1 Analysts fear China financial crisis (Julia
Kollewe & Angela Monaghan in The Guardian) China’s inflation rate picked up
slightly in December but remained sharply below the official target, signalling
persistent weakness in the world’s second largest economy as a US investment
bank warned that a credit crunch in China is “highly probable” this year.
Annual consumer inflation edged up to 1.5% last
month from 1.4% in November, according to the National Bureau of Statistics,
still less than half the 3.5% target. Economists said there was a chance China
could slip into deflation, increasing the likelihood that policymakers at the
People’s Bank of China would respond by further cutting interest rates. The
Bank cut rates for the first time in more than two years in November in an
attempt to boost the economy.
“Deflation this year is definitely a risk,” said
Minggao Shen, economist at Citi in Hong Kong. “We continue to argue that
deflation provides more room for policy easing.” Economists are predicting
China’s annual economic growth slowed to 7.2% in the fourth quarter, the
weakest since the depths of the global financial crisis. Full-year growth is
expected to be below the official 7.5% target.
Chinese president Xi Jinping this week trumpeted the
“new normal”, referring to slower growth as the government tries to rein in the
credit boom – which has led to a debt of $26tn – and rebalance the economy from
its overreliance on exports and investment towards consumer spending.
2 Kerry in India to push trade ties (San Francisco
Chronicle) US Secretary of State John Kerry is in India to attend an
international investment conference and push trade ties with the giant South
Asian nation ahead of visit by President Barack Obama later this month.
Kerry will see India’s prime minister to discuss
plans for Obama's upcoming trip to participate in India's annual Republic Day
ceremonies. Kerry will also hold talks with the prime minister of the tiny
Himalayan kingdom of Bhutan, a rare cabinet-level meeting between the two
nations.
Kerry stopped briefly in Germany on Saturday to meet
with the ailing ruler of Oman, the Mideast country that's served an important
intermediary role in negotiations over Iran's nuclear program. Among the topics
they covered were the Iran talks, which are set to resume this coming week in
Switzerland; the situation in Yemen; the Syrian civil war; the terrorist
attacks in Paris; and tensions between Israelis and Palestinians.
3 Europe’s struggle with Islamism (Caroline Wyatt on
BBC) In rational, post-Enlightenment Europe, religion has long since been relegated
to a safe space, with Judaism and Christianity the safe targets of satire in
secular western societies. Not so Islam. The battle within Islam itself between
Sunni and Shia, so evident in the wars of the Middle East, and the fight
between extremist interpretations of Islam, is now being played out on the
streets of Europe with potentially devastating consequences for social
cohesion.
These latest shootings may be the work of "lone
wolves" but their consequences will ripple across Europe and provoke much
soul-searching about the failure of integration over the past decades. Immigrant
communities are already being viewed with increasing suspicion in both France
and Germany, with their significant Muslim populations, and even in the UK.
France has the largest Muslim population in Europe,
some five million or 7.5% of the population, compared with Germany's four
million or 5% of the population, and the UK's three million, also 5% of the
population.
In the UK, that unease has largely played out on the
public stage in a more peaceable manner, in the debate over "British values"
and the recent Trojan horse schools affair. The fatwa against the writer Salman
Rushdie over 20 years ago following the publication of The Satanic Verses,
forcing him into hiding for several years, was perhaps the first time the issue
impinged on British consciousness, though the attacks of 7/7 were a reminder
that extremist violence could also hit the heart of the UK.
The killings at Charlie Hebdo are a deeply unwelcome
reminder to the west that for some, mainly young radicalised men, their
fundamentalist interpretation of their religion matters enough to kill those
who offend it. As a result, across western Europe, liberally-minded societies
are beginning to divide over how best to deal with radical Islamism and its
impact on their countries, while governments agonise over the potential for a
backlash against Muslims living in Europe.
Mainstream Muslim organisations in the UK and France
have unequivocally condemned the killings, saying that terrorism is an affront
to Islam. But the potential backlash, including support for far right parties
and groups, may well hurt ordinary Muslims more than anyone else, leaving the
authorities and religious leaders in western Europe wondering how to confront
violence in the name of religion without victimizing minorities or being
accused of 'Islamophobia'.
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