A flotilla of tankers carrying liquefied natural gas have been parked in a maritime traffic jam off the coast of Spain in recent days, waiting to unload their precious cargo for Europe’s power grid. In Finland, where sweltering sauna baths are a national pastime, the government is urging friends and families to take saunas together to save energy.
Both efforts are emblematic of the measures Europe is taking to increase energy supplies and conserve fuel before a winter without Russian gas.
The tactic by President Vladimir V. Putin of Russia to weaponize energy against countries supporting Ukraine has produced a startling transformation in how Europe generates and saves power. Countries are banding together to buy, borrow and build additional power supplies, while pushing out major conservation programs that recall the response to the 1970s oil crisis.
forcing shutdowns at energy-intensive businesses, including the production of steel, chemical and glass. Companies are furloughing workers. Governments are issuing more debt to shield households and businesses from pain. There are growing projections that the energy crisis will tilt Europe into a recession next year.
went on a buying spree, has put so much gas into reserve that there’s no longer room to store the incoming fuel. Europe still gets a small supply — around 7 percent — of natural gas from Russia through pipelines running beneath Ukraine. If that flow is severed, several countries will be in a bind.
And some Europeans may decide that they aren’t so willing after all to make personal sacrifices for Ukraine as household energy bills spiral higher. Street protests against the soaring cost of living have broken out in Paris, Prague and elsewhere, chipping away at Europe’s united front for sanctions against Russia.
fill most of their gas reserves — enough to provide around three months of power — despite dwindling Russian flows. Unseasonably warm weather in Europe is delaying the need for early heating, so the stock may last longer than expected.
The consulting group Rystad Energy has calculated that Europe has enough gas stored to survive this winter unless it gets very cold, while natural gas prices have fallen to their lowest levels since June.
even tougher winter next year as natural gas stocks are used up and as new supplies to replace Russian gas, including increased shipments from the United States or Qatar, are slow to come online, the International Energy Agency said in its annual World Energy Outlook, released last week.
Europe’s activity appears to be accelerating a global transition toward cleaner technologies, the I.E.A. added, as countries respond to Russia’s invasion of Ukraine by embracing hydrogen fuels, electric vehicles, heat pumps and other green energies.
But in the short term, countries will be burning more fossil fuels in response to the natural gas shortages.
gas fields in Groningen, which had been slated to be sealed because of earthquakes triggered by the extraction of the fuel.
Eleven countries, including Germany, Finland and Estonia, are now building or expanding a total of 18 offshore terminals to process liquid gas shipped in from other countries. Other projects in Latvia and Lithuania are under consideration.
Nuclear power is winning new supportin countries that had previously decided to abandon it, including Germany and Belgium. Finland is planning to extend the lifetime of one reactor, while Poland and Romania plan to build new nuclear power plants.
European Commission blueprint, are voluntary and rely on buy-ins from individuals and businesses whose utility bills may be subsidized by their governments.
Energy use dropped in September in several countries, although it is hard to know for sure if the cause was balmy weather, high prices or voluntary conservation efforts inspired by a sense of civic duty. But there are signs that businesses, organizations and the public are responding. In Sweden, for example, the Lund diocese said it planned to partially or fully close 150 out of 540 churches this winter to conserve energy.
Germany and France have issued sweeping guidance, which includes lowering heating in all homes, businesses and public buildings, using appliances at off-peak hours and unplugging electronic devices when not in use.
Denmark wants households to shun dryers and use clotheslines. Slovakia is urging citizens to use microwaves instead of stoves and brush their teeth with a single glass of water.
website.“Short showers,” wrote one homeowner; another announced: “18 solar panels coming to the roof in October.”
“In the coming winter, efforts to save electricity and schedule the consumption of electricity may be the key to avoiding electricity shortages,” Fingrad, the main grid operator, said.
Businesses are being asked to do even more, and most governments have set targets for retailers, manufacturers and offices to find ways to ratchet down their energy use by at least 10 percent in the coming months.
Governments, themselves huge users of energy, are reducing heating, curbing streetlight use and closing municipal swimming pools. In France, where the state operates a third of all buildings, the government plans to cut energy use by two terawatt-hours, the amount used by a midsize city.
Whether the campaigns succeed is far from clear, said Daniel Gros, director of the Centre for European Policy Studies, a European think tank. Because the recommendations are voluntary, there may be little incentive for people to follow suit — especially if governments are subsidizing energy bills.
In countries like Germany, where the government aimsto spend up to €200 billion to help households and businesses offset rising energy prices starting next year, skyrocketing gas prices are hitting consumers now. “That is useful in getting them to lower their energy use,” he said.But when countries fund a large part of the bill, “there is zero incentive to save on energy,” he said.
The U.S. economy grew slowly over the summer, adding to fears of a looming recession — but also keeping alive the hope that one might be avoided.
Gross domestic product, adjusted for inflation, returned to growth in the third quarter after two consecutive quarterly contractions, according to government data released Thursday. But consumer spending slowed as inflation ate away at households’ buying power, and the sharp rise in interest rates led to the steepest contraction in the housing sector since the first months of the pandemic.
The report underscored the delicate balance facing the Federal Reserve as it tries to rein in the fastest inflation in four decades. Policymakers have aggressively raised interest rates in recent months — and are expected to do so again at their meeting next week — in an effort to cool off red-hot demand, which they believe has contributed to the rapid increase in prices. But they are trying to do so without snuffing out the recovery entirely.
The third-quarter data — G.D.P. rose 0.6 percent, the Commerce Department said, a 2.6 percent annual rate of growth — suggested that the path to such a “soft landing” remained open, but narrow.
loss of purchasing power over time, meaning your dollar will not go as far tomorrow as it did today. It is typically expressed as the annual change in prices for everyday goods and services such as food, furniture, apparel, transportation and toys.
What causes inflation? It can be the result of rising consumer demand. But inflation can also rise and fall based on developments that have little to do with economic conditions, such as limited oil production and supply chain problems.
Is inflation bad? It depends on the circumstances. Fast price increases spell trouble, but moderate price gains can lead to higher wages and job growth.
Can inflation affect the stock market? Rapid inflation typically spells trouble for stocks. Financial assets in general have historically fared badly during inflation booms, while tangible assets like houses have held their value better.
President Biden cheered the report in a statement Thursday morning. “For months, doomsayers have been arguing that the U.S. economy is in a recession, and congressional Republicans have been rooting for a downturn,” he said. “But today we got further evidence that our economic recovery is continuing to power forward.”
By one common definition, the U.S. economy entered a recession when it experienced two straight quarters of shrinking G.D.P. at the start of the year. Officially, however, recessions are determined by a group of researchers at the National Bureau of Economic Research, who look at a broader array of indicators, including employment, income and spending.
Most analysts don’t believe the economy meets that more formal definition, and the third-quarter numbers — which slightly exceeded forecasters’ expectations — provided further evidence that a recession had not yet begun.
But the overall G.D.P. figures were skewed by the international trade component, which often exhibits big swings from one period to the next. Economists tend to focus on less volatile components, which have showed the recovery steadily losing momentum as the year has progressed. One closely watched measure suggested that private-sector demand stalled out almost completely in the third quarter.
Mortgage rates passed 7 percent on Thursday, their highest level since 2002.
“Housing is just the single largest trigger to additional spending, and it’s not there anymore; it’s going in reverse,” said Diane Swonk, chief economist at the accounting firm KPMG. “This has been a stunning turnaround in housing, and when things start to go really quickly, you start to wonder, what are the knock-on effects, what are the spillover effects?”
The third quarter was in some sense a mirror image of the first quarter, when G.D.P. shrank but consumer spending was strong. In both cases, the swings were driven by international trade. Imports, which don’t count toward domestic production figures, soared early this year as the strong economic recovery led Americans to buy more goods from overseas. Exports slumped as the rest of the world recovered more slowly from the pandemic.
Both trends have begun to reverse as American consumers have shifted more of their spending toward services and away from imported goods, and as foreign demand for American-made goods has recovered. Supply-chain disruptions have added to the volatility, leading to big swings in the data from quarter to quarter.
Few economists expect the strong trade figures from the third quarter to continue, especially because the strong dollar will make American goods less attractive overseas.
The DealBook newsletter delves into a single topic or theme every weekend, providing reporting and analysis that offer a better understanding of an important issue in business. If you don’t already receive the daily newsletter, sign up here.
At a Communist Party congress starting in Beijing on Oct. 16, Xi Jinping is expected to be named to a third five-year term as the country’s top leader, paving the way for him to consolidate power to an extent not seen in decades.
Under Mr. Xi, China has become the world’s dominant manufacturer of everything from cement to solar panels, as well as the main trading partner and dominant lender for most of the developing world. It has built the world’s largest navy, developed some of the world’s most advanced ballistic missiles and constructed air bases on artificial islands strewn across the South China Sea.
in a tailspin. Its property market, which over the last ten years contributed about a quarter of the country’s economic output, is melting down. Foreign investment has faltered. And widespread lockdowns and mass quarantines, part of China’s zero-tolerance approach to Covid-19, have hurt consumer demand and stalled businesses.
At the same time, Mr. Xi has worked to turn China into a more state-led society that often puts national security and ideology before economic growth. He has cracked down on Chinese companies and limited their executives’ power. Some of China’s best-known entrepreneurs have left the country and others, such as Alibaba co-founder Jack Ma, have largely disappeared from public view.
All of this has hurt China’s economy, which was just 0.4 percent larger from April through June than during the same period last year. The growth was far below the government’s initial target for growth of about 5.5 percent this year. For the first year since the 1990s, China’s economic growth is expected to fall below the rest of Asia’s.
at the start of the last party congress, in 2017, lasted more than three hours. But buried in that jargon are likely to be some important messages. Here’s what finance leaders and corporate executives around the world want to know.
Domestic Ideology: ‘Common Prosperity’
One of Mr. Xi’s favorite economic policy initiatives in recent months has a simple, innocuous-sounding name: “common prosperity.” The big question lies in what it means.
Common prosperity, a longtime goal of the Communist Party, has been defined by Mr. Xi as reining in private capital and narrowing China’s huge disparities in wealth. Regulators and tax investigators cracked down last year on tech giants and wealthy celebrities. Beijing demanded that tycoons give back to society. And Mr. Xi has strongly discouraged speculation in housing, pushing instead for government subsidies for the construction of more rental apartments.
A regulatory crackdown on tech companies and after-school education companies contributed to a wave of layoffs that left one in five young Chinese city dwellers unemployed by August. Lending limits on China’s highly inflated housing sector have triggered a nosedive in the number of fresh construction projects being started and a wave of insolvencies among real estate developers. Many Western hedge funds that bet heavily on the real estate developers’ overseas bond issues incurred considerable losses.
The term “common prosperity” was seldom used by top officialslast spring during those setbacks. But Mr. Xi conspicuously revived it during a tour of northeastern China in mid-August. The Politburo subsequently mentioned common prosperity when it announced on Aug. 30 the starting date and agenda for the party congress.
first put forward in May 2020, is a theory of what he calls “dual circulation.” The concept involves relying primarily on domestic demand and innovation to propel the Chinese economy, while maintaining foreign markets and investors as a backup engine for growth.
Mr. Xi has pushed ahead with lavish subsidies to develop Chinese manufacturers, especially of semiconductors. But the slogan has attracted considerable skepticism from foreign investors in China and from foreign governments. They worry that the policy is a recipe for replacing imports with Chinese-made goods.
China’s imports have indeed stagnated this year while its exports have soared, producing the largest trade surpluses the world has ever seen. Those surpluses, not domestic demand, have sustained China’s economic growth this year.
Chinese officials deny that they are trying to discourage imports, and contend that China remains eager to welcome foreign companies and products. When the Politburo scheduled the party congress for Oct. 16, it did not mention dual circulation, so the term might be left aside. If it goes unmentioned, that could be a conciliatory gesture as foreign investment in China is already weakening, mainly because of the country’s draconian pandemic policies.
Pandemic: ‘Covid Zero’
China’s zero-tolerance approach to Covid-19 has prevented a lot of deaths and long-term infections, but at a high and growing cost to the economy. The question now lies in when Mr. Xi will shift to a less restrictive stance toward controlling the virus.
in Tiananmen Square, on the 100th anniversary of the founding of the Chinese Communist Party, when he reiterated China’s claim to Taiwan, a self-ruled island democracy. President Biden has mentioned four times that the United States is prepared to help Taiwan resist aggression. Each time his aides have walked back his comments somewhat, however, emphasizing that the United States retains a policy of “strategic ambiguity” regarding its support for the island.
Even a vague mention by Mr. Xi at the party congress of a timeline for trying to bring Taiwan under the mainland’s political control could damage financial confidence in both Taiwan and the mainland.
New Leaders
The most important task of the ruling elite at the congress is to confirm the party’s leadership.
Particularly important to business is who in the lineup will become the new premier. The premier leads the cabinet but not the military, which is directly under Mr. Xi. The position oversees the finance ministry, commerce ministry and other government agencies that make many crucial decisions affecting banks, insurers and other businesses. Whoever is chosen will not be announced until a separate session of the National People’s Congress next March, but the day after the congress formally ends, members of the new Politburo Standing Committee — the highest body of political power in China — will walk on a stage in order of rank. The order in which the new leadership team walks may make clear who will become premier next year.
a leading hub of entrepreneurship and foreign investment in China. Neither has given many clues about their economic thinking since taking posts in Beijing. Mr. Wang had more of a reputation for pursuing free-market policies while in Guangdong.
Mr. Hu is seen as having a stronger political base than Mr. Wang because he is still young enough, 59, to be a potential successor to Mr. Xi. That political strength could give him the clout to push back a little against Mr. Xi’s recent tendency to lean in favor of greater government and Communist Party control of the private sector.
Precisely because Mr. Hu is young enough to be a possible successor, however, many businesspeople and experts think Mr. Xi is more likely to choose Mr. Wang or a dark horse candidate who poses no potential political threat to him.
In any case, the power of the premier has diminished as Mr. Xi has created a series of Communist Party commissions to draft policies for ministries, including a commission that dictates many financial policies.
What do you think? Let us know: dealbook@nytimes.com.
Russia’s invasion of Ukraine and the continuing effects of the pandemic have hobbled countries around the globe, but the relentless series of crises has hit Europe the hardest, causing the steepest jump in energy prices, some of the highest inflation rates and the biggest risk of recession.
The fallout from the war is menacing the continent with what some fear could become its most challenging economic and financial crisis in decades.
While growth is slowing worldwide, “in Europe it’s altogether more serious because it’s driven by a more fundamental deterioration,” said Neil Shearing, group chief economist at Capital Economics. Real incomes and living standards are falling, he added. “Europe and Britain are just worse off.”
eightfold increase in natural gas prices since the war began presents a historic threat to Europe’s industrial might, living standards, and social peace and cohesion. Plans for factory closings, rolling blackouts and rationing are being drawn up in case of severe shortages this winter.
China, a powerful engine of global growth and a major market for European exports like cars, machinery and food, is facing its own set of problems. Beijing’s policy of continuing to freeze all activity during Covid-19 outbreaks has repeatedly paralyzed large swaths of the economy and added to worldwide supply chain disruptions. In the last few weeks alone, dozens of cities and more than 300 million people have been under full or partial lockdowns. Extreme heat and drought have hamstrung hydropower generation, forcing additional factory closings and rolling blackouts.
refusing to pay their mortgages because they have lost confidence that developers will ever deliver their unfinished housing units. Trade with the rest of the world took a hit in August, and overall economic growth, although likely to outrun rates in the United States and Europe, looks as if it will slip to its slowest pace in a decade this year. The prospect has prompted China’s central bank to cut interest rates in hopes of stimulating the economy.
“The global economy is undoubtedly slowing,” said Gregory Daco, chief economist at the global consulting firm EY- Parthenon,but it’s “happening at different speeds.”
In other parts of the world, countries that are able to supply vital materials and goods — particularly energy producers in the Middle East and North Africa — are seeing windfall gains.
And India and Indonesia are growing at unexpectedly fast paces as domestic demand increases and multinational companies look to vary their supply chains. Vietnam, too, is benefiting as manufacturers switch operations to its shores.
head-spinning energy bills this winter ratcheted up this week after Gazprom, Russia’s state-owned energy company, declared it would not resume the flow of natural gas through its Nord Stream 1 pipeline until Europe lifted Ukraine-related sanctions.
Daily average electricity prices in Western Europe have reached record levels, according to Rystad Energy, surging past 600 euros ($599) per megawatt-hour in Germany and €700 in France, with peak-hour rates as high as €1,500.
In the Czech Republic, roughly 70,000 angry protesters, many with links to far-right groups, gathered in Wenceslas Square in Prague this past weekend to demonstrate against soaring energy bills.
The German, French and Finnish governments have already stepped in to save domestic power companies from bankruptcy. Even so, Uniper, which is based in Germany and one of Europe’s largest natural gas buyers and suppliers, said last week that it was losing more than €100 million a day because of the rise in prices.
International Monetary Fund this week to issue a proposal to reform the European Union’s framework for government public spending and deficits.
caps blunt the incentive to reduce energy consumption — the chief goal in a world of shortages.
Central banks in the West are expected to keep raising interest rates to make borrowing more expensive and force down inflation. On Thursday, the European Central Bank raised interest rates by three-quarters of a point, matching its biggest increase ever. The U.S. Federal Reserve is likely to do the same when it meets this month. The Bank of England has taken a similar position.
The worry is that the vigorous push to bring down prices will plunge economies into recessions. Higher interest rates alone won’t bring down the price of oil and gas — except by crashing economies so much that demand is severely reduced. Many analysts are already predicting a recession in Germany, Italy and the rest of the eurozone before the end of the year. For poor and emerging countries, higher interest rates mean more debt and less money to spend on the most vulnerable.
“I think we’re living through the biggest development disaster in history, with more people being pushed more quickly into dire poverty than has every happened before,” said Mr. Goldin, the Oxford professor. “It’s a particularly perilous time for the world economy.”
The announcement of trade talks comes after Beijing fired missiles into the sea to intimidate Taiwan after U.S. House Speaker Nancy Pelosi visited.
The U.S. government will hold trade talks with Taiwan in a sign of support for the island democracy that China claims as its own territory, prompting Beijing to warn Thursday it will take action if necessary to “safeguard its sovereignty.”
The announcement of trade talks comes after Beijing fired missiles into the sea to intimidate Taiwan after U.S. House Speaker Nancy Pelosi this month became the highest-ranking American official to visit the island in 25 years.
Chinese President Xi Jinping’s government criticized the planned talks as a violation of its stance that Taiwan has no right to foreign relations. It warned Washington not to encourage the island to try to make its de facto independence permanent, a step Beijing says would lead to war.
“China firmly opposes this,” Ministry of Commerce spokesperson Shu Jueting said. She called on Washington to “fully respect China’s core interests.”
Also Thursday, Taiwan’s military held a drill with missiles and cannons simulating a response to a Chinese missile attack.
Taiwan and China split in 1949 after a civil war and have no official relations but are bound by billions of dollars of trade and investment. The island never has been part of the People’s Republic of China, but the ruling Communist Party says it is obliged to unite with the mainland, by force if necessary.
President Joe Biden’s coordinator for the Indo-Pacific region, Kurt Campbell, said last week that trade talks would “deepen our ties with Taiwan” but stressed policy wasn’t changing. The United States has no diplomatic relations with Taiwan, its ninth-largest trading partner, but maintains extensive informal ties.
The U.S. Trade Representative’s announcement of the talks made no mention of tension with Beijing but said “formal negotiations” would develop trade and regulatory ties, a step that would entail closer official interaction.
Being allowed to export more to the United States might help Taiwan blunt China’s efforts to use its status as the island’s biggest trading partner as political leverage. The mainland blocked imports of Taiwanese citrus and other food in retaliation for Pelosi’s Aug. 2 visit.
Taiwan’s Foreign Ministry expressed “high welcome” for the trade talks, which it said will lead to a “new page” in relations with the United States.
“As the situation across the Taiwan Strait has recently escalated, the U.S. government will continue to take concrete actions to maintain security and stability across the Taiwan Strait,” it said in a statement.
U.S.-Chinese relations are at their lowest level in decades amid disputes over trade, security, technology, and Beijing’s treatment of Muslim minorities and Hong Kong.
The U.S. Trade Representative said negotiations would be conducted under the auspices of Washington’s unofficial embassy, the American Institute in Taiwan.
“China always opposes any form of official exchanges between any country and the Taiwan region of China,” said Shu, the Chinese spokesperson. “China will take all necessary measures to resolutely safeguard its sovereignty.”
Washington says it takes no position on the status of China and Taiwan but wants their dispute settled peacefully. The U.S. government is obligated by federal law to see that the island has the means to defend itself.
“We will continue to take calm and resolute steps to uphold peace and stability in the face of Beijing’s ongoing efforts to undermine it, and to support Taiwan,” Campbell said during a conference call last Friday.
China takes more than twice as much of Taiwan’s exports as the United States, its No. 2 foreign market. Taiwan’s government says its companies have invested almost $200 billion in the mainland. Beijing says a 2020 census found some 158,000 Taiwanese entrepreneurs, professionals and others live on the mainland.
China’s ban on imports of citrus, fish and hundreds of other Taiwanese food products hurt rural areas seen as supporters of President Tsai Ing-wen, but those goods account for less than 0.5% of Taiwan’s exports to the mainland.
Beijing did nothing that might affect the flow of processor chips from Taiwan that are needed by Chinese factories that assemble the world’s smartphones and consumer electronics. The island is the world’s biggest chip supplier.
A second group of U.S. lawmakers led by Sen. Ed Markey, a Democrat from Massachusetts, arrived on Taiwan on Sunday and met with Tsai. Beijing announced a second round of military drills after their arrival.
Taiwan, with 23.6 million people, has launched its own military drills in response.
On Thursday, drills at Hualien Air Base on the east coast simulated a response to a Chinese missile attack. Military personnel practiced with Taiwanese-made Sky Bow 3 anti-aircraft missiles and 35mm anti-aircraft cannon but didn’t fire them.
“We didn’t panic” when China launched military drills, said air force Maj. Chen Teh-huan.
“Our usual training is to be on call 24 hours a day to prepare for missile launches,” Chen said. “We were ready.”
The U.S.-Taiwanese talks also will cover agriculture, labor, the environment, digital technology, the status of state-owned enterprises and “non-market policies,” the U.S. Trade Representative said.
Washington and Beijing are locked in a 3-year-old tariff war over many of the same issues.
They include China’s support for government companies that dominate many of its industries and complaints that Beijing steals foreign technology and limits access to an array of fields in violation of its market-opening commitments.
Then-President Donald Trump raised tariffs on Chinese goods in 2019 in response to complaints that its technology development tactics violate its free-trade commitments and threaten U.S. industrial leadership. President Biden has left most of those tariff hikes in place.
The verbal skirmish grew out of China’s suspension of talks with the U.S. on climate and several other issues earlier this month.
The world’s two biggest emitters of greenhouse gases are sparring on Twitter over climate policy, with China questioning whether the U.S. can deliver on the landmark climate legislation signed into law by President Joe Biden this week.
“You can bet America will meet our commitments,” U.S. Ambassador to China Nicholas Burns tweeted in response on Wednesday, using a national flag emoji for “America.” He called on China to resume suspended climate talks, writing, “We’re ready.”
The punchy exchange, part of a longer back and forth on Twitter, is emblematic of a broader worry: U.S.-China cooperation is widely considered vital to the success of global efforts to curb rising temperatures. With the breakdown in relations over Taiwan and other issues, some question whether the two sides can cooperate.
After Congress passed the climate bill last Friday, Burns took to Twitter over the weekend to say the U.S. was acting on climate change with its largest investment ever — and that China should follow.
On Tuesday night, China’s Foreign Ministry responded with its own tweet: “Good to hear. But what matters is: Can the U.S. deliver?”
The verbal skirmish grew out of China’s suspension of talks with the U.S. on climate and several other issues earlier this month as part of its protest over a visit to Taiwan by a senior American lawmaker, House Speaker Nancy Pelosi.
Climate has been one of the few areas of cooperation between the feuding countries. U.S. officials criticized China’s move, with Secretary of State Antony Blinken saying it “doesn’t punish the United States — it punishes the world.”
Asked to respond, Chinese Foreign Ministry spokesperson Zhao Lijian called on the U.S. last week to “deliver on its historical responsibilities and due obligations on climate change and stop looking around for excuses for its inaction.”
The ministry later tweeted some of his answer, and Burns responded four days later with his tweet on the U.S. climate bill. Using the acronym for the People’s Republic of China, he ended with, “The PRC should follow+reconsider its suspension of climate cooperation with the U.S.”
China elaborated on its “Can the U.S. deliver?” message with a second tweet suggesting that the U.S. meet rich country pledges to help poorer countries cope financially with climate change and lift sanctions imposed last year on solar industry exports from China’s Xinjiang region because of allegations of forced labor.
The Twitter battle highlights a perception divide between the longstanding superpower that wants to lead and the rising power that no longer wants to feel bound to follow anyone else’s direction.
The decision by former President Donald Trump to pull the U.S. out of the Paris climate accord — reversed by President Biden after he took office last year — dealt a blow to American credibility on the issue.
A Chinese expert praised parts of the U.S. legislation but said it is overdue and not enough.
“Although there are some breakthrough achievements in the bill, I am afraid it can’t reestablish U.S. leadership on climate change,” said Teng Fei, a professor at Tsinghua University’s Institute of Energy Environment and Economy.
U.S. climate envoy John Kerry has been pressing China to set more ambitious climate goals. China has responded that its goals are realistic, given its development needs as a middle-income country, while the U.S. sets ambitious goals that it fails to achieve.
China’s ruling Communist Party generally sets conservative targets at a national level because it doesn’t want its performance to fall short. Those targets are sometimes exceeded, though, in the eager pursuit of those goals by local officials.
“China should be able to do better than its national targets indicate,” said Cory Combs, a senior analyst with the Trivium China consultancy. “But of course, those local plans are all subject to failure and delays, so it’s impossible to tell quite what they’ll add up to.”
In retaliation for Speaker Nancy Pelosi’s visit to Taiwan last week, China conducted large-scale military exercises around the self-governing island democracy and suspended some trade between the sides.
The exercises led to a few shipping disruptions, but they did not affect traffic at Taiwanese or Chinese ports, analysts say. And the trade bans were notable mainly for what they did not target: Taiwan’s increasingly powerful semiconductor industry, a crucial supplier to Chinese manufacturers.
The bans that Beijing did impose — on exports of its natural sand to Taiwan, and on imports of all Taiwanese citrus fruits and two types of fish — were hardly an existential threat to the island off its southern coast that it claims as Chinese territory.
Taiwanese pineapples, wax apples and grouper fish, among other products.
a self-governing island democracy of 23 million people, as its territory and has long vowed to take it back, by force if necessary. The island, to which Chiang Kai-shek’s Chinese forces retreated after the Communist Revolution of 1949, has never been part of the People’s Republic of China.
Understand the China-Taiwan Tensions
What does Xi Jinping want? China’s leader has made it clearer than any of his predecessors that he sees unifying Taiwan with China to be a primary goal of his rule — and a key to what he calls China’s “national rejuvenation.” Mr. Xi is also keen to project an image of strength ahead of his expected confirmation to an unprecedented third term this fall.
Understand the China-Taiwan Tensions
How is the U.S. involved? In an intentionally ambiguous diplomatic arrangement adopted in 1979, the United States maintains a “one China” policy that acknowledges, but does not endorse, Beijing’s claim over Taiwan. U.S. leaders have remained vague about how they would help Taiwan if China attacked, but President Biden has pledged to defend the island.
Understand the China-Taiwan Tensions
Why are tensions rising now? Speaker Nancy Pelosi’s recent trip to Taiwan — the highest level visit to the island by an American official since 1997 — has ignited regional tensions, prompting China to conduct its largest-ever military exercises near Taiwan. A chorus of official Chinese bodies portrayed her trip as part of an American effort to sabotage China’s efforts at unification with Taiwan.
“The political message is greater than the economic hit,” said Chiao Chun, a former trade negotiator for the Taiwanese government.
Even though about 90 percent of Taiwan’s imported gravel and sand comes from China, most of that is manufactured. China accounted for only about 11 percent of Taiwan’s natural sand imports in the first half of this year, according to the Bureau of Mines.
The two types of Taiwanese fish exports that China restricted last week — chilled white striped hairtail and frozen horse mackerel — are collectively worth about $22 million, less than half the value of the Taiwanese grouper trade that was banned earlier this year. They are also less dependent on the Chinese market.
As for Taiwan’s half-a-billion-dollar citrus industry, its shipments to China account for only 1.1 percent of the island’s total agricultural exports, according to Taiwan’s Agriculture Council. A popular theory is that Beijing singled out citrus farmers because most orchards are in southern Taiwan, a stronghold for the governing political party, the Democratic Progressive Party, a longtime target of Beijing’s anger.
Future bans may become more targeted to punish industries in counties that are D.P.P. strongholds, said Thomas J. Shattuck, an expert on Taiwan at the University of Pennsylvania’s Perry World House. There may also be less retaliation against counties run by the Kuomintang opposition party “in an attempt to put a finger on the scale for Taiwan’s local, and even national, elections,” he added.
increasingly indispensable node in the global supply chains for smartphones, cars and other keystones of modern life. One producer, the Taiwan Semiconductor Manufacturing Company, makes roughly 90 percent of the world’s most advanced semiconductors, and sells them to both China and the West.
simulated a blockade of Taiwan.
Even though some of the exercises took place in the Taiwan Strait, a key artery for international shipping, they did not disrupt access to ports in Taiwan or southern China, said Tan Hua Joo, an analyst at Linerlytica, a company in Singapore that tracks data on the container shipping industry. He added that port congestion would build only if the strait was completely blocked, port access was restricted or port operations were hampered by a labor or equipment shortage.
“None of these are happening at the moment,” he said.
Vessels that chose to avoid the Taiwan Strait last week because of the Chinese military’s “chest beating” activities would have faced a 12- to 18-hour delay, an inconvenience that would generally be considered manageable, said Niels Rasmussen, the chief shipping analyst at Bimco, an international shipping association.
If Beijing were to escalate tensions in the future, it would indicate that it was willing to put at risk China’s own economy as well as its trade and relations with Japan, South Korea, Europe and the United States, Mr. Rasmussen said by phone from his office near Copenhagen.
“That’s just difficult to accept that they would take that decision,” he added. “But then again, I didn’t expect Russia to invade Ukraine.”
Sen. Gustavo Petro won the presidential election in June by beating conservative parties who failed to connect with frustrated voters.
Colombia’s first leftist president was sworn into office Sunday, promising to fight inequality and bring peace to a country haunted by feuds between the government, drug traffickers and rebel groups.
Sen. Gustavo Petro, a former member of Colombia’s M-19 guerrilla group, won the presidential election in June by beating conservative parties that offered moderate changes to the market-friendly economy, but failed to connect with voters frustrated by rising poverty and violence against human rights leaders and environmental groups in rural areas.
On Sunday, he said Colombia was getting a “second chance” to tackle violence and poverty and promised that his government would implement economic policies that seek to end longstanding inequalities and ensure “solidarity” with the nation’s most vulnerable.
The incoming president said he was willing to start peace talks with armed groups across the country and also called on the United States and other developed nations to change drug policies that have focused on the prohibition of substances like cocaine, and fed violent conflicts across Colombia and other Latin American nations.
“It’s time for a new international convention that accepts that the war on drug has failed,” he said. “Of course peace is possible. But it depends on current drug policies being substituted with strong measures that prevent consumption in developed societies.”
Petro is part of a growing group of leftist politicians and political outsiders who have been winning elections in Latin America since the pandemic broke out and hurt incumbents who struggled with its economic aftershocks.
The ex-rebel’s victory was also exceptional for Colombia, where voters had been historically reluctant to back leftist politicians who were often accused of being soft on crime or allied with guerrillas.
A 2016 peace deal between Colombia’s government and the Revolutionary Armed Forces of Colombia turned much of the focus of voters away from the violent conflicts playing out in rural areas and gave prominence to problems like poverty and corruption, fueling the popularity of leftist parties in national elections. However smaller rebel groups like the National Liberation Army and the Gulf Clan continue to fight over drug trafficking routes, illegal gold mines and other resources abandoned by the FARC.
Petro, 62, has described U.S.-led antinarcotics policies as a failure but has also said he would like to work with Washington “as equals,” building schemes to combat climate change or bring infrastructure to rural areas where many farmers say coca leaves are the only viable crop.
Petro also formed alliances with environmentalists during his presidential campaign and has promised to turn Colombia into a “global powerhouse for life” by slowing deforestation and taking steps to reduce the country’s reliance on fossil fuels.
The incoming president has said Colombia will stop granting new licenses for oil exploration and will ban fracking projects, even though the oil industry makes up almost 50% of the nation’s legal exports. He plans to finance social spending with a $10 billion a year tax reform that would boost taxes on the rich and do away with corporate tax breaks.
“He’s got a very ambitious agenda,” said Yan Basset, a political scientist at Bogota’s Rosario University. “But he will have to prioritize. The risk Petro faces is that he goes after too many reforms at once and gets nothing” through Colombia’s congress.
In Cúcuta, a city just a few miles from the border with Venezuela, trade school student Daniela Cárdenas hopes Petro will carry out an educational reform that includes financial aid for college students.
“He has promised so many things,” Cardenas, 19, said after traveling 90 minutes from her rural community to the city. “At least we work to be able to pay our student fees, which are quite expensive and, well, that makes many things difficult for us.”
Eight heads of state attended Petro’s inauguration, which was held at a large colonial-era square in front of Colombia’s Congress. Stages with live music and big screens were also placed in parks across Bogota’s city center so that tens of thousands of citizens without invitations to the main event could join in the festivities. That marked a big change for Colombia where previous presidential inaugurations were more somber events limited to a few hundred VIP guests.
“It’s the first time that people from the base can come here to be part of a presidential inauguration,” said Luis Alberto Tombe, a member of the Guambiano tribe wearing a traditional blue poncho. “We feel honored to be here.”
Hours before Petro took office, at the most important border crossing bridge with Venezuela, a group of people carried a Colombian flag as they walked toward Venezuela chanting “Viva Colombia, Viva Venezuela.” People crossing in both directions joined their chants.
“We wish peace for both Venezuela and Colombia,” organizer Salvador Albarracin said. “Today, we are in Colombia sowing the possibilities of peace through a person who is President Gustavo Petro.”
Dozens of people erupted in cheers the moment Petro took office.
“Seeing Gustavo Petro as president is something very impressive and being aware that for the first time in our lives we are in a government,” Javier Uscategui, a human rights defender who works with victims of the armed conflict, said while wearing a baseball cap with the faces of the late Cuban revolutionary leader Fidel Castro, the late Venezuelan President Hugo Chávez and other leftist leaders.
Sen. Gustavo Petro won the presidential election by beating conservative parties who failed to connect with frustrated voters.
Colombia’s first leftist president will be sworn into office Sunday, promising to fight inequality and heralding a turning point in the history of a country haunted by a long war between the government and guerrilla groups.
Sen. Gustavo Petro, a former member of Colombia’s M-19 guerrilla group, won the presidential election in June by beating conservative parties that offered moderate changes to the market-friendly economy, but failed to connect with voters frustrated by rising poverty and violence against human rights leaders and environmental groups in rural areas.
Petro is part of a growing group of leftist politicians and political outsiders who have been winning elections in Latin America since the pandemic broke out and hurt incumbents who struggled with its economic aftershocks.
The ex-rebel’s victory was also exceptional for Colombia, where voters had been historically reluctant to back leftist politicians who were often accused of being soft on crime or allied with guerrillas.
A 2016 peace deal between Colombia’s government and the Revolutionary Armed Forces of Colombia turned much of the focus of voters away from the violent conflicts playing out in rural areas and gave prominence to problems like poverty and corruption, fueling the popularity of leftist parties in national elections.
Petro, 62, has promised to tackle Colombia’s social and economic inequalities by boosting spending on anti-poverty programs and increasing investment in rural areas. He has described U.S.-led antinarcotics policies, such as the forced eradication of illegal coca crops, as a “big failure.” But he has said he would like to work with Washington “as equals,” building schemes to combat climate change or bring infrastructure to rural areas where many farmers say coca leaves are the only viable crop.
Petro also formed alliances with environmentalists during his presidential campaign and has promised to turn Colombia into a “global powerhouse for life” by slowing deforestation and taking steps to reduce the country’s reliance on fossil fuels.
The incoming president has said Colombia will stop granting new licenses for oil exploration and will ban fracking projects, even though the oil industry makes up almost 50% of the nation’s legal exports. He plans to finance social spending with a $10 billion a year tax reform that would boost taxes on the rich and do away with corporate tax breaks.
Petro has also said he wants to start peace talks with remaining rebel groups that are currently fighting over drug routes, gold mines and other resources abandoned by the FARC after their peace deal with the government.
“He’s got a very ambitious agenda,” said Yan Basset, a political scientist at Bogota’s Rosario University. “But he will have to prioritize. The risk Petro faces is that he goes after too many reforms at once and gets nothing” through Colombia’s congress.
At least 10 heads of state are expected to attend Petro’s inauguration, which will take place at a large colonial-era square in front of Colombia’s Congress. Stages with live music and big screens will also be placed in parks across Bogota’s city center so that tens of thousands of citizens without invitations to the main event can also join in the festivities. That’s a big change for Colombia where previous presidential inaugurations were more somber events limited to a few hundred VIP guests.
“We want the Colombian people to be the protagonists,” Petro’s press chief, Marisol Rojas, said in a statement. “This inauguration will be the first taste of a new form of governing, where all forms of life are respected, and where everyone fits in.”
WASHINGTON — The Biden administration’s push to form an international buyers’ cartel to cap the price of Russian oil is facing resistance amid private sector concerns that it cannot be reliably enforced, posing a challenge for the U.S.-led effort to drain President Vladimir V. Putin’s war chest and stabilize global energy prices.
The price cap has been a top priority of Treasury Secretary Janet L. Yellen, who has been trying to head off another spike in global oil costs at the end of the year. The Biden administration fears that the combination of a European Union embargo on Russian oil imports and a ban on the insurance and financing of Russian oil shipments will send prices soaring by taking millions of barrels of that oil off the market.
But the untested concept has drawn skepticism from energy experts and, in particular, the maritime insurance sector, which facilitates global oil shipments and is key to making the proposal work. Under the plan, it would be legal for them to grant insurance for oil cargo only if it was being sold at or below a certain price.
Mike Salthouse, global claims director at The North of England P&I Association Limited, a leading global marine insurer. “If you have sophisticated state actors wanting to deceive people, it’s very easy to do.”
He added: “We’ve said it won’t work. We’ve explained to everybody why.”
That has not deterred Ms. Yellen and her top aides, who have been crisscrossing the globe to make their case with international counterparts, banks and insurers that an oil price cap can — and must — work at a moment of rapid inflation and the risk of recession.
“At a time of global anxiety over high prices, a price cap on Russian oil is one of the most powerful tools we have to address inflation by preventing future spikes in energy costs,” Ms. Yellen said in July.
The Biden administration is trying to mitigate fallout from sanctions adopted by the European Union in June, which would ban imports of Russian oil and the financing and insuring of Russian oil exports by year’s end. Britain was expected to enact a similar ban but has not yet done so.
not solve the world’s oil supply problems. European officials, who have been skeptical, continue to say they are analyzing its viability.
restricted natural gas flows to parts of Europe in retaliation for sanctions, would curb oil exports because of their importance to its economy.
senior fellow at the Atlantic Council who works in the financial services industry, said of Russia’s cooperation with a price cap. “If that were the case, he wouldn’t have invaded Ukraine in the first place.”
But proponents believe that if the European Union bans insurance transactions, an oil price cap may be the best chance to mitigate the economic fallout.
John E. Smith, former director of the foreign assets control unit, said the key was ensuring that financial services firms and maritime insurers were not responsible for vetting every oil transaction, as well as providing guidance on complying with the sanctions.
“The question is will enough jurisdictions agree on the details to move this forward,” said Mr. Smith, who is now co-head of Morrison & Foerster’s national security practice. “If they do, it could be a win for everyone but Russia.”
Matina Stevis-Gridneff contributed reporting from Brussels.
