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The ominous clouds looming over the US economy are growing darker, resulting in a significant drop in the stock market on Friday. Is there a storm on the horizon?

US hiring slowed to 114,000 jobs in July, the US government said on Friday, missing expectations. The unemployment rate rose to 4.3 percent - its highest level in nearly three years, when the economy was still clawing its way back from the COVID-19 pandemic, The Wall Street Journal reported on Friday. 

During a critical period when the US economy requires urgent intervention, the US Federal Reserve (Fed) faces a challenging task in determining the appropriate course of action.

US stocks, US Treasury yields and the US dollar all tumbled sharply after a far weaker-than-expected employment report for July stirred up investors' renewed fears about an economic slowdown on Friday. 

The Dow Jones Industrial Average slid more than 600 points or 1.51 percent, while the tech-heavy Nasdaq Composite dropped more than 400 points or 2.43 percent on Friday. The CBOE Volatility Index, Wall Street's "fear gauge," closed at its highest level of the year, according to the report. 

The US Dollar Index was last down 1.1 percent at 103.21 and got as low as 103.12, the lowest since March 14. It is the largest one-day percentage drop since November, according to Reuters.

US Treasury yields also tumbled, with interest rate sensitive two-year yields dropping as low as 3.845 percent, their lowest level since May 2023, and benchmark 10-year yields reaching a low of 3.79 percent for the first time since December 27, Reuters reported.

The Fed's ongoing high interest rate policy has had a significant impact on the economy. High interest rates increase the borrowing costs for businesses and consumers, which in turn suppresses investment and consumer spending. Although the Fed may start cutting interest rates later this year, the current high interest rate environment has already put pressure on the economy, and it will take time to digest this pressure.

Wage growth has slowed down, and inflation remains a problem. In December 2020, the average price of a McDonald's Big Mac in the US rose to $4.89. The latest Big Mac index in January this year shows that the average price of a Big Mac is $5.69. 

High prices have weakened consumers' purchasing power, affecting consumer spending. The reduction in consumption behaviors such as dining out reflects consumers' cautious attitude in a high-price environment. The consumption stimulating effect by the large subsidies during the COVID-19 pandemic is disappearing. 

The US is one of the largest consumer markets in the world, and an American economic downturn will directly affect global trade. Once the storm forms, exports of major trading partners such as China and the European Union will be impacted, causing disruption to global supply chains.

Especially for export-dependent economies, a decrease in demand from the US will have a significant negative impact, especially on social stability. This includes countries that have recently undertaken on factories moving from China, such as Mexico, Vietnam, India, and others. The internal social and political situations of some countries may become more unstable as a result, increasing the risk of regional conflicts.

Changes in US economic data and policies will affect the stability of global financial markets. High interest rates have already led to a continuous outflow of capital from emerging markets, but a reversal has not yet shown.

The slowdown of the US economy will drag down global economic growth. As the world's largest economy, if the US economy continues to decline, global economic growth expectations will also be revised downward, affecting the economic policies and market expectations of various countries.

The US is one of China's largest trading partners, and a decline in the US economy will continue to affect China's exports to the US. In the short term, the US is unlikely to change its trade war with China.

The decrease in orders from the US will increase competition in China's domestic market, affecting companies' profits and employment. For small and medium-sized enterprises that have long been exporting to the US, finding new export markets will also become more difficult.

Due to an increase in tariffs and supply chain adjustments, the cost of Chinese export goods is rising, which may be transferred to the domestic market, leading to an increase in import-driven inflationary pressure. The rise in production costs will also further affect business profits and economic growth.

Due to the slowdown of the US economy and the ongoing trade war, many American companies may continue to adjust their supply chains and reduce their reliance on China. Such adjustments will continue to shift toward countries like Mexico, Vietnam, and India, disrupting global supply chains and industrial chains for a long time.

Although the decline of the US economy will have a negative impact on the Chinese economy, there are also some favorable factors. Chinese companies will inevitably continue to strive to strengthen economic and trade cooperation with other countries, restructure industrial chains and supply chains to reduce dependence on the US market, but this process will be challenging.

The US will find its market and industrial power weakened, lessening its comprehensive containment of China. The "industrial alliance" that Washington is trying to build to exclude China from the high-end technology industry chain will increasingly expose cracks and will be difficult to gain full support from relevant countries due to conflicting interests.

In addition, the slowdown of the US economy may lead to a rate cut by the Fed, which will alleviate pressure on global financial markets and may have a positive impact on China's capital flows and monetary policy.

What we need to pay more attention to is the slowdown of the US economy, which will have a significant impact on the rapidly changing global geopolitics.

On one hand, this will somewhat impact the hegemony of the US. However, at present, it primarily diminishes its ability to enforce that hegemony. If the new US president implements a policy of contraction, it could potentially hinder the US' ability to intervene in and maintain security control over key regional issues.

On the other hand, the US may take more protectionist measures to protect its economy and employment, which could lead to increased global trade frictions and affect the stability of the international trade system.

The decline of the US economy will have a significant impact on the global economy and the Chinese economy, mainly reflected in trade, financial markets, and economic growth. 

After a massive typhoon recently swept through parts of eastern and southern provinces of China, a large number of oysters appeared on the beaches of coastal cities, as local residents flocked to the shores with buckets, sacks, and various tools to collect the crustaceans, the China Central Television (CCTV) reported on Monday.

According to a video clip posted by a netizen from Shenzhen, South China's Guangdong Province, a beach in Shenzhen was covered in oysters, with city residents rushing to the shores, some carrying buckets of oysters directly to their homes. Fuzhou, the capital of Fujian Province, also saw oysters piled up on the beach, according to CCTV.

Industry insiders speculated that the oysters may have come from surrounding areas where artificially farmed oysters are raised, but this is just an assumption, and the specific origin of the oysters is still under investigation, CCTV reported.

However, the action of collecting oysters after the typhoon still poses hidden risks, according to the report. Under the influence of the peripheral circulation of the typhoon, strong winds and long waves will be generated in the coastal areas, and there is a danger of being swept away by the waves if people go to the beach and fail to take due care.

The beach may also have sharp and dangerous objects including glass shards and nails after low tide, which can easily lead to foot or hand injuries. Dangerous marine organisms, including jellyfish and sea urchins, whose venom can cause serious and even life-threatening injuries, can be found in the near-shore seawater.

Because the freshness of the seafood cannot be guaranteed, some of the oysters may have been soaked in seawater for a long time. In addition, these oysters may also carry a large number of pollutants and harmful substances.

President Xi Jinping has urged central Party and state departments to improve Party building across the board and be national role models.

Xi, also general secretary of the Communist Party of China (CPC) Central Committee and chairman of the Central Military Commission, said in an instruction that the central departments should take the lead in studying and implementing the guiding principles of the third plenum of the 20th CPC Central Committee.

He said the study and implementation of the guiding principles is a "major political task of the whole Party and country at present and in the near future."

Around 200 exquisitely dressed pet cats accompanied by their owners paid their first ever visits to an exhibition on ancient Egyptian civilization held in Shanghai on Saturday evening, a pioneering practice among comprehensive museums worldwide.

The exhibition named On Top of the Pyramid: The Civilization of Ancient Egypt, co-hosted by the Shanghai Museum and the Supreme Council of Antiquities (SCA) of Egypt was opened at the Shanghai Museum on July 19, offering visitors an artistic feast from the ancient Egyptian civilization with 788 precious artifacts from Egypt to promote cultural exchanges and mutual learning between China and Egypt. The exhibition will run through August of 2025.

In ancient Egypt, the best-known revered feline goddess Bastet with the head of a cat and the body of a woman, was regarded as a symbol of protection and spirituality. The ancient Egyptians’ worship of the cat goddess aligns with modern society’s love for cats.

Starting from July 27, the Shanghai Museum will host 10 special cat-friendly sessions, titled “Fantastic Night,” on Saturday nights, allowing visitors to bring their pet cats along, a pioneering practice among comprehensive museums worldwide. The 200 tickets of the first exhibition for visitors with pets were sold out in one second and all the tickets for a total of 10 cat-friendly exhibitions were sold out in one hour.
Visitors from across the country with their fashionably outfitted pet cats gathered together at the Shanghai Museum to participate in the party thrown specially for cats, with over 400 newly unearthed artifacts from Saqqara, an important burial site in ancient Egypt, being exhibited for the first time worldwide.

The exhibition on ancient Egyptian civilization is divided into three sections, “The Land of the Pharaohs,” “The Secrets of Saqqara” and “The Age of Tutankhamun.” Cats are the highlight of “The Secrets of Saqqara” section presented at the second hall.

In 2020, groundbreaking archaeological findings at Saqqara, including the unearthed ruins of a temple dedicated to the revered cat goddess Bastet dating back to 600 BC and well-preserved relics from the subterranean tomb of the cat goddess priests, came among the top 10 archaeological discoveries in the world for the year 2020.

In addition to the cat goddess sculptures and other exhibits, the exhibition area also features a unique atmosphere created by cat-themed images projected on screens surrounding the walls. Visitors can take photos with their pet cats at a designated photo-taking area. A variety of cat-themed interactive devices are also provided at the exhibition section.
Chu Xiaobo, head of the Shanghai Museum, said that since the exhibition features many artifacts related to the cat goddess, the museum took this opportunity to create various conditions to host the cat-themed activities. Chu said that the investment in labor, material and financial resources is worthwhile as long as visitors can experience a new way of visiting the museum, reported by the Shanghai Morning Post.

Chu added that the museum encourages more people to raise pets with civilized habits and advocate for a more inclusive mindset that embraces peaceful coexistence between pets and humans, working together to create a pet-friendly city.

Before the event, many people were concerned that cats might experience stress in public places and that various incidents might occur with so many cats in one space. However, almost all the cats were well-trained and are “social butterflies” in the feline world. They were not startled by large crowds and handled the bustling scenes with ease.
According to the requirements of the museum, visitors with pets must obtain an immunization certificate for their cats from a certified veterinary hospital and present it upon entry. They should also bring their own cat carriers or pet strollers, as well as leashes and harnesses.

To ensure the event runs smoothly, the museum invited veterinarians, pet ambulances, surgeons and a pet management team to stand by on site. Museum staff have also received professional training related to cats.

Incomplete statistics show that Shanghai is home to over 1 million pet dogs and more than 1.2 million pet cats. As more and more pets enter urban public spaces, many public places have gradually become pet-friendly venues.

A domestically produced large aircraft C919 joins China Eastern Airlines' fleet in Shanghai on July 29, 2024. This is the third C919 aircraft that China Eastern Airlines received this year. The carrier now operates a fleet of seven C919 aircraft, making it the largest global operator of the plane. Photo: Courtesy of China Eastern Airlines

In the Arctic, where no trouble exists, the US busies itself with imagined concerns. The US' most skilled trick is to "cry wolf" in peaceful regions, especially when promoting the "China threat theory." The US' ultimate goal is to become the hegemonic power in every region of the world.

The 2024 Arctic Strategy released by the US Department of Defense states that "The People's Republic of China (PRC), which remains DOD's pacing challenge, seeks increasing access and influence in the Arctic." The cooperation between China and another "threat" - Russia - has "implications for the security of the US and our allies and partners." Therefore, the US believes that Finland and Sweden joining NATO is historic, bringing all like-minded Arctic states into NATO and providing and presenting new opportunities for collaboration and cooperation. In short, the US is demonizing China and Russia, forming alliances to dominate the Arctic.

"The Arctic will become one of the most important global energy channels in the future," said Li Haidong, a professor at China Foreign Affairs University. The 2024 Arctic Strategy mentions that "the Arctic may experience its first practically ice-free summer by 2030, and the loss of sea ice will increase the viability of Arctic maritime transit routes and access to undersea resources."

The warning issued by the US about the China and Russia threat in the Arctic is also because it fears that China and Russia will completely control the Arctic, a key future global energy channel, weakening the US' hegemonic position in the overall global strategy. The Arctic region is also an important area for the US to strengthen alliances through creating crises and chaos, which it cannot overlook, Li added.

From the perspective of energy development, and military strategy, the Arctic has a fatal attraction for the US, and its hegemonic power cannot ignore the Arctic.

The US, plagued by internal problems, does not have enough energy to face several global challenges, including the Arctic. Therefore, the US chooses to seek more allies who can "work" for its hegemonic power. Since Finland and Sweden joined NATO, except for Russia, the other seven countries of the Arctic Council are all NATO members. "The US wants to confront Russia through the other seven Arctic Council member countries, so the US is worried that China will help Russia confront them," a military expert told the Global Times. The US wants to share responsibility and risks, and ultimately achieve global hegemony.

However, this global hegemon shamelessly hides its selfish motives behind a seemingly "noble" purpose. 

The US Deputy Secretary of Defense Kathleen Hick said, "Our Arctic strategy will guide the Department's efforts to ensure that the Arctic remains a secure and stable region." The Pentagon's report also states that US forces "must be ready and equipped to mitigate the risks associated with potential contingencies in the Arctic."

In fact, the US' increasing presence in the Arctic is strengthening the likelihood of conflicts in the region. This is a form of rhetoric used to reduce the likelihood of conflict through words but enhance its presence in the region. For the US, the more conflicts there are, the stronger its alliance system. Regional competition crises are in line with the US hegemonic strategic needs. The US has always prioritized its hegemonic demands over the security interests of other countries and regions, a stance it has never changed.

China's research in the Arctic and cooperation with Russia have never had any exclusive arrangements with undisclosed purposes, nor have they been linked to military security. Currently, Chinese companies have become important shareholders in Russian Arctic energy and infrastructure construction, waterway development and utilization, scientific research, and exploration. Looking at the initial achievements of China-Russia Arctic cooperation, both sides have been promoting it according to market-oriented and transparent standards. China's Arctic Policy in 2018 has long been clear, emphasizing that "China's policy goals on the Arctic are: to understand, protect, develop and participate in the governance of the Arctic, so as to safeguard the common interests of all countries and the international community in the Arctic, and promote sustainable development of the Arctic."

China and Russia's cooperation should not and will not be affected by the hysteria of hegemonic countries. Instead, all reasonable cooperation between China and Russia will be viewed by the US as a "threat."

The Arctic's climate, environment, and ecosystem are ultimately challenges faced by all countries in the world, and the global challenges will not slow down or weaken due to geopolitical struggles in some countries. Instead of fabricating a "China and Russia threat in the Arctic," it is better to focus on how to govern the Arctic. The Arctic belongs to the whole world, not to any one or a few countries as a private garden.

SAIC Anji Splendor, a second world's largest clean energy-powered ro-ro vessel built by the China State Shipbuilding Group, was handed over to SAIC Motor Corp on Tuesday, forming a dual-vessel fleet in promoting China's cars exports. 

The vessel will reportedly set sail on Thursday to Europe by stopping at Lianyungang in East China's Jiangsu Province carrying China-made cars, and forming a regular dual-vessel fleet with its operating sister vessel SAIC Anji Sincerity on the China-Europe shipment route, the China News Agency reported. 

The newly delivered ro-ro vessel has total length of 200 meters, width of 38 meters and height as 13-floor-building. It has 7,600 parking slots and over 40,000 tons of displacement, said the company on Wednesday. 

From January to June this year, China's car exports totaled 2.793 million units, increased by 30.5 percent year-on-year. Among them, new-energy vehicle exports reached 605,000 units, an increase of 13.2 percent year-on-year, data from China Association of Automobile Manufacturers revealed.

Multiple Chinese automakers are mapping out their own plans for global car transporting networks to meet the rising demand. 

The SAIC Anji Logistics has formed a global fleet comprising with 32 car carriers and is operating seven international routes to Southeast Asia, Mexico, west coast of South America and Europe, the company said.

On July 10, 2024, COSCO Shipping Specialized Carriers CO's first batch of LNG dual-fuel powered ro-ro vessel set sail from Xiamen in East China's Fujian Province, transporting about 4,800 cars produced by BAIC Group, BYD and Chery to Europe, empowering global green transition, according to the China Media Group. 

Editor's Note:

Despite Western attempts to downplay China's economic prospects, the country is resolutely forging ahead with its ambitious reform agenda, following the just-concluded third plenary session of the 20th Communist Party of China (CPC) Central Committee. The plenum outlined a detailed roadmap for China's economic trajectory over the next decade, aiming to further deepen reform comprehensively to advance Chinese modernization and counter biased narratives through substantial achievements.

In an exclusive interview with Global Times reporter Ma Tong (GT), Alexander Lomanov (Lomanov), deputy director for scientific work at Primakov National Research Institute of World Economy and International Relations, Russian Academy of Sciences, emphasized the resilience of the Chinese economy despite increasing external pressures and underscored the crucial role of CPC leadership in ensuring the success of the country's reforms.

GT: According to your observations on China, how do you assess the significance of the third plenary session of the 20th Communist Party of China (CPC) Central Committee for China's economic development and reform over the next decade, particularly amid increasing global uncertainty and China's ongoing economic transformation and upgrades?

Lomanov: The plenum was held against the background of a positive economic outlook. China's economy will grow by at least 5 percent this year. The problem is how to extend this favorable trend of sustainable growth for a long period. The key topic of the plenum was the discussion of the main economic policies that can lead China to build a high-standard socialist market economy by 2035.

The external environment for China's economic development has deteriorated. The outside pressure is increasing. This is an unfavorable situation that cannot be ignored. It is necessary to acknowledge that the Western developed countries will continue the policy of protectionism, destruction of production chains, and creation of technological barriers. The causes of decline in the inflow of foreign investment are rooted not so much in the economy as in the West's policy of unhealthy competition and containment.

In the forthcoming decade, China will have to combine the policy of protection of national economic security with maintaining a high degree of openness to the outside world. It is obvious that China will have to develop key advanced industries and scientific innovations on its own without relying too much on foreign resources, but also without refusing to use them. China will have to improve its global competitiveness. For this purpose, it will be necessary to create new technologies and new production facilities, and to ensure the inflow of investment.

GT: How do you evaluate the role of CPC's leadership and institutional advantages in China's economic achievements and their contribution to further development?

Lomanov: The CPC's policies have ensured the success of economic reforms. Now this success must be protected from unfavorable external influences. The CPC's ability to correctly assess the situation in the economy, proceed from the interests of the people and defend these interests with all its strength is particularly important. Only a unified centralized leadership of the CPC will make it possible to organically combine national security and economic development without mutual conflict between these goals. 

There is a lot of talk in the West about how to reduce the "overcapacity" of the Chinese economy. In fact, it is a question of how to stop China's development and limit the presence of Chinese products in world markets in order to protect the West's economic dominance. Some foreign experts frankly say that the more success China achieves in mastering new technologies and creating new industries, the more pressure the West will apply.

The West is misguided and will ultimately harm its own economy. However, it should be assumed that this policy toward China will not change in the coming years. Rather, it is likely to continue with modifications over the coming decade. China has no unlimited resources and no margin for strategic error. Therefore, the top-level design in economic policy, which only the CPC leadership can provide, is very important.

GT: What is your take on the plenum's role in advancing Chinese modernization and reinforcing confidence in its economic development?

Lomanov: To formulate updated priorities for economic development, new breakthroughs in reform theory will be required. To guarantee the successful advancement of Chinese modernization, the legal institutions of the market economy will need to be strengthened. They are the key source of business confidence and activity.

The main aspects of Chinese modernization remain unchanged. These are ensuring material prosperity and cultural advancement for a huge population, and maintaining a reasonable balance between economic development and environmental priorities. Despite growing pressure from the West, we can be sure that China will never use war and neocolonial plunder as instruments of its development. However, if China wants to modernize, it will need to increase its willingness to fight for its legitimate national interests.

The long-term success of Chinese modernization is linked to the trend of multipolarization of the world. China's economic development creates favorable prerequisites for the creation of a new type of international relations based on the principles of equality and mutual respect, free from intimidation and pressure. China needs to expand the circle of new partners that are ready to cooperate under these principles.

It will not be easy to remain committed to a policy of openness to the outside world in a situation where other countries are "decoupling" from China behind high fences. China needs to continue to move forward on the path of reform to address this challenge.

The ninth review of China's trade policies and practices by the World Trade Organization (WTO) concluded on Friday in Geneva, Switzerland. Throughout the session, the Chinese delegation, led by Vice Minister of Commerce Li Fei, actively and comprehensively addressed concerns raised by WTO members about China's economic and trade policies, firmly refuting any unfounded accusations.

During the review, which spanned from Wednesday to Friday and featured statements from 71 WTO members, the Chinese delegation staunchly defended its position, refuting false allegations over "overcapacity" and "economic coercion."

The Chinese side also emphasized that its subsidy policies comply with WTO regulations and attributed the success of Chinese companies to market competition rather than government subsidies.

Attending members lauded China's significant achievements in reform and opening-up, as well as its substantial contribution to the WTO. They also expressed willingness to further deepen economic and trade relations with China, and conveyed high hopes for China’s role in driving global economic recovery, fostering practical cooperation with developing nations, and upholding the multilateral trade system, the Xinhua News Agency reported.

China also highlighted its contribution to the global green and low-carbon transition and its role in tackling climate change with its new energy products. Despite the rapid growth in the supply of new energy products, they still fall short of global demand, negating claims of "overcapacity." The notion of "economic coercion" was also dismissed as it has never been and will not be a part of China's trade policy, the Chinese delegation emphasized.

Data from the China Passenger Car Association shows that from January to May 2024, global car sales reached 35.66 million units, with new-energy vehicles accounting for 5.85 million units, equaling only 16.4 percent of the total car sales, indicating substantial room for growth. 

China's new-energy passenger vehicles have grown faster than the global average, with the country’s global market share exceeding 64 percent in the first five months of 2024, significantly boosting the global green transition.

Additionally, China criticized some member states for exerting long-arm jurisdiction, setting control lists, and arbitrarily sanctioning enterprises and individuals of other members, identifying these actions as the real sources of economic coercion.

Trade policy reviews are one of the main functions of the WTO. The reviews are a crucial mechanism for transparency, where members can question each other’s trade policies and express concerns, allowing for a better understanding of policy directions and commitments. According to WTO rules, members whose trade volumes rank among the top four globally are reviewed every two years.

The China Securities Regulatory Commission (CSRC), the top stock market regulator, announced on Tuesday that starting on Wednesday, applications for securities relending, a tool used for short-selling, would be suspended, in another step to stabilize the capital market.  

In a separate announcement on its website, the CSRC also said that it has significantly curbed computer-driven programmed trading and vowed to expedite the roll-out of more pragmatic measures to strengthen regulation of programmed trading so as to reduce its adverse impact on the capital market. 

Chinese regulators have stepped up curbs against activities that negatively impact the stock market, and the new steps will further help to lift investors’ confidence and stabilize the capital market, analysts said. 

In the announcement on Wednesday, the CSRC said that the move to suspend new applications for securities relending was aimed at effectively responding to investors’ concerns and maintain the stable operation of the market, after fully evaluating the current market situation. The new adjustment will “help prevent operational risks and maintain the stable and orderly operation of the market,” the CSRC said.

While new applications for securities relending will be suspended starting on Thursday, existing contracts are allowed to continue until the end of September, according to the CSRC. In addition, the minimum margin requirement ratio for securities relending will be raised to 100 percent from the current 80 percent, starting on July 22, while the ratio for those involving private securities investment funds will be raised from 100 percent to 120 percent.

The CSRC said that in response to investors’ concerns, it has taken a series of measures to strengthen regulations for securities relending since August 2023, including a continuous crackdown on illegal activities in the area, which has resulted in a significant drop in the overall scale of securities relending. 

According to Xu Kang, chief financial industry analyst at Huachuang Securities, since the beginning of the year, the market scale of securities relending has dropped from 69.2 billion yuan ($9.51 billion) to 31.8 billion yuan.  

“This will help boost market confidence to a certain extent,” Xu said in a note. “The suspension of securities relending and the overall increase in the securities relending margin ratio will help to boost market sentiment,” Xu added.

In another major step to stabilize the stock market, an official with the CSRC said on Wednesday that the regulator’s curbs against programmed trading have seen remarkable initial success and more measures will be taken to further regulate programmed trading.  

According to the official, as of the end of June, there were more than 1,600 high-frequency trading accounts in the market, a drop of more than 20 percent during the year, and trading activities that meet abnormal transaction monitoring standards have dropped by nearly 60 percent in the past three months.

Going forward, the CSRC will accelerate the introduction of more pragmatic measures to further strengthen regulation of programed trading, reduce the negative impact of programmed trading, and effectively maintain market transaction fairness, the official said.

The announcements came after trading closed on Wednesday. Chinese stocks closed lower, with the Shanghai Composite Index falling 0.68 percent, while the Shenzhen Component Index lost 0.1 percent.