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After 3 years of Covid, CNN went deep into rural China for Lunar New Year. Here’s what we found and how officials tried stopping us | CNN

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After 3 years of Covid, CNN went deep into rural China for Lunar New Year. Here’s what we found and how officials tried stopping us | CNN


Guizhou
CNN
 — 

In China’s southern Guizhou province, there’s a tiny village within the southeast nook, nestled deep inside the mountains, referred to as Dali. A wall of lush inexperienced timber and bamboo encompass this village of about one-thousand individuals, who’ve lived in wood houses with gray-tiled roofs for hundreds of years.

It’s the Lunar New 12 months, and through the daytime, the doorways are hardly ever closed. Individuals right here say they’re all family, and the village is like one massive household. Nearly everybody shares the surname Yang, apart from a couple of households with the final identify Li or Wang. Most individuals I met requested me to name them “Xiao Yang” or “Little Yang.”

We walked by a raucous group of younger adults, sat shoulder-to-shoulder on tiny stools round a brief desk packed to the brim with meals. The lads smoked and ate on the identical time, throwing tangerine peel and the hulls of sunflower seeds on the bottom. I defined to them I used to be a overseas journalist, attempting to inform the story of how they have a good time the New 12 months.

“We have a good time by consuming!” one man on the desk mentioned, earlier than I might end my clarification. They invited me to hitch in, squeezing yet one more stool across the desk. A person handed me a plastic bowl, and one other began filling it with their home made 60 proof rice liquor, pouring it from an enormous clear plastic bottle that regarded like a gasoline container.

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A lady mentioned all of them labored in factories within the cities. This was the one time a lot of them might see their kids.

“We go wherever we will make cash,” the person subsequent to me mentioned. He usually returns dwelling just for the Lunar New 12 months, however for the previous three years has discovered doing even that has develop into exhausting on account of Covid restrictions.

“Earlier than, once we needed to go dwelling, we couldn’t, he mentioned. “However now the nation is open, we will all go dwelling. We’re glad.”

Dali Village is sort of a time capsule, untarnished by the skyscrapers and air pollution of recent China. Its isolation has preserved its individuals’s lifestyle for hundreds of years. Automobiles can’t drive into the village or slot in its slender, cobblestone streets. The village’s white noise is roosters crowing, pigs squealing, and the occasional increase or pop from kids setting off fireworks.

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All of the inhabitants are Dong individuals, one in every of China’s 56 formally acknowledged ethnic minorities. They’ve their very own language, custom and tradition. Lots of the girls, particularly the aged, put on indigo shirts embroidered across the hem, with their shiny hair twisted right into a bun round a red-toothed comb. The tempo of life is unhurried. Ladies weave colourful ribbons on the streets. Villagers wash greens in a stream that cuts by the village. Youngsters run across the wood drum tower with out their mother and father in sight. Aged males amble into the rice paddy fields carrying their pet birds in cages.

Dali Village, Guizhou, China.

The bases of the mountains are chiseled with stepped rice paddies. Greens blanket the land close by. Rooster and geese roam on practically each avenue. Pigs lay inside wood pens.

Dali is an enclave inside Guizhou, a mountainous province, stuffed with craggy, steep, and winding roads. The one option to get there’s to stroll or drive up a giant mountain, then down into the valley. Dali’s remoteness means individuals right here, over the centuries, have realized to be self-sufficient. They develop or increase most of their very own meals. Some households have vegetable patches subsequent to their houses or plots of land nearer to the mountains.

It’s pastoral and idyllic in some ways, however Dali Village can’t escape the financial realities of modernity.

A younger lady, Xiao Qing, invited us into her dwelling. Her mother and father and grandfather had been carrying winter jackets, sitting round a small coal fireplace on the bottom to remain heat. The room, concrete from ground to ceiling, was sparse inside, with a bunch of candy potatoes hung from the ceiling. Her father is just in his mid-40s, however his face is tan and weathered with wrinkles from years of exhausting labor. Her dad labored in factories whereas she was rising up. After Xiao Qing graduated from highschool, she took the baton, went to the factories, and have become the household breadwinner.

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Xiao Qing speaks to CNN in her home in Dali Village.

“I’ve been very homesick working away from dwelling,” Xiao Qing mentioned. “Staying at dwelling means farming. Younger individuals like us don’t get a lot earnings from farming.”

Solely every year, through the Lunar New 12 months, does she return from work in a cosmetics manufacturing facility, 500 miles away in Guangdong province. Her story is echoed throughout all of the households in Dali Village, and throughout rural China. Giant swaths of China’s countryside are stuffed with the aged and younger children, with many of the working-age adults gone. They’re working in far-away factories as low-cost labor powering China’s standing because the world’s largest producer, whereas sending their earnings again dwelling.

One villager places it this fashion: leaving dwelling to go distant is only a reality of life, there’s no different alternative for survival.

We visited a younger couple on the opposite facet of the village, who reside in a wood dwelling on the facet of the mountain. They each work in factories in Guangdong province, making circuit boards.

His two younger kids, a boy and lady, had been leaping on the sofa behind us through the interview. His daughter, carrying a purple howdy kitty sweater, stored swinging her arms round her dad’s shoulders to offer him a heat embrace.

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He mentioned his son might barely stroll when he final noticed him, however now, he’s operating round. He didn’t return for the vacations till a couple of days in the past, after midnight. “However my daughter, she insisted on ready for me out right here. Once I walked by the door, I hugged her, however she had already fallen asleep.”

A marketplace selling Lunar New Year decorations in Liping county, Guizhou province, China.

I didn’t see anybody carrying a masks in Dali Village, apart from the few vacationers coming by, nor did I see any Covid antigen assessments, or a lot medication mendacity round individuals’s houses. The sense of normalcy was shocking.

In Beijing, the place I had simply flown in from, many individuals had been nonetheless carrying masks exterior. Once I visited hospitals within the metropolis weeks earlier than, they had been overflowing with aged sufferers. Frequent chilly and fever medication had bought out. Crematoriums had been swamped. Households informed me they needed to wait days to cremate their family members.

After we first arrived in Guizhou, we landed in Tongren, a metropolis a couple of four-hour drive from Dali. Our taxi driver mentioned his household within the countryside had all been contaminated with Covid. He mentioned many individuals he knew died at dwelling, as a result of they couldn’t afford to go to the hospital.

I attempted to search out out if Dali Village’s remoteness has shielded it in any method from China’s wave of Covid instances and deaths.

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There was one funeral ceremony throughout our keep in Dali, however all of the villagers mentioned the deceased was a person in his 90s who died of outdated age.

Everybody I interviewed on digital camera mentioned nobody round them had been contaminated. A number of aged villagers I spoke to mentioned they had been absolutely vaccinated and hadn’t gotten sick. However I bumped into a bunch of younger individuals, consuming scorching pot exterior, who mentioned in any other case. I squatted subsequent to them across the desk, since there have been no stools left. One in every of them, it turned out, is a physician at a hospital in a close-by metropolis.

“Nearly all villagers have been contaminated. They’d signs,” he informed me, as he picked a bit of meat out of the boiling pot of soup along with his chopsticks.

I requested him if the villagers knew whether or not it was Covid, or if they simply thought it was a chilly.

“It’s like a chilly anyway,” one other man interjected.

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The physician replied, along with his again turned to the digital camera the entire time, “They only haven’t been recognized, however the signs match Covid. They only by no means examined.”

Dali Village has perserved its people's way of life for centries.

A gaggle of six authorities officers greeted us the second we arrived in Dali Village. It’s frequent for native officers to maintain an in depth eye on overseas journalists of their jurisdiction, however they had been particularly persistent on this village, following our each transfer.

No less than 4 of them booked rooms in our identical lodge, or close by. Regardless of how early we woke they’d be ready within the foyer, see us strolling down the steps and comply with us.

We might usually see them whispering to villagers quickly earlier than or after we interviewed them. They introduced in one other native official who spoke the Dong language, stopping any of us from understanding her conversations with villagers. The entire officers refused to obviously reply what their goal was, or what they had been telling the villagers.

It shortly grew to become obvious I’d be unable to additional examine the Covid scenario within the space, with the officers hovering over us. Therefore, we drove out of the village to a public hospital within the neighboring county about two hours away, hoping the minders wouldn’t comply with and that folks could be extra comfy talking freely.

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The hospital’s fever clinic was nearly solely empty. The principle hospital space had extra individuals, however it wasn’t packed. It was a stark distinction to the photographs of overcrowded hospitals in main cities throughout China.

I needed to know: had the height of Covid infections already handed on this space?

We went to a different ground of the hospital and requested a nurse if the place had been packed a couple of weeks in the past. “It’s at all times packed and busy right here,” she replied. She couldn’t say something extra as a result of a physician got here by and interrupted, ending our interview.

One lady, a affected person’s member of the family, informed me exterior the hospital that everybody round her already had been contaminated with Covid after which recovered.

Quickly after, we realized we had been being adopted. A person approached us exterior the hospital and mentioned he was a part of the propaganda division.

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We confirmed him our press playing cards and informed him we had been right here to report on the Covid scenario and Lunar New 12 months festivities. We bought within the automobile and left.

At a village clinic a 30 minute drive away, the identical man and one other lady adopted us in.

Government minders follow CNN into a village clinic.

We noticed them say one thing to the employees there, then all of a sudden nobody would converse to us, so I went exterior and requested close by shops if they’d seen traces exterior the clinic a couple of weeks in the past. Each time, the federal government minder would interrupt the dialog to talk to the interviewee, clearly telling them to not say something.

The federal government officers once more appeared on the subsequent hospital we visited. This time, there have been extra of them. I attempted confronting them, asking why they had been following us. Anytime I spoke to them, they’d instantly stroll away and ignore me. Then, the second I turned away, they’d proceed tailing us, whereas obstructing our reporting.

We drove to a close-by market to seize lunch. The roads had been lined with tents promoting a kaleidoscopic array of Lunar New 12 months items. A number of shops had been promoting bins of firecrackers stacked from ground to ceiling, with big purple banners and lanterns on the market held on the surface of the tents. Dwell chickens, frogs, and fish had been on sale, together with contemporary produce. When you bought a rooster, they’d snap its neck on the spot.

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On the nook of a avenue, a bunch of siblings had been ready in line for skewered, roasted meat and greens. We approached them, recognized ourselves as journalists working for a overseas media community referred to as CNN, and requested if anybody would converse to us about their Lunar New 12 months expertise.

The younger lady agreed. I had solely requested her a couple of questions on how excited she was to be again and if it was exhausting to e book a practice ticket dwelling, when a authorities minder all of a sudden walked into the center of the interview, whereas we had been nonetheless filming, and grabbed her away, abruptly ending our interview. He pushed her and her household away, then left them alone.

We left and headed to a number of extra hospitals. However with the minders following and interfering, we couldn’t get responses from anybody.

A government minder interrupts CNN's interview and pushes the interviewee away.

China’s CDC says the Covid peak throughout the nation has handed for the reason that authorities deserted its zero-Covid coverage.

It says that 80% of the inhabitants, or greater than 1.1 billion individuals, have already been contaminated. Well being authorities declare that visits to clinics for fever and Covid hospitalizations have declined since their peaks in late December and early January.

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Specialists say China’s inhabitants had nearly no underlying pure immunity earlier than reopening, whereas current Chinese language vaccines provide restricted safety towards an infection from Omicron, so one huge wave ended up sweeping over the entire nation – hitting rural and concrete areas nearly concurrently.

What makes China totally different is that Covid “can unfold like wildfire with none obstacle”, mentioned Yanzhong Huang, a senior fellow for world well being on the Council on Overseas Relations. “The pace and scale of the unfold challenged typical knowledge. Nearly on the identical time Covid was wreaking havoc in city areas, we noticed the fast enhance of infections in lots of components of rural China.”

However Huang provides that the federal government has not launched correct knowledge on the dimensions and toll of the outbreak. The Chinese language authorities says greater than 72,500 individuals with Covid died in hospitals between December 8 and January 19, however the World Well being Group has recommended these numbers “under-represent the true impression of the illness.”

In rural areas, specialists say there’s seemingly much more silent struggling. Extra individuals seemingly died at dwelling as a result of they couldn’t afford, or had been unable, to get to the hospital.

Again within the village, we had been greeted by the sounds of squealing pigs, on the brink of be slaughtered. This is a vital a part of the Lunar New 12 months custom in Dali. Many years in the past, for many countryside households, this was the one time of the 12 months after they might afford to eat meat.

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Now, it’s about bringing the household collectively to feast. A number of the households increase the pigs themselves, others purchase them from sellers. I got here throughout a truck of squealing pigs proper on the village entrance. With a string tied across the pig’s hoof, a person tugged the pig out of the truck, utilizing his entire physique weight to tug it by the streets. All of the whereas, the pig was screaming and utilizing all of its may to remain put. The person used a keep on with hit the pig, coaxing it to maneuver.

A villager drags a pig through the streets at the entrance of Dali Village.

A lady subsequent to the truck was watching, unfazed. She informed me she was the one who bought him the pig. Now that persons are allowed to assemble and barbeque collectively, her enterprise is booming.

Households choose a day shortly earlier than the Lunar New 12 months vacation to slaughter the pig, both themselves or by hiring a butcher. They instantly smoke a part of the meat to make “la rou” or cured pork stomach, which might final all of them 12 months, however a portion of the meat is for feasting as quickly because it’s cooked.

A villager we befriended over a number of days invited us to her dwelling for his or her post-slaughtering feast. The additional pig carcass was laying in the midst of her dwelling, divided into quite a few big steel bowls. Her home was full of family, seated round two tables.

San Jie is in style within the village. She’s in her 50s, spunky, extroverted, and at all times smiling. All through the week, we noticed family and pals always coming out and in of her dwelling, both to borrow her instruments and experience, or just to say hello. Teams of family incessantly stroll into her dwelling with big wood buckets of piping scorching sticky rice, harvested from the paddy fields close by. They’d dump the rice right into a machine in her dwelling that turns it right into a paste to make ciba, a conventional sticky rice cake. Each time we bumped into her, she would insist we come inside to eat and open up her greatest vats of home made liquor.

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When San Jie was youthful, she labored in a manufacturing facility stitching denims. Now, she makes use of her expertise to make garments and materials for villagers. She confirmed me the garments they put on for various events, how they intricately wrap their hair, and the way they adorn heavy silver neck items and ornaments.

San Jie shows Selina traditional Dong minority clothes and jewelry.

I touched a bit of intricately woven black and white fabric greater than a meter lengthy. She mentioned making only a skinny, inch-long strip of that fabric takes her greater than a day of stitching.

I requested San Jie and the opposite aged feminine relations if their kids know methods to make these garments. Laughing, they mentioned their kids wouldn’t have the endurance, however San Jie mentioned she has taught her youthful daughter how.

“I informed my daughter it’s too tiring, too exhausting. My again and neck harm. It’s all to your training,” San Jie mentioned. “My daughter mentioned, ‘Mother, let me provide help to’, so she realized.”

Her elder daughter works in a manufacturing facility in Guangdong, leaving her two toddlers in her care. Her youthful daughter, who’s in highschool, stood close to the doorway throughout our entire dialog, engrossed in a cell phone recreation. San Jie mentioned she doesn’t must waste time studying outdated traditions, however as a substitute ought to deal with her research.

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We mentioned our goodbyes within the village and bought within the automobile for the lengthy drive to the airport, our tummies stuffed with sticky rice and our heads heat from rice liquor. We observed the identical automobile from earlier than was following us all the best way to the airport, and questioned how the minders in Dali would write up a report on our journey for his or her bosses within the propaganda division. They witnessed us befriend and study from the hardworking Dali villagers, who’re prepared to do no matter it takes to offer their kids a greater life.

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Video: Tanker Fire Shuts Down I-95

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Tanker Fire Shuts Down I-95

Traffic stopped on the highway as firefighters worked to extinguish the flames in Norwalk, Conn.

We’re lucky. We’re [expletive] lucky we weren’t a little closer than this.

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The clash over whether to commandeer Russia’s frozen assets

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The clash over whether to commandeer Russia’s frozen assets

At the recent gathering of G20 finance ministers in Brazil, delegates were gripped by a deep sense of unease over a pressing issue: the potential seizure or use of Russian assets frozen under the western sanctions that followed its invasion of Ukraine.

Two ministers — Saudi Arabia’s Mohammed al-Jadaan and Indonesia’s Sri Mulyani Indrawati — were among those particularly alarmed by the idea. Were G7 countries seriously preparing to do this? And had they considered the full implications of such a drastic step?

Their questions to their western counterparts cut to the heart of a fraught debate over whether hundreds of billions of euros in frozen Russian central bank assets should be mobilised to help fund Ukraine as the conflict there drags into a third year.

Doing so would deliver a financial boost with the potential to turn the war in Kyiv’s favour, argue those in support, led by the US. For opponents of the idea, such a move risks setting a dangerous precedent in international law — one that could endanger not only the interests of any country that falls out with western capitals, but also the international legal order itself.

For now, Kyiv is relying on the $61bn package of military aid approved by the US Senate on April 24 following months of political wrangling. But US President Joe Biden is pressing his allies to seek ways of tapping into the roughly €260bn of Russian reserves, with the G7 leaders’ summit in Italy next month seen as a key moment to push for progress.

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“We immobilised the assets together; we would like to mobilise them together as well,” says Daleep Singh, White House deputy national security adviser for international economics. 

Yet the topic is dividing the club of advanced economies. The Biden administration has backed calls for confiscation, as have Canada and some members of the UK government, especially its foreign secretary, Lord David Cameron. Meanwhile, Japan, France, Germany, Italy — and the EU itself — remain highly cautious, resulting in a stalemate.

Some of the most prominent sceptics are G7 central bankers who are conscious of the stabilising role that foreign exchange reserves play. European Central Bank president Christine Lagarde has warned that “moving from freezing the assets, to confiscating them, to disposing of them [could carry the risk of] breaking the international order that you want to protect; that you would want Russia to respect”.

Speaking in São Paulo in February, finance minister Giancarlo Giorgetti of Italy, which holds the G7 presidency this year, said that it would be “hard and complicated” to find a legal basis for seizing Russian state assets. His French counterpart, Bruno Le Maire, was even more trenchant, arguing that the legal foundation simply did not exist.

Mohammed al-Jadaan, the Saudi finance minister, with US Treasury secretary Janet Yellen in São Paulo in February
Mohammed al-Jadaan, the Saudi finance minister, with US Treasury secretary Janet Yellen in Brazil in February. Saudi Arabia has been lobbying against plans to seize Russia’s assets © Nelson Almedia/AFP/Getty Images

Further afield, the worry is about the precedent this would set. Countries such as Indonesia and Saudi Arabia have been lobbying EU capitals not to seize the assets, according to officials, fearing for the future of their own reserves held within the west. “They are very worried,” says one European official, adding that their main concern is: “Is our money still safe there?”

“Our international legal system doesn’t have a police force . . . it really does rest on fundamental respect for international law,” says Philippa Webb of King’s College London, author of a European parliament study on the legality of confiscating Russia’s assets.

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“The risk is that if we just start ignoring these principles, they can equally be used against us by other states and that we set a precedent that can have unintended effects down the line.”


The debate over what to do about Russian foreign reserves has been raging ever since Kyiv’s allies took the landmark step of immobilising hundreds of billions of euros following the full-scale invasion of Ukraine in 2022.

The move showed how far Kyiv’s supporters were willing to go to harm the Russian economy, with one senior US official vowing to send the rouble into freefall.

But since then the vast trove of Russian assets has been sitting inert in western financial institutions, such as central securities depository Euroclear.

To the government of Ukrainian President Volodymyr Zelenskyy, the case for grabbing the assets, the majority of which are in the EU, is clear-cut and well founded in international law.

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Kyiv itself has already confiscated the equivalent of some €366mn in Russian state assets belonging to state-owned Sberbank and the Russian state development corporation VEB.RF, using countermeasures and self-defence as legal arguments.

Column chart of Quarterly profit and tax due to Russian sanctions, Q2 2022 to Q1 2024 (€mn) showing Euroclear has made more than €5bn in extraordinary profits since the Russian invasion

Ukraine’s Iryna Mudra, deputy head of the presidential office, argues that confiscating the central bank’s assets would not be a way of penalising Russia, but rather “restoring the rightful norm” by compelling Moscow to honour an existing obligation to make war reparations. 

“It’s not just because Ukraine wants this, it’s because international law allows this and requires the states to act all together, in order to cease this aggression,” she says. 

But other governments, including those within the G7, are wary of being accused of taking any step that would amount to a violation of international law — the very thing they accuse Russia of.

“It is morally and politically absolutely sound, but legally it is not sound,” says Armin Steinbach, professor of law and economics at HEC Paris business school.

Any plan to use these assets would test the legal principle of state immunity, whereby no country can be sued by the courts of another if they do not agree it has jurisdiction over it, say some academics. “It’s a very old and well-established principle, and it’s based on the idea that all states are equal,” says Webb, a public international law professor at King’s. “Even the world’s superpowers can’t sit in judgment on a tiny island state.”

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Some European officials also worry that such a move would unleash a flurry of reparations claims relating to decades-old disputes such as those against Germany after the two world wars, as well as former colonies staking claims on former imperialist powers.

The US, however, argues there is a legal basis for outright confiscation of the assets as a lawful countermeasure to Russia’s war of aggression. It has sought to convince others that G7 countries are “specially affected” by Russia’s unlawful invasion, including through the impact on their economies, and can therefore act to make Moscow end its aggression.

The foreign aid package passed by Congress last week grants the Biden administration the right to seize Russian assets held by the US, paving the way for confiscation.

But Europeans point out it is easier for the US to adopt a hardline stance given America holds only $5bn in Russian state assets. “They have little skin in the game,” says one European diplomat. 

Christine Lagarde, European Central Bank president, in Washington last month
Christine Lagarde, European Central Bank president, in Washington last month. She has warned that confiscating Russian assets risks damaging the international order © Ken Cedeno/Reuters

While violations of international law can, in very restricted circumstances, be justified, an important condition is that the countermeasures be temporary and reversible. 

Confiscation would not fulfil that requirement, says Webb, adding that central bank assets “have traditionally enjoyed a very high level of immunity”.

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Violating this could lead to other states seizing western assets in their jurisdictions, opponents say, damaging the standing of Europe’s financial centres and creating a wild west where anything goes.

China, which opposed western plans to impose “unilateral sanctions” on Moscow in the first place, has concerns about the credibility of the international financial system if frozen assets are mobilised, says Cui Hongjian, professor with the Academy of Regional and Global Governance, Beijing Foreign Studies University.

China has pursued a de-dollarisation agenda, partly by encouraging countries to switch to Renminbi as an alternative, with so far limited success.

“It will maybe send a message to China to try to provide more guarantees for its assets abroad,” says Cui, a former director of a think-tank affiliated with the Chinese foreign ministry. “It will also maybe give some encouragement to the discussion within China about the internationalisation of the renminbi.”


Although Ukraine continues to push for an all-out seizure of Russia’s assets, G7 officials say privately that is no longer on the table. Instead, they are exploring alternative ways of extracting funding from the frozen assets.

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One idea proposed in February by Belgium, which holds about €190bn in Russian central bank reserves at Euroclear, suggested using those reserves as collateral to raise debt for Ukraine.

Under this plan, the G7 would set up a special purpose vehicle issuing debt in Russia’s name and the collateral would only be called on when the debt reached maturity.

But after initially gaining traction — US Treasury secretary Janet Yellen has touted it as an option — the Belgian plan was abandoned. The idea could leave the liability for any resulting legal claims with Euroclear, which argued the plan comes with the same challenges as full confiscation.

European countries want to steer clear of anything that appears to touch the assets themselves for fear of retaliation.

To get around this, the White House is pushing a new idea that it hopes will win the support of G7 leaders in June. This would involve releasing about $50bn of funding for Ukraine via a loan or bond secured against future profits from the frozen assets, explains Singh.

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Euroclear has already made more than €5bn in extraordinary profits after tax since the start of the war, as it reinvests stuck coupon payments and cash from maturing securities that cannot be paid out to Russia under the sanctions.

A pro-Ukraine group prepares a rocket launcher to fire towards Russian troops in the Zaporizhzhia region
A pro-Ukraine group prepares a rocket launcher to fire at Russian troops in the Zaporizhzhia region. The EU plans to use profits from frozen Russian assets to secure weapons for Ukraine © Stringer/Reuters

But the EU has a different plan for this money. Under EU proposals, set to be adopted in the coming weeks, a majority of present and future profits from Russian assets held by Euroclear will be used primarily to jointly purchase weapons for Ukraine. All the profits generated up to mid-February will be left to Euroclear to act as a buffer against legal costs and risks.

“We can think about other actions, but for now we believe that this is something that is legally supported,” said Josep Borrell, the EU chief diplomat, in an apparent rebuff to US proposals in a speech at the end of April.

Politicians, legal experts and Euroclear itself agree that using the extraordinary profits, rather than the assets themselves, is legally sound, making it far less risky than grabbing the Russian reserves.

But the EU’s plan, which needs a consensus of all 27 member states, would only generate an estimated €3bn a year, depending on the evolution of interest rates.  

Under the White House plan, however, those profits would be brought forward as rapidly as possible, with a goal of handing Ukraine tens of billions of dollars shortly after any potential deal is agreed at the forthcoming G7 leaders’ summit.

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“We are developing the option that seems to have the greatest likelihood of delivering the most impact in the shortest period of time,” says Singh. “It is really important for us that we maintain solidarity.”

The problem with that plan, for Europe, is what happens if the war ends in the near future. The debt raised against the expectation of decades’ worth of profits would need to be backed by state guarantees or by the Russian assets themselves — something that could be “complicated and costly”, says one EU official.

“If there is ever a peace negotiation and Ukraine decides to participate, there might be a situation where Russia demands its frozen assets back and in exchange agrees to make territorial concessions to Ukraine. You can’t do that if you’ve already mortgaged those assets,” says one German official.

Eurozone officials are also deeply wary of anything that could negatively affect the euro’s hard-fought gains as a global reserve currency. 

Daleep Singh, White House deputy national security adviser for international economics
Daleep Singh, White House deputy national security adviser for international economics, says that how the G7 responds to Russia’s actions will ‘have generational consequences’ © Chris Kleponis/CNP/Bloomberg

Given that most of the Russian reserves are held by EU jurisdictions, the ECB and key EU capitals argue that the euro would carry the brunt of any flight from foreign reserves triggered by an effort to tap into the assets. 

They also consider the safety of European assets still held in Russia, given that Moscow has pledged to retaliate against property held by western public and private actors held in the country if the G7 moved to confiscate Russia’s foreign reserves.

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“We have ways to respond. We have also frozen sufficient volumes of financial assets and investments of foreign investors in our securities, all of which transfers we carry out for the owners of our securities,” says Russia’s finance minister, Anton Siluanov.

According to European officials, European investors have €33bn stuck in Russia’s National Settlement Depository — the Russian equivalent of Euroclear — which are slowly being seized through its courts.

While many western companies have left Russia, often selling their business at a loss, some of them maintain physical assets there, such as factories and stock, worth billions of euros.

Foreign companies hold physical assets in Russia worth $285bn, according to research by Steinbach based on data from the Kyiv School of Economics. The largest part, $105bn, are European companies’ assets — more than three times the $36bn of assets held by American companies in Russia.

If the G7 measures are carefully designed and in accordance with international law, Russia would be violating international law by seizing any western assets, experts say. 

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But it is unlikely that crossing that line would have much of an impact on Moscow’s thinking. Russia is already seizing western businesses, recently nationalising Russian subsidiaries of German and Italian home appliance makers BSH Hausgeräte and Ariston.

The urgency of the situation in Ukraine may be the issue that finally breaks the deadlock on frozen assets.

Some countries are hoping the recently approved US aid package will alleviate the pressure of having to tap into Russian assets now that Kyiv is on more stable financial footing, European officials say.

But that notion is rejected by the White House’s Singh who warns that the decisions made by the G7 in the short term “have generational consequences.”

There are risks to mobilising the reserves, he acknowledges. But the alternative is the “risk that Ukraine is not sufficiently funded and one of the most egregious violations of international law in recent history occurs with impunity.”

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Additional reporting by Kana Inagaki in Tokyo, Joseph Leahy in Beijing, Guy Chazan in Berlin and James Politi in Washington

This article has been amended to correct Iryna Mudra’s role

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Biden to award Presidential Medal of Freedom to 19, including Pelosi and Ledecky

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Biden to award Presidential Medal of Freedom to 19, including Pelosi and Ledecky

President Biden on Friday will give the nation’s highest civilian honor, the Presidential Medal of Freedom, to 19 people — with recipients covering nearly every corner of American life, including former House speaker Nancy Pelosi (D-Calif.), Olympic champion Katie Ledecky, Academy Award winner Michelle Yeoh and, posthumously, civil rights leader Medgar Evers.

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