Business

China revamps lending initiative to developing countries as it reins in risk on November 7, 2023 at 5:30 pm Business News | The Hill

Published

1 year ago

November 7, 2023

China is revamping the Belt and Road Initiative that pumped billions of dollars in grants and loans into developing countries over the last 10 years, as it attempts to rein in the risks that plagued its earlier investments, according to a new report released on Monday.

The Asian nation has shifted its attention to reducing the risk of not being repaid, its exposure to environmental, social or governance (ESG) factors and potential damage to its reputation in the developing world, the report from AidData, a research lab at William & Mary, found.

“Beijing has launched a far-reaching effort to de-risk the (Belt and Road Initiative) by refocusing its time, money, and attention on distressed borrowers, troubled projects, and sources of public backlash in the Global South,” the report said.

“It is learning from its mistakes and becoming an increasingly adept international crisis manager,” it added.

With more than half of its loans now in repayment, China is facing the fallout from the lack of guardrails in place at the outset of its Belt and Road Initiative. About 19 percent of borrowers had fallen behind on repayments as of 2021, up from 7 percent in 2000, according to the report.

As a result, Beijing is shifting away from infrastructure project lending — once a central feature of its initiative — and moving toward emergency rescue lending to ensure its borrowers “have enough cash on hand to service their outstanding infrastructure project debts,” the report said.

It has also sought to put in place more stringent ESG safeguards, with the risk prevalence rate in the country’s infrastructure project portfolio falling from 63 percent in 2018 to 33 percent in 2021, according to the report.

This shift comes as the U.S. and its allies have ramped up their own lending to the developing world in recent years in an effort to compete with Beijing. In 2021, America committed $61 billion to low- and middle-income countries, narrowing the gap with China.

Beijing has also pulled back slightly on its investments to developing countries. It committed $79 billion to low- and middle-income countries in 2021, down from an average of $117 billion a year between 2013 and 2017.

However, the report warned that Western nations don’t “seem to have a good understanding” of the recent changes China has made to its Belt and Road Initiative.

“Consequently, those who make and shape policy in Washington, London, Paris, Berlin, Tokyo, Rome, and Ottawa increasingly run the risk of competing with a version of the BRI that no longer exists,” the report noted.

Business, International, News, Technology, belt and road initiative, China, esg China is revamping the Belt and Road Initiative that pumped billions of dollars in grants and loans into developing countries over the last 10 years, as it attempts to rein in the risks that plagued its earlier investments, according to a new report released on Monday. The Asian nation has shifted its attention to reducing…

Business

How Your Lipstick, Lunch & Underwear Predict a Recession

Published

1 week ago

April 17, 2025

Bolanle Media Staff

As economists scrutinize GDP reports and unemployment rates, unconventional metrics—from cosmetics to undergarments—offer startlingly accurate glimpses into economic health. These “unofficial indicators” reveal how consumer behavior shifts under financial strain, often foreshadowing downturns before traditional metrics do.

Lipstick Effect: Small Luxuries in Hard Times

The lipstick index, coined by Estée Lauder’s Leonard Lauder, tracks rising sales of cosmetics during recessions. When budgets tighten, consumers skip big-ticket indulgences but splurge on affordable treats like lipstick. During the 2001 post-9/11 downturn, U.S. lipstick sales jumped 11%, while the Great Depression saw a 25% spike in cosmetics sales.

Today, brands like MAC and Sephora report 15% growth in cosmetics sales, with drugstore options gaining traction as consumers prioritize affordability. This trend reflects the “moisturizer index” observed during COVID-19, where skincare replaced lipstick due to mask mandates, but the core principle remains: small luxuries thrive when wallets shrink.

Men’s Underwear: A Bare Necessity

The men’s underwear index, popularized by Alan Greenspan, signals trouble when sales drop. Men postpone replacing worn-out undergarments until finances stabilize, making it a reliable recession harbinger. Recent data shows a 6% decline in sales, suggesting consumers are stretching non-essentials.

Lunch Habits: Brown-Bagging It

Economic anxiety reshapes meal choices. More workers now bring lunches from home, opting for cost-saving over convenience. Similarly, the snack index reveals downturns through reduced purchases of items like Chex Mix and pet treats—General Mills reported a 5% sales drop, linking it to weakened consumer confidence.

Beer and Beauty: Downgrading Discretionary Spending

The beer index highlights a shift from craft brews to budget six-packs during recessions. “Craft beer sales are significantly down,” notes supply chain expert Jackington, as social drinking becomes a lower priority. Meanwhile, beauty routines adapt: “recession blonde” trends (skipping salon touch-ups) and press-on nail searches (up 10%) reflect thriftiness3.

Why These Indicators Matter

These metrics capture real-time consumer sentiment often missed by lagging economic reports. While not foolproof, they underscore how financial strain permeates daily life—from skipped haircuts to stretched underwear. As economist Kevin Shahnazari explains, “Affordable indulgences provide psychological comfort without breaking the bank”.

In an era of uncertainty, the economy’s pulse beats in the details—proving that sometimes, the most telling signs are hiding in plain sight.

Bolanle Media covers a wide range of topics, including film, technology, and culture. Our team creates easy-to-understand articles and news pieces that keep readers informed about the latest trends and events. If you’re looking for press coverage or want to share your story with a wider audience, we’d love to hear from you! Contact us today to discuss how we can help bring your news to life

Business

Chinese Business Owners Face Uncertainty as Trade War Escalates and Growth Slows

Published

1 week ago

April 17, 2025

Bolanle Media Staff

The deepening U.S.-China trade war has plunged Chinese entrepreneurs into a crisis of confidence, with retaliatory tariffs exceeding 145% on key exports and domestic economic pressures compounding fears of prolonged stagnation. While China reported stronger-than-expected GDP growth of 5.4% in Q1 2025, analysts warn this pre-dates the full impact of America’s sweeping tariffs enacted in April—a move that threatens to derail export-driven sectors and exacerbate existing vulnerabilities.

Trade War Fallout
The U.S. has imposed a 145% tariff on Chinese goods, prompting Beijing to retaliate with 125% duties on American imports, including agricultural products. This escalation has disrupted supply chains globally, with Chinese manufacturers reporting canceled orders from U.S. buyers and halted shipments across industries like furniture, toys, and apparel. Hong Kong-based exporters, such as Gaoxd, have seen sales drop by 20% this year, with owners citing a “wait-and-see” paralysis among clients.

Domestic Challenges
Despite the Q1 growth surge, China faces a fragile recovery:

Real estate crisis: Property market indicators remain weak despite minor price rebounds.
Consumer hesitancy: Domestic demand lacks momentum, with households reluctant to spend amid deflationary pressures.
Manufacturing strains: Factories report minimal room to further cut costs, with relocation to Southeast Asia hindered by underdeveloped supply chains.

Strategic Shifts
Beijing is aggressively diversifying trade partnerships, reducing U.S. export reliance from historic highs to 14.7% in 2024. President Xi Jinping’s recent Southeast Asia tour emphasized China’s pitch as a “reliable” alternative to U.S.-led trade frameworks. Meanwhile, state media insists China has “valuable experience” from eight years of trade tensions, framing the conflict as an existential struggle against Western decline.

Outlook
While China’s $586 billion fiscal stimulus and focus on high-end manufacturing aim to offset trade losses, analysts caution that the tariffs’ delayed effects could erase Q1 gains. With U.S. imports of Chinese goods effectively halted by prohibitive tariffs, businesses face a bifurcated future: adapt to decoupled markets or risk collapse in a prolonged standoff between the world’s largest economies.

As economist Vina Nadjibulla notes, the critical question is which economy can endure more pain—a calculus now keeping Chinese business owners awake at night.

Business

The Impact of Stock Market Issues on Cinema

Published

2 weeks ago

April 9, 2025

Bolanle Media Staff

The film industry, like many others, is closely tied to the economy. When the stock market faces challenges, Hollywood and the broader cinema world feel the effects in several ways. Let’s explore how stock market issues are influencing movies and the people who make them.

1. Delays in Movie Releases
When there’s uncertainty in the stock market, studios often delay movie releases. Why? Because changes in release dates can make investors nervous. A study found that when studios announce delays, stock prices tend to drop, especially for big-budget films. This shows that investors worry more about rising costs than whether a movie will succeed at the box office.

2. Strikes and Production Shutdowns
Recent strikes by writers (WGA) and actors (SAG-AFTRA) have caused many movies and TV shows to stop production. These strikes happened because workers wanted better pay and job security. Without actors to promote their work, studios have delayed big releases, which could hurt their profits. For example, some Christmas movies might be pushed back if stars can’t attend premieres or interviews.

3. Advertising and Budget Cuts
Economic problems often lead to cuts in advertising budgets. Since movies rely heavily on ads to attract audiences, this can hurt ticket sales. Studios may also reduce spending on new projects, meaning fewer movies get made. Families feeling the pinch might also cut back on trips to theaters or cancel streaming subscriptions.

4. Licensing and Merchandise Challenges
Hollywood doesn’t just make money from tickets—it also earns a lot from licensing deals (like toys or clothes based on popular movies). However, rising costs for these products could mean fewer deals, reducing income for studios like Disney.

5. Opportunities During Tough Times
Interestingly, movie theaters often do well during economic downturns. When people can’t afford expensive vacations or concerts, they turn to movies as a cheaper form of entertainment. However, with ticket prices for premium formats like IMAX rising, theaters might need to offer discounts to keep audiences coming.

Looking Ahead
The film industry is facing a tough moment with strikes, stock market instability, and economic uncertainty all happening at once. While this creates challenges like delayed releases and reduced budgets, it also opens doors for smaller films and affordable entertainment options. As Hollywood navigates these issues, 2026 is being seen as a critical year for recovery.

In the meantime, both studios and audiences are waiting to see how these financial shifts will reshape the future of cinema.