrayal as a very assertive peacemaker and quite sharpens the optics of decisiveness ahead of of broader geopolitical summits that are upcoming for the United States.
So while this gesture may convey in strength the speed and inconsistency in deadlines, they also raise questions about the real leverage that Trump has against the political posturing.
So does giving Russia a 10 -day ultimatum really help push negotiations forward, or does it risk boxing both sides into a corner with no room for diplomacy?
I think it's a very good question.
So when you're setting up like this kind of short ultimatum, you're looking for a potential upside somewhere.
And I think this is perceived to be a tight deadline that could force Moscow to either engage substantively or face consequences.
But it's also going to focus both parties' attention on the issue.
issue. But the thing is, with ultimatums, you always have a significant downside because they constrain flexibility and there's always a risk of diplomatic breakdown if neither side sees a path that meets their bottom lines.
And that could corner both Russia and Ukraine, undermining carefully calibrated negotiations otherwise.
But how seriously should we take Trump's deadline?
Because his deadlines have been frequently shifting, not just on Ukraine, but also on Iran, on TikTok and on many other issues.
I mean, how does this pattern affect the credibility of US foreign policy?
I think there is certainly credibility erosion in this kind of deal -making that Trump is trying to project.
It has fostered skepticism, as you rightly mentioned, the situations in Ukraine, Iran and even, you know, kind of companies like TikTok.
talk um i think that uh i i right now see a lot of analysis coming from a lot of experts especially focusing on this let's say that such fluidity actually damages u .s policy reliability and i think also this is there is mixed expectations uh that the trump is creating uh so while zulensky's team team for example praised trump's urgency russia dismissed the warning as empty and and escalatory in tone, you know, kind of highlighting this inconsistency.
So I think this just diminishes diplomatic leverage over time.
But just how realistic is it to expect a negotiated ceasefire between Russia and Ukraine within 10 days, especially given the deep divisions and the ongoing hostilities on the ground?
Well, as I say, given the entrenched hostilities, deep mutual mistrust, ongoing battlefield activity that is nowhere close to stagnating or finishing.
I think achieving a ceasefire within just 10 days is very much unlikely.
I don't think there is a huge room for discussion here, but with historical precedent and structural complexity, they both suggest that even shorter ceasefires typically require better defined agendas and phased implementation.
And in Ukraine, we have such long battlefield lines that, you know, creating a credible ceasefire requires much more preparation, much more coordination and much more concentrated effort that we are witnessing right now.
So a quick win is improbable without a huge concession roadmap.
roadmap. Trump has threatened very severe secondary sanctions and tariffs, potentially up to 100 % or higher, targeting Russia and its trading partners.
But what economic and geopolitical impacts could these matters have if implemented?
Well, this threat of 100 % secondary tariffs on Russia and even its trade partners, it's a wide -reaching effect, have potential for wide -reaching effects but they are mostly disruptive because um targeting nations that are purchasing russian oil that can disrupt global energy markets you will see higher uh brent oil prices that would ripple across economies potentially triggering inflation or recession even on the global scale right so if that threat is real uh it it's going to create a very severe economic disruption which might not be in favor of united states doing it at all There are also geopolitical
ripple effects, right?
Big countries like India, for example, they may resist United States pressure or build stronger alliances with Russia and other non -Western actors to hedge their risks.
So the U .S. might be pushing away the countries, but it has a potential to have good relationship and coordination, especially in economic dimension.
mentioned. So such sanctions, you know, they may punish Russia, that's true, if they're actually implemented and if it's actually working.
But it also can strain a lot of transatlantic cooperation and global economic ties, which will not play into the US favor.
But can tariff -based strategy actually deter military aggression?
Because we've seen sanctions on Russia over the past several years, yet the war is still ongoing, right?
So does this really work?
Or does tariff only risk pushing Russia closer to alternative trading partners or blocks like the BRICS, for example, that's outside the Western financial system?
I would say any kind of this pressure, the tariff strategy that would be imposed on Russia will inevitably push Russia to deepen its ties with other economies, for example, BRICS alliance or with the other partners that Russia may still have relations with.
But the problem here, I would say, if we take the tariff strategy separately, it can it can have only very, very limited effect.
And the deterrence effect is going to be measly and not really effective because we have seen that Russia is not being deterred by the combination of sanctions to date.
The tariffs, what they're going to do is just going to raise economic costs for Russia, but only in the certain sectors that are actually going to be outside the military sector.
So without credible enforcement that would also touch the military sector for any extensive damage, I think Russia will just not be deterred and we'll see the continuation of Russia's strategy as it is.
Okay. Thank you, Kamal Makhilya Aliev, Associate Professor at the School of Global Studies at University of Gothenburg.
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I'm Zhao Ying. China has introduced a nationwide childcare subsidy program starting in 2025.
The move comes as part of broader efforts to support families and encourage childbirth.
The program will offer families 3 ,600 yuan or around 500 US dollars per year for each child under the age of three.
The policy aims to ease the financial burden of raising children and ensure fair access to support.
The subsidies will be exempt from individual income tax and they will will not be counted as household or individual income in certain circumstances.
And for more, we are joined by Han Hua, co -founder and secretary general of Beijing Club for International Dialogue.
Thanks for joining us.
Thanks for having me.
So first of all, how effective do you think this subsidy can be in promoting childbirth?
I think before promoting childbirth, it serves more like an encouragement rather than a real support to these families, especially in the context of China's urbanization rate has already surpassed the 60%, meaning in many cities in China, the cost of raising a child, including housing, education, future health care, far exceeds the value of such subsidies.
So for many families, economic pressure, career concerns, and the lack of child care support, a holistic support, still remain key deterrents to having more children.
children. Having said this I think this policy can serve as a guiding principle or guiding policy for many local provincial level city level governments to further carry out and the plan for some further subsidies according to their local GDP.
So I'm waiting to see whether there are some cities like especially in the southern part of China can come out to come up with some some further subsidy policies and some other supports to support this subsidy.
Okay, so is this primarily a population policy or a consumption policy?
Where do you think the government's real motivation lies?
Well, it appears to me it is primarily a population policy aimed at addressing China's declining birth rate and the long -term challenges in demographic.
However, it also carries some elements of e -consumption policy, because, you know, encouraging births can stimulate demand in sectors like housing, health care, education, and the child care.
So I think the government's real motivation lies in demographic concerns, because a shrinking and aging population threatens China's labor force, threatens its economic growth potential, and also social welfare sustainability.
sustainability so with this kind of short -term consumption boosts may be a welcome side effect that the subsidy can be better understood as a strategic response to avert future structural risks okay so is this subsidy fiscally sustainable in the long run and and does china have to sacrifice in other areas of public spending to sustain them well i think the long -term fiscal sustainability of China's childbirth subsidy depends on its scale, its target, and its integration with broader social policy reforms. At current levels the subsidy is modest and unlikely to significantly strain public and the policy
finances. However, if expanded nationwide and made more generous especially for those those less developed regions, it might be having, you know, some impact over the subsidy, over the fiscal policy in a broader term.
So we need to wait and see.
I think China's, you know, the calculation of its fiscal space is based both on, you know, the comparison with other economies, especially the largest economies in the world, for example, a certain percentage of the GDP per capita, and as well as the coupled with the consideration of its own domestic and the social development realities.
So it's, it's a good question.
And then we need to take care of the, you know, take the fiscal concern, fiscal policy concerns from time to time and to review the policies, not only from the central level, but also from the city and the provincial level.
Yeah, and you know that China's declining birth rate comes amid a broader rethinking of gender roles, of work culture, and maybe of individual fulfillment.
So how much can government policy realistically shape such deeply personal choices?
Yeah, government policy can influence but not reshape these personal decisions like childbirth.
It's definitely very personal, Especially amid the shifting social values in China, the declining birth rate for the past 10 to 20 years reflects the broader societal trends, changing gender roles, rising aspirations for individual fulfillment, especially for women.
I mean, the Chinese women have the most and the largest occupational rate in the world.
About 70 percent of Chinese women are in the labor force.
And also some other factors have to be taken into consideration, the high costs of raising children, like I said.
So there are many cultural and structural forces that cannot be reversed just by subsidies only.
Okay, so as you said, 70 % of Chinese women are in labor force.
But could there be unintended consequences of such policy, such as reinforcing the traditional expectations of women to return to the home, especially in those less developed areas?
Yes, thanks for this follow -up question.
Yes, China is such a large country with such a long history.
So yes, I'm not very optimistic.
I think the unintended consequences are possible, especially in regions where traditional culture, the gender norms remain very strong.
So while childbirth subsidies may aim to ease financial burdens and encourage fertility, they could also inevitably reinforce the expectation that women should prioritize caregiving roles rather than to go to the drug market.
So this might be possible.
So in such contexts, subsidies might be interpreted as government endorsement or more conservative family structures pressing suggesting women to leave or avoid the workforce after childbirth.
So this could limit women's economic independence and install progress on gender equality.
Moreover, without accompanying reforms such as affordable child care, flexible working arrangements, especially for women, for moms to have more other factors taken into the subsidy consideration, like the more longer leaves, maternity leaves.
So I think this might be possible.
Okay. And also we've been discussing this declining birth rate, which seems to concern Chinese government, but is this always a liability or could it actually be a good thing, especially in an era of AI and automation?
I think in the era of AI and automation, a shrinking workforce force can be partially offset by technological gains this is this is the prediction many people many experts are you know seeing in the foreseeable future so rather than focusing on quantity economies can pivot toward the quality of labor as we discuss about this new production you know force a new quality production force so investing in human capital innovation and the productivity is on the way so fewer people can mean less pressure or on resources and infrastructure especially if paired with smarter governance still challenges
lately behind like pension burdens and labor shortages remain because we cannot move you know so quickly into this AI and automation world unfortunately we have to wrap up our discussion thank you Hanhua co -founder and Secretary -General of Beijing Club for International Dialogue.
And that's all we have for this edition of World Today.
I'm Jiaying. Thank you so much for listening.
See you next time.
