BEIJING — The vice head of China’s state planner said on Monday he was “fully confident” the world’s second-largest economy would achieve its economic growth target of around 5% for 2025, pledging new policies to be rolled out over the second quarter.

Zhao Chenxin, vice chair of the National Development and Reform Commission, told a press conference that the foundation for China’s economic recovery needed to be consolidated as external impacts rise, and said that further policies would be implemented based on changes in the economic situation.

While US President Donald J. Trump’s tariffs have darkened China’s economic outlook, Chinese policymakers remain confident that the White House will relent first, analysts say. This would allow Beijing to proceed with its planned stimulus measures intended for release throughout the remainder of the year.

China’s deputy central bank governor Zou Lan, speaking at the same press conference, affirmed the continuation of a moderately loose monetary policy and increased support for the economy, while maintaining yuan stability.

The impact on China’s foreign assets from volatility in the US bond market is limited, Mr. Zou said, adding that the People’s Bank of China would stabilize market expectations on the yuan and deal with market-distorting behaviors. — Reuters

NICOSIA — Migrant workers in Cyprus should have the same rights as all other Cypriot and EU workers, a European human rights watchdog said on Monday, warning that the poorly paid and overworked labourers were vulnerable to abuse and trafficking.

More than 20,000 domestic workers are employed in the east Mediterranean island, which has a population of 930,000 in its southern, government-controlled areas, experts from the Council of Europe, a Strasbourg-based body, said in an assessment.

The migrant workers are mainly from the Philippines, Sri Lanka, Nepal and Vietnam.

They earn considerably less than the state-sanctioned minimum wage which applies to other workers, experts from the Council of Europe, a Strasbourg-based body, the report said.

“(This) renders these workers vulnerable to exploitation and trafficking,” the assessment panel, known as GRETA, said in a five-yearly report on the member state’s compliance with anti-trafficking.

The report cited findings from the Cyprus Ombudsman’s office in 2020 that the average hourly wage received by a domestic worker could be as low as 1.29 euros ($1.47). Many worked an average of 58 hours a week, far exceeding the 42 hours in their contracts.

By law, gross salaries for domestic workers are set at a minimum of 460 euros monthly before deductions for food and accommodation, which can lop off up to 25% of earnings, as opposed to a starting minimum salary of 1,000 euros which applies to other individuals.

“GRETA urges the Cypriot authorities to take measures to ensure migrant workers enjoy the same rights and protections, including the same minimum wage, as Cypriot and EU workers,” the Council of Europe report said.

While noting improvements in its legislative framework, Cyprus needed to be more proactive in identifying exploitation victims, providing access to legal aid and improving conditions for migrant workers in general, the report said. — Reuters

STOCKHOLM – World military expenditure reached $2.72 trillion in 2024, an increase of 9.4% from 2023 and the steepest year-on-year rise since at least the end of the Cold War, according to a report released by a leading conflict think tank on Monday.

Heightened geopolitical tension saw increased military spending in all world regions, with particularly rapid growth in both Europe and the Middle East, data from the Stockholm International Peace Research Institute (SIPRI) showed.

“Over 100 countries around the world raised their military spending in 2024,” SIPRI said. “As governments increasingly prioritize military security, often at the expense of other budget areas, the economic and social trade-offs could have significant effects on societies for years to come,” it said.

The war in Ukraine and doubts over US commitment to the NATO-alliance saw military spending in Europe (including Russia) rise by 17%, pushing European military spending beyond the level recorded at the end of the Cold War.

Russia’s military expenditure reached an estimated $149 billion in 2024, a 38% increase from 2023 and double the level in 2015. This represented 7.1% of Russia’s GDP and 19% of all government spending.

Ukraine’s total military expenditure grew by 2.9% to reach $64.7 billion, which amounts to 43% of Russia’s spending. At 34% of GDP, Ukraine had the largest military burden of any country in 2024.

“Ukraine currently allocates all of its tax revenues to its military,” SIPRI said. “In such a tight fiscal space, it will be challenging for Ukraine to keep increasing its military spending.”

Military spending by the US rose by 5.7% per cent to reach $997 billion, which was 66% of total NATO spending and 37% of world military spending in 2024. — Reuters

WASHINGTON – Global finance leaders came to Washington this past week seeking clarity on what it would take to get some relief from President Donald Trump’s multi-layered tariff assault and on just how much pain it will bring to the world economy.

Most headed home with more questions than answers.

Many participants in the International Monetary Fund and World Bank Spring Meetings had a senseUS that Trump’s administration was still conflicted in its demands from trading partners hit with his sweeping tariffs.

During the whirlwind week, many finance and trade ministers sought to meet with US Treasury Secretary Scott Bessent and other key Trump administration officials, to no avail. Those that did were often told to be patient – even as the clock steadily ticks down on the 90-day pause Trump had granted on the steepest levies.

Indeed, not a single deal was finalized over the course of the week despite the Trump administration touting the receipt of 18 written proposals and a full slate of negotiations.

“We are not negotiating. We are just presenting, discussing the economy,” said Polish Finance Minister Andrzej Domanski. He added that he stressed “how this uncertainty is bad for Europe, for the US I mean, it’s actually bad for everyone.”

Warnings that the tariffs – 25% on all US imports of vehicles, steel and aluminum and currently 10% for most everything else – would cause painful damage to the US and other major economies went largely unheeded by US officials.

“We know that they think – that it won’t be that bad,” Domanski said. “They think it’s a short-term pain, long-term gain. And I’m afraid that we’ll have short-term pain, long-term pain.”

The Trump administration’s most substantial trade negotiations during the week were with Japan and South Korea, but the results were inconclusive as Bessent cited “productive” talks with both countries. Specific currency targets for the Japanese yen were not discussed, but both countries’ currency policies are expected to be part of future talks as the US sees currency weakness against the dollar as a nontariff barrier to American exports.

The IMF took a slightly more optimistic view of the economic fallout from the highest US tariffs in more than a century, slashing growth forecasts for most countries in its World Economic Outlook but stopping far short of predicting recessions – even for the US and export-dependent China, which now faces US tariffs of 145% on many goods.

IMF Managing Director Kristalina Georgieva acknowledged that member countries were anxious about the uncertainty shock to a global economy buffeted by pandemic, inflation and wars but held out hope that trade negotiations would ease the tariff strains.

“We recognize that there is work under way to resolve trade disputes and reduce uncertainty,” Georgieva told reporters. “Uncertainty is really bad for business, so the sooner there is this cloud that is hanging over our heads is lifted, the better for profit, for growth, for the world economy.”

Several finance officials told Reuters that odds of recession were higher than the IMF’s 37% chance, citing private sector forecasts.

DEBT RISKS RISE
Eric LeCompte, executive director of Jubilee USA Network, a faith-based nonprofit group advocating debt relief, said that the IMF’s forecasts were clearly aimed at preventing market panic, even as officials in private meetings expressed concerns about new debt crises emerging.

“It was a do-nothing kind of week,” LeCompte said, adding that debt discussions were inconclusive and overshadowed by tariff talks.

Reza Baqir, a former Pakistan central bank governor who now heads sovereign debt advisory at Alvarez & Marsal, said: “For many developing countries, especially in the Global South, there is a real sense of despair that the agenda on Financing for Development is really not center-stage. And who is going to be there to champion that debate?”

World Bank chief economist Indermit Gill also sounded an alarm on rising debt levels for emerging markets, noting that tariffs had prompted a sharp slowdown in trade and foreign direct investment that are crucial to developing country growth.

He and other World Bank and IMF officials told countries to cut their own tariffs to boost growth prospects.

NO US WITHDRAWAL
Policymakers did breathe a sigh of relief when Bessent expressed US support for the IMF and the World Bank, declaring that they have “enduring value” but criticizing their “mission creep” into climate, gender and equality issues.

Rather than withdrawing from the institutions as prescribed by the Project 2025 Republican policy manifesto, Bessent said he wanted to refocus them on their core missions of economic stability and development, with expanded World Bank energy financing options and an end to China loans.

Participants at the meetings, along with financial markets, were encouraged by Bessent’s comments early in the week that triple-digit US tariffs on Chinese goods and vice versa were unsustainable, suggesting that a deal to ease them could be reached soon.

But China denied Trump’s assertions that tariff negotiations were under way with Beijing, adding to the week’s confusion over his tariffs and offering little reassurance to country delegations.

“I think most people left here bracing for things to get worse from an economic perspective,” said Josh Lipsky, a former IMF adviser who is now senior director of the Atlantic Council’s GeoEconomics Center. “The broad picture, when you step back, is very concerning.”

But a big challenge for developed countries at the moment was the recent selloff in US Treasury debt and other dollar-based assets, which indicated an erosion of trust in US economic policies, Lipsky said.

Trust in US economic leadership was the fundamental reason that the dollar had achieved reserve currency status, he said. While the US economy is too big to ignore the dollar for now, trading partners will try to seek alternatives unless that trust is repaired, he added. — Reuters

WASHINGTON/TOKYO/BRUSSELS – He has launched an unprecedented global tariff war and slashed US foreign aid. He has disparaged NATO allies and embraced Russia’s narrative about its invasion of Ukraine. And he has spoken about annexing Greenland, retaking the Panama Canal and making Canada the 51st state.

In the chaotic first 100 days since President Donald Trump returned to office, he has waged an often unpredictable campaign that has upended parts of the rules-based world order that Washington helped build from the ashes of World War II.

“Trump is much more radical now than he was eight years ago,” said Elliott Abrams, a conservative who served under Presidents Ronald Reagan and George W. Bush before being appointed US special envoy on Iran and Venezuela in Trump’s first term. “I have been surprised.”

Trump’s second-term “America First” agenda has alienated friends and emboldened adversaries while raising questions about how far he is prepared to go. His actions, coupled with that uncertainty, have so unnerved some governments that they are responding in ways that could be difficult to undo, even if a more traditional US president is elected in 2028.

All this comes amid what the Republican president’s critics see as signs of democratic backsliding at home that have raised concerns abroad. These include verbal attacks on judges, a pressure campaign against universities and the transfer of migrants to a notorious El Salvador prison as part of a broader deportation drive.

“What we’re seeing is a huge disruption in world affairs,” said Dennis Ross, a former Middle East negotiator for Democratic and Republican administrations. “No one is certain at this point what to make of what’s happening or what will come next.”

This assessment of Trump’s shakeup of the global system comes from Reuters interviews with more than a dozen current and former government officials, foreign diplomats and independent analysts in Washington and capitals around the world.

Many say that while some of the damage already done could be long-lasting, the situation may not be beyond repair if Trump softens his approach. He has already backtracked on some issues, including the timing and severity of his tariffs.

But they see little chance of a dramatic shift by Trump and instead expect many countries to make lasting changes in their relationships with the US to safeguard against his erratic policy-making.

The fallout has already begun.

Some European allies, for instance, are looking to boost their own defense industries to reduce reliance on US weapons. Debate has intensified in South Korea about developing its own nuclear arsenal. And speculation has grown that deteriorating relations could prompt US partners to move closer to China, at least economically.

The White House rejects the notion that Trump has hurt US credibility, citing instead the need to clean up after what it calls former President Joe Biden’s “feckless leadership” on the world stage.

“President Trump is taking swift action to address challenges by bringing both Ukraine and Russia to the negotiating table to end their war, stemming the flow of fentanyl and protecting American workers by holding China accountable, getting Iran to the negotiating table by reimposing Maximum Pressure,” White House National Security Council spokesman Brian Hughes said in a statement.

He said Trump was also “making the Houthis pay for their terrorism … and securing our southern border that was open to invasion for four years.”

More than half of Americans, including one in five Republicans, think Trump is “too closely aligned” with Russia, and the American public has little appetite for the expansionist agenda he has laid out, according to a Reuters/Ipsos poll completed on April 21.

HIGH STAKES
At stake, say experts, is the future of a global system that has taken shape over the past eight decades largely under US primacy. It has come to be based on free trade, rule of law and respect for territorial integrity.

But under Trump, who has been scornful of multilateral organizations and often views global affairs through the transactional lens of a former real estate developer, that world order is being shaken up.

Accusing trading partners of “ripping off” the US for decades, Trump has set in motion a sweeping tariffs policy that has roiled financial markets, weakened the dollar and triggered warnings of a slowdown in worldwide economic output and increased risk of recession.

Trump has called the tariffs necessary “medicine” but his objectives remain unclear even as his administration works to negotiate separate deals with dozens of countries.

At the same time, he has all but reversed US policy on Russia’s three-year-old war in Ukraine and engaged in an Oval Office shouting match with Ukrainian President Volodymyr Zelenskiy in late February. He has warmed to Moscow and stirred fears that he will force NATO-backed Kyiv to accept the loss of territory while he prioritizes improved relations with Russian President Vladimir Putin.

The administration’s belittling of Europe and NATO, long the central pillar of transatlantic security but accused by Trump and his aides of freeloading off the US, has caused deep unease.

German Chancellor Friedrich Merz, after winning February’s election, expressed concern about European relations with the United States, saying it would be difficult if those who put “America First” actually made their motto “America Alone”.

“This really is five minutes to midnight for Europe,” Merz said.

In a further blow to Washington’s global image, Trump has employed expansionist rhetoric long avoided by modern-day presidents, which some analysts say could be used by China as justification if it decides to invade self-governed Taiwan.

With his blustery style, he has insisted that the US will “get” Greenland, a semi-autonomous Danish island. He has angered Canada by saying it has little reason to exist and should become part of the US He has threatened to seize the Panama Canal, which was handed over to Panama in 1999. And he has proposed that Washington take over war-ravaged Gaza and transform the Palestinian enclave into a Riviera-style resort.

Some analysts say Trump may be seeking to resurrect a Cold War-style global structure in which big powers carve up geographic spheres of influence.

Even so, he has offered no details on how the US could acquire more territory, and some experts suggest he may be assuming extreme and even over-the-top positions as bargaining ploys.

But some countries are taking him seriously.

“When you demand to take over a part of the Kingdom of Denmark’s territory, when we are met by pressure and by threats from our closest ally, what are we to believe in about the country that we have admired for so many years?” Danish Prime Minister Mette Frederiksen told a news conference in Greenland in early April. “This is about the world order that we have built together across the Atlantic over generations.”

COPING WITH TRUMP 2.0
Other governments are also beginning to recalibrate.

The European Union — which Trump has claimed, without evidence, was formed to “screw” the US — has prepared a range of retaliatory tariffs if negotiations fail.

Some countries such as Germany and France are looking at spending more on their militaries, something Trump has demanded but which could also mean investing more in their own defense industries and buying fewer arms from the US
With its historic friendship with the US now strained, Canada is seeking to strengthen economic and security links to Europe. This comes against the backdrop of Canada’s national elections on Monday dominated by voter resentment of Trump’s actions, which have triggered a nationalist wave and fueled perceptions that the US is no longer a reliable partner.

South Korea, too, has been rattled by Trump’s policies, including his threats to withdraw US troops. But Seoul has vowed to try to work with Trump and preserve the alliance it regards as critical against the threat of nuclear-armed North Korea.

US ally Japan is also on edge. It was taken by surprise by the magnitude of Trump’s tariffs and “is now scrambling to respond,” said a senior Japanese government official close to Prime Minister Shigeru Ishiba.

A key question is whether some governments will quietly hedge their bets by forging closer trade ties to China, Trump’s number one tariff target.

Spanish Prime Minister Pedro Sanchez met with President Xi Jinping in Beijing in early April, and China said recently it exchanged views with the EU on bolstering economic cooperation.

Beijing has cast itself as a solution for nations that feel bullied by Trump’s trade approach, despite its own record of sometimes predatory practices internationally, and is also trying to fill the vacuum left by his cuts in humanitarian aid.

Aaron David Miller, a former veteran US diplomat in Republican and Democratic administrations, said it’s not too late for Trump to shift course on foreign policy, especially if he begins to feel pressure from fellow Republicans uneasy over economic risks as they seek to retain control of Congress in next year’s mid-term elections.

If Trump holds firm, the next president could try to re-establish Washington’s role as guarantor of the world order, but the obstacles could be steep.

“What’s happening is not yet beyond the point of no return,” said Miller, now a senior fellow at the Carnegie Endowment for International Peace in Washington. “But how much damage is being done now to our relations with friends and how much adversaries will benefit is probably incalculable.” — Reuters