Beijing’s Bleak Economic Numbers

Welcome back to World Brief, where we’re looking at China’s latest economic numbers, a U.S. soldier’s detention in North Korea, and Russian drone strikes on an Odesa port.

On Monday, China’s National Bureau of Statistics released new GDP data that suggests the nation’s post-COVID-19 economic recovery has slowed. Its starkest figure: The economy grew by only 0.8 percent in quarter two (April to June) compared to quarter one (January through March, immediately after Beijing terminated its zero-COVID policy).

The world’s second-largest economy grew by only 6.3 percent in the second quarter of 2023 compared to the same period last year, a slower-than-expected rate given Shanghai’s two-month COVID-19 lockdown last spring. The dollar value of Chinese exports also shrank by more than 12 percent, its sharpest drop since the height of the pandemic in February 2020, and the price of Chinese goods and services fell by 1.4 percent, the worst decrease since the 2008 global financial crisis.

Annual incomes continue to fall as young people ages 16 to 24 face the highest unemployment levels since at least 2018, when the National Bureau of Statistics first began announcing that age range’s data. And new figures show that the mainland’s housing crisis has spread from small towns to some of China’s largest cities. The real estate industry makes up a quarter of China’s economy; however, apartment sales fell by 27 percent in June compared to last year.

Several Wall Street banks now predict China’s 2023 GDP growth will hit around just 5 percent, down from previous forecasts. That tracks with the 5 percent goal Beijing set in March, and Chinese officials maintain the country’s economic recovery post-zero-COVID remains strong.

Some of China’s poor financial performance is due to deflation. Weak spending has led the country’s export rates to decrease, local governments are finding themselves strapped for cash, and investment continues to plummet. Beijing officials blame the falling cost of commodity prices, such as oil, for weak spending habits. But foreign economists suggest the lingering effects of China’s zero-COVID strategy is the root cause—with some going a step further by arguing that Beijing’s global influence has peaked entirely.

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Detained in the DMZ. North Korean authorities detained a U.S. soldier on Tuesday after he crossed into the country from South Korea during a tour of Panmunjom, a border village in the heavily armed Demilitarized Zone (DMZ) between the two countries. The soldier, Pvt. Travis King, was dressed in civilian clothing and went “willfully and without authorization,” said Col. Isaac Taylor, a spokesperson for the U.S. Armed Forces in Korea.

According to The Associated Press, King had just been released from a South Korean prison, where he had been held on assault charges, and was facing additional military disciplinary actions in the United States. He had been escorted to the airport to fly back to Fort Bliss, Texas, but instead of getting on the plane, he left the airport and joined a tour of Panmunjom. While there, he ran across the border into North Korea. Pentagon officials are working to secure the soldier’s release.

Revenge in Odesa. Russian forces targeted the Ukrainian port of Odesa on Tuesday. According to the Kremlin, Russia used missile and drone strikes to destroy a fuel storage facility, numerous homes, and a plant that made seaborne drones. No deaths were reported. At the time of the attack, a U.S. Agency for International Development delegation was visiting the city to announce a new $250 million aid package to expand port capacity and modernize grain export infrastructure.

These “mass revenge strikes” came less than 24 hours after Ukraine targeted the Crimean Bridge with seaborne drones, a move that many experts believe pushed Russian President Vladimir Putin to suspend Moscow’s participation in the Black Sea Grain Initiative later that day. Odesa is one of Ukraine’s main ports for exporting grain, which many suspect was another reason why the Ukrainian city was specifically targeted.

A blow to refugee protections. Britain’s controversial migration bill is set to become law after a slew of proposed amendments watering down the language were cut by the House of Lords on Monday night. The contested immigration plan would make it easier for London to send asylum-seekers who cross into Britain illegally to a “safe country” like Rwanda—a move rights activists, politicians, and lawyers have argued is illegal and inhumane. Under the law, these refugees would be banned from ever entering U.K. territory again.

On Tuesday, the United Nations warned of other countries following Britain’s lead, with Volker Turk, U.N. high commissioner for human rights, saying it could cause “a potentially adverse effect on the international refugee and human rights protection system as a whole.” The bill is a key element of British Prime Minister Rishi Sunak’s pledge to “stop the boats” from crossing the English Channel, FP columnist Anchal Vohra explained.

Today’s heroes come in capes, suits—and fishing gear. The crew of a Mexican tuna boat rescued an Australian man and his dog after they had been adrift at sea for three months. Having survived off raw fish and rainwater, Timothy Lyndsay Shaddock and man’s best friend Bella were discovered around 1,200 miles from land in the Pacific Ocean. Next on the docket for them: “rest and good food.”